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Caterpillar Accused Of Tax Dodging

CAT avoided paying more than $2 billion in federal income taxes from 2000 to 2009 by accounting fraudulently for billions of profits, lawsuit says.

PEORIA, Ill. (AP) -- Caterpillar Inc. avoided paying more than $2 billion in federal income taxes from 2000 to 2009 by accounting fraudulently for billions in dollars of profits, according to a lawsuit filed by a manager of the heavy equipment maker.

Daniel Schlicksup, who was a global tax strategy manager for the company from 2005 to 2008, alleges that the company wrongly attributed at least $5.6 billion in profits from sales through an Illinois-based warehouse to its unit in Switzerland in order to lessen its tax burden and increase earnings.

He claims Caterpillar reassigned him to another job after he complained about the practice and threatened to fire him if he didn't accept.

Bloomberg News on Friday reported on the lawsuit, which was filed 2009 in U.S. District Court in Peoria. It remains unresolved.

Schlicksup, now a manager in Caterpillar's global information services division in Peoria, seeks a court order enabling him to return to his previous job and also asks in the lawsuit for stock options he says should not have been withheld from him.

A spokesman for Caterpillar, which reported $2.7 billion in profits last year as the world's largest maker of mining and construction equipment, said the company has engaged in no wrongdoing.

"Caterpillar complies with applicable tax laws and regulations in the countries where we have operations and conduct business," spokesman Jim Duggan said in a statement.

Caterpillar contends it has not retaliated against Schlicksup.

"The company has a robust and well-defined process for examining questions and concerns raised by employees, and that process has been followed as it relates to the allegations made in this case," Duggan said in the statement.

He declined to discuss specifics of the case.

The company said in one filing in the case that one purpose of the Swiss tax strategy in question is to reduce its overall taxes. It said it pays less in U.S. taxes but more to Switzerland under that structure.

Schlicksup's lawyer, Dan O'Day, would not say whether his client had complained directly to the Internal Revenue Service about what the lawsuit called the "tax and financial statement fraud."

Schlicksup did not return a telephone query Friday.

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