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referral fees only to outside attorneys and associates, not
to CSB shareholders; and (3) CSB owned its cases and work in
process.
Petitioner’s arguments do not take into account the fact
that the payment to decedent’s estate was set at $5 million
pursuant to a written agreement between CSB and decedent and
was made because decedent performed services for CSB, such as
bringing cases to CSB. CSB’s ownership of work in process, the
rights of other CSB shareholders, and CSB’s practices regarding
the payment of referral fees are not dispositive of whether any
part of the $5 million payment was income in respect of a
decedent.
The $5 million payment from CSB was income in respect of a
decedent (to the extent it was not payment for decedent’s CSB
stock) because it was attributable to personal services decedent
provided to CSB and was payable on his death. Estate of Bausch
v. Commissioner, 186 F.2d 313, 314 (2d Cir. 1951) (payments made
voluntarily by a corporation to decedents’ estates upon their
deaths in recognition of services to the corporation are income
in respect of a decedent), affg. 14 T.C. 1433 (1950); Collins v.
United States, 318 F. Supp. 382, 389 (C.D. Cal. 1970) (payments
made pursuant to a written agreement for 5 years to the wife of a
deceased employee of a company were income in respect of a
decedent because the decedent bargained for those payments in
exchange for his services), affd. per curiam 448 F.2d 787 (9th
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