Could Congress Target Inversions Retroactively?

A steady increase in the number of corporate inversions – an M&A deal that moves a company headquarters overseas to a more favorable tax venue – has whipped up a popular backlash. The numbers are dramatic: one such deal was completed in 2010, six in 2013, but 16 have already either been signed or completed this year. Legislative action, while less than certain, is looking increasingly likely, and that in itself seems to be speeding the pace of inversions. An article by Orrick, Herrington & Sutcliffe attorney Jason M. Halper addresses some questions that arise in this context: What is the likelihood of future anti-inversion legislation being retroactive, and how retroactive could it be and still pass muster with the courts? What are the implications for companies if retroactive legislation is passed? And in any case, what does even the possibility of retroactive legislation say about how these agreements should be drawn up now?