Douglas A. Gibson - Page 13

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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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