The tax lawyer is exactly right, it’s about pricing.
Transfer (inter-company) pricing is an inexact and frustrating accounting exercise. There are no absolute answers. The IRS has it’s own dog in this fight. They want transfer prices to be as low as possible on the U.S. side so they can collect more tax.
Income taxes on corporations are so 19th century.
Yes, he is right. IRS will not leave, but gives trouble until both parties come to some settlement !!!