Treasury Saw Exception to Inversion Regs’ Disqualified Stock Rule as Slippery Slope

Timothy Shuman, at a District of Columbia Bar Taxation Section event, voiced criticism of recent IRS rules on determining surrogate foreign ownership in acquisitions. “Nonqualified property is per se excluded” from the rules, Mr. Shulman noted. “There’s not an out [from nonqualified property] if you have some good purpose for the use of the cash, such as acquiring other businesses or investing in your business. What this can set up is a difference [between] the way a stock transaction is treated and an asset transaction is treated.”