USAco, a domestic corporation, is a wholly-owned subsidiary of a Japanese parent, ASIAco, which manufactures automobiles. During the current year, USAco pays $100 million for automobiles from ASIAco. If USAco fails to contemporaneously document its transfer pricing practices and the IRS makes an adjustment of $40 million, USAco is:

a. subject to the transfer pricing penalty.

b. not eligible to contemporaneously document its transfer pricing practices in future years.

c. not subject to any transfer pricing penalty.

d. not eligible for an advance pricing agreement.