Thousands of federal retirees who opted to be paid their back taxes immediately have been waiting since May for the checks. They're going to have to wait probably two weeks longer at least.
In a drawn-out court decision that required Legislative arbitration, federal retirees who paid state income taxes in the late 1980s could get those taxes back plus 9 percent interest immediately, or over three tax years get the money back plus 12 percent. Many opted for the immediate refund plus 9 percent, and were told in January the checks would come by May.Not so.
First the attorneys for the retirees had to settle their fees, and that has taken longer than anticipated.
Jack Helgesen, lead attorney for the retirees, couldn't be reached for comment Tuesday morning. Under an original agreement with a class of retirees, Helgesen's law firm would get 15 percent of the final settlement - which amounted to $58 million. That would be an $8.7 million fee.
Third District Judge David Young, who heard the original case, which was decided in favor of the retirees, said Tuesday he's been promised off and on for two weeks that a 45-page attorney settlement agreement was coming to him for final approval.
Janice Perry, spokeswoman for the Utah State Tax Commission, says as soon as Young signs the final order, checks can be cut and mailed to retirees "within several days." Helgesen's fee must be subtracted from the checks before they are sent to retirees, so that settlement must be made before checks can be cut.
Young said after the Legislature reached final agreement with retirees that Helgesen suggested checks be sent out immediately to retirees, with 15 percent kept out for his fee. If Young ruled later that Helgesen should get less than 15 percent, then another mailing would be made to retirees for that difference. "But I wouldn't agree to two mailings, it cost $100,000 to per disbursement (mailing the checks). I want just one mailing," said Young.
While he hasn't seen the final agreement, it's Young's understanding that two attorneys assigned to review Helgesen's billings and other work have completed their work and that the original 15 percent fee stands. The state isn't concerned about the fee; that's between the retirees and Helgesen. Young said he anticipates that if the final settlement meets the approval of the outside attorneys who reviewed it, he'll sign the order and the checks can be mailed.