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the contingent fees under all such arrangements to which he is a
party with other clients). The client is in the position of the
landowner (lessee-sublessor), who bears none of the operating
expenses, but is responsible for paying the carrying charges on
his land, such as mortgage interest and real estate taxes. These
charges are analogous to court costs, which the client under a
contingent fee agreement is usually responsible for, and which
the attorney can only advance to or on behalf of the client.
It is apparently so clear that there is no direct authority
that cropsharing arrangements result in a division of the crops
and the total gross revenue from their sale in the agreed upon
percentages. See IRS Publication 225, Farmer’s Tax Guide 15-16
(1999). This income is characterized as rental income to the
owner or lessee of the land and farm income to the tenant-farmer.
See id.65
The analogy of contingent fee agreements to crop sharing
arrangements is suggestive and helpful. It solves the problem
under the attorney’s ethics rule that says the attorney is not
65 Probably the most litigated issue has been whether, under
the facts of each particular case, there has been “material
participation” by the owner or lessee so as to obligate him or
her to pay self-employment tax and to be entitled to Social
Security benefits. See, e.g., Davenport, Farm Income Tax Manual
sec. 303, “Rents Received in Crop Shares”, particularly “Material
Participation Trade-off”, pages 203-204 (1998 ed.); ALI-ABA,
Halstead, ed., Federal Income Taxation of Agriculture, ch. 2
Social Security and the Farmer, particularly 16-27 (3d ed. 1979).
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