NOT FOR PUBLICATION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 jurisdictio n 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, CLER K U.S. COURT OF APPEAL S2 16

- 72867

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

West, Inc. , 430 F.3d 1253, 1256 (9th Cir. 2005). W e 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 accur acy

- related penalty was appropriate for

the Du lantos’ 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 require d to be shown on the tax retur n 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 under3 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 Dulan tos

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 sp ecifically and distinctly raised and argued

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

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

AFFIRMED.