Energy

IRS To Give Tax Breaks To Those Impacted By California Gas Leak

REUTERS/Lucy Nicholson

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Craig Boudreau Vice Reporter
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The IRS announced it will provide tax relief for Southern Californians who were affected by a recent gas leak.

The tax relief will allow affected residents to exclude payments received as reimbursement from the Southern California Gas Company from federal tax returns, according to a Forbes article published Friday.

The California gas company was ordered by the Los Angeles County Department of Public Health to pay for relocation of affected residents from November 19, 2015 through May 31, 2016. The gas company also had to pay these residents’ food bills, any extra mileage incurred, parking fees, laundry, utility fees, air filtration expenses and cleaning of affected homes.

Residents were concerned the IRS would seek its share of the money from the payouts, as reported by the San Fernando Sun. Those fears were put to rest with IRS Announcement 2016-25, which gave the tax relief.

“Questions have been raised concerning the taxability of these expenses paid on behalf of or as reimbursements to affected area residents,” the IRS statement read. “The IRS will not assert that an affected area resident must include these payments or reimbursements in gross income.”

In the past few months, a gas leak emanating from an Aliso Canyon storage facility spewed more than 97,000 metric tons of methane into the atmosphere. Shortly after the leak, residents of Southern California began complaining about nausea, dizziness, shortness of breath, and headaches.

The gas company initially said there was nothing to worry about. It claimed the well was “outdoors at an isolated area of our mountain facility over a mile away from and more than 1,200 feet higher than homes or public areas,” according to a New York Times report.

The gas company also issued a summary report with the California Public Utilities Commission which seemed to show an attempt at keeping the leak under wraps. The summary read “No ignition, no injury. No media.”

A quarterly report given to The Daily Caller News Foundation from Southern California Gas Company shows 138 lawsuits have been filed as of April, putting the mitigating cost at $665 million dollars. The company says the number could rise “significantly.”

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