Which of the following statements regarding Internal Revenue Code Section 482 is false?

Question

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Section 482 does not apply if related corporations charge each other arms-length transfer prices. In fact, Section 482 only applies if related corporations do not charge each other arms-length transfer prices. The section is designed to ensure that related corporations do not set transfer prices artificially high or low, in order to shift income to a lower tax rate member or avoid taxes altogether. The prevailing attitude of the courts is that the IRS's determination of transfer price should be upheld unless the taxpayer can show that the IRS was arbitrary or capricious, and Section 482 can be used to override artificial transfer prices established between related parties.

Which of the Following Statements Regarding Internal Revenue Code Section