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San Bruno Residents: Are PG&E Settlements Taxable?

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A chimney is all that remains at a burned home near the epicenter of the gas line explosion that devastated a neighborhood in San Bruno. (Justin Sullivan/Getty Images)

A chimney is all that remains at a burned home near the epicenter of the gas line explosion that devastated a neighborhood in San Bruno. (Justin Sullivan/Getty Images)

ChrisFilippi 20100909_KCBS_0379r Chris Filippi
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SAN BRUNO (KCBS) — Hundreds of people convened at a town-hall meeting in San Bruno Friday night where residents asked if settlement payments from PG&E are taxable.

The mayor of San Bruno read a letter from PG&E’s president declaring that the company will not replace the damaged gas pipeline in the Crestmoor neighborhood.

It was the kind of news some concerned residents, including Eric Lipton, wanted to hear.

“I was sure that if it was coming back, I was moving out of the neighborhood, even if it made me bankrupt,” said Lipton.

Some residents who have received money from PG&E were surprised to hear from an IRS representative that in some cases, those payments could be taxable.

Congresswoman Jackie Speier, who attended the meeting, said she would take action to make sure fire victims won’t have to share their settlements with Uncle Sam.

“The first thing I’m going to do is meet with the IRS commissioner and see if we can resolve it administratively. If we can’t resolve it administratively then I’ll have to look at introducing legislation,” stated Speier.

The September 9th explosion and fire killed eight people and destroyed 37 homes.

(© 2010 CBS Broadcasting Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)

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