A bill to amend the Internal Revenue Code of 1986 to modify the rules relating to inverted corporations.

Sponsor: Richard J. Durbin (Democratic-IL)February 11, 2026

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Introduced

In Committee

Passed One Chamber

Passed Both Chambers

Signed into Law

Read twice and referred to the Committee on Finance. (text: CR S579-580)

Makes it harder for companies to avoid U.S. taxes by moving their headquarters abroad.

This bill would make it harder for U.S. companies to avoid paying U.S. taxes by moving their official headquarters to another country. It would expand the definition of what makes these "inverted" companies still count as U.S. companies for tax purposes, affecting corporations and their owners. This aims to ensure more companies are subject to U.S. taxes.

What Would Change

Today, U.S. tax rules treat certain foreign companies as U.S. companies for tax purposes. This happens if they acquire a U.S. company and its former owners hold at least 60 percent of the new foreign company. This bill would expand these rules. After this bill, more foreign companies would be treated as U.S. companies for tax purposes. This would happen if former U.S. owners hold 80 percent of the new company. It would also apply if they meet new definitions for an "inverted domestic corporation." These new definitions are based on 50 percent ownership or U.S. management and significant U.S. business activities.

Key Provisions

Treats more foreign corporations as U.S. companies for tax purposes if former U.S. owners hold at least 80 percent of the new company.
Defines a new category called "inverted domestic corporations" that would be taxed as U.S. companies.
Considers a foreign company an "inverted domestic corporation" if, after May 8, 2014, it acquires a U.S. company and either former U.S. owners hold over 50 percent of its stock, or its main management is in the U.S. and it has significant U.S. business.
Allows an exception for companies that have substantial business activities in their foreign country of organization.
Gives the Treasury Secretary power to create rules for determining when a company's management and control are primarily in the United States.

View on Congress.gov

S 3847 · 119th Congress · February 11, 2026 · AI Summary by gemini-2.5-flash · 8/10

A bill to amend the Internal Revenue Code of 1986 to modify the rules relating to inverted corporations.

What Would Change

Key Provisions

Lobbying Activity