Accelerated tax reduction platform

• US 20020178039A1
• Filed: 05/22/2002
• Published: 11/28/2002
• Est. Priority Date: 05/22/2001
• Status: Abandoned Application

• Current Assignee: Casey Enterprises
• Original Assignee: Casey Enterprises
• Inventors: Kennedy, Diane M.
• Application Number:
  US10/153,093
• Publication Number:
  US 20020178039A1
• Time in Patent Office: Days
• US Class Current: 705/7
• CPC Class Codes: G06Q 20/207 Tax processing
• CPC Class Codes: G06Q 40/02 Banking, e.g. interest calculation or account maintenance credit or loans G06Q40/03
• CPC Class Codes: G06Q 40/123 Tax preparation or submission

Abstract

Methods and systems are disclosed for reducing a tax burden, one such method including: developing a tax strategy to determine an estimated projected tax, implementing the tax strategy, reviewing results of the implemented tax strategy for changes in taxpayer circumstances and tax laws, determining whether to update the tax strategy based on the reviewed results. Developing the tax strategy may include: collecting taxpayer information, processing the collected information to determine a suggested tax strategy, and determining action items to implement the suggested tax strategy. Implementing the tax strategy may include: developing a list of specific steps to implement the action items, and determining a timeline for performing the specific steps. A system for selecting appropriate business entities based on taxpayer circumstances is also disclosed. The invention also discloses computer programs and systems for reducing a tax burden.

Claims

1. A method for reducing a tax burden comprising:

developing a tax strategy to determine a projected tax;

facilitating implementation of the tax strategy;

reviewing results of the implemented tax strategy for changes in at least one of taxpayer circumstances and tax laws; and

determining whether to update the tax strategy based on the reviewed results.

2. The method of claim 1 wherein developing the tax strategy comprises:

collecting taxpayer information using a uniform series of questions.

3. The method of claim 2 wherein the uniform series of questions is presented in an electronic format.

4. The method of claim 2 wherein the uniform series of questions is presented in a paper format.

5. The method of claim 2 wherein the uniform series of questions is presented in a verbal format.

6. The method of claim 1 wherein developing the tax strategy comprises:

processing taxpayer information to determine a suggested tax strategy.

7. The method of claim 6 wherein processing taxpayer information comprises:

characterizing at least one of taxpayer income and assets.

8. The method of claim 6 wherein processing taxpayer information comprises:

determining one or more potential deductions from one or more expenses qualifying as an ordinary and necessary expense.

9. The method of claim 6 wherein processing taxpayer information comprises:

determining one or more potential deductions based on benefits provided by a business.

10. The method of claim 6 wherein processing taxpayer information comprises:

determining whether taxpayer income may be moved to a lower taxed entity.

11. The method of claim 6 wherein processing taxpayer information comprises:

determining an exit strategy for a taxpayer to exit a business.

12. The method of claim 6 wherein processing taxpayer information comprises:

evaluating funding sources for a taxpayer business.

13. The method of claim 6 wherein processing taxpayer information comprises:

assessing at least one of a taxpayer'"'"'s tolerance for risk, potential personal risks to a taxpayer'"'"'s business assets, and potential business risks to a taxpayer'"'"'s personal assets.

14. The method of claim 6 wherein processing taxpayer information comprises:

evaluating business entities based on the taxpayer information.

15. The method of claim 1 wherein developing the tax strategy comprises:

determining action items to implement a suggested tax strategy.

16. The method of claim 1 wherein facilitating implementation of the tax strategy comprises:

developing a list of specific steps to implement the action items; and

determining a timeline for performing the specific steps.

17. The method of claim 16 wherein facilitating implementation of the tax strategy further comprises:

coordinating the specific steps and the timeline with at least one of a taxpayer and the taxpayer'"'"'s representative.

18. The method of claim 1 wherein facilitating implementation of the tax strategy comprises:

coaching at least one of the taxpayer and a taxpayer'"'"'s representative in tax related accounting coding, expensing and record keeping for the tax strategy.

19. The method of claim 1 wherein reviewing results of the implemented tax strategy comprises:

reviewing, on a periodic basis, the taxpayer'"'"'s financial statements for accuracy and adherence to the tax strategy;

determining an actual tax based on the reviewed financial statements; and

comparing the actual tax with the projected tax.

20. The method of claim 1 wherein reviewing results of the implemented tax strategy comprises:

periodically evaluating whether the tax strategy complies with current laws and regulations.

21. The method of claim 20 wherein periodically evaluating further comprises evaluating whether the tax strategy takes advantage of changes in current laws and regulations.

22. The method of claim 19 wherein determining whether to update the tax strategy comprises at least one of:

evaluating whether the actual tax differs from the projected tax by greater than a predetermined amount;

evaluating whether a financial status of the taxpayer has changed by more than a certain amount since the implementation of the tax strategy; and

evaluating whether a cost of developing and implementing a new tax strategy outweighs a cost of continuing with the tax strategy.

26. The method of claim 25 further comprising:

determining potential tax deductions available to the taxpayer.

27. The method of claim 26 wherein determining potential tax deduction comprises at least one of:

(i) identifying taxpayer expenses that may qualify as deductions, and (ii) identifying potentially deductible benefits that may be provided by a taxpayer'"'"'s business.

28. The method of claim 25 further comprising:

determining whether taxpayer income may be accounted to a different entity, wherein said different entity has a lower marginal tax rate than the taxpayer.

29. The method of claim 25 further comprising:

identifying an exit strategy for the taxpayer to exit a business.

30. The method of claim 25 further comprising:

assessing at least one of (i) a taxpayer'"'"'s tolerance for risk;

(ii) a taxpayer'"'"'s personal risks to business assets; and

(iii) business risks to personal assets of the taxpayer.

31. The method of claim 25 further comprising:

evaluating potential business structures based on the obtained taxpayer information; and

identifying at least one business structure for utilization by the taxpayer based on the evaluation.

32. The method of claim 25 wherein characterizing the taxpayer'"'"'s income and assets comprises:

determining whether a taxpayer'"'"'s business is one of a qualified personal service company and a personal holding company; and

identifying actions, if any, that may be taken to remove the taxpayer'"'"'s business as being the qualified personal service company or the personal holding company.

33. The method of claim 25 wherein characterizing the taxpayer'"'"'s income and assets comprises:

determining an amount of projected income for the taxpayer'"'"'s business;

identifying an amount of the projected income that is earned income; and

identifying appreciating assets of the taxpayer'"'"'s business that are separable from the business.

34. The method of claim 27 wherein identifying taxpayer expenses that may qualify as deductions comprises:

comparing taxpayer expenditures with a list of accepted deductible ordinary and necessary business expenses; and

identifying taxpayer expenditures eligible for deduction based on the comparison.

35. The method of claim 34 wherein identifying taxpayer expenses that may qualify as deductions further comprises:

summing the identified taxpayer expenditures to determine a total expense deduction.

36. The method of claim 27 wherein identifying potentially deductible benefits that may be provided by a taxpayer'"'"'s business comprises:

comparing benefits that may be provided by the taxpayer'"'"'s business with a list of employer benefit deductions available under current law; and

identifying those benefits that may be provided by the taxpayer that are eligible for deduction based on the comparison.

37. The method of claim 34 wherein comparing and identifying taxpayer expenditures are performed by a processing device executing machine readable code.

38. The method of claim 36 wherein comparing and identifying benefits is performed by a processing device executing machine readable code.

39. The method of claim 28 wherein determining whether taxpayer income may be accounted to the different entity comprises:

identifying taxpayer dependents and companies held by a C corporation that may be eligible to be compensated by the taxpayer for performing tasks on behalf of the taxpayer; and

designating a compensation for the identified taxpayer dependents and companies held by the C corporation that is reasonable for the tasks to be performed.

40. The method of claim 25 further comprising:

evaluating funding sources for a taxpayer'"'"'s business.

41. The method of claim 40 wherein evaluating funding sources comprises:

identifying whether funding will be needed for the taxpayer'"'"'s business; and

if so;

identifying what percentage of business funding will be provided by the taxpayer and what percentage of business funding will be provided by a third party;

identifying an accounting type for business funding;

identifying whether business funding will come from public investment; and

identifying ownership rights between taxpayer and the third party.

42. The method of claim 41 further comprising:

evaluating identified information to determine one or more appropriate business structures.

43. The method of claim 29 wherein identifying the exit strategy comprises:

identifying whether the taxpayer will exit the business through one of an asset sale, a stock sale, a gift and closing.

44. The method of claim 43 wherein if the exit strategy is identified to be the asset sale, the method further comprises:

identifying whether assets will be sold to family, employees or outsiders; and

if sold to family, determining whether a minority discount is available for assets sold at less than fair market value;

else,

if sold to employees, determining whether an earned discount is applicable for assets sold at less than fair market value due to employee service.

45. The method of claim 43 wherein if the exit strategy is identified to be the stock sale, the method further comprises:

identifying whether stock will be sold publicly, to outsiders or to employees; and

if sold to outsiders, determining whether the business may be a qualified small business corporation;

or

if sold to employees, determining whether one of an employee stock option plan and an earned discount is applicable.

46. The method of claim 43 wherein if the exit strategy is identified to be the gift, the method further comprises:

determining whether the gift will be to family or to charity; and

if gifted to family, determining whether the gift will be a long term gift or an immediate gift;

or

if gifted to charity, determining whether a charitable trust is applicable.

47. The method of claim 30 wherein assessing the taxpayer'"'"'s tolerance for risk comprises:

soliciting the taxpayer to provide answers to a risk tolerance quiz.

48. The method of claim 30 wherein assessing the taxpayer'"'"'s personal risks comprises:

identifying personal circumstances of the taxpayer that pose a potential risk to assets of the taxpayer'"'"'s business;

assigning a weight to each identified personal circumstance; and

determining an overall personal risk based on the assigned weights.

49. The method of claim 30 wherein assessing business risks to personal assets of the taxpayer comprises:

identifying business circumstances that may pose a potential risk to the taxpayer'"'"'s personal assets;

assigning a weight to each business circumstance identified; and

determining an overall business risk based on the assigned weights.

50. The method of claim 31 wherein evaluating potential business structures comprises:

processing the obtained taxpayer information using a business entity formula to determine at least one recommended business entity; and

comparing one or more business entities presently used by the taxpayer with the at least one recommended business entity.

51. The method of claim 50 wherein processing is performed by a processing device executing machine readable code.

23. A method for reducing a tax burden comprising:

collecting taxpayer information using a uniform series of questions;

developing a tax strategy using the collecting taxpayer information to determine an estimated tax;

facilitating implementation of the tax strategy;

reviewing results of the implemented tax strategy; and

determining whether to update the tax strategy based on the reviewed results.

24. A method for reducing a tax burden comprising:

collecting taxpayer information;

processing the collected information to determine a suggested tax strategy;

implementing the suggested tax strategy;

reviewing result of the implemented tax strategy for changes in at least one of taxpayer circumstances and tax laws; and

determining whether to update the tax strategy based on the reviewed results.

25. A method of developing a tax strategy for a taxpayer, the method comprising:

obtaining taxpayer information; and

characterizing the taxpayer'"'"'s income and assets using the obtained taxpayer information.

52. A computer program product for recommending one or more business entities for utilization by a taxpayer based on inputted taxpayer information, the computer program product comprising machine readable code stored on a tangible medium, wherein the machine readable code comprises code for:

considering potential tax deductions of a taxpayer'"'"'s expenses and deductible benefits that may be provided by a business owned by the taxpayer; and

determining a first tax rate for the business as a flow through entity and a second tax rate for the business as a C corporation. considering an exit strategy for exiting the business; and

.

53. The computer program product of claim 52 further comprising machine readable code for:

considering a characterization of taxpayer income and assets.

54. The computer program product of claim 52 further comprising machine readable code for:

considering an exit strategy for exiting the business.

55. The computer program product of claim 52 further comprising machine readable code for:

considering a type of funding for the business.

56. The computer program product of claim 52 further comprising machine readable code for:

considering a characterization of taxpayer income and assets;

considering an exit strategy for exiting the business; and

considering a type of funding for the business.

57. The computer program product of claim 56 further comprising machine readable code for:

processing considered information to recommend one or more business structures; and

outputting the one or more recommended business structures.

59. The computer program product of claim 58 wherein the machine readable code further comprises:

code for determining potential benefit tax deductions for benefits provided by a business owned by the taxpayer; and

code for assisting the taxpayer in determining whether earned income may be accounted to a different entity.

60. The computer program product of claim 58 wherein the machine readable code further comprises:

code for determining a marginal tax rate for a taxpayer'"'"'s business and the taxpayer; and

code for assisting the taxpayer in determining an exit strategy.

61. The computer program product of claim 58 wherein the machine readable code further comprises:

code for performing a risk analysis of at least one of a personal risk, a business risk and a tolerance for the taxpayer to risk.

62. The computer program product of claim 58 wherein the machine readable code further comprises:

code for recommending at least one business entity based on input of the taxpayer'"'"'s information.

63. The computer program product of claim 58 wherein the machine readable code further comprises:

code for identifying action items for reducing the taxpayer'"'"'s taxes.

64. The computer program product of claim 58 wherein the computer program product comprises a distributed computer program having components thereof stored in at least two different locations.

58. A computer program product for reducing a taxpayer'"'"'s taxes comprising machine readable code stored on a tangible medium, the machine readable code comprising:

code for accepting input of the taxpayer'"'"'s information;

code for determining potential tax deductions for taxpayer expenditures based on a comparison of the taxpayer expenditures with a list of ordinary and necessary expenses.

65. A system for reducing a tax burden comprising:

input means for allowing a taxpayer to input information; and

processing means for processing the taxpayer'"'"'s information to determine a suggested tax strategy.

66. The system of claim 65 wherein the processing means comprises a processing device executing machine readable code.

67. The system of claim 65 wherein the input means comprises a worksheet.

68. The system of claim 67 wherein the worksheet comprises a questionnaire represented on one or more sheets of paper.

69. The system of claim 67 wherein the worksheet comprises a questionnaire represented by pixels displayed on a display device.