IRS has eye on PG&E payouts to San Bruno pipeline victims

Victims of the San Bruno pipeline explosion three months ago may have received financial assistance to cover some costs to rebuild, but they now face a new obstacle: federal income taxes.

Congresswoman Jackie Speier, D-San Mateo-San Francisco, though, is pushing to make sure none of the money received as part of the disaster has to be declared as gross income.

In a town hall meeting Sunday that included representatives from the National Transportation Safety Board, PG&E, the city of San Bruno and California Public Utilities Commission, Speier encouraged Internal Revenue Service representatives, who were also present, to promise victims the money they received would not be taxed.

“The money from PG&E was for the purpose of making their home clean again,” she said. “The [IRS] commissioner has the discretion under the tax code that all payments made by PG&E under the circumstances are not taxable.”

As a result of the Sept. 9 explosion, PG&E — the utility company responsible for the 30-inch pipeline that exploded in the Glenview neighborhood, killing eight people — gifted $15,000 to residents whose homes were damaged that day.

For homes fully destroyed or uninhabitable, the company gave $50,000. A total of 37 homes were destroyed and another 18 had major damage.

Residents were notified last month, however, that the money could be taxed by the IRS. The percent of tax is based on each individual’s income.

Jerry Guernsey, 67, whose house was completely destroyed in the explosion, said it doesn’t matter whether the $50,000 he received is taxed or not, it’s a small amount going toward rebuilding his life.

“It’s still better than nothing,” he said. “I had 45 years of my life in that house. If it’s taxed 30 percent, it’s better than not having any money.”

Linda Metcalfe, 61, said she’d wished she’d known it was possible the $50,000 she received would be taxed.

“We thought it was a gift,” she said. “But now to find out it could be taxed, it was a bit of a shock.”

Speier encouraged residents who received any money from PG&E to avoid filing their 2010 federal income taxes until the matter is resolved.

Speier called on the federal IRS commissioner Douglas H. Shulman to visit San Bruno in January to answer questions and concerns about the money that victims have already received.

“I am available in January whenever he is,” she said. “These people lost portions of their homes, and are coping enough. They don’t need the IRS breathing down their necks.”

akoskey@sfexaminer.com

Reporting income

Guides for the 2011 year for married couples filing jointly:

Income………………Tax bracket
$0-$16,750……………….10%
$16,750-$68,000………15%
$68,000-$137,300…….25%
$137,300-$209,250…..28%
$209,250-$373,650…..33%
$373,650+………………..35%

Source: Internal Revenue Service


Bay Area NewsLocalPeninsulaSan BrunoSan Francisco

If you find our journalism valuable and relevant, please consider joining our Examiner membership program.
Find out more at www.sfexaminer.com/join/

Just Posted

Organizer Jas Florentino, left, explains the figures which represent 350 kidnapped Africans first sold as slaves in the United States in 1619 in sculptor Dana King’s “Monumental Reckoning.” The installation is in the space of the former Francis Scott Key monument in Golden Gate Park. (Kevin N. Hume/The Examiner)
What a reparations program would look like in The City

‘If there’s any place we can do it, it’s San Francisco’

Officer Joel Babbs at a protest outside the Hall of Justice in 2017 (Bay City News file photo)
The strange and troubling story of Joel Babbs: What it tells us about the SFPD

The bizarre and troubling career of a whistle-blowing San Francisco police officer… Continue reading

Gov. Gavin Newsom speaks at a COVID-19 update at the City College of San Francisco mass vaccination site in April. (Kevin N. Hume/The Examiner)
Gavin Newsom under COVID: The governor dishes on his pandemic life

By Emily Hoeven CalMatters It was strange, after 15 months of watching… Continue reading

People fish at a dock at Islais Creek Park on Thursday, June 10, 2021. (Kevin N. Hume/The Examiner)
What Islais Creek tells us about rising sea levels in San Francisco

Islais Creek is an unassuming waterway along San Francisco’s eastern industrial shoreline,… Continue reading

Deputy public defender Chris Garcia outside the Hall of Justice on Wednesday, June 16, 2021. (Kevin N. Hume/The Examiner)
As pandemic wanes, SF public defender hopes clients will get ‘their day in court’

Like other attorneys in San Francisco, Deputy Public Defender Chris Garcia has… Continue reading

Most Read