Help for Taxpayers

The IRS has opened a special telephone line for taxpayers affected by the Gulf oil spill. Those with questions about the BP payments or who are experiencing filing or payment hardships because of the oil spill should contact the IRS at 866-562-5227. The special services phone line will operate weekdays from 7 a.m. to 10 p.m. local time.

Payments and Claims: The existing law dictates whether payments received from BP for losses, damage and injuries are taxable. See these technical questions and answers for more.

Other Resources

• DisasterAssistance.gov
• RestoretheGulf.gov

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On January 27, Senator Shelby testified at a hearing before the Senate Committee on Homeland Security and Governmental Affairs’ Subcommittee on Disaster Recovery examining the Gulf Coast Claims Facility.

Senator Shelby met with Mr. Kenneth Feinberg, the government-appointed administrator of the Gulf Coast Claims Facility (GCCF), regarding the oil claims process progress in Alabama on November 18.  Senator Shelby has visited the Alabama Gulf Coast many times to survey firsthand the damage caused by the BP oil spill.  In the intervening time, he has been in close contact with local leaders and residents affected by the disaster.  Businesses along the Gulf Coast are not only trying to survive now but also prepare for the next tourist season, which is quickly approaching.  During the meeting, Senator Shelby raised several issues with Mr. Feinberg.    First, there is no clear formula to determine payment of a claim.  Filers deserve clarification as to why their claims were denied or their payments were less than expected.   Second, there is no process for claimants to submit an appeal prior to a final payment.  These victims deserve a fair opportunity to appeal inadequate payments, particularly in light of the lack of transparency, clarity, and consistency in the payment process.  Finally, the GCCF must eliminate the backlog of claims that were already submitted to BP.  These claims have been outstanding the longest and need to be resolved expeditiously.

Mr. Feinberg pledged that he would create a task force to address these concerns.  This task force will be on the Alabama Gulf Coast shortly after Thanksgiving.  Any business that believes it was treated unfairly will now be able to file for an interim payment every three months for the next three years.  Mr. Feinberg stated he would re-evaluate the original payment and provide additional payments if necessary.  Further, no claimants will have to sign away their right to sue. I will be monitoring the situation closely to see that it is fulfilled.  I told him to address these issues and meet back with me after the task force visits Alabama to show me exactly what steps were taken to resolve these concerns.

On December 13, Feinberg announced that the Facility would begin providing additional compensation to the victims of the BP oil spill. All eligible claimants will have the opportunity to choose one of three compensation alternatives:

   1. A lump-sum final payment for all documented past, present and future damage. Each eligible claimant choosing this option will be required to sign a full release giving up the right to sue BP and all other alleged defendant companies arising out of the explosion and spill.
   2. Quarterly interim payments for documented past damage. Some eligible claimants, uncertain as to the future of the Gulf, may be reluctant to accept a final payment. Interim payments will be available to such eligible claimants once every quarter until the expiration of the Facility in August 2013. Quarterly interim payments will be made for documented past damage not previously covered by emergency payments. No release will be required under this option.
   3. A one-time “quick pay” amount of $5,000 for an eligible individual or $25,000 for an eligible business. This “quick pay” alternative is only available to those eligible claimants who have already received an emergency payment from the Facility (over 166,000 individuals and businesses have received such payments). No further documentation need be submitted by any eligible claimant choosing this option. But a full release will be required. Claimants submitting claims for the first time or claimants who were denied emergency payments will not be eligible for this option but may file either a lump sum fully documented final claim or a fully documented interim claim.

Feinberg also announced that a program for free legal assistance will soon be made available to any claimant seeking such help. He also announced that he is retaining the services of respected local citizens throughout the Gulf region to assist claimants during this next phase of the compensation program. “I have listened to those claimants and others who have urged me to retain the services of respected local individuals who can be available to answer questions at the various Claims Offices throughout the Gulf. Their physical presence should make the claims process more transparent and consistent.”

The necessary claim forms for the three payment options will be available aat the various 35 Claims Offices and online (at www.gulfcoastclaimsfacility.com).

Senator Shelby wrote a letter to the CEO of BP asking them to commit to Alabama’s recovery by funding efforts to revitalize Alabama’s tourism and fisheries industries.  BP announced in November that it finalized an agreement with the State of Louisiana to provide $18 million in seafood safety and monitoring, $30 million in seafood marketing, and $30 million in tourism marketing to the State.  No such payments were made to the other 4 affected Gulf Coast States. 

On October 12, the Department of Interior announced that it is lifting a moratorium on deepwater drilling imposed after the Gulf oil spill. New rules have been implemented that must be met before drilling resumes. The rules can be viewed at: http://www.doi.gov/news/pressreleases/loader.cfm?csModule=security/getfile&PageID=64755. The decision to lift the moratorium is a step in the right direction, although a belated one. While it is imperative that oil companies and regulators ensure the safety of wells, it is also critical to ensure that new regulations do not amount to a de facto ban on drilling in the Gulf. Our nation needs this energy and our people need these jobs.

The Small Business Administration will close the last two Alabama offices accepting applications for oil-spill related disaster loans on Thursday. Businesses and nonprofit groups in Mobile, Baldwin, Clarke, Escambia, and Monroe counties can still apply for such loans through February 14, 2011, by calling 1-800-659-2955 or by sending an email to disastercustomerservice@sba.gov.

BP and the Gulf of Mexico Alliance (a partnership of the States of Alabama, Florida, Louisiana, Mississippi, and Texas) announced plans for the implementation of BP's $500 million Gulf of Mexico Research Initiative (GRI) to study the effects of the Deepwater Horizon incident and the potential associated impact on the environment and public health over ten years. The GRI will be managed by a board comprised of scientists from academic institutions with peer-recognized credentials. BP and the Gulf of Mexico Alliance will appoint an equal number of research scientists to the board.

The objectives of the research will be to address the following five themes:

•The physical distribution and ultimate fate of contaminants associated with the Deepwater Horizon incident.

•The chemical evolution and biological degradation of the contaminants.

•The environmental effects of the contaminants on Gulf of Mexico ecosystems, and the science of ecosystem recovery.

•Technology developments for improved detection, characterization, mitigation, and remediation of offshore oil spills.

•Integration of the previous four themes in the context of human health.

The independent scientific research will be conducted at academic institutions primarily in the US Gulf Coast states. Funds will be distributed using the practice of merit review by peer evaluation as described in the 2005 Report of the National Science Board (NSB-05-119). Individual researchers will comply with professional standards as laid out in the National Academy of Sciences Publication - On Being a Scientist: Responsible Conduct in Research (2009). The research will involve sampling, modeling and studies - not acquisition or construction of infrastructure such as ships or laboratories. All GRI-funded research will be independent of BP, and the results will be published in peer-reviewed scientific journals with no requirement for BP approval.

Senator Shelby sent a letter on September 17 to Ken Feinberg outlining several concerns regarding both the short and long term effects of the oil spill on the Alabama Gulf Coast.

The federal government established the Interagency Alternative Technology Assessment Program to collect and review oil spill response solutions from scientists and vendors. The Coast Guard’s Research and Development Center, in collaboration with interagency partners, issued a Broad Agency Announcement on www.FedBizOpps.gov, calling for the submission of white papers that cover: oil sensing improvements to response and detection; oil wellhead control and submerged oil response; traditional oil spill response technologies; alternative oil spill response technologies; and oil spill damage assessment and restoration. Submissions will be screened based on technical feasibility, potential effectiveness and deployment capability. Additionally, BP continues to review ideas on how to stop the flow of oil or contain the oil spill. To submit alternative response technology, services or products to BP directly, call (281) 366-5511. Each caller to the Houston suggestion line will have their details entered into the Horizon Call Center database. The database will then send the caller a simple form, termed either the Alternative Response Technologies form, or the Products and Services Form, for them to set out the details of their idea. The forms are available online at: www.horizonedocs.com.

After the caller completes and submits the form, it is sent for review by a team of 30 technical and operational personnel who will review its technical feasibility and application. Given the quantity of the proposals and the detail in which the team investigates each idea, the technical review can take some time.