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November 27, 2006

Structured Settlement Factoring Transaction

by  Structured Settlement Watchdog

Despite what many advertise, what "cash now", "money now" or other settlement purchaser/settlement transfer companies engage in, is not structured settlements. What they do is legally defined as a structured settlement factoring transaction in the United States' Internal Revenue Code.

The Internal Revenue Code provides for a whopping 40% excise tax on the amount of the discount the "cash now", "money now" or other settlement purchaser/settlement transfer company  charges against your the structured settlement payment rights it is acquiring from you, if such transfer is not approved in advance in a "'qualified order" by an appropriate Court.

Here is a link to IRS Form 8876 which is titled "Excise Tax on Structured Settlement Factoring Transactions". At the bottom of the form you can see that the IRS has several definitions which pertain to the subject matter of this blog.

Companies whose business is structured settlement factoring transactions or specialty finance, who imply through "slight of hand" or "tongue in cheek" or "nod nod wink wink" that they do structured settlements or provide structured settlement quotes, when they (1) do not posssess insurance licenses (2)  are not appointed by any annuity issuer that manufactures structured settlement annuities (3) may not be registered to do business in your state, are full of it.

Posted at 07:16 AM in Structured Settlement Definitions, Structured Settlement Factoring, Structured Settlement Transfers, Structured Settlement Watchdog®, Structured Settlements |

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Guide to Structured Settlements 2024

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  • Treasury Funded Structured Settlements
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    Use the Taxable Equivalent Yield chart to help compare the Internal Rate of Return (IRR) of a structured settlement to other alternative or complementary investments. Need help with the chart? Call 4structures.com® LLC at 888-325-8640
  • Structured Settlement Payments | Types of Structured Settlements 2024
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  • Structured Attorney Fees for Tax Deferral for Attorney Contingency Fees
    Structured attorney fees is a financial strategy that offers a unique way to defer taxes for lawyers and law firms. Lawyers CAN structure their legal fees even if the plaintiff doesn't structure their settlement. There are multiple ways to structure your attorney fees, such as capped or uncapped index linked structured settlement annuities where payments are adjusted based on upside changes in the S&P 500 or another index, Trial Lawyers may also use a special deferred pay/deferred compensation arrangement, if market based returns returns are desired with no cap. Plan NOW for year end! Put structured attorney fee expert John Darer® on your settlement planning team in 2024.
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  • What Are Structured Settlement Annuities?
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  • History of Structured Settlements
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    Market based structured settlements are an alternative or supplementary structured settlement solution for the plaintiff, attorney or law firm that: 1. Can afford to take some market risk 2. Have discretionary settlement dollars. Claimants and attorneys alike may find that market-based structured settlements provide the opportunity to receive tax-free income, or tax-deferred income, while enjoying growth potential.
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Qualified Settlement Funds

  • What is a Qualified Settlement Fund?
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  • Firmwide Qualified Settlement Funds Debunked
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  • New York Insurance Advertising law requires the full name of the Insurer to be listed along with the city and state of the principal office. Stating that you represent these fine companies using Insurance company logos without the preceding information are also illegal
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Why Take a Structured Settlement?

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