The IRS has announced that residents in Southern California who received payments from Southern California Gas Co. for some relocation and cleaning expenses related to the company’s gas leak may exclude the payments from income (Announcement 2016-25).
The announcement provides that the IRS will not assert that affected area residents be required to include the following payments or reimbursements in gross income:
- Hotel expenses, including meal reimbursement ($45 per day for an individual age 18 and older; $35 per day or $25 per day for a child based on age), mileage reimbursement, parking expenses, pet boarding fees, internet fees, electric vehicle charging fees, and laundry fees;
- Expenses of staying with friends or family at the rate of $150 per day, and mileage reimbursement;
- Expenses of renting another home for a lease term (including a lease term extending beyond May 31, 2016) as approved by SoCal Gas, including expenses of housewares, appliances, pet fees, furniture rental, utility fees, and moving expenses;
- Mileage allowances or alternative transportation for a resident whose child or children attended the relocated area schools until the date the resident exited the relocation program. If, however, a resident enrolled a child in a school outside of the affected area, SoCal Gas must pay the mileage allowance until the child no longer attends the re-enrolled school or the school year ends, whichever occurs first;
- Expenses of cleaning the interior of an affected individual's home prior to returning home according to protocols established by the Los Angeles County Department of Public Health;
- Air filtration and purification expenses;
- Expenses of cleaning residue from the exterior of an affected individual's home, outdoor fixtures, and exterior furniture and appliances;
- Expenses of a vehicle detailing treatment; and
- Other expenses not specifically described in the relocation plan based on SoCal Gas's evaluation of the expenses.
However the relief will not necessarily extend to friends and family who may have received payments for allowing affected individuals to stay with them. As the announcement provides:
...[F]amily and friends who received payments under the relocation plan for housing affected area residents must include these payments in gross income under § 61 of the Internal Revenue Code, unless these amounts are properly excludable from gross income under § 280A (relating to the exclusion for rental income from a taxpayer's residence for less than 15 days during the taxable year).