From what I've seen, tax loopholes exist mainly because of incompetence. The Section 482-7 regs were written by the IRS to control how intellectual property is

From what I've seen, tax loopholes exist mainly because of incompetence. The Section 482-7 regs were written by the IRS to control how intellectual property is shifted offshore. The valuation methods outlined in the article were questionable. I read the regs multiple times to understand them and made an Excel valuation model to follow their rules. Don't think the IRS realized they created terrible, ridiculous theoretical models. Don't think it was intentional either. Just a few people that didn't understand the implications and congress that signed the code into law without being able to understand it. Tax code for valuing IP is highly complex. The US government writes terrible tax code in my opinion, mainly because they're just not very good. They're not as good as top private sector tax lawyers. I empathize with the "You make the tax laws @SenWarren; we just follow them. If you don't like the laws you've created, by all means, change them" sentiment. Multinational corporations have to comply with tax laws from multiple countries that are arbitrary and complex.