The Treasury Department on Thursday took steps to ease regulations issued during former President Barack ObamaBarack Hussein ObamaSecond-tier Democrats face do-or-die phase Obama endorses 'outstanding group of Virginia Democrats' ahead of state elections Democrats feud over health care, Trump strategy in Iowa MOREs administration that were aimed at curbing offshore tax deals.

Treasury issued final regulations eliminating documentation requirements that were part of the Obama-era rules. The department also announced its intention to propose regulations in the future that alter other portions of the offshore tax rules.

Senior Treasury officials said that the moves are designed to protect the U.S. tax base while reflecting the changes to the tax code made by President TrumpDonald John TrumpJudge blocks White House's health care requirement for new immigrants: report Trump gets deluge of boos upon entering MSG prior to UFC 244 Trump: 'I would love' to host Ukrainian president at White House MOREs tax-cut law and making the rules less burdensome for taxpayers.

Because tax cuts made our business environment more competitive, we are now able to remove regulatory burdens that have been rendered obsolete, further reduce costs for job creators and hardworking Americans, and protect the U.S. tax base, Treasury Secretary Steven MnuchinSteven Terner MnuchinUS launches national security review of Chinese-owned app TikTok: report The Hill's Morning Report Presented by Better Medicare Alliance A new phase for impeachment On The Money: Senate passes first spending package as shutdown looms | Treasury moves to roll back Obama rules on offshore tax deals | Trade deal talks manage to weather Trump impeachment storm MORE said in a statement.

In 2016, Obamas Treasury Department issued rules aimed at preventing corporate inversions transactions in which U.S. companies merge with foreign companies and then reincorporate overseas in an effort to lower their tax burden. The rules recharacterized certain related-party debt as equity, in an effort to prevent inverted companies from avoiding taxes by moving U.S. earnings to foreign countries.

The rules were a part of a series of regulations issued by the Obama administration that slowed the pace of inversions. But business groups had long disliked the rules, arguing that they ensnared transactions that had nothing to do with inversions and that the documentation requirements were too burdensome.

Trump in 2017 issued an executive order calling for a review of tax regulations. In response to that executive order, the Treasury Department issued a report in October 2017 announcing that it was considering revoking the documentation rules which never had been operable, since their effective date had been delayed. At the time,the agency also said it would reassess the other portion of the rules after legislation overhauling the tax code was enacted.

Trumps tax cut law, which he signed in December 2017, included a number of provisions that were designed to help prevent inversions, including the reduction in the corporate tax rate from 35 to 21 percent and changes to how U.S. companies foreign earnings are taxed.

On Thursday, the Treasury Department finalized the revocation of the documentation rules and also issued an advance notice of proposed rulemaking signaling an intention to issue other regulations in this area.

Part of the 2016 rules addressed situations in which a company borrows from a foreign parent and then separately distributes cash or property to the foreign parent. The rules included a per se test that said that those two steps were connected to each other if they occurred within 72 months of each other.

In its notice Thursday,the agencysaid it plans to replace this test with a new standard to determine whether funding is connected to a distribution.

Under the proposed regulations, a debt instrument issued without such a connection to a distribution or similar transaction would not be treated as stock, the Treasury Department said in its notice. As a result, the proposed distribution regulations would be more streamlined and targeted while continuing to deter tax-motivated uneconomic activity.

The advance notice of proposed rulemaking has a 90-day comment period.

Senate Finance Committee Chairman Charles GrassleyCharles (Chuck) Ernest GrassleyGOP argues whistleblower's name must be public Overnight Health Care: Warren unveils 'Medicare for All' funding plan | Warren says plan won't raise middle class taxes | Rivals question claims | Biden camp says plan will hit 'American workers' | Trump taps cancer doctor Stephen Hahn for FDA chief GOP senator requests Obama, Clinton emails MORE (R-Iowa) praised the move.

The 2017 tax reform bill, with a reduced corporate tax rate and enhanced tax base-protections, has worked to substantially reduce the incentives for American companies to relocate offshore and has encouraged companies to come back to the United States," Grassley said in a statement.

He said the Obama rules "were released in a tax environment where the United States had the highest corporate income tax rate among our major trading partners."

"It makes sense in todays tax environment for Treasury to reconsider those regulations," Grassley added.

But Sen. Ron WydenRonald (Ron) Lee WydenOvernight Health Care: Warren unveils 'Medicare for All' funding plan | Warren says plan won't raise middle class taxes | Rivals question claims | Biden camp says plan will hit 'American workers' | Trump taps cancer doctor Stephen Hahn for FDA chief White House distances itself from Pelosi plan to lower drug prices Twitter shakes up fight over online political ads MORE (D-Ore.), the ranking member of the Senate Finance Committee criticized the proposed changes.

The corporations that got a massive taxpayer handout are getting another gift from Donald Trump," Wyden said in a statement. "The Obama administration had essentially shut down inversionstransactions whose only purpose is to help big multinational corporations move overseas to avoid paying taxes. Weakening these rules only provides an opening for corporations to again dodge their taxes.

Updated at 6:41 p.m.

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