The parties have reached a tentative $60 million settlement in an action filed against the government of Guam on behalf of low-income workers who alleged that the local government failed to correctly credit their taxes. Persons eligible to take part in the action should contact the attorneys for the class or more information.

Federal Judge Joaquin Manibusan approved an agreement that will require the government of Guam to pay low-income workers $60 million within the next nine years -- about half the Earned Income Tax Credit the local government failed to pay them since 1998. Eligible taxpayers will receive notification letters and applications forms from the Department of Revenue and Taxation. The former government administration stopped paying the tax credit, calling it an unfunded federal mandate, and the current administration continued the policy by denying taxpayers the ability to claim it. The tax credit, which was created by the federal government in 1973, is intended as an incentive to keep the working poor on the job.

The settlement also requires the government to begin paying the tax credits in full from now on. Forms will be mailed to taxpayers at their last known address, and the Department of Revenue and Taxation is expected to pay about $20 million in tax credits during the first year and about $5 million a year during the following 8 years.

Though the stated settlement amount is $60 million, the parties recently announced that the Guam government would pay out an estimated $120-160 million in tax credits over the next six years during a recent joint press conference between Acting Governor Kaleo Moylan, Attorney General Douglas Moylan, and the plaintiffs’ attorneys.