How does the U.S.deal with issuing involving transfer pricing?

Question

Quizplus · Accepted Answer

Section 482 of the Internal Revenue Code allows the IRS to reallocate income, deductions, and credits among related companies to prevent the manipulation of transfer pricing. The goal is to ensure that the profits are allocated fairly between the related companies and that income is not artificially shifted to low-tax jurisdictions. Therefore, the correct choice is C. Choices A and B are incorrect because Section 482 does not make transfer pricing illegal but instead provides guidelines for its proper use. Choice D is also incorrect because firms cannot set whatever price they want in transfer pricing situations as this could lead to tax evasion.

How Does the U