More On Tax Planningfrom The Advisor's Professional Library
- IRAs: In General Individual Retirement Accounts are highly popular tools for contributing funds that grow on a tax deferred basis. Depending on the type of IRA, the accumulation can be tax free.
- Long Term Care Insurance: Premiums While premiums for qualified long-term-care insurance may be deductible as medical expenses there are exceptions to this general rule. Learn how to avoid unnecessary tax liabilities.
At issue is the current practice of “patenting tax strategies,” which the FPA says, “has hindered the financial planning process for both practitioners and consumers.”
"The Committee’s action on this bill is a tremendous step on behalf of taxpayers and their financial planners," Marvin W. Tuttle (left), executive director and CEO of the FPA, said in an announcement. "The practice of patenting a specific strategy is like a football team laying claim to the Hail Mary and forbidding other teams to use it in their playbook. FPA encourages the Senate to put American taxpayers first and pass the bill, which will lift the burden that has been unnecessarily inflicted on the tax and planning process."
The FPA pointed out in its release that, “Patenting tax strategies and corresponding ‘advice’ has been an increasing problem because it limits the ability of taxpayers to fully utilize interpretations of tax law intended by Congress. Many feel that it has created a monopoly for the patent holders to determine who can and cannot utilize parts of the tax code.”
The FPA also noted the extra burden that patents of this type place on planners, saying it “believes” that patenting tax strategies “has also affected the creation of financial plans because it requires the planner to be aware of ever-increasing strategy patents, in addition to ever-changing tax laws. Advisors must seek permission from the patent holder to provide the most advantageous advice to clients, or risk a lawsuit for themselves and their clients.”