Case Applauds IRS Decision Supporting His Request To Not Tax Relocation Assistance Given to Help Those Forced From Homes During The Red Hill Fuel Crisis
Honolulu, HI, April 5, 2023
Tags: Red Hill
(Honolulu, HI) – Congressman Ed Case (HI-01) today applauded the decision announced this Wednesday by the Internal Revenue Service (IRS) to not tax emergency assistance given to an estimated 1,700 resident families who were temporarily relocated from their homes due to the Red Hill fuel crisis in 2022.
“When I heard from constituents who were receiving 1099 income forms from the IRS a few months ago stating they owed taxes on the value of the emergency relocation assistance they received during the Red Hill crisis, I knew it was straight-out wrong to tax families displaced from their homes through no fault of their own,” said Case.
On March 2, 2023, Case sent a letter with the other members of Hawaii’s Congressional delegation to IRS Acting Commissioner Douglas O’Donnell expressing “deep concern” over an effort to tax those who received temporary assistance. Case and the delegation asked the IRS to “use its administrative authority to exempt any assistance provided by the Department of Defense to ensure the ‘equitable administration’ of the tax code.” The delegation also noted that just as assistance provided to individuals by the Federal Emergency Management Agency under the Stafford Act is exempted from taxation, Red Hill emergency assistance should be exempted.
In its announcement today, the IRS stated it will use its administrative authority to correct the situation and “informs Federal civilian employees and other civilians who are not employed by the Federal government who received certain payments in 2022 and 2023 from the Department of Defense (DOD) in reimbursement for lodging, meals, and personal property damage expenses after the release of petroleum from the Red Hill Bulk Fuel Storage Facility on Oʻahu, Hawaii (Red Hill Fuel Spill) that such payments are excludable from gross income for Federal income tax.”
1. Hawai‘i Congressional delegation letter to the IRS March 2, 2023
2. IRS press release April 5, 2023