Padre Co. is a multinational enterprise involved in selling cement mixers worldwide.It has established several subsidiaries in countries in Latin America.One subsidiary, Hijo Co., is located in Country X.Hijo is responsible for locating customers for Padre.Once the customer is put in touch with Padre, Hijo does nothing more.If the customer buys mixers, Padre pays Hijo 5 percent of the sales price as a finding fee.Payments by the customer are made directly to Padre at its home office in Topeka, Kansas, USA.Padre itself does no business whatsoever in Country X, other than to pay Hijo its finding fees.During the current tax year, Padre sold U.S. $10,000,000 worth of cement mixers in Country X.It earned for itself (after paying Hijo $500,000) $1,500,000.Country X's Internal Revenue Agency (IRA) has assessed taxes on Hijo of $400,000, which is 20 percent (the appropriate tax rate) of $200,000.The IRA contends that Padre and Hijo are in reality one company and that Hijo's taxes are assessable on the total income of both Padre and Hijo.Is the IRA correct? Explain.