There are clear interpretations and case law that state that faithful adherence to the letter of the tax law is fine. How is one to interpret the &quot;spirit&quot; of the law when the spirit inferred by one reader is at odds with the text of the law as acted upon by someone else? It&#x27;s (relatively) easy to show compliance with the letter of the law. It&#x27;s (essentially) impossible to show compliance with all possible spiritual interpretations thereof.<p>The Internal Revenue Service (of the US) writes:<p>Avoidance of taxes is not a criminal offense. Any attempt to reduce,
avoid, minimize, or alleviate taxes by legitimate means is permissible.
The distinction between evasion and avoidance is fine yet definite. One
who avoids tax does not conceal or misrepresent. He shapes events to
reduce or eliminate tax liability and upon the happening of the events,
makes a complete disclosure. Evasion, on the other hand, involves
deceit, subterfuge, camouflage, concealment, some attempt to color or
obscure events, or making things seem other than what they are.<p>Did this Dutch company purchase product&#x2F;services from this Irish company?<p>Did these two companies merge and the surviving company was the non-US company?<p>Did this executive receive stock options on such-and-such date?<p>Those are all relatively easy questions of fact.<p>Should the surviving entity of the merger have been the US company? (According to whom? Or on what basis? To what end? Which benefits the investors the most? What did the shareholders vote to do with their company? Why should someone else judge that what they did was &quot;legal but improper&quot;?)<p>The real issue is simply that the US is relatively uncompetitive as a corporate domicile (on a rates and particularly on a &quot;worldwide income basis&quot;) Attempts to patch the system without addressing this root issue are unlikely to succeed in a clean and sustainable fashion, IMO.