A debate exists among tax practitioners over whether or not a plaintiff’s attorney’s contingency fee paid out of an award or settlement should be considered part of the plaintiff’s gross income. In what is already a major circuit split, the courts of appeals have lined up on both sides of the issue. Most recently, in Srivastava v. Commissioner, the Fifth Circuit came down reluctantly on the side of the taxpayer, holding that the attorney’s contingent-fee portion of a settlement was not gross income for tax purposes.Part I of this Note discusses briefly the Fifth Circuit’s decision. Part II surveys the state of the law in the various courts of appeal. Part III examines the complications in the Code that confuse the issue. Finally, Part IV proposes a workable solution.