In an effort to crack down on companies relocating outside the US for tax benefits, the US Department of the Treasury and the Internal Revenue Service issued its first steps on a targeted approach to reduce the tax benefits—and when possible, stop—corporate tax inversions.
The department said this strategy of inversion has recently increased. According to the department, this technique is described as when a US-based multinational company restructures so that the US parent company is replaced by a foreign corporation to avoid US taxes.