The IRS's 20% penalty for transfer pricing adjustments during a year that exceed $10 million of taxable income are not tax deductible.

Name: The IRS's 20% penalty for transfer pricing adjustments during a year that exceed $10 million of taxable income are not tax deductible.
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The 20% penalty imposed by the IRS for transfer pricing adjustments is considered a penalty for tax underpayment or non-compliance, and penalties or fines paid to the government for violations of law are not tax deductible.

The IRS's 20% Penalty for Transfer Pricing Adjustments During a Year