by John Darer CLU ChFC MSSC CeFT RSP CLTC
Non qualified assignments have been concluded in thousands of non personal injury cases since Liberty Mutual introduced the BARCO program in the late 1990s. Allstate and Prudential versions of the non qualified assignment program soon followed.
Today non qualified assignments are used in a wide variety of applications, such as the resolution of the non wage loss aspect of employment case settlements.
Even with a large number of cases concluded, there was always the feeling that a larger number of claimants and their attorneys would feel comfort is there was a definitive IRS ruling.
Integrated Financial Settlements, the holding company for a number of NSSTA member companies, today announced such a favorable Private Letter Ruling, or PLR, which while based on an employment claim, opens the door to using periodic payments to resolve a multitude of taxable claims, such as non-physical injuries, fraud, slander, wrongful imprisonment and other types of claims not excluded from income under the Internal Revenue Code.
IRS Private Letter Ruling on Structured Settlement Used in an Employment Settlement
According to press release, the PLR was requested on behalf of a client with an employment claim stemming from a hostile work environment.
- If the claim had been disbursed as a lump sum, a significant portion of the settlement would have been lost to taxes. I
- Instead, by utilizing a series of periodic payments through a non-qualified assignment, the claimant is ensured a secure, tax-deferred income stream specifically designed to meet their future needs.
IFS is to be commended for seeking the ruling. Others in the structured settlement and settlement planning industry are encouraged to invest in the business and to seek such rulings which benefit all parties and the industry. If you have a unique situation and the tab seems too much to bear, don’t wish to invest your own money consider partnering up with other firms in the common interest.
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