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an individual taxpayer’s deduction of legal expenses “smacks of
injustice” because the taxpayer is effectively robbed of any
benefit from the deductibility of legal expenses as miscellaneous
itemized deductions), affg. T.C. Memo. 1995-51. Despite this
potential for unfairness, however, these policy issues are in the
province of Congress, and we are not authorized to rewrite the
statute. See, e.g., Badaracco v. Commissioner, 464 U.S. 386, 398
(1984); Warfield v. Commissioner, 84 T.C. 179, 183 (1985).
There is a split of authority among the Federal Courts of
Appeals on this issue. The U.S. Court of Appeals for the Fifth
Circuit reversed this Court and held that amounts awarded in
Alabama litigation that were assigned and paid directly to cover
attorney’s fees pursuant to a contingent fee agreement are
excludable from gross income. See Cotnam v. Commissioner,
263 F.2d 119 (5th Cir. 1959), affg. in part and revg. in part 28
T.C. 947 (1957). In Cotnam, the taxpayer entered into a
contingent fee agreement to pay her attorney 40 percent of any
amount recovered on a claim prosecuted for the taxpayer’s behalf.
A judgment was obtained on the claim, and a check in the amount
of the judgment was made jointly payable to the taxpayer and her
attorney. The attorney retained his share of the proceeds and
remitted the balance to the taxpayer. The Commissioner treated
the total amount of the judgment as includable in the taxpayer’s
gross income and allowed the attorney’s fees as an itemized
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