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ACTEC Comments on Tax Strategy Patent Legislation

An Adobe PDF version of this document is available here.
October 21, 2009
The Honorable John Conyers, Jr.
Chairman, Judiciary Committee
United States House of Representatives
Washington, DC 20510

The Honorable Charles B. Rangel
Chairman, Ways and Means Corrunittee
United States House of Representatives
Washington, DC 20510

The Honorable Rick Boucher
United States House of Representatives
Washington, DC 20510
The Honorable Lamar S. Smith
Ranking Member, Judiciary Committee
United States House of Representatives
Washington, DC 20510

The Honorable Dave Camp
Ranking Member, Ways and Means Committee
United States House of Representatives
Washington, DC 20510

The Honorable Bob Goodlatte
United States House of Representatives
Washington, DC 20510
Re: Tax Strategy Patent Legislation
Dear Chairman Conyers, Ranking Member Smith, Chairnan Rangel, Ranking Member Camp, Mr. Boucher, and Mr. Goodlatte:
I am writing to you as the President of the American College of Trust and Estate Counsel (the "College"), a professional association of over 2,500 lawyers from throughout the United States who are elected to membership by their peers on the basis of professional reputation and ability in the fields of trusts and estates law. As leaders in the estate planning community, we have considered the significant problems related to the patenting of tax strategies and are convinced that prompt legislative action to prohibit tax strategy patents is imperative.
As evidenced by my testimony before the Subcommittee on Select Revenue Measures of the House Committee on Ways and Means on July 13, 2006, and the College's October 23, 2007 letter to many of you supporting legislation to prohibit the patenting of tax strategies, the College has long been concerned about the negative impact that the patenting of tax strategies is having on taxpayers and their advisors, and on our system of taxation in general. Among other problems, tax patents limit taxpayers' ability to interpret tax laws and, in effect, grant private licenses to use the Internal Revenue Code to patent holders. And, as has been noted by the Treasury, such patents mislead taxpayers into believing that a patented tax planning strategy is automatically valid under tax law.

Some have asked whether tax patent legislation should be postponed while the Bilski case is pending before the Supreme Court. Since this case does not involve a tax strategy patent, the Court's decision will not prevent the further issuance of tax strategy patents, and it should not, in any way, delay your legislative efforts. With the Patent and Trademark office continuing to grant tax strategy patents (83 have been issued and 134 applications are pending as of the date of this letter), a legislative solution remains an absolute necessity.

I have attached a copy of a letter dated October 20, 2009, which was recently sent to you by a coalition of 16 consumer organizations, taxpayer rights groups and tax advisors applauding your leadership on the critically important issues of tax strategy patents and asking for your continued help to pass the Boucher-Goodlatte bill, H. R. 2584. The College hereby joins the coalition in applauding your efforts and expressly endorses the views of the coalition as expressed in their October 20 letter.

We strongly endorse H.R. 2584 and urge you to see that this legislative language is enacted into law, either as a separate bill or as part of broader patent law reform legislation.

Sincerely,

Dennis I. Belcher,
President