Tax Strategy Patents: Looking Back

When President Barack Obama signed the Leahy-Smith America Invents Act into law on Friday, it marked the end of a five-year process to ban the patenting of tax strategies. Take a look at the VSCPA's efforts to ban tax patents and read below for a timeline of the history of the issue.

• July 2006: VSCPA member Mary Anne McElmurray, CPA, of Brown, Edwards & Co. reads an email discussing the patenting of tax strategies. She realizes the burden such patents place on tax professionals and contacts the VSCPA.
• October 2006: The VSCPA Board of Directors writes a letter to the American Institute of CPAs (AICPA) Board of Directors Chair Leslie Murphy urging the AICPA to oppose the patenting of tax strategies.
• July 2007: Reps. Rick Boucher (D-Va.), Bob Goodlatte (R-Va.) and Steve Chabot (R-Ohio) introduce an amendment to the Patent Reform Act that would ban the future award of tax planning method patents. The bill passed in the House of Representatives, but not the Senate.
• November 2007: Sens. Max Baucus (D-Mont.) and Chuck Grassley (R-Iowa) introduce a bill to amend the U.S. Code to ban tax strategy patents. The bill does not make it out of the Senate Committee on the Judiciary.
• March 2008: VSCPA sends a letter urging Boucher and Goodlatte to continue advocating for a ban on tax patents.
• March 2008: Boucher discusses tax patents in an article in the March-April 2008 issue of Disclosures.
• April 2008: The VSCPA communicates with Virginia Sens. John Warner and Jim Webb, encouraging them to cosponsor legislation banning tax patents.
• March 2009: Several Senators introduce the Stop Tax Haven Abuse Act, which would ban tax patents. The bill does not make it out of the Senate Committee on Finance.
• April 2009: A potential ban on tax strategy patents is a top issue discussed with the entire Virginia Congressional delegation when VSCPA members and staff go to Capitol Hill during the AICPA Council meeting.
• May 2009: Boucher, Goodlatte and Reps. Walter Jones Jr. (R-N.C.), Brad Sherman (D-Calif.) and John Spratt Jr. (D-S.C.) introduce another bill to ban tax strategy patents. The bill does not make it out of the House Committee on the Judiciary.
• October 2009: The VSCPA writes to Virginia Reps. Randy Forbes and Robert Scott about the issue.
• September 2010: The VSCPA joins with the Michigan Association of CPAs and the Texas Society of CPAs to send a letter a to the ranking members of the House Judiciary and Ways & Means committees, as well as Boucher and Goodlatte, urging continued movement on the banning of tax strategy patents.
• January 2011: Sens. Patrick Leahy (D-Vt.) and Lamar Smith (R-Texas), among others, introduce the Leahy-Smith America Invents Act, previously known as the Patent Reform Act of 2011.
• February 2011: The VSCPA writes to lawmakers, asking for them to solve the tax patent problem once and for all.
• March 2011: The Senate passes the America Invents Act by a vote of 95–5.
• March 2011: VSCPA members Kevin Humphries, CPA, Tom Rosengarth, CPA, and VSCPA Government Affairs Director Emily Walker meet with Goodlatte in his Staunton office to ask him to continue championing this issue in the House.
• May 2011: Tax strategy patents is a top issue discussed with the entire Virginia Congressional delegation when VSCPA members and staff go to Capitol Hill during the AICPA Council meeting.
• June 2011: The VSCPA urges Virginia Representatives to pass the House version of the America Invents Act.
• June 2011: The House passes its version of the America Invents Act by a vote of 304–117, sending it to conference.
• September 2011: The VSCPA asks the Senate to follow the House’s lead.
• September 2011: The Senate passes the House version of the America Invents Act by a vote of 89–9.
• Sept. 16, 2011: President Barack Obama signs the America Invents Act into law.

Read more about the tax patent saga, or click here to hear what McElmurray has to say about the topic.