Corporate inversions, by which United States companies aim to reduce their tax burden by reincorporating under a foreign jurisdiction, have been viewed unfavorably by the Obama administration and others.

A recent notice by the U.S. Department of the Treasury that new regulations designed to limit that controversial practice soon will be issued may cause parties to rethink deals in process. Others are questioning the legislative authority of the Treasury Department to issue such regulations, which could lead to litigation. All of this uncertainty prompts many questions for companies considering inversions, and the continued need for legal advice.

Ballard Spahr tax partner Wayne R. Strasbaugh commented that although interest in inversions had begun to slow even before news of new regulations, the new Treasury Department notice could likely halt deals in progress while companies wait to see what is covered by the new regulations.

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Tax