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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
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