Washington Law Review


Sarah Dods


In Kochansky v. Commissioner, the Ninth Circuit held that an attorney was fully taxable on a contingent fee he agreed to split with his spouse at divorce, reasoning that the assignment of income doctrine requires that income be taxed to the person who earns it. This Note observes that in applying the assignment doctrine, the Kochansky court erred by failing to determine the extent of the spouse's community property interest in the contingent fee; community property income must be taxed one-half to each spouse, regardless of which spouse earns it, which spouse collects it, and when it is collected. This Note argues, moreover, that instead of applying any form of the assignment doctrine, the Kochansky court simply should have applied section 1041 of the Internal Revenue Code, under which each spouse would have been taxable on his or her share of the proceeds when collected. Many commentators have advocated such an approach, and the Tax Court has tentatively endorsed it in other cases.

First Page