Apple avoids paying taxes using offshore entities, a new investigation by the Senate found. It is charging that the company does so via a "complex web" of offshore entities, and the practice has continued for years, allowing Apple to avoid paying taxes.

 Apple, Inc. pays little or no money on billions of dollars earned according to the inquiry the Senate conducted, which was revealed on Monday. The offshore entities, including many in Ireland, don't have any physical addresses or employees but siphon money to avoid paying taxes.

Starting in 2009, Apple hid $74 billion or more, the investigation charges. It did so via subsidiaries in Ireland.

While many companies, particularly large multinational companies, funnel some assets offshore to dodge US tax laws, the way Apple did so was unprecedented because they didn't even attempt to have a physical presence. So while the practice isn't unheard of, the sheer scale and scope of Apple's actions is new, according to the Senate.  They have accused Apple of not paying taxes because the Irish subsidiaries technically didn't belong to any government.

"Apple sought the Holy Grail of tax avoidance", Senator Carl Levin (Dem-Michigan), who chaired the committee, told press. "It has created offshore entities holding tens of billions of dollars while claiming to be tax resident nowhere."

The Permanent Subcommittee on Investigations launched an inquiry that is accusing Apple of paying, in one example, no taxes on $30 billion of earnings and, in another branch of the company's holdings, 0.05% on $22 billion USD.

Apple CEO Tim Cook will speak to the Senate committee and defend his company. A statement released by Apple says, "Apple does not use tax gimmicks."  The statement defended the purpose of the offshore subsidiaries, saying the ones in Ireland help expansion in Asia and Europe and fund projects that benefit the US economy in research and development. They claim they have not broken any tax laws.

John McCain (Republican-Arizona) called the Apple tax structure "byzantine" and said "Apple claims to be the largest U.S. corporate taxpayer, but by sheer size and scale it is also among America's largest tax avoiders."

Because much of Apple's value is in intellectual property, like many other tech companies, the Senate charges that it was easy to funnel money through fake or crooked accounts that don't actually do any work for the company. Other companies that may be impacted in the Senate's probe include Google, Hewlett-Packard, and Microsoft.