DomCo, a domestic corporation, is a wholly-owned subsidiary of its Japanese parent corporation, ASIAco, which manufactures lightbulbs. During the current year, DomCo pays $100 million for 100 million lightbulbs from ASIAco. If DomCo fails to contemporaneously document its transfer pricing practices and the IRS adjusts the transfer price to $60 million (a reduction of $40 million), DomCo is: