In yesterday’s address on jobs creation President Obama mentioned patent legislation that has just passed. Among other provisions, the new law prevents the grant of future tax patents. These patents have been heavily criticized for carving out tax-saving techniques that cannot be used without paying royalties to the patent holder. Another concern has been the notion that in granting a patent, the government implicitly approves of a technique that may not hold up in court. The legislation does not prevent the patenting of technology for preparing tax returns or managing finances, but no further patents that restrict the ability of taxpayers to use tax-saving techniques, or advisors to recommend such techniques, will be granted.

The legislation applies to any patent issued on or after the date President Obama signs the law, including currently pending patent applications. It does not affect tax patents that have already been granted, however.

The IRS is gearing up to impose a testing requirement on tax return preparers who lack the professional qualifications of CPAs, attorneys and enrolled agents. Those who are anticipating the need to take this exam may be interested in the specifications released by the IRS (PDF). The document lists the areas to be tested, the weights given to each area, subject matter covered within each area, and source documents for relevant information (such as IRS publications, return instructions, and Circular 230).

For the most part this document includes pretty much what you would expect. One small surprise is the inclusion of alternative minimum tax (“AMT”). Apparently the powers that be decided you aren’t competent as a return preparer unless you know the basics of this tax. Unfortunately, the IRS has never seen fit to release a publication describing how the AMT works, so the only official reference they can offer for learning about it is Form 6251 and instructions.

Our free online guide to AMT offers an overview of how this tax works.