After U.S. authorities raided Caterpillar Inc’s Peoria, Illinois, headquarters as part of a criminal investigation Thursday, the company stated the search was part of an Internal Revenue Service investigation related to profit earned by a parts subsidiary based in Switzerland.
A Senate subcommittee on investigations in 2014 claimed that Caterpillar deferred or avoided paying $2.4 billion in U.S. taxes between 2000 and 2012 by shifting more than $8 billion of parts sales to Switzerland.
Caterpillar is contesting an IRS proposal to levy taxes and penalties of approximately $2 billion arising from its assignment of profit to the Swiss operation. PricewaterhouseCoopers, which devised the plan while also serving as Caterpillar’s auditor, declined comment.
The Senate subcommittee had the following specific findings:
(Reporting by Lisa Baertlein- Editing by David Greising and Leslie Adler)
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