Financial Reporting zone

Financial reporting briefs: September 2007

The House of Representatives has voted 220-175 to overhaul patent rules and place a ban on tax-planning method patents.

America’s Patent Reform Act of 2007 will contain a provision that protects accounting firms from lawsuits over tax-planning methods.

"Our underlying concern with tax strategy patents is that they violate the core principle of equity that is the foundation of our voluntary tax system," said Barry Melancon, CEO of the American Institute of CPAs. At the time of voting, the US patent office had already granted 60 tax strategy patents with an additional 99 pending.

The legislation defines a tax-planning method as a plan, strategy, technique or scheme designed to reduce, minimize or defer a taxpayer's tax liability. The patent status for tax preparation tools and other software used "to perform or model mathematical calculations or prepare tax or information returns" remains unchanged.

Previous financial reporting briefs:

August 2007
July 2007