David A. Raymond and Lori Raymond v. United States

WESLEY, Circuit Judge.

The Supreme Court has long asserted that “[i]n tax law, ... substance rather than form determines tax consequences.” Cottage Sav. Ass’n v. Comm’r, 499 U.S. 554, 570, 111 S.Ct. 1503, 113 L.Ed.2d 589 (1991) (Blackmun, J., dissenting) (citing Comm’r v. Court Holding Co., 324 U.S. 331, 334, 65 S.Ct. 707, 89 L.Ed. 981 (1945)). In this appeal, we are presented with an issue in which the line between substance and form has blurred. The question presented is whether a taxpayer who receives a recovery for lost wages, and who agreed to pay his attorney on a contingent-fee basis,…