the irs has the authority to impose penalties on companies that significantly underp 4375885

The IRS has the authority to impose penalties on companies that significantly underpay taxes as a result of inappropriate transfer pricing. Acme Company transfers a product to a foreign affiliate at $15 per unit, and the IRS determines the correct price should have been $65 per unit. The adjustment results in an increase in U.S. tax liability of $1,250,000. Due to this change in price, “what amount of penalty for underpayment of taxes as a result of an inappropriate transfer price will Acme Company pay?” a. $0 b. $125,000 c. $250,000 d. $500,000 View Solution:
The IRS has the authority to impose penalties on companies

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