Stay current on changes and developments in corporate law with a wide variety of resources and tools.
Sept. 10 — Congressional Republicans appeared sour on a bill that seeks to curb corporate inversions, released by Sens. Charles E. Schumer (D-N.Y.) and Richard J. Durbin (D-Ill.), as the likelihood for a legislative deal in September dimmed further.
Released Sept. 10, the proposal would attack corporate inversion deals, overseas mergers and acquisitions for tax purposes, by denying companies certain deductions after the deal is completed.
The Corporate Inverters Earnings Stripping Reform Act is the latest Democratic effort to curb inversions. In May, Sen. Carl Levin (D-Mich.) and Rep. Sander M. Levin (D-Mich.) introduced the Stop Corporate Inversions Act (S. 2360, H.R. 4679), which would set tougher regulatory requirements for inversion deals, making them nearly impossible.
Also Sept. 10, Treasury Secretary Jacob J. Lew and Mark Mazur, the department's assistant secretary for tax policy, met with House Ways and Means Committee Democrats to discuss the matter. But the meeting was scheduled in advance and the administration officials didn't preview possible executive actions they are contemplating if legislative efforts stall, a committee aide told Bloomberg BNA.
Schumer told Bloomberg BNA that he doesn't expect consideration of his bill until after November's midterm elections, but declined to forecast whether it would move with other legislation scheduled for the lame-duck session, such as tax extenders or the next continuing resolution.
The core of the Schumer-Durbin bill would prevent companies from practicing earnings stripping after an inversion deal is completed. Earnings stripping involves an inverted company's U.S. subsidiary owing debt to its foreign parent. The subsidiary can then deduct interest payments on the money owed.
Meanwhile, Treasury Secretary Jacob J. Lew said the Obama administration can make tax inversions less economically attractive to U.S. corporations and deter companies from changing their addresses.
Lew said a “broken” tax system is what prompts U.S. companies to reduce taxes by moving their addresses abroad. He reiterated Sept. 9 that the administration will decide on possible action in the “very near future” to limit inversions.
“If Congress doesn’t act, we have to take the steps we can, which will reduce the economic value of inversions,” he said in an interview with Bloomberg Television at the Treasury Department in Washington. “It will not take away the need for legislation. But it will take a lot of the value out of these inversions, which I hope will change the decisions companies make.”
Lew’s comments went beyond a speech earlier this month in which he said Treasury is exploring its legal authority to act without Congress. The comments were the strongest yet in which he affirmed Treasury’s authority to limit inversions, which he had played down in July.
To contact the editor responsible for this story: Cheryl Saenz at firstname.lastname@example.org
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to email@example.com.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to firstname.lastname@example.org.
Put me on standing order
Notify me when new releases are available (no standing order will be created)