On April 14, the House Judiciary Committee approved by a vote of 32-3 H.R. 1249, the “America Invents Act,” a comprehensive patent reform act that would, among other things, prevent individuals or firms from being able to receive patents on tax strategies. The proposed language states that “any strategy for reducing, avoiding, or deferring tax liability, whether known or unknown at the time of the invention or application for patent, shall be deemed insufficient to differentiate a claimed invention from the prior art.”
H.R. 1249 is largely similar to S.23, also titled the “America Invents Act,” which was approved by the Senate on March 8 by a vote of 95-5.
Both bills provide an exclusion for methods or software used solely to prepare a return or other tax filing, or to transmit or organize related information. However, H.R. 1249 also contains an exclusion for methods or software that are used solely for financial management, to the extent that such is severable from any tax strategy or contains no limits on the taxpayer's (or tax advisor's) use of any tax strategy.