Eldon R. Kenseth and Susan M. Kenseth - Page 26

                                        - 26 -                                          
         held that a taxpayer cannot avoid taxation on his income by an                 
         anticipatory assignment of that income to another.  See id.                    
         Thus, any anticipatory assignment by the taxpayer of the proceeds              
         of the lawsuit must be included in the taxpayer’s gross income.                
              We reject petitioner’s contention that he had insufficient                
         control over his cause of action to be taxable on a recovery of a              
         portion of the settlement proceeds that was diverted to or paid                
         to Fox & Fox under the contingent fee agreement.  There is no                  
         evidence supporting petitioner’s contention that he had no                     
         control over his claim.  In Wisconsin, a lawyer cannot acquire a               
         proprietary interest that would enable the attorney to continue                
         to press a cause of action despite the client’s wish to settle.                
         Indeed, the Supreme Court of Wisconsin has stated that “The claim              
         belongs to the client and not the attorney, the client has the                 
         right to compromise or even abandon his claim if he sees fit to                
         do so.”  Goldman v. Home Mut. Ins. Co., 22 Wis. 2d 334, 341, 126               
         N.W.2d 1 (1964).                                                               
              Likewise, petitioner has not waived his right to settle his               
         claim at any time, and it would be an ethical violation for his                
         attorney to press forward with such a case against the will of                 
         the client.  Wisconsin Supreme Court rule 20:1.2(a) provides:                  
              A lawyer shall abide by a client’s decisions concerning                   
              the objectives of representation, subject to paragraphs                   
              (c), (d) and (e), and shall consult with the client as                    
              to the means by which they are to be pursued.  A lawyer                   
              shall inform a client of all offers of settlement and                     

Page:  Previous  16  17  18  19  20  21  22  23  24  25  26  27  28  29  30  31  32  33  34  35  Next

Last modified: May 25, 2011