During an April 16 Finance committee hearing, Casey secured IRS Commissioner Danny Werfel commitment to deliver tax relief to Norfolk Southern derailment victims
In new letter, Casey follows up on commitment made earlier this week by IRS Commissioner to do everything in its power to provide relief to Darlington residents
Casey has repeatedly fought for resources for Pennsylvanians affected by the derailment, working to hold Norfolk Southern accountable for the necessary cleanup and aid to help the community recover
Washington, D.C. – U.S. Senator Bob Casey (D-PA) sent a letter to Internal Revenue Service (IRS) Commissioner Danny Werfel and Treasury Secretary Janet Yellen urging them to recognize the Norfolk Southern derailment as “of a catastrophic nature” and exempt families from being taxed on reimbursements for reasonable post-disaster necessities, such as shelter, food, and clothing. This letter follows Senator Casey’s questioning of Werfel during an April 16 Senate Committee on Finance hearing where Casey secured a commitment from Commissioner Werfel that the IRS will do everything in its power to deliver tax relief to victims of this disaster.
“Impacted individuals and families faced great hardships and disruption during this period and were forced to deal with sudden unexpected evacuations and school closures with little access to their belongings or homes…The Pennsylvania victims of this disaster should not be forced to pay tax on reimbursements for the hardship they endured and the losses they suffered. These payments were not income, and the Treasury and IRS should use their authority and not recognize them as such,” wrote Senator Casey.
Since the Norfolk Southern train derailment in February 2023, Senator Casey has been fighting relentlessly to ensure victims of the disaster receive the resources, reimbursement, and support they need to recover. On numerous occasions, Casey has pressed Norfolk Southern to meet its obligation to compensate the residents of Darlington and play a significant role in the clean-up and damage remediation process. He has also pushed the federal government to hold Norfolk Southern accountable to that obligation. In total, Casey has pushed Norfolk Southern to provide $1.2 million in funding for Darlington Township.
Senator Casey has also led efforts to protect the health of Darlington residents. He has repeatedly pushed for the federal government to devote significant resources to expand access to clean public drinking water and increase health assistance and monitoring in the region.
Casey has also made preventing future derailments a major legislative focus in the wake of the Darlington derailment. In March 2023, he introduced the bipartisan Railway Safety Act, which would take key steps to improve rail safety protocols and reduce the possibility of derailments. In May 2023, the Senate Committee on Commerce, Science, and Transportation passed a version of the legislation on a 16-11 vote. This bill also included provisions based on Casey’s Assistance for Local Heroes During Train Crises Act to set aside funds—paid for by companies that ship and carry hazardous materials—to provide emergency responders, firefighters, and law enforcement with the financial resources needed to replace equipment, pay workers overtime, and address other urgent costs in the event of a serious derailment. Casey has also repeatedly pushed the Department of Transportation and Norfolk Southern to take steps to strengthen safety protocols and decrease the likelihood of future derailments.
See Senator Casey’s full record on the Norfolk Southern derailment HERE.
Read the full letter HERE or below:
April 16, 2024
Dear Secretary Yellen and Commissioner Werfel:
On February 3, 2023, a Norfolk Southern train carrying hazardous materials derailed in East Palestine, Ohio, less than 1,000 feet from the border with Darlington Township, Beaver County, Pennsylvania. The train caught fire and burned through the weekend. On Monday, February 6, following a mandatory evacuation of Ohio and Pennsylvania residents, Norfolk Southern conducted a vent-and-burn of five tanker cars carrying vinyl chloride on the grounds that doing so would mitigate concerns of a more serious explosion. The vent-and-burn decision by Norfolk Southern—the scientific support for which NTSB Chair Homendy has called into question—had a tremendous impact on communities in Pennsylvania, with at least 135 households in Beaver County, PA forced to evacuate their homes for a prolonged period to avoid further toxic exposure.
Impacted individuals and families faced great hardships and disruption during this period and were forced to deal with sudden unexpected evacuations and school closures with little access to their belongings or homes. In response to the frightening and chaotic disarray Norfolk Southern caused, and public pressure, the company opened a Family Assistance Center in New Waterford, Ohio, a neighboring town requiring almost 20 minutes travel time from Darlington Township. Families needed to transport themselves to the Center to show proof that they were evacuated so they could qualify for a $1,000 inconvenience payment. In addition, the company started to allow individuals to present evidence of receipts for shelter, food, and clothing to qualify for reimbursements.
Norfolk Southern made payments to many of the affected families and also reimbursed those who had expenses due to needing to flee their homes to escape the health hazards caused by the derailment and the subsequent burning of the spilled chemicals. These payments were subsequently reported to the IRS by Norfolk Southern and sent to the affected individuals using Form 1099. Unfortunately, the affected Pennsylvanians will now have to pay taxes on these reimbursements as if they were income, rather than a reimbursement for the reasonable and necessary costs incurred by families due to this catastrophic disaster.
Therefore, I call on the Department of the Treasury and the Internal Revenue Service to invoke your authority under Section §139 of the Internal Revenue Code and recognize that the Norfolk Southern accident was “of a catastrophic nature” and that therefore the reasonable and necessary payments made to these families are exempt from tax. Congress gave this authority to you for a situation such as what occurred following the Norfolk Southern derailment disaster. The Pennsylvania victims of this disaster should not be forced to pay tax on reimbursements for the hardship they endured and the losses they suffered. These payments were not income, and the Treasury and IRS should use their authority and not recognize them as such.
Thank you for your consideration. I appreciate your efforts to serve the American people and to implement a fair and just tax system.
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