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Under section 482, the Commissioner has broad authority to
allocate income among commonly controlled corporations to prevent
the artificial shifting of net incomes of controlled taxpayers
and to place them on a parity with uncontrolled, unrelated
taxpayers. Seagate Tech., Inc., & Consol. Subs. v. Commissioner,
102 T.C. 149, 163 (1994); Sundstrand Corp. v. Commissioner, 96
T.C. 226, 352-353 (1991); see also Bausch & Lomb, Inc. v.
Commissioner, 92 T.C. 525, 581 (1989), affd. 933 F.2d 1084 (2d
Cir. 1991); Edwards v. Commissioner, 67 T.C. 224, 230 (1976);
sec. 1.482-1(b)(1), Income Tax Regs.
The Commissioner’s section 482 determination must be
sustained absent a showing that he has abused his discretion.
Paccar, Inc. v. Commissioner, 85 T.C. 754, 787 (1985), affd. 849
F.2d 393 (9th Cir. 1988). Consequently, the taxpayer bears the
heavier than normal burden of proving that the Commissioner’s
section 482 allocations are arbitrary, capricious, or
unreasonable. Your Host, Inc. v. Commissioner, 489 F.2d 957, 960
(2d Cir. 1973), affg. 58 T.C. 10, 23 (1972); Seagate Tech., Inc.
& Consol. Subs. v. Commissioner, supra at 164; G.D. Searle & Co.
v. Commissioner, 88 T.C. 252, 359 (1987). Whether the
Commissioner's discretion has been abused is a question of fact.
American Terrazzo Strip Co., Inc. v. Commissioner, 56 T.C. 961,
971 (1971). In reviewing the reasonableness of the
Commissioner’s allocation under section 482, we focus on the
reasonableness of the result, not the details of the methodology
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