DARLINGTON, Pa.—Kim Nalesnik was shocked to receive a 1099-MISC tax form from Norfolk Southern Railway. She never worked there, however, her household received $2,500 from the company in 2023.
A Norfolk Southern train derailed in neighboring East Palestine, Ohio, in February 2023, spilling 1.1 million pounds of toxic vinyl chloride. Adding to the disaster, officials started a controlled release and burn from overturned rail cars days later, creating a fireball and large plume of black smoke filled with chemicals that could be seen for miles.
Locals say the smoke dropped poisons into their land and water and that they are still feeling the effects a year later.
In a letter to Norfolk Southern, the Environmental Protection Agency (EPA) noted that the incident caused the release of vinyl chloride, butyl acrylate, ethylhexyl acrylate, and ethylene glycol monobutyl ether.
In the aftermath, Norfolk Southern stated that it made $21 million in financial assistance payments to more than 4,500 families. It put some residents up in hotels; paid for lost wages, animal care, and property damage; and made an “inconvenience payment” of roughly $1,000 per person to some people in households in affected areas.
This month, 1099 tax forms began arriving in mailboxes, listing payments the company made to victims as taxable income. It was another kick in the teeth to residents who say the derailment left them potentially sick, with lower property values, and anxious about the future.
Norfolk Southern didn’t respond to a request for comment for this article but does offer much public information online regarding the continuing cleanup.
The IRS requires Norfolk Southern to send a 1099 income form to anyone who received more than $600 from the company in 2023. Norfolk Southern hired Youngstown, Ohio-based HD Growth Partners, a firm of certified public accountants, to hold meetings and explain the implications of the tax forms to those who received them.
One meeting was held on Feb. 19 in the Darlington, Pennsylvania, firehouse. Just nine people attended. Ms. Nalesnik got ready and made it in time for the second half after learning about the gathering in a local Facebook group after the meeting had started.
Timing Tax Filing
At the meeting, HD Growth Partners Managing Partner Tim Petrey suggested to people who received the 1099 form from Norfolk Southern that they consider getting an extension on their taxes and wait for an answer to come on the upcoming tax relief act.He explained that, in March 2023, Rep. Bill Johnson (R-Ohio) introduced the East Palestine tax relief act that would exempt federal taxes on payments to individuals from Norfolk Southern Railway or any subsidiaries, insurers, or agents related to the company. The bill would also exempt any payments for loss, damages, or other expenses from federal, state, or local governments.
Mr. Johnson resigned from Congress on Jan. 21 to take the position of president of Youngstown State University. His legislation was attached to a larger bill, the Tax Relief for American Families and Workers Act of 2024, which passed in the House in January and awaits attention in the Senate.
“It is a bipartisan bill, so there’s support on both sides,” Mr. Petrey said during the meeting. “It’s just lumped together now with other things, which is why it’s now slowing down.”
Norfolk Southern got an extension for sending out the 1099 forms because they were hoping that the bill would pass and that they wouldn’t have to send them out at all, he said.
In Ohio, residents are exempt from state and local taxes related to the derailment.
Pennsylvania state Sen. Doug Mastriano, a Republican, has stayed in contact with the Pennsylvania train derailment victims. His office told The Epoch Times that Mr. Mastriano is aware of the potential tax burden to Pennsylvania residents due to the derailment and that he’s currently gathering support from the legislature that would exempt residents from paying taxes on financial assistance received, similar to the laws recently passed in Ohio.
“If you are going to get a refund, and you want to hurry up and get that refund, you could file now and get whatever refund you are due now, and then potentially have to amend your tax return later, or potentially wait for a letter from the IRS depending on how any of this stuff gets settled in Congress,” Mr. Petrey said. “If you can wait, waiting is the best thing to do, until we get some clarity and some final answers here.”
Some in the meeting suggested that residents ignore the 1099 form and simply not mention it on their taxes. However, Mr. Petrey explained that the IRS uses software to compare 1099s sent from companies to tax filings received from taxpayers. If the IRS notices a difference, it will send an automated matching letter and flag the tax filing for an audit.
If the legislation doesn’t pass, those who received wage loss payments or inconvenience payments will have to pay taxes for those funds, but other payments the company made, such as for hotel stays, are exempt from taxes, he said.
Lingering Frustration
Most of the 4,700 residents in East Palestine and some in Darlington accepted inconvenience payments. Darlington residents are frustrated because their area was also affected but is often forgotten in discussions of the disaster. Those discussions, such as the informal one held after the tax meeting, often center on health.While residents are quick to say it is tough to legally tie health issues directly to the massive release of chemicals, many say they have new, persistent health and land problems that started immediately or shortly after the derailment.
During the evacuation, Ms. Nalesnik had to leave the family’s pet pot-bellied pig behind. When they returned, the pig refused to go outside. She walked to the door, sniffed, and turned back into the house. She quit eating and died within a month.
“Since this happened, I now have this constant cough,” Ms. Nalesnik told The Epoch Times. “There’s drainage down the back of my throat constantly. Everybody says it’s because I smoke. No, it is not because I smoke. I’ve smoked for a long time. Yes, it’s not good for me. But why is it so much worse now?”
She brought her 1099 tax form to the meeting, which showed that Norfolk Southern paid her household $2,500, including $1,000 each in inconvenience payments for her husband and herself and $500 in lost wages. It’s all taxable income.
Ms. Nalesnik was annoyed but polite. She joked that before leaving for the meeting, her husband warned her, “Don’t go to jail.”
The couple has springs on their property where children and dogs play. After the derailment, there was foam in the nearby creek. She shared a photo of a grandchild who now has persistent rashes.
In the 25 years that Lori O’Connell has known her husband, he was sick just once with strep throat. But 18 weeks after the derailment, the Darlington man developed a rare form of male breast cancer.
“Last year, we spent the year between fighting this and at the hospital and at the oncologist in chemo. He had a double mastectomy,” Ms. O’Connell told The Epoch Times. “Our 24-year-old daughter, who was healthy, started throwing up and now she’s on medication to stop her throwing up.”
That started soon after the derailment and continues a year later, and now she is scheduled for cancer testing.
The night of the explosion, when they returned home, Ms. O’Connell told her husband to replace the furnace filter. They saved the old filter in a bag and taped it shut. An independent tester took a sample of the filter and found the filter “1,200 times more potent than a normal filter,” Ms. O’Connell said. It was filled with chemicals she couldn’t pronounce.
“The EPA came out and tested our soil and our water, and of course, everything was below their limits. But we have carbon disulfides in our water, which are components of a rubber factory. We don’t have a rubber factory around us; we live on what was an old farm,” Ms. O’Connell said, noting that the EPA could not explain that and advised them to drink bottled water. They do, but they still shower in the tap water.
The O’Connells pay for that bottled water and weren’t offered inconvenience payments because they are outside the radius to get the offer. She attended the meeting so she could communicate the tax situation to others.
An air monitor in her home still measures volatile organic compounds (VOC), and when it rains, snows, is foggy, is hot, or the wind blows, the VOCs go “sky high,” she said.
Because it’s an old farmhouse, they used to have mice, but not since the explosion. And they don’t see squirrels and birds as often on the property anymore.
“When you live someplace for as long as we have, you notice when things change,” Ms. O’Connell said.
Health Concerns
Julie Kent, 34, and her husband Jonathan Kent, 35, have a Darlington address and live very close to the Ohio–Pennsylvania border, roughly a mile from the derailment site.They bought a 15-acre farm in 2018 with plans to, in time, start a therapeutic horse riding center. Things got tight financially when COVID-19 hit and work slowed, but they work hard; she is a bartender, and he’s an arborist. She was at work the night of the derailment. He was at home and sent her photos of the billowing smoke and glow from the flames.
“He was exposed to whatever happened then. That whole weekend. We had cops knocking on our doors telling us different things—that we didn’t need to be evacuated,” Ms. Kent told The Epoch Times.
But a few days later, they were evacuated and managed to find transportation and boarding for their nine horses, four dogs, and three cats in two hours.
Norfolk Southern gave them roughly $8,000 to pay for moving the horses and other expenses. She said they haven’t received a 1099 form yet.
“I'll be damned if I’m going to pay taxes on money that was given to me for being forced out of my home,” Ms. Kent said.
After the derailment, the field was covered with what looked like metal shavings.
“I bagged some. I mean, I’ve had the EPA here traipsing through my field, picking up soil samples, like we’ve been through the wringer with all of it,” she said. “We bought this property with a lot of plans, and it just feels like it’s all been kind of taken from us because it’s like we live in a toxic wasteland.”
Less than two months after the derailment, Mr. Kent was getting ready to go to work and fell to the ground in a violent seizure for the first time in his life. This year, he has had four seizures. In addition to new medical bills, he couldn’t drive, nor could he operate heavy machinery at work.
Ms. Kent has had persistent rashes. They’re both worried about their future health and the health of the land. And their dream of starting a therapeutic riding center seems very far away.
“People are like, well, you could just move ... but how do I get out of a mortgage that I just started?” she said.
They’ve invested their money into developing the land for the horses and cannot foresee finding a similar property that they can afford. She would like to be bought out of her home and still have money to buy a safe place to live with her horses.
Ms. Kent wasn’t impressed with President Joe Biden’s recent visit to East Palestine, a year after the disaster, saying all it did was snarl traffic in the area. She feels that the administration has forgotten the region.
“You’re talking about a demographic that’s more conservative, that doesn’t have a whole lot. So basically, it doesn’t matter because it’s not for the agenda that a lot of the people in government are pushing for,” she said.
“I can tell you, the only people that have cared are on the Republican side because Sen. Mastriano reached out and met with us on multiple occasions. I mean, Trump wasn’t even president and came out to see us before anybody else. I’m not saying I’m a Trumper.”
Congressional Run
Dr. Rick Tsai lives in East Palestine and has had his chiropractic business in Darlington for decades. An avid fisherman, he hoped to retire in a few years and get better acquainted with his fishing reel, but because of the derailment, he’s running for Congress in Ohio District 6, to replace Rep. Bill Johnson (R-Ohio).Some of his favorite fishing creeks still show visible signs of contamination, he said, and he’s disgusted with the government’s response at the local, state, and federal levels.
“When the press leaves, when everybody leaves, not a damn thing happens. So I thought maybe if I can get into office, that I can do something. I won’t shut up about it. I'll fight for the whole district,” Dr. Tsai, a Republican, told The Epoch Times at his office.
“The out that the companies have is that causation is really hard to prove.
“Chemical exposure, things like eating bad food or smoking cigarettes—it is very hard to hold people accountable when it’s years down the line ... even the experts can’t prove it, but when you look at inhalation of vinyl chloride, one of the studies shows that there’s a significant increase in breast cancer.”
And he said in addition to Mr. O’Connell’s case, he knows of a woman who had never been sick but just had a double mastectomy.
In the past year, his patients have increasingly reported seizures, migraines, skin problems, and rashes.
“People that live in town, they’re still getting sick,” Mr. Tsai said. “Especially when it rains or there’s a fog. When there’s a heavy fog, it smells like an open can of paint in town. When you get out of your car, you’re like, what is that smell?”
Everyone in the 44413 ZIP code could receive the $1,000 inconvenience payments, Mr. Tsai said, and he and his wife each took the payment.
Common sense tells you that the tax is not right, he said.
He faces two other Republicans in the March 19 special primary election, Ohio state Sen. Michael Rulli and Ohio state Rep. Reggie Stoltzfus.
The winner of the primary will come up against the winner of the Democratic primary—between Rylan Finzer of Bedford Heights and Michael Kripchak of Youngstown—in the general special election on June 11. The winner will complete the term, which will end in January 2025.
“When President Biden came in, his big thing was, ‘We’re giving grants to study the long-term health effects of what’s happening here,’” Mr. Tsai said.
“If you do not get rid of the poison, move the people away from the poison. Do not treat us like lab rats and study us. What good does that do us? ‘Oh, yeah, look, you’ve got cancer,’ 10 years later. ‘There’s a cancer cluster here.’”
Many people just want to be relocated, Mr. Tsai said.
