Section 304(a) of the Consolidated Appropriations Act of 2016 added IRC 139F which provides that gross income does not include compensation received by an individual as a result of incarceration for an individual’s wrongful conviction of a crime.While IRC 139F has eliminated some of the uncertainty for these cases, important issues are left unanswered - which are identified and addressed in Release 65 of “Structured Settlements and Periodic Payment Judgments” available in mid-April and sent automatically to online subscribers.
These issues include:
- Can IRC 139F compensation be paid via an IRC 130 qualified assignment, or must this be done via non-qualified assignment?
- Are punitive damages excluded from gross income under Code § 139F?
- If 139F compensation is paid to family members of the wrongfully incarcerated person, are those payments likewise excluded from gross income?
First published in 1986, both the National Structured Settlement Trade Association (NSSTA) and the Society of Settlement Planners (SSP) utilize "Structured Settlements and Periodic Payment Judgments" (S2P2J) as an educational resource for their certification programs.