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Patented Tax Shelters Not Necessarily Legal
Posted By Jim On 08/30/2006 @ 8:57 am In Taxes | 1 Comment
Apparently the US Patent and Trademark Office has been granting patents to folks who apply with their tax shelter ideas, which they consider business practices, and the Internal Revenue Service is upset because this gives the impression that a patented practice is legitimate or even legal. Businesses are then marketing these tax shelter strategies with the government’s seal of approval, which a patent is not, and the IRS is concerned people will be screwed in the process.
“A patent carries with it no assurance whatsoever that the patented process, transaction or structure will pass IRS muster,” IRS Commissioner Mark Everson told a Congressional hearing in July. “We are concerned, however, that taxpayers may be confused about this.”
There are other wider reaching ramifications of this but I think that this part of the issue is most important to consumers like us. It’s not hard to believe that the various parts of the government don’t exactly talk to one another on a daily basis (just try getting anything from the government, it seems like parts of one department don’t even talk to each other) so it’s not surprising the USPTO is granting patents even though they don’t know much about the ever changing tax laws.
So if you’re shopping around for tax preparation services, remember that just because a process is patented doesn’t mean it’s legal or legitimate in the eyes of the IRS.
Story via Fortune Magazine .
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 Fortune Magazine: http://money.cnn.com/2006/08/30/pf/taxes/patents.fortune/index.htm
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