Predicate Logic Tax System for Automated Accounting Entries

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Solution Overview

Problem

Current tax and accounting software lacks the ability to efficiently apply tax and accounting principles to specific business transactions, requiring manual effort and relying on human expertise, and fails to provide accurate and timely recording of tax consequences due to inefficiencies in processing and interpretation of legal and tax authorities.

Innovation Solution

A computerized predicate logic system translates authority documents into logical statements, indexes them for search, and uses a comparison and inference engine to apply these statements to user queries, facilitating the determination of correct tax and accounting entries and providing timely notifications and accurate interpretations.

Engineering Contradictions & Design Principles

VSEngineering Contradiction Analysis

1Productivity

If manual accounting processes are used where accountants review contracts and apply tax principles, then flexibility and judgment in complex cases are maintained, but processing time and labor costs increase significantly

Engineering Contradiction:

Improvetransaction processing speedVSAvoidtime for accountant review and analysis

Core Design Contradiction:

ProductivityVSLoss of time

Solution Approach 1:

The patent introduces a computerized system with natural language processing capabilities as an intermediary between tax authority documents and accountants. The system translates legal and tax authorities into searchable logical statements, automatically applies them to transaction facts, and generates accounting entries, thereby dramatically reducing the time accountants spend on manual review while maintaining accuracy through rule-based logic

Inventive Principle:

Principle #24Intermediary (Mediator)

Solution Approach 2:

The patent replaces the mechanical manual process of reviewing contracts and applying tax principles with an automated computerized system. The system uses natural language processing to parse authority documents, converts them into logical representations, and automatically applies these rules to transactions, substituting human cognitive labor with computational processes that operate faster and without fatigue

Inventive Principle:

Principle #28Mechanics substitution (Replace mechanical system)

2Measurement precision

If comprehensive tax authority documents are manually analyzed, then accurate tax determination is achieved, but the complexity and time required for research increases

Engineering Contradiction:

Improveaccuracy of tax consequence determinationVSAvoidcomplexity of tax research process

Core Design Contradiction:

Measurement precisionVSDevice complexity

Solution Approach 1:

The patent segments the complex task of tax research into distinct components: (1) natural language processing of authority documents, (2) conversion to logical statements, (3) indexing and storage, (4) automatic application to transaction facts, and (5) generation of accounting entries. This segmentation reduces complexity by breaking down the monolithic manual research process into manageable automated steps that can be executed systematically

Inventive Principle:

Principle #1Segmentation

Solution Approach 2:

The patent changes the parameter of information representation from natural language text to formal logical statements. By translating tax authority documents into structured logical form with defined relationships and rules, the system enables precise computational manipulation while maintaining the semantic meaning, thereby improving accuracy without increasing complexity for the user

Inventive Principle:

Principle #35Parameter changes

3Ease of operation

If current tax research software is used to identify relevant authorities, then authorities are located, but the software cannot apply them to specific transaction facts

Engineering Contradiction:

Improveability to locate applicable authoritiesVSAvoidautomatic application of tax rules to transactions

Core Design Contradiction:

Ease of operationVSExtent of automation

Solution Approach 1:

The patent creates a universal system that performs multiple functions: it locates relevant tax authorities through natural language processing, translates them into logical rules, indexes them for efficient retrieval, applies them automatically to transaction facts, and generates accounting entries. This multi-functional system eliminates the need for separate tools for authority research and application, providing end-to-end automation

Inventive Principle:

Principle #6Universality (Multi-functionality)

Data Source

PatentUS10706480B1Determining correct answers to tax and accounting issues arising from business transactions and generating accounting entries to record those transactions using a computerized predicate logic implementation

Publication Date: 2020.07.07 ORPHYS HENRY A

AI summary

Pertinent natural language authority documents are translated into corresponding statements in a system of predicate logic which statements are encoded into relations in a programming language. The authority documents are indexed into an electronic database to facilitate subsequent searching. User-entered query terms and/or query terms derived from pertinent prose are obtained, specifying at least one of a tax problem and an accounting problem; based on same, the electronic database is searched to locate applicable authority(ies). A comparison and inference engine executing on at least one hardware processor is activated to apply applicable relations in the programming language to a problem ascertainable from the query, to obtain a conclusion by applying derivation rules in the system of predicate logic. The conclusion is presented to a decision maker.