The SBSE Revenue Agent proposed a deficiency and fraud penalty against XYX for the 2016 taxable year. At Appeals, Appeals Officer John and XYZ agreed to the following settlement: There is a $600,000 underpayment in XYZ's 2016 income tax. For 2016, XYZ is liable for the fraud penalty. XYZ demonstrated that $100,000 of the underpayment was attributable to a reasonable, although incorrect, position that XYZ took concerning whether it could take a foreign tax credit for certain payments made to the Government of Italy.

Question: what was XYZ’s liability for the fraud penalty for the 2016 taxable year?

A. $120,000.

B. $375,000.

C. $90,000 per month.

D. $75,000 per month.

E. $450,000.