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commission DISC. Brown-Forman Corp. v. Commissioner, supra at
926-927. Although the section 994(a) pricing rules literally
applied only to a buy-sell DISC, they were adopted for commission
DISC's pursuant to statutory authority granted to the Secretary.
Sec. 994(b)(1); sec. 1.994-1(d)(2)(i), Income Tax Regs.
In 1984, Congress enacted the FSC provisions (sections 921
through 927) to replace and cure certain perceived shortcomings
in the DISC provisions for taxable years beginning after December
31, 1984. Deficit Reduction Act of 1984, Pub. L. 98-369, sec.
801(a), 98 Stat. 494, 985; S. Prt. 98-169 (Vol. 1), at 636
(1984); see Brown-Forman Corp. v. Commissioner, supra at 924-925,
946. The Senate Finance Committee explanation of the FSC
legislation states that
In general, where the provisions of the bill are
identical or substantially similar to the DISC
provisions under present law, the committee intends
that rules comparable to the rules in regulations
issued under those provisions will be applied to the
FSC. [S. Prt. 98-169 (Vol. 1), supra at 636.]
As with DISC's, under the FSC provisions, the FSC and its
related supplier remain subject to section 482 but may elect
between two safe harbor pricing methods to determine the profit
of the FSC in order to avoid the complexities of section 482.
Sec. 925(a)(1) and (2). The transfer pricing rules applicable to
FSC's are analogous to the rules applicable to DISC's. Secs.
925(a), 994(a); General Dynamics Corp. & Subs. v. Commissioner,
supra at 117-118. The FSC and related supplier may, subject to
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