ROANOKE TIMES 

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

DATE: MONDAY, June 19, 1995                   TAG: 9506220005
SECTION: BUSINESS                    PAGE: 8   EDITION: METRO  
SOURCE: MAG POFF
DATELINE:                                 LENGTH: Medium

EARNED-INCOME CREDITS MAY CAUSE DELAYED TAX REFUNDS

Q: I am having trouble getting a tax refund. I claimed an earned-income credit on my tax form, which the government said would cause a delay, but I still expected the money sooner. I called the office of Rep. Rick Boucher, D-Abingdon, who couldn't help me. Then I called the IRS problem resolutions officer who, I understand, is required by law to come to my home, but he didn't come.

A: The Internal Revenue Service will not discuss an individual's tax situation with anyone - including a congressman or a newspaper - without a written power of attorney document from you authorizing that person to act on your behalf. But all earned-income tax credit claims are receiving close scrutiny from the government because of a high instance of fraud involving such claims.

A spokeswoman for the IRS in Richmond said you should be able to get a report on the status of your refund by calling (800) 829-1040. The people who deal with that number cannot push your refund along any faster, but they have access to the status of each refund. Be sure to have a copy of your form and all relevant documents when you place the call.

The spokeswoman said there is no law requiring a problem resolutions officer to come to your home. In fact, officers in that section deal with the people they help primarily by telephone.

Q: Now that investors have only three business days to get their payments or securities to the broker when they buy or sell, are the brokers required to make payment to the seller within three business days? If not, why not? Why don't the rules apply equally to all?

A: Fair is fair. Brokers now have only three days to make payment to a customer who sells securities, although mail could again be a problem for customers who don't have money market accounts. Brokers have prepared to process payments more quickly now that they have only three business days to settle a trade.

Q: My late husband, who died March 29, 1992, had bought two Series EE Savings Bonds for $5,000 each May 20, 1986. They are both in his name or my name, but both have his Social Security number on them. I understand they mature May 20, 1996. Both were bought at a local bank.

Interest will be due when I cash them. What I'd like to know is how I go about cashing them. Also, if I don't cash them, will they continue to earn interest after the 10-year period?

A: U.S. Savings Bonds mature at different dates, depending on the market rate of interest and, in the case of old bonds, on the guaranteed minimum rate.

Larry Harding, Roanoke area coordinator for U.S. Savings Bonds, said those purchased in 1986 had a guaranteed minimum rate of 7.5 percent. They have been earning at that level all these years of lower rates, so they will mature in 10 years. That is, they mature by doubling from the amount of the investment to the face amount of the bond. In your case, that will be from $5,000 to $10,000 by next May.

You do not have to cash in the bonds. Those purchased in that period will earn interest for 30 years, although, at maturity, the interest rate will drop to market levels.

As co-owner of the bonds, you can cash them in at any bank at any time.

If you want to keep them, however, Harding suggested that you transfer them to your own name. If you wish, you can transfer them to your name with another co-owner. This transfer is a nontaxable event, so you don't have to worry about paying taxes on the accumulated interest.

Q: If my name is on all my grandfather's accounts as co-owner, do I have to file probate when he dies? He does have a will, but it seems costly and time-consuming when everything is left to me and I'm the executor. He has no property, just bank accounts.

A: Carr L. Kinder Jr. of the Roanoke law firm of Bird, Kinder and Huffman said there is no code section in Virginia that requires probate of a will. The only code section covers concealment of a will for illegal purposes, such as cheating a beneficiary out of an inheritance. Kinder said husbands and wives with uncomplicated estates who leave everything to each other commonly do not probate a will even though it offers certain protections to follow the procedure.

Kinder has no opinion in your case because he does not have all the facts. But if the situation is as you present it - a simple estate with no real estate involved - you might not probate the will if you are the only heir and already have legal control of the only assets. 


 by CNB