
                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: SATURDAY, March 7, 1992                   TAG: 9203070156
SECTION: BUSINESS                    PAGE: A-8   EDITION: METRO 
SOURCE: GEORGE KEGLEY BUSINESS EDITOR
DATELINE:                                 LENGTH: Medium

SOME WORKERS RESIST WITHHOLDING CHANGE

Roanoke Valley companies said Friday as many as 10 percent of their employees are rejecting the federal government's attempt to fatten their paychecks by cutting income tax withholding, part of President Bush's plan to pump an extra $2 billion a year into the economy.

Starting this week, employers withheld about $3 less a week in income taxes of single workers and $6 less for married workers.

But companies said some workers have filled out revised W-4 forms asking that their withholding be kept at the same level.

At least 10 percent of the local employees at Allstate Insurance, Medeco Security Locks and Times-World Corp. have completed the forms, voting against withholding less.

Chris Christensen, human resources manager at Medeco in Salem, said he rejected the withholding cut because he faces a heavy tax bill resulting from his move last year from New York City. "I'll owe the feds a lot of money, and I'm trying to get even."

Christensen said his company told employees, "This is not a change in the tax rate but in the withholding rate." Completing the W-4s will create a whole new wave of paperwork, he said, "but I suspect we'll get a lot more."

Calls and inquiries came into the payroll departments of Appalachian Power Co., Norfolk Southern Corp. and ITT Corp., but the number of employees who've actually requested W-4s is small, those companies' spokesmen said.

Dominion Bank and Apco said they plan to give employees information about their choice of taking the withholding reduction or leaving the amount unchanged. "Most employees don't know about it," said Brenda McDaniel, Dominion vice president.

When Allstate's 700-plus employees saw a notice of the change with their paychecks, about 75 decided to refuse the withholding cut. "And many more have gotten the forms, so we anticipate more," said spokesman Chuck Lockard.

Royce Stanford, manager of payroll accounting for Norfolk Southern, said the rail system advised employees to wait until they see their first check with the withholding reduction before acting.

Some workers are using the Internal Revenue Service as a way to force themselves to save, at least from one tax year to the next, even though they make no interest on that money.

For others, the greater withholding is a hedge against the chance they would wind up owing the IRS at tax time.

For the past several years, about 80 percent of all taxpayers have received refunds. This year the refunds are averaging $1,048. In most cases, authorities say, workers deliberately allow themselves to be overwithheld.

"Most workers know it doesn't make economic sense to let the government use their money interest-free," said tax preparer Jackson Hewitt of Jackson Hewitt Tax Service in Virginia Beach. "But they know the refund is the only lump sum they have each year for vacation or making the down payment on a car."

The Associated Press contributed to this story.

by CNB