Friday, June 18, 2004

Brant Hellwig (South Carolina) & Gregg Polsky (Minnesota) recently filed an amicus brief in the two pending contingent fee cases in the the U.S. Supreme Court (Commissioner v. Banks (No. 03-892) and Commissioner v. Banaitis (03-907)). The issue is whether litigation proceeds paid to an attorney pursuant to a contingent fee agreement constitute income to the client. The brief does not take a position on whether the execution of the fee agreement is a current transfer of a portion of the cause of action to the attorney; rather, it explains that a correct tax analysis under either scenario leads to the same inclusion/deduction result.