Two Connecticut congressmen say they've received word that homeowners with crumbling foundations will soon be able to seek federal tax relief.
Democratic U.S. Reps. Joe Courtney and John Larson announced Wednesday the Internal Revenue Service has agreed homeowners with foundations deteriorating because of the presence of the iron sulfide pyrrhotite can deduct the cost of repairs from their federal taxes as a casualty loss.
Under the new IRS "revenue procedure," eligible taxpayers will be able to claim a loss for 75 percent of the unreimbursed repair costs in a given taxable year.
Both Courtney and Larson met with Treasury Secretary Steve Mnunchin in September about the costly problem, which has affected hundreds of homeowners in eastern and central Connecticut.
The decision affects federal income tax returns filed after Nov. 21.
“The individuals and families in Connecticut with crumbling foundations have been experiencing an ongoing nightmare. While there is no one silver bullet solution to make up for the loss experienced by these homeowners, today’s announcement by the U.S. Department of Treasury will provide at least some degree of relief for many of them. It is the first time that the federal government has acknowledged the unique harm Connecticut residents have suffered through no fault of their own. I’d like to thank the IRS, the Department of Treasury, the National Taxpayer Advocate, and especially all of the homeowners who have reached out to my office to share their stories and allowed me to tour their homes,” Larson said in a statement on Wendesday. “Our work is not done. Rep. Courtney and I will continue to engage with the administration and colleagues on both sides of the aisle to pursue every possible avenue at the federal level to provide relief for these homeowners.”
Courtney said Wednesday was a "yes" to "helping homeowners struggling with the cost and damage of crumbling foundations."
"This is the culmination of a 19-month process with the Treasury Department, IRS, and the National Taxpayer Advocate to get federal recognition of the severe property casualty loss that north-central and eastern Connecticut homeowners are struggling with. This tax guidance adds a powerful new tool to the toolbox of options for homeowners and communities looking for way to get their arms around this extensive and long-term problem for our region. The origins of this effort started at the grassroots level from homeowners speaking out at community meetings and from Connecticut’s CPAs who urged Washington to extend casualty loss deduction to this problem. I thank Assistant Secretary Kautter, Secretary Mnuchin and former IRS Commissioner Koskinen for their personal attention and commitment to this issue - today’s announcement reflects their recognition that this is a severe problem requiring immediate attention. I look forward to continuing to work with my partner in this effort, Congressman John Larson, and officials from Treasury and IRS to make the implementation of this guidance as smooth as possible for homeowners and their communities ,” Courtney said.
Copyright 2016 WFSB (Meredith Corporation). The Associated Press contributed to this report. All rights reserved.