- 21 -
See Bagley v. Commissioner, 105 T.C. 396, 418-419 (1995), affd.
121 F.3d 393, 395-396 (8th Cir. 1997); 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, on
appeal (9th Cir., Feb. 2, 1999). In O’Brien, we held that “even
if the taxpayer had made an irrevocable assignment of a portion
of his future recovery to his attorney to such an extent that he
never thereafter became entitled thereto even for a split second,
it would still be gross income to him under” assignment of income
principles. O’Brien v. Commissioner, supra at 712. “Although
there may be considerable equity to the taxpayer’s position, that
is not the way the statute is written.” Id. at 710. In reaching
this conclusion, we rejected the distinction made in Cotnam v.
Commissioner, supra, with respect to the Alabama attorney’s lien
statute, stating that it is “doubtful that the Internal Revenue
Code was intended to turn upon such refinements.” O’Brien v.
Commissioner, supra at 712. Numerous decisions of this Court
have reached the same result as O’Brien by distinguishing other
States’ attorney’s lien statutes from the Alabama statute
considered in Cotnam. See Estate of Gadlow v. Commissioner, 50
T.C. 975, 979-980 (1968) (Pennsylvania law); Petersen v.
5(...continued)
income doctrine that was originated by the Supreme Court in Lucas
v. Earl, 281 U.S. 111 (1930). Lucas v. Earl, supra, has been
relied on by this Court for assignments of income involving both
related and unrelated taxpayers.
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