ShareThisWASHINGTON - Homeowners saddled with tainted Chinese drywall may be in for a significant tax break.
Six members of Congress from states stuck with Chinese drywall urged the Internal Revenue Service on Tuesday to approve a hefty tax deduction -- known as a "casualty loss" -- for affected homeowners in Florida, Louisiana and Virginia. Complaints have come from dozens other states.
The request for the tax break, which could be worth tens of thousands of dollars to individual homeowners, comes the day after federal investigators issued a report saying there is a "strong association" between Chinese drywall and rotten egg-smelling gas.
A representative of the U.S. Consumer Product Safety Commission also told the legislators in a letter Monday that the levels of the smelly gas were below irritant levels, but that "it is possible that the additive or synergistic effects of the hydrogen sulfide, formaldehyde and other compounds in the subject homes could cause the irritant effects."
The request comes months after the IRS said it would consider allowing a deduction for homes affected by tainted drywall, depending on the outcome of a federal investigation.
In their letter Tuesday to IRS Commissioner Douglas Shulman, the members of Congress pounced on this research and the accompanying statement, saying they "provide the scientific evidence and satisfy the legal criteria necessary to meet this requirement."
Casualty loss deductions allow property owners to deduct from their taxes a portion of the decrease in value of the property, following sudden or unexpected damage. An IRS spokeswoman declined comment Tuesday.
On Monday, one of the letter's authors, Sen. Bill Nelson, D-Fla., pointed to evidence supporting the possibility that the IRS would allow a casualty loss deduction. After a conversation with CPSC Chairwoman Inez Tenenbaum, Nelson said: "CPSC says an individual homeowner screening test has been approved to determine corrosion, which could allow an IRS casualty loss deduction on a homeowner's income tax return."
CPSC spokesman Scott Wolfson denied Monday that such a screening test has been approved. Wolfson said the CPSC asked the IRS to make a decision on the tax breaks.
Along with Nelson, Tuesday's letter was co-authored by Sens. George LeMieux, R-Fla, David Vitter, R-La., Mark Warner, D-Va. and Jim Webb, D-Va. and Rep. Glenn Nye, D-Va.
E-mail Isaac Wolf at wolfi(at)shns.com
(Distributed by Scripps Howard News Service, http://www.scrippsnews.com)
