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IRS May Tax Payments to Gulf Coast Victims
fox ^ | 6/22/10 | fox

Posted on 06/22/2010 11:02:05 AM PDT by Nachum

NEW ORLEANS — Out-of-work Gulf Coast shrimper Todd Pellegal spent his first $2,500 check from BP quickly, paying off bills and buying groceries for his family.

He never even considered putting some of it away for taxes.

Now he's among the people up and down the Gulf Coast reeling from the oil spill disaster who are surprised — and frustrated — to find out the Internal Revenue Service may take a chunk of the payments BP PLC is providing to help them stay afloat.

(Excerpt) Read more at foxnews.com ...


TOPICS: Front Page News; Government; News/Current Events
KEYWORDS: bp; democrats; irs; liberalfascism; obama; oilspill; payments; revenuegestapo; tax; taxes; victims
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1 posted on 06/22/2010 11:02:08 AM PDT by Nachum
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To: Jet Jaguar; NorwegianViking; ExTexasRedhead; HollyB; FromLori; EricTheRed_VocalMinority; ...

The list, ping


2 posted on 06/22/2010 11:03:14 AM PDT by Nachum (The complete Obama list at www.nachumlist.com)
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To: Nachum

Mr. Pellegal it is income!


3 posted on 06/22/2010 11:04:59 AM PDT by Red_Devil 232 (VietVet - USMC All Ready On The Right? All Ready On The Left? All Ready On The Firing Line!)
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To: Nachum

The IRS would fight buzzards to pick at the last remaining flesh on the bones of a dead taxpayer.


4 posted on 06/22/2010 11:05:45 AM PDT by OB1kNOb (Celebrities first seek fame...then they seek relevance, only to fail miserably at the latter.)
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To: Nachum

They tax your Unemployment too, what made them thing they would get this handout with no strings attached?

It sux, but I would have immediately asked about the taxes on that.


5 posted on 06/22/2010 11:05:55 AM PDT by Mr. K (This administration IS WEARING OUT MY CAPSLOCK KEY!!!!!)
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To: Nachum

Well, duh.


6 posted on 06/22/2010 11:06:14 AM PDT by waxer1 ( "The Bible is the rock on which our republic rests." -Andrew Jackson)
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To: Nachum
IRS May Tax Payments to Gulf Coast Victims

Known as: Insult to Injury courtesy of Hussein 0bama.

7 posted on 06/22/2010 11:06:20 AM PDT by The Sons of Liberty (The 0bama regime represents an "Clear and Present Danger" to the US - Mene, Mene, Tekel, Upharsin)
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To: Nachum

If they are getting paid for lost wages or income, why wouldn’t it be taxable?

If they are getting paid for damages like they would if collecting on a law suit, why wouldn’t it be taxable when other law suits are taxable?

If they are getting paid for personal injury, then no it should not be taxable.


8 posted on 06/22/2010 11:06:34 AM PDT by Raycpa
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To: Nachum

I knew for sure they’d do that. Obama want’s all that BP Money set aside, rest assured it will all go to government cleanup workers (aka democrats without real jobs) and a taudry amount will go to joe shrimp packs of which most will be taxes. Obama gets to ban oil drilling and get paid for, and let the environment be destroyed by refusing help from other countries thus ensuring a new frothing at the mouth group of activists to campaign for Cap and Trade, it’s PERFECT !!


9 posted on 06/22/2010 11:07:42 AM PDT by Scythian
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To: Nachum
It's income. Income the guy didn't even have to work to receive. Of course it is subject to federal income tax, state income tax, social security (FICA) and Medicare tax. Did the guy think he was going to get a total free ride?
10 posted on 06/22/2010 11:08:04 AM PDT by Myrddin
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To: Nachum

is tax money gained from IRS....... INCOME?... that can be taxed?...


11 posted on 06/22/2010 11:08:08 AM PDT by hosepipe (This propaganda has been edited to include some fully orbed hyperbole....)
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To: Nachum

Obama really cares. meh. what is new? Americans better get off their hind ends and drum the commies out of DC.


12 posted on 06/22/2010 11:09:26 AM PDT by dforest
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To: Nachum

Amendment the 16th: “The Congress shall have power to lay and collect taxes on incomes, from whatever source derived...”


13 posted on 06/22/2010 11:10:46 AM PDT by Lurker (The avalanche has begun. The pebbles no longer have a vote.)
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To: The Sons of Liberty
"...IRS May Tax Payments to Gulf Coast Victims..."

Let's see...BP makes these payments. IRS takes a cut from the recipient...hmmm, kinda sounds like a shakedown to me!

14 posted on 06/22/2010 11:10:51 AM PDT by skimbell
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To: skimbell

“The government do take a bite, don’t she?”


15 posted on 06/22/2010 11:11:51 AM PDT by dfwgator
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To: skimbell
Let's see...BP makes these payments. IRS takes a cut from the recipient...hmmm, kinda sounds like a shakedown to me!

No, its neutral. BP income goes down by amount of the payment. Recipient's income goes up by amount of payment. A wash in net income.

16 posted on 06/22/2010 11:13:20 AM PDT by Raycpa
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To: Mr. K
They tax your Unemployment too
In NY, they only tax it if you have more than $20K annual income.
So if your only income for the year is UI, there's no tax.
17 posted on 06/22/2010 11:14:30 AM PDT by oh8eleven (RVN '67-'68)
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To: Nachum

So let me get this straight, the Govt shakes down BP for money to get to the residents.

BP takes the money, which it will right off against income and profits and send it to the escrow account run by Feinberg to disburse to people.

The people who get it get taxed on income, pay sales taxes when they pay for stuff, etc.

Do you people realize what a mafia racket the Govt is yet?
The Govt makes the mob like like choir boys.

This entire thing is a scam only liberals could love.

So in the end the govt is going to get about 25% of all the BP money.

DISGUSTING!


18 posted on 06/22/2010 11:15:05 AM PDT by GlockThe Vote
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To: Nachum

I wonder how much of the Gulf fishing industry was cash (unreported or taxed) business. Do workers idled by the spill have to produce W2s to validate their claims of lost wages?


19 posted on 06/22/2010 11:17:43 AM PDT by Roccus (......and then there were none.)
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To: Roccus

Maybe PetroBas can hire them. I am pretty certain if they want to drill in the Gulf, the Obama Administration wouldn’t have a problem with it.


20 posted on 06/22/2010 11:21:04 AM PDT by EQAndyBuzz (Conservatives are producers. Liberals are parasites)
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To: GlockThe Vote
So in the end the govt is going to get about 25% of all the BP money.

You've borken the code. Destroy red-states, destroy an oil company, create new precedents for seizing power and make 5 billion in the process. What more could a man-child want.

21 posted on 06/22/2010 11:23:37 AM PDT by Drill Thrawl (Government is cancer.)
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To: EQAndyBuzz

Fishermen.....not drill workers.


22 posted on 06/22/2010 11:25:03 AM PDT by Roccus (......and then there were none.)
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To: Nachum

BP should pay the taxes on it. But, that being said, the IRS has the reputation of kicking people when they are down. Keep the people broke and you have control of them.


23 posted on 06/22/2010 11:27:07 AM PDT by RC2
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To: Nachum

After all, he probably didn’t pay taxes on his former income....

D’OH!


24 posted on 06/22/2010 11:27:42 AM PDT by silverleaf (Those who can make you believe absurdities can make you commit atrocities.)
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To: Nachum

25 posted on 06/22/2010 11:28:31 AM PDT by Joe 6-pack (Que me amat, amet et canem meum)
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To: Myrddin

“Did the guy think he was going to get a total free ride”?

...as a matter of fact, yes! This does seem to help bite the kenyan in the ass as the bad guy since most Americans think on the same terms as the shrimper.


26 posted on 06/22/2010 11:29:09 AM PDT by albie
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To: RC2

“BP should pay the taxes on it”

We have defined a new stuck-on-stupid syndrome

“BPDS” = (BP Derangement Syndrome)


27 posted on 06/22/2010 11:30:20 AM PDT by silverleaf (Those who can make you believe absurdities can make you commit atrocities.)
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To: Nachum

IRS rules for court settlements state that money received in compensation for missing wages is subject to income tax. This is not new. Current $20B fund is to compensate for lost wages. It’s not a court settlement, so there is room to argue in tax court . . .but . . . me guesses . . . the IRS wins.


28 posted on 06/22/2010 11:31:39 AM PDT by BAW (Arizona.got it right.)
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To: GlockThe Vote
So in the end the govt is going to get about 25% of all the BP money.

The states will get their share too. States with an income tax will include the BP amounts when computing income subject to tax. Nothing new . . . this has been true for a long time.

29 posted on 06/22/2010 11:34:48 AM PDT by BAW (Arizona.got it right.)
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To: Nachum

If they were working their income should be taxed. I suspect a lot of them get paid in cash normally and the tax thing doesnt happen.


30 posted on 06/22/2010 11:34:51 AM PDT by crosshairs
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To: Nachum

Unless they apply for a waiver.....=.=


31 posted on 06/22/2010 11:35:06 AM PDT by cranked
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To: Roccus
I wonder how much of the Gulf fishing industry was cash (unreported or taxed) business. Do workers idled by the spill have to produce W2s to validate their claims of lost wages?

I heard where a lot of them were complaining that BP was requiring that they produce W-2's to prove how much they were losing. A lot of them said they don't have W-2's. I say they should produce filed income tax returns to prove the kind of income they were losing. Maybe they don't have those either.
32 posted on 06/22/2010 11:37:45 AM PDT by crosshairs
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To: crosshairs

I disagree, we shouldnt be giving the govt any of this money. The people need the help the most, not the disgusting govt.


33 posted on 06/22/2010 11:38:49 AM PDT by GlockThe Vote
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To: Nachum
Wow, they get a 20 billion dollar shake down to pay out to the chosen few and their cronies THEN keep 40 to 50% in taxes.

Way to go Chavez, oops I mean Obama!

34 posted on 06/22/2010 11:41:12 AM PDT by poobear
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To: GlockThe Vote
So in the end the govt is going to get about 25% of all the BP money.

Actually, a case can be made that the Fed Gov is taking it on the chin. Without the payments, BP's income would have been higher by 20 billion. BP's tax rate would be about 35%. If the profits were distributed to shareholders as planned, the Feds cut would be another 15%. The feds would have gotten a combined 45% effective tax.

Instead the funds are being distributed to folks getting taxed anywhere from 0 to 35%. This results in a net loss to the Fed's of about 10-45% depending on the tax bracket of the folks getting the money.

35 posted on 06/22/2010 11:41:57 AM PDT by Raycpa
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To: crosshairs

I should have included 1099s, but you got my drift.


36 posted on 06/22/2010 11:42:11 AM PDT by Roccus (......and then there were none.)
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To: crosshairs

Or their tax returns showed vastly understated income due to the cash nature of their business. They probably took all their business deductions, showed just enough income to cover it. Which would make it hard to prove they are losing money by not working. They have kind of screwed themselves up in this deal. IMHO.


37 posted on 06/22/2010 11:47:39 AM PDT by NEMDF
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To: Nachum

gee free money where do we get that? If the cost of clean up includes the coast guard who pays for that? What these folks need to do is go to BP with their tax return for last year and tell them I am losing ____ because I can’t fish - get all of it up front and then move the booms to clean up the spill. Maybe next year will be a good fishing year.


38 posted on 06/22/2010 11:50:58 AM PDT by q_an_a (a)
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To: Nachum

Compensation “to make you whole” is not taxed.


39 posted on 06/22/2010 12:13:37 PM PDT by Sacajaweau (What)
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To: Sacajaweau
Compensation “to make you whole” is not taxed.

Sure it is, especially when you are being compensated for lost income that would have been taxable. You are no worse off paying a tax on a wage earned than on paying a tax on the same amount being paid to you because you did not earn a wage.

40 posted on 06/22/2010 12:29:02 PM PDT by Raycpa
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To: Nachum

Income is taxed, thus compensation for lack of income is taxed.

Compensation for a loss or damage of something you have (say the oil screwed up his boat and BP paid to have it fixed), or for pain and suffering, is not taxed.


41 posted on 06/22/2010 12:36:04 PM PDT by antiRepublicrat
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To: Nachum

IT is INCOME!

This is income in place of your not being able to pursue your normal work.

Anyone thinking this is not INCOME is just plain stupid.

They all want replacement money for that which they lost, but it is definately taxable.


42 posted on 06/22/2010 12:39:21 PM PDT by ridesthemiles
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To: Raycpa

“A wash in net income.”

But not a wash in net taxes. Given the corporate tax rate is 35% and that most affected workers likely are in a 15% tax bracket, even when SS taxes are added on top, the net haul by the tax man actually will be lower. Of course, if the $20B comes out of profits that had been beyond the reach of Uncle Sam, then any taxes collected will be pure gravy.


43 posted on 06/22/2010 12:40:58 PM PDT by DrC
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To: crosshairs
I suspect a lot of them get paid in cash normally and the tax thing doesnt happen.

That's called tax evasion. Subject to criminal prosecution.

44 posted on 06/22/2010 12:41:13 PM PDT by Myrddin
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To: BAW
Current $20B fund is to compensate for lost wages

I don't believe that is exclusively the case. It should also compensate for lost rent (condo owners) and lost revenue (small business owners).

45 posted on 06/22/2010 12:42:59 PM PDT by 6ppc (It's torch and pitchfork time)
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To: BAW

“Current $20B fund is to compensate for lost wages.”

Agreed, but it sort of depends on how the amount of compensation was determined. To make a worker “whole” technically only requires replacement of after-tax income rather than gross income. So if I’m making payments from a limited fund, my incentive is to pay the lowest amount that would make the individual whole. The purpose of the fund is to assist workers, not help bankroll Obama’s profligate spending.

The point is, if the worker only got an amount to cover after-tax lost wages, he has a legitimate beef about having to pay taxes on this, especially if the situation was not explained to him.


46 posted on 06/22/2010 12:46:54 PM PDT by DrC
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To: Nachum
Anytime you receive income, it is taxed. Maybe not upon receipt, but later, at tax time, it definitely will be.

In the future, these folks need to put aside, from their checks, the equivalent of what was withheld from their paychecks, from a similar amount in the past, or a portion of what they paid in previous years for their taxes.

47 posted on 06/22/2010 12:56:17 PM PDT by SuziQ
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To: 6ppc
I don't believe that is exclusively the case. It should also compensate for lost rent (condo owners) and lost revenue (small business owners).

The issue is the same. If the payments are determined to be replacing other income that would have been earned, the income is reportable on the appropriate form . . . same as the original income would have been.

48 posted on 06/22/2010 2:34:15 PM PDT by BAW (Arizona.got it right.)
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To: Scythian

Will this 20 billion be put into an account that will draw intrest?


49 posted on 06/22/2010 2:39:54 PM PDT by guitarplayer1953 (Rebellion to Tyrants is Obedience to GOD! Thomas Jefferson)
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To: DrC

“The purpose of the fund is to assist workers, not help bankroll Obama’s profligate spending.”

I’m not sure you can leap to that conclusion. I wouldn’t/don’t.


50 posted on 06/22/2010 2:59:24 PM PDT by Attention Surplus Disorder (The United States has become a kakistocracy. Look it up if you doubt it.)
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