Treasury weighing actions to stem tax avoidance

WASHINGTON Tue Aug 5, 2014 5:23pm EDT

U.S. Treasury Secretary Jack Lew testifies before a Senate Banking, Housing and Urban Affairs Committee hearing on the Financial Stability Oversight Council's annual report, on Capitol Hill in Washington June 25, 2014.   REUTERS/Jonathan Ernst

U.S. Treasury Secretary Jack Lew testifies before a Senate Banking, Housing and Urban Affairs Committee hearing on the Financial Stability Oversight Council's annual report, on Capitol Hill in Washington June 25, 2014.

Credit: Reuters/Jonathan Ernst

WASHINGTON (Reuters) - The Obama administration said on Tuesday it is considering administrative actions to discourage U.S. companies from moving to other countries to reduce their tax bills, given the failure of Congress to address the issue.

The administration has been urging lawmakers to stem a wave of corporate deals known as inversions, in which a U.S. company shifts its tax home base to a lower-tax country by combining with a company based in that country. Popular destinations are Ireland and the Netherlands.

While some Democratic lawmakers are clamoring for anti-inversion legislation, Republicans have set a higher hurdle by saying the issue should only be addressed through comprehensive tax reform.

The Treasury Department said legislation was the only way to fully address the matter but that it was studying the possibilities of a partial fix.

"Treasury is reviewing a broad range of authorities for possible administrative actions that could limit the ability of companies to engage in inversions, as well as approaches that could meaningfully reduce the tax benefits after inversions take place," a Treasury representative said in an email.

The representative added that there were limits to what Treasury can do without action by Congress and that "legislation is the only way to fully address inversions."

U.S. Treasury Secretary Jack Lew has publicly questioned the patriotism of companies that engage in tax inversion deals.

"We are looking at a very long list of possible ways to address the issue,” he said in an interview with the New York Times on Tuesday.

Earlier in the day, UK-based Sky News cited sources saying that U.S. retailer Walgreen Co was backing away from a plan to reincorporate abroad to reduce its U.S. taxes even as it planned to buy the 55 percent it does not already own of European drugstore chain Alliance Boots.

(Reporting by Jason Lange; Editing by Steve Orlofsky)

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Comments (9)
Randy549 wrote:
Perhaps Congress feels that no action is necessary.

Aug 05, 2014 4:58pm EDT  --  Report as abuse
cgallaway wrote:
Well, some things Obama’s administration and the Treasury can do….follow existing U.S. Law detailing companies that hide their money overseas to avoid taxes (by using the IRS and Justice Departments). Though, that won’t keep companies from moving overseas. So about that…Only U.S. Companies can get federal contracts for work in the United States.

Aug 05, 2014 6:08pm EDT  --  Report as abuse
9825 wrote:
These liberal democrats are hypocrites and Obama is one of the biggest. back taxes owed by his administration while he chases after companies that are following the law.

http://www.westernjournalism.com/tax-cheating-obama-staffers-owe-how-much-in-back-taxes/

Throw all these liberal hypocrites out of office every chance you get.

Aug 05, 2014 7:02pm EDT  --  Report as abuse
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