Treasury Secretary Jacob J. Lew said that Congress should immediately change the law to stop companies from avoiding U.S. taxes through inversion transactions, Bloomberg News reported yesterday. Any change should be retroactive to May 2014, Lew wrote in a letter yesterday to lawmakers. “We should prevent companies from effectively renouncing their citizenship to get out of paying taxes,” Lew wrote. The pace of inversion deals has escalated in recent months, as companies such as Medtronic Inc. and Mylan Inc. have announced transactions that let them move their legal address outside the U.S. In inversions, U.S.-based companies purchase a foreign company, then switch the legal address to take advantage of the foreign jurisdiction’s favorable tax rules.
