Caterpillar settles tax dispute with IRS that led to 2017 government raids
PEORIA (25 News Now) - Caterpillar said Thursday it reached a settlement of its long-standing tax dispute with the U.S. Internal Revenue Service (IRS) that came to light when federal agents raided several local CAT plants in early 2017.
The heavy-equipment maker said the settlement resolves all issues for tax years 2007 through 2016 without any penalties, however no information was given how much Caterpillar wound up paying in back taxes.
“We have been cooperating with the government in its review of the issues and are pleased to have reached this resolution with the IRS,” Caterpillar said in a statement.
In a filing Thursday with the U.S. Securities and Exchange Commission (SEC), Caterpillar said the company is “subject to the continuous examination of our income tax returns by the IRS, and tax years subsequent to 2016 are not yet under examination.”
The settlement includes resolution of a tax dispute on profits earned by Caterpillar’s Switzerland-based subsidiary.
Caterpillar said in its SEC filing that the company “vigorously contested the IRS’s application of the “substance-over-form” or “assignment-of-income” judicial doctrines and its proposed increases to tax and imposition of accuracy-related penalties.”
“The settlement does not include any increases to tax in the United States based on those judicial doctrines and does not include any penalties,” the company also said in the SEC filing.
Caterpillar’s share price rose almost 1.3% Thursday to $183.15.
Copyright 2022 WEEK. All rights reserved.