Betty Amos

United States Tax Court
T.C. Memo. 2022-109BETTY AMOS,
Petitioner
v.
COMMISSIONER OF INTERNAL REVENUE,
Respondent
—————
Docket No. 4331-18. Filed November 10, 2022.
—————
Ayuban A. Tomas, for petitioner.
Derek P. Richman and Daniel C. Munce, for respondent.
MEMORANDUM FINDINGS OF FACT AND OPINION
URDA, Judge: Petitioner, Betty Amos, challenges a notice of
deficiency on which the Internal Revenue Service (IRS) disallowed net
operating loss (NOL) deductions claimed on her 2014 and 2015 tax
returns and determined accuracy-related penalties under section
6662(a). 1 Ms. Amos, a certified public accountant (CPA) and former
owner of multiple Fuddruckers restaurant franchises in Florida and
Tennessee, contends that her declining business fortunes in 1999 and
2000 produced significant NOLs, which she carried forward to 2014 and
2015. The Commissioner responds that she has established neither the
underlying NOLs nor that any portions of those NOLs remained
1 Unless otherwise indicated, all statutory references are to the Internal
Revenue Code (Code), Title 26 U.S.C., in effect at all relevant times, all regulation
references are to the Code of Federal Regulations, Title 26 (Treas. Reg.), in effect at all
relevant times, and all Rule references are to the Tax Court Rules of Practice and
Procedure. We round all monetary amounts to the nearest dollar.
Served 11/10/22
2
[*2] available for use in 2014 and 2015. We will sustain the
Commissioner’s determinations. 2
FINDINGS OF FACT
I. Ms. Amos’s Business Background
Ms. Amos is an accomplished Miami CPA and restaurateur. She
graduated from the University of Miami in 1973, receiving a bachelor of
business administration degree magna cum laude with a major of
accounting. After graduation, Ms. Amos passed the Florida CPA
examination and earned her master of business administration (again
from the University of Miami) in 1976, which allowed her to practice as
a CPA.
During her time in school, Ms. Amos worked as a financial
analyst. She later transitioned to the role of tax adviser and investment
manager for certain high net-worth individuals, including one of the
founders of Burger King. Ms. Amos owned her own accounting firm and
was active in both the American Institute of Certified Public
Accountants and the Florida Institute of Certified Public Accountants.
While living in Miami, Ms. Amos became acquainted with Nick
Buoniconti, a retired National Football League (NFL) Hall of Famer who
had played football both for the University of Notre Dame and the Miami
Dolphins. Mr. Buoniconti was looking for investment opportunities and
decided to invest in the restaurant industry with Ms. Amos, who had
gleaned insights into it from her clients. Ms. Amos and Mr. Buoniconti
ultimately settled on the Fuddruckers restaurant chain after being
alerted to it by another retired NFL player, Fred Willis. Ms. Amos, Mr.
Buoniconti, and Mr. Willis thereafter formed a partnership, Abkey
2 At trial, we reserved ruling on the Commissioner’s relevance objections to
Exhibits 15-P through 18-R and Exhibits 40-P through 47-P. The Commissioner
argued that these exhibits are irrelevant as they relate to tax years different from the
years at issue. While it is true “that every tax year stands on its own,” see Couturier
v. Commissioner, T.C. Memo. 2022-69, at *8, it is “well settled that we may determine
the correct amount of taxable income or net operating loss for a year not in issue . . .
as a preliminary step in determining the correct amount of a net operating loss
carryover” to the year at issue, Lone Manor Farms, Inc. v. Commissioner, 61 T.C. 436,
440 (1974), aff’d without published opinion, 510 F.2d 970 (3d Cir. 1975); Amanda Iris
Gluck Irrevocable Tr. v. Commissioner, 154 T.C. 259, 269 (2020). We will overrule the
Commissioner’s objections.
3
[*3] No. 1, Ltd., 3 in 1983 to become Fuddruckers franchisees in Florida,
signing a multirestaurant development deal.
Mr. Buoniconti and Mr. Willis both moved from Florida before the
first restaurant opened, however. Ms. Amos and Mr. Buoniconti
subsequently bought out Mr. Willis’s interest in the partnership.
Although Mr. Buoniconti was not actively involved in the Fuddruckers
venture, he did maintain a stake in the business. Despite the loss of
active participation of her partners, Ms. Amos pressed ahead, opening
her first Fuddruckers in 1984.
Over the next 27 years Ms. Amos ran a total of 15 different
Fuddruckers restaurants in Florida and Tennessee. Ms. Amos operated
her Fuddruckers enterprise through several partnerships and
subchapter S corporations, each bearing some variation of the Abkey
name (despite Mr. Willis’s departure).
For her efforts, Ms. Amos was honored in 1993 by the National
Association of Women Business Owners as its Outstanding Woman
Business Owner. She was named to the board of trustees of the
University of Miami in 1997, serving as the chair of the audit and
compliance committee.
Ms. Amos’s business fortunes began to decline in the late 1990s
after Mr. Buoniconti brought a lawsuit relating to the business, which
led to his receiving a hefty settlement payment. In 1999 Ms. Amos was
forced to close one of her Fuddruckers locations. Her business fortunes
continued to decline over the next decade, and Ms. Amos closed her last
Fuddruckers restaurant in 2011.
II. 1999 and 2000 Tax Reporting and IRS Audits
Ms. Amos and her then husband, Dr. Thomas Righetti, filed joint
income tax returns for 1999 and 2000, which were prepared by the
accounting firm of Kaufman, Rossin & Co. On their 1999 return, the
couple claimed a refund of $89,908. They reported adjustable gross
income of negative $1,447,749, based upon, inter alia, wage income of
$309,220, interest income of $71,793, and a loss of $1,818,202 from Ms.
Amos’s Fuddruckers enterprise. The couple calculated an NOL of
$1,498,512 (based upon their negative gross income and deductions) and
included on their tax return an election under section 172(b)(3) to forgo
3 The name “Abkey” was an amalgam of the first initials of Amos and
Buoniconti, as well as part of the name of one of Mr. Willis’s companies.
4
[*4] the two-year carryback period. They also attached an “NOL
carryover worksheet,” which set forth the reported NOL amount and
identified it as originating in 1999.
On their 2000 return Ms. Amos and Dr. Righetti claimed a refund
of $75,222. They reported adjustable gross income of negative
$1,826,726, which they calculated by taking into account, inter alia,
wage and interest income, losses of $699,996 from the Fuddruckers
enterprise, and their 1999 NOL carryforward of $1,498,512. The couple
claimed an NOL deduction for their 2000 tax year of $371,663, again
electing to forgo the carryback period under section 172(b)(3). They also
recorded their 2000 NOL on an NOL carryover worksheet, which
reflected that they had a total NOL available (from 1999 and 2000) of
$1,870,175.
The IRS audited Ms. Amos and Dr. Righetti’s 2000 return as well
as the 2000 return of Abkey Management Corp. (one of Ms. Amos’s
companies that managed some of her Fuddruckers establishments). The
IRS ultimately agreed that there was no deficiency in the couple’s 2000
tax.
By the time Ms. Amos filed her 2008 tax return, the NOL
carryforward reported on her tax return had ballooned to $5,747,514. 4
The NOL carryforwards reported on Ms. Amos’ tax returns exceeded
$5.2 million for each of the next three years. For 2012 and 2013, the
NOL carryforwards reported on her returns dipped to $4,375,505 and
$4,302,895, respectively. 5
III. Ms. Amos’s 2014 and 2015 Tax Returns
Ms. Amos prepared and filed her 2014 tax return herself. On that
return she reported individual retirement account (IRA) distributions of
4 Dr. Righetti passed away in 2002, when a MiG-15 jet fighter that he was
piloting for an air show crashed. See Dr. Thomas R. Righetti, The Aspen Times (Oct. 2,
2002), https://www.aspentimes.com/news/dr-thomas-r-righetti/.
5 Ms. Amos received notices from the IRS regarding her 2003, 2005, and 2008
tax years, which stated that she owed nothing or was entitled to a refund. The notice
relating to 2003 reflects adjusted gross income of $4,556,647 and no taxable income.
Ms. Amos petitioned this Court with respect to a notice of deficiency for her 2009 tax
year, which resulted in a stipulated decision determining a deficiency of $11,545 and
additions to tax. The parties stipulated that the deficiency amount did not take into
consideration the claimed NOLs from prior years, with Ms. Amos reserving the right
to claim such NOLs in future years and the IRS reserving the right to challenge any
such claimed losses.
5
[*5] $100,000 (as well as some small, miscellaneous income items) and
claimed an NOL carryforward deduction of $4,220,639, resulting in
negative $4,119,628 of adjusted gross income. After she took her 2014
deductions into account, her NOL decreased to $4,149,326, with a total
tax due of zero. On an attached “net operating loss carryforward
deduction statement,” Ms. Amos stated that the carryforwards were
“from losses incurred prior to 2012.”
As with her 2014 return, Ms. Amos prepared and filed her own
2015 return. She reported IRA distributions of $90,000 (again with
certain miscellaneous income items) and claimed an NOL carryforward
deduction of $4,149,326, resulting in adjusted gross income of negative
$4,058,261. She again reported that her total tax due was zero. And
she attached another “net operating loss carryforward deduction
statement,” which explained only that the carryover “from 2014 [was]
accumulated from prior years.”
IV. Notice of Deficiency and Tax Court Proceedings
In February 2018 the IRS sent Ms. Amos a notice of deficiency
that determined deficiencies of $21,477 and $18,864, respectively, for
her 2014 and 2015 tax years. The notice additionally determined
penalties under section 6662(a)—$4,295 for 2014 and $3,773 for 2015.
In an attachment to the notice the IRS explained that it had disallowed
the claimed NOL deductions of $4,220,639 and $4,149,326 for 2014 and
2015, respectively, on the ground that Ms. Amos had not established
that she sustained the loss in prior years or that any loss was available
to be carried over to 2014 and 2015.
Ms. Amos filed a timely petition in this Court challenging the
IRS’s disallowance of the NOL deductions as reflected in the notice of
deficiency, as well as the accuracy-related penalties. Ms. Amos resided
in Florida when she filed the petition.
OPINION
I. Burden of Proof
The Commissioner’s determinations in a notice of deficiency are
generally presumed correct, and a taxpayer bears the burden of proving
that the Commissioner’s determinations are in error. Rule 142(a); Welch
v. Helvering, 290 U.S. 111, 115 (1933). The taxpayer also bears the
burden of proving her entitlement to any deduction claimed. New
Colonial Ice Co. v. Helvering, 292 U.S. 435, 440 (1934). “If, in any court
6
[*6] proceeding, a taxpayer introduces credible evidence with respect to
any factual issue relevant to ascertaining the liability of the
taxpayer . . . , the [Commissioner] shall have the burden of proof with
respect to such issue.” § 7491(a)(1); see also Higbee v. Commissioner,
116 T.C. 438, 440–41 (2001); Bordelon v. Commissioner, T.C. Memo.
2020-26, at *11.
To avail herself of this burden shift, however, a taxpayer must
have “complied with the requirements . . . to substantiate any item” and
“maintained all records required under this title.” § 7491(a)(2)(A)
and (B). As to the latter, section 6001 provides that the Secretary “may
require any person” to “keep such records, as the Secretary deems
sufficient to show whether or not such person is liable for tax under this
title.” Treasury Regulation § 1.6001-1(a) specifies, in turn, that “any
person subject to tax under subtitle A of the Code . . . shall keep such
permanent books of account or records, including inventories, as are
sufficient to establish the amount of gross income, deductions, credits,
or other matters required to be shown by such person in any return of
such tax or information.” As we will discuss in greater detail, Ms. Amos
neither substantiated the items at issue nor maintained adequate
records, and accordingly she is not entitled to a shift in the burden of
proof under section 7491(a)(1).
II. NOL Deduction
A. General Requirements
Section 172 allows a taxpayer to deduct NOLs for a taxable year.
The amount of the NOL deduction equals the aggregate of the NOL
carryovers and NOL carrybacks to the taxable year. § 172(a).
Section 172(c) defines an NOL as the excess of deductions over gross
income, computed with certain modifications specified in section 172(d).
See, e.g., Jasperson v. Commissioner, T.C. Memo. 2015-186, at *6, aff’d,
658 F. App’x 962 (11th Cir. 2016).
An unused NOL is first required to “be carried to the earliest of
the taxable years to which . . . such loss may be carried.” § 172(b)(2);
McRae v. Commissioner, T.C. Memo. 2019-163, at *23. Any excess NOL
that is not applied in one year is carried to the next earlier year.
§ 172(b)(2). Absent an election under section 172(b)(3), an NOL for any
taxable year first must be carried back 2 years and then carried over 20
years. § 172(b)(1)(A), (2), (3). A taxpayer claiming an NOL must file
with her return “a concise statement setting forth the amount of the net
7
[*7] operating loss deduction claimed and all material and pertinent
facts relative thereto, including a detailed schedule showing the
computation of the net operating loss deduction.” Treas. Reg. § 1.172-
1(c).
“A taxpayer who claims a net operating loss deduction bears the
burden of establishing both the existence of the net operating loss and
the amount that may be carried over to the year involved.” Chico v.
Commissioner, T.C. Memo. 2019-123, at *39 (citing Keith v.
Commissioner, 115 T.C. 605, 621 (2000)), aff’d without published
opinion, No. 20-71017, 2021 WL 4705484 (9th Cir. Oct. 28, 2021). A
taxpayer “cannot rely solely on [her] own income tax returns to establish
the losses [she] sustained.” Barker v. Commissioner, T.C. Memo. 2018-
67, at *13, aff’d, 853 F. App’x 571 (11th Cir. 2021); see also Wilkinson v.
Commissioner, 71 T.C. 633, 639 (1979). Importantly here, the taxpayer
“must establish that the NOL was not fully absorbed in the years
preceding the particular year for which [s]he seeks the NOL deduction.”
Villanueva v. Commissioner, T.C. Memo. 2022-27, at *3. “To meet this
burden [Ms. Amos] must introduce convincing evidence that [she]
incurred NOLs in the taxable years [1999–2000] and also prove [Ms.
Amos’s] taxable income for the period beginning with [2001] and ending
with [2013].” Power v. Commissioner, T.C. Memo. 2016-157, at *14.
B. Analysis
Ms. Amos is not entitled to the claimed NOL carryforward
deductions because (1) she failed to provide sufficient evidence of the
underlying NOLs in 1999 and 2000 and (2) she failed to show that any
NOL was available to carry forward to the years at issue. We will
address each point in turn.
As an initial matter, Ms. Amos failed to establish that she
incurred NOLs in 1999 and 2000. Ms. Amos relied primarily on her tax
returns, as well as her own testimony, to establish these losses. We have
previously held similar proof to be insufficient to substantiate a
taxpayer’s entitlement to a loss carryforward. See Bulakites v.
Commissioner, T.C. Memo. 2017-79, at *8; see also McRae, T.C. Memo.
2019-163, at *26; Ghafouri v. Commissioner, T.C. Memo. 2016-6, at *9
(“The prior tax returns show only that [the taxpayers] claimed NOL
carryforward deductions. They do not provide evidence that [the
taxpayers] are entitled to them.”); Wagner v. Commissioner, T.C. Memo.
2015-120, at *26–27.
8
[*8] More specifically, Ms. Amos failed to adduce evidence that would
give a full picture of her gross income and deductions as necessary to
substantiate the claimed losses of $1,498,512 and $371,663 for 1999 and
2000, respectively. Although the record contains some documents (such
as tax returns for the year 2000 from various Abkey entities, business
ledgers, and documentation of loan defaults) that support her claim of
losses, Ms. Amos failed to link these documents to the purported NOLs
either at trial or in her posttrial briefing. See, e.g., Jasperson, T.C.
Memo. 2015-186, at *9 (“[W]ithout any sort of direction as to the
contents of these documents, this type of voluminous, unverified, and
indiscriminate documentation does not provide adequate substantiation
of the items [the taxpayer] reported . . . .”). The fragmentary record
before us is inadequate to establish her 1999 and 2000 income and
deductions so as to substantiate the NOLs at issue. 6
Even assuming arguendo that Ms. Amos incurred the purported
losses in 1999 and 2000, she nonetheless failed to establish her
entitlement to NOL carryforward deductions for 2014 and 2015. To
start, Ms. Amos did not include with the returns at issue (or the returns
for earlier years for which an NOL carryforward deduction had been
claimed) either a concise statement that set forth the material and
relevant facts or a detailed schedule showing a computation of the NOL
amount. See Ghafouri, T.C. Memo. 2016-6, at *9; Treas. Reg. § 1.172-
1(c).
6 At trial, Ms. Amos argued that the Commissioner should be estopped from
disallowing the NOL deductions because the IRS had not disallowed NOL deductions
purportedly stemming from the same underlying losses in other years. Ms. Amos failed
to raise this issue either in her petition or in her posttrial briefs, and thus has conceded
or abandoned the issue. See, e.g., Rule 34(b)(4); Mendes v. Commissioner, 121 T.C. 308,
312–13 (2003) (“If an argument is not pursued on brief, we may conclude that it has
been abandoned.”); Elbasha v. Commissioner, T.C. Memo. 2022-1, at *22 (failing to
raise issue in petition deemed a concession). In any event the IRS’s prior allowance of
a deduction does not bind the agency with respect to other years. See, e.g., Black v.
Commissioner, T.C. Memo. 2007-364, 2007 WL 4302432, at *15 (“[The Commissioner’s]
failure to audit or disallow a loss claimed on a return for one year does not estop [him]
from disallowing an NOL carryover of that loss to a future year.”); Frische v.
Commissioner, T.C. Memo. 2000-237, 2000 WL 1073327, at *3; see also Taylor v.
Commissioner, T.C. Memo. 2009-235, 2009 WL 3326640, at *7 (“[T]he Commissioner
may challenge in a succeeding year what was condoned or agreed to in a former year.”);
Forste v. Commissioner, T.C. Memo. 2003-103, 2003 WL 1889626, at *15 (“The doctrine
of equitable estoppel does not bar [the Commissioner] from correcting mistakes of
law.”). Nor do we believe that Ms. Amos has established that she satisfied the
requirements for equitable estoppel (or collateral estoppel). See, e.g., Korean-Am.
Senior Mut. Ass’n, Inc. v. Commissioner, T.C. Memo. 2020-129, at *30.
9
[*9] Ms. Amos failed to establish how much of the claimed 1999 and
2000 NOLs had been absorbed before the years at issue. Specifically,
she did not introduce a complete set of her 2001–13 tax returns as might
allow us to determine how much of the purported NOL had been used.
Although Ms. Amos provided the first two pages of each of her tax
returns from 2008–13, these snippets, lacking in context, give us no
insight into the absorption of the 1999 and 2000 NOLs during this
period. Ms. Amos also relies on certain worksheets that she prepared,
which showed that she had used a portion of each NOL as carryforward
deductions for 2004, 2006–08, and 2012–13. Ms. Amos, however, failed
to introduce any support that might lend credence to the specific
assertions in her worksheets.
In sum, we find that Ms. Amos failed to establish her entitlement
to NOL carryforward deductions for 2014 and 2015, and we will sustain
the Commissioner’s disallowance of these deductions. 7
III. Accuracy-Related Penalty
An accuracy-related penalty of 20% is imposed on the portion of
an underpayment of tax attributable to negligence. 8 § 6662(a) and
(b)(1). Negligence includes the failure to properly substantiate items
claimed on the return. Treas. Reg. § 1.6662-3(b)(1). The Commissioner
bears the burden of production with respect to a taxpayer’s liability for
the section 6662(a) penalty and must produce evidence that the
7 Ms. Amos suggests that she has introduced enough evidence to permit this
Court to approximate her allowable NOL carryforward deductions. “While we may
estimate the amount of allowable deductions where there is evidence that deductible
expenses were incurred, we must have some basis on which an estimate may be made.”
Deutsch v. Commissioner, T.C. Memo. 2012-318, at *19 n.20. Given the dearth of
evidence in this case, we have no basis upon which to make an estimate and, therefore,
decline to do so.
8 In the notice of deficiency the IRS determined an accuracy-related penalty
under section 6662(a) on the grounds of negligence and substantial understatement of
income tax. The Commissioner has not addressed the ground of substantial
understatement in his briefs, however, and we thus conclude that the Commissioner
has decided to forgo or has otherwise waived this argument. See, e.g., Marks v.
Commissioner, T.C. Memo. 2018-49, at *8; Estate of Richard v. Commissioner, T.C.
Memo. 2012-173, 2012 WL 2344649, at *5 n.18.
10
[*10] imposition of the penalty is appropriate. See § 7491(c); see also
Higbee, 116 T.C. at 446. 9
The Commissioner has met his prima facie burden. Ms. Amos
failed to substantiate the NOL carryover deductions claimed for 2014
and 2015, and the Commissioner thus has established negligence. See
Treas. Reg. § 1.6662-3(b)(1); see also Velez v. Commissioner, T.C. Memo.
2018-46, at *10 (“[The Commissioner] satisfied his burden of production
with regard to negligence by establishing that [the taxpayer] did not
maintain sufficient records to support the . . . deduction.”).
The accuracy-related penalty does not apply to any part of an
underpayment of tax if it is shown that the taxpayer acted with
reasonable cause and in good faith with respect to that portion.
§ 6664(c)(1); Rogers v. Commissioner, T.C. Memo. 2019-61, at *31, aff’d,
9 F.4th 576 (7th Cir. 2021). The determination of whether a taxpayer
acted in good faith is made on a case-by-case basis, considering all the
pertinent facts and circumstances. Treas. Reg. § 1.6664-4(b)(1). “A
taxpayer’s knowledge, education, and experience are relevant factors to
indicate reasonable cause and good faith.” Rogers, T.C. Memo. 2019-61,
at *31. Ms. Amos bears the burden of proving that she had reasonable
cause and acted in good faith with respect to the underpayments. See
Higbee, 116 T.C. at 449.
Ms. Amos claims that she acted with reasonable cause and in good
faith, contending that she relied on professional advice in claiming the
deductions and that it was reasonable for her to claim them because the
IRS had allowed similar deductions in prior years. As an initial matter,
Ms. Amos did not rely on any professional advice with respect to the
2014 and 2015 returns on which she claimed the NOL carryforward
deductions. See McRae, T.C. Memo. 2019-163, at *29. Although Ms.
Amos and Dr. Righetti retained the services of the Kaufman firm to
prepare their 1999 and 2000 tax returns, those are not the years at
9 Ms. Amos has not raised the issue of whether the Commissioner complied
with the supervisory approval requirements of section 6751. In any event, the record
establishes that the revenue agent received written supervisory approval on July 5,
2017. As assessment has not yet occurred, see § 6215(a), the IRS has plainly satisfied
the section 6751 requirement as interpreted by the Court of Appeals for the Eleventh
Circuit, to which an appeal in this case would ordinarily lie, see Kroner v.
Commissioner, 48 F.4th 1272, 1276 (11th Cir. 2022), rev’g in part T.C. Memo. 2020-73;
cf. Golsen v. Commissioner, 54 T.C. 742, 757 (1970) (“[I]t is our best judgment that
better judicial administration requires us to follow a Court of Appeals decision which
is squarely in point where appeal from our decision lies to that Court of Appeals and
to that court alone.” (Footnote omitted.)), aff’d, 445 F.2d 985 (10th Cir. 1971).
11
[*11] issue, and the firm did not opine on Ms. Amos’s entitlement to
claim the NOL carryforward deductions for 2014 and 2015. See Cooper
v. Commissioner, 143 T.C. 194, 223 (2014), aff’d, 877 F.3d 1086 (9th Cir.
2017).
Ms. Amos’s claim that she acted with reasonable cause and in
good faith given the IRS’s acquiescence to her tax positions in previous
tax years fares no better. As an initial matter, the record contains little
information regarding the previous tax years, leaving us unable to
determine whether they were at all apposite. More significantly, Ms.
Amos is a longtime CPA who has worked for high-profile clients, owned
her own accounting firm, and been involved with national and state CPA
associations. See Donoghue v. Commissioner, T.C. Memo. 2019-71,
at *47–48, aff’d, No. 19-2265, 2021 WL 6129132 (1st Cir. June 2, 2021).
It beggars belief that she would be unaware that each tax year stands
alone and that it was her responsibility to demonstrate her entitlement
to the deductions she claimed. See Rogers, T.C. Memo. 2019-61, at *31–
32; cf. Ochsner v. Commissioner, T.C. Memo. 2010-122, 2010 WL
2220305, at *7–8. We cannot find that Ms. Amos established that she
acted with reasonable cause and in good faith when claiming the NOL
carryforward deductions for 2014 and 2015. As a result, Ms. Amos is
liable for accuracy-related penalties under section 6662(a).
IV. Conclusion
We uphold the determinations in the notice of deficiency to
disallow the NOL deductions Ms. Amos claimed for her 2014 and 2015
tax years. We also conclude that Ms. Amos is liable for the
section 6662(a) penalties.
To reflect the foregoing,
Decision will be entered for respondent.