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Rev and Tax may help tally cost of compacts

COFA

Rev and Tax may help tally cost of compacts

Two Guam senators want the Guam Department of Revenue and Taxation to research beyond the department if tax filers claiming tax credits for the working poor are from Palau, the Federated States of Micronesia, or the Marshall Islands.

Sens. Tony Ada and Rory Respicio co-authored Bill 113, which would give Rev and Tax that authority.

The legislation also states that any local government agency or office that conducts surveys should also ask FAS citizens about tax refunds they received under the Earned Income Tax Credit.

The information that Rev and Tax and other GovGuam agencies can collect will help the local government quantify its cost of hosting regional migrants, Ada said.

The Earned Income Tax Credit is a federal mandate that GovGuam doesn’t get reimbursed for, Ada said.

GovGuam went from paying $22 million in tax refunds in 2006 based on the Earned Income Tax Credit, to $53 million in fiscal 2013, Pacific Daily News files show.

Ada has said the number of regional immigrants who claim the tax credit on their Guam income tax return “may number in the thousands.”

Citizens from the FSM, Palau and the Marshall Islands can move to Guam under their nations’ compacts of free association with the United States by just showing up at the airport with their passports. They don’t go through a stringent visa screening process.

Ada said the legislation doesn’t intend to single out regional immigrants. He said it’s “quantifying and reporting the effects of EITC as it relates to the compact of free association.”

Respicio said the legislation “merely gives the Government of Guam an opportunity to accurately account for additional reimbursements due to Guam under the compact agreement.”

“The money used to fund the EITC payments are being paid for by local funds,” Respicio said.

Public assistance programs for U.S. citizens who are children of freely associated states citizens are not calculated in Compact impact costs, the bill states.

Many public services on Guam, including food stamps and public housing are funded by the federal government.

The bill states “many of these children of FAS citizens may be reaching the age where they may be eligible for EITC payments from the government of Guam.”

The tax credit is designed to help America’s working poor stay in the workforce.

Low-income families with several dependent minor children can get significant tax-refund checks because of the tax credit.

As an example, in a case filed in federal court, a woman from Chuuk, Surely Suda, is accused of illegally receiving $28,774 in tax refunds through the tax credits for four tax years. She was indicted for allegedly claiming the tax credits in Hawaii when she lives on Guam, court documents show.

The tax credits convert into tax refunds if a taxpayer owes little or no taxes.

On Guam, $39 million of the Earned Income Tax Credit-based refunds in 2012 went to households that paid no income tax or withholding taxes, an audit report found.

[Original post at Guam PDN: http://www.guampdn.com/story/news/2015/06/03/compact-gd-0604-evt/28402459/]

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