Configurable Tax Determination System Using Knowledge Base
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Solution Overview
Problem
Existing computer-based systems for managing tax compliance are costly and inefficient due to the need for extensive programming for each jurisdiction, with frequent changes in tax rules requiring significant programmer time and resources, and lack scalability as they are typically custom-built for specific jurisdictions.
Innovation Solution
A system with a tax knowledge base and rule base that allows for configurable tax determination, using a tax services request manager, geography model, and trading community model to automatically determine jurisdictions and apply tax rules, reducing the need for extensive programming and enabling easy updates by loading new data and rules independently of the system.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Measurement precision
If computer-based systems are custom-built for each jurisdiction, then tax determination accuracy is improved, but system complexity and development cost increase significantly
Solution Approach 1:
The patent creates a universal tax determination system that can handle multiple jurisdictions through a common architecture. The system uses a centralized knowledge base and rule base that can be configured for different jurisdictions without requiring custom development for each one, allowing the same system to serve multiple purposes across different geographic regions and tax regimes.
Solution Approach 2:
The system segments tax determination into modular components: a knowledge base for jurisdiction-specific data, a rule base for tax logic, and a determination engine. This segmentation allows each component to be independently configured and maintained, reducing overall system complexity while maintaining accuracy for multiple jurisdictions.
2Reliability
If custom programming is done for each jurisdiction, then tax compliance reliability is improved, but programmer time and development cost increase
Solution Approach 1:
The system performs preliminary configuration by pre-building the knowledge base and rule base with jurisdiction-specific tax information and logic. Once configured, the system can reliably determine taxes for that jurisdiction without requiring additional programming time for each new tax determination task, as the foundational work has already been completed.
Solution Approach 2:
The patent enables copying and reusing of tax determination logic and data across jurisdictions. Once a jurisdiction's tax rules are encoded in the knowledge base and rule base, this configuration can be replicated or adapted for similar jurisdictions, eliminating the need to rewrite code for each new jurisdiction and reducing programmer time significantly.
3Measurement precision
If the system is custom-built for specific jurisdictions, then tax determination accuracy is improved, but adaptability to new jurisdictions decreases
Solution Approach 1:
The system is designed to be dynamic and adaptable rather than static. The knowledge base and rule base can be easily updated and reconfigured to accommodate new jurisdictions or changing tax rules. This dynamic architecture allows the system to adapt to new requirements without requiring fundamental redesign, maintaining accuracy while improving versatility.
4Measurement precision
If extensive programming is done for each jurisdiction, then tax rule coverage is improved, but ease of maintenance and updates deteriorates
Solution Approach 1:
The patent extracts jurisdiction-specific tax rules and data from the core system logic into separate, external knowledge base and rule base components. This extraction allows tax rules to be maintained and updated independently of the system code itself, improving ease of maintenance while ensuring comprehensive tax rule coverage through the structured knowledge base.
Data Source
AI summary
One embodiment of the present invention provides a system for determining taxes that is configurable for local jurisdictions. The system includes a tax knowledge base that provides the facility to store data pertaining to taxes in local jurisdictions, and a tax rule base that provides the facility to store rules for applying taxes in local jurisdictions. The system also includes a tax determination manager that determines the tax for a transaction using the tax knowledge base and, optionally, the tax rule base.