Three-phase four switch (TPFS) inverters are an effective solution to reduce the size and cost of the distribution STATic COMpensator (DSTATCOM). The performance of TPFS inverter is identical to three-phase four leg, three-phase split capacitor inverter topologies during balanced load conditions. During unbalanced load conditions, the absence of the neutral wire in TPFS topologies does not allow the DSTATCOM to compensate the unbalance in load currents. To overcome this limitation, a special purpose transformer is connected across the load along with the DSTATCOM. This special transformer provides a path for neutral current, reduces the cost and rating of the inverter, improve the performance under stringent unbalanced currents generated by computer loads and also improves short duration overloading capability. In the proposed work, two different TPFS topologies namely four switch one capacitor and four switch split capacitor are proposed along with two special purpose transformers which include zigzag and T-connected for three-phase four-wire distribution systems. The combination of TPFS inverter and special transformer can achieve power factor improvement, harmonic elimination, neutral current compensation and load balancing. The evaluation of the proposed method has done using simulation and experimental investigations.