WASHINGTON 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)