Roman v. Commissioner of Internal Revenue

• Court: Court of Appeals for the Ninth Circuit
• Decided: March 18, 2026
• Docket: 24-2220
• Status: Unpublished

Opinion

NOT FOR PUBLICATION FILED UNITED STATES COURT OF APPEALS MAR 18 2026 MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS FOR THE NINTH CIRCUIT

LUMINITA ROMAN, No. 24-2220 D.C. No. Petitioner - Appellant, 10878-16 v. MEMORANDUM* COMMISSIONER OF INTERNAL REVENUE,

Respondent - Appellee.

Appeal from a Decision of the United States Tax Court

Submitted March 16, 2026**

Before: SILVERMAN, NGUYEN, and HURWITZ, Circuit Judges.

Luminita Roman appeals pro se from the Tax Court’s judgment concluding

that a payment Roman received in a settlement agreement was not excludable from

her gross income and assessing a penalty. We have jurisdiction under 26 U.S.C.

§ 7482(a)(1). We review de novo the Tax Court’s conclusions of law and for clear

* 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). 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 payment was not

excludable from Roman’s gross income because there was no direct causal link

between the settlement and her personal physical injuries or physical sickness, and

Roman failed to demonstrate that any other exclusion applies. See 26 U.S.C.

§ 104(a)(2) (exempting from taxation settlement payments based on personal

physical injuries or physical sickness); Rivera, 430 F.3d at 1257 (setting forth the

framework for determining when settlement proceeds qualify for a § 104(a)(2)

exclusion and holding that there must be a direct causal link between damages and

personal physical injuries); see also Comm’r v. Banks, 543 U.S. 426, 433 (2005)

(explaining that gross income includes “all economic gains not otherwise

exempted”); Getty v. Comm’r, 913 F.2d 1486, 1490 (9th Cir. 1990) (holding that a

taxpayer must demonstrate that funds “fit into one of the specific exclusions

created by the Code” for funds to be exempt from gross income).

The Tax Court did not clearly err by allocating Roman half of the settlement

payment. See DJB Holding Corp. v. Comm’r, 803 F.3d 1014, 1027 (9th Cir. 2015)

(explaining that we review for clear error the allocation of income when the Tax

Court’s analysis was “primarily factual”); see also Comm’r v. Culbertson, 337 U.S.

733, 739-40 (1949) (holding that “income must be taxed to him who earns it”).

2 24-2220 The Tax Court did not clearly err by concluding that Roman failed to

produce sufficient evidence that she acted with reasonable cause and in good faith,

and thus properly found that the accuracy-related penalty was appropriate for

Roman’s substantial understatement of income tax. See 26 U.S.C. § 6662(a),

(b)(2) (authorizing accuracy-related penalty for substantial understatement of

income tax); id. § 6662(d)(1)(A) (defining substantial understatement); id.

§ 6664(c)(1) (stating that no penalty shall be imposed if the taxpayer acted with

reasonable cause and in good faith); DJB Holding Corp., 803 F.3d at 1022, 1028-

31 (setting forth the standard of review and framework for determining when

§ 6664(c)(1) applies).

AFFIRMED.

3 24-2220