-24-
agreement established a “Subchapter K partnership”, however,
because the “novel [proposition] of law with broad implications
for the tax system” was not advanced at an earlier stage of the
litigation. Commissioner v. Banks, 543 U.S. at ___, 125 S. Ct.
at 833.
a. Petitioner’s Argument That Banks Is
Distinguishable
In this case, petitioner hired an attorney to represent him
in the settlement of his legal claims against the defendants on a
contingent fee basis, received a settlement amount from the
defendants, failed to include the settlement amount, including
the portion paid to his attorney, in his gross income, and was
issued a notice of deficiency by respondent. This is precisely
the type of situation the Supreme Court considered in Banks. We
therefore reject petitioner’s contention that Banks is not
controlling because the type of facts on which he relies to
distinguish his case--the nature of his relationship with the
defendants and his underlying claims,14 and what he terms his
14The Supreme Court did consider the fact that Mr. Banks
brought his legal claims under Federal statutes authorizing fee
awards to prevailing plaintiff’s attorneys due to Mr. Banks’
contention that the application of the anticipatory assignment of
income principle would be inconsistent with the purpose of
statutory fee-shifting provisions. Commissioner v. Banks, 543
U.S. at ___, 125 S. Ct. at 834. Because Mr. Banks ultimately
settled his claims and his attorney received his fee pursuant to
their contingent fee arrangement rather than a statutory fee-
shifting provision, however, the Supreme Court did not address
this contention. Id. Petitioner has not asserted a similar
(continued...)
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