Senator calls for probe of BP tax plans
WASHINGTON (Reuters) - A senator from Florida called on Wednesday for a congressional inquiry into BP Plc's plan to use losses from the Gulf oil spill to reap $10 billion in tax benefits.
Senator Bill Nelson said he wants a probe into whether BP, which announced on Tuesday a $32 billion charge linked to the clean-up, will be deducting legal expenses related to nondeductible fines and penalties, and whether BP should deduct the full cost of its $20 billion cleanup fund.
"I was appalled upon learning that BP intends to shift nearly $10 billion of the costs related to the Gulf oil spill to the backs of American taxpayers, including the very taxpayers whose lives have been devastated by the spill," Nelson, a Democratic member of the tax-writing Senate Finance Committee, wrote to the panel's chairman, Max Baucus.
Nelson urged Baucus to start a probe of the federal tax treatment of costs incurred by BP as a result of the spill.
Tax experts have said it would be natural for BP to deduct costs from the cleanup of the worst oil spill in U.S. history as a business expense.
Fines and penalties are usually not tax deductible.
Nelson mentioned the decision by Boeing Co to forgo tax benefits from a $615 million settlement over an ethics probe, under pressure from lawmakers.
He also said that Goldman Sachs group Inc is electing not to deduct its $550 million settlement recently announced with the U.S. Securities and Exchange Commission.
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