Litchfield Corporation is a U.S.-based manufacturer of fashion accessories that produces umbrellas in its plant in Roanoke, Virginia, and sells directly to retailers in the United States. As chief financial officer, you are responsible for all of the company's finance, accounting, and tax-related issues.

Required
Draft a memo responding to Sarah Litchfield's question by explaining U.S. income tax regulations related to the export sales described in her memo. Include a discussion of any significant risks associated with her proposal. Make a recommendation with respect to how the price for these sales might be determined.