Which of the following statements is false concerning § 482 and its aim of reallocating income and deductions among affiliated companies?
A) Pricing reallocations made by the IRS are generally sustained by the courts unless found to be arbitrary or capricious.
B) There is an assumption that the prices set for transactions among affiliated companies are based on tax avoidance.
C) It is the affiliated companies' responsibility to persuade the IRS that their pricing policies are the same as policies followed by unaffiliated companies.
D) Proof that a company's pricing decisions are based on sound business reasons is sufficient to avoid any reallocation by the IRS under § 482.
Correct Answer:
Verified
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