I was trying VS Code on windows, setting up a project with TypeScript when I received this error:

error TS5023: Unknown compiler option 'p'.

This was a big surprise because the parameter is also present in the documentation.

After some attempts I figured out that VS Code was using a different executable for TypeScript, that was installed with Microsoft SDKs (and obviuosly was an older version… 1.0.3 instead of 1.5.3 on npm). So I had to remove that tsc environment from the System PATH to work with the correct version installed by npm, as they suggest on the official web page.