Internal Revenue Service May Tax Gulf Coast Damage Claims Following Deepwater Horizon Oil Spill

President Barack Obama created a $20 billion disaster relief fund last week to compensate victims who have lost their livelihood after placing a six-month ban on deepwater drilling in the region

The April 20 oil rig explosion of Deepwater Horizon killed 11 workers and resulted in the worst oil spill in U.S. history.

The IRS would not comment on whether an exception would be made. And Kenneth Feinberg, who is overseeing the handouts, said he hasn’t determined if the funds would be taxed.

But tax experts said all income can be taxed under federal law unless specific exceptions are made by the Treasury Department or Congress.'

Read more...