GUAM GOVERNMENT OWES MILLIONS IN TAX CREDIT REFUNDS

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HAGATNA, Guam (Pacific Daily News, March 20) – By the first few weeks of April, Guam's working poor who filed for a tax credit in 1997 and 1998 should begin to receive refunds or notices from the government's tax department.

Art Ilagan, director of the Department of Revenue and Taxation, said as part of a US$90 million court settlement to make up for the government's failure to pay the Earned Income Tax Credit (EITC), the government is obligated to have completed the processing of the EITC accounts through 1998 by April 2. Ilagan said Rev and Tax should be ready to mail out the checks and notice that week.

Gov. Felix Camacho has agreed to pay the island's working poor because the government during the past decade has prevented them from claiming the EITC on their tax returns -- costing them as much as US$200 million, according to estimates by some attorneys involved in the case.

As part of the settlement the government had agreed to immediately pay out US$10 million, which will primarily go toward recipients from 1998, who already had filed for the tax credit at the time of the settlement.

Ilagan said the government will first issue checks to year 1997 recipients to cover the US$295,000 left outstanding from that year, then it will pay about 67 percent to each recipient from 1998.

Attorney Mike Philips, who represented EITC recipients in the class action lawsuit, said it will cost more than US$15 million to cover 1998 alone.

As a result each eligible recipient from that year will receive what amounts to 10-15ths of what they should receive, minus any outstanding obligations they have to the government.

"If they owe what would amount to partial parts of their EITC refund, they would get a check in the mail with the deduction and if they do cash it, they are choosing to opt in to the agreement to cover their obligations if they have any," Ilagan said. "If their whole refund would end up going to their liability then they will get a letter asking for their signature that they are agreeing to opt in to the agreement to use the refund to offset the balance of their liability."

Ilagan said the government can afford to make the US$10 million payment because Revenue and Tax has been withholding about 15 percent of their monthly tax refund payments as part of the court agreement to pay EITC.

Taxpayers are owed more than US$200 million in refunds, according to Pacific Daily News files.

Phillips added that it is important for all others who were eligible from 1999 onward to file their claim at the Department of Revenue and Taxation.

Pacific Daily News: www.guampdn.com

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