Litigation

She's Right, Sort Of

By John Darer

Patricia Laborde. Division Counsel from "cash now" pusher Stone Street Capital, publicly admits to enjoy reading this blog and I thank her for that. She recently made an attempt to hoist me on my own petard concerning the regulation of factoring companies by linking a post that I wrote in December 2008 denouncing her reference to IRC 5891 as a "penalty while I corrected her in referring to it as an excise tax. 

In a recent post I utilized the updated IRS Audit Guide on Structured Settlement Factoring as a means to successfully dispel the myth so often propagated by settlement planners and brokers as well as the factoring industry, that IRC 5891 "made factoring legal". Trish Laborde however, displaying the acute reading skills one would expect of a good contract lawyer, alertly points out that in the audit guide the IRS refers to the 40% excise tax as a "penalty". So what we have is a definition in the Internal Revenue Code expressly states that IRC 5891 is about the imposition of an "excise tax" and an audit guide that ALSO refers to it as both.

Steal by Ms. Laborde  She then she tries to "wiggle" past with a misdirection about regulation. There is no dispute that IRC 5891 is a means for regulating one aspect of factoring company behavior. It does nothing however, to regulate "Harvey the Rabbit" advertising practices such as "cash now" or the predatory bait tactics deployed by Woodbridge, or the Structured Asset Funding Ferarri-luxury yacht "fandango", or deal with the servicing of structured settlement payment rights.

IRC 5891 did not make factoring legal (or illegal) and Laborde still oversees the division of a company that continues to deliver  a "moo"-ving  "cash now" message.

Touche!

Full post as published by Structured Settlements 4Real on September 11, 2009 (boomark / email).