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judgment proceeds are includable in her 1993 gross income, the
$73,399.25 paid to her attorneys is excludable from her gross
income because it was paid directly to her counsel under a
contingent fee retainer agreement. We note at the outset that
this Court has, relying on the well-established assignment of
income doctrine, uniformly rejected the contention that taxpayers
may exclude the amount of their legal fees and costs from gross
income. See Kenseth v. Commissioner, 114 T.C. ___ (2000);
O’Brien v. Commissioner, 38 T.C. 707, 712 (1962), affd. per
curiam 319 F.2d 532 (3d Cir. 1963); Benci-Woodward v.
Commissioner, T.C. Memo. 1998-395.
Petitioner relies on Cotnam v. Commissioner, 263 F.2d 119
(5th Cir. 1959), affg. in part and revg. in part 28 T.C. 947
(1957), arguing that, under the “attorney’s lien” rationale, an
attorney’s contingent fee portion of a judgment is not included
in the taxpayer’s income. In Cotnam, the taxpayer and her
attorneys entered into a contingent fee agreement under which the
attorneys would receive 40 percent of any amount recovered on
behalf of the taxpayer on her claim. The taxpayer received a
judgment on the claim, and a check in the amount of the judgment
was made payable to both her and her attorneys. The attorneys
retained their share of the proceeds and remitted the rest to the
taxpayer. In holding that the amount retained by the attorneys
was not includable in the taxpayer’s gross income, the Court of
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