On Tuesday, May 20th the Democrats in the House and Senate introduced legislation to tighten the restrictions on corporate tax inversions, limiting the ability of U.S.-based companies to avoid U.S. taxes by combining with a smaller foreign business and moving their tax domicile overseas. As a background, there have been dozens of corporate inversions in the last decade alone, costing the U.S. tax base billions of dollars, according to the bill’s proponents. The Treasury Department estimates that the President’s FY 2015 budget proposal set forth this past March on inversions would raise $17 billion in revenue over the next decade.

Under current law, a corporate inversion is not recognized for U.S. tax purposes if 80% or more of the new combined corporation incorporated offshore is owned by historic Read More