Tax Strategy Patent Legislation in Prior Congressional Sessions

110th Congress

H.R. 2584 - Boucher-Goodlatte 2009 Bill to Prohibit Tax Strategy Patents

On May 21, 2009, Rep. Rick Boucher (D-VA) introduced HR 2584, a bill to prohibit tax strategy patents. It is identical to Section 10 of HR 1908, the Patent Reform Act of 2007 that passed the House in the last Congress, and similar to S. 2369, which Senators Baucus and Grassley introduced in the 110 th Congress. There were 4 original cosponsors to the bill – Reps. Bob Goodlatte, Brad Sherman, John Spratt, Jr., and Walter Jones, Jr.

• Bill Text - HR 2584
• AICPA Press Release on HR 2584
• Boucher Press Release on HR 2584
• Boucher Dear Colleague Letter - May 20, 2009

S. 506 and H.R. 1265 - Section 303

Section 303 of The Stop Tax Haven Abuse Act (S. 506, introduced by Senators Levin, McCaskill, Nelson, Shaheen, and Whitehouse, and H.R. 1265, introduced by Rep. Doggett) would stop tax shelter patents by prohibiting the U.S. Patent and Trademark Office from issuing patents for "inventions designed to minimize, avoid, defer, or otherwise affect liability for Federal, State, local, or foreign tax."   For more info, see www.Levin.senate.gov.

• S 506 and H.R. 1265 - Bill Text
• Statement by Senator Levin – Intent of Section 303 of the bill on tax strategy patents
• Press release on bill sections

110th Congress

S. 2369 - Senate Introduces Bill Banning Tax Strategy Patents

On November 15, 2007, Senate Finance Committee leaders, Chairman Senator Max Baucus of Montana and ranking-minority member Senator Chuck Grassley of Iowa, introduced S. 2369, a bill that would prohibit patents on tax planning inventions. The AICPA is urging the Senate to pass the bill, which is similar to the ban in the broad patent reform bill (H.R. 1908), which passed the House in September of this year.   Both bills would still allow patents to be granted for tax preparation software products. The bill has as c o-sponsors:   Democratic Senator Carl Levin of Michigan, Senator Ron Wyden of Oregon, Senator Barack Obama of Illinois, and Senator Jeff Bingaman of New Mexico.  We thank them for their leadership and support. Currently, at least 60 tax strategy patents have already been granted and 101 more are pending.

• S. 2369 text as introduced
• Key Senators Urge Passage of S. 2369  
• Comparison of S. 2369 text with H.R. 1908
• Senate technical explanation
• Grassley-Baucus press release 
• Levin announcement of support 
• AICPA November 19, 2007, press release

H.R. 1908 - House Passes Tax Strategy Patent Amendment to Patent Reform Act of 2007

On September 7, 2007, the House passed the Patent Reform Act of 2007 (H.R. 1908), including the AICPA-supported provision prohibiting tax strategy patents. The bill will go to conference once the Senate finalizes its patent reform bill (which does not yet contain a tax strategy patent provision). This amendment would make any tax planning methods, whether federal, state, local or any other government levy, unpatentable effective upon enactment of the bill. Tax preparation software and other tools used solely to perform or model mathematical calculations or prepare tax or information returns would not be affected. 

• Full text of H.R. 1908
• Text of Section 10 on tax strategy patents - statute and House report language
• Full House Report on H.R. 1908
• Revenue Estimate for H.R. 1908
• Rangel-McCreary Dear Colleague letter
• Administration Statement on H.R. 1908
• AICPA Press Release on House Passing H.R. 1908 - September 7, 2007

S. 861, Section 303

Section 303 of The Stop Tax Haven Abuse Act (S. 681, introduced by Senators Levin, Coleman, and Obama and H.R. 2136, introduced by Rep. Doggett) would stop tax shelter patents by prohibiting the U.S. Patent and Trademark Office from issuing patents for "inventions designed to minimize, avoid, defer, or otherwise affect liability for Federal, State, local, or foreign tax." 

• Full Text of The Stop Tax Haven Abuse Act (S. 681) [Word version]
• Full Text of The Stop Tax Haven Abuse Act (S. 681) [PDF version]
• Text of S. 681, Section 303
• Summary of S. 681
• Introductory remarks on S. 681 by Senator Levin
• Introductory remarks on S. 681 by Senator Obama
• Full text of H.R. 2136
• Text of H.R. 2136, Section 303

Tax Strategy Patent Immunity Legislation

Rep. Boucher Introduced Tax Strategy Patent Bill Sought by AICPA

Senior members of the House Judiciary Committee have introduced HR 2365, legislation sought by the AICPA to limit damages and other remedies with respect to patents for tax planning methods.

• H.R. 2365 Dear Colleague Letter from Reps. Boucher and Goodlatte - May 23, 2007
• H.R. 2365, as introduced May, 17, 2007

Other Legislation and Related Items

• White House Weighs in On Tax Strategy Patents 
  On September 6, 2007, the Administration issued a policy statement acknowledging its understanding of the concerns surrounding patent protection for tax planning methods and indicating that it will work with Congress to address these concerns.

• Rep. Boucher Introduces Tax Strategy Patent Bill Sought by AICPA 
  Senior members of the House Judiciary Committee have introduced H.R. 2365, legislation sought by the AICPA to limit damages and other remedies with respect to patents for tax planning methods.

• Congressional Research Service Report on Tax Strategy Patents 
  The CRS Report summarizes the debate on tax strategy patents and describes current, pending legislative attempts to address this issue.

• Senate Finance Committee Hearings 
  Read transcript from 2004 hearings on tax gap with commissioner of Patents, US Commerce Department testifying.

• July 13, 2006 Hearing of the House Ways and Means Committee Oversight Subcommittee on Issues Relating to the Patenting of Tax Advice - Notice of Hearing Advisory and Associated Reports and Testimony:

  • Joint Committee on Taxation Report - Background and Issues Relating to the Patenting of Tax Advice -JCX-31-06
  • IRS Commissioner Everson Testimony
  • Commerce Department Patent and Trademark Office General Counsel James Toupin Testimony
  • Dennis Belcher - ACTEC Testimony
  • Ellen Aprill - Loyola Law School Professor Testimony
  • American Intellectual Property Law Association Statement for the Record

From the House Ways and Means Oversight Subcommittee Hearing on Issues Relating to the Patenting of Tax Advice, July 13, 2006.   

Note:  See Current 112th Congress Legislation regarding Tax Strategy Patents.