by John Darer® CLU ChFC MSSC CeFT RSP CLTC
Origins of the Periodic Payment Settlement Tax Act of 1982
The Periodic Payment Settlement Tax Act of 1982, also known as Public Law 97-143 or P.L. 97-143 codified all of the prior revenue rulings related to periodic payments to injured parties This public law allowed defendants and/or their insurers (via a “qualified assignment”) to assign their obligations to make future periodic payments, to a third party, without retaining a future obligation to the injured party.
The third parties, known as qualified assignment companies, are generally special purpose companies formed to hold these obligations and related to certain of the Top Structured Settlement Companies | Top Structured Settlement Companies 2025 (4structures.com)
This law enables the defendant and/or its insurer to enter into a structured settlement without retaining a long tail future periodic payment obligation to the injured party because that obligation under the settlement agreement has been assigned to a third party.
Lessons to be Learned from Eric Yerkes v Cessna and Yerkes v Anapol Weiss – Structured Settlements 4Real® Blog 2025 June 15, 2020
How did Claimants and Plaintiffs Benefit from PL 97-143?
Claimants and plaintiffs benefited as well because, as a result of P.L. 97-143, there was an option where they no longer had to fear a defendant or insurer going bust while holding the obligation to make periodic payments long into the future.
The Tax Benefits of a Structured Settlement Remain Good Public Policy
The tax benefits of a structured settlement were, are, and are likely to continue to be good public policy as the Act and subsequent legislation indicates.
For example, a later amendment to IRC 130 created the option for plaintiffs to be a secured creditor as part of the structured settlement process in lieu of general creditor status.
Periodically, some plaintiff advocates have tried to suggest that a qualified assignment only benefits defendants and/or insurers. They are misinformed. Plaintiffs cannot buy structured settlement annuities on their own, after they have received settlement funds.
The Periodic Payment Settlement Tax Act of 1982 was Foundational Law that Made Qualified Assignments Possible
Qualified assignments remain an integral part of how structured settlements work.
Fellow blogger and structured settlement industry “cartographer” Patrick Hindert, now with Independent Life Insurance Company, told me he was the only person to testify on the subject before the House Ways and Means Committee in 1982.
Last updated November 10, 2025
Estimated reading time: 3 minutes
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