It's time to correct yet another blooper by Forge Consulting, LLC, the firm that brought us "plantiffs", "depending on the time of deferral, the sole benefit (of structuring attorney fees) is equivocated guaranteed interest rates at approximately 15%", the John Edwards "pay for testimonial" scandal, the "cover up", and the "ethical scoliosis" that it is perfectly OK to sign an affidavit under penalty of perjury that conflicts with your print and broadcast advertising.
On its website Forge Consulting claims that "Section 130 specifies the requirements to establish a qualified assignment":
- The company assumes the liability from the defendant, who then takes the case off of their books.
- An agreement must be made between the plaintiff and defendant that the payment schedule cannot be altered.
- The annuity may be excluded from the recipient's gross income.
- The injury must be physical in nature.
- A financially sound funding asset, which is usually an annuity, must fund the payments.
Definition of to specify to name or state explicitly or in detail
First, IRC 130(a) states that any amount received for agreeing to a qualified assignment shall not be included in gross income to the extent that such amount does not exceed the aggregate cost of any qualified funding assets.
Then, in defining "qualified assignment" IRC 130(c) states:
The term ''qualified assignment''
means any assignment of a liability to make periodic payments as
damages (whether by suit or agreement), or as compensation under
any workmen's compensation act, on account of personal injury or
sickness (in a case involving physical injury or physical sickness)
(1) if the assignee assumes such liability from a person who is a party to the suit or agreement, or the workmen's compensation claim, and
(2) if -
(A) such periodic payments are fixed and determinable as to amount and time of payment,
(B) such periodic payments cannot be accelerated, deferred, increased, or decreased by the recipient of such payments,
(C) the assignee's obligation on account of the personal injuries or sickness is no greater than the obligation of the person who assigned the liability, and
(D) such periodic payments are excludable from the gross income of the recipient under paragraph (1) or (2) of section 104(a).
Forge Consulting is clearly mistaken with what is says is the specifics of Section 130
Among other things to correct from the Forge Consulting misrepresentation of the "specifics" of IRC 130:
- 104(a) refers to personal physical injury OR physical sickness IRC 104
- Qualified assignments are a tool that is not limited to law suits. "whether by suit or agreement" means that qualified assignments may be sue to resolve cases that are not in suit, where there is no defendant but a respondent.
- The annuity is not excluded from the recipient's gross income, the periodic payments are. IRC 130(c)(2)(D)
Don't you think it is essential to tort victims, trial lawyers and judges to be able to TRUST that those upon whom they rely for financial advice possess the ability to properly articulate the subject matter of their expertise?
Forge Consulting partner, Spooner Phillips, is the membership chairman of the National Structured Settlement Trade Association (NSSTA)