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Senate Passes Bill Addressing Tax Strategy Patents - Emil Estafanous, CPA : Emil Estafanous, CPA

Senate Passes Bill Addressing Tax Strategy Patents

The Senate voted 95–5 on Mar 8 to pass a America Invents Act (S. 23), that was before called a Patent Reform Act. Included in a check is a sustenance dictated to stop a extenuation of patents for taxation strategies. That provision, in territory 14 of a bill, would hold any “strategy for reducing, avoiding, or deferring taxation liability” to be before art. Under U.S. obvious law, to be patentable an thought contingency be novel and non-obvious; patents can't be postulated for ideas that are already within a physique of open knowledge, that is famous as before art (35 U.S.C. §102).

The obvious check 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.”

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 some-more than 130 patents on taxation strategies.

The America Invents Act now moves to a House of Representatives for consideration. Its prospects there are uncertain.

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