Master Authority Maps
Everything above, mapped back to the three pillars.
8.1 · By pillar — which authority does what
| Pillar | Core authorities | Supporting authorities |
|---|---|---|
| Qualifies as installment sale | §453(a)–(c); §453(f)(3); Reg. §15a.453-1, incl. (b)(3) (definition of "payment") | Pub. 537; Form 6252; §1274/§483 (interest); §453(i), §1245/§1250 (recapture limits); Holmes (1970) (third-party note = payment) |
| Eligibility screens / limits | §453(e), §453(g), §453(k), §453(l); §453A | §1239, §267(b), §318; §6621; TAM 9853002 |
| Obligor substitution is not a disposition | §453B; Rev. Rul. 75-457; Rev. Rul. 82-122; Cunningham | Rev. Rul. 74-157, 68-419; GCM 36299; PLR 201248008, 201144005; T.D. 8675; (outer limit: Burrell Groves) |
| No constructive receipt | Reg. §1.451-2; Oden; Williams | Pub. 537 escrow rules; §130/§72 architecture (annuity owned by assignment company) |
| Assignment mechanics | §130 (why NQA is required); §72(u)(3) | §104(a); NQA PLR line |
| Distinguishing the abusive cousin | REG-109348-22; §7701(o); §6011/§6111/§6112 | ECC 202118016; DOJ 2025 complaint; Dirty Dozen |
8.2 · The obligor-substitution authority chain (chronological)
| Authority | Year | Holding |
|---|---|---|
| Cunningham v. Commissioner, 44 T.C. 103 (acq.) | 1965 | New-obligor assumption is not a disposition; focus on the seller's unchanged rights |
| Rev. Rul. 74-157 | 1974 | Multiple notes substituted for one — not a disposition |
| Rev. Rul. 75-457 | 1975 | Obligor substitution, same terms — not a disposition |
| Rev. Rul. 82-122 | 1982 | Obligor substitution + rate change — not a disposition |
| T.D. 8675 preamble, 61 Fed. Reg. 32926 | 1996 | §453B standard (not §1001) governs |
| PLR 201144005 | 2011 | Price + rate + payment-date changes — not a disposition |
| PLR 201248008 | 2012 | Maturity deferral + obligor substitution + rate change — not a disposition |
8.3 · The four conditions a compliant SIS must satisfy
The seller's payment rights are not materially altered — same schedule and amounts (Rev. Rul. 75-457/82-122; Cunningham; outer limit Burrell Groves).
The seller does not constructively receive the proceeds — no unfettered access to escrow or the annuity (Reg. §1.451-2; Oden; Williams).
The seller has no ownership interest in the funding annuity — it is the assignment company's asset (§72(u)(3); NQA structure; §130 contrast).
The non-qualified assignment is executed at or before closing — before any right to a lump sum vests (§453; constructive-receipt doctrine).
A note on the weight of authority
- Binding on everyone: the Internal Revenue Code (§453 and related) and final/temporary Treasury Regulations (§15a.453-1, §1.451-2).
- Binding on the IRS, citable by taxpayers: Revenue Rulings (75-457, 82-122) and the acquiesced Cunningham decision.
- Persuasive, precedential: Tax Court and federal appellate decisions (Oden, Williams, Burrell Groves).
- Persuasive, not citable as precedent (§6110(k)(3)): Private Letter Rulings, TAMs, GCMs, and Chief Counsel Advice — valuable as windows into IRS reasoning.
- Not yet effective: REG-109348-22 (proposed) — relevant only to the abusive monetized structure and only if finalized.
The SIS rests on a notably clean and consistent body of authority: an unbroken half-century chain (1965 → 2012) holding that obligor substitution is not a §453B disposition, paired with an even older and equally consistent constructive-receipt line (Williams 1955 → Oden 1970) defining the escrow boundary the structure is built to respect. No authority has ever held the bona fide three-party SIS itself to be abusive; the enforcement activity of 2023–2025 is aimed squarely at the monetized variant, which a properly built SIS does not resemble.
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