Court Case Facts: The Terry Hutchison Case

Facts: Terry Hutchison was a self-employed lawyer until two years ago when he retired. He had a cash basis business for tax purposes and paid self-employment taxes on all of his income. Five years ago, Terry represented ABC corporation in an antitrust lawsuit against XYZ corporation and won the lawsuit. At that time, Terry and ABC could not agree on the amount of compensation for legal services rendered. Currently, Terry and ABC have reached an agreement and Terry was paid $90,000 for services provided five years ago. Terry was