26 U.S.C. 5891, quoted verbatim
Selling a structured settlement in United States
What 26 U.S.C. 5891 requires before payment rights can be transferred, quoted from the statute and dated: 3 of 5 questions answered on the pages read here, the rest recorded as absences naming what was read.
- requirements quoted word for word
- 3
- questions the section does not answer
- 2
- the day these pages were read
- 2026-09-11
Where this jurisdiction stands
The federal layer: a 40 percent excise tax on the factoring discount unless a court approved the transfer first
Every requirement, as 26 U.S.C. 5891 states it
| The question | What the statute says | Source |
|---|---|---|
| Whether a court has to approve the transfer | The tax under subsection (a) shall not apply in the case of a structured settlement factoring transaction in which the transfer of structured settlement payment rights is approved in advance in a qualified order. | 26 U.S.C. 5891, Structured settlement factoring transactions read September 2026 |
| What the court has to find | does not contravene any Federal or State statute or the order of any court or responsible administrative authority, and (ii)is in the best interest of the payee, taking into account the welfare and support of the payee’s dependents | 26 U.S.C. 5891, Structured settlement factoring transactions read September 2026 |
| Whether the payee must be told to take advice | 26 U.S.C. 5891, Structured settlement factoring transactions does not address this on the section read here (26 U.S.C. 5891, Structured settlement factoring transactions, read September 2026). Section 5891 sets the federal consequence of an unapproved transfer and defines what a qualified order must find. It says nothing about advising the payee to take independent professional advice; that duty is carried by the state acts, and three of the four read here impose it. | 26 U.S.C. 5891, Structured settlement factoring transactions read September 2026 |
| What the buyer must disclose, and when | 26 U.S.C. 5891, Structured settlement factoring transactions does not address this on the section read here (26 U.S.C. 5891, Structured settlement factoring transactions, read September 2026). The federal section imposes no disclosure obligation of its own. What it requires is that the order be issued under the authority of an applicable State statute by an applicable State court, which is where the disclosure rules live. | 26 U.S.C. 5891, Structured settlement factoring transactions read September 2026 |
| What happens if there is no approval | structured settlement payment rights in a structured settlement factoring transaction a tax equal to 40 percent of the factoring discount as determined under subsection (c)(4) with respect to such factoring transaction. | 26 U.S.C. 5891, Structured settlement factoring transactions read September 2026 |
An absence here means we have no quotation, never that the requirement does not exist.
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United States: 3 transfer-law requirements quoted verbatim from the statute and 2 recorded absences (Structured Settlement Compare US Transfer-Law Record).
Cite as: "Structured Settlement Compare US Transfer-Law Record: United States", updated 2026-09-11, https://structuredsettlementcompare.com/law/united-states/.
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