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Commissioner, 38 T.C. 137, 151-152 (1962) (Nebraska law and South
Dakota law); Sinyard v. Commissioner, T.C. Memo. 1998-364, on
appeal (9th Cir., Oct. 15, 1999) (Arizona law); Srivastava v.
Commissioner, T.C. Memo. 1998-362, on appeal (5th Cir., June 14,
1999) (Texas law); Coady v. Commissioner, T.C. Memo. 1998-291
(Alaska law).
After further reflection on Cotnam and now Estate of Clarks
v. United States, supra, we continue to adhere to our holding in
O’Brien that contingent fee agreements, such as the one we
consider here, come within the ambit of the assignment of income
doctrine and do not serve, for purposes of Federal taxation, to
exclude the fee from the assignor’s gross income. We also
decline to decide this case based on the possible effect of
various States’ attorney’s lien statutes.6
6 With the exception of situations where, under our holding
in Golsen v. Commissioner, 54 T.C. 742, 756-757 (1970), affd. 445
F.2d 985 (10th Cir. 1971), we feel compelled to follow the
holding of a Court of Appeals, we have consistently held that
attorney’s fees are not subtracted from taxpayers’ gross income
to arrive at adjusted gross income. In Davis v. Commissioner,
T.C. Memo. 1998-248, affd. per curiam ___ F.3d ___ (11th Cir.
2000), we followed Cotnam v. Commissioner, 263 F.2d 119 (5th Cir.
1959), affg. in part and revg. in part 28 T.C. 947 (1957),
because the appeal would lie to the Court of Appeals for the 11th
Circuit, which follows precedents of the Court of Appeals for the
5th Circuit for cases decided before Oct. 1, 1982. In a per
curiam opinion, the Court of Appeals for the 11th Circuit
affirmed our decision based on the binding Cotnam precedent and
declined to consider the Commissioner’s argument that Cotnam was
wrongly decided, noting that Cotnam can be overruled only by the
court sitting en banc. See Davis v. Commissioner, F.3d
2000 WL 491747 (11th Cir. 2000); see also Foster v. United
States, F. Supp. 2d (N.D. Ala., Mar. 13, 2000), on appeal
(continued...)
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