Our Terms of Service and Privacy Policy have changed.

By continuing to use this site, you are agreeing to the new Privacy Policy and Terms of Service.

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

Search for Jobs

Index Last Change % Change
Dow 19,841.04 -44.69 -0.22%
Nasdaq 5,542.64 -31.48 -0.56%
S&P 500 2,269.39 -5.25 -0.23%
Treasuries 2.34 -0.04 -1.51%
Data as of 2:19pm ET
Company Price Change % Change
Bank of America Corp... 22.29 -0.72 -3.13%
Reynolds American In... 57.74 1.77 3.16%
Chesapeake Energy Co... 7.07 0.15 2.17%
Ford Motor Co 12.61 -0.02 -0.16%
Apple Inc 119.96 0.91 0.77%
Data as of 2:05pm ET
Sponsors

Sections

ExxonMobil announced a $5.6 billion deal on Tuesday to purchase a slew of U.S. oil resources in the shale hotbed of the Permian Basin. More

Wilbur Ross is likely to face tough questions during his Senate confirmation hearing about the muscular trade agenda President-elect Donald Trump hopes will resurrect U.S. manufacturing. More

Twitter will officially phase out its beloved six-second video service on Tuesday and replace it with a 'pared-down' camera application instead. More

If your employer offers you free money for contributing to your retirement plan, take it. Otherwise, you'll be selling yourself short in the long run. More