In 2009, W-2 wage earners found out that the extra $250 in 'stimulus money' that they received was taxable as part of adjusted gross income.
Most recipients of any federal or state unemployment benefits found out that a portion, or a couple thousand dollars, was tax exempt but the remainder of the benefits got taxed as special income. **
In addition, when a beneficiary of unemployment benefits received that extra $25 in stimulus money from President Obama as was clearly noted in any electronic filers account, a subsequent question was attached: ‘Do you want to withhold $2.00 for federal income tax?’
In the eyes of the IRS, there are ‘no free lunches’ and if you get two pieces of bologna, they will take one for themselves; but you’ll be allowed to keep the rest of the sandwich intact meaning the sandwich is still 'whole', a word you will hear over and over in the next few weeks.
Therefore, the Internal Revenue Service wants its cut from oil spill victims who receive BP payments for lost wages.
Under IRS current law, BP payments for lost wages are taxable, just like the wages would have been, said the IRS on Friday. Payments for physical injuries or property loss, however, are generally tax free. Payments for emotional distress are also taxable, though medical expenses related to emotional distress are deductible, maybe - depending upon your gross income.
BP officials have agreed to create a $20 billion fund for spill victims, as well as a $100 million fund to support laid-off oil rig workers due to the Deepwater Horizon explosion.
The IRS issued its guidance on Friday to help spill victims realize that taxes would be due just like ordinary income. The agency has posted tax information for oil spill victims on its website and plans to hold forums in seven Gulf Coast cities on July 17th to address tax issues.
Taxpayers and tax preparers will be able to work directly with IRS employees to resolve tax issues, including specific topics related to the oil spill. The IRS will hold the Gulf Coast Assistance Day in four states:
• Alabama: Mobile
• Florida: Panama City and Pensacola
• Louisiana: New Orleans, Houma and Baton Rouge
• Mississippi: Gulfport
In addition, taxpayers with problems related to the Gulf spill will soon be able to reach IRS personnel through an IRS toll-free telephone line. Specially trained IRS personnel will be available to help people with tax questions related to the oil spill. More information will be available about the telephone line.
Says IRS Commissioner Doug Shulman, 'as residents of the region cope with the evolving situation, I want to assure them that the IRS will be doing everything it can to provide tax help to those who need it. We encourage anyone who has an issue with the IRS to contact us and explain their hardship and we will work with them to find a solution.’
An informational summary can be found on its public website by clicking on the IRS Seal below.
<<<<< click here or click on the IRS seal >>>>
‘We'll do everything we can under current law to help taxpayers,’ Shulman added.
The IRS encourages taxpayers to review their tax situation or talk with their tax preparers about the implications of payments or compensation from the oil spill.
Look for a live report from Biloxi, Mississippi on the area's Deepwater Horizon explosion impact
Contact Richards by email at editor@pronlinenews.com or call him at (256) 417-6084 and follow him on Facebook or Twitter
Hank is a prostate cancer survivor and a nationwide public speaker on the issue. If you want to schedule him for your next speaking venue, just call the number listed above
**background data verified by Capital Earnings & Research, a Huntsville, Alabama PR firm
Comments
That bunch will weasel in on a burial.
That dog always gets the last bite.
I don't see why this is so scandalous. BP is paying these people replacement wages. The wages they would have earned otherwise would be taxable. But replacement wages shouldn't be? They're not losing anything they'd otherwise be entitled to -- they're paying the same taxes on income they would pay anyway -- and I don't get why absent some act of Congress they should be presumed to suddenly owe no tax. You all want your lawmakers to give them a tax break, go ahead and tell them. I'm not against it. But don't act like the government is robbing these people.
BP is paying wages to individuals. These earning are just that earnings. Everyone of us pay Federal Income Tax on our wages. They should be taxed as normal income just as my income is taxed. As for losses they incure they should not be taxed, such as clean up cost, medical etc. just as I would be. This is not an a big issue. Let's face it many of these guy/gals had cash businesses and didn't fully pay taxes before the spill.
Our ever so efficient government is one big scum sucking parasitic tick.
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