                           NOT FOR PUBLICATION                           FILED
                    UNITED STATES COURT OF APPEALS                       NOV 20 2017
                                                                      MOLLY C. DWYER, CLERK
                                                                       U.S. COURT OF APPEALS
                           FOR THE NINTH CIRCUIT

JOSE M. DULANTO; ANA M.                         No. 16-72867
DULANTO,
                                                Tax Ct. No. 19123-12
                Petitioners-Appellants,

 v.                                             MEMORANDUM*

COMMISSIONER OF INTERNAL
REVENUE,

                Respondent-Appellee.

                           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).
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


                                          2                                     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.




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