Why does the Miami Florida law firm of Gerson and Schwartz , P.A.,a supporter of structured settlements on the one hand, appear to be promoting NATLE endorsed "cash now pusher" Strategic Capital Corporation on its Miami Personal Injury Lawyer blog on the other?
Gerson and Schwartz also contends in its post of January 30, 2008 "Sale of Structured Settlement Annuities" that that THE INTERNAL REVENUE CODE, specifically IRC 5891 expressly authorizes the sale of structured settlements annuities by plaintiffs.
- Perhaps the intention of these "responsible plaintiff's lawyers" was right but, the post appears to have material inaccuracies and delivers the wrong message
- I'll leave the legal definition of the phrase "expressly authorized" to you lawyers.
- According to Wikipedia, "The Internal Revenue Code (or IRC) (more formally, the Internal Revenue Code of 1986, as amended) is the main body of domestic statutory tax law of the United States"
- The words "annuity" or "annuities" appear nowhere in IRC 5891
- A structured settlement factoring transaction deals with the sale of structured settlement payment rights NOT the sale of structured settlement annuities, which are typically owned by a qualified assignment company.
- The sale of structured settlement annuities requires valid life insurance license issued by the insurance department in the state of solicitation, a prerequisite which it is believed most purchasers of structured settlement payment rights DO NOT possess.
- IRC 5891 entitled "structured settlement factoring transactions", deals solely with the imposition of an excise tax "on any person who acquires directly or indirectly structured settlement payment rights" [See IRC 5891 (a)]. It goes on to deal with exceptions to that excise tax [See IRC 5891 (b)]. It DOES NOT expressly authorize such transactions.
- Prior to enactment of the Victims of Terrorism Tax Relief Act of 2001, the act of Congress which created IRC 5891, the tax consequences were less clear.
- The Gerson and Schwartz, P.A. blog post also refers to the de facto endorsement of "Cash Now pusher" Strategic Capital Corporation by the "Academy of Florida Trial Lawyers", a former name of its professional association which I believe has been the "Florida Justice Association" for almost a year since prior to their post. Strategic Capital pays $10,000-$14,999 as a financial benefactor of Florida Justice Association.
Click here for the text of IRC 5891.
The other day I questioned a Coral Gables law firm which had reciprocal promotions with the same "Cash Now pusher" Strategic Capital on their websites. What is going on in South Florida?
Some thoughts for personal injury lawyers and leaders of legal trade associations
- What exposure to personal injury attorneys have in (1) promoting factoring (2) promoting a single company (3) promoting a single company that is a known "Cash Now pusher"? (4) promoting a single company that is a known "Cash Now pusher" because it gives a financial donation to your professional association?
- If a lawyer was going to steer a desperate client why would he or she not consider the more relevant concept of a structured settlement factoring exchange where multiple sources could be quoted easily and efficiently letting market forces take effect? Doesn't the "implied due diligence" stare right back at you?
- If a lawyer was going to steer a desperate client why would he or she not consider a company which DOES NOT perpetuate the fraud that is "cash now" advertising? Doesn't the "implied due diligence" stare right back at you?
- If a legal trade association such as the Florida Justice Association gives what amounts to a "paid endorsement" why would it not consider a company or entity that DOES NOT perpetuate or participate in the fraud that is "cash now" advertising. Doesn't the "implied due diligence" stare right back at you?