Webb Introduces Amendment to Help Chinese Drywall Victims

Senator Jim Webb introduced an amendment to the Senate Tax Extenders bill (HR 4213) to require that the Internal Revenue Service (IRS) issue guidance on the applicability of Chinese drywall victims filing for a casualty loss deduction on their homes and possessions.  The IRS has yet to issue such guidance, despite requests by Senator Webb and others, creating confusion for the thousands of victims seeking to file potential claims.

Senator Webb’s provision requires IRS action by the extension deadline for filing a 2009 tax return.

“This provision would compel the IRS to respond to the tax concerns of thousands of American families whose homes have been contaminated with Chinese drywall,” said Senator Webb, who first requested IRS guidance on the issue in November 2009. “I have heard directly from my constituents about the emotional, physical, and financial hardship they continue to face as they struggle to maintain payments on houses that have been rendered uninhabitable, while also paying for a place to live and often dealing with corresponding health issues. This amendment is not the final solution, but it is an important step forward.”

Since 2005, more than 550 million pounds of drywall have been imported to the United States from China.  In the last 25 months, more than 3,300 cases in 37 states, as well as the District of Columbia and Puerto Rico, have reported noxious fumes and excessive corrosion emanating from this tainted drywall.  The wall board also is suspected of causing serious metal corrosion in air conditioning units, copper pipes and electrical wiring creating further dangerous outcomes. In addition, a number of homeowners have reported health issues that appear to be related to the drywall, including bloody noses, headaches, insomnia and skin irritation.  Many of these homeowners are seeing their property values decline, and some have even moved out of their homes and now are force to pay two housing bills. 

The amendment follows months of efforts by Senator Webb on behalf of those affected by the tainted Chinese drywall. Since April 2009, Senator Webb has pushed constituent casework for individual reports, contacted seven federal agencies requesting disaster declarations, casualty loss tax deductions, expedited tests and evaluations, and mortgage assistance, and requested that President Obama raise the issue with President Hu Jintao during his visit to the People’s Republic of China. In addition, Senator Webb’s regional offices have worked to collect and provide information to the Consumer Product Safety Commission (CPSC) and have worked with local financial institutions to provide relief for Virginia’s drywall victims.