- 40 -
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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