Section 7430, attorney’s fees, assignment of income, tax policy
This article examines statutory interpretation in general and the common-law doctrines at issue in particular (the assignment-of-income doctrine as well as the doctrine first identified in the seminal case of Old Colony Trust). While the author believes that these plaintiffs ought--as a matter of policy and income tax theory--to escape taxation on the amounts paid to their attorneys, she belives that the issue is truly a " deduction" issue, not a "gross income" issue. The article concludes, however, that the ill-fitting application of "gross income" doctrine in this context leads to indefensible distinctions that sound superficially plausible under the rubric of the common-law doctrines themselves but which are ultimately meaningless in the context of the larger problem at hand.
Deborah A. Geier, Some Meandering Thoughts on Plaintiffs and Their Attorneys' Fees and Costs, 88 Tax Notes 531 (July 24, 2000)