by Structured Settlement Watchdog
I was highly disappointed to see fellow Certified Structured Settlement Consultant Tory Owens fumble his attempt to explain a structured settlement in a promotional YouTube video.
Says Owens according to the transcript:
"There was a tax code passed by the IRS called 104( a)(2 )that allows for all of the annuity payments to be tax-free and that also includes the compound interest that that annuity earns yes the compound interest is also tax-free and guaranteed what's better than that if you ever have any more questions feel free to reach out to me because we're in this together"
6 Ways That Tory Owens Was Deficient in His Explanation of Structured Settlements Posted on YouTube (as of March 10, 2021)
- The Internal Revenue Service (IRS) does not pass tax codes. The IRS enforces the tax laws
- In the United States, the Congress passes the Federal tax laws subject to the powers granted in the United States Constitution. Article I, Section 8, Clause 1: "The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States".
- IRC 104(a)(2) is not a tax code, it is a section of the tax code, specifically the Internal Revenue Code of 1986, as amended. It is comprised of only a few sentences. In contrast, according to a 2015 article by Scott Greenberg, published at TaxFoundation.org, the tax code is over 10 million words long. This figure includes the federal internal revenue code (2,412,000 words long) and federal tax regulations (7,655,000 words long). It does not include the substantial body of tax-related case law that is often vital to understanding the tax code.
- IRC 104(a)(2) is a tax exemption under the code that says "Except in the case of amounts attributable to (and not in excess of) deductions allowed under section 213 (relating to medical, etc., expenses) for any prior taxable year, gross income does not include— 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;
- The word "annuity" does not appear in IRC 104(a)(2). The word annuity appears in IRC 130(d) which defines the term " qualified funding asset". It's important to understand the interplay between these two code sections to have a true appreciation of how structured settlements work
- The term "compound interest" does not appear in IRC 104(a)(2).
A settlement planner who uses a professional credential in advertising but cannot articulate structured settlement fundamentals, diminishes the value of the credential by unacceptably lowering the standard, in my opinion. It's up to other holders of the same credential to maintain a high bar and to call them out to "know your "sh^t!" After all, as Owens likes to say "we're in this together".
Owens appears to be a glib, fun loving guy who on the same YouTube Channel shows that he can hob nob with lawyers from the Consumer Attorneys Association of Los Angeles on a private jet, drinking and getting sprayed with champagne. May he raise the standard in the future and, if he chooses, raise a glass while he's at it.