US cracks down on companies moving overseas

In this Sept. 4, 2014 file photo, Treasury Secretary Jacob Lew speaks in the Cash Room of the Treasury Department in Washington. The Obama administration will decide “in the very near future” what actions it can take to make it less profitable for U.S. companies to shift their legal addresses to other countries, Lew said Monday. A growing number of U.S. companies are shifting their addresses abroad in an effort to reduce their U.S. taxes. AP

WASHINGTON — The Obama administration is cracking down on American companies that seek to reincorporate overseas to avoid paying U.S. taxes.

In a so-called “tax inversion,” a U.S. business merges with or is acquired by a foreign company in a country with a lower tax rate

The Treasury Department says it’s putting forward regulations that will make inversions less lucrative by barring some techniques companies use to defer their taxes.

It’s also making it harder for companies to pursue an inversion by tightening the requirement that the company’s former owners own less than 80 percent of the new company.

Treasury Secretary Jacob Lew says the steps will ensure that it’s no longer financially beneficial for companies to use that tactic.

The new measures will take effect immediately.