Treasury Department officials are considering rolling back a taxrule aimed at preventing American companies from moving moneyoffshore to avoid U.S. taxes, according to several people familiarwith the discussions.

The Treasury is looking at regulations intended to preventAmerican firms from lowering their U.S. tax bills by shifting income to their offshore branches thatthey can loan to their domestic branches and deduct the interestoff their IRS bills. The department is also contemplating repealingthem entirely to replace them with something morebusiness-friendly.

The move could make it easier for companies to use accountingtactics to minimize their U.S. earnings and inflate their foreignprofits, which are frequently taxed at rates lower than the current21 percent domestic corporate levy. The existing regulations wereaimed at stopping U.S. companies from moving their headquarters toa lower-tax country, known as a corporate inversions.