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
What Business Owners Get Wrong Before Meeting a Litigation Attorney
What should you expect when meeting a litigation attorney about a business dispute? You should expect to describe the dispute in your own words, hand over the most important documents, flag any deadlines or immediate threats, and leave with a clearer picture of the problem, what information is still needed, and the likely next steps. […]
Author: Michael Mietlicki
Arbitration vs. Litigation vs. Mediation: What New Jersey Businesses Should Know Before Signing a Contract
Arbitration resolves disputes privately before an arbitrator whose decision is usually final, while litigation resolves them in court with full rights of appeal. Whether a business ends up in arbitration or litigation is often decided when it signs the contract, long before any dispute arises. Key Takeaways When facing a contract dispute, carefully consider your […]
Author: Graham Staton
Can You Own Part of a New Jersey Business Without a Written Agreement?
Can you own part of a business in New Jersey without a written agreement? Yes, it is possible. Under New Jersey’s Uniform Partnership Act, a partnership can arise when two or more people carry on a business as co-owners for profit, whether or not they ever intended to form one. Ownership doesn’t necessarily depend on […]
Author: Michael Mietlicki
Crisis-Proofing Your New Jersey Business: Building a Crisis Response Plan Before You Need One
For New Jersey businesses, crisis preparedness should be viewed as a legal and operational function, not simply an emergency-management exercise. A well-designed crisis response plan can help preserve evidence, protect confidential communications, meet reporting obligations, limit unnecessary exposure, and prevent an already difficult situation from becoming a larger legal problem. Key Takeaways A serious crisis […]
Author: Sean M. Pena
Monmouth County's Next Development Wave: What Developers and Investors Need to Know
Monmouth County is entering a significant new phase of development. For those looking to acquire property or undertake a new project, understanding the market opportunity is only the beginning. The more important question is whether a particular property can actually be developed as contemplated and what approvals, agreements, and other conditions will be required to […]
Author: Donald M. Pepe
Are Your Conversations with AI Shielded from Discovery? Courts Are Split
Whether a client’s prompts to a generative AI tool and the documents it produces are protected from disclosure depends on the case type, who claims protection, and whether counsel was involved. In United States v. Heppner, a New York federal judge ruled that a criminal defendant’s communications with an AI platform were protected by neither […]
Author: Chris Seelinger
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.