THE VIRGINIAN-PILOT 
              Copyright (c) 1995, Landmark Communications, Inc.

DATE: Saturday, April 8, 1995                TAG: 9504060013
SECTION: FRONT                    PAGE: A10  EDITION: FINAL 
TYPE: Letter 
                                             LENGTH: Medium:   55 lines

WHAT'S FAIR FOR VIRGINIA OUGHT TO BE FAIR FOR HIM

I am one of the military retirees who was illegally taxed by Virginia. The commonwealth has agreed that the taxes were collected illegally and that retirees are due a refund. According to the records provided by the commonwealth, $2,026 was collected from me for tax years 1986, 1987 and 1988.

The commonwealth has asked that retirees settle this amount for approximately 76 cents on the dollar. This means that retirees are being asked to forfeit 24 cents on the dollar of the face amount, plus all interest on the entire amount for periods ranging from seven to 10 years. Now, after announcing that all those owed less than $2,000 would be paid the reduced amount in full the first year (this item was reported by your newspaper), it seems that things have changed. Only those owed a reduced amount of $1,148.95 or less will be paid in full the first year. Everyone else will receive 10.8 percent of the reduced amount this year, and heaven knows what percentage during the next (four) year(s).

Most of us were led to believe that the Department of Taxation was playing it straight with us. Checks were expected for amounts far greater than were received. Many people planned accordingly and were unpleasantly surprised.

I owed the commonwealth $34 from my return for 1993, plus $114.92 in underpaid taxes for 1991. With interest and penalties these amounts grew to $41.13 and $144.41, respectively. The Department of Taxation contacted me and asked when it could expect payment. I advised that I would pay when I received my settlement from the commonwealth. In no uncertain terms, I was told that the Department of Taxation could not wait for the money owed. If I did not pay up within 10 days, legal actions would be taken.

On Feb. 1, the Department of Taxation issued a ``Notice of Tax Lien and Demand for Payment'' against my salary. This was done with no court involvement at all. On Feb. 24, my employer, acting on the tax lien, withheld $185.54 from my pay.

According to my calculations, the amount offered to settle the debt owed to me, which the commonwealth has publicly acknowledged, comes to $1,539.76. This is calculated at 76 cents on the dollar amount of $2,026 and includes no interest or penalties for a period covering nine years. If the amount of $185.54 (taxes owed with interest and penalties) had been deducted from the settlement (without interest and penalties), the commonwealth would still have owed me $1,354.22. Now I have been told to forgo the $1,539.76 and accept $166.29 this year and an unspecified amount next year.

How exactly does the individual who has been shafted yet again by the commonwealth issue a ``Notice of Tax Lien and Demand for Payment'' against the commonwealth (without having to resort to the courts)?

TED A. PAINTER

Onancock, April 4, 1995 by CNB