On October 8, 2014, Penn State Law's Center for the Study of Mergers and Acquisitions hosted a free, public interest webinar on tax inversions and the U.S. Treasury and IRS notice outlining administrative actions on inversions. Two government officials who were involved in the drafting of the inversion notice participated in what was one of the first, if not the first, formal discussion on inversions.

Watch the Webinar

Brian Davis' Slides
Sam Thompson's Slides
A Guide to the Treasury Notice on Inversions, prepared by Sam Thompson

The webinar consists of a panel discussion featuring:

• Brenda Zent, taxation specialist, Office of the International Tax Counsel, U.S. Department of the Treasury
• Daniel M. McCall, special counsel, IRS Chief Counsel (International) 
• Brian Davis, tax partner in the Washington, D.C., office of Ivins, Phillips & Barker and an expert on international tax and inversions
• Samuel C. Thompson, Jr., (moderator) professor of law and director of the Center for the Study of Mergers and Acquisitions at Penn State Law and author of several articles on tax inversions.

Background

On September 22, the Treasury and IRS issued Notice 2014-52 addressing administrative steps it is taking on tax inversions. Inversions are transactions that employ complex corporate transactions to cause a U.S. company -- such as Burger King in a proposed merger that recently made headlines -- and a foreign company -- Tim Hortons in the Burger King merger -- to become subsidiaries of a new foreign holding company with the shareholders of the U.S. company (Burger King) owning a controlling interest in the new holding company. 

As explained in the Notice, the Treasury and IRS are (1) “concerned that certain recent inversion transactions are inconsistent with the purposes of sections 7874 and 367 of the Internal Revenue Code,” and (2) “understand that certain inversion transactions are motivated in substantial part by the ability to engage in certain tax avoidance transactions [e.g., interest stripping and avoidance of the repatriation tax on foreign earnings] after the inversion that would not be possible in the absence of the inversion.”  The Notice says that, to address problems with inversions, the Treasury and IRS “intend to issue regulations under sections 304 (b) (5) (B), 367, 956 (e), 7701 (l), and 7874 of the Code.