IRS Could Claim Millions From Flint Water Crisis Settlement
Over a decade after the Flint water crisis came to light, residents aren’t the only ones waiting for their cut of a partial settlement totaling $626.25 million. According to the Detroit Free Press, the IRS is waiting for its cut of long-overdue monetary atonement to residents.
“Uncle Sam has yet to acknowledge any federal liability in the 2014 lead poisoning of Flint residents, but he’s in line for a cut from the civil settlement fund, according to a recent court filing,” wrote the Detroit Free Press.
Of the approximately 28,000 claims filed, an estimated 25,900 payments had been approved for compensation. The federal government could take 37% of the fund’s interest due to the trust classification. The little-known provision provides millions to the federal government rather than back to the impacted community.
As noted by the Detroit Free Press, the settlement fund has accrued millions in interest since its establishment. The exact amount of the interest remains unknown, but at 37% it’s a hefty haul for the federal government, even as a lawsuit against the Environmental Protection Agency is pending. Another lawsuit against private contractors is also underway.
The IRS tax loophole is another example of the inequities buried in this system and how the chips are stacked against working communities. People may gloss over the legal jargon, but buried deep in the settlement agreement was language about the tax implications of the award.
The devil, as they say, is in the details. But when you are holding on and waiting for long overdue relief, the details sometimes get overlooked. Under the agreement, the state of Michigan and other defendants are not responsible for paying the taxes.
It’s not surprising that a federal agency under this administration would fail to provide redress to affected communities; the Flint issue spans several administrations. Beyond Flint, communities across the country have been affected by water and sewage systems.
In April, the Trump administration eliminated a water settlement for a Black community in Alabama under the guise of its anti-DEI campaign. As reported by NewsOne, the Department of Justice claimed it wouldn’t pursue environmental justice despite the well-documented reality for many Black communities.
Inequity and racial injustice are baked deep into the fabric of state and federal governments, often leaving Black families and communities without recourse. From the race massacres of the late 1800s and early 1900s to the multiple environmental crises of the modern era, government agencies at all levels have failed to protect Black families.
Our lives are treated as disposable with little regard for the outcomes and consequences of official actions. Meanwhile, corporations and government officials get a mere slap on the wrist.
The legal system for redress of harm often falls short of restoring what people have lost. And not everyone in Flint even qualifies for the settlement, even though the water crisis impacted the entire community.
Also, even if Flint’s water is “within standards,” those standards often fall far short of what is best for our health and well-being. As someone impacted by a water crisis in West Virginia, this writer has experienced firsthand being told their water is “within standards.”
It can still make you and your children sick. The unknown outcomes of contaminant exposure can add to the anxiety and stress already present in parenthood.
And the settlement process isn’t easy, and not everyone impacted always benefits. Often, the amount given to individuals barely scratches the surface of the harm caused.
But Flint became a rallying cry for communities overlooked, left behind, and abused by patterns and practices dating back to the days of redlining. Communities pay taxes. And our taxes should be invested back into us, not simply hoarded for the benefit of wealthy elites.
In a recent interview with WWMT News Channel 3, water activist and Flint resident Melissa Mays discussed how the crisis’s impact exceeds the compensation offered. She also told the news outlet that there are still updated infrastructure needs.
“It is so hard to put into any kind of monetary amount what the price tag on our kids’ futures, on our organs that we lost, on the people that had passed away,” she said. “While it might seem like a big amount of money, nobody’s gonna be off partying and jetting to a new world.”
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