Predicate Logic Tax Analysis System
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Solution Overview
Problem
Current accounting and tax software lacks the ability to efficiently apply tax and accounting principles to specific business transactions, requiring manual effort and expertise from accountants and attorneys to determine the correct accounting entries and tax consequences, and does not provide effective assistance in interpreting legal and tax authorities.
Innovation Solution
A computerized predicate logic implementation that paraphrases legal and tax authorities into logical statements, encodes them into a logic programming language, and applies semantic rules to automatically determine the correct accounting entries and tax consequences of transactions, reducing the need for manual intervention and improving efficiency.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Measurement precision
If manual accounting and tax processing is performed by accountants and attorneys, then accurate application of tax and accounting principles is achieved, but time consumption and labor effort are excessive
Solution Approach 1:
The patent replaces the manual mechanical process of accountants and attorneys reviewing contracts, memoranda, and court decisions with an automated computerized system. The system uses natural language processing to parse legal documents, applies tax and accounting rules through algorithmic logic, and generates accounting entries automatically, thereby eliminating manual labor while maintaining accuracy through systematic rule application.
Solution Approach 2:
The system enables self-service by automatically determining tax consequences and generating accounting entries without requiring manual intervention from accountants or attorneys. The computerized system independently analyzes transaction data, applies relevant tax authorities and accounting principles, and produces ready-to-record accounting entries, allowing the organization to process transactions autonomously.
2Loss of information
If current legal and tax research software is used to identify relevant authorities, then relevant tax authorities are found, but assistance in applying those authorities to specific facts and circumstances is not provided
Solution Approach 1:
The patent merges the functions of identifying relevant tax authorities with the function of applying those authorities to specific facts. The system combines natural language processing capabilities to locate applicable tax laws and regulations with logical reasoning engines that automatically apply those laws to the specific transaction at hand, producing integrated results that include both the identified authority and its application outcome.
Solution Approach 2:
The system performs multiple functions within a single integrated platform: it identifies relevant tax authorities, interprets their meaning, applies them to specific factual scenarios, and generates accounting entries. This multi-functional approach eliminates the need for separate manual steps of researching authorities and then separately applying them, providing a universal solution that handles the entire tax analysis workflow.
3Measurement precision
If multiple steps are taken to review information and determine accounting entries, then accurate understanding of transaction consequences is achieved, but process complexity and inefficiency increase
Solution Approach 1:
The patent segments the complex accounting process into distinct modular components: natural language processing of legal documents, extraction of transaction facts, identification of applicable tax authorities, logical application of rules to facts, and generation of accounting entries. Each module handles a specific aspect of the analysis, making the overall complex process manageable, maintainable, and efficient while preserving accurate understanding of transaction consequences through systematic breakdown.
Data Source
AI summary
At least one pertinent authority, in ordinary English language, is paraphrased into a series of intermediate forms. The at least one pertinent authority is at least one of a tax authority and an accounting authority. The series of intermediate forms are rendered into a corresponding series of logical statements. The series of logical statements are encoded into relations in a logic programming language.