The district director will take a setoff into account only if the taxpayer –
(A) Establishes that the transaction that is the basis of the setoff was not at arm’s length and the amount of the appropriate arm’s length charge;
(B) Documents, pursuant to paragraph (g)(2) of this section, all correlative adjustments resulting from the proposed setoff; and
(C) Notifies the district director of the basis of any claimed setoff within 30 days after the earlier of the date of a letter by which the district director transmits an examination report notifying the taxpayer of proposed adjustments or the date of the issuance of the notice of deficiency.