THE VIRGINIAN-PILOT
Copyright (c) 1994, Landmark Communications, Inc.
DATE: Thursday, September 15, 1994 TAG: 9409150456
SECTION: LOCAL PAGE: B3 EDITION: VIRGINIA
SOURCE: ASSOCIATED PRESS
DATELINE: RICHMOND LENGTH: Medium: 67 lines
Many illegally taxed federal retirees have wasted no time filing with the state for refunds - about 92,000 have sent in forms since Aug. 1, Virginia Tax Commissioner Danny M. Payne said Wednesday.
``I think we're on target, quite frankly,'' Payne said, noting the state Department of Taxation has hired additional staff to respond to phone calls and provide assistance to pensioners.
About 186,000 federal retirees are eligible to participate in the five-year, $340 million refund program for taxes the state illegally collected from 1985 to 1988.
The state has hired about 45 people part time to help retirees seeking refunds. They include people who have worked for tax preparation companies, Payne said.
The deadline for filing overpayment forms with the state is approaching. Pensioners who fail to file with the Department of Taxation by Nov. 1 will be ineligible for refunds.
All retirees eligible for the settlement should have received forms at the start of August. Since then, the state has been running notices in major newspapers in Virginia, Maryland, the District of Columbia, Florida, North Carolina, Texas, Arizona and California to alert retirees to the filing deadline, Payne said.
Notices have also appeared in USA Today and publications aimed at retired military personnel.
Payne estimated about half of the $3.5 million the General Assembly approved for administration and notification of the settlement program will be spent on publicity.
Of the overpayment forms that had been sent in through Tuesday, about 7,200 include figures or information that must still be resolved, Payne said.
Despite an error discovered earlier this summer, Payne said he's pleased with how the system has worked. In August, the Department of Taxation sent about 80,000 military retirees incorrect pension data that had been provided by the Defense Department.
Payne later sent out a letter explaining the error, which involved a mix-up in which tax years were covered by the settlement.
``Many (military retirees) called and knew how to resolve that themselves,'' Payne said.
Some state lawmakers worried the computation error could be used to challenge the settlement that was signed into law by Gov. George Allen. But Attorney General James S. Gilmore III said there was no need for a special legislative session to address the problem.
Federal retirees will receive a second notice, containing final settlement offers, on or before Dec. 15.
Taxpayers who meet the state deadline and provide the appropriate documentation should receive their first refund installment next year. The payments are to go out next March, Payne said.
A lawsuit filed by federal retirees who say they were illegally taxed remains before the Virginia Supreme Court.
Michael Kator, an attorney based in Washington who represents the retirees, said he still has some concerns about the state's efforts.
He noted thousands of spouses of deceased retirees may still not know what they are entitled to.
KEYWORDS: PENSION REFUND by CNB