Judge Emin (“Eminent”) Toro has an appetite for a good dictionary chaw and romp through statutory thickets, and gets both in United Therapeutics Corporation, 160 T. C. 12, filed 5/17/23. UTC did enhanced research via clinical trials of Section 45C orphan drugs over a four (count ’em, four) year stretch.

Section 45C orphans are drugs that would treat or cure diseases so rare that the Big Pharma beancounters wouldn’t spend a dime on them, but people would die for want of them. So Congress strewed some ill-defined largesse by way of a dollar-for-dollar credit against tax for those whom sought them out. Everyone agrees UTC did that kind of research and incurred creditable costs.

But since our old chum the Section 41 enhanced research credit is also applicable, Section 45(C)(c)(2) attempts to harmonize the two. Absent this enactment, which UTC says is a dead letter and should be ignored, taxpayers could run research over a bunch years (hi, Judge Holmes), average the costs, and if the last year’s expenses after deducting the average yielded a better break than ignoring them and taking the last year alone for Section 45C, take the Section 41 enhanced rather than the Section 45C straight.

Clear? Thought not. So try the tables at 160 T. C. 11, at pp. 10-12.

Judge Eminent puts the issue thus. “Section 45C(c) provides that qualified clinical testing expenses must be excluded from all section 41 calculations, except that, under section 45C(c)(2), qualified clinical testing expenses that are also qualified research expenses must be included ‘in determining base period research expenses for purposes of applying section 41 to subsequent taxable years.’ The parties agree that the qualified clinical testing expenses at issue are qualified research expenses. So the only question before us is whether ‘base period research expenses’ are relevant to United Therapeutics’ research credit computation for [year at issue].” 160 T. C. 11, at p. 13.

The term “base period research expenses” is defined neither in Section 41 nor Section 45C. Happily, everyone agrees that the expenses at issue are research expenses for both statutes.

There follows an exhaustive, not to say exhausting, slog through the rules of statutory construction. UTC’s trusty attorneys need find no other way of making a living; they drag out any ambiguity, be it as thin even as a spider’s web, to entrap Judge Eminent. But he conquers all, and decides that the statute says what it means, and means what it says.

And it means UTC loses.