Sen. Orrin Hatch (R-Utah), chairman of the Senate Finance Committee, and the majority members of the House Ways and Means Committee sent separate letters to U.S. Treasury Secretary Jacob Lew calling for some radical revisions to Treasury’s proposed Section 385 regulations, which would set stringent new documentation requirements on cross-border intercompany transactions in order for them to quality for tax-favored equity treatment. The proposal is meant to curb uses of corporate inversions to escape U.S. corporate tax rates, regarded as high compared with other countries.
