Hobson, Justin E.
The Internal Revenue Service (IRS) continues its focus on perceived abuses in corporate inversion transactions. On November 19, the IRS released Notice 2015-79, which places new limitations on the ability of a U.S. multinational corporation to reduce its U.S. tax burden by inverting its corporate structure. U.S.-based multinationals are subject to U.S. federal income taxes on their worldwide net income. Subject to certain exceptions, a U.S. multinational’s foreign subsidiaries generally are not subject to U.S. income tax on their earnings, and the U.S. parent is not subject to tax on the earnings until they are repatriated.