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realized under a settlement agreement, and, second, added
substantially to whatever speculative value those claims might
have had when the contingent fee agreements were entered into.
The Bankruptcy Court for the Middle District of Alabama said
it very well in recently applying Cotnam in Hamilton v. United
States, 212 Bankr. 212 (Bankr. M.D. Ala. 1997), a case that would
have been appealable to the Court of Appeals for the Eleventh
Circuit: “This decision does not limit taxation of the total
amount of the judgment as income. It merely apportions the
income to the proper entities”.
In conclusion, there should be no concern that giving effect
to my findings and conclusion will open the door to tax
avoidance. They are confined to a peculiar situation, far
removed from the intrafamily and other related party transfers
that generated and sustain the assignment of income doctrine.
The case at hand is not an appropriate occasion for application
of that doctrine. The gross income realized and received by Mr.
Kenseth and his colleagues should not be inflated to include the
contingent fee paid to their attorneys.
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