The Wall Street Journal on September 24, 2014 reports: “In an inversion, an American company moves its tax home to a country such as the U.K. or Ireland, where corporate taxes are lower. Its administrative headquarters and most business operations typically remain in the U.S. American companies have pulled off most of their recent inversions by merging with smaller foreign companies.”

“This week, Treasury officials used five sections of the U.S. tax code to launch an assault on inversions. They made it more difficult for companies to access their overseas cash without having it taxed at U.S. rates, and they tightened standards for a merger to qualify as an inversion…”

In June medical-device maker Medtronic agreed to acquire Dublin-based Covidien PLC for $42.9 billion and become an Irish company. Medtronic included a caveat that would allow the Minneapolis-based company to walk away from its deal without paying an $850 million breakup fee if tax rules tightened… Medtronic has said the company is ‘studying Treasury’s actions.’”

“…The most far-reaching of the new rules is one that would restrict U.S. companies’ use of offshore cash to fund merger deals…. Any chilling effect on inversions might not last long, experts said, adding that companies could find ways to do the deals despite the new rules.”