After Reed Urges Action, Treasury Department Moves to Limit Corporate Tax Dodging Known as "Inversions'

Press Release

U.S. Senator Jack Reed today applauded a series of actions announced by the U.S. Treasury Department aimed at curbing a practice known as "inversion," in which U.S. companies move their headquarters overseas, but only on paper, in order to avoid paying U.S. taxes. Through legislation and direct appeals to the Treasury Department, Reed has been working to close the inversion loophole to protect American taxpayers and businesses that pay their fair share of taxes.

The U.S. Treasury Department on Thursday announced the new rules designed to make it more difficult for U.S. corporations to cut their tax bills by reincorporating overseas. The new restrictions strengthen existing rules imposed in September 2014 that were already on the books, but have continued to be exploited.

"This is an issue of simple economic fairness, and I applaud the Treasury Department for taking action to address this practice of corporate greed and tax evasion known as inversion. This corporate shell game allows some companies to shift their address abroad for tax purposes while remaining in the United States, benefitting from our workforce, research and innovation infrastructure, and education system, but shifting their tax burden to the American taxpayers. Middle-class families and small Main Street businesses don't have that option when tax season comes around. Ending inversions will help protect American taxpayers and American jobs," said Senator Reed. "These steps by Treasury are a significant step in the right direction, but the best long-term solution is legislation that ends this practice once and for all."

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