THE VIRGINIAN-PILOT
Copyright (c) 1994, Landmark Communications, Inc.
DATE: Friday, August 12, 1994 TAG: 9408120635
SECTION: LOCAL PAGE: B5 EDITION: FINAL
SOURCE: ASSOCIATED PRESS
DATELINE: RICHMOND LENGTH: Short : 34 lines
House Majority Leader C. Richard Cranwell said Thursday the General Assembly may have to reconvene to fix a problem in the state's settlement with illegally taxed federal retirees.
Cranwell, D-Roanoke County, criticized the state Department of Taxation for trying to correct the problem by taking actions not authorized in legislation spelling out terms of the $340 million settlement with 186,000 federal pensioners.
By going beyond its statutory authority, Cranwell said, the tax department opened the door for a possible legal challenge of the settlement. He said if the attorney general's office could not assure him the state has a 90 percent chance of winning such a lawsuit, lawmakers should return to Richmond and rewrite the legislation.
The problem stems from records provided by the Department of Defense on about 80,000 military retirees' pensions for the disputed tax period of 1985-1988. The pension amounts reported for each year except 1985 are incorrect.
KEYWORDS: GENERAL ASSEMBLY VIRGINIA STATE DEPARTMENT OF TAXATION
FEDERAL RETIREES PENSION
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