Can a plaintiff know the cost of the structured settlement without jeopardizing the tax advantages?
Yes. Knowing the cost of a structured settlement does not constitute constructive receipt. IRS Private Letter Ruling 83-33035 states that a plaintiff may know the cost of the structured settlement without endangering its tax-free nature. 9. How does a structured settlement achieve tax-free payments to the plaintiff? The settlement documents must conform to Revenue Ruling 79-220 and if there is an assignment, to Internal Revenue Code (IRC) 130 as well. Then each payment will be tax free under IRC 104(a)(2). 10. What are the financial risks of a structured settlement? There are two major financial risks with a structured settlement, excluding currency risks (inflation, the collapse of the dollar, etc.). One risk is that the life insurance company issuing the annuity could become insolvent. The owner of the annuity and the payee bear this risk. The other risk is that the owner of the annuity may become insolvent (see also disadvantages of a structured settlement). 11. What is the role of
