Software developers attempting to claim a tax credit for research and development expenditures will face great difficulties due to a decision by the United States Court of Appeals for the Tenth Circuit. In Tax and Accounting Software Corp. v. United States, the court offered new guidelines for applying the “discovery” and “process of experimentation” requirements of the section 41 research and development tax credit. The court held that the plain meaning of the discovery test is clear: “the taxpayer must show that he discovered new information and that information must be separate from the product that is actually developed.” The court found that the parties in this case never developed this issue, however, and so a factual analysis on this test remains unavailable to concerned taxpayers. The court also analyzed the process of experimentation requirement, delving deep into legislative history to reach the conclusion that a tax credit may be claimed for a software development process that includes research the taxpayer performs using known methods, as long as the taxpayer does not believe from the start that the result of the development project is technically feasible. Because the software programmers in this case did not question the technical feasibility of the software they worked to develop, the taxpayer failed to meet the necessary conditions for the tax credit.Part I of this Note provides background on the statutes and regulations relevant to this tax credit. Part II explains the facts of the case. Part III summarizes the Tenth Circuit’s opinion. Part IV explains that while the Tenth Circuit’s reliance on partial legislative history created vague new tests for software programmers rather than clarifying the law, the result of this case is consistent with recent decisions by other courts and should not shock the software industry.