Guam Earned Income Tax Credit Litigation
This class action was filed in the United States District Court for the Territory of Guam on December 3, 2004. The Second Amended Complaint alleges the Government of Guam: (1) Wrongly deprived its citizens of a mechanism to claim the Earned Income Tax Credit (EITC) on tax return forms; (2) refused to process or pay claims for the EITC; and (3) failed to comply with statutory provisions requiring the Government to set up reserve accounts to ensure it would be able to pay EITCs and other tax refunds due.
On March 17, 2005, the Court denied the Government's motion to have the case dismissed. Currently pending before the Court is Plaintiffs' motion for summary judgment.
The Court has not yet ruled on whether to certify the class. There are three proposed Classes and one Subclass defined as follows:
The Claims Made Class is defined as:
All Guam income tax payers who, for any or all of tax years 1995, 1996 and 1999-2003 were: (1) eligible to claim an EITC pursuant to the Organic Act and/or the Guam EIC; (2) filed a sufficient tax return; and (3) have not received a refund or an overpayment associated with their EITC claim, nor has such overpayment been applied to their tax liability.
The Claims Made Class includes a subclass consisting of Potentially Time-Barred Claims.
The Potentially Time-Barred Subclass is defined as:
All members of the Claims Made Class who were eligible for an EITC and filed a tax return for tax years 1995, 1996 and 1999.
The specific relief sought for the Claims Made Class, as a whole, consists of either: (i) declaratory relief stating the tax returns they have already filed constitute timely and allowable claims for refund of the overpayment associated with their EITCs, or are sufficient to allow amendment of such claims; or, alternatively, (ii) injunctive relief requiring the Government to provide class members notice of their entitlement to the EITC and a procedure and schedule under which such claims should be made. The additional or alternative relief sought for the Potentially Time Barred Subclass includes declaratory relief that the Government is estopped from asserting the applicable statutory limitations period to bar Plaintiffs from filing claims now for refunds of 1995, 1996, and 1999-2003 EITC overpayments. Such claims may be filed within a reasonable time as set by the Court.
The Refund Class is defined as:
All Guam income tax payers who, for any or all of tax years 1995-2003, were: (1) eligible to receive the EITC pursuant to the Organic Act and/or the Guam EITC, (2) filed a timely and allowable administrative claim for refund of the overpayment of their EITC, and (3) have not received a refund of the overpayment nor has the overpayment been applied to offset their tax liability. For purposes of this class definition a "timely and allowable administrative claim" includes claims filed pursuant to any relief granted any portion of the "Claims Made Class," as well as claims timely filed pursuant to applicable provisions of the tax code.
The relief sought for the Refund Class is payment of the refund due based on the EITC claims, with interest, plus attorneys' fees and costs.
The Future Refund Class includes:
All Guam citizens who, for any or all of tax year 2000 and any subsequent year in which the EITC remains authorized by law: (1) were or will be eligible to receive the EITC pursuant to either the Organic Act and/or the Guam EITC, (2) have not yet filed a tax return; (3) are still able to file a timely and allowable administrative claim, pursuant to 26 U.S.C. � 6511, for refund of an overpayment associated with an EITC to which they are entitled; and (4) have not received a refund of an overpayment associated with an EITC, nor has such an overpayment been applied to offset their tax liability.
The relief sought for the Future Refund Class includes declaratory relief that the EITC applies to Guam taxpayers either through the Organic Act or pursuant to the Guam EITC and that the Government is obligated to pay, in a time and manner required by law, class members' properly made administrative claims for refund of an overpayment associated with an EITC to which they are entitled.
Frequently Asked Questions How does this case relate to the Santos v. Guam case I have heard about that also challenges the Government’s failure to pay the EITC? The plaintiff in Santos v. Guam seeks some of the same relief as sought in this action, however, the Santos action does not include all tax years represented in this action. The plaintiff in Santos v. Guam has proposed to settle the claims for all tax payers it covers for much less than the full amount of the EITC owed. Case Documents Please click on a document below to download. PDF documents can be read using the free product Adobe Reader available here. The Court’s Ruling on Defendant’s Motion to Dismiss
The Second Amended Complaint
Contact Information If you believe you are a member of the class or if you would like further information, please email us at guam-eitc@tbscases.com or call 1-800-299-0391.
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