WASHINGTON, D.C.—On April 4, the U.S. Department of the Treasury and the Internal Revenue Service (IRS) issued temporary and proposed regulations to further reduce the benefits of and limit the number of corporate tax inversions, including by addressing earnings stripping, according to an announcement from the Treasury. The move could impact the pending merger of Allergan plc (NYSE:AGN) and Pfizer Inc., (NYSE:PFE) the latter of which recently underwent one of the biggest tax inversions in history when it moved its headquarters from the U.S. to Ireland.

In response to the Department of Treasury Notice, both companies said in a joint statement, “We are conducting a review of the U.S. Department of Treasury’s actions announced today. Prior to completing the review, we won’t speculate on any potential impact.”

Although several financial media outlets speculated that the impending $160 billion deal was in danger of collapsing, neither Allergan or Pfizer had any comment at press time.

By undertaking an inversion transaction, companies move their tax residence overseas to avoid U.S. taxes without making significant changes in their business operations. After an inversion, many of these companies continue to take advantage of the benefits of being based in the U.S., while shifting a greater tax burden to other businesses and American families, according to the Treasury.

Treasury Secretary Jacob J. Lew said, “Treasury has taken action twice to make it harder for companies to invert. These actions took away some of the economic benefits of inverting and helped slow the pace of these transactions, but we know companies will continue to seek new and creative ways to relocate their tax residence to avoid paying taxes here at home.

Lew said the Treasury was planning additional actions to further rein in inversions and reduce the ability of companies to avoid taxes through earnings stripping. “This will have an important effect, but we cannot stop these transactions without new legislation. I urge Congress to move forward with anti-inversion legislation this year. Ultimately, the best way to address inversions is to reform our business tax system, which is why Treasury is releasing an updated framework on business tax reform, outlining the administration’s proposals to date as a guide for future reform. While that work goes on, Congress should not wait to act as inversions continue to erode our tax base,” he said.