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$120,000 and paid attorney's fees of $50,365.83 pursuant to a
contingent fee arrangement. The Commissioner treated the
$120,000 as taxable income and allowed a deduction for the
attorney's fees. The Court of Appeals for the Fifth Circuit held
that the $50,365.83 in attorney's fees should not have been
included in the taxpayer's income. Id. at 125.
Respondent makes several arguments to the effect that
contingent attorney's fees should not reduce the amount of a
judgment but constitute a miscellaneous itemized deduction. See,
e.g., Baylin v. United States, 43 F.3d 1451 (Fed. Cir. 1995);
Bagley v. Commissioner, 105 T.C. 396, 418-419 (1995), affd. 121
F.3d 393 (8th Cir. 1997). Under the Golsen rule, however, we
follow the law of the circuit in which this case is appealable,
here the Eleventh Circuit. Golsen v. Commissioner, 54 T.C. 742
(1970), affd. 445 F.2d 985 (10th Cir. 1971). Under Bonner v.
City of Prichard, Alabama, 661 F.2d 1206 (11th Cir. 1981),
decisions of the former Court of Appeals for the Fifth Circuit
are binding precedent for courts in the Eleventh Circuit.
Respondent has not brought to our attention any legal authority
that overrules the Court of Appeals for the Fifth Circuit's
opinion in Cotnam v. Commissioner, supra, a case that is squarely
3(...continued)
Sept. 30, 1981, unless and until such precedent is overruled or
modified by the Court of Appeals for the Eleventh Circuit.
Bonner v. City of Prichard, Alabama, 661 F.2d 1206 (11th Cir.
1981).
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