WASHINGTON
Thompson, Padilla, LaMalfa press for swift implementation of law to deliver tax relief for wildfire survivors
Today, Representative Mike Thompson (D-CA-04) and U.S. Senator Alex Padilla (D-CA) and Representative Doug LaMalfa (R-CA-01) released a letter urging the Internal Revenue Service (IRS) to take immediate actions to implement their bipartisan legislation providing critical tax relief for wildfire victims. President Biden recently signed the Federal Disaster Tax Relief Act into law.
The Federal Disaster Tax Relief Act supports the nearly 70,000 survivors who suffered significant losses during three major federally declared California fires in 2015, 2017, and 2018 who have received related settlement payments, as well as future recipients of other wildfire settlements related to federally declared fires.
Many California wildfire survivors have already been taxed on their settlement payments, with some even losing access to certain federal benefits as a result of their compensation wrongly being considered income. The requests outlined by Thompson, Padilla, and LaMalfa are instrumental in delivering the full relief these wildfire survivors deserve.
“[M]any Californians that received compensation have already been taxed on these payments in previous calendar years. This has significantly and unfairly hindered their ability to rebuild after devastating loss,” wrote the lawmakers. “Now that President Biden has signed this bill into law, the IRS must take every action available to provide clarity and guide taxpayers through the changes to the tax treatment of such payments.”
“Californians who have suffered inconceivable losses as a result of utility-caused wildfires have waited too long for tax relief,” continued the lawmakers. “We appreciate your attention to this matter, and we look forward to working with you to ensure that wildfire survivors have access to their full settlements and federal benefits.”
Specifically, the lawmakers recommended that the IRS take the following urgent steps in implementing Section 3 of the Federal Disaster Tax Relief Act:
- Prioritize the drafting and approval of FAQs: The lawmakers asked the IRS to quickly finalize relevant FAQs so that impacted taxpayers can begin applying for refunds.
- Make necessary technical changes to IRS’ systems: Sec. 3(e) of the Federal Disaster Tax Relief Act extends the period of limitation for credit or refund claims allocable to the exclusion of settlement payments to one year after the date of enactment.
- To implement this, the IRS must make technical updates to process applications and issue approved refunds online.
Maximize community outreach and education: The lawmakers requested the IRS provide targeted outreach and work with community partners to ensure that all eligible taxpayers are aware of these tax code changes. - Ensure all federal benefits are restored: Many wildfire survivors who would have otherwise qualified for certain federal benefits were wrongfully denied because their income was artificially inflated from the settlement payments. The lawmakers urged the IRS to ensure taxpayers are also made whole on federal benefits, such as Affordable Care Act premium assistance and Child Tax Credit and Earned Income Tax Credit payments.
—Submitted
Record Bee seeks Hometown Heroes
The Lake County Record-Bee, in a joint project with a dozen other north state newspapers that are part of the California Newspaper Partnership, are asking our readers for nominations for our second annual “Lake County Hero” feature.
Here’s how: Just send an email to desk@record-bee.com and tell us who you’d like to nominate, and why.
How you choose your hero, and what criteria you want to establish for your hero, is entirely up to you. You can send us an email about anyone you see as someone who does great things for the community, or other people, or animals, or the environment, or anything you consider hero-worthy. We’ll give equal consideration to heroes who perform their extraordinary feats behind the scenes as those who are paid to do it.
We’ll convene a panel to review the entries, and in early February, we’ll announce five finalists and write stories on each, highlighting their “heroic” acts.
The overall winner will receive a cash prize, an honor that will be repeated for “Hometown Heroes” throughout our Northern California newspaper group from Monterey to Eureka.
Nominations are due Saturday, Jan. 4, 2025 at noon.
Our panel of judges will pick five finalists, who we’ll honor in a series of stories beginning in January, before announcing our overall “hero” Feb. 11, 2025.
The everyday heroics of people doing great things behind the scenes have always been a big part of what makes Lake County such a special place to live. We’re looking forward to receiving your nominations and sharing their stories.
To nominate a hometown hero, please send an email to desk@record-bee.com
—Lake County Record-Bee
