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mitigate taxes. This company manufactures and sells cars in the U.S.
and two (2) foreign countries.
Using the Internet or Strayer Library, research the rules and
techniques for transfer pricing. Choose two foreign countries and
research their respective tax rates.
Write a six to eight (6-8) page paper in which you:
1. Based on your research, create projections of revenues, costs,
and tax rates for all three (3) countries, including the U.S. Provide
support for your projections.
2. Based on your projections, create at least two (2) scenarios in
which you allocate revenues and costs to each country to determine
the lowest possible overall tax for each country. Provide support for
your rationale.
3. Create at least three (3) scenarios and propose a scenario to the
client that will result in a favorable tax position. Provide support for
your rationale.
4. Create at least three (3) scenarios and propose a scenario to
your client that is less likely to result in an IRS audit. Provide
support for your rationale.
5. Assume that the IRS has challenged the allocations and is
preparing to audit the client. Prepare a position to defend the client
to IRS. Provide support for your position.
6. Imagine that you are an IRS agent auditing a multinational
company’s transfer pricing methods. Evaluate the tools you could