- 17 -
F.3d 353, 365 (5th Cir. 2000), revg. and remanding in part,
and affg. on another issue T.C. Memo. 1998-362; Davis v.
Commissioner, 210 F.3d 1346 (11th Cir. 2000) ("this panel
[of the Court of Appeals for the 11th Circuit] is bound by
Cotnam, which can be overruled only by the en banc Court"),
affg. T.C. Memo. 1998-248. In Estate of Clarks v. United
States, supra, the Court of Appeals for the Sixth Circuit
followed Cotnam v. Commissioner, supra, and held that the
interest portion of a judgment in an action for personal
injuries could be offset by the contingent legal fees paid
to the taxpayer's attorney because an attorney's lien under
Michigan law was similar to an attorney's lien under
Alabama law.
Petitioners acknowledge that we recently reconsidered
the same issue and reached the opposite conclusion in
Kenseth v. Commissioner, 114 T.C. 399 (2000), affd. 259
F.3d 881 (7th Cir. 2001). In that case, the taxpayer was
one of a class of persons who had entered into an agreement
with their former employer in settlement of a class action
for age discrimination. The taxpayer's share of the gross
settlement amount was $229,501.37, of which the taxpayer
received $126,470.42, after the former employer had
withheld employment taxes of $11,230.41 and the taxpayer's
attorneys had withheld attorneys' fees of $91,800.54. The
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