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Congress Passes Tax Patent Reform; Sends Bill to President - Emil Estafanous, CPA : Emil Estafanous, CPA

Congress Passes Tax Patent Reform; Sends Bill to President

On a dusk of Sep 8, a Senate upheld a America Invents Act (H.R. 1249) by a opinion of 89–9. The Senate’s chronicle of a check was matching to one upheld by a House of Representatives in June, and it now goes to President Barack Obama for his signature.

The act reforms a U.S. obvious system, and among a supplies is one dictated to stop a extenuation of patents for taxation strategies. The act deems any “strategy for reducing, avoiding, or deferring taxation liability” to be “prior art” underneath obvious law, and therefore not patentable. The taxation plan sustenance relates to “any obvious focus that is tentative on, or filed on or after” a date of enactment.

In a act, “tax liability” is broadly tangible to meant any guilt for taxation underneath federal, state, internal or unfamiliar law, and a sustenance covers taxes imposed by any “statute, rule, regulation, or bidding that levies, imposes, or assesses such taxation liability.”

The provision, however, does not request to taxation credentials and other software; it categorically excludes any “method, apparatus, technology, mechanism module product, or system, that is used only for scheming a taxation or information lapse or other taxation filing” or that is “used only for financial management, to a border that it is severable from any taxation plan or does not extent a use of any taxation plan by any taxpayer or taxation advisor.”

The AICPA and state CPA societies have been advocating for legislation to residence taxation plan patents for a past 5 years. In a minute to all United States senators on Sep 6, AICPA President and CEO Barry Melancon urged a Senate to pass H.R. 1249, job a taxation obvious provision, a “pro-taxpayer sustenance that will assistance safeguard that a taxation formula is fair, reduction complicated, and permitted to all.”

In prior letters to Congress and a IRS, a AICPA voiced a concerns that permitting taxation strategies to be patented:

  • Limits taxpayers’ ability to use entirely taxation law interpretations dictated by Congress;
  • May means some taxpayers to compensate some-more taxation than Congress dictated or some-more than others likewise situated;
  • Complicates a sustenance of taxation recommendation by professionals;
  • Hinders correspondence by taxpayers;
  • Misleads taxpayers into desiring that a law plan is current underneath a taxation law; and
  • Precludes taxation professionals from severe a effect of a law strategy.

The U.S. Patent and Trademark Office Tax has postulated over 150 patents on taxation strategies and some-more than 160 some-more are pending. Existing patents would not be influenced by a new law, though applications tentative on a date of dramatization are within a range of a provision.

Tax strategies became patentable in 1998, along with other business methods, as a outcome of a Federal Circuit Court of Appeals decision, State St. Bank Trust v. Signature Fin. Group, 149 F.3d 1368 (Fed. Cir. 1998).

About Emil Estafanous, CPA
Certified Public Accountant (CPA) Tax Professional committed in representing taxpayers and resolving their tax problems.

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