New Regulations Issued to Expand the Reach of Anti-Inversion Rules

Code Section 7874 seeks to remove the U.S. tax benefits that can apply by inserting a non-U.S. holding company into the ownership structure of businesses formerly conducted through a U.S. holding company. This is a big political issue as several large U.S. multinationals have shifted into a foreign holding company structure in ways that have skirted these rules. Many in the U.S. want to stop such corporate expatriations, and thus the IRS is beefing up the reach of Section 7874 to disincentivize such transfers.

Taxpayers have attempted to work around the technical rules of Section 7874…

T.D. 9761, 04/04/2016

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