Some members of Congress are receiving praise from the Financial Accountability and Corporate Transparency (FACT) Coalition for introducing the Stop Corporate Inversion Act. This new bill demonstrates an effort to fight against corporate tax avoidance. The new bill is meant to end the treatment of domestic United States corporations, which have been inverted as foreign corporations for tax purposes.

An inversion occurs when a multinational U.S. based business merges with a foreign company to give the impression that it is actually a foreign based company. This arrangement allows the company to structure transactions so that the income is earned in a foreign jurisdiction, instead of domestically, thereby allowing the company to avoid U.S. taxes.

Rebecca Wilkins, FACT Executive Director, states that “Companies pursuing corporate inversion are among the worst of the tax dodgers.” She explains that these companies shift billions of dollars in earnings from jurisdictions where they have actual business operations, to tax havens where they have little more than a mailbox. Wilkins feels that this tax strategy appears especially offensive when the company shifts profits “that were made possible by tax incentives like the research and development credit” and “the U.S. patent office and the U.S. court system.”

Spokespersons from other organizations like U.S. PIRG (the federation of state Public Interest Research Groups), Fair Share, Jubilee USA Network, Public Citizen, American Sustainable Business Council and Oxfam America have united in support of the effort to do away with corporate inversion. This support is based on the view that tax avoidance by large multinational corporations shifts the burden to small businesses and individual taxpayers.