Last week the IRS released PLR 201432002, where it applied the anti-inversion rules of Code §7874.
The IRS ruled that a newly formed foreign corporation was not a surrogate foreign corporation (i.e., there was no inversion) under Code §7874 where it acquired a U.S. corporation from a foreign corporation in a Code §368(a)(1)(F) reorganization that was followed by a private placement and an IPO. The shares of the new foreign corporation were excluded from the numerator and the denominator of the ownership fraction (under the "internal group restructuring" exception) and the private placement and IPO shares were excluded from the denominator (under the "anti-stuffing" rules). This produced an ownership fraction of zero over zero. The ownership requirement was not met and there was no surrogate foreign corporation.
An image of the chart is shown below and the chart can be viewed as a PDF file here: PLR 201432002.
We will shortly add this chart to andrewmitchel.com, where you can find hundreds of similar situational charts.
For some recent commentary on inversions, visit Paul Caron's TaxProf Blog.