US oil spill compensation may be taxed

NEW ORLEANS - Out-of-work Gulf Coast shrimper Todd Pellegal spent his first $2,500 check from BP quickly, paying off bills and buying groceries for his family.

He never even considered putting some of it away for taxes.

Now he's among the people up and down the Gulf Coast reeling from the oil spill disaster who are surprised - and frustrated - to find out the Internal Revenue Service may take a chunk of the payments BP PLC is providing to help them stay afloat.