"Michael T Wing CPA" <mtwingcpa[at]yahoo.com> wrote:
- quote -

For district court decisions, the official cite is generally
the West publication, generally cited as F.Supp. Circuit
court cases are again West, known as the Federal Reports,
and generally cited Fed., F.2d or F.3d.

Note that not all tax cases are given in those publications
for some reason, though for the most part they are.

There's an official Court of Claims report (generally cited
as Ct.Cl.), but those cases are generally also in the
Federal Reports.

The Supreme Court official cases are in U.S. reports.

There are a bunch of companies that sell services that have
their own reports, but I'm not familiar with any but CCH and
BNI.

Stu

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Michael T Wing CPA" <mtwingcpa[at]yahoo.com> wrote:
- quote -

You are correct. I cut and pasted from the wrong part of
the case. CCH cites 6th Circuit case as:

US-CT-APP-6, [2003-2 USTC ¶50,675]

The USTC means this is the CCH format for citing.

A link to the case:

http://pacer.ca6.uscourts.gov/cgi-bi...ON=03a0347p.06

Drew Edmundson, CPA (NC)
e-mail is my first name at nccpa dot com

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Stuart O. Bronstein <spamtrap[at]lexregia.com> wrote:

- quote -

Well, I can generally recognize and distinguish between the
official and proprietary citations to Tax Court cases.
However, beyond that jurisdiction I'm lost.

For example, I recently quoted a cite to the Banks 6th
Circuit case that had been sent to me by another group
member. It contained a reference to the AFTR. Little did I
know (prior to Ed's message) that such refers to an RIA
publication! When it comes to circuit (and above) cases, I
typically end up searching alphabetically by case name. Can
be a major hassle if the name is common and/or you aren't
certain of ~which~ circuit and/or you don't know the year of
the decision.

MTW

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"Michael T Wing CPA" <mtwingcpa[at]yahoo.com> wrote:
- quote -

Sounds like you don't need much explaining. What don't you
understand?

Stu

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Michael T Wing CPA wrote:

- quote -

Well, I don't know that I'm an expert in this by any stretch
of the imagination but...<grin
For CPAs and EAs in tax practice, mainly the Tax Court's
"primary" citation is the one that would be important.
While there are other "more standard" citations for cases
that are important to CPAs and EAs in tax practice, most of
us only have "edited" sets of cases for U.S. District
Courts, Courts of Appeal, U.S. Supreme Court, etc.

But the "main" citations for the Tax Court are:

XX TC No. X (published tax court cases--also have page
number citation that is similar)

TC Memo XXXX-XXX (memorandum cases)

TC Summary XXXX-XXX (small cases tried under the informal
procedures that are not subject to appeal, nor are to be
cited as precedent)

XX BTA XXX (Board of Tax Appeals cases--predecessor to the
Tax Court)

Most of us with "full" tax libraries have all of those
cases. The publishers will also add their own citations for
those items, but I generally don't pay attention to those
since they don't do much good if you subscribe to another
service--but the above citations will work across all of the
vendors.

For the other cases, most CPAs or EAs subscribe either to
the US Tax Cases (published by CCH) or the American Federal
Tax Reporter (published by RIA) which contains selected
cases that impact tax matters. RIA actually will give both
citations in the Federal Tax Coordinator.

The courts will generally cite using the "official" citation
(as I recall, tied into contracts to West Publishing) that
gives a page number reference on those cases for citation
purposes. The "edited" versions generally contain
cross-references to those more standard citations.

--
Ed Zollars, CPA
Phoenix, Arizona

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Drew Edmundson <cfdaqw[at]nccpa.info> wrote:

- quote -

Those look like the cites to the original Tax Court case.
The recent 6th Circuit case, partially reversing the Tax
Court on this particular issue, is (I think):

John W. Banks, II, (2003) (CA 6 9/30/2003) 92 AFTR 2d 2003-5332.

In any event, the case can be found at the 6th Circuit's
website. <g
Sidebar: Maybe someday we can get Mr. Zollars to explain to
us how to recognize that various different citation formats
used by the various different legal publishers verses the
formats used by the courts themselves. For example, I
believe the first two of the three cites you provided above
are "proprietary" formats of CCH. The third is the court
assigned reference.

MTW

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Michael T Wing CPA" <mtwingcpa[at]yahoo.com> wrote:

- quote -

I believe the cite is:

Dec. 54,258(M), 81 TCM 1219, TC Memo. 2001-48

Drew Edmundson, CPA (NC)
e-mail is my first name at nccpa dot com

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Michael T Wing CPA wrote:

- quote -

Well, that's more a "quirk of luck" <grin> in this case,
because any holding that is more likely to impact employees
is more likely to be impacted by this rule.

But I still feel that if the underlying problem (Congress
and its hatred of employees) isn't addressed, there's going
to be more quirks like this.

An interesting aside--this week I had the pleasure of
speaking in a conference where Kenneth Gideon was also a
presenter. He pointed out an interesting "compromise" that
has actually created our AMT problems today that hopefully I
can relate back in proper detail. Back when the 1986 Act
was enacted, the AMT served to create a backdoor political
compromise.

Six states have no income tax. In the 1986 Act, those
states found that their sales taxes (which they relied upon
much more heavily having no income) no longer were no longer
given "favored" treatment under the federal income tax.
However, they were placated when it was pointed out that the
AMT created an effective "cap" on those deductions. The
rest of the AMT served to "hide" this key justification
<grin> and even today, per Ken's observation, that
compromise is still keeping us from really dealing with the
AMT openly.

He suggested that if, instead of the AMT, you simply limited
state income tax deductions to a specified percent of
income, the tax cost would be low or nonexistent. But if
you do that, you strip off the "cover" for this compromise,
infuriating those in high income tax states <grin> .

--
Ed Zollars, CPA
Phoenix, Arizona

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Ed Zollars, CPA <ezollar[at]mindspring.com> wrote:

- quote -

That is true. But one category of cases that is most often
noted with this problem is job discrimination cases - and
those by definition ONLY impact employees. (I doubt that you
or I, as independent contractors, would have much luck suing
our clients for age/sex/ethnicity discrimination. <g> )

MTW

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Harlan Lunsford wrote:
- quote -

Harlan, I think you may have missed the point on Banks. The
6th Circuit in Estate of Clarkes cited the Alabama case
(Cotnam). They said that Michigan's attorney lien law was
just like Alabama's and therefore the attorney fees could be
excluded from GI. In Banks, they have said that Clarkes is
still relevant even if the attorney lien law in CA is
nonexistent. They cite all the other factors that usually
come with a contingency fee agreement. What is important
about this decision, is that it stands a very good chance of
forcing the Supreme Court to finally reconcile the
differences that exist in the Circuits.

Basically you have the 5th, 6th and 11th allowing exclusion
based on state law. You have the 3rd, 4th, 7th, 9th*, 10th &
federal circuits buying into the IRS assignment of income
theory and you have the 2nd and 8th who have not rendered an
opinion on any appeal from the lower courts. *9th has
supported exclusion in a state where the attorney lien law
is like Alabama.

--

Alan
http://taxtopics.net

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Michael T Wing CPA wrote:

- quote -

You have to wonder how long the Supreme Court is going to
ignore this issue given the fact that the circuit courts are
ending up all over the map on this one. Heck, the Ninth
Circuit's own opinions have dicta in each that would lead to
dead opposite conclusions about rulings on future cases.

We either need Billy and the Supremes to take this one on
*OR* our friendly Congress-critters to simply put the answer
into the IRC itself. My own suspicion is that neither wants
to touch it because they can't figure out how to handle this
one without either appearing to be subsidizing plaintiff's
attorneys who bill on a contingent fee basis and thus
helping to encourage additional lawsuits (by allowing the
netting, which would increase the expected after tax value
of an award) *OR* appearing to be ripping off the individual
taxpayers involved by pushing the deduction below the line.

As well, there's the big problem no one really wants to talk
about--the basic unfairness in the IRC that results from
expenses incurred by an employee vs. those incurred in any
other form (the push below the line, following by AMT
disallowance and 2% haircut).

Remember, if this occurs outside the employment context,
there's not a problem--if we get a $1,000,000 award of
damages to my CPA firm with $400,000 of legal fees, it
really doesn't matter whether we can net those amounts
(reporting $600,000 of income) or have to report them
separately ($1,000,000 of income and a $400,000 deduction).

The same is true if those damages came to me as a sole
proprietor of a CPA enterprise. Only if I have the "bad
luck" of being an employee am I going to have a real problem.

--
Ed Zollars, CPA
Phoenix, Arizona

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Michael T Wing CPA wrote:

- quote -

6th circuit. Hmmm.. Have I heard of them before? Ah yes,
the pledge of allegiance, and so many other cases that were
overturned. (not the pledge case; yet)

Chances are this one will be overturned also.

But in Alabama, it's different. State law allows such
netting of awards. Of course Alabama has a most powerful
legal lobby and tort reform is an oxymoron.

cheer$,
Harlan Lunsford, EA in LA

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It looks like the 6th Circuit has just ruled in Banks vs.
Commissioner (sorry, I don't have a better cite) that
contingent attorney's fees ARE excludable from the
plaintiff's taxable income, and this result does NOT depend
on attorney's lien rights conveyed by applicable state law.
Rather, the fees are excludable if the fee agreement simply
represents a "contingent expectancy." In the court's
opinion, such does NOT constitute an "assignment of income"
due to the uncertainty involved. IOW, no income had been
earned or accrued by the plaintiff at the time the agreement
was entered into.

Although this case was decided in the 6th Circuit (based, I
gather, on the plaintiff's current residence), the case
resulting in the legal fees had taken place in California.

MTW

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