President Obama doesn't have the authority to simply stop the companies he calls “corporate deserters” from taking up legal residency in low-tax countries. But it appears that his Treasury Department will try to make the prospect of leaving the U.S. as unattractive as possible.

A Treasury representative confirmed that the agency is reviewing options for limiting so-called tax “inversions,” a tax maneuver in which U.S. companies buy smaller firms in countries with low corporate taxes and then establish their headquarters there. The Treasury's review includes looking at measures that could "meaningfully reduce the tax benefits after inversions take place, to at least provide a partial fix," the spokesman said.

The Obama administration began examining its ability to take executive action to address corporate inversions without Congress because it lacks the support of Republicans. It also fears the possibility of a mad rush of businesses ditching the U.S. tax base before comprehensive corporate tax reform could be enacted to lower the U.S. corporate tax rate from 35 percent, the highest rate among Organization for Economic Cooperation and Development nations.

In an interview with the New York Times in August, Treasury Secretary Jack Lew suggested that the Treasury might have the means to "materially change the economics of inversions" to keep companies from expatriating.

What that might involve, the Treasury hasn't specified. A spokesman told the Washington Examiner that the Treasury is "going through a thorough review of potential options and while that is happening, don’t have a steer about what may be being discussed."

But two possibilities that might be available to Lew were laid out in an article published in the tax journal Tax Notes by Harvard Law School professor Stephen Shay, a former international tax affairs official in the Obama Treasury. Shay said the Treasury already has the authority to “materially reduce the incentive for a U.S. corporation to expatriate” through enforcement that would reduce the tax payoff of an inversion.

Shay recommended two steps. The first would be aimed at "earnings stripping," the process by which foreign-owned parent companies reduce U.S. subsidiaries' taxable earnings by issuing debt and making tax-deductible interest payments to the parent company. Shay suggested the Treasury has the power to reclassify certain kinds of corporate debt as equity, making it taxable.

The second measure would be to prevent companies from using inversions to avoid paying taxes on foreign earnings held abroad by distributing them to a new foreign headquarters in a jurisdiction where they would not be taxable. Currently U.S. companies hold nearly $2 trillion in such funds overseas, according to a recent estimate from the left-of-center Citizens for Tax Justice, and they are ultimately taxable under the U.S. worldwide corporate tax system.

Shay suggested that the Treasury could simply "effectively treat the new parent as if they were the old U.S. parent" with its existing authority.

Shay wrote the article, which has attracted notice among tax experts, because he "was worried about a tipping point being reached where [the government] couldn't rein in the deals," he told the Examiner. He mentioned that he sent a copy to the Treasury before publishing it and received a thank you, but is sure officials there already knew of similar possibilities.

Other tax analysts agreed that Shay's proposals could slow inversions. Alan Viard, a scholar at the conservative American Enterprise Institute, said his proposal to prevent earnings stripping "would have some impact. Whether it's a good idea might be a different matter, but it would limit tax benefits of inversions."

Shay said that the Treasury has clear authority under existing law to carry out his anti-inversion plan, but following his advice would at least prove controversial. House Speaker John Boehner warned earlier in the month that “anything truly effective would exceed [Lew's] executive authority.” Lew himself initially said that the Treasury did not have authority to address the problem unilaterally.

J. Richard Harvey, a law professor at Villanova University and a former official in the Reagan, George W. Bush and Obama Treasury departments, warned that Treasury action could be challenged in court. He added that whatever steps were taken would not address all the reasons a company might seek an inversion, meaning that "even if Treasury takes action, inversions are likely to continue — but at a somewhat reduced pace."

"Unless the U.S. corporate tax rate is reduced to 10 percent or less," Harvey told the Examiner, "it will still be beneficial for U.S. [multinational corporations] to invert."