_____ Which of the following statements is false?
A) The IRS's transfer pricing rules apply to inbound transfers.
B) The IRS's transfer pricing rules apply to outbound transfers.
C) Under certain circumstances, the Internal Revenue Service has the authority to set the transfer prices.
D) The Internal Revenue Service requires intercompany inventory transfer prices to be set at halfway between the seller's cost and the buyer's expected selling price.
E) None of the above.

Question

Quizplus · Accepted Answer

The IRS does not mandate a specific method like setting intercompany inventory transfer prices at halfway between the seller's cost and the buyer's expected selling price. Instead, it requires that transfer prices comply with the arm's length principle, meaning they should be consistent with the prices that would have been charged between unrelated parties under similar circumstances.

_____ Which of the Following Statements Is False