IRS_revenue_rulingHave you ever wondered where the actual legal wording came from that enables injured parties to receive compounded tax-free income from a structured settlement? IRS Revenue Ruling 79-220 is your answer.

The ruling spells out that “the recipient may exclude the full amount of the payments from gross income under section 104(s)(2) of the (IRS) Code rather than the discounted present value. Payments made to the estate after the recipient’s death are also fully excludable.”

Just two pages long, the ruling has impacted millions of injured Americans since it became law in 1982 (Periodic Payment Settlement Act of 1982). By allowing injured parties to receive tax-free compounded income through a structured settlement, the law has enabled injured individuals and their families the ability to lead lives free from financial worry.

Here’s a link to the ruling.

For any questions, please call or email, pat@patrickfarber.com, 800-734-3910

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