President Obama made the lives of advisers, accountants and taxpayers easier today by removing the burden of having to get permission to use trademarked tax strategies.
If you have a clever idea for helping a client lower his or her tax bill, you no longer have to worry about whether you are violating another adviser's copyright.
A measure signed into law today by President Barack Obama prohibits tax-strategy patents. In an event in Virginia, Mr. Obama touted the potential economic benefits of the American Invents Act, asserting that it would help entrepreneurs and businesses capitalize more quickly on their ideas.
For advisers, though, the biggest benefit of the bill could be a headache that it eases.
“No one should be granted a monopoly over a form of compliance with the federal tax code, and no taxpayer should be subject to paying royalties or defending themselves in lawsuits simply for using a legal way to comply with the tax code,” Dan Barry, chief lobbyist for the Financial Planning Association, wrote in a letter to senators last week, shortly before the Senate approved the legislation.
Prior to patent reform, advisers had to receive permission from a copyright holder before using a trademarked tax strategy, such as certain types of loopholes. Sponsors of the bill said that it would ensure more ways to pay taxes legally, make the tax code fairer and increase compliance.
“Tax strategy patents are on the rise,” Sen. Charles Grassley, R-Iowa, ranking member of the Senate Judiciary Committee, said in a statement last week. “More and more legal tax strategies are unavailable or more expensive for more and more taxpayers.”
Sen. Max Baucus, D-Mont., chairman of the Senate Finance Committee, said in the same statement: “Unfair patents can give a small number of people a stranglehold on tax strategies that should be open to anyone. This bill will bring fairness to the system, and it will deter the use of tax shelters to evade the responsibility we all share.”
