Guillermo Mojarro v. Commissioner of Internal Revenue

NOT FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
GUILLERMO MOJARRO,
Petitioner-Appellant,
v.
COMMISSIONER OF INTERNAL
REVENUE,
Respondent-Appellee.
No. 15-72153
Tax Ct. No. 1492-14
MEMORANDUM*
Appeal from a Decision of the
United States Tax Court
Submitted April 11, 2017**
Before: GOULD, CLIFTON, and HURWITZ, Circuit Judges.
Guillermo Mojarro appeals pro se from the Tax Court’s judgment following
a bench trial concluding that a $250,000 payment that Mojarro received under a
settlement agreement was not excludable from his gross income and assessing
penalties. We have jurisdiction under 26 U.S.C. § 7482(a)(1). We review de novo
* 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
APR 21 2017
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS

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the Tax Court’s legal conclusions, and for clear error its factual findings. DJB
Holding Corp. v. Comm’r, 803 F.3d 1014, 1022 (9th Cir. 2015). We affirm.
The Tax Court properly concluded that, with the exception of $1,500 paid
for medical treatment for Mojarro’s emotional distress, Mojarro’s $250,000
settlement was not made on account of “physical injuries or physical sickness” and
was therefore not excludable from Mojarro’s gross income. 26 U.S.C. § 104(a)(2)
(exempting settlement payment based on physical injuries or physical sickness
from taxation, but not treating emotional distress as a physical injury or physical
sickness); Rivera v. Baker W., Inc., 430 F.3d 1253, 1256-57 (9th Cir. 2005) (setting
forth framework for determining when settlement proceeds qualify for a
§ 104(a)(2) exclusion and explaining that there must be a “direct causal link”
between damages and personal injuries).
The Tax Court did not clearly err in concluding that Mojarro failed to
produce sufficient evidence that he acted with reasonable cause and in good faith,
and thus properly concluded that Mojarro was ineligible for the exception under
§ 6664(c)(1) for his substantial underpayment of income tax. See 26 U.S.C.
§ 6662(a), (b)(2) (authorizing penalty for any substantial understatement of income
tax); id. § 6662(d)(1)(A) (defining substantial understatement); DJB Holding
Corp., 803 F.3d at 1022, 1028-31 (setting forth standards of review and discussing
penalties under § 6662 based on substantial underpayment and circumstances for

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applying exception under § 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 Mojarro’s motion for
reconsideration because Mojarro did not establish grounds for relief. See
Parkinson v. Comm’r, 647 F.2d 875, 876 (9th Cir. 1981) (standard of review).
We do not consider matters not specifically and distinctly raised and argued
in the opening brief. See Padgett v. Wright, 587 F.3d 983, 985 n.2 (9th Cir. 2009).
AFFIRMED.

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