by Structured Settlement Watchdog®
Annuity.org, which shills exclusively for Conshohocken PA based CBC Settlement Funding is an unreliable source of structured settlement information. Between Annuity.org and its sister website with the same players, they churn out a lot of Structured Settlement Social Media Road Kill.
Annuity.org Rubbish "The good news for minors, though, is this: eventually, they reach the age of majority. Once they turn 18, they’re considered an adult, and they own their annuity"
The Truth Is that a person receiving structured settlement payments never owns the annuity that is funding their structured settlement payments. The annuity is a so-called "qualified funding asset", defined under Section 130(d) of the Internal Revenue Code that is purchased by a qualified assignment company which has assumed the obligation to such payments from the Defendant or Defendant's insurer. If the Plaintiff, or the recipient of the payments were to own the annuity then the tax consequences would not be favorable.
Annuity.org Rubbish In a section entitled "Changes Affect Tax-Free Status of Settlements Annuity.org claims "IRC Section 104(a)(2) states that periodic payments constitute damages that are tax-free to the injured party. Section 139 specifies that injured parties can receive a future income stream through a qualified, tax-free assignment like an annuity or government securities"
The Truth Is that IRC 104 is a section of the Internal Revenue Code that provides an income tax exclusion for certain types of income payments. IRC 104 has been in place since before the writer of the Annuity.org rubbish was born (and possibly before her parents were born, or were in diapers). IRC 104(a)(1) amounts received under workmen’s compensation acts as compensation for personal injuries or sickness; IRC 104(a)(2) the amount of any damages (other than punitive damages) received (whether by suit or agreement and whether as lump sums or as periodic payments) on account of personal physical injuries or physical sickness; IRC 139 states that "Gross income shall not include any amount received by an individual as a qualified disaster relief payment". IRC 130 provides a work around to the ownership of annuities by a non-natural person rule in IRC 72(u), by providing a tax exclusion to a qualified assignment company that takes on future periodic payment obligations subject to a suit or agreement, subject to the rules set forth in IRC 130. An annuity or government securities are not a qualified tax-free assignment. Annuities or government securities may be considered qualified funding assets provided they meet the qualification of IRC 130(d) [ hope Annuity.org staff writer and Master's student Alanna Ritchie does a better job in her Master's program. How she could blow it so badly after citing NSSTA and the seminal text for structured settlements is beyond comprehension]
Annuity.org Rubbish In a Section entitled " Structured Settlement Protection Act, states "The Structured Settlement Protection Acts (SSPA) of 2002 was created shortly after victims of the 9/11 disaster received financial awards as compensation for the terrorist acts.
The Truth is that the title of the Act that is described by Annuity.org is Victims of Terrorism Tax Relief Act of 2001, December 21, 2001, Public Law 107-134. The new law was a part of the tax relief and assistance package for the victims of the September 11 terrorist attacks [see IRS Factoring Audit Technique Guide] The enactment of VTTRA 2001 did not follow the payment of awards. Structured Settlement Protection Acts generally refers to state level protection, which in the majority of the USA, preceded the 9/11 terror attacks
States which enacted Structured Settlement Protection Acts months or years before the citizens of the USA even heard the names Mohammed Atta and Marwan Al Shehhi
- California Eff. Date: 01/01/2000 California Insurance Code § 10134 to § 10141
- Connecticut Eff. Date: 10/01/1998 Connecticut Statute § 52-225f
- Delaware Eff. Date: 07/26/2000 Delaware Code, title 10, § 6601 & § 6602
- Idaho Eff. Date: 07/01/2001 Idaho Code § 28-9-109
- Illinois Eff. Date: 01/01/1998 Illinois Statute § 153 (215 ILL)
- Indiana Eff. Date: 06/30/2001 Indiana Code § 34-50-2-1 to § 34-50-2-11
- Iowa Eff. Date: 07/01/2001 Iowa Code Ann § 682.1 through § 682.7
- Kentucky Eff. Date: 07/15/1998 Kentucky Rev. Statute § 454.430 to § 454.435
- Louisiana Eff. Date: 08/15/2001 Louisiana Sess. Law Serv. § 9.2715
- Maine Eff. Date: 09/18/1999 Maine Rev. Statute Ann. Title 24A § 2241 to § 2246
- Maryland Eff.Date: 10/01/2000 Maryland Courts and Judicial § 5-1101-5-1105
- Massachusetts Eff. Date: 01/12/2001 Massachusetts Ann. Laws chapter 231C § 2
- Michigan Eff. Date: 01/14/2001 Michigan Comp. Laws § 691.1191 to § 691.1197
- Minnesota Eff. Date: 08/01/1999 Minnesota Statute § 549.31 to § 549-34
- Missouri Eff. Date: 08/28/1999 Missouri Rev. Statute § 407.1060 to § 407.1068
- New Jersey Eff.Date: 08/02/2001 New Jersey Statute Ann. § 2A:16-63 to § 2A:16-69
- North Carolina Eff. Date: 10/01/1999 North Carolina General Statute § 44B-1-543.10 to § 44B-1-543.15
- Ohio Eff. Date: 10/27/2000 Ohio Rev. Code Ann. § 2323.58.1 to § 2323.58.7
- Pennsylvania Eff.Date: 04/11/2000 40 Pennsylvania Statute § 4001 to § 4009
- Rhode Island Eff. Date: 08/13/2001 Rhode Island Code R. § 27-9.3-1 to § 27-9.3-7
- South Dakota Eff. Date: 07/01/2001 South Dakota Codified Laws § 21-3B-1 to § 21-3B-12
- Tennessee Eff.Date: 06/23/2000 Tennessee Code Ann. § 47-18-2601 to § 47-18-2607
- Texas Eff.Date: 09/01/2001 Texas Civ. Prac. & Rem. § 141.001 to § 141.009
- Virginia Eff.Date: 07/01/1999 Virginia Code Ann. § 59.1:475 to § 59.1:477.1
- Washington Eff. Date: 07/22/2001 Washington Rev. Code § 19.205.010 to § 19.205.900
- West Virginia Eff.Date: 06/11/1999 West Virginia Code Statute R. § 46A-6H-1 to § 46A-6H-8
Other States that enacted Structured Settlement Protection Acts before VTTRA 2001.
- Florida Eff. Date: 10/01/2001 Florida Statute § 626.99296
- Oklahoma Eff. Date: 11/01/2001 Oklahoma Statute Title 12 § 3228 to § 3245
The Annuity.org writer got the facts wrong even though she cited the IRS Structured Settlement Factoring Audit Technique Guide that contains this information.
Annuity.org Rubbish falsely defines Non qualified Annuities as "a type of settlement is used when claims for damages fall outside the usual scope of physical injury, sickness or wrongful death".
The Truth is that non qualified annuities refers to any annuities that are not tax qualified. An annuity you buy on your own, rather than through a qualified employer sponsored retirement plan or individual retirement arrangement, is a non-qualified annuity. For example if you have $500,000 and want to convert it to a lifetime income you can buy a single premium immediate annuity and that is a non qualified annuity. A non qualified annuity may have nothing at all to do with a settlement. A non qualified structured settlement on the other hand IS a type of settlement is used when claims for damages are taxable (i.e. " fall outside the usual scope of physical injury, sickness or wrongful death")
Annuity.org Rubbish Secondary Market Annuity (SMA): An annuity purchased from the original owner, then transferred to a third party, which may then sell payments at a discount.
The Truth is that what some label a Secondary Market Annuity is not an annuity. It is a derivative. It represents structured settlement payment rights. The annuity contract ownership never transfers. Annuity.org calling an unregulated structured settlement derivate often peddled byb unlicensed solicitors, an annuity, is intentionally misleading and yet another reason to justify calling Annuity.org an unreliable source of information.
Annuity.org Rubbish Structured settlements stem from lottery payouts
The Truth is No they don't. If you look up the only definition of structured settlement in the Internal Revenue Code you won't find the word lottery mentioned. A quick Google search reveals that Annuity is unique in its delusion on behalf of CBC Settlement Funding. Intentionally deceiving or totally ignorant you be the judge.
Between Annuity(dot)org and Structured settlements(dot)com, related websites ultimately promoting the business of CBC Settlement Funding (Annuity.org features an image of a building with the CBC Settlement Funding logo) and using the bad information to drive leads for profit, there is a lot of lazy and careless research. In my professional opinion, if you choose to rely on Annuity.org, you do so at your own peril.
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