Boston, MA 04/07/2014 (wallstreetpr) –Caterpillar Inc. (NYSE:CAT) will have its offshore tax strategies scrutinized by a U.S. Senate panel, on Tuesday. The world’s largest mining and construction equipment maker is all set to go under the radar for its dealings in the countries of Switzerland, Luxembourg and Bermuda.
Tax evasion hearing
Of late, many multinational organizations have been reported for tax avoidance cases and have also been severely criticized. Senator Carl Levin, who is a veteran tax sleuth, will chair the session of his Permanent Subcommittee on Investigations. Also present in this hearing, will be three former and current Caterpillar Inc. (NYSE:CAT)’s executives, who will testify.
Levin’s panel digs deeper than any other at present, into the details of tax laws and accounting. This current probe will probably center on the tax aspects of the company’s restructuring, which took place in the late 1990s and early 2000s.
PricewaterhouseCoopers LLP, one among the Big Four accounting firms, had advised Caterpillar on its tax strategies. They will also be sending three officers as witnesses, to the hearing.
No comments on the matter
A spokeswoman for Caterpillar Inc. (NYSE:CAT) declined to comment on the tax strategies taken by the company. A spokeswoman for Levin also declined to comment, as did PricewaterhouseCoopers.
Levin’s panel has not yet established any detailed findings. A lawsuit that involved the restructurings and was settled in 2012 might provide the clues as to what might be the topic of the hearing.
Richard Harvey, a former Internal Revenue Service official said that it was probable; the IRS took a very good look into these transactions. Richard, who testified before Levin’s panel last year, was also the one who reviewed existing court records from the lawsuit that revealed some of the company’s dealings.
Back in 1999, Caterpillar Inc. (NYSE:CAT) had shifted a “replacement parts” division from the U.S. to Switzerland. The executives said this step was taken in order to reduce taxes, according to the records. Caterpillar also set up units in Bermuda and Luxembourg, where low taxes are applicable, in 2005, according to the court filings.
Two of Caterpillar Inc. (NYSE:CAT)’s officials, Rob Beran, who was chief tax officer and Daniel Schlicksup, a tax official, will appear before the panel on Tuesday, also declined to comment on the matter.
