2011

Press Release


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Contact(s):

Shirley Twillman
202-434-9220
stwillman@aicpa.org

Coalition Urges Senate Judiciary Committee to Keep Tax Strategy Patent Provision in Patent Reform Act of 2011 

Published February 02, 2011

A coalition of 15 national organizations urged the Senate Judiciary Committee to keep a provision in S. 23, The Patent Reform Act of 2011, that would stop tax strategy patents. The bill goes to mark-up tomorrow, Feb. 3.

 

The coalition thanked Committee Chairman Senator Patrick Leahy and Ranking Member Senator Charles Grassley for including the tax strategy provision in the broad patent reform bill.  “’We commend you for including a provision in S. 23…to address the serious problem of tax strategy patents,” the letter said. “We believe that this pro-taxpayer measure is a critical component of any comprehensive patent reform effort.  The ongoing, serious concerns associated with tax strategy patents pose a significant threat to American taxpayers and businesses, and we believe that Congress must prioritize fixing this problem as soon as possible.”

 

The coalition said tax strategy patents “may limit the ability of taxpayers to utilize fully interpretations of tax law intended by Congress – effectively creating a monopoly for the patent holders to determine who can and cannot utilize parts of the tax code.”

 

The organizations that signed the letter are the American Institute of Certified Public Accountants, Tax Justice Network USA, New Rules for Global Finance, American College of Tax Counsel, Consumer Action, The American College of Trust and Estate Counsel, Partnership for Philanthropic Planning, Global Financial Integrity, International Association for Registered Financial Consultants, National Association of Enrolled Agents, USPIRG, Certified Financial Planner Board of Standards, Financial Planning Association, American Association of Attorney-Certified Public Accountants and Citizens for Tax Justice.

 

A copy of the letter is pasted below. 

For more information, contact Shirley Twillman, AICPA senior manager of media relations, at stwillman@aicpa.org or 202.434.9220. 

 

 

February 2, 2011

 

 

The Honorable Patrick J. Leahy

Chairman

Committee on the Judiciary

United States Senate

Washington, DC 20510

 

The Honorable Charles Grassley

Ranking Member

Committee on the Judiciary

United States Senate

Washington, DC  20510

 

Re: Tax Strategy Patents

 

Dear Gentlemen:

 

On behalf of our 15 national organizations representing consumer, taxpayer, charitable, financial planning, and tax advisor groups, we commend you for including a provision in S. 23, The Patent Reform Act of 2011, to address the serious problem of tax strategy patents.  Similar to legislation recently introduced by Senators Baucus and Grassley, S. 139, we believe that this pro-taxpayer measure is a critical component of any comprehensive patent reform effort.  The ongoing, serious concerns associated with tax strategy patents pose a significant threat to American taxpayers and businesses, and we believe that Congress must prioritize fixing this problem as soon as possible. 

 

As the Senate Judiciary Committee moves to mark up S. 23, we ask you specifically to champion this provision, and aggressively oppose any efforts to weaken or remove it.  There is too much at stake to allow special interests to try to monopolize methods of Federal tax compliance, leaving American taxpayers potentially subject to lawsuits, royalties, and a much more complicated, expensive tax code. 

 

As you know, the problems associated with tax strategy patents are multiple and quite complex.   First, such patents may limit the ability of taxpayers to utilize fully interpretations of tax law intended by Congress – effectively creating a monopoly for the patent holders to determine who can and cannot utilize parts of the tax code.  Furthermore, tax advisors, who generally are not patent experts, have the burden to be aware of such patents, and either provide tax advice that complies with the patent holder’s requirements, risk a lawsuit for themselves and their clients, or potentially not provide the most advantageous advice to clients.  Not surprisingly, these patents create a highly burdensome level of cost ultimately borne by taxpayers. 

 

These patents already affect a myriad of tax planning vehicles, including retirement plans, real estate transactions, deferred compensation, financial investments, charitable giving, and estate planning transfers.  We are concerned that the U.S. Patent Office may permit the expansion of these types of patents into additional areas broadly affecting average taxpayers. For example, there are pending patents that would affect taxpayers’ ability to create a financial plan for funding college education, utilize incentive programs for health care savings account cards, insure against tax liabilities, and use life insurance to generate income.

As of now, the numbers of tax strategy patents have grown to over 130 issued and more than 150 pending.  We fear this trend is likely to continue to grow exponentially without your leadership.  Legislation must be passed quickly if we are to provide taxpayers with equal access to all available avenues of federal tax compliance. 

 

As you know, there is broad, bipartisan, and growing support for this legislation.  In the 111th Congress, Congressmen Rick Boucher and Bob Goodlatte introduced H.R. 2584, a similar initiative which ended the Congress with 45 co-sponsors.  That legislation built off of the passage of comprehensive patent reform legislation, passed by the House in the 110th Congress, which included its own tax strategy patents provision.  In addition, Senators Baucus and Grassley previously introduced legislation on this topic in the 110th Congress, garnering 30 co-sponsors, including then-Senator Barack Obama.  The National Taxpayer Advocate, Nina Olsen, has also publicly stated her support for a legislative solution to this problem.  Clearly, with such overwhelming support and momentum over the last several years, the time has come to finally enact this proposal and send it to the President. 

 

Thank you again for your leadership on behalf of American taxpayers.  Please contact any of us if we can assist you as you move forward on this important matter.

 

Sincerely,

 

 

Barry C. Melancon, CPA

President and Chief Executive Officer

American Institute of Certified Public Accountants

 

 

Nicole Tichon

Executive Director

Tax Justice Network USA

                       

Jo Marie Griesgraber                                                                      Richard M. Lipton

Executive Director                                                                           Chair

New Rules for Global Finance                                                     American College of Tax Counsel

                               

 

Linda Sherry                                                                                       Karen M. Moore

National Priorities Director                                                           President

Consumer Action                                                                             The American College of Trust and Estate

    Counsel

 

 

Tanya Howe Johnson                                                                     Raymond W. Baker

President and CEO                                                                          Director

Partnership for Philanthropic Planning                                   Global Financial Integrity

 

 

Edwin P. Morrow, CLU, ChFC, CFP®, RFC®

Chairman and Chief Executive Officer

International Association for Registered Financial Consultants

 

 

H. Stephen Bailey

President

International Association for Registered Financial Consultants

 

 

Michael Nelson

Executive Vice President & Chief Executive

    Officer

National Association of Enrolled Agents

 

Gary Kalman

Director, Federal Legislative Office

USPIRG

 

 

 

Kevin R. Keller

Chief Executive Officer

Certified Financial Planner Board of Standards

 

Marvin W. Tuttle, CAE

Executive Director/CEO

Financial Planning Association

 

 

John Akard Jr., JD, CPA
President

American Association of Attorney-Certified Public Accountants

 

Robert S. McIntyre

Director

Citizens for Tax Justice

 

cc: 

 

The Honorable Harry Reid, Senate Majority Leader

The Honorable Mitch McConnell, Senate Minority Leader

Members of the Senate Judiciary Committee

Co-Sponsors of S. 139

·         The Honorable Max Baucus

·         The Honorable Jeff Bingaman

·         The Honorable Kent Conrad

·         The Honorable Michael Enzi

·         The Honorable John Kerry

·         The Honorable Carl Levin

·         The Honorable Ron Wyden

 

 

 

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