In R.H. Donnelley Corp. v. United States, No. 5:08-cv-00501 (ED NC 2010), the court addressed a unique situation involving the carryback of an R&D tax credit. The facts were as follows. The R&D tax credit was for tax year 1994. The taxpayer’s 1994 tax return was audited. No changes were made as a result of the audit. The taxpayer then filed a refund claim for its 1991 tax year to carry back its 1994 R&D tax credit. The government disallowed the claim by asserting that the taxpayer’s 1994 tax liability was higher than the amount reported and the higher amount used up the taxpayer’s R&D tax credit in that tax year. The government did not assess this additional tax for the 1994 tax year because the time period for doing so had expired. The taxpayer believed that it was entitled to a refund for its R&D tax credit because the government could only count the tax that was actually assessed. The court did not agree. It concluded that the taxpayer could not carry back its R&D tax credit because of the unassessed tax liability in 1994.