Structured Settlements 4Real®Blog 2026

Structured settlements expert John Darer reviews the latest structured settlements and settlement planning information and news, and provides expert opinion and highly regarded commentary. that is spicy, Informative, irreverent and effective for over 20 years.

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The STRUCTURED SETTLEMENTS 4REAL® Blog is a highly regarded source for structured settlement news, information, and commentary, led by structured settlement and settlement planning subect mater expert John Darer CLU ChFC MSSC CeFT RSP CLTC. With two decades of operation, the blog and 4structures.com are recognized as comprehensive resources, offering detailed guides and specialized insights. Established in 2005, the blog caters to a broad audience, including legal professionals, injured individuals, families, and various stakeholders, providing reviews and opinions on settlement planning. John Darer, President of 4structures.com LLC, is a seasoned structured settlement expert with over 40 years of financial services experience and 31 years specializing in structured settlements. Based in Stamford, CT, he is a Certified Financial Transitionist and Registered Settlement Planner, holding insurance licenses in 45 states and the District of Columbia. John Darer is dedicated to transparency and advocacy, he emphasizes the importance of engaging trained and licensed professionals for settlement planning, offering valuable insights through his investigative journalism and professional commentary.

IRC § 104(a)(2) and Tax Treatment of Plaintiff Recovery for Physical Injury

by John Darer® CLU ChFC CSSC RSP

The Michigan Lawyers Weekly gets it wrong on the tax treatment of a plaintiff’s recovery.

The article in Michigan Lawyers Weekly asks  “Did you ever wonder how the plaintiffs of such cases (lawsuits) are treated by the IRS?  The author of the article, an experienced plaintiff only structured settlement consultant, responds “In cases where an actual “physical” injury has occurred, any recovery a plaintiff receives is treated as income tax-free per Internal Revenue Code § 104(a)(2)”.  (underline added for emphasis).

With respect to the income tax treatment of a plaintiff’s recovery, the article (which is STILL in circulation and posted on the structured settlement consultant’s website) IS NOT accurate because:

Internal Revenue Code § 104(a)(2) is an income tax exclusion which expressly states that punitive damages are not part of the exclusion. To wit…

(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;  (bold and  capitals added for emphasis).

Structures 101 folks!

 

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