IRS Finalizes Anti-Inversion Regs With Strict Bright Line

Law360, New York (June 3, 2015, 3:24 PM ET) — Final rules released Wednesday by the Internal Revenue Service meant to deter corporate inversions retain a strict bright-line rule that subjects an inverted company to sanctions if it does not have a substantial business presence in a foreign country, despite objections.

Under tax code Section 7874, if a company inverts, it is subject to adverse U.S. tax consequences if the former stockholders of the domestic company retain at least 60 percent ownership in the foreign company and the new company does not have substantial business activities…