Robert W. Wood, the preeminent authority on "Taxation of Damage Awards and Settlement Payments", analyzes structured attorney fees in his second audio podcast interview with Ned Arthur (S2KM Podcast Tape 9).
Rob prefaces his analysis by noting that no specific Internal Revenue Code section addresses structured attorney fees. Instead, Rob views structured attorney fees as an accounting concept confirmed by case law - an attorney pays tax when he or she receives compensation.
According to Rob, when they are properly arranged, structured attorney fees allow a contingently-compensated attorney to:
- Defer portions of his or her compensation; and
- Pay tax upon receipt;
- Regardless of:
- The type of case; or
- Whether the client receives a lump sum or periodic payments.
Rob's podcast analysis of structured attorney fees addresses:
- Related tax history;
- Appropriate cases;
- Tax advantages and risks;
- Private annuity regulations;
- Public policy - for and against structured attorney fees.
For articles written by Rob Wood about attorney fee tax issues, see Wood & Porter's website generally including these specific articles:
- "Structuring Attorney Fees When You are Not a Solo";
- "New Regulations Address 1099s for Attorney Fees";
- "Contingent Attorney Fees in the Post-Banks Era";
- "Wood on the Private Annuity Regs and Structured Attorney Fees".
Rob's audio podcast interviews are featured on S2KM's Structured Settlement Public Policy Wiki. They are also accessible directly from S2KM's blog (upper left) or subscribe to S2KM Podcast.