| Tested Party |
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Treas. Reg. §1.482-5(b)(2)(i) provides that the tested party is the participant in the controlled transaction whose operating profit attributable to the controlled transactions can be verified using the most reliable data and requiring the fewest and most reliable adjustments, and for which reliable data regarding uncontrolled comparables can be located. Consequently, in most cases the tested party is the least complex of the controlled taxpayers and does not own valuable intangible property or unique assets that distinguish it from potential uncontrolled comparables. |
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