Private Data Compliance Scoring With Custom Reviewer Parameters

Solution Overview

Problem

Existing enterprise resource planning (ERP) and accounting applications fail to provide accurate tax information, particularly in complex transactions spanning multiple tax jurisdictions, leading to potential over- or under-estimation of taxes owed and an inability to model the impact of geographical changes on a business's tax obligations.

Innovation Solution

A computer-implemented method and system that generates compliance scores by allowing a third party to access first party data through a second party system, applying computational rules to determine compliance with tax requirements, using a scoring engine to calculate scores based on first party data, and outputting the results to the first and third parties.

Engineering Contradictions & Design Principles

VSEngineering Contradiction Analysis

1Measurement precision

If conventional ERP and accounting applications are used to manage tax information, then basic accounting functions are maintained, but accurate tax determination across multiple jurisdictions cannot be achieved

Engineering Contradiction:

Improvetax compliance accuracyVSAvoidmulti-jurisdiction tax rule adaptation

Core Design Contradiction:

Measurement precisionVSAdaptability or versatility

Solution Approach 1:

The patent introduces a specialized tax compliance platform as an intermediary between conventional ERP systems and tax jurisdictions. This platform connects to the ERP system via API to retrieve transaction data, then applies specialized tax determination logic and rules from multiple jurisdictions to calculate accurate tax liabilities. The platform acts as a mediator that bridges the gap between general-purpose accounting software and complex, jurisdiction-specific tax requirements.

Inventive Principle:

Principle #24Intermediary (Mediator)

Solution Approach 2:

The patent segments the tax compliance function from the general ERP system into a separate, specialized module. This segmentation allows the tax compliance platform to independently handle complex multi-jurisdictional tax rules while the ERP system continues to manage core accounting operations. The separation enables specialized tax logic to be applied without disrupting the overall ERP system architecture.

Inventive Principle:

Principle #1Segmentation

2Reliability

If comprehensive tax rules from multiple jurisdictions are applied, then accurate tax determination is achieved, but system complexity increases

Engineering Contradiction:

Improvetax reporting accuracyVSAvoidcomputational rules complexity

Core Design Contradiction:

ReliabilityVSDevice complexity

Solution Approach 1:

The patent introduces a specialized tax compliance platform as an intermediary between conventional ERP systems and tax jurisdictions. This platform connects to the ERP system via API to retrieve transaction data, then applies specialized tax determination logic and rules from multiple jurisdictions to calculate accurate tax liabilities. The platform acts as a mediator that bridges the gap between general-purpose accounting software and complex, jurisdiction-specific tax requirements.

Inventive Principle:

Principle #24Intermediary (Mediator)

Solution Approach 2:

The patent implements preliminary action by pre-configuring tax rules, rates, and thresholds for multiple jurisdictions within the compliance platform before actual tax calculations are needed. The system maintains updated tax tables and rules that are automatically applied when transactions occur, eliminating the need for complex real-time calculations and reducing computational complexity during tax determination.

Inventive Principle:

Principle #10Preliminary action

3Loss of information

If third parties need to access first party data for compliance review, then compliance assessment is enabled, but data privacy and security risks increase

Engineering Contradiction:

Improvecompliance information accessibilityVSAvoiddata privacy risk

Core Design Contradiction:

Loss of informationVSObject-affected harmful factors

Solution Approach 1:

The patent introduces a compliance review mechanism where a third-party compliance reviewer can access and verify tax compliance data through the compliance platform. The platform acts as an intermediary that allows the third party to review compliance scores and tax determination accuracy without requiring direct access to the first party's sensitive transaction data or proprietary information. This maintains data privacy while enabling independent compliance verification.

Inventive Principle:

Principle #24Intermediary (Mediator)

Data Source

PatentUS12450668B2Enabling reviewer to assess private data set of other party using custom parameter values

Publication Date: 2025.10.21 AVALARA INC

AI summary

Embodiments of the invention relate to generating compliance scores based on first party data on a second party system for viewing by a third party.