- 23 - and branches of foreign corporations. The Omnibus Budget Reconciliation Act of 1989, Pub. L. 101-239, sec. 7403, 103 Stat. 2358, added record maintenance requirements that were broadened by the Omnibus Budget Reconciliation Act of 1990, Pub. L. 101- 508, sec. 11315(a), 104 Stat. 1388, to affect all open years. The IRS issued final implementing regulations on June 19, 1991. Sec. 1.6038A-1, Income Tax Regs., 56 Fed. Reg. 28056 (June 19, 1991). Section 6038A was drafted to aid the IRS in enforcement of section 482; its sponsors in the House of Representatives described it as an effort to "Improve [the] enforceability of section 482". H. Rept. 101-247, at 1295 (1989). The IRS had experienced difficulties obtaining information from foreign parents of U.S. corporations. See United States v. Toyota Motor Corp., 561 F. Supp. 354 (C.D. Cal. 1983). The noncompliance penalty of section 6038A(e)(3) is among the principal enforcement mechanisms of the statute. Section 6038A(e)(3) provides: (3) APPLICABLE RULES IN CASES OF NONCOMPLIANCE.-- If the rules of this paragraph apply to any transaction-- (A) the amount of the deduction allowed under subtitle A for any amount paid or incurred by the reporting corporation to the related party in connection with such transaction, and (B) the cost to the reporting corporation of any property acquired in such transaction from the related party (or transferred by such corporation in such transaction to the related party),Page: Previous 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 Next
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