Contingent Fee Agreements & Tax Liability: An Opportunity for Change

In 1969, Congress enacted I.R.C. § 169, which provides an election to amortize "certified pollution control facilities" over five years.I.R.C. § 169(a), (b) (West 2001).The purpose of this legislation was to provide a financial incentive to private industry by way of a rapid write-off for facilities whose function is to abate or control air or water pollution.See S. REP.No. 91-552 (1969).2. For example, I.R.C. § 1041, enacted by the Tax Reform Act of 1984, provides that no gain or loss will result on the transfer of property between spouses or former spouses (if the transfer is incident to a divorce), even though the property may be subject to different state property laws.See I.R.C. § 1041.Prior to § 1041, the spouse making the transfer could recognize gain when property was transferred in connection with a divorce because the relinquishment of marital rights by the transferee spouse was held to constitute a consideration received