Treasury Secretary Jacob J. Lew's crackdown on inversions will get an immediate test as eight U.S. companies with pending deals decide whether to proceed -- and other companies contemplating a foreign address now have to think twice.
That's exactly what Lew had in mind."
This action will significantly diminish the ability of inverted companies to escape U.S. taxation," Lew told reporters on a conference call yesterday. "For some companies considering deals, today's action will mean that inversions no longer make economic sense."
The Treasury announcement heightened the tension between the government and companies considering obtaining a foreign address to lower their tax bills. Lew and President Barack Obama made clear that they were prepared to use rule-making authority to try stop some deals, even at the risk of a backlash from the companies and from Republicans, who already complained that Lew's moves went too far.
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