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"As a result of those licensing and servicing agreements,

over the next thirteen years from 2000 to 2012, Caterpillar shifted to CSARL in Switzerland taxable income from its non-U.S. parts sales totaling more than $8 billion, and deferred or

avoided paying U.S. taxes totaling about $2.4 billion," the report said.

It said the arrangement resulted in Caterpillar paying an effective tax rate of only 4 percent to 6 percent.

Caterpillar, in its 2016 annual report, said it is "vigorously contesting" the IRS demand. "We believe that the relevant transactions complied with applicable tax laws and did not violate judicial doctrines," it stated.

The Senate committee report also criticized Caterpillar's accountants, PwC, saying that the firm's roles as auditor and tax consultant represented a conflict of interest. PwC on Thursday said it had no comment.

In testimony before the Senate in 2014, PwC partner Thomas Quinn said the firm believed that its "tax advice and Caterpillar’s tax positions were correct under applicable tax laws. In sum, PwC’s provision of tax services to Caterpillar as our audit client was entirely appropriate."

Caterpillar also disclosed in its annual report that it had received grand jury subpoenas from the U.S. District Court for the Central District of Illinois seeking documents and information related to the movement of cash among U.S. and non-U.S. subsidiaries, and the purchase and resale of replacement parts by Caterpillar Inc. and non-U.S. Caterpillar subsidiaries, including Caterpillar SARL. Caterpillar said it is cooperating with the investigation and did not believe it would have a material impact on its finances.

PARTS BUSINESS; TAXES

The facility in Morton, according to the company’s website, is responsible for receiving and shipping replacement parts to parts facilities and Caterpillar dealers worldwide.

Caterpillar reported sales fell 18 percent in 2016 to $38.5 billion and since late 2015 it has shrunk its workforce by more than 16,000 employees and consolidated or closed 30 facilities. Caterpillar cut 12,300 jobs in 2016, including 7,700 in the United States.

It said it was considering closing two more major production facilities, including one in Aurora, Illinois, and also announced it was moving its corporate headquarters from Peoria to Chicago this year.

Last week in Missouri, U.S. Vice President Mike Pence toured Fabick CAT, a family-owned company that is one of the largest U.S. distributors of Caterpillar equipment. "You are the strength in the American economy, and you're going to lead an American comeback," he told workers there.