Larson and Courtney Get National Taxpayer Advocate to Agree to Intercede on Behalf of Homeowners Affected by Crumbling Foundations
Washington, D.C. – Today, Reps. John B. Larson (CT-01) and Joe Courtney (CT-02) heard from the National Taxpayer Advocate Nina Olson, that they are requesting federal tax relief for homeowners harmed by the crumbling foundation problem that has struck communities in Eastern Connecticut. After ongoing efforts led by Courtney, Larson spoke directly with Olson at a Ways & Means Oversight Subcommittee hearing Friday morning.
Rep. Larson’s remarks at the hearing can be viewed here.
“Today, we were pleased to hear from National Taxpayer Advocate Nina Olson that her office has sent a request to the IRS’ Office of Chief Counsel for priority guidance to allow homeowners to apply for federal tax relief. We will continue to work with Ms. Olson in getting the IRS to agree to release guidance as soon as possible to help Connecticut homeowners.
“While we are pleased with today’s news, the IRS must agree to issue guidance before homeowners can apply for some relief and because this path may not help all affected residents, it will take continued, coordinated efforts with our state and local partners to ensure that homeowners know all their options for pursuing assistance. We thank National Taxpayer Advocate Nina Olson for her commitment to work with us on a path forward.”
The letter sent to the National Taxpayer Advocate after the hearing can be found here and below:
May 19, 2017
Ms. Nina E. Olson
National Taxpayer Advocate
Internal Revenue Service (IRS)
1500 Pennsylvania Ave, NW
Washington, DC 220229
Dear Ms. Olson:
Thank you for your testimony before the Ways & Means Oversight Committee on May 19, 2017 at the hearing on “IRS Reform: Lessons Learned from the National Taxpayer Advocate.” We were pleased to hear that your office has submitted a request to the Internal Revenue Service, urging them to consider priority guidance on how Connecticut homeowners harmed by crumbling foundations may apply for federal tax relief. While this is just the first step in a longer process, we thank you for your advocacy on behalf of Connecticut homeowners.
As you are aware, stakeholders have identified a particular provision in the tax code that allows taxpayers to deduct the cost of casualty losses. While usually limited to sudden losses, the IRS has issued exceptions in the past. In particular in the case of imported corrosive drywall, which affected thousands of homeowners in southeastern states, the IRS issued a revenue procedure to apply casualty losses to this non-sudden case.
In order to complete the record for the hearing, we ask for a copy of the request submitted to the IRS’ Office of Chief Counsel regarding CT homeowners and their crumbling home foundations caused by the mineral, pyrrhotite.
As discussed in the hearing, homeowners in three dozen towns in north central and northeast Connecticut have reported that their foundations are failing. The cost of repairs is estimated to be $150,000 per home and it is not covered under any homeowners’ insurance policy. While over 500 formal complaints have been registered with the state’s Department of Consumer Protection, the reach and impact of this problem is much wider. A recent Associated Press article estimates that as many as 30,000 homes could be affected.
After months of meeting and working with homeowners, local leaders, state officials and my colleagues in the Connecticut federal delegation, it is clear to many of us that there is no single solution to this crisis and that any response to this problem must be multi-faceted, with a range of options on the local, state and federal levels.
Thank you again for your testimony and your attention to these questions.
John B. Larson Joe Courtney
Member of Congress Member of Congress