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evidence indicating that the fee arrangement with petitioner’s
attorneys was of a contingent nature.
Accordingly, petitioners must include in their gross income
their share of the gross proceeds received pursuant to the
settlement agreement with PayLess. The proceeds allocable to
attorney’s fees are deductible subject to certain statutory
limitations as determined by respondent.
Reviewed and adopted as the report of the Small Tax Case
Division.
Decision will be entered
for respondent.
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Last modified: May 25, 2011