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House Passes Bill with Tax Patent Provision, Sends Back to Senate - Emil Estafanous, CPA : Emil Estafanous, CPA

House Passes Bill with Tax Patent Provision, Sends Back to Senate

On Jun 23, by a opinion of 304–117, a House of Representatives upheld a America Invents Act (H.R. 1249), that includes a sustenance dictated to stop a extenuation of patents for taxation strategies. The check would hold any “strategy for reducing, avoiding, or deferring taxation liability” to be before art, and therefore not patentable.

The House authorized several amendments to a bill, and given it differs from a chronicle upheld by a Senate on Mar 8, it now contingency go behind to a Senate for reconsideration.

The taxation plan provision, as passed, relates to “any obvious focus that is tentative on, or filed on or after” a date of enactment. Before flitting a bill, a House degraded on a voice opinion an amendment due by Rep. Jared Polis, D-Colo., that would have authorised tentative taxation obvious applications to pierce brazen and presumably be postulated obvious protection. A bloc including a AICPA sent a minute to a Speaker of a House, House Minority Leader, and chair and ranking member of a House Judiciary Committee on Jun 21 hostile a Polis amendment. The minute forked out that a amendment “would concede adult to 160+ additional taxation plan patents to be granted,” and that this “could potentially some-more than double” a series of taxation plan patents in existence.

H.R. 1249 defines “tax liability” broadly to meant guilt for taxation underneath federal, state, internal and unfamiliar law, and a sustenance would cover taxes imposed by any “statute, rule, regulation, or bidding that levies, imposes, or assesses such taxation liability.”

The check excludes from a qualification 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.”

Tax strategies have been patentable as a form of business process ever given a Federal Circuit Court of Appeals dynamic that business methods could be law in State St. Bank Trust v. Signature Fin. Group, 149 F.3d 1368 (Fed. Cir. 1998). Since then, a U.S. Patent and Trademark Office has postulated approximately 140 patents on taxation strategies.

The AICPA has for several years against a distribution of patents for taxation strategies. In letters to Congress and a IRS, a AICPA has 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.

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

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