As we await the release of the Treasury Department’s recommended revisions to certain significant Obama-era regulations, a court has struck down perhaps the most controversial of the regulations issued during President Obama’s tenure: the anti-inversion temporary regulation that frustrated the Pfizer-Allergan combination. As we described in a recent client memorandum, the District Court for the Western District of Texas invalidated the temporary regulation that excluded certain recent acquisitions of U.S. companies by the non-U.S. party to a potential inversion transaction in calculating the “ownership fraction,” which had the effect of reducing the size of the non-U.S. party and thus of making it more difficult to satisfy the requirements of Section 7874. Read the full order here.

Meanwhile, the September 18 deadline for Treasury to issue its final report to President Trump with specific recommendations “to mitigate the burden imposed” by certain identified regulations has come and gone without any activity (other than certain deferrals of effective dates), or at least any publicly reported activity. In June, Treasury issued Notice 2017-38 identifying eight regulations to target in response to an executive order from President Trump requiring a review of all significant tax regulations issued after January 1, 2016. Treasury’s list includes debt-equity regulations under Section 385, regulations changing the allocation of partnership liabilities, regulations implementing the foreign currency rules of Section 987 and regulations that limit the ability of taxpayers to transfer goodwill and going concern value to corporations on a tax-deferred basis under Section 367.