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(3) Foreign related party transactions for which
only monetary consideration is paid or received by the
reporting corporation. If the related party is a
foreign person, the reporting corporation must set
forth on Form 5472 the dollar amounts of all reportable
transactions for which monetary consideration * * * was
the sole consideration paid or received during the
taxable year of the reporting corporation. * * * The
types of transactions described in this paragraph are:
* * * * * * *
(v) Consideration paid and received for
technical, managerial, engineering,
construction, scientific, or other services;
* * * * * * *
(x) Other amounts paid or received not
specifically identified in this paragraph
(b)(3) to the extent that such amounts are
taken into account for the determination and
computation of the taxable income of the
reporting corporation.
The above provisions defining a transaction are very broad.
Indeed, petitioner does not dispute, and we hold, that it engaged
in transactions with a related party for its taxable year ending
April 30, 1991, when it contracted with and paid for assembly
services by ASAT, Ltd. Petitioner nevertheless maintains that
section 6038A is inapplicable for the reasons set forth below.
Before those reasons are examined, however, a review of the
statute's background is in order to provide context to an
analysis of the statute and the parties' arguments.
4. Background of Section 6038A
Section 6038A, as originally enacted in 1982, imposed
reporting requirements on foreign controlled U.S. corporations
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