By Troy Torres
(Tumon, Guam) The latest filed Income Tax Refund Status Report continues to show virtually no movement in the processing and payment of error- and suspended-tax returns awaiting tax refunds. The total amount that has been withheld from taxpayers for tax years 2006 - 2017 since May 2019? Between $14 million to $17 million.
The obligation as of the December 2019 report for these years is $16.95 million.
Today Gov. Lou Leon Guerrero signed a memorandum of understanding with the U.S. Department of the Treasury that will allow the local government to use money that otherwise would pay for these refunds to pay adjudicated claims to war claims survivors.
The MOU will allow the Leon Guerrero administration to identify claimants and to pay them using this money, then have the government of Guam reimbursed this cost once Congressman Michael San Nicolas's federal war claims bill becomes law.
The local war claims measure - a controversial political grab-and-smash by Speaker Tina Muna Barnes and the governor - now is a Catch 22 for the federal war claims effort. On one hand, the local money is available thanks to the withholding of error- and suspended returns into Status A returns ready for refund. On the other hand, these payments may jeopardize passage of the federal war claims effort that will end up reimbursing the General Fund through Section 30 monies already set aside for the same purpose.
Mr. San Nicolas this afternoon also took umbrage over the administration's lack of information in its public relations campaign regarding the local effort.
"We have no idea how many of the claims that have been adjudicated are actually of living claimants. While we all share in the desire to have everyone live to see this day, so many families are being left behind and that is not being said upfront; many will be heartbroken when they show up to the processing center on behalf of their deceased loved ones only to be turned away or informed they are not eligible locally," Mr. San Nicolas said. "I just can't bear the thought of that. Closure for something like this should not be discretionary, and the entire MOA let's GovGuam pick and choose who gets paid."
Meanwhile, an attorney familiar with the Paeste federal tax refunds landmark ruling told Kandit that the administration's scheme to save up cash for war claims by withholding the processing of error- and suspended tax refunds walks a blurred legal line.
"The federal tax ruling says they have to pay error-free refunds within a certain time," the attorney said on condition of anonymity. "The government of Guam is opening itself up to potential liability by not processing these error- and suspended status refunds."