Relocation Payments to Residents Affected by Natural Gas Leak in Southern California Not Included in Gross Income (Ann. 2016-25)

CCH Tax Day Report

Victims of the Southern California Gas Company (SoCal Gas) natural gas leak at the Aliso Canyon storage field will not be required to include relocation payments in gross income. The Los Angeles County Public Health Department directed SoCal Gas to offer free, temporary relocation to affected residents because the gas leak caused significant symptoms for area residents. As part of the relocation plan, SoCal Gas was required to either pay on behalf of or reimburse affected residents for certain relocation and cleaning expenses incurred for the period beginning November 19, 2015, through May 31, 2016. Relocated residents will not be required to include these payments or reimbursements in gross income. However, family and friends who received payments under the relocation plan for housing affected area residents must include the payments in gross income under Code Sec. 61, unless the amounts are properly excludable from gross income under Code Sec. 280A.

Announcement 2016-25, 2016FED ¶46,375

Other References:

Code Sec. 61

CCH Reference – 2016FED ¶5504.201

Tax Research Consultant

CCH Reference – TRC INDIV: 33,450

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