• Apple does not use tax gimmicks. Apple does not move its intellectual property into offshore tax havens and use it to sell products back into the US in order to avoid US tax; it does not use revolving loans from foreign subsidiaries to fund its domestic operations; it does not hold money on a Caribbean island; and it does not have a bank account in the Cayman Islands. Apple has substantial foreign cash because it sells the majority of its products outside the US. International operations accounted for 61% of Apple's revenue last year and two-thirds of its revenue last quarter. These foreign earnings are taxed in the jurisdiction where they are earned ("foreign, post-tax income").

Tim Cook will have one thing going for him Tuesday. I bet he understand this stuff. Odds are his Senate inquisitors don't.

UPDATE: We got a taste of where the senators are headed with two quotes given Monday afternoon to the New York Times:

"Apple wasn't satisfied with shifting its profits to a low-tax offshore tax haven," said Senator Carl Levin, a Michigan Democrat. "Apple sought the holy grail of tax avoidance. It has created offshore entities holding tens of billions of dollars while claiming to be tax resident nowhere."

John McCain, the Arizona Republican who is the ranking member on the committee, added: "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."

UPDATE 2: The Wall Street Journal fills in some of the blanks with details from the subcommitee's staff report: (I quote from a story titled Apple Pays No Tax on Much of Its Overseas Income, Senate Panel Finds)

• Apple has long based its operations for Europe, the Middle East, India, Africa, Asia and the Pacific in Cork, Ireland, where it had negotiated a special corporate tax rate of 2% or less in recent years, the company told investigators. Ireland's statutory corporate tax rate is already 12%, well below 35% in the U.S.
• One of Apple Sales International's parent companies, Apple Operations International, hasn't filed a corporate tax return in the past five years—anywhere, the Senate panel found. The unit, which reports directly to California headquarters, took in $29.6 billion from smaller subsidiaries, including ASI, between 2009 and 2012, Apple told investigators.
• In 2011, another Apple unit, Ireland-based Apple Sales International, which sells iPhones, iPads, MacBooks and other products to overseas distributors, recorded $22 billion in pretax earnings, but paid $10 million in taxes, investigators found. That works out to a rate of about .05%.
• A third Apple subsidiary, Apple Operations Europe, also maintains its corporate profit isn't taxable by any country, according to the investigation.

Get out the popcorn. This could get hot. The hearings are scheduled to start at 9:30 a.m. Eastern. Cook, CFO Peter Oppenheimer and Phillip Bullock, head of Apple's tax operations (hired from Symantec a year ago last April), are in the second panel.

For the TV schedule, check C-Span Tuesday morning.

See also

• How Apple sidestepped U.S. taxes: The Senate's version
• Link to the subcommittee report: Offshore Profit Shifting and the U.S. Tax Code - Part 2 (Apple Inc.).