Patents on Tax Planning Methods May Be Denied

James V. Roberts (Attorney at Law, Glast, Phillips & Murray P.C.) has recently published his article entitled Update on Patenting Tax Advice, RPPT eREPORT (2007).

Here is an abstract of his article:

The idea of issuing patents in the area of tax planning has stirred significant controversy and has been reported on before in eReport. As previously noted, the expansion of patents in this area has worried many practitioners for a variety of reasons, most notably the possibility that a strategy conceived for a private client later exposed (typically through a dispute process with the IRS) may be the same as or substantially similar to an existing patent, triggering an infringement claim. And from that claim, discovery could reach into the practitioner’s other files, and, if part of a firm, into the files of other practitioners in the firm.

In January of this year, the State Bar of Texas Board of Directors approved a request by that bar’s Tax Section to submit to the Internal Revenue Service a response to its request for comment on this area, and, in that response, offering specific legislation to prohibit enforcement of tax strategy patents. The model for the proposed legislation is the language added in 1997 to prevent patents on surgical procedures from being enforced against doctors and hospitals.