In August, President Barack Obama pledged to use the powers of his office to discourage the corporate tax-avoidance technique known as inversion, in which U.S. companies claim foreign tax addresses.
Four months earlier, according to a previously unreported legal document, his Department of Homeland Security did just the opposite. It decided that it was fine to do business with Ingersoll-Rand Plc even though a 2002 law bars the department from awarding contracts to inverted companies.
Ingersoll-Rand, a major manufacturer, helped inspire the ban by shifting its legal address from New Jersey to Bermuda in 2001. It took an Irish address in 2009. The offshore domiciles cut its effective tax rate by about half.
“I’m flabbergasted,” said Rebecca Wilkins, a senior counsel at Citizens for Tax Justice, a Washington-based group that supports limits on inversions. “I don’t know how they could possibly pretend not to be an inverted company.”
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