- 19 - 412 that we respectfully continue to believe that Cotnam was wrongly decided and that we would “adhere to our holding * * * [contrary to Cotnam] that contingent fee agreements * * * come within the ambit of the assignment of income doctrine and do not serve * * * to exclude the fee from the assignor’s gross income.” The Court of Appeals for the Sixth Circuit, the court to which an appeal of this case lies, agrees with the holding in Cotnam that excludes from a taxpayer’s gross income the portion of a damage award paid to the taxpayer’s attorney under a contingent fee arrangement. In Estate of Clarks ex rel. Brisco- Whitter v. United States, supra at 856, the Court of Appeals for the Sixth Circuit interpreted applicable State (Michigan) law to operate more or less the same way as the applicable State (Alabama) law in Cotnam. The court held that a portion of the contingent fee paid to the estate’s attorneys was not includable in the estate’s income. The court rejected the proposition that the assignment of income doctrine enunciated in Lucas v. Earl, 281 U.S. 111 (1930), is applicable to such contingent fee agreements. Under our so-called Golsen doctrine, see Golsen v. Commissioner, 54 T.C. 742, 756-757 (1970), affd. 445 F.2d 985 (10th Cir. 1971), we follow the holding of a Court of Appeals to which a case is appealable where that holding is squarely on point. For the reasons stated by the Court of Appeals for thePage: Previous 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 Next
Last modified: May 25, 2011