Phu M. Au; Yvonne D. Au v. Commissioner of Internal Revenue

This disposition is not appropriate for publication and is not precedent*
except as provided by 9th Cir. R. 36-3.
The panel unanimously concludes this case is suitable for decision**
without oral argument. See Fed. R. App. P. 34(a)(2).
NOT FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
PHU M. AU; YVONNE D. AU,
Petitioners - Appellants,
v.
COMMISSIONER OF INTERNAL
REVENUE,
Respondent - Appellee.
No. 11-70270
Tax Ct. No. 16366-09
MEMORANDUM*
Appeal from a Decision of the
United States Tax Court
Submitted September 10, 2012**
Before: WARDLAW, CLIFTON, and N.R. SMITH, Circuit Judges.
Phu M. and Yvonne D. Au appeal pro se from the Tax Court’s decision,
following a bench trial, upholding the Commissioner of Internal Revenue’s
deficiency and additions for tax year 2006. We have jurisdiction under 26 U.S.C.
FILED
SEP 21 2012
MOLLY C. DWYER, CLERK
U .S. C OU R T OF APPE ALS

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11-70270 2
§ 7482(a). We review de novo the Tax Court’s legal conclusions, and for clear
error its factual findings. Johanson v. Comm’r, 541 F.3d 973, 976 (9th Cir. 2008).
We affirm.
The Tax Court properly upheld the tax deficiency because the Aus’
gambling losses could only be deducted from gambling winnings. See 26 U.S.C.
§ 165(d) (“[l]osses from wagering transactions shall be allowed only to the extent
of gains from such transactions”)
The Tax Court did not clearly err by finding that the Aus were subject to the
accuracy-related penalty for negligence under 26 U.S.C. § 6662(b) where they
made no inquiry to confirm that their substantial deductions were allowable. See
Sparkman v. Comm’r, 509 F.3d 1149, 1161 (9th Cir. 2007) (“The Tax Court’s
determination on a negligence penalty is reviewed for clear error.”).
The Tax Court did not abuse its discretion in declining to appoint counsel
where the Aus did not request counsel until the day of the trial and failed to show
exceptional circumstances. See Palmer v. Valdez, 560 F.3d 965, 970 (9th Cir.
2009) (standard of review and exceptional circumstances requirement).
The Aus’ contention that they were forced to sign stipulations prior to trial is
not supported by the record.
AFFIRMED.

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