IRS Releases Notice Expanding Anti-Inversion Rules and Limiting Certain Tax Benefits in Corporate Inversion Transactions
On September 22, 2014, the Treasury Department and the Internal Revenue Service announced that they intend to issue regulations under several Sections of the Internal Revenue Code of 1986, as amended, including Section 7874 (often referred to as the “anti-inversion” rule), that generally (i) expand when outbound acquisitions of a domestic company by a foreign company are subject to the anti-inversion rule, and (ii) limit certain tax benefits previously available to domestic companies following such acquisitions. The announcement was made in response to the recent surge in such acquisitions, which the Treasury Department maintains are tax-motivated. The Treasury Department intends that the forthcoming regulations will generally be applicable to transactions completed on or after September 22, 2014.