T.C. Memo. 2003-50
UNITED STATES TAX COURT
SUPERIOR PROSIDE, INC., Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 4804-00. Filed February 26, 2003.
Joseph H. O’Donnell, Jr., for petitioner.
Linda P. Azmon, for respondent.
MEMORANDUM FINDINGS OF FACT AND OPINION
COHEN, Judge: The petition in this case was filed in
response to a Notice of Determination Concerning Worker
Classification Under Section 7436 (notice of determination)
regarding petitioner’s liabilities pursuant to the Federal
Insurance Contributions Act (FICA) and the Federal Unemployment
Tax Act (FUTA) for 1995, 1996, and 1997. The issues for decision
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are: (1) Whether Thomas L. Murdock (Murdock) was an employee of
petitioner for Federal employment tax purposes during 1995
through 1997 and, if so, (2) whether petitioner is entitled to
relief under section 530 of the Revenue Act of 1978, Pub. L. 95-
600, 92 Stat. 2885, as amended (Section 530).
Unless otherwise indicated, all section references are to
the Internal Revenue Code in effect for the years in issue, and
all Rule references are to the Tax Court Rules of Practice and
Procedure. For convenience, FICA and FUTA taxes are collectively
referred to as employment taxes.
FINDINGS OF FACT
Some of the facts have been stipulated, and the stipulated
facts are incorporated in our findings by this reference.
Petitioner’s Organization and Operations
Petitioner is an S corporation that was incorporated in
Pennsylvania on or about September 21, 1987. At all relevant
times, petitioner’s principal place of business was located in
Levittown, Pennsylvania.
Since its organization, petitioner has operated as a siding
contractor and residential remodeling service. This activity was
and is petitioner’s only business and only source of income.
Murdock has been the sole shareholder of petitioner from the time
of its incorporation and throughout 1995, 1996, and 1997.
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Murdock has at all times also served as petitioner’s
president. During 1995, 1996, and 1997, Murdock performed the
following services for petitioner: (1) Solicited business on
behalf of petitioner; (2) ordered petitioner’s supplies;
(3) entered into verbal and/or written agreements on behalf of
petitioner; (4) oversaw the finances of petitioner; (5) collected
moneys owed petitioner; (6) managed petitioner; (7) obtained
clients for petitioner; (8) hired and fired independent
contractors on behalf of petitioner; (9) maintained customer
satisfaction; and (10) supervised all work done on behalf of
petitioner. No other person performed any services on behalf of
petitioner.
During 1995, 1996, and 1997, petitioner did not make regular
payments to Murdock for his services. Rather, Murdock obtained
funds from petitioner as his needs arose. There were no set
intervals at which Murdock would take these moneys from
petitioner. Petitioner neither classified any payment as a
dividend nor distributed any dividends to shareholders from 1995
through 1997.
Petitioner’s Tax Reporting
Petitioner timely filed Forms 1120S, U.S. Income Tax Return
for an S Corporation, and related schedules, for the 1987 through
1994 taxable years. On these returns, petitioner did not report
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treating Murdock, or any other individual, as an employee of
petitioner.
Petitioner filed a Form 1120S for each of the years 1995,
1996, and 1997. Petitioner reported ordinary income from its
trade or business of $29,671.48, $29,402.99, and $41,668.75 for
1995, 1996, and 1997, respectively. Petitioner claimed no
deduction either for compensation of officers or for salaries and
wages. Schedules K-1, Shareholder’s Share of Income, Credits,
Deductions, etc., attached to the returns show $29,671.46 for
1995, $29,402.99 for 1996, and $41,668.75 for 1997 as the pro
rata share of, and as a property distribution other than a
dividend to, Murdock. Petitioner’s Forms 1120S were signed by
Murdock as president and by Joseph M. Grey (Grey) as preparer.
During the period from 1995 to 1997, petitioner did not
issue any Forms 1099-MISC, Miscellaneous Income, or Forms W-2,
Wage and Tax Statement, to Murdock. Since petitioner’s
incorporation in 1987, petitioner has not reported paying Murdock
a salary or wages for work he performed on behalf of petitioner.
Petitioner did not file a Form 941, Employer’s Quarterly
Federal Tax Return, for any quarters in 1995, 1996, or 1997 or a
Form 940, Employer’s Annual Federal Unemployment (FUTA) Tax
Return, for 1995, 1996, or 1997. Throughout this period,
petitioner did not treat any individual as an employee.
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Murdock’s Tax Reporting
For each of the years 1995, 1996, and 1997, Murdock and his
wife filed a joint Form 1040, U.S. Individual Income Tax Return.
On these returns, Murdock reported as ordinary income from
“Rental real estate, royalties, partnerships, S corporations,
trusts, etc.” $29,671.48, $29,402.99, and $41,668.75 for 1995,
1996, and 1997, respectively. Attached Schedules E, Supplemental
Income and Loss, characterize the foregoing amounts as nonpassive
income from Schedules K-1.
The Notice of Determination
Prior to the audit underlying the instant case covering
1995, 1996, and 1997, respondent neither audited petitioner for
employment tax purposes nor challenged petitioner’s treatment of
Murdock as other than an employee. Thereafter, on February 23,
2000, respondent sent to petitioner the notice of determination
at issue in this proceeding. The notice was based on a
determination that Murdock was to be legally classified as an
employee for purposes of Federal employment taxes and that
petitioner was not entitled to relief from such classification
pursuant to Section 530. Enclosed with the notice was a schedule
setting forth petitioner’s liabilities for FICA and FUTA taxes.
The parties have stipulated that, if the Court decides that
Murdock is to be classified as an employee for Federal employment
tax purposes for all periods in 1995, 1996, and 1997, the amounts
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of taxes due and owing are as set forth in the notice of
determination. Conversely, if the Court decides that Murdock
should not be classified as an employee for any of the periods in
issue, the parties agree that petitioner owes no employment
taxes.
ULTIMATE FINDINGS OF FACT
Murdock, as president of petitioner, performed more than
minor services and received remuneration therefor.
Petitioner did not have a reasonable basis for failing to
treat Murdock as an employee during the years in issue.
OPINION
I. Statutory and Regulatory Provisions
A. Subtitle C of the Internal Revenue Code
Subtitle C of the Internal Revenue Code governs payment of
employment taxes. In particular, sections 3111 and 3301 impose
taxes on employers under FICA (pertaining to Social Security) and
FUTA (pertaining to unemployment), respectively, based on wages
paid to employees. The term “wages” as used in these statutes
generally encompasses “all remuneration for employment”. Secs.
3121(a), 3306(b). “Employee” is defined for purposes of FICA
taxes in section 3121(d), and, with modifications not germane
here, section 3306(i) makes this definition applicable for
purposes of FUTA taxes as well. Section 3121(d) provides:
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SEC. 3121(d). Employee.--For purposes of this
chapter, the term “employee” means--
(1) any officer of a corporation; or
(2) any individual who, under the usual
common law rules applicable in determining the
employer-employee relationship, has the status of
an employee; or
(3) any individual (other than an individual
who is an employee under paragraph (1) or (2)) who
performs services for remuneration for any
person--
(A) as an agent-driver or commission-
driver * * *;
(B) as a full-time insurance salesman;
(C) as a home worker * * *; or
(D) as a traveling or city salesman
* * *;
* * * [under specified conditions]; or
(4) any individual who performs services that
are included under an agreement entered into
pursuant to section 218 of the Social Security
Act.
Regulations promulgated under section 3121(d) clarify the
scope of the inclusion in paragraph (1) for corporate officers,
as follows:
Generally, an officer of a corporation is an employee
of the corporation. However, an officer of a
corporation who as such does not perform any services
or performs only minor services and who neither
receives nor is entitled to receive, directly or
indirectly, any remuneration is considered not to be an
employee of the corporation. * * * [Sec. 31.3121(d)-
1(b), Employment Tax Regs.]
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Identical language is also included in regulations promulgated
under section 3306. Sec. 31.3306(i)-1(e), Employment Tax Regs.
B. Section 530 of the Revenue Act of 1978
Section 530 operates in enumerated circumstances to afford
relief from employment tax liability, notwithstanding the actual
relationship between the taxpayer and the individual performing
services. The statute provides, in part:
SEC. 530. CONTROVERSIES INVOLVING WHETHER INDIVIDUALS
ARE EMPLOYEES FOR PURPOSES OF THE EMPLOYMENT TAXES.
(a) Termination of Certain Employment Tax
Liability.--
(1) In general.--If--
(A) for purposes of employment taxes, the taxpayer
did not treat an individual as an employee for any
period, and
(B) in the case of periods after December 31,
1978, all Federal tax returns (including information
returns) required to be filed by the taxpayer with
respect to such individual for such period are filed on
a basis consistent with the taxpayer’s treatment of
such individual as not being an employee,
then, for purposes of applying such taxes for such
period with respect to the taxpayer, the individual
shall be deemed not to be an employee unless the
taxpayer had no reasonable basis for not treating such
individual as an employee.
(2) Statutory standards providing one method of
satisfying the requirements of paragraph (1).-- For
purposes of paragraph (1), a taxpayer shall in any case
be treated as having a reasonable basis for not
treating an individual as an employee for a period if
the taxpayer’s treatment of such individual for such
period was in reasonable reliance on any of the
following:
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(A) judicial precedent, published rulings,
technical advice with respect to the taxpayer, or a
letter ruling to the taxpayer;
(B) a past Internal Revenue Service audit of the
taxpayer in which there was no assessment attributable
to the treatment (for employment tax purposes) of the
individuals holding positions substantially similar to
the position held by this individual; or
(C) long-standing recognized practice of a
significant segment of the industry in which such
individual was engaged.
In specified circumstances, Section 530(e)(4) places the
burden of proof on the Commissioner with respect to certain
issues under Section 530, but this provision does not affect our
analysis here. Section 530(e)(4) applies only to periods after
December 31, 1996, so has no bearing on petitioner’s liabilities
for 1995 and 1996. Small Business Job Protection Act of 1996,
Pub. L. 104-188, sec. 1122(b)(3), 110 Stat. 1767. For subsequent
periods, a taxpayer desiring to take advantage of Section
530(e)(4) first must establish a prima facie case that it was
reasonable not to treat an individual as an employee and must
have fully cooperated with the Secretary. Because, as explained
in detail below, petitioner did not establish a prima facie case
that its treatment of Murdock was reasonable, the burden of proof
remains on petitioner with respect to 1997 as well.
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II. Classification of Murdock for Employment Tax Purposes
A. Status Under FICA and FUTA Provisions
In contending that Murdock should not be classified as an
employee under the FICA and FUTA provisions of the Internal
Revenue Code, petitioner focuses on Murdock’s status as an
S corporation shareholder and alleged lack of status as a common
law employee. We briefly address these contentions seriatim.
1. Contentions Regarding S Corporation Shareholders
Petitioner cites sections 1366, 1372, and 6037(c) and
Durando v. United States, 70 F.3d 548 (9th Cir. 1995), presumably
in support of an argument that S corporation shareholders should
not be deemed employees. Sections 1366 and 6037(c) generally
require that income items of S corporations be passed through to
shareholders on a pro rata basis and reported by such
shareholders in a manner consistent with treatment on the
corporate return. These rules, however, pertain to calculation
of income tax liability under subtitle A and have no bearing on
computation of Federal employment taxes. Veterinary Surgical
Consultants, P.C. v. Commissioner, 117 T.C. 141, 145 (2001),
affd. sub nom. Yeagle Drywall Co. v. Commissioner, 54 Fed. Appx.
100 (3d Cir. 2002). Furthermore, an employer cannot by the
expedient of characterizing moneys paid in remuneration for
services as distributions of net income, rather than as wages,
avoid FICA and FUTA liabilities. Id. at 145-146. Thus, as in
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Veterinary Surgical Consultants, P.C. v. Commissioner, supra at
145-146, and Joseph M. Grey Pub. Accountant, P.C. v.
Commissioner, 119 T.C. 121, 128 (2002), we reject any suggestion
that petitioner’s passing through of its net income to Murdock
precludes the finding of an employer-employee relationship
between petitioner and Murdock. We likewise reject as not
germane to the question before us petitioner’s reliance on
section 1372, addressing fringe benefits under subtitle A, and
the reference to that statute in Durando v. United States, supra
at 551. See Veterinary Surgical Consultants, P.C. v.
Commissioner, supra at 147-148, 150.
2. Contentions Regarding Common Law Employment
Petitioner contends that “employee” as used throughout
section 3121(d) must be construed in a manner consistent with its
use in section 3121(d)(2), such that the usual common law rules
for determining existence of an employer-employee relationship
are to be taken into account. In support of this position,
petitioner quotes the following passage from Tex. Carbonate Co.
v. Phinney, 307 F.2d 289, 291-292 (5th Cir. 1962):
The statutory definition of “employees” as
including officers of a corporation will not be so
construed as to mean that an officer is an employee
per se. Only such officers as work for it in fact are
to be so included and, in determining whether an
officer is an employee within the meaning of the
statutes the usual employer-employee tests are to be
applied. * * *
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Petitioner further emphasizes that common law focuses on whether
the alleged employer held the right to control the details of the
work performed by the individual and argues that petitioner did
not exercise control over Murdock during any part of 1995, 1996,
or 1997. There exist, however, at least two fatal defects in
petitioner’s arguments in this regard.
First, from the standpoint of statutory construction, the
premise underlying petitioner’s position finds no support either
in the structure of the text or in the Tex. Carbonate Co. v.
Phinney, supra, decision. Section 3121(d) is written in the
disjunctive, with each of the four paragraphs expressly separated
from the next by “or”. Accordingly, each paragraph affords a
separate and independent basis for deeming one engaged to perform
services an employee. Individuals described in paragraphs (1),
(3), and (4) of section 3121(d) are therefore frequently referred
to as “statutory” employees, subject to FICA and FUTA regardless
of their status under common law. See Joseph M. Grey Pub.
Accountant, P.C. v. Commissioner, supra at 126.
Moreover, Tex. Carbonate Co. v. Phinney, supra, is not
authority to the contrary. Significant regulatory and statutory
developments have occurred since the years in issue in that case.
Given that sections 31.3121(d)-1(b) and 31.3306(i)-1(e),
Employment Tax Regs., were promulgated after those years and that
the FUTA definition of “employee” then in effect appears to have
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contemplated a corporate officer who could be an independent
contractor under common law, see, e.g., sec. 1607(i), I.R.C.
1939, the Court of Appeals’ statements concerning common law
rules “may no longer be relevant.” Joseph M. Grey Pub.
Accountant, P.C. v. Commissioner, supra at 128 n.4. The opinion
in Tex. Carbonate Co. v. Phinney, supra at 291, recognized that,
regardless of the test purportedly being applied, “such officers
as work for * * * [a corporation] in fact” are included as
employees. The court also addressed the impact of an alleged
absence of control in that case, as follows:
Even though an absence of control is shown, and this as
we have noted has not been done, the force of the
factor is diminished to near de minimis by the fact
that * * * [the service provider] himself was a member
of the Board of Directors, a Vice President, and the
executive of the Company in charge of its sales and the
development of its markets. * * * [Id. at 292.]
Hence, critical components of the analysis in Tex. Carbonate Co.
v. Phinney, supra, are consistent with the current regulatory
approach to officers and contrary to petitioner’s position.
Second, from a factual standpoint, even if the common law
control factor were pertinent to our evaluation, petitioner has
failed to establish a lack of control over Murdock in the
performance of his services. As in Joseph M. Grey Pub.
Accountant, P.C. v. Commissioner, supra at 128-129, to accept
petitioner’s contentions in this regard would be the equivalent
of disregarding the corporate form in which Murdock chose to
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conduct his business. Caselaw does not permit a taxpayer to use
his or her dual role as a shareholder of and service provider to
a corporation as grounds for ignoring the legal ramifications of
the business construct so selected. Moline Props., Inc. v.
Commissioner, 319 U.S. 436, 438-439 (1943); Joseph M. Grey Pub.
Accountant, P.C. v. Commissioner, supra at 129.
3. Application of Section 3121(d)(1)
On the basis of the foregoing analysis, application of
section 3121(d)(1) is not precluded or limited here by
considerations pertaining to Murdock’s status as an S corporation
shareholder or under the common law. Section 3121(d)(1) and
sections 31.3121(d)-1(b) and 31.3306(i)-1(e), Employment Tax
Regs., specify that corporate officers are to be classified as
employees if they perform more than minor services and receive or
are entitled to receive remuneration. The overwhelming weight of
the evidence here shows that Murdock’s activities vis-a-vis
petitioner met these criteria. (Accordingly, considerations with
respect to burden of proof do not affect our analysis on this
point.) Murdock at all relevant times served as petitioner’s
president and worked for petitioner in all significant aspects of
petitioner’s business operations. As Murdock testified, no other
person performed services for petitioner during 1995, 1996, or
1997. Murdock also obtained remuneration from petitioner as his
needs arose.
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Furthermore, although section 3121(d)(1) may be inapplicable
to the extent that an officer performs services in some other
capacity, i.e., as an independent contractor, petitioner has
neither contended nor offered evidence that Murdock worked for or
was engaged by petitioner in a capacity other than president.
See Joseph M. Grey Pub. Accountant, P.C. v. Commissioner, 119
T.C. at 129-130; Rev. Rul. 82-83, 1982-1 C.B. 151, 152. Hence,
we conclude that Murdock was an employee of petitioner for
employment tax purposes, in accordance with section 3121(d)(1).
B. Availability of Section 530 Relief
Section 530 affords relief from employment tax liability,
notwithstanding an adverse classification, where the following
three requirements are satisfied: (1) The taxpayer has not
treated the individual, or any individual holding a substantially
similar position, as an employee for any period; (2) the taxpayer
has consistently treated the individual as not being an employee
on all tax returns for periods after December 31, 1978; and
(3) the taxpayer has a reasonable basis for not treating the
individual as an employee. Sec. 530(a)(1), (3). With respect to
the case at bar, respondent has conceded that petitioner meets
the first of the above requirements and does not argue that
petitioner fails to meet the second. Rather, the parties dispute
whether petitioner had a reasonable basis for not treating
Murdock as an employee.
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Concerning the existence of a reasonable basis for purposes
of Section 530(a)(1), Section 530(a)(2) sets forth three
statutory safe havens. Reliance upon any of the circumstances
enumerated in subparagraph (A), (B), or (C) of Section 530(a)(2)
is deemed sufficient to establish the requisite reasonable basis.
Subparagraph (A) lists judicial precedent, published
rulings, technical advice with respect to the taxpayer, or a
letter ruling to the taxpayer. The second amended petition
alleges:
For reasonable basis for Petitioner’s reliance on
the non-employee status of Thomas L. Murdock in
reference to his services performed on behalf of
Petitioner during 1995, 1996, and 1997, Petitioner
asserts judicial precedent in Texas Carbonate Company
v. R.L. Phinney, 307 F.2d 289 (5th Cir.), cert denied,
371 U.S. (1962); wherein that Court’s opinion stated
that an officer of a corporation is not an employee per
se, and that an employer and employee (master and
servant) relationship must exist between a corporation
and an officer of the corporation, for which an officer
performs services.
On brief, petitioner reiterates reliance on Tex. Carbonate Co. v.
Phinney, 307 F.2d 289 (5th Cir. 1962), and cites as well to
Automated Typesetting, Inc. v. United States, 527 F. Supp. 515
(E.D. Wis. 1981), in support of the premise that petitioner
reasonably looked to common law control concepts in classifying
Murdock.
For the reasons previously discussed, Tex. Carbonate Co. v.
Phinney, supra, does not afford a reasonable basis for disregard
of the explicit rules of section 3121(d)(1) and sections
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31.3121(d)-1(b) and 31.3306(i)-1(e), Employment Tax Regs.
Equally unavailing in this regard is Automated Typesetting, Inc.
v. United States, supra. The District Court in that case simply
evaluated the employment relationship of the involved individuals
both through a common law analysis and through application of the
provisions relating to corporate officers. Id. at 519-522. In
deciding that the individuals qualified as employees under either
rubric, the court did not repudiate the statutory treatment of
corporate executives. Id. at 520, 522; see also Joseph M. Grey
Pub. Accountant, P.C. v. Commissioner, supra at 129 n.5.
Moreover, even if we were to assume arguendo that the cited
cases could offer a reasonable basis for treating an officer as a
nonemployee, petitioner has failed to establish reliance on the
claimed precedent as a factual matter. To fall within the safe
harbors of Section 530(a)(2), the taxpayer must have relied on
the alleged authority during the periods in issue, at the time
the employment decisions were being made. The statute does not
countenance ex post facto justification. See 303 W. 42nd St.
Enters., Inc. v. IRS, 181 F.3d 272, 277, 279 (2d Cir. 1999)
(reversing and remanding because it was “unclear from the record
whether * * * [the taxpayer] in fact relied on any specific
industry practice in reaching its decision to treat its * * *
[workers] as non-employee tenants, let alone whether such
reliance was reasonable”); Select Rehab, Inc. v. United States,
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205 F. Supp. 2d 376, 380 (M.D. Pa. 2002) (“The taxpayer must show
that it relied upon those grounds [alleged as a reasonable
basis], and that the reliance was reasonable.”); W. Va. Pers.
Servs., Inc. v. United States, 78 AFTR 2d 96-6600, at 96-6608,
96-2 USTC par. 50,554, at 85,919 (S.D. W. Va. 1996) (“The plain
meaning of section 530(a)(2) is that only evidence known to and
relied upon by the taxpayer is relevant. Facts that are learned
after the incorrect treatment of the employees * * * are not
facts that a taxpayer relied upon in making its original decision
regarding how to treat its employees.”).
Until shortly before trial, petitioner did not purport to
rely on Section 530 or the bases described therein and expressly
disclaimed any dependence on the statute. Petitioner’s present
claim of reliance is not credible. The following colloquy
transpired at trial between Murdock and counsel for respondent:
Q [Counsel for respondent] Mr. Murdock are you
familiar with a case, Texas Carbonate versus Phinney?
A [Murdock] No, I’m not.
Q No one ever discussed that case with you?
A No.
Petitioner proposed to call Grey, the accountant who advised
petitioner and prepared petitioner’s tax returns. Grey was not
allowed to testify in this case because he had not been listed as
a witness in petitioner’s trial memorandum, in violation of this
Court’s Standing Pre-Trial Order. See Rule 131(b). His
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testimony, in any event, would not have made a difference. See
Veterinary Surgical Consultants, P.C. v. Commissioner, T.C. Memo.
2003-48 (where Grey testified that he was unaware of the Tex.
Carbonate Co. v. Phinney, supra, case until posttrial briefing,
during the fall of 2001, in Joseph M. Grey Pub. Accountant, P.C.
v. Commissioner, 119 T.C. 121 (2002)). Petitioner failed to
establish that it relied on judicial precedent or, for that
matter, on any of the other sources specified in Section
530(a)(2)(A). Accordingly, we conclude that subparagraph (A)
does not aid petitioner here.
The same result obtains with respect to subparagraphs (B)
and (C). The parties have stipulated that respondent did not
audit petitioner for employment tax purposes prior to the
examination underlying the present case. Petitioner therefore
cannot show reliance on a past audit under Section 530(a)(2)(B).
Likewise, petitioner has adduced no evidence of conventions in
the siding and remodeling industry to establish longstanding
industry practice under Section 530(a)(2)(C). The safe havens of
Section 530(a)(2) are therefore inapplicable on the record before
us.
In seeking to establish a reasonable basis for Murdock’s
treatment apart from the safe havens, petitioner quotes the
following definition of “employment status” in Section 530(c)(2):
“The term ‘employment status’ means the status of an individual,
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under the usual common law rules applicable in determining the
employer-employee relationship, as an employee or as an
independent contractor (or other individual who is not an
employee).” Petitioner apparently believes that the purported
lack of common law control makes its treatment of Murdock
reasonable within the meaning of Section 530 and that the above
definition supports this view.
Again, however, petitioner’s approach is contrary to
controlling statutes and to the facts of this case. As a matter
of construction, Section 530(c)(2) defines employment status for
purposes of certain provisions of Section 530 not germane here.
It does not purport to override or interpret the definition of
“employee” in section 3121(d) and related regulations. Hence,
Section 530(c)(2) does not render it rational for petitioner to
have ignored the statutory mandate regarding corporate officers
and to have taken a position that was not otherwise supported by
authority. Petitioner also does not claim in actuality to have
relied on Section 530(c)(2) in deciding not to treat Murdock as
an employee in 1995, 1996, or 1997. We conclude and have found
as a fact that petitioner did not have a reasonable basis for
failing to characterize Murdock as an employee. Consequently,
relief from employment tax liability is not available to
petitioner under Section 530.
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C. Conclusion
We hold that Murdock is an employee of petitioner pursuant
to section 3121(d)(1) and that petitioner is not entitled to
relief under Section 530. Accordingly, petitioner is liable for
FICA and FUTA taxes for the periods in issue as set forth in
respondent’s notice of determination and the parties’
stipulations.
To reflect the foregoing,
Decision will be entered for
respondent and in accordance with
the parties’ stipulations as to
amounts.