For purposes of the tax imposed in Chapter 18 of this title, the following rules shall apply:

(a) In any case of two or more organizations, trades, or businesses (whether or not affiliated within the meaning of 26 U.S.C. § 1504) owned or controlled directly or indirectly by the same interests, the Commissioner of the Alabama Department of Revenue may distribute, apportion, or allocate gross income, deductions, credits, or allowances, if the commissioner determines that such distribution, apportionment, or allocation is necessary in order to prevent evasion of Alabama income taxes or to clearly reflect the income of any such organization, trade, or business.

Terms Used In Alabama Code 40-2A-17

  • Contract: A legal written agreement that becomes binding when signed.
  • Evidence: Information presented in testimony or in documents that is used to persuade the fact finder (judge or jury) to decide the case for one side or the other.
  • following: means next after. See Alabama Code 1-1-1
  • person: includes a corporation as well as a natural person. See Alabama Code 1-1-1
  • state: when applied to the different parts of the United States, includes the District of Columbia and the several territories of the United States. See Alabama Code 1-1-1
(b) Any transaction based upon tax planning advice, tax return preparation advice, or tax return preparation services with respect to which an improper contingent fee is directly or indirectly paid by the taxpayer shall be evidence of the evasion of Alabama income taxes.
(c) Any paid tax return preparer or tax planner who provides to a taxpayer tax planning advice, tax return preparation advice, or tax return preparation services in consideration for an improper contingent fee shall be subject to a penalty as if such paid tax return preparer or tax planner was subject to the penalties imposed by 26 U.S.C. § 6701.
(d) “Improper contingent fee” shall mean compensation received by a person or entity that is subject to the Code of Professional Conduct of the American Institute of Certified Public Accountants (or the applicable state version of such code) for tax planning advice or tax return advice or preparation that would be improper under the terms of the code rendered after December 31, 2001. With respect to any person or entity that renders tax planning advice, tax return advice, or tax return preparations, but is not a certified public accountant, an improper contingent fee shall be defined in regulations prescribed by the Alabama Department of Revenue on a basis consistent with the Code of Professional Conduct of the American Institute of Certified Public Accountants.
(e) Subsections (b), (c), and (d) shall not apply to any contingent fee contract executed prior to January 1, 2002.
(f) The Commissioner of the Alabama Department of Revenue shall exercise such authority in a manner consistent with Act 2001-1088 and, to the extent applicable, 26 U.S.C. § 482 and the rulings and regulations issued thereunder. The commissioner is authorized and directed to promulgate such additional regulations as are necessary to enforce the provisions of Act 2001-1088.
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