European Stars and Stripes (Newspaper) - October 08, 1989, Darmstadt, Hesse                                Page 18 the stars and stripes business news hard to keep Good $ Down Banks find the last two weeks Haven t been easy ones forthe Dollar. First there was a massive round of Dollar sell ing by Central Bankers during the last week of september which served to depress the . Currency in value by some eight pfennig. And As if that was t enough the West German Bundesbank on thursday voted to raise interest rates by a full percentage Point a move designed to rein in inflation on the " German Domestic scene and underpin the Mark s Worth internationally. Normally interest rate increases in West Ger Many Lake a bite out of by Randy Mcclain the Greenback s hide by attracting investors to the Mark and away from the Dollar. This time though the Buck withstood the Challenge. After slipping As Low As 1.8615 Marks on the Frankfurt West Germany foreign Exchange Market thursday the Buck bounced Back. By midday Friday the Dollar had reached it High Point for the week trading in the neighbor Hood of 1.90 Marks. The release of a relatively weak . Unemployment and jobs growth re port later in the Day knocked the Buck Down to 1.89 Marks in late european trading but there was Strong demand for dollars at that Lowe level traders reported. In West Germany the . Military rate for the weekend was set at 1.88 Marks based on amid afternoon Price fixing in Frankfurt. The Dollar was also up against the japanese yen and the British Pound for the week. On monday one Pound was Selling for $ 1.6135, but by Friday afternoon it was Down to $1.6045. Against the japanese currency the Dollar started the week at about 139 yen but the Buck was fetching 142.5 yen by late Friday afternoon. The Dollar s stubbornness has Many foreign Exchange traders speculating that the . Cur Rency remains undervalued at current  expect the Buck to make another run to Ward two Marks Over the next few months. There s a Strong possibility hat the Dollar will move into the nigh 1.90s by year end and possibly Over two Marks unless the West Ger mans raise interest rates again said Ian Amstad an economist with Chase investment Bank in London. The underlying demand for dollars is still  on the intervention front Amstad and other traders said last week that they Haven t tired of doing Battle with the world s Central Bankers de spite the estimate that those Banks have pumped Between $8 billion and $20 billion per week into currency markets to keep a lid on the Dollar. Perhaps the g-7 has used up All its ammunition against the Dollar Amstad said referring to the West s seven biggest economic Powers including Japan the United states and West Germany. At economic meetings in Washington Las month the g-7 came out strongly for a lower Dol Lar saying that would help Correct world Trade imbalances. But some currency dealers Don t believe a lower Dollar is necessary to bring Trade into better balance. Amstad for instance maintains that . Exports arc very competitive even with the Dollar in the 1.90-Io-2 Mark Range. The West German and japanese economics arc booming and there s plenty of demand in those two countries As Well As other european nations for american manufactured goods the Chase economist said. The Bottom line is that Amstad expects recent monthly improvements in the . Trade deficit to continue. The strength of the Dollar is really not All that surprising he said. ". Fundamentals Are  he said jaw boning by the g-7 aimed at driving the Dollar lower and intervention by the Central Banks will Only work fora Short while. If he s right american service members May be Able to look for Ward to having slightly fatter wallets this Winter. A Ohhi a whih Harfes will review cases of Laid off class i workers by Randy Mcclain financial writer the Fate of six former class i employees who claim they were unfairly Laid off earlier this year by the army and air Force Exchange service could be decided oct. 18 at an cafes administrative hearing i Offenbach West Germany. The six employees five of whom were with the army s class i Agency and one from the air Force s stores were Laid off in late March when military liquor stores were handed Over to cafes by the department of defense. Exchange officials said at the time that there were no jobs available within cafes to which the men could have been assigned. The employees were transferred from their old agencies to the cafes payroll March 25 and Laid off two Days later in what the Exchange service termed a reduction in Force. But attorney Bob Giorc of Frankfurt West Ger Many who represents the sex army civilian workers said the Exchange service did not conduct its Layoff fairly. In a proper reduction in Force an Agency identifies positions that arc not needed and makes personnel cuts after taking seniority or other objective criteria into account Giorc said. But in this Case Fiore maintains his clients were singled out by cafes because of their High salaries and Ages. All the Laid off workers Are Middle aged held managerial positions and had been with class i at least 15years. The highest ranking of the dismissed employees is Harold d. Simpson former director of the army Sclass i stores. He earned More than $63,000 a year. Giorc said Simpson and his five colleagues should have been been offered jobs within cafes even if Thad meant bumping ices  Exchange work ers. Instead no consideration was Given to keeping the men on the payroll he said. An cafes spokesman in Munich said the cases of Fiore s five clients and that of fired air Force class i procurement officer Klaus Schul Plank of Kaiser slam Lern West Germany will be reviewed by hearing offi cer John Bowlin of Dallas. Bowlin who once was cafes s general counsel i Munich will Fly to West Germany from the Exchange service s worldwide Headquarters for the hearing late this month. The spokesman said three Days have been set aside for Bowlin to review the six men s cases. In addition to Schonlank and Simpson the employees in question Are Heinz j. Eggler onetime special assistant to Simpson William Bowen former area manager in Frankfurt for army class i stores Vin cent Chin of former army class i area manager in Mannheim West Germany and Richard Cullen for Mer assistant area manager for army class i outlets in Giessen West Germany. If Bowlin agrees that any of the six men were improperly treated he will recommend corrective action to cafes Headquarters an Exchange service spokes Man said. That could include reinstating the employees with Back pay. In a separate Issue Giorc is pursuing an age discrimination complaint on behalf of his five clients with the army s equal employment Opportunity office. Feder Al Law prohibits companies from discriminating against employees based solely on their age and Fiore claims that played a part in the termination of his clients. The attorney said his clients want either their jobs Back or a total of one year s salary each As compensation. That would amount to More than $175,000 in separation pay he said although one of he men could be limited to $8,282 under Giorc s proposal. Schonlank 65, also wants one year s salary roughly $42,000, in separation pay. Schonlank said he worked More than 30 years for air Force class i and he was Given Only four weeks Severance pay by the Exchange service when he was Laid off. He considers that Doolittle. Irs fighting to keep taxing overseas civilian allowances by Chuck Vinch Washington Bureau Washington the internal Revenue service has decided to Battle a recent court ruling that said it is improper to collect medicare and social Security taxes from various allowances paid to defense department civilians overseas. In filing an Appeal tuesday of the aug. 4 ruling the irs has ensured that taxation of those allowances will go on for at least another 18 months according to the attorney who has been fighting the Revenue service on behalf of an overseas teachers Union. Some people just have to learn the hard Way Washington attorney Richard him said of the irs decision to take the Case to a higher court. Him had argued successfully in . Claims court that the overseas allowances arc not wages As the irs maintains but compensation for reimbursable expenses that should not be taxed. He has filed refund claims totalling More than $700,000 with the Revenue service on behalf of 2,072 members of the overseas education association. I expect to be filing a whole lot More on behalf of sea members in january for the 1989 tax year he said. Although him is handling the refund claims of sea members Only some of which run As High As $ 1,700 for one tax year he said government employees who have had social Security and medicare taxes withheld from their overseas allowances can file refund claims with the irs at the end of each year. They should Sec a lawyer or tax adviser As soon As possible to do that he said. Claims can be made retroactively As far Back As two years meaning employees should still have Lime to file them for the 1987 and 1988 tax years. Him said the irs will deny the refund claims but unless employees go through the filing process they can t seek the Money later in court. The attorney expressed Confidence that the irs would be unsuccessful in its Appeal and that the tax refunds eventually would have to be paid. There is just no Law on the books that can be interpreted As saying that allowances arc wages for tax Pur poses he said. Him originally filed suit on behalf of 18 teachers in the department of defense dependents schools sys tem in Bermuda. In its recent ruling in favor of the teachers the . Claims court said the allowances were not wages but reimbursements for expenses incurred during an overseas assignment. The Justice department which will handle the a peal on behalf of the irs declined to comment on the ruling. At Issue arc four kinds of civilian overseas allow ances living quarters supplemental Post temporary lodging and Cost of living allowances. The amount withheld depends on an employee retirement system. Those covered by the civil service retirement system pay Only medicare taxes while those under the Federal employees retirement system pay both social Security and medicare taxes which arc shown on pay stubs As Pica. All Federal employees hired since Jan. 1, 1984, arc covered by the Federal employees retirement system. The Navy in 1985 was the first defense department Agency to begin Pica withholding citing changes in the social Security Laws. When Navy civilian employees began complaining the service queried the irs which issued an opinion backing up the Navy s Posi Tion. By 1988, All the military services had followed suit. Him said the defense department appears to be the Only Federal Agency that is withholding the taxes from its overseas employees allowances. Officials with the irs declined to comment while the Case is being litigated. It seems like the Navy asked the irs about taxing the allowances and they just said to go ahead and do it him said. What do you expect the irs wants More