468B Single Claimant Qualified Settlement Fund OFF Treasury Priority Guidance Plan After 6 Years

by John Darer CLU ChFC CSSC RSP

Has there been too much "crying wolf" about Treasury guidance concerning the Single Claimant Qualified Settlement Fund?

Here's my February 9, 2009 post  "Qualified Settlement Fund Use in Single Claimant Cases"

Make no mistake, the announcement that "the tax treatment of single-claimant 468B qualified settlement funds (QSF) has been eliminated from the list of tax priorities in the Priority Guidance Plan for 2009-2010 on November 24, 2009 by the United States Treasury Department and the Internal Revenue Service" is a real "howler" to some.

As S2KM and TSSG's Patrick Hindert admits "the purpose of the Priority Guidance Plan is to focus United States government resources "on guidance items that are most important to taxpayers and tax administration."

Patrick Hindert's fading star is never more evident in a blog post commentary dated November 28, 2009, about the aforementioned announcement entitled "U.S.Treasury Priority Guidance Plan 2009-2010".

1. He rehashes old arguments that the U.S. Treasury has apparently decided not to address, after 6 years of being on the priority guidance plan.
2. He cites a 3rd year law student with no bona fides as a tax authority and labels him a "QSF analyst".
3. He cites attorney Dick Risk who he says "interprets the decision to remove the single claimant 468B project from the Priority Guidance Plan as evidence that sufficient guidance favoring single claimant 468B QSFs already exists. Risk points to I.R.C. § 7805(d) which requires the Treasury Secretary to “prescribe all needful rules and regulations for the enforcement of [the Internal Revenue Code].” Risk concludes that Treasury’s decision is an acknowledgment that additional guidance is not “needful.”  Wonder why Risk and others have spent 6 years writing why Treasury should issue guidance?

All the above brought to you by some of the same "cast of characters" who previously tried to broaden the definition of structured settlement in IRC 5891(c)(1) to say that it ostensibly establishes rights of plaintiffs to receive structured settlements, despite the Tax Code expressly stating that the definition solely applies to that specific Tax Code section.

This author is not denying that there are merits to the idea of a single claimant 468B qualified settlement fund under certain circumstances. Its proponents however have failed strategically. Perhaps it's time to go back to the stable and saddle up a NEW horse.

Hindert's shameless in desperately trying to opine that there's wiggle room in a statement by San Francisco tax attorney Robert W. Wood. Wood in a recent text wherein Wood suggests that single claimant QSFs be avoided without further clarification. Hindert cites to Wood's "alleged belief" that the regulations "seem to allow the possibility of the single claimant QSF". This lack of academic foundation is both astonishing and disingenuous given that only months ago HIndert was "talking trash" behind Jeremy Babener's dissipation paper. While said paper has been interpreted as an attack on the structured settlement tax subsidy based on alleged lack of empirical evidence to prove 90% of injury victims blow their money in 5 years, Hindert seems to abandon empirical evidence when it suits him.

Pay no attention to this "blatteroon".