Light at the End of the Tunnel: Clarification of the Tax-Inversion Rule

By Clifford Hwang

Perhaps it is due to the long hours that tax attorneys have put in at the office these past two weeks since the Treasury Department introduced new tax-inversion rules, but it finally seems that there may be clarification of these rules soon.  These tax-inversion rules, which were introduced on April 4, had threatened to curb some cross-border mergers and did curb the Pfizer-Allergan deal.  The rules will hopefully be clarified as Canada’s Mitel Networks Corp attempts to merge with the U.S.’s Polycom Inc. for $1.96 billion, which is anticipated to present significant tax savings.  Perhaps the Treasury will offer even more guidance if and when someone files suit against the administration to challenge this rule.