[StBernard] La. Delegation Pushes IRS to Guide Road Home Grant Recipients through Tax Process

[Westley Annis]

La. Delegation Pushes IRS to Guide Road Home Grant Recipients through Tax
Process

 

WASHINGTON - Five members of the Louisiana delegation today sent a letter to
the IRS asking for six measures to help Road Home grant recipients who are
facing huge tax bills on the April 15 tax deadline.  The IRS has determined
that taxpayers who took a casualty loss deduction in 2005 and received a
Road Home grant must add the casualty loss amount to their 2007 income. 

"We write to express our strong concerns regarding the Internal Revenue
Service's ("IRS'") lack of assistance for residents along the Gulf Coast who
still have many unanswered questions about the additional tax attributable
to their Road Home grants," wrote United States Senators Mary L. Landrieu,
D-La., and David Vitter, R-La., and Congressmen Charles W. Boustany, R-La.,
Charlie Melancon, D-La., and William J. Jefferson, D-La., to Acting IRS
Commissioner Linda E. Stiff.

"As you know, the IRS concluded that taxpayers who took a casualty loss
deduction due to damage to their homes and received a Road Home grant must
recapture the amount of their casualty loss deductions on their 2007 income
tax returns.  This decision has caused a dramatic increase in taxes for
thousands of our constituents.    

"Although the IRS arrived at this decision several months ago, it has been
extremely slow to respond to the myriad questions and concerns that our
constituents have raised."  

The delegation laid out key strategies, such as town hall meetings and
additional IRS caseworkers in the hurricane-impacted cities of Lake Charles,
Houma and New Orleans to help Louisianians through the tax filing process.
They also recommended a toll-free hotline dedicated solely to the Road Home
tax. 

"We ask that the IRS consider these measures on an expedited basis given the
financial strain and confusion associated with the tax on Road Home grants
and the looming April 15 tax deadline," the delegation wrote. 

            The Louisiana Congressional delegation said it will continue to
fight for Road Home tax relief.

A full copy of the delegation letter is attached.

 

- 30 -

 
February 26, 2008


Ms. Linda E. Stiff
Acting Commissioner
Internal Revenue Service
1111 Constitution Avenue, NW
Washington, DC 20224

Dear Commissioner Stiff:

We write to express our strong concerns regarding the Internal Revenue
Service's ("IRS") lack of assistance for residents along the Gulf Coast who
still have many unanswered questions about the additional tax attributable
to their Road Home grants.

As you know, the IRS concluded that taxpayers who took a casualty loss
deduction due to damage to their homes and received a Road Home grant must
recapture the amount of their casualty loss deductions on their 2007 income
tax returns. This decision has caused a dramatic increase in taxes for
thousands of our constituents.

Although the IRS arrived at this decision several months ago, it has been
extremely slow to respond to the myriad questions and concerns that our
constituents have raised. Many residents, for example, have received
conflicting information as to how they should account for their grants if
they sold their homes back to the Louisiana Recovery Authority. At the same
time, many residents have questions as to how they should account for a
grant on property that they sold to other individuals.

In order to respond more effectively to our constituents, we request that
the IRS consider the following measures:

.	Provide better coordination between the IRS' Washington, DC and
Louisiana offices;

.	Conduct town hail meetings in Lake Charles, Houma and New Orleans to
assist tax preparers and residents;

.	Provide clear guidance and assistance for residents who may not be
able to pay back their tax attributable to their Road Home grants;

.	Temporarily assign additional caseworkers to the Lake Charles, Houma
and New Orleans IRS offices;

.	Establish and publicize a toll-free hotline dedicated to questions
about the Road Home tax; and

.	Schedule "problem solving days" in Houma, Lake Charles and New
Orleans to assist taxpayers on an individual basis.

cc: Nina E. Olson, National Taxpayer Advocate
	We ask that the IRS consider these measures on an expedited basis
given the financial strain and confusion associated with the tax on Road
Home grants and the looming April 15 tax deadline.

Of course, if you have any questions regarding the foregoing, please do not
hesitate to contact us.



Sincerely,
Sen. Mary Landrieu
Sen. David Vitter
Rep. Charlie Melancon
Rep. Charles Boustany