William T. and Kathryn A. Kees - Page 12

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          affd. without published opinion 70 F.3d 637 (D.C. Cir. 1995);               
          Gray v. Commissioner, T.C. Memo. 1982-392.  The decision of the             
          administrative law judge in the record herein demonstrates                  
          petitioner’s medical infirmities, which existed when petitioners            
          filed their return for the year in issue.  Petitioner’s medical             
          history as documented in his disability hearing shows that he was           
          subject to grand mal seizures, a major depressive disorder,                 
          debilitating headaches, and other chronic pain.  Further,                   
          petitioners’ opening brief and other submitted documents suggest            
          that he does not have a sophisticated knowledge of the tax laws.            
          In these circumstances, we believe that petitioners’ failure to             
          include the disability payments in income was due to reasonable             
          cause under section 6664(c)(1).  Thus, the underpayment arising             
          from the omitted income is not subject to accuracy-related                  
          penalties under section 6662(b)(2).                                         
               To reflect the foregoing,                                              

                                             An appropriate order will                
                                           be issued, and decision will be            
                                           entered for respondent with                
                                           respect to the deficiency and              
                                           for petitioners with respect to            
                                           the accuracy-related penalty.              

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