In two consolidated cases, the U.S. Supreme Court has resolved a split among the circuit courts in ruling that fees paid to a plaintiff’s attorney under a contingent-fee arrangement are taxable income to the plaintiff for federal income tax purposes.
In Commissioner v. Banks, the issue before the court was whether the taxpayer’s gross income should include that portion of a settlement arising from a claim of employment discrimination that was paid to the taxpayer’s attorney pursuant to a contingent fee arrangement. The tax issue was similar in Commissioner v. Banaitis, although in that case the taxpayer’s underlying claim was essentially for breach of contract and there was no apparent allegation of discrimination.
This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.
To view this content, please continue to their sites.
Not a Lexis Subscriber?
Subscribe Now
Not a Bloomberg Law Subscriber?
Subscribe Now
LexisNexis® and Bloomberg Law are third party online distributors of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® and Bloomberg Law customers are able to access and use ALM's content, including content from the National Law Journal, The American Lawyer, Legaltech News, The New York Law Journal, and Corporate Counsel, as well as other sources of legal information.
For questions call 1-877-256-2472 or contact us at [email protected]
