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Apple target of Senate probe into offshore tax practices

Apple CEO Tim Cook expected to testify next week at a hearing on the various tax-reduction strategies used by companies.

Apple CEO Tim Cook

Apple will reportedly be the subject of a Senate hearing next week into U.S. companies' offshore tax practices.

Apple CEO Tim Cook is expected to testify Tuesday before the Senate Permanent Subcommittee on Investigation, according to Politico, which first reported on Apple's involvement at the hearing. The committee has been examining the various tax-avoidance strategies used by companies, including Microsoft and Hewlett-Packard, and how that affects U.S. interests.

Apple recently announced a $17 billion bond plan as part of its shareholder capital returns plan that will save it $9.2 billion in taxes it would have had to pay had it tapped its huge overseas cash pile. Even though Apple has $145 billion in cash, more than $100 billion of that is held outside the U.S. By issuing bonds, Apple will have money to use without getting hit with what's currently a 35 percent corporate tax rate.

Apple defended its tax record and said it has cooperated with the committee.

"We've been working with the Subcommittee to answer their questions about Apple, and we welcome any further questions they might have," Apple spokesman Steve Dowling said in a statement. "Apple is one of the largest taxpayers in the United States, having paid $6 billion in federal corporate income tax in fiscal 2012. We also help create hundreds of thousands of jobs in the U.S. by keeping our R&D in California and creating category-defining products like the iPhone, the iPad and the App Store, which has generated billions of dollars in sales for software developers."

The witness list is expected to be released Friday, a spokesman for Sen. Carl Levin, a Michigan Democrat who is chairman of the committee, told Bloomberg.