40%the federal excise tax on buying a settlement without a judge's approval first
Federal law has taxed the purchase of someone's structured settlement payments at 40% since 2002, unless a court first finds the sale serves the seller's best interest.
The tax applies whether a buyer skips the court process entirely, fakes the independent advice many states also require, or forges the judge's signature outright, the ways this page's documented cases defeated it.
Source: Cornell Law School, Legal Information Institute. Read more: structured settlement purchase fraud