Earlier this month, U.S. law enforcement officials raided three of the heavy machinery manufacturer's Illinois facilities as part of an Internal Revenue Service probe related to profits earned by the company's Swiss parts unit, Caterpillar SARL.

The IRS has demand that the company pay $2 billion in taxes and penalties for profits assigned to the Swiss unit.

The unit was also the subject of a 2014 Senate committee report that concluded Caterpillar shifted billions in profits abroad and had $2.4 billion in taxes deferred or avoided from 2012.

"I have asked Bill - who has no prior connection with Caterpillar - to draw on his experience ... to take a fresh look at Caterpillar's disputes with the government," Chief Executive Jim Umpleby said in a statement on Thursday.

Barr served as the 77th attorney general when George H.W. Bush was president. Before that he was the deputy attorney general and assistant attorney general in charge of the U.S. Department of Justice's Office of Legal Counsel.

He also served for over 14 years as executive vice president and general counsel of Verizon Communications Inc.