Settlement planning must be protected by Congress. AASC PAC will support policymakers who serve as our champions in Washington, D.C.
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117th Congress (2021-2022)
- Continue to protect the tax code for structured settlements – 130 and 104(a)(2). These provisions of the tax code are the bedrock of our profession - they have protected millions of individuals and their families from prematurely dissipating their funds and are critical to preserving injured parties‘ financial independence.
- Encourage the development of useful market-based products for structured settlements. Factors to consider in the process include usefulness to settlement planning, acceptability to settling parties, and consideration of potential regulatory and/or legislative changes. Settling parties are often reluctant to embrace structured settlements because they feel that current products do not sufficiently address existing needs. Enhanced product offerings will likely prevent many inappropriate lump sum settlements.
- Provide better understanding of structured settlement benefits to policymakers by obtaining better statistics on client outcomes. Request that the GAO quantify the share of lump sum settlements that are prematurely dissipated, and the economic burden shouldered by the government as a result. Use statistics to better educate members of Congress regarding the benefits of structured settlements – how they protect consumers, provide life-long income, and reduce reliance on public assistance. UPDATE: Congressmen Lloyd Smucker and Gregory F. Murphy, M.D. sent this request to the GAO on November 3, 2022. Special thanks to all of our members who helped with this effort. You can download a copy of the request at this link.
- Expand 104(a)(2) to include sexual assault, sexual abuse, molestation, PTSD and emotional distress. The question of when settlements and damage awards can be excluded from gross income is arbitrary and continues to confuse taxpayers. Incidents involving the aforementioned torts cause lasting harm to clients and should receive the same preferential tax treatment as those currently allowed by 104(a)(2).