Washington, DC – U.S. Senators Dianne Feinstein and Barbara Boxer (both D-Calif.) today introduced legislation in the Senate, and U.S. Representatives Mary Bono, Ken Calvert, and Jerry Lewis (all R-Calif.) are set to introduce legislation in the House of Representatives, to ensure that the more than $1 million of charitable donations raised for the families of the firefighters killed in the October 2006 Esperanza fire will be treated as tax-deductible and the IRS will not tax the families for the funds they receive.

“Following the fire, there was an outpouring of support from a grateful community for the families,” Senator Feinstein said. “But these donations may never reach them because of bureaucratic pitfalls. So we are introducing this legislation to cut through the red tape, make a minor tax code clarification, and ensure the families of the fallen firefighters receive the generously donated funds. This is the right thing to do.”

“The support for the families of the firefighters fallen in the Esperanza fire has been overwhelming, and Senator Feinstein and I are committed to ensuring that these heartfelt contributions don’t get caught in bureaucratic red tape,” Senator Boxer said.

“This senseless act of arson, which was the cause of this catastrophic fire, claimed the lives of five heroic US Forest Service Firefighters, inflicting a tragic loss upon their families,” said Representative Bono. “The outpouring of aid, support and assistance from our community and indeed the entire country to assist these families must be protected. In working with my colleagues to introduce this important piece of legislation, we are hopeful that its passage will remove any threats against the disbursement of these funds and will assist in securing the future of the families who lost their loved ones.”

“The generous Americas who donated this money did not intend it to go to the Internal Revenue Service (IRS),” said Representative Calvert. “I am hopeful that there will be a positive outcome and we can pass this bill today. These families have been through the most difficult time of their lives; let's not add insult to injury by giving the IRS money that the families need.”

“We promised the families of these brave firefighters that we would not forget them and urged our constituents to step forward and show our community's appreciation for their sacrifice,” said Representative Lewis. “Our constituents have responded in dramatic fashion, and we in Congress are now committed to ensuring that those donations go toward their intended purpose - to provide for the families of the heroes who gave their lives to protect us.”

It has been reported that over $1 million in funds have been raised by the Central County United Way for the families of the five firefighters killed in the Esperanza fire. Unfortunately, current IRS rules dictate that a tax-exempt charitable group can’t limit its assistance to specific individuals. Because of this, the Central County United Way could lose its tax-exempt status if it disburses these funds to the families of firefighters, and donors may not be able to treat their contributions as tax deductible.

These consequences have forced the Central County United Way to consider the possibility of returning the donations.

The legislation introduced by Senators Feinstein and Boxer would preserve the tax-exempt status of the Central County United Way, provide that donations given to the firefighters’ families in good faith will be tax deductible, and ensure that any benefits received by the families will not be taxed away. These same exemptions were provided to the families of 9/11 victims, who faced similar tax issues.

“The good and charitable people who made donations should receive the tax deductions they expected, and the firefighters’ families should not be stripped of a large portion of the funds contributed to help them through these difficult times,” Senator Feinstein said. “This legislation encourages the kind of generosity that we should all commend, not discourage. Although the time remaining in Congress is very short, I will do everything in my power to try to get this legislation passed before we adjourn.”

Senators Feinstein and Boxer previously worked together on a Senate resolution honoring the firefighters and other public servants who responded to the Esperanza fire in southern California in October 2006. That resolution passed the Senate unanimously on November 16.

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