by Structured Settlement Watchdog®
Despite a lack of a sizeable flock, "wiki man" Patrick Hindert has been a tireless shepherd of the of the knowledge management story to several overlapping industries in our space, most recently the National Academy of Elder Law Attorneys (NAELA). As critical of Hindert as I am at times I was an early adopter of technology, web 1.0 and subquently, Web 2.0 tools. They have made a difference in my business and the capability to deliver information to clients and prospective clients and other stakeholders.
Wistfully the Hindert "love fest" must now end after a solitary paragraph.
Some people like to throw around geek jargon like "knowledge worker" as a value proposition. But does it really matter if you are "Chief Professor Spaghetti and Meatballs" if you don't have the structured settlement fundamentals correct? With all the talk about Web 2.0 let us not forget one of the timeless technological buzz phrases of the "paleolithic" pre Web 1.0 era, "garbage in equals garbage out".
"A structured settlement is a package of financial and/or insurance products, generally including periodic payments, which a claimant accepts to resolve a personal injury claim or to compromise a statutory periodic payment obligation. For purposes of Federal taxation, a structured settlement is defined in IRC Section 5891(c)(1)". Patrick Hindert November 25, 2004 and cited to by Hindert on March 15, 2010 in a blog post "NAELA Special Needs Summit-3".
FACT: The structured settlement definition which appears at Internal Revenue Code at IRC 5891(c)(1) is preceded by the words " for the purposes of this section". IRC 5891 expressly has to do with an excise tax imposed on the purchaser of structured settlement payment rights, based on the factoring discount, when certain guidelines are not followed. The section also describes the exceptions to the tax.
Despite this limitation, the use of the definition has been inexplicably expanded by settlement planners, structured settlement brokers, "knowledge workers" and industry commentators such as Patrick Hindert of S2KM and The Settlement Services Group (TSSG)
The Federal taxation of structured settlement payments has its roots in sections of the tax code that long precede the creation of IRC 5891. Qualified structured settlements represent payment of damages excludable under sections 104(a)(1) or 104(a)(2) of the Internal Revenue Code. IRC 104(a)(1) deals with workers compensation payments and 104(a)(2) deals with damages for physical injury and physical sickness.
With National Financial Literacy Month approaching, this author calls upon S2KM and others to demonstrate superior knowledge management.
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