FORTUNE — The 40-page case study on Apple’s (AAPL) overseas tax strategies submitted by the Senate’s Permanent Subcommittee on Investigations Monday is not an easy read.
The 10-page overview of tax principles and law in the middle — a history of how a program to block the use of offshore tax havens begun by President Kennedy was riddled with loopholes introduced by Congress — is almost impenetrable.
Yet you need to wrap your mind around how Subpart F of the U.S. Tax Code was undermined by the so-called check-the-box and look-through rules in order to understand how Apple, by the subcommittee’s calculations, was able to legally avoid paying U.S. taxes on $44 billion of income over a four-year period.
In one two-year span, according to the report, Apple was able to make $35 billion in income disappear through the check-the-box loophole and avoid paying $12.5 billion in U.S. taxes, or $17 million a day. The trick, as illustrated by the chart above, was to have billions in profits and dividends from overseas operations made payable to Apple Operations International, Apple’s Irish subsidiary that by the company’s own description is, for tax purposes, resident neither in the U.S. nor in Ireland.
Apple CEO Tim Cook and two of his fellow executives — CFO Peter Oppenheimer and Phillip Bullock, head of Apple’s tax operations — could face some tough questions today when they appear before the subcommittee. The hearings are scheduled to begin at 9:30 a.m. ET in Room 1o6 of the Dirkson Senate Office Building. The Apple guys are in the second of three panels, so the precise timing of their testimony is unclear.
C-Span is planning to cover the hearings gavel to gavel. I expect the cable networks will be dipping in and out as well.
Should be an interesting day.
See also: Meet AOI, Apple’s mysterious Irish subsidiary