In this weeks edition of Speaking of Settlements I am joined by noted national tax expert Robert Wood, who is also now the host of his own channel on The Legal Broadcast Network, entitled The Tax Law Channel.
As many of you know a private letter ruling was obtained by the IFS group, spearheaded by John McColluch of EPS, in which the validity of using non-qualified assignments and annuity payments as a means of spreading out tax liability on taxable damage cases was affirmed.
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What made this PLR so important was not that there were questions on taxable damage cases and non-qualified assignments, but that there had never been a PLR on the topic. The resultant language and ruling from the IRS not only validated the concept, but through it's explanation probably further strengthened the ability of attorney's to structure their legal fees.
You can also get a full pdf copy of the private letter ruling on taxable damages by clicking here.
Hopefully this PLR, which was the result of the investment and foresite of IFS to get it done, will spur some of the other life markets besides Allstate and Prudential to jump with both feet into the non-qualified market. It is my professional opinion that it is a potentially huge market, particularly if tax rates jump in the next few years, as people will want to defer the tax hit that comes on any taxable damage case.