Correlative relief is a component of the U$.$S$.$ Model Income Tax Treaty. What is correlative relief?

Multiple Choice

The burden of revising transfer pricing schemes is offset by reduction of the corporate tax rate on foreign source income.

When the IRS adjusts an international transfer price, the tax authority in the foreign country makes a corresponding adjustment.

Additional tax imposed by the IRS related to a transfer pricing audit is offset with a foreign tax credit in the same amount.

IRS and foreign taxing authorities will collaborate in determining the appropriate international transfer price.