Nancy J. Hukkanen-Campbell - Page 16




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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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