In this Oct. 14, 2010 photo, the exterior of Yahoo Inc. offices are seen in in Santa Clara, Calif. Yahoo Inc. reports third-quarter financial results Tuesday, Oct. 19, after the close of the market. (AP Photo/Paul Sakuma) (Paul Sakuma/AP)

Yahoo has reportedly broken off talks with its partners in Asia to work out a deal to drop its holdings in China and Japan and save Yahoo over $4 billion in U.S. taxes.

All Things Digital’s Kara Swisher reported Tuesday that “sources close to the situation” have said that the discussions have reached an impasse. Those sources blame Yahoo for changing its demands.

The deal, as detailed in the Wall Street Journal, was believed to have been a swap of cash and assets that would help Yahoo avoid a serious tax hit.

The Sunnyvale, Calif.-based company has been undergoing some major changes in the past year, naming former PayPal executive Scott Thompson to be its chief executive. Last month, Yahoo co-founder and former CEO Jerry Yang left Yahoo’s board; a few weeks later chairman Roy Bostock announced he and three other board members will step down. With those developments, all of Yahoo’s directors will have joined the board after 2010.

In a release announcing a major board shake-up, Yahoo had mentioned that it was looking at restructuring its Asian assets without going into detail.

Yahoo stock fell following the report, down over 5 percent in mid-afternoon trading. Around 1:45 p.m., Yahoo stock was trading at $15.15 per share, down from an opening price of $16.07.

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