Scarinci Hollenbeck, LLC
The Firm
201-896-4100 info@sh-law.comFirm Insights
IRS Chief: U.S. Can't End Corporate inversions
Author: Scarinci Hollenbeck, LLC
Date: May 12, 2014
Key Contacts
Back
In the wake of a spate of corporate inversions over the last two years, regulators are considering ways to curb the use of this tax strategy, under which corporations move overseas to enjoy lower income tax rates. On April 30, a U.S. Treasury official told Reuters that the Obama administration is focused on ways to curb tax-motivated inversions.
“Cracking down on companies that reincorporate overseas to reduce their U.S. taxes is a priority for the administration,” the official told the news source in an emailed statement. “Inversion transactions illustrate the need for comprehensive business tax reform that would lower corporate tax rates and limit the ability of multinationals to shift income outside the U.S.”
This focus comes on the heels of two companies’ announcements that they were pursuing inversions with overseas rivals, including Pfizer and Omnicom Group Inc., the largest U.S. advertising company, Reuters explained. The IRS issued a notice April 25 limiting shareholders’ tax free treatment in these deals.
Despite this focus, IRS commissioner John Koskinen announced April 30 that the government probably can’t take regulatory action to stop companies from undergoing inversions, according to Bloomberg.
“We’ve done, I think, probably all we can within the statute,” Koskinen, 74, told reporters in Washington, the news source reported. “We try to make sure people are within the bounds, but if they’re within the bounds, if they play according to the rules, then they have a right to do that.”
Koskinen’s announcement demonstrates the limits of the Obama administration’s ability to effect tax reform without Congress, which remains deadlocked on tax issues, Bloomberg explained. In response to the recent string of inversions, U.S. lawmakers have spoken about the importance of making broad changes to the tax code, but these are likely to be months or years away from reality.
- Practices: Tax and Trusts & Estates, Corporate Transactions & Business, International Law & Trade
- Locations: Red Bank, NJ, New York City, Little Falls, NJ
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Related Posts
See all
SPACs Are Back, What You Need to Know
Special purpose acquisition companies (better known as SPACs) appear to be making a comeback. SPAC offerings for 2025 have already nearly surpassed last year’s totals, with additional transactions in the pipeline. SPACs last experienced a boom between 2020–2021, with approximately 600 U.S. companies raising a record $163 billion in 2021. Notable companies that went public […]
Author: Dan Brecher
Short Form Merger: Streamlining the Process for Businesses
Merging two companies is a complex legal and business transaction. A short form merger, in which an acquiring company merges with a subsidiary corporation, offers a more streamlined process that involves important corporate governance considerations. A short form merger, in which an acquiring company merges with a subsidiary corporation, offers a more streamlined process. However, […]
Author: Dan Brecher
Tariff Response Options for Small Businesses Facing Financial Distress
The Trump Administration’s new tariffs are having an oversized impact on small businesses, which already tend to operate on razor thin margins. Many businesses have been forced to raise prices, find new suppliers, lay off staff, and delay growth plans. For businesses facing even more dire financial circumstances, there are additional tariff response options, including […]
Author: Brian D. Spector
Common Causes of Partnership Disputes and How to Resolve Them
Business partnerships, much like marriages, function exceptionally well when partners are aligned but can become challenging when disagreements arise. Partnership disputes often stem from conflicts over business strategy, financial management, and unclear role definitions among partners. Understanding Business Partnership Conflicts Partnership conflicts place significant stress on businesses, making proactive measures essential. Partnerships should establish detailed […]
Author: Christopher D. Warren
Businesses Are Facing Financial Headwinds—A Practical Guide
*** The original article was featured on Bloomberg Tax, April 28, 2025 — As a tax attorney who spends much of my time helping people and companies who have large, unresolved issues with the IRS or one or more state tax departments, it often occurs to me that the best service that I can provide […]
Author: Scott H. Novak
President Trump's Termination of Member Gwynne Wilcox
On January 28, 2025, the Trump Administration terminated Gwynne Wilcox from her position as a Member of the National Labor Relations Board (NLRB or the Board). Gwynne Wilcox, a union side lawyer for Levy Ratner, was confirmed to the Board for an original term in 2021 and confirmed again for a successive five-year term expiring […]
Author: Matthew F. Mimnaugh
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Sign up to get the latest from our attorneys!
Explore What Matters Most to You.
Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.
Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.