Fishermen who are tax scoflaws want payment from BP based on actual earnings

Little Green Footballs (LGF): I heard some of this on local talk radio while the Roi & I were out and about today.

There are problems with the BP's claims payment process. However,  it seems BP wants to base lost income claims payments on people's tax returns, and it seems some of those tax returns weren't, well, exactly forthcoming in all cases as to the amount of money a person was earning per year.

BP has stated it will accept W-2 and even ship tickets. The man in the video didn't file income tax for three years which is against the law.

Now these folks can either:

1. Keep their mouths shut and accept a claims payment based on what they told the IRS they earned, or

2. Go back and file amended tax returns for each year, which would most likely result in their owing additional income tax (plus penalty and interest).

(LGF has) absolutely no sympathy whatsoever for those folks who got themselves into this pickle by cheating on their income taxes.

New York attorney Jerrold Parker warned about the potential pitfalls facing fisherman who intend to file claims against BP for the Gulf of Mexico oil spill.

Parker, speaking at Harris Martin Publishing's Oil Spill Litigation Conference, said there is "a lot of major tax evasion" among Gulf Coast commercial fisherman.

The conference, held at the W Hotel in New Orleans, dealt with BP litigation strategy.

Parker spoke with Reserve attorney Daniel Becnel Jr. and New Orleans attorney Camilo Salas III during a section entitled "The Claims Game."

Parker, a former IRS tax agent in New York City, warned attendees that, should attorneys file claims against BP - which has established a $20 billion escrow account to handle legitimate claims - the process could get murky for fishermen because many deal in cash.

"Many Vietnamese and Cambodian fisherman live on their boats and don't speak much English," he said. "They pay for their supplies in cash, for their bait in cash and their gas in cash."

The BP guy wanted my tax statements, but how can I pay taxes if everything I earned was in cash?

But foreign fishermen aren't the only ones affected. In a May 30 article in the Los Angeles Times, an anonymous crab fisherman said, "The BP guy wanted my tax statements, but how can I pay taxes if everything I earned was in cash?"

After the presentation, Becnel said that he and most of the lawyers he knows are providing their services and filing claims for fishermen free of charge.

"If we get something on the back end, so be it," he said. "If we don't, then we struck a lousy deal."