by John Darer CLU ChFC MSSC CeFT RSP CLTC
In September 2023, the United States Office of Tax Policy and Internal Revenue Service released the 2023 — 2024 Priority Guidance Plan, addressing various accounting method issues as well as other provisions.
The plan includes 237 guidance projects, which the Treasury and IRS are seeking to complete by June 30, 2024. For the first time in 14 years, qualified settlement funds are on the agenda. But it's not about single claimant qualfied settlement funds. According to an October 10, 2023 publication of the accounting firm of Ernst & Young** "The IRS National Office informally has expressed interest related to the establishment or structuring of qualified settlement funds. The addition of this topic to the Priority Guidance Plan may be reflective of an increased focus in this technical area".
This author understands that the focus is on potential accounting abuses of qualified settlement funds and not structured settlements. This is a developing story and will be amplified as more beomes available.
If one had to speculate however, here are some area of concern about the potential for abuse on the subject of Firmwide Qualified Settlement Funds.
- How have Firmwide QSFs beeen marketed to personal injury law firms across the United States of America?
- How are Firmwide QSF's being adminstered? How much discretion does the QSF administrator have?
- What sort of things about accounting issues related to Qualified Settlement Funds might pique the interest of the United States Treasury and the Internal Revenue Service?
Following are links to two blogs about FirmWide QSFs from 4structures' Settlement News Network blog that may be worth re-reading:
Other Articles on QSF accounting and tax Issues
Last updated December 21, 2023