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:

Cognitive Therapy

A type of psychotherapy that focuses on changing negative patterns of thought to alter unwanted behavior patterns or treat mood disorders such as depression.

Systematic Desensitization

A therapeutic method used to reduce phobia or anxiety through gradual exposure to the feared object or situation combined with relaxation techniques.

Classical Conditioning

A learning process that occurs when two stimuli are repeatedly paired; a response that is at first elicited by the second stimulus is eventually elicited by the first stimulus alone.

Unconditional Positive Regard

A concept in psychology, particularly within humanistic therapy, where the therapist offers the client acceptance and support regardless of what the client says or does.