[Ed. Note: Thanks are due to Henry F. Murray, plaintiff's co-counsel in the CT case described above, for referring me to coverage of this issue in the FY 2002 National Taxpayer Advocate's Annual Report to Congress.
CT Client Taxed for Attorney Fee: 2nd Circuit District Court Sides with IRS
Uncertainty over who has to pay income tax on a lawyer's fee has long vexed employment litigation. But U.S. District Senior Judge Peter C. Dorsey has concluded that both client and lawyer must fork over income tax on the attorney's fee component of an award or settlement.
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