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President Signs Patent Reform Bill Banning New Tax Strategy Patents - Emil Estafanous, CPA : Emil Estafanous, CPA

President Signs Patent Reform Bill Banning New Tax Strategy Patents

On Sep 16, President Barack Obama sealed into law a Leahy-Smith America Invents Act (H.R. 1249), that reforms a U.S. obvious complement and stops a extenuation of patents for taxation strategies. The check had been upheld by a Senate progressing this month and by a House of Representatives in June.

Under a act, any “strategy for reducing, avoiding, or deferring taxation liability” is deemed 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” Sep 16, 2011.

The act defines “tax liability” as any guilt for taxation underneath federal, state, internal or unfamiliar law. The sustenance covers taxes imposed by any “statute, rule, regulation, or bidding that levies, imposes, or assesses such taxation liability.” It does not, however, request to taxation credentials and other software, categorically incompatible 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 became patentable, as business methods, underneath a 1998 justice preference (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 some-more than 160 patents on taxation strategies, covering a far-reaching operation of activities including genuine estate transactions, free giving, retirement formulation and a extenuation of batch options. Another 167 applications were tentative when a act was sealed into law. Existing taxation plan patents are not influenced by a act, though taxation strategies in tentative obvious applications will be deemed before art underneath a new law.

AICPA President and CEO Barry Melancon welcomed a bill’s enactment, observant in a prepared statement, “Tax plan patents are a homogeneous of private tollbooths that retard taxation correspondence options and could cost Americans some-more money. We are beholden that Congress and a boss famous this and acted to scold a inequity.”

The AICPA and state CPA societies have been advocating for legislation to residence taxation plan patents for a past 5 years, lifting concerns in a array of letters to Congress and a IRS during that time.

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

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