B-142060, MAY 24, 1965
Highlights
HUME AND ENGELMAN: REFERENCE IS MADE TO YOUR LETTER OF APRIL 28. THERE IS A REPORTED BALANCE OF $17. THE SURETY AND AN ASSIGNEE BANK TO PAYMENT OF THE CONTRACT BALANCE WERE CONSIDERED IN OUR LETTER TO YOU OF JUNE 25. THESE CONDITIONS HAVE BEEN MET BY LETTERS DATED APRIL 26 AND APRIL 30. THE INTERNAL REVENUE SERVICE HAS REPORTED THAT THE CONTRACTOR IS INDEBTED TO THE UNITED STATES FOR UNPAID WITHHOLDING AND FICA TAXES FOR THE THIRD QUARTER OF 1961 AND THE FIRST AND SECOND QUARTERS OF 1962. SINCE THE UNITED STATES IS NO LONGER A MERE STAKEHOLDER IN THE MATTER. WE ARE REQUIRED TO MAKE SETOFF OF SUCH TAX LIABILITY AGAINST THE BALANCE OF $17. WE HAVE ISSUED INSTRUCTIONS TO OUR CLAIMS DIVISION THAT THE CLAIM FOR$17.
B-142060, MAY 24, 1965
TO HART, HUME AND ENGELMAN:
REFERENCE IS MADE TO YOUR LETTER OF APRIL 28, 1965, CONCERNING THE CLAIM OF YOUR CLIENT, THE HANOVER INSURANCE COMPANY AS SUCCESSOR TO THE MASSACHUSETTS BONDING AND INSURANCE COMPANY, SURETY ON THE PAYMENT AND PERFORMANCE BONDS FURNISHED WITH NAVY CONTRACT NO. NBY-21183, ENTERED INTO WITH OVE GUSTAVSSON CONTRACTING COMPANY, INCORPORATED. THERE IS A REPORTED BALANCE OF $17,516 DUE FROM THE GOVERNMENT UNDER THAT CONTRACT AND THE RESPECTIVE RIGHTS OF THE CONTRACTOR, THE SURETY AND AN ASSIGNEE BANK TO PAYMENT OF THE CONTRACT BALANCE WERE CONSIDERED IN OUR LETTER TO YOU OF JUNE 25, 1964.
WE AGREED TO AUTHORIZE PAYMENT TO THE CONTRACTOR BY CHECK MAILED IN CARE OF THE SURETY, IF THE CONTRACTOR CONSENTED TO SUCH ARRANGEMENT AND THE ASSIGNEE BANK RELEASED OR CANCELED ITS CLAIM. THESE CONDITIONS HAVE BEEN MET BY LETTERS DATED APRIL 26 AND APRIL 30, 1965, FROM THE MARINE MIDLAND TRUST COMPANY OF NEW YORK AND OVE GUSTAVSSON CONTRACTING COMPANY, INCORPORATED, RESPECTIVELY. HOWEVER, THE INTERNAL REVENUE SERVICE HAS REPORTED THAT THE CONTRACTOR IS INDEBTED TO THE UNITED STATES FOR UNPAID WITHHOLDING AND FICA TAXES FOR THE THIRD QUARTER OF 1961 AND THE FIRST AND SECOND QUARTERS OF 1962, IN THE AMOUNT OF $7,891.56, PLUS ACCRUED INTEREST COMPUTED TO MAY 11, 1965, FOR $583.98, MAKING A TOTAL LIABILITY OF $8,475.54 AS OF THAT DATE.
SINCE THE UNITED STATES IS NO LONGER A MERE STAKEHOLDER IN THE MATTER, BUT HAS A CLAIM OF ITS OWN TO ASSERT, WE ARE REQUIRED TO MAKE SETOFF OF SUCH TAX LIABILITY AGAINST THE BALANCE OF $17,516 DUE UNDER THE CONTRACT. SEE UNITED STATES V. MUNSEY TRUST COMPANY, 332 U.S. 234. ACCORDINGLY, WE HAVE ISSUED INSTRUCTIONS TO OUR CLAIMS DIVISION THAT THE CLAIM FOR$17,516 BE CERTIFIED FOR PAYMENT IN THE NET AMOUNT OF $9,040.46 AND THAT THE DIFFERENCE OF $8,475.54 BE SCHEDULED FOR DEPOSIT INTO THE TREASURY AS AN INTERNAL REVENUE COLLECTION. AS REQUESTED THE CHECK WILL BE ISSUED TO THE ORDER OF THE CONTRACTOR AND MAILED TO HIM IN CARE OF YOUR FIRM.