NOT FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

JOSE M. DULANTO; ANA M. 

DULANTO, 

Petitioners-Appellants, 

 v. 

COMMISSIONER OF INTERNAL 

REVENUE, 

Respondent-Appellee.

No. 16-72867 

Tax Ct. No. 19123-12 

MEMORANDUM*

Appeal from a Decision of the

United States Tax Court

Submitted November 15, 2017**

Before: CANBY, TROTT, and GRABER, Circuit Judges.

Jose M. Dulanto and Ana M. Dulanto appeal pro se from the Tax Court’s 

judgment concluding that a payment that Ana M. Dulanto received in a settlement 

agreement was not excludable from their gross income and assessing penalties. 

We have jurisdiction under 26 U.S.C. § 7482(a)(1). We review de novo the Tax 

 

* This disposition is not appropriate for publication and is not precedent 

except as provided by Ninth Circuit Rule 36-3.

** The panel unanimously concludes this case is suitable for decision 

without oral argument. See Fed. R. App. P. 34(a)(2).

FILED

NOV 20 2017

MOLLY C. DWYER, CLERK

U.S. COURT OF APPEALS
 2 16-72867 

Court’s conclusions of law and for clear error its findings of fact. Rivera v. Baker 

West, Inc., 430 F.3d 1253, 1256 (9th Cir. 2005). We affirm.

The Tax Court properly concluded that the settlement was not excludable 

from the Dulantos’ gross income because neither the settlement agreement nor the 

facts and circumstances of the case demonstrate that the settlement was based on 

Ana M. Dulanto’s physical injury or physical sickness, or her loss of consortium 

arising from Jose M. Dulanto’s physical injury or physical sickness. See 26 U.S.C. 

§ 104(a)(2) (exempting from taxation a settlement payment based on personal 

physical injuries or physical sickness); Rivera, 430 F.3d at 1257 (to determine 

whether a settlement is based on physical injury or physical sickness, courts 

consider the settlement agreement and the facts and circumstances of the case).

The Tax Court did not clearly err in concluding that the Dulantos failed to 

produce sufficient evidence that they acted with reasonable cause and in good 

faith, and thus properly found that the accuracy-related penalty was appropriate for

the Dulantos’ understated taxes. See 26 U.S.C. § 6662(a), (d)(1) (authorizing 

penalty for substantial understatement of taxes when understatement exceeds the 

greater of ten percent of the tax required to be shown on the tax return or $5,000); 

DJB Holding Corp. v. Comm’r, 803 F.3d 1014, 1022, 1028-31 (9th Cir. 2015)

(setting forth standards of review and discussing penalties under § 6662 based on 

substantial underpayment and circumstances for applying exception under 
 3 16-72867 

§ 6664(c)(1) regarding whether taxpayer had reasonable cause for his position and 

acted in good faith).

The Tax Court did not abuse its discretion in denying the Dulantos’ motion 

to continue because it was filed within 30 days of the trial date and the Dulantos

were aware of Ana M. Dulanto’s disability before that period. See Tax Ct. R. 133 

(a motion for a continuance is granted “only in exceptional circumstances,” and if

filed within 30 days of hearing, it “ordinarily will be deemed dilatory and will be 

denied unless the ground therefor arose during that period or there was good reason 

for not making the motion sooner”); see also Woods v. Saturn Distribution 

Corp., 78 F.3d 424, 427 (9th Cir. 1996) (standard of review).

We do not consider matters not specifically and distinctly raised and argued 

in the opening brief, or arguments and allegations raised for the first time on 

appeal. See Padgett v. Wright, 587 F.3d 983, 985 n.2 (9th Cir. 2009).

AFFIRMED.