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2) Acme Company transfers a product to a foreign affiliate at $35 per unit, and the IRS determines the correct price should have been $100
2) Acme Company transfers a product to a foreign affiliate at $35 per unit, and the IRS determines the correct price should have been $100 per unit. The adjustment results in an increase in U.S. tax liability of $1,000,000. Required: Due to this change in price, what amount of IRS penalty for underpayment of taxes as a result of an inappropriate transfer price will Acme Company pay? - Response (show your work)
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