Couple sues Guam over foreign tax credit, casualty loss

A Guam couple is suing the Government of Guam and its tax agency, claiming they were denied a tax break for business taxes paid in the CNMI even though Bank of Guam was allegedly allowed to claim the same type of credit.

Manu and Anita Melwani filed the lawsuit last Sept. 2 in the District Court of Guam against the Government of Guam, Department of Revenue and Taxation, and DRT director Marie Lizama in her official capacity. Their lawsuit also disputes DRT’s refusal to recognize losses from business property they say was destroyed in the Philippines.

Put simply, the couple is arguing that they should not effectively be taxed twice on the same business activity—once through taxes paid in the CNMI and again through Guam income taxes without receiving the credit they contend the tax code allows.

Their attorney, Tina Azarvand, managing partner of Azarvand Tax Law, said during a Sept. 2 interview with Marianas Press at the news outlet’s office at Marianas Business Plaza that her clients are based in Guam but operate businesses in both Guam and the CNMI.

The lawsuit was filed by Berman Law Firm in conjunction with Azarvand Tax Law as co-counsel.

At the heart of the first dispute is the CNMI’s Business Gross Revenue Tax, or BGRT. The Melwanis argue that BGRT qualifies for what is known as a foreign tax credit under Guam’s tax laws.

Azarvand said the issue becomes particularly significant because, according to her and the complaint, DRT has previously allowed Bank of Guam to receive such a credit for BGRT paid to the CNMI.

“You know, they've actually issued specific guidance specific to the Bank of Guam saying, yes, Bank of Guam, it's okay to take that credit. But now they're saying, oh, well, that foreign tax credit, that's just for Bank of Guam, not the rest of you,” she said.

The complaint alleges DRT allowed Bank of Guam to claim foreign tax credits for BGRT payments to the CNMI but denied the couple a credit for taxes paid to the same jurisdiction. The couple argues that the differing treatment violates equal-protection requirements.

The second dispute is easier to understand: The Melwanis say business property they owned in the Philippines was destroyed and they lost money as a result, but DRT would not allow them to deduct that loss from their taxable income.

According to the complaint, the property was destroyed by armed state actors during the administration of then-Philippine President Rodrigo Duterte. The couple contend the destruction resulted in an uncompensated business loss that qualifies as a casualty-loss deduction.

Azarvand compared the principle to other situations in which property is destroyed through no fault of its owner.

“So it's not exclusive to just typhoons and terrorism. You know, those are just examples that I am giving. But they're saying here, we don't think it applies,” she said.

She added, “And they lost money, and they just want to take the deduction to offset their losses.”

The lawsuit goes beyond the two tax disputes. The couple also alleges problems with the way DRT handled their attempts to challenge the agency’s decisions.

The complaint alleges that an appeals officer’s decisions were not subject to meaningful independent review and that attempts to elevate the dispute were sent back to the same decision-maker.

Azarvand said she repeatedly attempted to resolve the matter without going to court.

“I've sent an in-person courier, I've showed up myself, I've raised it verbally, you know, these kinds of issues with the governor, myself in the past, and the director myself. I have sent the director several letters, she's not responded to me,” she said.

When asked whether she had exhausted available avenues before filing the lawsuit, Azarvand said, “Yeah, I've exhausted more avenues than required to file the lawsuit, in fact.”

According to the complaint, the dispute covers tax years 2019, 2020, and 2021. The couple filed an administrative refund claim with DRT on March 16, 2026.

The couple is asking the court to order refunds of taxes and penalties they contend resulted from DRT’s decisions, plus applicable interest. They are also seeking attorneys’ fees and court costs and asking the court to require an independent administrative review process for tax disputes.

Azarvand said there is no fixed dollar amount being sought because interest and legal fees continue to accrue.

“So we're just seeking a refund of the taxes that's being improperly withheld. Acknowledgement of what the law says and our fees,” she said.

The couple also alleges that their broader taxpayer rights were violated, including their right to challenge DRT’s position and receive an independent appeal.

Azarvand said those rights include “the right to pay no more than the correct amount of tax due, the right to challenge the Division of Revenue's position and be heard, as well as the right to appeal in an independent forum.”

Summonses were issued last Sept. 2 to the Government of Guam, DRT, and Lizama. The copies reviewed by Marianas Press do not contain completed proofs showing that service had been made.

The court filings reviewed by Marianas Press do not include a response from the Government of Guam, DRT, or Lizama to the allegations, and the court has not ruled on whether the couple’s claims have merit.

Azarvand has petitioned the District Court of Guam for admission pro hac vice in the case, with Michael J. Berman designated as local counsel. The complaint was signed by Berman on behalf of the couple.