Image: Shrimp boat deck hand Alex Guillotte of Irvington, Ala., talks with a BP claims adjuster
Dave Martin  /  AP
Shrimp boat deck hand Alex Guillotte of Irvington, Ala., talks with a BP claims adjuster at a claims center Bayou La Batre, Ala. Some deck hands and other day laborers who get paid in cash or don't receive W2 forms have little or no way of proving they are losing income.
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updated 7/7/2010 9:58:21 AM ET 2010-07-07T13:58:21

In the fallout from the BP oil disaster, they're almost invisible: deck hands and other day laborers who get paid in cash, don't receive W2 forms, may not file tax returns and have little or no way of proving they are losing income because of the spill.

"We run into them on a daily basis. They're stuck in limbo," Tuan Nguyen, deputy director of the Mary Queen of Vietnam Community Development Corp. in eastern New Orleans, said in a recent interview.

Nguyen said he has encountered hundreds of workers, mostly deck hands, who lack the documentation BP needs from claimants seeking a piece of the $20 billion of the oil giant's aid fund.

"It's a very cash-involved industry," said Nguyen, whose organization formed after Hurricane Katrina to help the Vietnamese community recover from Hurricane Katrina in 2005. "Some of the boat captains or boat owners, they sell fish on the side of the road or directly to families. They don't have records of that."

Stuart Smith, an attorney handling oil-spill lawsuits, said seeking aid can be intimidating, and some cash workers fear that they'll face penalties or prosecution for not paying taxes if they come forward.

"Proving that you worked in that capacity is going to be an issue for a lot of these people because they're not sophisticated businessmen," Smith said.

That fear may be why it's hard to find a laborer willing to talk about the problem. Along Bayou Hopedale, east of New Orleans, a group of men sorting crabs at a ramshackle waterside building declined to answer questions recently.

Less than a mile away, Christian Delos Reyes, who until the spill made a living dredging oysters, was helping prepare a boat for cleanup work. He had documented his income and started the BP claims process, he said. But he lamented the fate of others. "A lot of them don't pay taxes," he said.

BP requests tax returns for 2007 through 2009, but will work with individuals who want to provide other documentation, including wage loss statements, deposit slips, boat registrations, copies of current fishing licenses and other financial statements, the company said in a written response to questions about the process.

"BP will make every effort to keep claimant information confidential but will meet all of its legal obligations," the company statement said, adding it will report claims it pays to the IRS.

Ken Feinberg, appointed by the White House and BP to administer the aid fund, didn't hold out a lot of hope for people who take cash to avoid taxes. Feinberg administered a similar fund for victims of the Sept. 11, 2001, terrorist attacks.

"I must say under the 9/11 fund, which was all public money, we were not sympathetic to paying claims based on cash-only, no tax returns," Feinberg said in an interview.

"You go down that road and you're really opening up this fund to diversion to people who can't justify the claims," he said.

Still, he added, President Barack Obama wants money to get to the people who are entitled to it.

"Maybe there's some compromise we can reach," he said.

IRS spokesman Eric Smith in Washington said the agency could not comment on the issues faced by workers who lack documentation.

Meanwhile, the seafood industry has organized a charitable corporation to raise money for those who might fall through the cracks of the claims process. The group doesn't need the documentation required by BP or government agencies.

"We don't even have an application process," said Kevin Voisin, the group's head and an executive with Motivatit Seafood in Houma, La.

Using a database of seafood-related companies in the Gulf region, volunteers are contacting managers and asking which workers need help, either because they have applied for aid that hasn't arrived yet, lacked the documentation for an application or feared reprisal.

"We don't need W2s. We don't need 1040s," Voisin said. "We know the places that are shutting down. We know the communities."

As of Thursday, Horizon Relief had raised $55,000 from around 300 donors. Needs and amounts vary but generally, in an area where rents are low, a little money goes a long way.

"Five hundred dollars can make a family pretty stable for a whole month," Voisin said.

Copyright 2010 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Video: Oil reaches Lake Pontchartrain

  1. Transcript of: Oil reaches Lake Pontchartrain

    LESTER HOLT, anchor: The Coast Guard says drilling to shut down the gushing oil well in the gulf is ahead of schedule, but there's no slowdown in the movement of oil already drifting across the gulf. NBC 's Kerry Sanders has the latest from Lake Pontchartrain in New Orleans . Kerry , good morning.

    KERRY SANDERS reporting: Well, good morning, Lester . Louisiana state officials say they have now found more than 1600 tar balls here in Lake Pontchartrain , yet one more indication that oil that's escaping into the gulf is traveling far and wide. Lake Pontchartrain , 630-square-miles, the second largest saltwater lake in the United States , and now the same waters that overtopped the levees and flooded New Orleans during Hurricane Katrina are now getting hit with tiny tar balls. Those may look like autumn leaves, but that's oil, weathered and pushed here by the wind and high surf. Effectively, the flow gushing into the gulf 125 miles away is now at New Orleans ' front door.

    Ms. SUSAN BERGMARK (Lake Pontchartrain Resident): I guess I had my heart set that it wasn't going to happen here.

    SANDERS: Experts say the volume of oil flowing into the gulf made this latest arrival into Lake Pontchartrain inevitable because so little has been captured. Before the crisis, BP filed documents with the government that in an emergency they could collect a precise 491,721 barrels of oil each day. But since the disaster began, Coast Guard statistics reveal BP 's fallen far short. It's taken 79 days to collect what they initially said would only take 32 hours.

    SANDERS: This morning Louisiana wildlife officials have closed off 40 square miles of Lake Pontchartrain here to fishing. The fear, of course, is that the problem now in the front door of New Orleans is only going to get worse.

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