In a complaint filed on Aug. 4 in the Western District of Texas, the U.S. Chamber of Commerce and the Texas Association of Business filed suit against the IRS and Treasury over the inversion regulations. The suit alleges that Treasury has purported to "rewrite the Internal Revenue Code" and in doing so violated the Administrative Procedure Act.
The regulations in question were issued on April 4 and were part of the IRS and Treasury's ongoing efforts to limit inversion transactions and address earnings stripping. The regulations address transactions that are structured to avoid the purposes of Sections 7874 and 367.
The suit is the first in what may be a series of challenges faced by Treasury and IRS as part of their effort to combat inversion and earnings stripping transactions.
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