Wildfire survivors appeal to Congress to end federal income tax on settlements, lawyer fees

Sam Drevo walks by the burned foundation of his mother's home in Gates following the 2020 Labor Day fires. (Tyler Westfall)

Western wildfire survivors are calling on Congress to stop playing political football with a bill that would relieve them of federal income taxes on recovery settlements and lawyers fees.

To press their point, they've sponsored billboards this month in Idaho and Oregon that directly appeal to the two leaders of the U.S. Senate Finance Committee: Oregon's senior U.S. senator and committee chair, Democrat Ron Wyden, and Idaho's U.S. Sen. Mike Crapo, the Republican ranking member of the committee.

In response, Wyden agreed at a town hall at David Douglas High School in Portland last Friday to get the federal Disaster Tax Relief Act of 2023 passed by the end of the year and potentially before Thanksgiving, likely as a stand-alone bill. Both senators have attempted to tuck the bill into opposing tax packages for the last five months.

"They have waited long enough," Wyden said at the town hall. "They have suffered long enough. Life has been uncertain long enough. I'm going to pull out all the stops to get it before the end of the year to them."

The disaster relief act, which passed the U.S. House almost unanimously in May, and the billboards, which went up early November in Portland, Salem and Medford, were championed by a political action committee founded by survivors of the Thomas, Woolsey and other powerline-ignited fires that burned towns in California during 2017 and 2018. Those communities today are still only partially rebuilt. The bill would exempt disaster survivors in 47 states from paying federal income taxes on their disaster recovery settlements as well as lawyer fees. This includes survivors of wildfires, hurricanes and environmental disasters caused by human error, too, such as the East Palestine train derailment that occurred in Ohio in 2023.

It's similar to a bill that unanimously passed the Oregon Legislature in the spring of 2024 that ended state income taxation on settlements and lawyer fees for wildfire victims. That bill, Senate Bill 1520 , was championed by survivors of the 2020 Labor Day Fires, including Sam Drevo, who survived the Santiam Canyon fire that burned down much of the city of Gates in the heart of the Santiam State Forest. He, too, has appealed to Wyden along with Oregon's other senator, Jeff Merkley, also a Democrat.

"I've walked the streets of the city of Gates with Wyden and Merkely both, and they know how it's impacted the community," Drevo said.

Many survivors of the fires were uninsured or underinsured, and are facing steep rebuilding costs — especially in light of inflation over the last couple years.

"I'm really hoping that they can step up and be the leaders that they need to be in this moment, and seize the moment," Drevo said. "As the administration transitions, now is the time. Otherwise, who knows what the priorities are going to be in the next year."