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Why are structured settlements tax-free in physical injury cases?

April 26, 2017cases injury physical settlements structured tax-free

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Why are structured settlements tax-free in physical injury cases?

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IRS codes specify that structured settlement awards are not taxable because the amount and time of each payment is fixed, and because payments are issued by a qualified funding asset, that is, an annuity from a licensed insurance company. See IRS Code 130 and IRS Code 104(a).