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ABA ON TAX PATENTS: MEND, DON'T END?

October 06, 2006

The American Bar Association has formed a task force on tax strategies:

“It is an area that is just now emerging,” says Tax Section chair Susan P. Serota. “We want to examine all of the issues that this raises, including what patenting means for tax lawyers and for individual taxpayers and businesses. Consumers may not be aware that patents have been granted on certain tax strategy methods.” Serota added that the Section will convene a plenary panel discussion on patenting issues when it meets in Denver in two weeks.

It's not clear from the rest of the press release that they are really planning to look at "all issues." They seem to accept that tax patents should exist - as long as they are "valid":

The task force will assist in training examiners at the Patent and Trademark Office (PTO) who review patent applications in the tax field, to help them identify relevant information on tax strategies. To be granted a patent, tax strategies must be considered novel, nonobvious and useful.

“By training the PTO examiners in tax law,” says Serota, “we hope to help ensure that valid patents are granted. It is difficult for those who haven’t practiced in this area to determine whether some of these strategies are new or not,” she said. Serota noted that the PTO welcomes guidance on tax law from the section, with the common goal of improving the process.

The best way to improve the process of issuing tax patents is to end it. The enforcement of tax patents comes into direct conflict with tax law confidentiality requirements - how could you possibly enforce them without obtaining confidential taxpayer information? It also makes no sense from a policy standpoint to privately restrict the ability of taxpayers to find ways to comply with the law.

Links:

ABA press release (.doc file)

Tax Update on tax patents:

'THE TAX LAW SHOULD BE AN OPEN ROAD, NOT A TOLL ROAD'

PATENTLY ABSURD

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