The U.S. Treasury Department exceeded its authority by proposing wide-ranging regulations intended to curb corporations' ability to shift their American earnings overseas, tax lawyers told agency officials during a hearing last week.

Their complaints added to a growing corporate backlash against the so-called earnings-stripping regulations, which broadly aim to curb loans from foreign companies to their U.S. subsidiaries. Such loans, which allow for moving U.S. income overseas via tax-deductible interest payments, represent a key tax-cutting strategy for U.S.-based companies that have moved their tax addresses offshore.

But the rules are written so broadly that they also hit daily internal financing operations in global companies that aren't avoiding taxes, according to several letters sent to the Treasury as public comments on the proposal.