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More Bad News at Tax Time?

The Internal Revenue Service has proposed new rules that would pull within its orbit any software patent that affects taxes, likely choking innovation

While I have previously defended software patents on this very site, I come now to bury them. It's not because I've changed my mind. It's that the latest nemesis is so imposing, many would give up the fight before it starts.

The most feared meddler of all, the Internal Revenue Service, recently proposed new rules to regulate software patents. These proposed regulations attempt to deal with an alleged growing social ill—dreaded "tax patents" for financial tools and strategies based on IRS rules. But in the subtle way that only the IRS can manage, the agency is taking the elephant gun to the ant hill. The proposed rules purport to pull within the IRS's jurisdiction any licensed patent that "affects" taxes, except for programs like TurboTax. (Apparently, Intuit (INTU) has very good lobbyists. Kudos!)