The US Internal Revenue Service Can Reallocate Revenues and Expenses Between

question 53

True/False

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 proved innocent" tax approach.

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Definitions:

Overallotment Option

An underwriting provision that permits syndicate members to purchase additional shares at the original offering price.

Rights Offering

A chance given to existing shareholders to purchase additional shares at a discounted price before the public.

Underwriting Provision

A clause in an insurance policy or financial instrument that details the underwriter's obligations, covering areas like risk assessment and premium determination.