The Taxman Gets Tough on Inversions

The U.S. Treasury Department has thrown down the gauntlet in its campaign against corporate inversions.

For years, calls have been mounting for the agency to enact roadblocks to keep U.S. corporations from using acquisitions to move their legal addresses abroad for tax benefits. Previous attempts at a crackdown weren't tough enough to stop companies' steady march out of the country, and the thinking was that Treasury officials didn't have the power to go much further on their own.

Well, they apparently decided enough is enough. The new regulations put forth late Monday are the toughest yet, and much more aggressive than anticipated. And while the legal authority of the Treasury here is somewhat murky -- it's not clear whether the proposed regulations are enforceable without official backing from Congress -- merely going this far may produce a chilling effect on future and pending inversions. These include drug giant Pfizer's $160 billion merger with Dublin-based drugmaker Allergan, the biggest inversion to date.