KOCHANSKY V. COMMISSIONER - THE ASSIGNMENT OF INCOME DOCTRINE, COMMUNITY PROPERTY LAW, AND IRC-1041

In Kochansky v. Commissioner, the Ninth Circuit held that an attorney was fully taxable on a contingent fee he agreed to split with his spou se at divorce, reasoning that the assignment of income doctrine requir es that income be taxed to the person who earns it. This Note observes that in applying the assignment doctrine, the Kochansky court erred b y failing to determine the extent of the spouse's community property i nterest in the contingent fee; community property income must be taxed one-half to each spouse, regardless of which spouse earns it, which s pouse collects it, and when it is collected. This Note argues, moreove r, that instead of applying any form of the assignment doctrine, the K ochansky 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 ad vocated such an approach, and the Tax Court has tentatively endorsed i t in other cases.