The White House is preparing its next move in response to corporate inversions like the one underlying Medtronic’s (NYSE:MDT) acquisition of Covidien (NYSE:COV).

Treasury Secretary Jacob Lew told an audience at the Urban Institute, a research organization affiliated with the Tax Policy Center, that he’s close to a final ruling on how the Obama Administration will react to circumvent deadlock in Congress.

"The administration is clear-eyed about the possibility that Congress may not move as quickly as necessary to respond to the growing wave of inversions," Lew said. "Only a change in the law can shut the door, and only tax reform can solve the problems in our tax code that lead to inversions."

He added that any actions the Treasury might choose to take to discourage inversions would be rooted in a "strong legal and policy basis." Lew offered no other details and refused to answer additional questions, the New York Times reported.

Corporate inversions describe mergers and acquisitions in which a company moves its headquarters out of the U.S. to the foreign base of an acquired target. Inversions are entirely legal, but "these companies are eroding America’s corporate tax base," Lew said.

Medtronic plans to move its corporate headquarters to Covidien’s base in Ireland, although leadership will remain largely in the U.S. The companies have maintained that their merger isn’t motivated by the inversion, saying that the main drivers are strategic. The merger will allow Medtronic to tap the billions currently stored outside the U.S. without having to pay U.S. corporate taxes upon repatriation.

Covidien moved its headquarters to Ireland in 2009, saying at the time that the company hoped to benefit from the lower corporate tax rate there. Medtronic plans to make the same move once the merger closes later this year or early in 2015.