When were structured settlements first reflected in the Internal Revenue Code?
The Periodic Payment Settlement Tax Act of 1982 [P.L. 97-473, Sec. 101(a)] added after whether by suit or agreement the words and whether as lump sums or as periodic payments, for tax years ending after 1982. This codified the 1979 revenue rulings. Both the House and Senate committee reports gave the reason for the change that “it would be helpful to taxpayers to provide statutory certainty in the area.” The Periodic Payment Settlement Tax Act of 1982 also inserted a new section 130 into the Code “providing that, under certain circumstances, any amount received for agreeing to undertake an assignment of a liability to make periodic payments as personal injury damages is not included in gross income,” according to the House committee report. “Specifically, any amount so received will not be included in gross income to the extent it is used to purchase an annuity or an obligation of the United States if the annuity or obligation is designated (under regulations prescribed by the Secretar
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