Wednesday, May 09, 2007

Uneasiness at ABA over Tax Strategy Patents

My wife is a lawyer and she receives the ABA Journal; usually I don't pay attention, but I am glad that I did this month. In the "Crisis Pending" article, Steven Seidenberg covers the developing practice of patenting legal strategies and the pros and cons of this procedure. Probably the best known application of this approach is tax patents, Seidenberg mentions that 52 patents have been issued with another 84 applied for. One of the examples given concerns a "grantor retained annuity trust" developed by Floridian Robert Slane as a means for reducing gift taxes when donors give large gifts to family members.

An interesting development here: the ABA Tax Division parts company with the Patent Law section. The tax attorneys are clearly displeased while the patent lawyers believe that attorneys will eventually adjust to the license fees, etc.

As indicated in previous posts, I am no fan of patenting tax strategies. At least one criticism is that the patent approach puts lawyers in a superior position legally to accountants in providing tax planning, a position which I feel is frequently not deserved.


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