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injuries or physical sickness.7 Additionally, factor six, for
which petitioner claims he qualifies, refers to “any other
compensable loss” and does not necessarily include personal
physical injury and physical sickness.
Apart from petitioner’s self-serving and uncorroborated
testimony, the record does not establish that petitioner received
a portion of his $175,000 total settlement proceeds on account of
personal physical injury or physical sickness. Accordingly, we
sustain respondent’s determination that the settlement proceeds
petitioner received in 2002 are includable in his gross income.
See Geiger v. Commissioner, supra; Lerch v. Commissioner, supra.
II. Accuracy-Related Penalty
A. Section 6662(a) Penalty
Respondent determined an accuracy-related penalty under
section 6662(a) of $9,956. Respondent determined that the entire
underpayment of tax for 2002 was attributable to negligence or
disregard of rules or regulations, and/or a substantial
understatement of income tax.
Pursuant to section 6662(a), a taxpayer may be liable for a
penalty of 20 percent of the portion of an underpayment of tax
7 Petitioner qualified for factor 1 because he received a
citation. He qualified for factor 2 because the CCE authorities
told the Gibsons they would have to move. Also, the citation
threatened fines and imprisonment. Additionally, petitioner was
served with a notice to appear in court to face possible criminal
charges. He qualified for factor 4 because of the emotional
distress he suffered.
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