The IRS offers help to the BP Oil victims.
The IRS really does want to help BP oil spill victims.
Saturday, July 17 the Internal Revenue Service is opening offices in seven cities to provide help to the victims of the BP oil spill.
The IRS has announced some guidance for individuals and businesses affected by the oil spill in the Gulf of Mexico and announced a number of new efforts to help affected taxpayers, including a special Gulf Coast Assistance Day on July 17.
The guidance provided by the IRS is based on current law and it explains how recipients of payments from BP should treat the payments for tax purposes. According to current legislation, BP payments for lost income are taxable in the same way that the wages or business income these payments are replacing would have been. The law treats compensation for lost wages or income differently for tax purposes than compensation for physical injuries or property loss, which generally are nontaxable.
Every person can have unique financial circumstances, so 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.
The new information is available in a question-and-answer format on a special section of the IRS website, IRS.gov. The IRS is closely monitoring the situation in the Gulf, and additional information will be added to IRS.gov as it becomes available.
The IRS has several options for BP oil spill victims.
To help people in the Gulf Coast area dealing with tax issues regarding their losses, the IRS has announced a special assistance day on July 17 in seven cities. 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. The number is: 866-562-5227. The special services phone line will operate weekdays from 7 AM to 10 PM Eastern Daylight Time. Specially trained IRS personnel will be available to help people with tax questions related to the oil spill.
The IRS encourages taxpayers in the Gulf struggling with payment or collection issues to contact the agency. The IRS continues to have a number of ways to help taxpayers dealing with oil spill issues or other economic hardship issues, including:
- Assistance of the Taxpayer Advocate Service for those taxpayers experiencing economic harm, who are seeking help resolving tax problems that have not been resolved through normal channels.
- Postponement of collection actions in certain hardship cases.
- Added flexibility for missed payments on installment agreements and offers in compromise for previously compliant individuals having difficulty paying.
- IRS employees will be permitted to consider a taxpayer’s current income and potential for future income when negotiating an offer in compromise.
- Accelerated levy releases for taxpayers facing economic hardship.
Individuals who have suffered physical and/or economic losses as a result of the BP oil spill may also seek loans from the Small Business Administration (SBA). Homeowners and Renters can apply for loans to cover damages to their home, personal property, and vehicles. Businesses can apply for loans for damages to their real estate or business contents and for economic losses.
To reach the SBA:
SBA Answer Desk – 800-U-ASK-SBA (800-827-5722)
Send e-mails to: answerdesk@sba.gov