Patenting of Tax Advice Is Bad Policy That's Bad for Economy, Attorney Says
Charles Beaudrot Jr. of Morris, Manning & Martin LLP, in a letter to Treasury, has expressed opposition to the patenting of tax advice or tax strategies that have the potential for tax avoidance, suggesting in part that it is bad social policy to provide economic incentives to engage in tax planning to reduce taxes.
Date: Aug. 27, 2007
August 27, 2007
The Honorable Karen Sowell
Deputy Assistant Secretary for Tax Policy
Department of the Treasury
1500 Pennsylvania Avenue, NW
Room 2134
Washington, D.C. 20220
Re: Patenting of Tax Advice is a Bad Idea
Dear Deputy Sowell:
On behalf of all 12 members of our Tax Group here at Morris, Manning & Manning, LLP, I am writing to you regarding a major issue for our economy and all tax practitioners.
Patenting tax advice is a horrible idea. It needs to be absolutely prohibited by Congress.
First, patenting tax advice creates ridiculous distortions in the free flow of commerce. It puts ordinary taxpayers and their advisors at risk of inadvertently infringing patents in areas they have no realistic way to know are patented. Nor should taxpayers and their advisors be required to incur the cost and expense of determining when certain tax advice or a certain tax strategy is patented. And even if such an alleged patent is invalid, this can have a huge chilling effect on actions taken in efforts to avoid the risks of litigating validity.
Secondly, the last thing this country needs is more economic incentive to engage in tax planning in order to reduce taxes. A disproportionate number of our best and brightest minds are already devoted to reducing taxes, and are well compensated for doing so. I include myself and the members of our Tax Group here at Morris, Manning & Martin, LLP in that number. As a matter of social policy, providing additional incentives in the form of patent monopolies can only exacerbate the trend of misdirecting ever more of our intellectual capital to tax planning at the expense of other more productive activities.
Ironically, this new move to allow patents for tax advice is occurring at a time when Congress and the IRS have been struggling mightily to restore some semblance of tax compliance after the recent scandals involving tax shelter opinions.
Patenting tax advice is bad policy and bad business. It needs to be stopped before further damage is done and more needless expense incurred. We urge Congress to take prompt remedial action on this issue.
Most Sincerely,
Charles R. Beaudrot, Jr.
Morris, Manning & Martin, LLP
Atlanta, Georgia
cc:
Peggy J. Bailey,
Cassady V. Brewer,
Scot A. Burton,
Matthew T. Harris,
Richard L. Haury,
Gary M. Lucas, Jr.,
Shelly E. Nixon,
Timothy S. Pollock,
Sean J. Reynolds,
Susie K. Richter,
Michael J. Rhim,
Alison R. Solomon,
Philip E. Tribble,
William M. Winter,
Bruce H. Wynn
Tax Analysts Information
Code Section: Section 6011 -- Return Filing Requirement; Section 6111 -- Tax Shelter Registration; Section 6112 -- Tax Shelter List Requirement
Jurisdiction: United States
Subject Area: Compliance
Information disclosure
Tax system administration issues
Author: Beaudrot, Charles R., Jr.
Institutional Author: Morris, Manning & Martin LLP
Tax Analysts Document Number: Doc 2008-13982 [PDF]
Tax Analysts Electronic Citation: 2008 TNT 123-24
Cross Reference: For REG-129916-07, see Doc 2007-21745 [PDF] or 2007 TNT
187-10 .
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