Eldon R. Kenseth and Susan M. Kenseth - Page 40

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         including $229,501 in his gross income and treating his share of               
         the fee as an itemized deduction, subject to the alternative                   
         minimum tax (AMT).11                                                           
              The following evidentiary facts and inferences therefrom                  
         support this ultimate finding.                                                 
              The contingent fee agreement was a standardized form                      
         contract prepared by Fox & Fox.  Fox & Fox would have declined to              
         represent Mr. Kenseth if he had not entered into the contingent                
         fee agreement and agreed to the attorney’s lien provided therein.              
              Mr. Kenseth and the 16 other members of the class had a                   
         common grievance arising from APV’s terminations of their                      
         employment.  That grievance impelled them to retain the same law               
         firm to advise them and prosecute their claims for redress.  Once              
         that law firm had entered an identical contingent fee agreement                
         with each claimant, there was a substantial additional practical               
         impediment--as compared with a sole plaintiff who enters into a                
         contingent fee agreement--to Mr. Kenseth or any other class                    
         member firing Fox & Fox and hiring other attorneys.  That                      
         impediment became even more substantial as the prosecution of the              
         claims by Fox & Fox progressed, from the filing of the                         
         administrative claims, to the commencement of the class action                 

               11 On occasion, the Commissioner has inadvertently taken                 
          this position.  See Coblenz v. Commissioner, T.C. Memo. 2000-131.             

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Last modified: May 25, 2011