A-26129, JUNE 29, 1929, 8 COMP. GEN. 668

A-26129: Jun 29, 1929

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PENDING DETERMINATION OF THE QUESTION WHETHER OR NOT THE CLAIMANT IS IN FACT INDEBTED TO THE UNITED STATES FOR UNPAID TAXES. HAVE REQUESTED RECONSIDERATION OF DECISION OF MARCH 28. THE COURT IN THAT CASE HELD THAT THE WITHHOLDING OF THE MONIES BY THE COMPTROLLER GENERAL WAS WITHIN THE STATUTE 31 U.S.C.A. 227. THE JUDGMENTS AGAINST THE UNITED STATES MENTIONED IN SECTION 227 ARE NOW. IF SECTION 227 IS TO BE HELD AS STILL APPLYING TO CLAIMS PRESENTED TO THE SECRETARY ONLY. IT IS INCAPABLE OF ANY PRACTICAL APPLICATION. IT IS RATHER TO BE CONSTRUED AS A PART OF THE MASS OF LEGISLATION IN WHICH THE GENERAL ACCOUNTING OFFICE HAS TAKEN THE PLACE OF THE AUDITING ACTIVITIES FORMERLY IN THE TREASURY DEPARTMENT.

A-26129, JUNE 29, 1929, 8 COMP. GEN. 668

CLAIMS - DELAYED SETTLEMENT - INTEREST MERE DELAY IN THE SETTLEMENT OF CLAIMS PRESENTED TO THE GENERAL ACCOUNTING OFFICE FOR ADJUSTMENT, PENDING DETERMINATION OF THE QUESTION WHETHER OR NOT THE CLAIMANT IS IN FACT INDEBTED TO THE UNITED STATES FOR UNPAID TAXES, DOES NOT CONSTITUTE A WITHHOLDING OR A SET-OFF OF THE AMOUNT CLAIMED AS CONTEMPLATED BY THE ACT OF MARCH 3, 1875, 18 STAT. 481, SO AS TO REQUIRE THE PAYMENT OF INTEREST ON SAID CLAIMS.

DECISION BY COMPTROLLER GENERAL MCCARL, JUNE 29, 1929:

WILSON AND CO., A NEW JERSEY CORPORATION; WILSON AND CO. (INC.), OF KANSAS, A DELAWARE CORPORATION; WILSON AND CO. (INC.), A DELAWARE CORPORATION; WILSON AND CO. (INC.), OF OKLAHOMA, AND OKLAHOMA CORPORATION; AND WILSON AND CO. (INC.), OF LOUISIANA, A LOUISIANA CORPORATION, THROUGH JAMES D. COONEY, ATTORNEY, HAVE REQUESTED RECONSIDERATION OF DECISION OF MARCH 28, 1929, SUSTAINING DISALLOWANCE OF THEIR CLAIM FOR INTEREST IN THE SUM OF $8,877.34, ON CLAIMS AGGREGATING $227,955.10.

THE CLAIMANTS SUBMIT IN SUPPORT OF THEIR REQUEST THE FOLLOWING STATEMENT:

SINCE THE DECISION REFERRED TO IN YOUR MOST RECENT COMMUNICATION HAS BEEN FILED, THE UNITED STATES COURTS, IN THE CASE OF UNITED STATES OF AMERICA, PLAINTIFF, VS. LA GRANGE GROCERY CO; DEFENDANT, NO. 932 AT LAW, DISTRICT COURT FOR THE NORTHERN DISTRICT OF GEORGIA, HAS PASSED ON THIS PRECISE QUESTION, AND THE COURT IN THAT CASE HELD THAT THE WITHHOLDING OF THE MONIES BY THE COMPTROLLER GENERAL WAS WITHIN THE STATUTE 31 U.S.C.A. 227, AND SAID: "THE SECRETARY, DEPRIVED OF HIS COMPTROLLER AND AUDITORS, HAS NO MEANS OF KNOWING OF OR MAKING OFFSETS. THE JUDGMENTS AGAINST THE UNITED STATES MENTIONED IN SECTION 227 ARE NOW, BY SECTION 228, EXPRESSLY TO BE PAID ONLY THROUGH THE GENERAL ACCOUNTING OFFICE. IF SECTION 227 IS TO BE HELD AS STILL APPLYING TO CLAIMS PRESENTED TO THE SECRETARY ONLY, IT IS INCAPABLE OF ANY PRACTICAL APPLICATION. IT IS RATHER TO BE CONSTRUED AS A PART OF THE MASS OF LEGISLATION IN WHICH THE GENERAL ACCOUNTING OFFICE HAS TAKEN THE PLACE OF THE AUDITING ACTIVITIES FORMERLY IN THE TREASURY DEPARTMENT. SEE SECTION 44. THE INTEREST LIABILITY ATTACHES TO OFFSETS MADE (BY) THE GENERAL ACCOUNTING OFFICE JUST AS IT DID FORMERLY TO THOSE MADE IN THE TREASURY DEPARTMENT.'

THE DECISION OF THE COURT IN THE LA GRANGE GROCERY CO. CASE IS NOT CONTROLLING IN THE CASE HERE PRESENTED FOR THE REASON THAT, AS EXPLAINED IN DECISION OF MARCH 28, 1929, THERE WAS NO WITHHOLDING OR SET-OFF UNDER THE ACT OF MARCH 3, 1875, 18 STAT. 481. THE PROCEDURE FOLLOWED WAS MERELY THAT ACTION ON CERTAIN CLAIMS PRESENTED TO THIS OFFICE FOR SETTLEMENT WAS DELAYED PENDING FINAL DETERMINATION BY THE BUREAU OF INTERNAL REVENUE OF A QUESTION AS TO THE CLAIMANT'S LIABILITY IN FACT FOR UNPAID TAXES. AT THE TIME ACTION ON THE CLAIMS WAS DEFERRED IT WAS NOT CERTAIN WHETHER CLAIMANT WAS IN FACT INDEBTED TO THE UNITED STATES. BEFORE THE QUESTION COULD BE FINALLY DETERMINED ONE WAY OR THE OTHER CLAIMS AGGREGATING $227,955.10 HAD BEEN FILED. NONE OF SAID CLAIMS HAD BEEN "DULY ALLOWED BY LEGAL AUTHORITY" AT THE TIME THEY WERE PRESENTED HERE FOR SETTLEMENT. THE ACTION NECESSARY TO DETERMINE WHETHER THEY WERE ALLOWABLE OR NOT WAS NOT TAKEN UNTIL AFTER IT WAS REPORTED THAT CLAIMANT WAS NOT INDEBTED TO THE UNITED STATES. THE AMOUNTS CLAIMED WERE NEVER OFF-SET AGAINST THE GOVERNMENT'S SUPPOSED CLAIM AGAINST WILSON AND CO.

THEREFORE IT IS NOT NECESSARY TO DECIDE AT THIS TIME WHETHER THE LA GRANGE GROCERY CO. CASE, SUPRA, REQUIRES THIS OFFICE TO PAY INTEREST ON SUMS FOUND DUE IN "DULY ALLOWED" CLAIMS WHEN ACTUALLY SET OFF AGAINST A DEBT. IN THE LA GRANGE GROCERY CO. CASE THE SET-OFF HAD BEEN MADE. THE PRESENT CASE NO SUCH ACTION WAS TAKEN. ACCORDINGLY, PAYMENT OF INTEREST IS NOT AUTHORIZED.