The end result can be billions of dollars in profit that escapes U.S. taxation for years because it's parked offshore indefinitely.
Borrow from a low-tax subsidiary: This next maneuver is what Sullivan's colleague Lee Sheppard at Tax Analysts calls "the big enchilada of tax planning."
When U.S. multinationals borrow money from an offshore subsidiary in a low-tax country, the company gets a double tax benefit.
The U.S.-based operation gets to deduct the interest it pays on the loan. And the subsidiary that receives the interest payments only has to pay a very low income tax rate on it, far less than the 35 percent it would owe if the income were booked in the United States.