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Tax Analysts interviewed Venable partner Friedemann Thomma in a May 2, 2016 article on new inversion rules. Issued by the Treasury Department last month, the new rules quickly brought an end to what would have been the largest inversion in history. Thomma said he found it disconcerting that the new rules were built around specific fact patterns. "I'm not a fan of that," he said. "Conceptually, we want to achieve certain goals, and the latest round of regulations was very much targeted."

Discussing the proposed IRC section 385 rules, Thomma thought they were more damaging to cross-border M&A deals than the serial acquisition rules. Those rules "will add another layer of complexity to debt-financed M&A transactions and could thus slow down or impede common structures like those placing debt financing on operating subsidiaries of a target," he said. Currently, making an intercompany loan requires running "through the gauntlet of section 385, making sure there's no possibility of potential recharacterization, and complying with all documentation requirements."

Thomma also discussed the compliance burdens facing clients saying he would not be surprised if companies with the opportunity to move offshore and operate under a more efficient structure take advantage of it under the new rules. "Any related-party financing is an issue, any cash pooling will be affected, typical treasury management practices will be affected," he added.