Cases in which a physical injury did not occur such as employment litigation, wrongful termination or sexual harassment are taxable to the client. This can potentially create financial issues for the client because once attorney fees, costs and taxes are paid, there may not be much money left for the client. However structured settlements are able to provide a beneficial tax advantage wherein the payments are tax-deferred. Taxes are only paid in the year received and only on the amount received in that year. are not due until the year in which they are received by the client. This allows the client to grow their settlements funds tax-deferred, and avoid paying taxes on the entire large lump sum immediately after settlement.