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As we mentioned a couple weeks ago, the Treasury Department cannot fix the inversion crisis by itself. Only weeks after the Obama Administration announced that Treasury will take important regulatory steps to help prevent U.S. -based companies from inverting to foreign havens as a tax-dodging strategy, the Ohio-based Steris Corporation announced its plan to purchase a British health care firm and reincorporate in the United Kingdom.

While Treasury’s new efforts appear to have dissuaded at least one company from going forward with previously-announced inversion attempts, all it appears to have done in this case is to make Steris’s leadership deny that inversion was their idea: Steris’ CEO, Walt Rosebrough, said in a press conference that “[i]t was only our advisers that brought [the tax advantages] to us. It’s not naturally something we would think of.”

This is a little hard to swallow given the company’s recent history. Steris has subsidiaries in a wide range of tax havens, from the British Virgin Islands and Barbados to Mauritius and Luxembourg. Despite consistently earning more than two-thirds of its revenue in the United States and holding about 90 percent of its assets domestically, the company discloses that, somehow, 94 percent of its cash is currently being held (at least on paper) outside the United States.  Steris now holds a total $222 million in “permanently reinvested earnings” abroad—profits that have never been taxed by the U.S., and after a successful inversion may never be subject to our federal income tax. It’s impossible to know just how much of this cash is sitting in beach-island tax havens, but it seems unlikely that Steris owns a Virgin Islands subsidiary because of that country’s lucrative market for hand hygiene compliance programs (that’s one of the things Steris sells). 

As recently as 2012, the company reported a large cut in its U.S. taxes as the result of what it cryptically describes as “the rationalization of operations in Switzerland.”

So when it comes to tax avoidance, this is emphatically not Steris’s first rodeo.

Even more interesting, it appears that Steris is currently paying lower income tax rates to the federal government than it is to the other nations in which it does business. Over the past three years, the company has faced a current federal tax rate averaging 16.3 percent—well below the 28.5 percent foreign tax rate Steris paid on its overseas profits over the same period.

If Steris’ inversion is a naked attempt to avoid paying any taxes on its offshore cash, will the Treasury Department’s new regulatory strategy prevent it? No. As CTJ’s Rebecca Wilkins points out, the Treasury “can make getting at that offshore cash a longer and more complicated process, but ultimately cannot stop Steris from dodging taxes—they can only slow them down.”

All the more reason why the next Congress should do what this Congress couldn’t find the courage to—enact legislative fixes that will stop inversions in their tracks.