114 T.C. No. 6

UNITED STATES TAX COURT

DAVID H. AND SUZANNE HILLMAN, Petitioners v.

COMMISSIONER OF INTERNAL REVENUE, Respondent

Docket No. 19893-97. Filed February 29, 2000.

P’s S corporation (S) performed management

services for real estate partnerships in which P had

direct and indirect interests. P received passthrough

nonpassive income from S and passthrough passive

deductions from the partnerships. Sec. 469(l)(2),

I.R.C., required R to promulgate regulations “which

provide that certain items of gross income will not be

taken into account in determining income or loss from

any activity (and the treatment of expenses allocable

to such income)”. Pursuant to sec. 469(l), I.R.C., R

issued proposed regulations permitting the offsetting

of “self-charged” interest incurred in lending

transactions. Under the regulations, a taxpayer who

was both the payer and recipient of the interest was

allowed, to some extent, to offset passive interest

deductions against nonpassive interest income. R,

however, did not issue any regulation for self-charged

items other than interest. See sec. 1.469-7, Proposed

Income Tax Regs., 56 Fed. Reg. 14034 (Apr. 5, 1991). 
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Under circumstances identical to those in the

regulation, except for the fact that the self-charged

items were management fees rather than interest

deductions and income, P offset passive deductions

against nonpassive income. R determined that P was not

entitled to such treatment because R did not issue a

regulation for self-charged items other than interest. 

P contends that self-charged treatment was

congressionally intended for interest and other

appropriate items. R does not argue, as a matter of

substance, that there is any distinction between

interest and management fees within the self-charged

regime.

Held: R’s decision not to or failure to issue

regulations in this case is not a prohibition, per se,

to P’s ability to treat self-charged items as intended

by Congress. Held, further, P is entitled to offset

the passive management deductions against the

nonpassive management income.

Stefan F. Tucker and Kathleen M. Courtis, for petitioners.

Wilton A. Baker and Bettie N. Ricca, for respondent.

OPINION

GERBER, Judge: In a notice of deficiency addressed to

petitioners, respondent determined deficiencies of $294,556 and

$309,696 in petitioners’ Federal income tax for the years ended

December 31, 1993 and 1994, respectively. We consider here

whether petitioners are entitled to treat management fees that

generated nonpassive income and passive deductions and were paid

and received by passthrough entities in which petitioners held an
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1 All section references are to the Internal Revenue Code in

effect for the taxable years in issue. 

2 This case was submitted fully stipulated.

interest as offsetting self-charged items for purposes of section

469.1

Background2

Petitioners resided in Bethesda, Maryland, at the time their

petition was filed. During the 1993 calendar year, David H.

Hillman (petitioner) owned 100 percent of the stock of Southern

Management Corporation (SMC). During the 1994 calendar year,

petitioner owned 94.34 percent of SMC’s stock. SMC was

classified as an S corporation during the 1993 and 1994 taxable

years. SMC provided real estate management services to

approximately 90 passthrough entities (including joint ventures,

limited partnerships, S corporations) that were involved in real

estate rental activities (partnerships). Petitioner owns, either

directly or indirectly, interests in each of the partnerships. 

The general partner of each partnership is either petitioner or

an upper tier partnership or S corporation in which petitioner

owns an interest.

During the 1993 and 1994 taxable years, petitioners did not

participate in the activities of the partnerships. Petitioners

did, however, participate in the activities of SMC by performing

management services that SMC had contracted to perform for the
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partnerships. SMC engaged in real estate management activity

which was treated by petitioners as a separate activity, not

aggregated with any other activities carried on by SMC. During

the 1993 and 1994 taxable years, petitioner materially

participated in SMC’s real estate management activity in excess

of 500 hours. During the 1993 and 1994 taxable years, SMC also

conducted other operations in addition to real estate management

services, such as recreational services, medical insurance plan

underwriting, credit/collection services, and a maintenance

training academy. Petitioner did not materially participate in

any of these other operations of SMC.

Petitioners reported as salary (income), and SMC deducted as

an expense, compensation paid to petitioners for services related

to the conduct of the real estate management activity for the

1993 and 1994 taxable years. SMC separately reported management

fee income (after deduction of expenses) on petitioners’ 1993 and

1994 Schedules K-1. The portion of the management fee paid by

the partnerships to SMC (and allocable to petitioner’s ownership

percentage in each partnership) was deducted and resulted in

ordinary losses from trade or business on either petitioner’s

Schedules K-1 for the 1993 and 1994 taxable years or on the

Schedules K-1 of upper tier partnerships and S corporations for

the 1993 and 1994 taxable years. In computing their taxable

income for the 1993 and 1994 years, petitioners treated the total
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amounts of the self-charged management fee deduction (the

deduction arising from the transaction between the partnerships

and SMC that gave rise to passive management fees expense and

nonpassive income) as a reduction from petitioners’ gross income

from activities characterized as nonpassive under section 469.

The notice of deficiency disallowed the characterization of

the management fee expense as nonpassive, referencing section

1.469-7, Proposed Income Tax Regs., 56 Fed. Reg. 14034 (Apr. 5,

1991), which provides only that lending transactions (i.e., any

transaction involving loans between persons or entities) may be

treated as self-charged. No regulations were issued concerning

self-charged situations other than lending transactions.

Discussion

Respondent advances the unique position that the failure

(intentional or unintentional) to issue a regulation providing

for petitioners’ claimed tax treatment is sufficient to support

respondent’s disallowance. Ironically, respondent does not argue

that petitioners’ claimed treatment was incorrect, inappropriate,

or otherwise unjustified. More particularly, respondent contends

that Congress gave the Secretary the power and/or discretion to

issue legislative regulations, and, absent the issuance, there is

no entitlement to the tax treatment sought by petitioners.

In section 469(l), Congress mandated that the Secretary

issue such regulations as may be necessary or appropriate to
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3 Petitioners seek to offset their management fees expense

against their management income by recharacterizing the expense

as nonpassive. We note, however, that whether the offsetting

items of income and expense are characterized both as passive or

nonpassive makes no difference from a practical standpoint. 

carry out the provisions of section 469. The statute provides

for broad regulatory categories or subject matter, but it is

silent on the particular items or circumstances to be

specifically promulgated. Implementing a directive in the

legislative history regarding self-charged lending situations,

the Secretary issued a proposed regulation permitting offset of

passive interest deductions against nonpassive interest income. 

See sec. 1.469-7, Proposed Income Tax Regs., 56 Fed. Reg. 14034

(Apr. 5, 1991). The legislative history also anticipated that

the Secretary would, to the extent appropriate, issue regulations

addressing other self-charged situations. 

Petitioners contend that they should be allowed self-charged

treatment with respect to their pro rata share of the management

fees expense deducted by the partnerships and therefore be

allowed to offset it against their share of management income

received from SMC.3 Respondent does not dispute that the

circumstances in this case comport with the circumstances

described in the proposed regulation with the exception that the

regulatory subject matter is interest expense instead of

management fees expense.
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Petitioners argue that respondent’s attempt to limit the

scope of the treatment of self-charged items to interest income

and deductions in section 1.469-7, Proposed Income Tax Regs., is

arbitrary, capricious, or manifestly contrary to section 469, the

underlying statute. Petitioners further argue that the proposed

regulations violate the congressional mandate as expressed in

section 469(l) insofar as such proposed regulations omitted

provisions addressing self-charged items other than self-charged

interest. Petitioners also contend that it was arbitrary,

capricious, and/or manifestly contrary to the underlying statute

for respondent, when applying section 469, to disallow the

characterization of petitioner’s pro rata share of the management

fees expense as nonpassive.

Respondent simply counters that there was an exercise of the

Secretary’s discretion not to issue regulations addressing

whether or not self-charged treatment and netting is clearly

appropriate in situations other than lending transactions. 

Respondent further contends that in regard to self-charged

transactions, section 469 is not self-executing and therefore, in

the absence of regulations addressing self-charged treatment for

nonlending transactions, netting is unavailable.

A. Historical Background

Enacted by Congress as part of the Tax Reform Act of 1986,

Pub. L. 99-514, 100 Stat. 2085, the passive activity loss rules
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4 Use of losses from one activity to offset income from

another drove the “tax shelter industry” of the 1980’s. 

Transactions were fashioned to generate losses through the use of

accelerated depreciation, interest, and other deductions that

were used to offset the taxpayer’s other income such as salary,

interest, and dividends. The passive activity loss rules in sec.

469 were designed to curtail the use of tax shelters by

restricting a taxpayer’s ability to use the losses sustained in

the operation of a trade or business to shelter unrelated income,

unless the taxpayer materially participated in the operation of

that trade or business. See Schaefer v. Commissioner, 105 T.C.

227, 230 (1995) (“Section 469 represents the congressional

response to the widespread use of tax shelters by some taxpayers

to avoid paying tax on unrelated income.”); S. Rept. 99-313, at

716 (1986), 1986-3 C.B. (Vol. 3) 1, 716. We note that in the

present case, petitioners reported substantial taxable income

from their activities and do not appear to be engaged in any tax

sheltering activity. 

were specifically designed to limit a taxpayer’s ability to use

deductions from one activity to offset income from another

activity. These rules were designed to curtail the use of losses

generated by passive activities to offset unrelated income

generated by nonpassive activities.4 Under the section 469

passive activity loss rules, income generated from nonpassive

activities cannot be offset by deductions generated from passive

activities.

Although section 469 was designed to stop these practices,

Congress recognized that it would be inappropriate to treat

certain transactions between related taxpayers as giving rise to

one character of expense and another type of income. See H.

Conf. Rept. 99-841 (Vol. II), at II-146 to II-147 (1986), 1986-3

C.B. (Vol. 4) 1, 146-147. The House conference report, in the
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section concerning portfolio income, specifically focused on

situations where a payment of nonpassive interest income is

received by a taxpayer on a loan to an entity and a passive

deduction for the interest payment is passed through to the

taxpayer from the entity. See id. The legislative history

contains a specific example of a taxpayer who receives nonpassive

interest income on loans made to a taxpayer’s pass-through entity

from which passive interest deductions are passed through to the

taxpayer. See id. at II-146, 1986-3 C.B. (Vol. 4) at 146. Such

interest is considered “self-charged” interest and therefore

“[lacks] economic significance”. Id. The example involved a

taxpayer who charges $100 of interest on a loan to an S

corporation (engaged exclusively in passive activities) of which

he is the sole shareholder. Under the general application of the

passive loss rules, the taxpayer might be viewed as incurring

$100 of passive activity expense (interest expense passed through

by the S corporation), and having $100 of interest income, which

cannot be offset by the interest-expense deduction because it is

portfolio in nature. Thus, the taxpayer would have to recognize

$100 of taxable income from the transaction, although the

economic substance of the transaction was a payment of interest

to himself.

Likewise, the Staff of the Joint Committee on Taxation

focused on similar issues that could arise if a partnership makes
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loans to a partner (e.g., to finance a partner’s purchase of all

or part of his partnership interest, and the interest expense may

be treated as part of a passive activity). See Staff of Joint

Comm. on Taxation, General Explanation of the Tax Reform Act of

1986, at 233 n.26 (J. Comm. Print 1987). To avoid results that

lack economic significance in this type of transaction, it was

concluded that taxpayers should be permitted to offset the

interest income with respect to a loan to a pass-through entity

(in which he has an ownership interest) against the interest

expenses passed through to the taxpayer for the same taxable

year. See H. Conf. Rept. 99-841 (Vol. II), supra at II-146 to 

II-147, 1986-3 C.B. (Vol. 4) at 146-147. While there is no

indication in the legislative history as to whether the

offsetting items of income and expense should both be treated as

passive or nonpassive, that point is irrelevant because the

income and deductions are netted. 

The legislative history also contains the suggestion that

the amount of a taxpayer’s interest income from the loan that is

offset by the interest expense of a partnership should not exceed

the taxpayer’s allocable share of the interest expense (which

share for this purpose is not to be increased by a special

allocation). See id. at II-147, 1986-3 C.B. (Vol. 4) at 147.

Although the self-charged interest situation is specifically

recommended as a subject for regulations, the legislative history
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also contains the suggestion that other situations may be

appropriate for such netting treatment, as follows: 

The conferees anticipate that Treasury regulations

will be issued to provide for the above result. Such

regulations may also, to the extent appropriate,

identify other situations in which netting of the kind

described above is appropriate with respect to a

payment to a taxpayer by an entity in which he has an

ownership interest. * * * [Id.; emphasis added.]

There was congressional recognition that transactions, other

than those involving lending, essentially can be self-charged,

and thus lack economic significance. Congress expressly

anticipated that the Secretary would issue regulations dealing

not only with self-charged interest but also other situations

where netting would be appropriate. Like the rules for selfcharged interest, relief from nonlending situations in which

self-charged transactions arise is based on the principle that

the passive loss rules should not apply if the income to be

offset against the passive activity loss is essentially a payment

by the taxpayer to himself. 

Pursuant to section 469(l), which requires the Secretary to

promulgate regulations, respondent issued section 1.469-7,

Proposed Income Tax Regs., 56 Fed. Reg. 14034 (Apr. 5, 1991),

dealing with self-charged treatment for lending transactions. 

The proposed regulation, however, solely addresses lending

transactions and does not, as Congress contemplated, address any

other self-charged income and deduction situations. There is no
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5 We have located only one reference to the term

“nonlending” in the context of sec. 469 and related regulations. 

Sec. 1.469-11T(a)(2)(iii)(B), Temporary Income Tax Regs., 56 Fed.

Reg. 14034, 14040 (Apr. 5, 1991), is a proposed amendment that

contains a reference to “nonlending transactions”. Neither

party, however, referenced this proposed amendment, and we do not

find it relevant to the issue before us.

indication that the Secretary considered situations other than

lending transactions; i.e., that the Secretary specifically

decided that no other transactions should qualify. We do know

that the legislative history contains a directive that

regulations be promulgated to deal with self-charged lending

transactions. Thus, the Secretary’s actions were not necessarily

voluntary. In addition, nonlending transactions have not been

specifically addressed in any of the other passive activity loss

regulations.5 

B. Self-Charged Rules and Nonlending Transactions

In the absence of regulatory guidance by the Secretary and

in light of the legislative history (committee report language)

petitioners have reasonably taken the position that the netting

of nonlending items may be permissible.

In the absence of regulations dealing with nonlending

transactions, we must decide which party’s litigating position

most reasonably comports with section 469. While petitioners

urge us to invalidate section 1.469-7, Proposed Income Tax Regs.,

we are unwilling to do so because that regulation addresses self-
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6 There is some question as to whether a proposed regulation

is susceptible to “invalidation”. Fortunately, this question

need not be addressed at this time.

7 In light of the legislative history, it is difficult to

imagine the issuance of regulations denying self-charged

treatment for appropriate nonlending situations. Respondent does

not argue here that petitioners’ situation is inappropriate. 

Instead, respondent contends that the failure to address

nonlending situations in the regulations results in taxpayers not

being enabled to offset items other that the lending transactions

covered in the proposed regulation. 

charged interest in accordance with the congressional mandate.6

Here, we are faced with the unusual situation where the Secretary

has promulgated regulations dealing with some, but not all, of

the issues intended and/or anticipated by Congress. Congress

anticipated the Secretary would issue regulations regarding selfcharged treatment in situations where, with respect to payment to

a taxpayer by an entity in which the taxpayer has an ownership

interest, netting would be appropriate. The Secretary, however,

addressed only self-charged interest in proposed regulations.

Had self-charged nonlending transactions been addressed in

regulations, respondent’s regulatory position would have been

afforded greater deference than as a litigating position.7 See

Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc.,

467 U.S. 837 (1984). Under Chevron, legislative regulations are

entitled to the highest level of judicial deference. See id. at

843-844. This deference, however, does not extend to a

litigating position taken by an administrative agency.
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Respondent’s litigating position is that section 469 is not

self-executing. Therefore, in respondent’s view, taxpayers are

unable to claim self-charged offsets for items other than

interest, and, in the absence of specific regulations, courts

would not be permitted to decide that nonlending transactions are

subject to self-charged treatment. Conversely, petitioners argue

that section 469 is self-executing, they are entitled to claim

self-charged treatment, and this Court is permitted to approve

such treatment. We agree with petitioners.

In general, where regulations have been necessary to

implement a statutory scheme providing favorable taxpayer rules,

this Court has found that the statute’s effectiveness is not

conditioned upon the issuance of regulations. See Estate of

Maddox v. Commissioner, 93 T.C. 228, 233-234 (1989); First

Chicago Corp. v. Commissioner, 88 T.C. 663, 676-677 (1987), affd.

842 F.2d 180 (7th Cir. 1988); Occidental Petroleum Corp. v.

Commissioner, 82 T.C. 819, 829 (1984). As in the above-cited

cases, we are placed in the difficult position of “doing the

Secretary’s work” where there is a failure to issue regulations

that are congressionally intended. First Chicago Corp. v.

Commissioner, supra at 677. If Congress intended relief from the

passive activity rules for self-charged transactions, we must

decide whether petitioners’ claim is within that intent. In

other situations, we have held that the U.S. Department of the
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Treasury’s failure to provide the needed guidance should not

deprive taxpayers of the benefit or relief Congress intended. 

However, if, as contended by respondent, the Secretary was given

dominion over whether taxpayers were entitled to offset selfcharged items, then a court may not substitute or exercise its

judgment in deciding what rules or regulations should have been

promulgated. To answer these questions, we turn to the statute

and legislative history. 

The relevant statutory provision is section 469(l), which

provides as follows:

SEC. 469(l) Regulations.--The Secretary shall

prescribe such regulations as may be necessary or

appropriate to carry out provisions of this section,

including regulations--

* * * * * * *

(2) which provide that certain items of

gross income will not be taken into account

in determining income or loss from any

activity (and the treatment of expenses

allocable to such income),

* * * * * * *

In determining whether section 469(l)(2) is self-executing, it is

instructive to look at how section 469(l)(1) has been interpreted

by this Court. The language of section 469(l)(1) has been

generally described as self-executing. In Schwalbach v.

Commissioner, 111 T.C. 215, 226 (1998), “we [found] nothing in

the statutory text, or in its legislative history, that

conditions the effectiveness of section 469 on the issuance of
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regulations.” See also Trans City Life Ins. Co. v. Commissioner,

106 T.C. 274, 299-300 (1996); Estate of Neumann v. Commissioner,

106 T.C. 216 (1996); H Enters. Intl., Inc. v. Commissioner, 105

T.C. 71, 81-85 (1995). We can find no reason that would justify

or reconcile treating section 469(l)(1), which was at issue in

the Schwalbach case, as self-executing and treating section

469(l)(2) as not being self-executing.

We have held language similar to that in section 469(l)(2)

to be self-executing. For example, in International Multifoods

Corp. v. Commissioner, 108 T.C. 579, 584 (1997), the taxpayer

sourced a loss in accordance with the statutory rule of section

865(a). Despite a statutory provision that “The Secretary shall

prescribe such regulations as may be necessary or appropriate to

carry out the purpose of this section, including regulations * *

* relating to the treatment of losses from sales of personal

property,” no loss sourcing regulations were issued. The

Commissioner argued that nothing in the statute required the

promulgation of any “particular rule” with respect to the

allocation of losses on the disposition of personal property. In

rejecting that argument, we found that Congress had intended to

change the rules regarding the sourcing of losses and held that

the Commissioner could not hide behind the failure to promulgate

regulations. Under those circumstances, we stated: 

When Congress directs that regulations be

promulgated to carry out a statutory purpose, the fact
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that regulations are not forthcoming cannot be a basis

for thwarting the legislative objective. It is well

established that the absence of regulations is not an

acceptable basis for refusing to apply the substantive

provisions of a section of the Internal Revenue Code. 

* * *

Id. at 587. This Court reasoned that Congress had articulated

the “overall purpose” behind the statute in the legislative

history, and the taxpayer’s action was appropriate even in the

absence of regulations because the statute was self-executing.

Moreover, where the regulations merely provide “how” a

statutory provision applies, this Court has found the statutes to

be self-executing. In Estate of Neumann v. Commissioner, supra

at 218-219, the language in the statute’s command provision (that

is “The Secretary shall prescribe such regulations as may be

necessary or appropriate to carry out the purposes of this

chapter”) was contrasted with the language from certain other

statutes that provide that a statutory provision would apply

“only to the extent provided in regulations prescribed by the

Secretary.” See also Occidental Petroleum Corp. v. Commissioner,

supra; First Chicago Corp. v. Commissioner, supra. In Estate of

Neumann v. Commissioner, supra at 221, we concluded that

issuance of regulations is to be considered a

precondition to the imposition of a tax where the

applicable provision directing the issuance of such

regulations reflects a “whether” characterization * * *

and not where the provision simply reflects a “how”

characterization. * * *
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The command provision of section 469(l) contemplates regulations

that reflect a “how” characterization and does not contain the

type of “only to the extent” language that is found in statutes

that are not self-executing.

Respondent’s argument is essentially that the statute is not

self-executing since the Secretary was charged with writing

regulations. Respondent’s position that congressionally intended

benefits can be withheld simply by the refusal of the Secretary

to issue regulations is peculiarly Draconian. Respondent, in a

brief devoid of case references, articulated no reason for

denying the taxpayers in this case the tax treatment sought. In

that regard, allowing netting in this case fulfills the “economic

significance” concerns expressed in the legislative history. The

failure to issue regulations covering nonlending transactions

should not be a reason to preclude taxpayer from congressionally

intended and appropriate relief. As stated in Estate of Maddox

v. Commissioner, 93 T.C. 228, 234 (1989), 

we must do the best we can with the statutory provision

* * * now before us in the absence of pertinent

regulations, since, in our view, the Secretary cannot

deprive a taxpayer of rights which the Congress plainly

intended to confer simply by failing to promulgate the

required regulations. * * *

Section 469(l)(2) mandates the issuance of regulations

providing “that certain items of gross income will not be taken

into account in determining income or loss from any activity (and

the treatment of expenses allocable to such income)”. Although
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self-charged items are not specifically mentioned in the statute,

we have little difficulty placing self-charged items within the

ambit of section 469(l)(1) and (2). Through the legislative

commentary, the Secretary was directed to issue regulations for

self-charged lending transactions. The Secretary, by following

that direction and issuing section 1.469-7, Proposed Income Tax

Regs., 56 Fed. Reg. 14034 (Apr. 5, 1991), acknowledges that the

mandate of section 469(l)(2) includes self-charged items. Under

those circumstances, it is more difficult to accept respondent’s

position that the Secretary’s failure to issue regulations is a

bar to a taxpayer’s claiming that nonlending self-charged

transactions may also be offset. Respondent’s position would

ring more true, but not necessarily more correct, if no

regulations at all regarding self-charged items had been issued.

Having decided that the absence of regulations here is not

an acceptable basis for respondent’s determination, we turn to

the provision in question to determine whether petitioners are

entitled to self-charged treatment for the management fee income

and deductions. Petitioner received nonpassive income, through

SMC, for SMC’s providing real estate management services for the

partnerships (in which petitioner had an ownership interest,

either directly or indirectly). In connection with these real

estate management services, petitioner was also entitled to a

deduction for his distributive share of the management fees
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8 Any offset must, of course, be limited to petitioners’

ownership percentages.

expense of the partnerships for the services provided by SMC. 

The essence of these transactions is that petitioner, through

entities in which he held an interest, earned and paid the same

management fees; i.e., moved management fees from his “passive

pocket” to his “nonpassive pocket”. Under those circumstances,

the partnerships’ management fee deductions should be offset8

against the management fee payments (income) received by SMC. 

There was no net accretion of wealth with respect to the

management services provided from SMC to the partnerships. Under

respondent’s determination, petitioners would be required to

recognize income even though respondent does not dispute that, in

effect, petitioner has simply paid a management services fee to

himself. Respondent has identified no difference between the

circumstances in this case and those set forth in the proposed

regulation and the legislative history permitting an offset where

a taxpayer’s self-charged transaction involves interest (a

lending transaction).

Respondent’s position denying the offset to petitioners is

not only contrary to the legislative history and intent of

Congress, but it does not appear to be based on any established

tax policy or any reason other than the failure to promulgate a

regulation. Again, we note that respondent has not articulated
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9 Because of our conclusion that petitioners are entitled to

self-charged treatment with respect to the management fees, we

find it unnecessary to address their alternative argument that

the partnerships properly reported two activities to petitioner

(or to the upper tier partnerships or S corporations).

any reason why petitioners should be prohibited from

recharacterizing the management fees deduction as nonpassive in

order to accurately reflect the economic significance of the

transaction. Indeed, respondent does not dispute that

disallowing self-charged treatment for the management fees would

result in the very mismatching that Congress sought to alleviate

by directing the Secretary to issue regulations for self-charged

transactions. Nor has respondent identified a distinction

between lending and nonlending transactions in the context of

this case that would lead us to conclude that the two

transactions should be treated differently under the self-charged

regime.

We have considered all other arguments advanced by the

parties, and to the extent we have not addressed these arguments,

consider them irrelevant, moot, or without merit.9

To reflect the foregoing,

Decision will be entered for

petitioners.