Section of Taxation Publications
  VOL. 54
NO. 2
Contents | TTL Home

 Note: The following is an excerpt from the introduction to the article as published in The Tax Lawyer. Author citations have been omitted for brevity. Tax Section members may read the article in its entirety in Adobe Acrobat format.

Ethel Cotnam's Ghost—The Conflicting Tax Treatment of Contingent Attorney's Fees: Srivastava v. Commissioner

B. Douglas Smith, Jr.


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.


Published by
Section of Taxation, American Bar Association
With the Assistance of
Georgetown University Law Center


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