If it appears to the Commissioner of Revenue Services that any agreement, understanding or arrangement exists between the taxpayer and any other corporation or any person or firm, whereby the activity, business, income or capital of the taxpayer within the state is improperly or inaccurately reflected, the Commissioner of Revenue Services is authorized and empowered, in his or her discretion, provided such discretion is not arbitrarily, capriciously or unreasonably exercised, and in such manner as he or she may determine, to adjust items of income, deductions and capital, and to eliminate assets in computing any apportionment percentage under this chapter, provided any income directly traceable thereto shall also be excluded from entire net income, so as equitably to determine the tax. Where (1) any taxpayer conducts its activity or business under any agreement, arrangement or understanding in such manner as either directly or indirectly to benefit its members or stockholders, or any of them, or any person or persons directly or indirectly interested in such activity or business, by entering into any transaction at more or less than a fair price which, but for such agreement, arrangement or understanding, might have been paid or received therefor, or (2) any taxpayer, a substantial portion of whose capital stock is owned either directly or indirectly by another corporation, enters into any transaction with such other corporation on such terms as to create an improper loss or to reflect inaccurate net income, the Commissioner of Revenue Services may include in the entire net income of the taxpayer the fair profits, which, but for such agreement, arrangement or understanding, the taxpayer might have derived from such transaction. Not later than January 1, 1995, the commissioner shall adopt regulations, in accordance with the provisions of chapter 54, setting forth standards for taking the actions authorized under this section.