https://resources.comp-press.com/tags/penalties/ Recent content in Penalties on CompPress | Transfer Pricing Resources Hugo en-us Wed, 08 Apr 2026 00:00:00 +0000 https://resources.comp-press.com/articles/transfer-pricing-penalties/ Wed, 08 Apr 2026 00:00:00 +0000 https://resources.comp-press.com/articles/transfer-pricing-penalties/ <p>A useful distinction often gets lost in transfer pricing discussions: the risk that pricing is wrong and the risk that documentation is inadequate are two separate exposures, and they interact. In the United States, documentation is the principal defense against penalties when the IRS proposes a pricing adjustment. Without adequate documentation, a §6662(e) penalty can apply on top of the tax owed on the adjustment, materially increasing the cost. With adequate documentation, the same adjustment may produce additional tax but no penalty. In some other jurisdictions, separate documentation-failure penalties apply regardless of whether pricing is ultimately adjusted. This article walks through the mechanics of the US penalty regime under IRC Section 6662(e), notes how other major jurisdictions approach the question, and provides a self-assessment framework and a worked example so a finance or tax leader can produce a rough estimate of exposure for their own group.</p>