Gulf Coast oil disaster victims relief payments may be taxed

NEW ORLEANS - Accountants have been trying to sort out the implications for thousands of taxpayers after President Barack Obama said BP would create a $20 billion disaster fund and provide another $100 million for oil workers who lose their jobs because of the six-month moratorium on deepwater drilling in the Gulf of Mexico.

Tax experts say that unless an exemption is approved by Congress or the Treasury Department then the relief checks that workers have fought so hard to get will be taxed.

Out-of-work Gulf shrimper Todd Pellegal spent his first $2,500 relief check paying off bills and buying groceries. He, like many other people effected by spill, did not give any thought to putting aside money for taxes. So now people may by out their regular incomes and they might owe taxes on their relief checks.

The IRS has not commented on whether or not exemptions will be made. Kenneth Feinberg, who was chosen by Obama and BP to oversee the claims it hasn’t been determined whether or not relief checks will be taxed.

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