The Treasury Department will attempt to curb overseas tax-inversion deals with new "targeted guidance" this week.
In a letter to lawmakers Wednesday, Treasury Secretary Jack Lew called on Congress to pass legislation to stop the moves, in which a company completes an acquisition, move its tax address out of the United States and potentially reduces taxes. Lew did not specify what action the Treasury would take but said it will use all of its "existing administrative tools" to reduce the benefits of inversions.
"Unless and until Congress acts, creative accountants and lawyers will continue to find new ways for companies to move their tax residences overseas and avoid paying taxes here at home," Lew wrote.
The Treasury announced initial steps last year to reduce inversions. Lew said the department's current powers can only "slow the pace of these transactions."
"It is important to emphasize, however, that Treasury cannot stop inversions without new statutory authority," Lew wrote Wednesday.
The latest action comes after Ireland-based Allergan confirmed late last month that it was in talks with Pfizer about a potential deal. Though a possible merger raised questions about an inversion, neither company at the time gave details about the structure of a transaction.
The Obama administration has previously cited a need for "economic patriotism" by keeping taxes within the U.S.
Last month, activist investor Carl Icahn announced he would pour his deep pockets into curbing tax inversions. He pledged $150 million of his own money to push for legislation that stopped inversions.