Commissioner v. Banks, 543 U.S. 426 (2005), together with Commissioner v. Banaitis, was a case decided before the Supreme Court of the United States, dealing with the issue of whether the portion of a money judgment or settlement paid to a taxpayer's attorney under a contingent-fee agreement is income to the taxpayer for federal income tax purposes. The Supreme Court held when a taxpayer's recovery constitutes income, the taxpayer's income includes the portion of the recovery paid to the attorney as a contingent fee. Employment cases are an exception to this Supreme Court ruling because of the Civil Rights Tax Relief in the American Jobs Creation Act of 2004. The Civil Rights Tax Relief amended Internal Revenue Service § 62(a) to permit taxpayers to subtract attorney’s fees from gross income in arriving at adjusted gross income.
Read more about Commissioner V. Banks: Background, Issue, Opinion of The Court, Subsequent Developments
Famous quotes containing the word banks:
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—Peter De Vries (b. 1910)