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attorney lien priority was contrary to Missouri law and that,
under Missouri law, an attorney’s lien on the plaintiff’s
judgment is inferior to the defendant’s right to set off its own
judgment against the plaintiff. Hillside Enters., Inc. v.
Continental Carlisle, Inc., 147 F.3d at 735. The fact that
Missouri law subordinates an attorney’s lien to the rights
existing between the parties to the action or proceeding clearly
distinguishes it from the Alabama provision cited in Cotnam where
the lien of an attorney is “superior to all liens but tax liens.”
46 Ala. Code sec. 64 (1940). Based on the foregoing, we find
petitioner’s case distinguishable from Cotnam and hold that
petitioner’s gross income includes the $73,399.25 of her title
VII proceeds paid to her counsel as attorney’s fees.4
Petitioner complains that she is not subject to AMT because
the attorney’s fees portion of the judgment is not included in
gross income. We have held that petitioner’s gross income
includes the portion of her title VII proceeds paid to her
counsel as attorney’s fees, and therefore petitioner’s argument
that she is not subject to AMT is rejected.
4 We would reach this same holding irrespective of the
differences between the Missouri and Alabama attorney lien
statutes. See Kenseth v. Commissioner, 114 T.C. ___ (2000)
(majority rejected the reasoning of Cotnam v. Commissioner, 263
F.2d 119 (5th Cir. 1959), affg. in part and revg. in part 28 T.C.
947 (1957)).
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