Wade H. Griffin, III - Page 20




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               In a recent opinion, the Court of Appeals for the Eleventh             
          Circuit followed the Cotnam holding that the contingent legal               
          fees in Alabama are not includable in a taxpayer’s gross income             
          as part of the taxpayer’s lawsuit recovery.  See Davis v.                   
          Commissioner, supra.  In that case, the Court of Appeals                    
          considered respondent’s above-described alternative argument and            
          rejected it for lack of proof that the “values of the properties            
          exchanged” were sufficiently “unascertainable” to bring the open            
          transaction doctrine into play.  See id. at 1348.  Likewise, the            
          evidence in this case is insufficient to reach the question of              
          whether respondent’s alternative theory would change the result.            
          Cf. id. at 1348 n.5.                                                        
               The Court of Appeals for the Fifth Circuit’s holding in                
          Cotnam, as followed in Davis v. Commissioner, supra, applies in             
          this case under the Golsen rule because petitioner’s appeal of              
          our decision would be to the Court of Appeals for the Eleventh              
          Circuit.  In that regard, decisions of the Court of Appeals for             
          the Fifth Circuit prior to September 30, 1981, are binding                  
          precedent in the Court of Appeals for the Eleventh Circuit.  See            
          Bonner v. City of Prichard, 661 F.2d 1206 (11th Cir. 1981).                 
               That being the case, we hold for petitioner on this issue in           
          accord with the holding of the Court of Appeals to which appeal             
          of our decision would lie.  Our longstanding practice, founded in           
          Golsen v. Commissioner, 54 T.C. 742, 756-757 (1970), affd. 445              






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