This might mean that companies like Medtronic, which agreed a $42.9 billion purchase of Dublin-based Covidien for tax purposes just last month, will be hit with an unexpected new tax bill.
Rob Wyden, the Democrat Senator who chairs the U.S. Senate Finance Committee, warned on Tuesday that "up to 25" similar transactions made with the sole purpose of cutting a company's tax bill could be announced by the end of the year if action is not taken.
Another part of the proposed legislation which could be very important is that the proportion of the newly merged company consisting of the takeover target will be raised from the current 20 percent level -- which could wipe out cost savings at a stroke.
On top of this, share prices of U.K., Netherlands and Irish companies, particularly in the pharmaceuticals sector, have been boosted in recent months by the prospect of a U.S.-led inversion-related deal. Any gains are likely to be wiped out if these takeover bids seem less likely.
Here we outline some of the deals that may be affected.