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

DATE: THURSDAY, June 24, 1993                   TAG: 9306240334
SECTION: VIRGINIA                    PAGE: C4   EDITION: METRO 
SOURCE: Staff report
DATELINE: RICHMOND                                LENGTH: Medium

RETIREES ASKED TO DELAY FILING COMMISSIONER: PENSION CASE ISN'T RESOLVED YET

"We understand that federal retirees are anxious to close the chapter on this issue," said Commissioner W.H. Forst, "but until a final court ruling is issued in this case, we can do nothing."

The U.S. Supreme Court ruled last week that a 1989 decision overturning state taxes on federal pensions is retroactive. But the question of whether refunds are due was left to the Virginia Supreme Court, which must consider whether Virginia gave retirees an adequate opportunity to contest the taxes before paying them.

Until the 1989 ruling, Virginia and 22 other states taxed the pensions of federal workers while exempting those of state and local employees. The state has reformed its tax system to treat all pensions, including those paid by private employers, alike.

In a news release, Forst said he understands "that some retiree associations are encouraging their members to file amended returns immediately. We strongly urge federal retirees not to take such action at this time. Filing an amended return is a potentially time-consuming and costly action that is clearly premature at this stage."

Forst said if the Virginia court decides refunds are due, the tax department will act quickly to provide retirees with a mechanism for claiming them.

At stake in the case are taxes paid from 1985-88. With interest, the total due the state's 200,000 federal retirees could reach $467 million, according to some estimates filed by the high court.