A Comparative Approach to Documentation Methods and Avoiding Transfer Pricing Penalties: Is the United States Justified in Its Approach of Enforcing Penalties Under Section 6662?

By Atalya Santos | Volume 9 | Issue 1

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This Note examines the Internal Revenue Service’s application of § 6662 accuracy-related penalties in transfer pricing disputes, with particular focus on how the agency evaluates the adequacy of contemporaneous transfer pricing documentation prepared by multinational corporations (MNCs). It argues that the United States’ penalty-centered enforcement model reflects an aggressive compliance strategy that diverges meaningfully from the approaches adopted by Canada, the United Kingdom, and Australia. Through a comparative analysis of these jurisdictions, this Note evaluates whether the U.S. model is normatively justified as an anti-evasion mechanism or whether it imposes disproportionate compliance burdens relative to peer OECD economies.

Antalya Santos.

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