As the arrangements have grown more complex, plaintiff attorneys have increasingly turned to IRC Section 468(b) qualified settlement funds (or trusts) because of the flexibility the temporary vehicles afford in structuring settlements, particularly in mass tort cases involving multiple plaintiffs.
Hindert observes, too, that many abuses could be avoided if more PI claimants and their advisors were afforded access to qualified settlement funds to work through the issues--and potentially sidestep defense brokers.
Only the net amount of damages received from qualified settlement funds
is included in gross income.
A qualified settlement fund gives plaintiff attorneys a tool to combat abusive or self-serving insurance carriers.
Qualified settlement funds include the designated settlement fund plus liabilities under tort, environmental, breach-of-contract, violation-of-law, and other claims as designated by the IRS.
468B and related regulations apply to determine when economic performance is deemed to occur when taxpayer makes a transfer of money or other property to a designated settlement fund (DSF) or a qualified settlement fund
IRS guidance: In a series of letter rulings, (16) the Service ruled that contingent attorneys' fees paid from qualified settlement funds
, as defined by Sec.
pension plans and bankrupt estates) and (4) administrators of qualified settlement funds
468B dealing with qualified settlement funds
did not provide guidance for accounts and funds governed by Sec.