The U.S. Internal Revenue Service can reallocate revenues and expenses between parent corporations and their subsidiaries to more clearly reflect a proper allocation of income. In such instances it is the responsibility of the corporation to prove that the IRS has been arbitrary in its decision-making, thus establishing a "guilty until proven innocent" tax approach.

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This statement is true. The IRS has the authority to reallocate revenues and expenses between parent corporations and their subsidiaries if they feel that the allocation does not accurately reflect income. In such cases, it is up to the corporation to prove that the IRS's decision-making was arbitrary. This is known as the "guilty until proven innocent" approach.

The US Internal Revenue Service Can Reallocate Revenues and Expenses Between