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Discussion
This is yet another case in which a taxpayer who
successfully prosecuted a wrongful termination claim against his
former employer, obtaining a taxable recovery, has attempted to
avoid treating as an itemized deduction from adjusted gross
income the attorney’s fee paid to his attorney under their
contingent fee agreement. It is clear under the jurisprudence of
the Tax Court, and the Court of Appeals for the Ninth Circuit, to
which this case would be appealable, that such a fee is not
excluded from gross income under the “common law” of taxation.2
Petitioners have therefore chosen another tack on which there is
no authority on point in the Ninth Circuit: that the fee was
2See Kenseth v. Commissioner, 114 T.C. 399 (2000), affd. 259
F.3d 881 (7th Cir. 2001); Banaitis v. Commissioner, T.C. Memo.
2002-5; Freeman v. Commissioner, T.C. Memo. 2001-254; Banks v.
Commissioner, T.C. Memo. 2001-48. Compare Srivastava v.
Commissioner, 220 F.3d 353 (5th Cir. 2000), revg. in part, affg.
in part, and remanding T.C. Memo. 1998-362; Davis v.
Commissioner, 210 F.3d 1346 (11th Cir. 2000), affg. T.C. Memo.
1998-248; Estate of Clarks v. United States, 202 F.3d 854 (6th
Cir. 2000); Cotnam v. Commissioner, 263 F.2d 119 (5th Cir. 1959),
revg. in part 28 T.C. 947 (1957), with Sinyard v. Commissioner,
268 F.3d 756 (9th Cir. 2001), affg. T.C. Memo. 1998-364; Benci-
Woodward v. Commissioner, 219 F.3d 941, 943 (9th Cir. 2000),
affg. T.C. Memo. 1998-395; Coady v. Commissioner, 213 F.3d 1187
(9th Cir. 2000), affg. T.C. Memo. 1998-291; Brewer v.
Commissioner, T.C. Memo. 1997-542, affd. without published
opinion 172 F.3d 875 (9th Cir. 1999); Martinez v. Commissioner,
T.C. Memo. 1997-126, affd. without published opinion 166 F.3d 343
(9th Cir. 1998); Fredrickson v. Commissioner, T.C. Memo. 1997-
125, affd. without published opinion 166 F.3d 342 (9th Cir.
1998).
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