by Structured Settlement Watchdog
Patricia Laborde. Division Counsel from "cash now" pusher Stone Street Capital, publicly admits to enjoy reading this blog and I thank her for that. She recently made an attempt to hoist me on my own petard concerning the regulation of factoring companies by linking a post that I wrote in December 2008 (denouncing her reference to IRC 5891 as a "penalty" while I corrected her in referring to it as an excise tax) to one I wrote in August).
In the recent post I utilized the updated IRS Audit Guide on Structured Settlement Factoring as a means to successfully dispel the myth propagated by settlement planners and brokers as well as the factoring industry, that IRC 5891 "made factoring legal" (as a means for some of the former to validate their capitulation and/or justify taking vig from the cash now pushers). Trish Laborde however, displaying the acute reading skills one would expect of a good contract lawyer, alertly points out that in the audit guide the IRS refers to the 40% excise tax as a "penalty". So what we have is a definition in the Internal Revenue Code expressly states that IRC 5891 is about the imposition of an "excise tax" and an audit guide that ALSO refers to it as both.
Steal by Ms. Laborde She then she tries to "wiggle" past with a misdirection about regulation. There is no dispute that IRC 5891 is a means for regulating one aspect of factoring company behavior. Right now its like pressing your thumb against a high pressure leak and calling it a "protective dyke". It does nothing however, to regulate "Harvey the Rabbit" advertising practices such as "cash now", the predatory bait tactics deployed by Woodbridge, the Structured Asset Funding Ferrari-luxury yacht "fandango", or deal with the scary matter of the bankruptcy of a company servicing structured settlement payment rights.