Showing posts with label Congress. Show all posts
Showing posts with label Congress. Show all posts

Friday, September 16, 2011

Tax Strategy Patents: Looking Back

When President Barack Obama signed the Leahy-Smith America Invents Act into law on Friday, it marked the end of a five-year process to ban the patenting of tax strategies. Take a look at the VSCPA's efforts to ban tax patents and read below for a timeline of the history of the issue.
  • July 2006: VSCPA member Mary Anne McElmurray, CPA, of Brown, Edwards & Co. reads an email discussing the patenting of tax strategies. She realizes the burden such patents place on tax professionals and contacts the VSCPA.
  • October 2006: The VSCPA Board of Directors writes a letter to the American Institute of CPAs (AICPA) Board of Directors Chair Leslie Murphy urging the AICPA to oppose the patenting of tax strategies.
  • July 2007: Reps. Rick Boucher (D-Va.), Bob Goodlatte (R-Va.) and Steve Chabot (R-Ohio) introduce an amendment to the Patent Reform Act that would ban the future award of tax planning method patents. The bill passed in the House of Representatives, but not the Senate.
  • November 2007: Sens. Max Baucus (D-Mont.) and Chuck Grassley (R-Iowa) introduce a bill to amend the U.S. Code to ban tax strategy patents. The bill does not make it out of the Senate Committee on the Judiciary.
  • March 2008: VSCPA sends a letter urging Boucher and Goodlatte to continue advocating for a ban on tax patents.
  • March 2008: Boucher discusses tax patents in an article in the March-April 2008 issue of Disclosures.
  • April 2008: The VSCPA communicates with Virginia Sens. John Warner and Jim Webb, encouraging them to cosponsor legislation banning tax patents.
  • March 2009: Several Senators introduce the Stop Tax Haven Abuse Act, which would ban tax patents. The bill does not make it out of the Senate Committee on Finance.
  • April 2009: A potential ban on tax strategy patents is a top issue discussed with the entire Virginia Congressional delegation when VSCPA members and staff go to Capitol Hill during the AICPA Council meeting.
  • May 2009: Boucher, Goodlatte and Reps. Walter Jones Jr. (R-N.C.), Brad Sherman (D-Calif.) and John Spratt Jr. (D-S.C.) introduce another bill to ban tax strategy patents. The bill does not make it out of the House Committee on the Judiciary.
  • October 2009: The VSCPA writes to Virginia Reps. Randy Forbes and Robert Scott about the issue.
  • September 2010: The VSCPA joins with the Michigan Association of CPAs and the Texas Society of CPAs to send a letter a to the ranking members of the House Judiciary and Ways & Means committees, as well as Boucher and Goodlatte, urging continued movement on the banning of tax strategy patents.
  • January 2011: Sens. Patrick Leahy (D-Vt.) and Lamar Smith (R-Texas), among others, introduce the Leahy-Smith America Invents Act, previously known as the Patent Reform Act of 2011.
  • February 2011: The VSCPA writes to lawmakers, asking for them to solve the tax patent problem once and for all.
  • March 2011: The Senate passes the America Invents Act by a vote of 95–5.
  • March 2011: VSCPA members Kevin Humphries, CPA, Tom Rosengarth, CPA, and VSCPA Government Affairs Director Emily Walker meet with Goodlatte in his Staunton office to ask him to continue championing this issue in the House.
  • May 2011: Tax strategy patents is a top issue discussed with the entire Virginia Congressional delegation when VSCPA members and staff go to Capitol Hill during the AICPA Council meeting.
  • June 2011: The VSCPA urges Virginia Representatives to pass the House version of the America Invents Act.
  • June 2011: The House passes its version of the America Invents Act by a vote of 304–117, sending it to conference.
  • September 2011: The VSCPA asks the Senate to follow the House’s lead.
  • September 2011: The Senate passes the House version of the America Invents Act by a vote of 89–9.
  • Sept. 16, 2011: President Barack Obama signs the America Invents Act into law.

Read more about the tax patent saga, or click here to hear what McElmurray has to say about the topic.

Making a Difference: VSCPA Member Mary Anne McElmurray, CPA

Some people see cumbersome regulations as an annoyance or a necessary evil. The rule that concerned VSCPA member Mary Anne McElmurray, CPA, however, struck her as antithetical to the very nature of public accounting.

McElmurray (right), tax director at the Roanoke and New River Valley offices of Brown, Edwards & Co., first discovered the problem that bothered her in a daily tax email in 2006. She read that the U.S. Patent and Trademark Office (USPTO) had issued patents on tax strategies and had more applications pending, and the more she thought about it, the more the idea bothered her.

“I think our profession has suffered in the past from people selling program ideas,” McElmurray said. “Someone in an office comes up with an idea of being artful with the [Tax] Code, and they sell the program with a non-disclosure so they can sell it to a bunch of clients. I saw tax patents as being an outgrowth of the program idea.”

McElmurray got in touch with the VSCPA in 2006 and contacted her Congressman, Rep. Bob Goodlatte, and Sens. Mark Warner and Jim Webb. Spurred by McElmurray, the VSCPA — in concert with the American Institute of CPAs (AICPA) and various other state societies — pushed for a ban on tax strategy patents for the next few years, with several bills dying at various stages in the House or Senate.

But in 2011, McElmurray’s efforts paid off. The America Invents Act, which includes language to prevent the USPTO from issuing patents for tax strategy methods, survived both houses and various committees, and President Barack Obama signed the bill into law Friday morning.

That’s a welcome development for McElmurray and, she argues, the CPA profession.

“There have been instances where I have had clients that have been contacted by other practitioners, people other than even CPAs, that have been lured or spoken to about certain tax programs, but had to sign a non-disclosure,” she said. “I think that brings out the worst in our profession.”

What’s more, this difference-maker didn’t even envision herself as an accountant coming out of school. McElmurray started her professional career in real estate after graduating from the University of Virginia in 1979 and only switched professions after thinking back on fond memories of her college accounting classes.

She started at Ernst & Whinney’s Roanoke office in 1982 as the first paraprofessional in the history of her branch. After passing the CPA Exam, she stayed on at the firm until it closed the branch in 1986. She found a job at Brown Edwards and has been there ever since.

“Maybe I’m a product of my generation, which I guess is more about improving a system rather than running from position to position,” she said. “I’m not saying anything against the people who do that, but I’m of the generation where you can make a difference in an organization, and that’s why I’ve really stayed here.”

While McElmurray was looking for opportunities to effect change even then, it was her life in her native Roanoke with her husband, Fred, and sons, Philip and John, which led her to Brown Edwards. What she found there was a chance to make a difference in her community.

“You hear this all the time when you’re growing up in public accounting, but until you breathe it, you don’t understand it,” she said. “We listen to what people’s business issues are, and they might not even know what they need or what they’re really asking. But if we look at an issue and reach into our toolbox for things that can solve that issue, that’s what we do. We are not tax preparers, we’re problem solvers.”

And it’s never been more obvious that McElmurray is a problem solver than right now. The process she started came to a close Friday with a stroke of the President’s pen.

“A CPA in the trenches read something and was incredulous, and that CPA spurred the system and something got done,” McElmurray said. “It shows that if you make a valiant attempt, sometimes things do happen. I was very, very pleased with the result.”

Tuesday, September 13, 2011

Obama Sends Jobs Bill to Congress

On Monday, President Barack Obama released the American Jobs Act (PDF) to Congress, including tax credits for new hires and an expansion of the payroll tax cut.

Obama had revealed the basic framework of the bill during an address to a joint session of Congress on Sept. 8. The bill includes tax breaks for companies to hire unemployed workers and veterans and for small businesses to raise wages. It also includes an extension of the payroll tax cut and unemployment benefits, as well as money to fund infrastructure and school construction projects.

The bill would expand the payroll tax cut passed in December 2010 to cut workers’ payroll taxes in half for 2012. It would also halve the taxes paid by businesses on their first $5 million in payroll. It would completely eliminate payroll taxes for companies that increased their payrolls by adding new workers or increasing the wages of current workers, capped at the first $50 million in payroll increases.

Read the full article at vscpa.com and sound off in the comments. Can this bill help put unemployed Americans back to work?

Wednesday, July 20, 2011

'Gang of Six' Presents Budget Deficit Plan

A bipartisan group of U.S. senators, including one Virginia lawmaker, has presented its proposals for spending cuts and tax increases that would reduce the federal budget deficit by $3.7 trillion over the next decade.
Sens. Saxby Chambliss (R-Ga.), Tom Coburn (R-Okla.), Kent Conrad (D-N.D.), Mike Crapo (R-Idaho), Dick Durbin (D-Ill.) and Mark Warner (D-Va.), known as the “Gang of Six,” have been meeting for months to work on their deficit reduction plan. Coburn had previously left the group over a disagreement on tax increases, but was reportedly back with the group when it presented its proposals Tuesday morning.

The senators’ plan attracted support from leading Republicans including Sens. Lamar Alexander (R-Tenn.), Kay Bailey Hutchinson (R-Texas) and Mike Johanns (R-Neb.). But the legislation will not be ready before the Aug. 2 deadline to raise the debt limit and avoid government default.
According to the Associated Press, the plan reportedly includes three income tax rates — a bottom rate of 8–12 percent, a middle rate of 14–22 percent and a top rate of 23–29 percent. The current system has a bottom rate of 10 percent and five additional rates topping out at 35 percent. The plan would also reduce tax breaks on mortgage deductions, 401(k) plans and IRAs, charitable deductions and child tax credits, among other areas, and would close some corporate tax loopholes. It would lower tax rates for individuals and businesses and eliminate the alternative minimum tax.
The plan reportedly would cut $500 billion from the deficit immediately.

Read more at http://www.vscpa.com/.

Tuesday, October 19, 2010

Estate Tax Back from the Grave? Tax Cuts to Take Its Place?

As the current year quickly comes to a close, so do the Bush administration’s income tax cuts and estate tax exemptions. But Congress will surely fix that.

Maybe, but maybe not. The Economic Growth and Tax Reconciliation Act of 2001 called for a gradual rise in the estate tax exemption while cutting income tax rates. The increased estate tax exemptions and income tax cuts are both set to expire by the end of 2010.

So what happens if the federal estate tax reemerges come January 1? Estates valued at more than $1 million could be taxed up to 55 percent, plus a possible 5 percent surcharge on certain estates.
While $1 million seems like a lot, houses, retirement funds and other assets add up quickly, which means many more taxpayers could be impacted.

And will the 2003 tax cuts become permanent or will some (or all) expire? Right now it’s hard to say, considering Congress has adjourned without addressing either issue. Meanwhile, CPAs in financial planning and tax preparation are left to continue serving their clients amid this uncertainty.

Check out some recent articles on the topic, and tell us what you think about this issue: