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Defenders of this IRS position would say it comes home to Section 61. The waitress provided a service for me, and I paid for it. Compensation for services is taxable. End of transfer pricing deal.

The auditor going by your books does not necessarily want as part of your a problem, but he has to find a problem. It's his job, and he's to justify it, along with the time he takes to make it work.

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