U.S. Senate panel investigates Caterpillar for tax issues

By WEEK Producer

March 21, 2014 Updated Mar 21, 2014 at 10:36 PM CDT

PEORIA, Ill. -- Trouble may be brewing for big yellow. Rumors were swirling Friday night that a U.S. Senate panel is investigating whether Caterpillar improperly avoided U.S. taxes by moving profits outside the country.

Back in 2009, an employee who had worked on Caterpillar's tax strategy filed a lawsuit.

The suit accused the company of using a "Swiss structure" to shift profits to offshore companies and avoid more than $2 billion in U.S. taxes.

The employee also claimed the company used shell companies to return profits to the U.S. without paying required taxes.

Caterpillar denied the allegations.

That lawsuit was settled in 2012.

Now there are new rumors of a federal investigation.

According to Bloomberg, the sub-committee that is investigating Caterpillar has examined several other multi-national companies like Apple Inc.

Caterpillar had more than $50 billion in revenue last year.

As of December the company had $17 billion in overseas profits, which is up significantly from three years ago.

These profits have not been taxed by the U.S.

The Senate's Permanent Subcommittee on Investigations is expected to hold a hearing in early April.

A company spokesperson would not comment this Friday afternoon.

This story will be updated as more information becomes available.

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