Freddie Has Been Assessed a Preparer Penalty for Willful and Reckless

Freddie has been assessed a preparer penalty for willful and reckless conduct. When he completed Peggy's Federal income tax return (who is in the 35% tax bracket) , Freddie purposely omitted $100,000 of cash receipts that should have been reported as gross income. Freddie charged Peggy $6,000 to prepare the return. What is Freddie's preparer penalty?

A) $0, because Peggy incurred her own understatement penalty for the return.
B) $3,000.
C) $5,000.
D) $17,500.