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 incomemore 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