The logo of the company of machinery Caterpillar (CAT) is seen at the site of a future urban project in Vina del Mar, Chile May 23, 2017. REUTERS/Rodrigo Garrido

(Reuters) - Caterpillar Inc said on Thursday it was vigorously contesting the $2.3 billion tax and penalties for certain years proposed by the U.S. Internal Revenue Service and that the case would not have a material impact on its finances and operations.

Last year, the IRS challenged the company’s taxes for 2007-2012 and federal law enforcement officials searched three of its facilities in March in connection with an investigation related to profits earned by a Swiss parts subsidiary, Caterpillar SARL, or CSARL.

That subsidiary was the subject of a 2014 U.S. Senate committee report that concluded Caterpillar shifted billions in profits abroad and had $2.4 billion in taxes deferred or avoided from 2012.

In a regulatory filing, the heavy machinery manufacturer said the relevant transactions were in compliance with the law. (bit.ly/2nZbqqH)

“We currently believe the ultimate disposition of this matter will not have a material adverse effect on our consolidated financial position, liquidity or results of operations,” Caterpillar said in the filing.

The U.S. tax overhaul signed into law in December has raised hopes of a settlement with the government. Chief Executive James Umpleby last month said the company was cooperating with authorities and hopeful of a quick resolution.

The company’s shares were up more than 1 percent at $159.31 in afternoon trading.