By Gina Tabonares
Variety News Staff

AS PART of the settlement agreement approved by the federal court, the $10 million for payment of 1997 and 1998 earned income tax credits, or EITC, will be made available this week for more than 3,000 taxpayers who timely filed their claims.
Mike Phillips, lead counsel for the EITC class, disclosed this yesterday, saying that the release of checks and the recently approved forms for the “offset” issue are to take place in a few days as part of the scheduling order issued by the court.
He said the “early” payment notice was approved by the court after all parties expressed their support for the additional form.
While the EITC class is believed to have more than 10,000 taxpayers, the modified settlement agreement has redacted provisions concerning non-filers, showing only that more than 3,000 will benefit from the $10 million set aside for EITC payments.
Phillips said the $10 million has been made available from the funds set aside by the Department of Revenue and Taxation.
This as Department of Administration director Lourdes Perez reported to the District Court of Guam that the total amount paid from the income tax refund reserve fund or income tax refund efficient payment trust fund in February 2007 was more than $4.3 million, while more than $3.6 million was paid in tax refunds in January 2007.
Perez said the total amount reserved for EITC payments under the settlement agreement in February was $649,592.32 or 15 percent of $4,330,615.40.
According to Phillips, since the partial settlement agreement was approved by the court on Jan. 9, GovGuam has been reserving 15 percent of tax monies for EITC payments.
When the court approved the partial settlement agreement, it required GovGuam agencies that are among the defendants in the three EITC class actions to submit a monthly status report.
There are three separate class actions filed in the federal court concerning EITC payments. The Julie Babauta Santos et al vs. Felix Camacho filed on Feb. 14, 2004, the Charmaine R. Torres vs. Government of Guam filed on Aug. 9, 2004, and the Mary Grace Simpao vs. Government of Guam filed in December 2004.
Among the three class suits, the Santos vs. Camacho has moved forward with the $90 million settlement which the governor signed on June 20, 2005.
Based on the settlement agreement, the government will pay the EITC class not more than $15 million for their claims for tax years 1995, 1996, 1999 and 2000. The amount will be divided proportionally among each claimant found eligible for the EITC by the Guam Department of Revenue and Taxation based on the value of their claim, up to 100 percent.
The government will pay the EITC class not more than $15 million for their claims for tax year 1998 which will be divided proportionally among each claimant found eligible for the EITC by DRT based on the value of his or her claim, up to 100 percent.
The same amount will be divided equally among each claimant found eligible for each tax year of 2001, 2002, 2003 and 2004.
The $90 million settlement was not approved by former Attorney General Douglas Moylan, who challenged his disqualification from the EITC class actions in the higher court.
On May 26, 2006, a new settlement agreement was executed by the parties wherein the governor will immediately pay $10 million a 1997 and 1998 claims.