Tax Patents and the Law of Unintended Consquences

Posted on May 24, 2009 by Richard Gearhart

 

Jim Singer in his IP Spotlight Blog ipspotlight.com/2009/05/23/new-federal-bill-seeks-to-ban-tax-planning-strategy-patents/  points out:

On May 21, 2009, Representatives Rick Boucher (D-Va) and Bob Goodlatte (R-Va) introduced introduced a bill that would ban patents that cover tax planning strategies.  The bill would amend Section 101 of the Patent Act to provide that a ”tax planning method” is not patent-eligible subject matter.   Under the bill, a prohibited “tax planning method” is:

a plan, strategy, technique, or scheme that is designed to reduce, minimize, or defer, or has, when implemented, the effect of reducing, minimizing, or deferring, a taxpayer’s tax liability, but does not include the use of tax preparation software or other tools used solely to perform model mathematical calculations or prepare tax or information returns.

Similar bills were introduced into the House and Senate 2007 and 2008, but the prior bills never got very far. 

Interesting question where this will go.  With all eyes on patent reform, this seems to fit right in. 
On the other hand, does allowing monopolies on tax strategies  reduce the availability of those strategies generally? (assuming only one firm can practice them).  And if that is the case, then doesn't having a tax patent increase tax revenue for the Federal Gov, since fewer tax practioners can use the strategy?  I thought the Federal Govenment was looking for ways to increase, not decrease revenue.   Is this the law (pardon the pun) of unintended consequences?
 

 

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