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Chamber of Commerce Sues Treasury on Inversion Regs

Chamber of Commerce Sues Treasury on Inversion Regs

See e.g., Business groups sue over new U.S. limit on tax-driven foreign buyouts, Reuters (Aug. 4, 2016); Liz Moyer & Leslie Picker, Tax-Avoiding Mergers Find Champion in U.S. Chamber of Commerce, N.Y. Times (Aug. 4, 2006); Alison Bennet, Businesses Launch First Suit Against Inversion Rule, Bloomberg BNA (Aug. 4, 2016); U.S. Chamber Sues So American Firms Can Move Overseas and Dodge Taxes, (linking to Washington Post article).  The  U.S. Chamber of Commerce and the Texas Association of Business have initiated a suit against the Treasury Department over the new regulations .  The complaint, filed on August 4, 2016, is available on BNA at the following link: Chamber of Commerce of the U.S. v. IRS, W.D. Tex., No. 1:16-cv-00944.

The business groups claim that the regulations are making business harder for big companies to carry out transactions, referencing the proposed merger between U.S. drugmaker Pfizer and Ireland pharmaceutical company Allergan (both members of the Chamber of Commerce).  That merger, projected to save the U.S. company about $35 billion in taxes, fell apart immediately after the new regs were released. See Michael Merced and Leslie Picker, Pfizer and Allergan Are Said to End Merger as Tax Rules Tighten, NY Times (Apr. 5, 2016).  the lawsuit claims that Treasury did not have authority to issue the regulations and that there was insufficient notice to taxpayers under the Administrative Procedure Act.

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