Senator demands probe of BP tax break

By Annalyn Censky, staff reporter


NEW YORK (CNNMoney.com) -- Two days after BP said it will write off the cost of the oil spill cleanup against its income taxes, a U.S. senator is calling for a Congressional probe into the company's tax plans.

Sen. Bill Nelson, D-Fla. sent a letter to the Senate Finance Committee Thursday, requesting a series of hearings on the matter and calling BP's plans to take a tax write-off "unacceptable."

On Tuesday, BP said it took a $32 billion charge in the second quarter for clean-up costs, resulting in tax savings of about $10 billion.

That's half the value of the $20 billion fund that BP set up to aid Gulf coast victims, Nelson pointed out.

BP announced the charge along with its second quarter earnings, saying the cleanup costs were the main reason for its $17 billion loss during the quarter.

BP spokesman Daren Beaudo, in an email to CNN, said the company is following U.S. tax code in taking the charge.

"Taxes are paid on profits and the Gulf of Mexico spill response costs have reduced BP's US profits -- so it follows that our tax obligations will be lower as well," he said.

In admonishing the oil giant for its tax plans, Nelson also pointed out that Goldman Sachs (GS, Fortune 500) has said it will forgo any tax deduction for the $535 million it will pay in penalties in its settlement with the Securities and Exchange Commission. To top of page

Frontline troops push for solar energy
The U.S. Marines are testing renewable energy technologies like solar to reduce costs and casualties associated with fossil fuels. Play
25 Best Places to find rich singles
Looking for Mr. or Ms. Moneybags? Hunt down the perfect mate in these wealthy cities, which are brimming with unattached professionals. More
Fun festivals: Twins to mustard to pirates!
You'll see double in Twinsburg, Ohio, and Ketchup lovers should beware in Middleton, WI. Here's some of the best and strangest town festivals. Play
Index Last Change % Change
Dow 18,188.67 -99.96 -0.55%
Nasdaq 4,975.86 -32.24 -0.64%
S&P 500 2,105.87 -11.52 -0.54%
Treasuries 2.12 0.04 1.82%
Data as of 3:20pm ET
Company Price Change % Change
Bank of America Corp... 16.09 0.08 0.47%
Apple Inc 129.16 0.07 0.05%
Ford Motor Co 16.17 -0.40 -2.41%
Cisco Systems Inc 29.56 -0.64 -2.10%
Micron Technology In... 29.74 -1.50 -4.82%
Data as of 3:05pm ET
Sponsors

Sections

The historically black school will cover 50% of the cost of a a student's final semester if they graduate early or on time, starting next year. More

Meet the FREAK bug. Old U.S. export controls on data encryption has come back to haunt us in the form of a nasty computer bug. More

In Buffalo, New York, the city is selling vacant homes for a $1 to those who are willing to fix them up and live in them for a few years. But as many buyers soon find out, the cost to renovate these super cheap properties can quickly add up. More