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Taxes-101  
#101 Posted : Thursday, August 1, 2019 6:28:30 AM(UTC)
Taxes-101

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FYI... On the post above:
The State is expected to reply within 4 to 6 weeks.
That would be Aug 30 -- Sept 15.

Taxes-101
Taxes-101  
#102 Posted : Thursday, August 1, 2019 4:36:45 PM(UTC)
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FYI...
I am told by Virginia's rep that the response to the Admin Filing noted above
will be forthcoming in 4 to 6 weeks.
That will be Aug 30 -- Sept 15.
Taxes-101
Taxes-101  
#103 Posted : Friday, August 2, 2019 5:28:10 AM(UTC)
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FYI...
The Administrative "Request for Refund and Protective Claim" submitted
to the State of Virginia on July 30, 2019, is 21 pages of reasoning and
rationale. Based predominately on the "Dawson v Steager" U.S. Supreme Court
decision in Feb 2019.

Taxes-101
Taxes-101  
#104 Posted : Friday, August 2, 2019 6:10:21 AM(UTC)
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FYI...
A copy of the 21 page "Request for Refund 2016 & 2017 mailed to the
state of Virginia Tax Commissioner on July 20, 2019, was mailed to Mike Causey on
Aug 2, 2019. Mike is a Federal Employee/Retiree news guy.

Taxes-101
TheRealOrange  
#105 Posted : Friday, August 2, 2019 6:30:13 AM(UTC)
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Originally Posted by: Taxes-101 Go to Quoted Post
FYI...
The Administrative "Request for Refund and Protective Claim" submitted
to the State of Virginia on July 30, 2019, is 21 pages of reasoning and
rationale. Based predominately on the "Dawson v Steager" U.S. Supreme Court
decision in Feb 2019.

Taxes-101

I'd be curious to know how Dawson v. Steager helps in this situation. The holding in that case simply reaffirmed past decisions and existing Federal law (4 U.S. Code §111):

The United States consents to the taxation of pay or compensation for personal service as an officer or employee of the United States, a territory or possession or political subdivision thereof, the government of the District of Columbia, or an agency or instrumentality of one or more of the foregoing, by a duly constituted taxing authority having jurisdiction, if the taxation does not discriminate against the officer or employee because of the source of the pay or compensation.

The holding in Dawson is that a State violates §111 when it treats retired state employees more favorably than retired federal employees and no “significant differences between the two classes” justify the differential treatment. In the CSRS situation, the Virginia court already applied §111 to the facts and held that there is no discrimination against Federal CSRS employees based on the source of their pay or compensation, as prohibited by §111 (and that decision was upheld by the Supreme Court of Virginia). Nothing in Dawson would seem to change the previous Virginia court rulings, as it simply applied §111 in the normal course, where West Virginia "expressly affords state law enforcement retirees a tax benefit that federal retirees cannot receive." Is there a way for you to share the "Request for Refund and Protective Claim" that was submitted? I would love to see the reasoning and rationale, as I just don't see how the decision in Dawson would result in a change in the previous Virginia court rulings.

I am also curious why there was no attempt to appeal to the U.S. Supreme Court when the Supreme Court of Virginia previously refused the petition for appeal and ruled that there was no reversible error in the circuit court's judgment. It seems like starting the process over again in an attempt to likely appeal to the U.S. Supreme Court, as indicated in your post two days ago, just used a lot more time. I think your "unlikely to work" predictions are probably correct:

Round two was launched on July 30, 2019 with the Admin filing.
But it will likely need ALL FOUR steps:

1. File admin claim on over taxation. (FILED JULY 30, 2019).
2. Admin unlikely to work; file in VA Circuit Court (coming soon).
3. Circuit Court unlikely to work; Appeal to VA Supreme Court (coming soon).
4. Supreme Court VA unlikely work; Appeal U.S. Supreme Court (coming soon).

To complete All Four steps may take up to a year. Be patient.

Taxes-101

My guesses based on Dawson and the prior Virginia proceedings: 1. Admin, dismissal based on earlier court rulings; 2. Virginia Circuit Court, dismissal based on earlier court rulings; 3. Supreme Court of Virginia, refuse the petition for appeal based on earlier court rulings; and 4. U.S. Supreme Court, refuse to grant petition for a writ of certiorari. But, perhaps the "Request for Refund and Protective Claim" contains an argument based on Dawson that is not readily apparent from the language in the decision itself.
Taxes-101  
#106 Posted : Friday, August 2, 2019 9:03:03 AM(UTC)
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In the prior attempt at this issue (2015) the case was dismissed at the Circuit Court Level. Basically
the Judge's Letter of Analysis indicated "there is no wholesale Discrimination." That meaning:
Definition: “Wholesale” adjective; …broadly indiscriminate: wholesale discharge of workers.
Dawson v Steager was an issue dealing with only 2% of Federal Retirees in West Virginia.
At the 2% level, it could not be considered "Wholesale Discrimination." Thus, Dawson v Steager
Vacates (overturns) the concept that discrimination has to be wholesale. It can be very small.
This is new case law!
Also... the analysis of Virginia's discrimination has been evaluated in much deeper analysis.
It's far worse than thought in 2015.

The prior case was appealed to the VA Supreme Court. But VA Supreme Court refused to hear it.
(Virginia has a history of tax discrimination against Fed Retirees).
Attorney on the case advised that the statistics of the U.S. Supreme Court are such that
only about 2% of all cases requested to be heard, are heard... and thus it was highly unlikely to be heard
and and cost to appeal vs. chances of being heard ratio were highly unfavorable.
Attorney advised not to bother.
TheRealOrange  
#107 Posted : Friday, August 2, 2019 10:00:47 AM(UTC)
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Originally Posted by: Taxes-101 Go to Quoted Post
In the prior attempt at this issue (2015) the case was dismissed at the Circuit Court Level. Basically
the Judge's Letter of Analysis indicated "there is no wholesale Discrimination." That meaning:
Definition: “Wholesale” adjective; …broadly indiscriminate: wholesale discharge of workers.
Dawson v Steager was an issue dealing with only 2% of Federal Retirees in West Virginia.
At the 2% level, it could not be considered "Wholesale Discrimination." Thus, Dawson v Steager
Vacates (overturns) the concept that discrimination has to be wholesale. It can be very small.
This is new case law!
Also... the analysis of Virginia's discrimination has been evaluated in much deeper analysis.
It's far worse than thought in 2015.

The prior case was appealed to the VA Supreme Court. But VA Supreme Court refused to hear it.
(Virginia has a history of tax discrimination against Fed Retirees).
Attorney on the case advised that the statistics of the U.S. Supreme Court are such that
only about 2% of all cases requested to be heard, are heard... and thus it was highly unlikely to be heard
and and cost to appeal vs. chances of being heard ratio were highly unfavorable.
Attorney advised not to bother.

Thanks. A big distinguishing factor is that the West Virginia statute expressly afforded state law enforcement retirees a tax benefit that federal retirees could never receive. The Virginia statute is not similar in that regard. The Virginia Circuit Court found that the Virginia tax process and treatment of Social Security benefits did not discriminate against federal CSRS employees based on the source of their pay or compensation, as prohibited by Title 4 U.S.C. § 111. You likely have access to more information than can be found publicly, so I cannot address the issue of whether the Virginia Circuit Court relied on the fact that there was no "no wholesale discrimination." While that issue was not the primary one in Dawson, the Court addressed it because West Virginia asserted that its preference for State retirees couldn’t meaningfully interfere with the operations of the Federal government because so few people were involved. If Virginia is making that same argument, then I could see where Dawson might be helpful. However, where the West Virginia law clearly treated State and Federal retirees differently based on "the source of the pay or compensation," the Virginia courts have already ruled on that issue, and it seems that the Virginia law expressly treats State and Federal annuity recipients in the same manner. It is a bit of a circular argument to assert that being able to exempt Social Security benefits from taxable income in Virginia is discriminatory because CSRS annuitants generally do not receive Social Security benefits. I understand the argument; I'm just not sure the tax process in Virginia truly fits within the parameters of §111 (and I agree with your prediction that the Virginia courts will not rule that it does). It certainly will be interesting to see how all of this transpires.
Taxes-101  
#108 Posted : Friday, August 2, 2019 12:59:22 PM(UTC)
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The Case is not a slam dunk for sure. I am aware.

And I'm very aware that the WV case was not quite the same. And this could be an issue.
However, there are other issues as well that were not presented in the prior case (2015) that
should have been included in the complaint. And then there's the issue you mentioned
about because of the Source.

A. Currently VA exempts Social Security from it's income tax. VA has a large exemption for
"over 65 years of age" ($12,000 per person). On a joint return that's $24,000. Quiet a big deduction.
But it's means tested. VA then omits Social Security from the means test (typically 40% of total retirement), so it gives a huge (discriminatory) advantage to those who have the combined retirement system (Virginia Retirement+ Social Security). In practice in most all cases anyone with the combined system gets the $24,000 over 65 deduction... but most often NOT CSRS. Omitting Social Security, then giving the same group another $24,000 exemption brings them below the threshold where taxes are ZERO. So the entire tax scheme has a 3 part multi-discrimination built into. This is not an intended discrimination but it is still discrimination. Dawson vs Steager: Discrimination is not permitted even if not intentional. Virginia's system is structurally discriminatory.

B. Source: Is the source of retirement the CSRS fund as an entity? Or is the real source (origin) "as time earned (years or portions of years) and funded each payday while under Federal employment... same pay... it's dispensed as 14% of pay every payday over a working career. Same as Social Security at 12.4%.... every payday over a working lifetime.

C. Virginia doesn't exempt only Social Security. It also exempts "an equivalent social Security value" from Railroad retirement, dispensed by the Federal railroad retirement board (not social Security). That's exactly what I'm asking from... and Virginia is already doing it for Railroad retirement retirees.

All this and more is in the admin filing.
Taxes-101  
#109 Posted : Tuesday, August 13, 2019 7:24:04 AM(UTC)
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A second request for refund and protective order was mailed to the
Virginia Dept. of Taxation on Aug. 12, 2019.
This requested refund value will be included in the Complaint to
be later filed in the Virginia Civil Court!!!
Taxes-101  
#110 Posted : Friday, August 16, 2019 8:53:49 AM(UTC)
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Still waiting for Virginia Dept of Taxation to respond to the
"Request for Refund and Protective Orders (submitted July 30 and Aug 13th).
Should be interesting.
But I expect it to be negative.
More to come!!
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