The move could make it easier for companies to use accounting tactics to minimize their U.S. earnings and inflate their foreign profits, which are frequently taxed at rates lower than the current 21% domestic corporate levy. The existing regulations were aimed at stopping U.S. companies from moving their headquarters to a lower-tax country, known as a corporate inversion.

Modifying the regulations, commonly referred to as the debt-equity rules, would also count as one of President Donald Trump’s favorite kinds of policy: reversing a regulation introduced in the final days of President Barack Obama’s term.

Corporations resisted the original rules, published in 2016, arguing that the Internal Revenue Service was overstepping its authority. The rules allowed the agency to re-characterize tax-advantaged inter-company loans as equity, removing one of the main incentives for U.S. companies to move their headquarters to countries with corporate tax rates lower than the U.S. rate, then set at 35%.

Critics of the regulations say the rules are no longer necessary because the 2017 tax law made corporate inversions less attractive, thanks to lower tax rates and limits on how much interest companies can deduct. Businesses argue that the regulations, under tax code Section 385, apply too broadly to non-abusive transactions and create onerous requirements by making companies track every loan.

‘Moving Target’

It’s unlikely Treasury will repeal the rules entirely, even though some outside groups have pushed for that, the people familiar with the discussions said. IRS Chief Counsel Michael Desmond said earlier this month that the regulations in question are a “moving target” but that IRS and Treasury lawyers were looking at addressing this issue in some format this fall.

Groups including the U.S. Chamber of Commerce and the Organization for International Investment, which represents the U.S. operations of foreign-based companies, have lobbied to repeal the rules.

Treasury wants to tread cautiously because it knows it would be blamed if companies began using aggressive tax planning tactics to lower their bill, according to the people familiar with the discussions, who asked not to be named when talking about internal conversations.

Treasury, the IRS and the Office of Management and Budget didn’t respond to a request for comment.

Treasury has to seriously consider whether the 2017 tax law really eliminates the need for the regulations, said Mark Mazur, who was the assistant secretary for tax policy at Treasury under the Obama administration when the rules were issued.

“On the face, they do slightly different things and so it’s hard to believe that the Tax Cuts and Jobs Act took care of every one of those dimensions,“ said Mazur, now director of the Urban-Brookings Tax Policy Center.

George Callas, who worked as senior tax counsel to former House Speaker Paul Ryan during the passage of the 2017 law, said that tax code overhaul will prevent much of what the regulations are designed to block.

“It’s appropriate to analyze whether they’re still necessary in whole, in part, or not at all,” Callas said.