Which of the Following Statements Regarding Internal Revenue Code Section

question 89

Multiple Choice

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

• A) Section 482 applies if related corporations charge each other arms-length transfer prices.
• B) Section 482 is designed to prevent shifting of income from a high tax rate member of a related group to a low tax rate member.
• C) 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.
• D) Section 482 can be used to override artificial transfer prices established between related parties.

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Definitions:

Terror Management Theory

A theory which says that to minimize fear of mortality, humans strive to sustain faith that they are enduringly valued contributors to a meaningful world and therefore transcend their physical death.

Social Dominance Theory

The theory that large societies create hierarchies and that people tend to endorse beliefs thatlegitimatize that hierarchy.

Mortality

The state of being subject to death; the opposite of immortality.

Higher Entitativity

A perception of a group as being a cohesive and unified entity, based on similarities among its members or the strength of their shared identity.