March 11, 2008

Dear Congressmen Boucher and Goodlatte:

As patent reform legislation continues to move through Congress, I am writing to encourage you to remain strong and outspoken advocates for the inclusion of language banning the issuance of tax strategy patents.

The Virginia Society of CPAs (VSCPA) appreciates and thanks you for your past and ongoing leadership roles in this process. We know that, without your commitment to solving this problem, this important issue would not be part of the larger House-passed patent bill.

The Senate is poised to debate their version of patent reform sometime this spring. We are optimistic that language similar to your legislative solution will be offered as an amendment by Senators Max Baucus and Charles Grassley. But, irrespective of what type of bill ultimately passes the Senate, we feel strongly that the language you championed must be part of any final conference report. We are ready to assist you in any way that would be helpful in guaranteeing that outcome.

There is too much at stake for taxpayers and their advisors to allow this legislative window of opportunity to pass. In particular:

• The issuance of tax strategy patents continues to undermine the ability of taxpayers to pay their taxes in any legally permissible manner.;
• The challenges of compliance and the legal jeopardy for taxpayers associated with tax strategy patents are severe and daunting.
• There is little doubt that tax strategy patents undermine lawmakers’ intent when our tax laws were passed.
• As long as tax strategy patents are allowed, it is quite possible that taxpayers will find themselves paying more than Congress intended. Plus, the patenting of tax advice forces a choice between paying more in taxes than required or paying a patent royalty payment.
• The inability of CPAs to defend against a patent infringement suit due to client confidentiality standards places CPAs in a position of potential exploitation by patent holders or in conflict with their professional duties to a client.
• And finally, simply because the Patent and Trademark Office has issued a patent does not mean a tax strategy would be found to be legal by the Internal Revenue Service. A patent implies a false sense of security about a particular tax strategy.

I encourage you to continue to talk to your colleagues about the importance of solving this problem. And, the VSCPA hopes that you will remain a champion on this issue as the House and Senate move toward a conference.

Sincerely,

Monique T. Valentine, CPA
Chair, VSCPA Board of Directors