According to that investigation, Caterpillar gave its Swiss subsidiary legal ownership of all of the replacement parts it sells to foreign customers around the world. As a result, the profits from selling those parts piled up in Switzerland, not in Illinois.

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Now the IRS wants its cut of that money, saying the company was dodging taxes owed to the federal government. Caterpillar disputes the accusation, maintaining that its practices are legal.

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But under a plan Republicans are pushing to reform the nation's tax code, the company's strategy would no longer be necessary. The GOP plan, known as a border adjustment, poses essential questions about fairness in American taxation, and analysts say the proposal could give Caterpillar a big new break.

Currently, U.S. corporations such as Caterpillar owe taxes on the income they receive, regardless of where in the world their products are sold.

Sales to foreign customers and domestic clients are all subject to federal tax. Corporations can put off paying those taxes only if they find a way to keep the money overseas, rather than bringing it back to their U.S. headquarters. In Caterpillar's case, the profits stopped in Switzerland.

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With a border adjustment, U.S. firms' sales to foreign customers would not be taxed. As a result, Caterpillar would not need to rely on aggressive legal maneuvers to avoid taxes on those profits.

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Proponents of the plan argue that companies should not have to pay taxes on sales they make outside of the United States, and that a system that exempted those exports from taxation would be simpler, more efficient and more transparent.

“There's two different philosophical approaches to dealing with problems like this. One is to come up with regulations and penalties,” said Alan Auerbach, an economist at the University of California at Berkeley and one of the plan's most vocal supporters. "The other is to just change the rules so that you no longer have to worry about what companies are doing."

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Supporters also point out that with a border adjustment, manufacturers would be rewarded for relocating their factories to the United States. Many foreign countries tax companies based on where they produce. Companies producing in the United States could avoid those taxes, without paying taxes on the exports back overseas.

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Detractors say that since U.S. companies rely on domestic public services and infrastructure to educate their workers, maintain public safety and carry their products to international markets, U.S. exporters should bear some of the burden of taxation as well.

Meanwhile, economists and legal experts debate just how the complex Republican proposal would affect real costs for multinational firms.

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Economists predict that if the United States imposed a border adjustment, the price of the dollar should increase in response. A stronger dollar would protect importers, which would get more for their money from their suppliers abroad, and cancel out some of the financial benefits for Caterpillar and other exporters.

Observers on Wall Street are skeptical. Larry De Maria, an analyst at William Blair, said that Caterpillar and other major exporters are in an ideal position to benefit from a border adjustment.

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“That’s also by design,” De Maria said. “What President Trump is trying to do — the goal is to create jobs in the U.S."

For its part, Caterpillar is backing the GOP proposal. Caterpillar is part of an industry group calling itself the American Made Coalition consisting of multinational corporations with lucrative foreign markets.

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Caterpillar chief executive officer Jim Umpleby and officers of the other companies in the group signed a letter to lawmakers last month advocating for a border adjustment, writing that the current system “penalizes American workers who make products or provide services sold abroad, while favoring their international competitors.”

Caterpillar's support for the plan is galling for the company's critics — particularly after the company found itself the target of a federal raid.

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“Caterpillar appears to have elevated international tax avoidance to an art form,” said Matt Gardner, the former director of the left-leaning Institute on Taxation and Economic Policy. “From that perspective, this plan is exactly backwards. It would leave the barn door wide open for companies like Caterpillar to continue shifting their profits on paper offshore.”

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A newly enacted border adjustment, however, would not free Caterpillar from the controversy over what the IRS describes as unpaid taxes under the current system.

The reasons for the investigation by law enforcement that resulted in the visit to Caterpillar's facilities in Peoria, East Peoria and Morton, Ill. on March 2 have not been disclosed, but the company's recent public statements and filings suggest the investigation is related to its Swiss profits.

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“While the warrant is broadly drafted, we believe the execution of this search warrant is regarding, among other things, export filings that relate to the CSARL matter,” the company said in a statement, using the abbreviation for the Swiss entity. (Sharon Paul, a spokeswoman for the U.S. attorney's office in the Central District of Illinois, declined to elaborate on the probe.)

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According to the 2014 report by the Senate Permanent Subcommittee on Investigations, Caterpillar used accounting maneuvers to shift its profits from selling replacement parts to foreign customers to Switzerland, where Caterpillar had negotiated a tax rate of 4 percent to 6 percent. To avoid federal taxes, Caterpillar set up a Swiss subsidiary as the legal supplier of replacement parts for its customers overseas. Caterpillar's third-party suppliers manufactured the parts — predominantly at U.S. factories — and then sold them to the Swiss subsidiary. That entity in turn sold the parts to Caterpillar's independent dealers around the world.

The parts were never shipped to Switzerland, and Caterpillar did not have a warehouse there. All the same, because the Swiss subsidiary owned and sold the parts on paper, the company claimed the profits from its parts should be taxed in Switzerland.

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The IRS has asked Caterpillar for $2 billion in back taxes and penalties related to the Swiss operation, according to the company's filings, but the company insists it didn't step out of line.

“Caterpillar takes very seriously its obligation to follow tax law and pay what it owes,” the company said in a statement. “We are compliant with tax laws and stand by our financial reporting.”