Obama Administration Targets Corporate Offshore Tax Avoidance

WASHINGTON (Reuters) -
FILE - In this April 13, 2014 file photo, the Internal Revenue Service Headquarters (IRS) building is seen in Washington. An IRS watchdog says budget cuts to the agency are taking their toll _ and more are on the way under legislation that has advanced through a House panel. IRS budget cuts are hurting tax collections because there are fewer agents chasing delinquent taxpayers, according to a report released Wednesday by the Treasury inspector general for tax administration. The agency's budget has been cut by $1.2 billion since 2010. (AP Photo/J. David Ake, File)
The Internal Revenue Service Headquarters (IRS) building is seen in Washington, D.C. (AP Photo/J. David Ake, File)

The Obama administration on Thursday took aim at the use of foreign tax credits by American multinational companies to reduce their U.S. tax bills, in an action that closely followed a European Union order that Apple Inc. pay back taxes to Ireland.

The Treasury issued legal guidance aimed at reducing the scope companies have to credit foreign taxes against what they owe to the government.