Letter to Douglas H. Shulman, Commissioner of the Internal Revenue Services

Letter

U.S. Representative Paul Broun, M.D. (GA-10) today sent a letter to Internal Revenue Service (IRS) Commissioner Douglas H. Shulman requesting tax exemptions for Gulf Coast victims receiving compensation from BP, PLC.

"Recent press reports reveal that these emergency compensation checks may be taxable unless special exemptions are made," wrote Broun. "I urge the Internal Revenue Service (IRS) to provide tax exemptions for individuals affected by the Deepwater Horizon explosion.

"Many, who have already received payments, were without income for a significant period of time and spent their checks immediately upon receipt. Others, fearful of future taxes on these payments, are saving money they desperately need to spend on necessities. Assisting those affected by the explosion requires dedication at every level of government. I sincerely hope the IRS, under your direction, will do everything in its power to lessen the tax burden on those impacted by this terrible spill," Broun concluded.

A copy of the letter can be found below.

June 23, 2010

Dear Commissioner Shulman:

As you are aware, many individuals and businesses have been severely affected by the Deepwater Horizon explosion. BP PLC has established a $20 billion disaster fund to assist these victims and another $100 million relief fund for oil workers. Recent press reports reveal that these emergency compensation checks may be taxable unless special exemptions are made. I urge the Internal Revenue Service (IRS) to provide tax exemptions for individuals affected by the Deepwater Horizon explosion.

Many, who have already received payments, were without income for a significant period of time and spent their checks immediately upon receipt. Others, fearful of future taxes on these payments, are saving money they desperately need to spend on necessities. I encourage the IRS to act quickly in order to ease the burden of those who must now cope with the fallout of this disaster as well as a poor economy.

In the aftermath of Hurricane Katrina, many Gulf residents received disaster payments from the federal government to help rebuild their homes and small businesses. As you are aware, the IRS made the adverse decision to tax those much needed payments as regular income in 2007, and, as a result, it required an act of Congress to reverse this decision.

Please do not repeat past mistakes by taxing payments made by BP PLC to the victims of the most recent Gulf disaster. Assisting those affected by the explosion requires dedication at every level of government. I sincerely hope the IRS, under your direction, will do everything in its power to lessen the tax burden on those impacted by this terrible spill.

Thank you for your consideration of this request. Due to the time-sensitive nature of the request, I look forward to your prompt reply.

Sincerely,

Paul C. Broun, MD
Member of Congress

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