Harvard Law School professor emeritus Bernard Wolfman, a leading tax law expert, has written a strong critique of an emerging trend: the patenting of specific tax strategies.
In the article, originally a lecture at the University of Chicago and recently published in TAXES magazine, Wolfman challenges the concept of government protection of legal plans designed to minimize taxes.
“The freedom [for tax attorneys] to advise [their clients] is not a privilege available only to the first person who arrives in the Patent Office with an idea,” writes Wolfman. He adds that it is “absurd that anyone should be able to obtain a legal monopoly on an interpretation of the law.”
Wolfman was unable to persuade the US Patent and Trademark Office to stop issuing the tax strategy patents, so he is backing congressional legislation to address the issue. Due in part to the influence of his article, the Patent Reform Act of 2007 now includes language prohibiting the issuance of patents for tax strategies. This bill has passed the House, and is awaiting consideration in the Senate.
The White House has weighed in on the bill in a way that Wolfman reads as “favorably inclined” to support it.
Wolfman notes that the one legal challenge to to the practice of issuing tax strategy patents, Wealth Transfer Group v. Rowe, was settled out of court, which means that there are no applicable judicial rulings on the subject.
Wolfman is the Fessenden Professor of Law, Emeritus. He first came to HLS in 1964 as a visiting professor of law and returned as a tenured faculty member in 1976. He is the author of several tax law casebooks, including “Ethical Problems in Federal Tax Practice” and “Federal Income Taxation of Corporate Enterprise,” both of which have current editions that were published this year. He earned his A.B. and J.D. from the University of Pennsylvania in 1946 and 1948, respectively.