Grant Thornton urges IRS to delay patenting regulations

Grant Thornton LLP believes that patenting tax advice or tax strategies should be prohibited by legislation and urges the Internal Revenue Service and the U.S. Department of Treasury to delay finalizing the proposed regulations while Congress considers an appropriate legislative solution.

Tax advice and tax strategies are rooted in public law. Granting a patent on such strategies and advice allows the patent holder to control or charge another taxpayer for applying law enacted for the potential benefit of every taxpayer. This is unfair and should not be allowed, states Grant Thornton in a company news release.

Grant Thornton goes on to say that attempts to regulate the use of tax patents by requiring additional disclosure from taxpayers who may or may not understand they are employing patented advice does not directly address this unfairness. It will introduce inefficiencies, uncertainties and considerable taxpayer burdens into the tax compliance process. The ability to achieve a tax patent also may have the undesirable consequence of fostering an environment where the prospect of owning a tax patent leads to the development of overly aggressive, abusive tax-avoidance strategies. The IRS and Treasury should be applauded for attempting to address the problems created by allowing tax advice to be patented through the reportable transaction disclosure regime. But if increased taxpayer disclosure is the best solution available through regulation, then the necessity for a more direct legislative solution is clear.

Grant Thornton LLP has submitted a comment letter to the IRS and Treasury detailing its concerns and recommendations on proposed regulations that add a patented transactions category to the list of reportable transactions.

You may like these other stories...

Did you know that the tax code allows you to claim tax deductions for household damage caused by thefts, vandalism, fires, floods, hurricanes, and others kinds of casualties? But the law imposes several restrictions.Relief...
Inversions: Loophole Is the ProblemJacob J. Lew, the U.S. Treasury Secretary, published an opinion piece in the Wall Street Journal that "the system has become full of inefficiencies and special-interest loopholes. That...
School tax breaks get House support as Democrats objectRichard Rubin of Bloomberg reported that the House of Representatives on Thursday voted to expand and simplify tax breaks for education as Republicans continue to pass...

Upcoming CPE Webinars

Jul 31
In this session Excel expert David Ringstrom helps beginners get up to speed in Microsoft Excel. However, even experienced Excel users will learn some new tricks, particularly when David discusses under-utilized aspects of Excel.
Aug 5
This webcast will focus on accounting and disclosure policies for various types of consolidations and business combinations.
Aug 20
In this session we'll review best practices for how to generate interest in your firm’s services.
Aug 21
Meet budgets and client expectations using project management skills geared toward the unique challenges faced by CPAs. Kristen Rampe will share how knowing the keys to structuring and executing a successful project can make the difference between success and repeated failures.