Business Groups Sue Over U.S. Government Crackdown on Corporate Inversions

Two business groups have sued the Obama administration over the government’s crackdown on U.S. companies moving abroad to reduce their tax burden.  The process is known as a corporate inversion. Also called a tax inversion, a corporate inversion is the practice of a corporation relocating its legal domicile to a nation with lower taxes like Ireland, Britain and Canada, while retaining its material operations in its higher-tax country of origin. Such a process is legal, but has drawn criticism from some politicians who say U.S. companies engaged in corporate inversions are avoiding their tax obligations. Inverting U.S. companies usually leave their core U.S. operations intact domestically, but transfer their legal tax domiciles abroad to the country of the acquired company. In April, the U.S. Treasury Department unveiled a package of rules intended to discourage inversions, and were specifically aimed at transactions involving non-U.S. companies. In creating these new rules, the

Continue reading