A-44939, OCTOBER 12, 1932, 12 COMP. GEN. 397

A-44939: Oct 12, 1932

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IS AN EXPENSE INCIDENT TO THE TRANSMISSION OF GOVERNMENT FUNDS AND AS SUCH MAY BE CHARGED TO APPROPRIATIONS AVAILABLE GENERALLY FOR THE PAYMENT OF SUCH EXPENSES. A COPY OF WHICH IS ENCLOSED. ARE NOT SUBJECT TO THE TAX. THAT EXEMPTION CAN HAVE NO APPLICATION TO A PERSON WHO IN A PRIVATE CAPACITY DRAWS A CHECK OR DRAFT AS A MEDIUM FOR SERVING A CUSTOMER. FOREIGN SERVICE OFFICERS OF THE DEPARTMENT WHO ARE STATIONED ABROAD ARE CHARGED WITH THE COLLECTION OF GOVERNMENT FUNDS WHICH. DUE CREDIT BEING ALLOWED THE ACCOUNTABLE OFFICER IN HIS ACCOUNTS FOR THE AMOUNT OF SUCH REMITTANCE AND EXCHANGE CHARGES MADE BY THE BANK FROM WHICH THE BILL OF EXCHANGE WAS PURCHASED. YOUR DECISION IS REQUESTED AS TO WHETHER THE CHECK TAX IMPOSED BY THE REVENUE ACT IS PROPERLY PAYABLE FROM APPROPRIATED FUNDS.

A-44939, OCTOBER 12, 1932, 12 COMP. GEN. 397

TAXES - EXCISE - CHECKS AND DRAFTS THE INDIRECT PAYMENT OF THE CHECK AND DRAFT TAX IMPOSED BY SECTION 751 OF THE REVENUE ACT OF JUNE 6, 1932, 47 STAT. 276, ON DRAFTS DRAWN BY FOREIGN BANKS ON BANKS IN THE UNITED STATES FOR THE TRANSMISSION TO THE TREASURER OF THE UNITED STATES OF FEES COLLECTED BY FOREIGN SERVICE OFFICERS STATIONED ABROAD AT POSTS INCLUDED IN FISCAL DISTRICTS, IS AN EXPENSE INCIDENT TO THE TRANSMISSION OF GOVERNMENT FUNDS AND AS SUCH MAY BE CHARGED TO APPROPRIATIONS AVAILABLE GENERALLY FOR THE PAYMENT OF SUCH EXPENSES.

COMPTROLLER GENERAL MCCARL TO THE SECRETARY OF STATE, OCTOBER 12, 1932:

THERE HAS BEEN RECEIVED YOUR LETTER OF SEPTEMBER 27, 1932, AS FOLLOWS:

THE REVENUE ACT OF 1932, UNDER SECTION 751, IMPOSES A TAX OF TWO CENTS ON EACH CHECK, DRAFT, OR ORDER FOR THE PAYMENT OF MONEY DRAWN UPON A BANK, BANKER, OR TRUST COMPANY AND A RULING BY THE DEPUTY COMMISSIONER OF THE INTERNAL REVENUE, UNDER DATE OF AUGUST 20, 1932, A COPY OF WHICH IS ENCLOSED, STATES IN PART:

"WHILE CHECKS AND DRAFTS DRAWN BY OFFICERS OF THE UNITED STATES OR OF A STATE, COUNTY, OR MUNICIPALITY, OR OF A FOREIGN GOVERNMENT, IN THEIR OFFICIAL CAPACITIES, AGAINST PUBLIC FUNDS STANDING TO THEIR OFFICIAL CREDIT AND IN FURTHERANCE OF DUTIES IMPOSED UPON THEM BY LAW, ARE NOT SUBJECT TO THE TAX, THAT EXEMPTION CAN HAVE NO APPLICATION TO A PERSON WHO IN A PRIVATE CAPACITY DRAWS A CHECK OR DRAFT AS A MEDIUM FOR SERVING A CUSTOMER, WHO MAY BE A REPRESENTATIVE OF THE UNITED STATES.'

THE DIPLOMATIC, CONSULAR, AND FOREIGN SERVICE OFFICERS OF THE DEPARTMENT WHO ARE STATIONED ABROAD ARE CHARGED WITH THE COLLECTION OF GOVERNMENT FUNDS WHICH, AT POSTS WITHIN THE FISCAL DISTRICTS, MAY NOT BE USED BUT MUST BE REMITTED TO THE TREASURER OF THE UNITED STATES FOR DEPOSIT TO THE CREDIT OF THE PROPER FUND OR APPROPRIATION, DUE CREDIT BEING ALLOWED THE ACCOUNTABLE OFFICER IN HIS ACCOUNTS FOR THE AMOUNT OF SUCH REMITTANCE AND EXCHANGE CHARGES MADE BY THE BANK FROM WHICH THE BILL OF EXCHANGE WAS PURCHASED.

IN VIEW OF THE ABOVE, YOUR DECISION IS REQUESTED AS TO WHETHER THE CHECK TAX IMPOSED BY THE REVENUE ACT IS PROPERLY PAYABLE FROM APPROPRIATED FUNDS.

THE MATTER AS PRESENTED BY YOU DOES NOT INVOLVE, IN A STRICT SENSE, THE PAYMENT OF THE CHECK AND DRAFT TAX AS PROVIDED BY SECTION 751 OF THE REVENUE ACT OF JUNE 6, 1932, 47 STAT. 276, BUT AN EXPENSE INCIDENT TO THE TRANSMISSION OF THE FUNDS TO THE TREASURER OF THE UNITED STATES. UNDER THE HOLDING OF THE DEPUTY COMMISSIONER OF THE INTERNAL REVENUE, AS QUOTED IN YOUR LETTER, THE TAX IS NOT IMPOSED UPON THE UNITED STATES OR UPON THE GOVERNMENT REPRESENTATIVES ABROAD, BUT RATHER IT IS COLLECTED FROM THE DRAWEE BANK WHICH IN TURN CHARGES OR COLLECTS IT FROM THE FOREIGN DRAWER. THE ULTIMATE COLLECTION OF THE TAX FROM THE FOREIGN SERVICE OFFICER UNDER SUCH CIRCUMSTANCES SHOULD BE CONSIDERED AS AN EXPENSE INCIDENT TO THE COST OF TRANSMITTING THE FUNDS TO THE TREASURER OF THE UNITED STATES, AND, UPON SUCH BASIS, NO REASON APPEARS WHY THE FOREIGN SERVICE OFFICER SHOULD NOT BE REIMBURSED THEREFOR UNDER APPROPRIATIONS PROPERLY CHARGEABLE WITH THE EXPENSES OF TRANSMITTING THE FEES OF FOREIGN SERVICE OFFICERS TO THE TREASURER OF THE UNITED STATES. SEE, AS TO OTHER EXPENSES INCIDENT TO THE TRANSMISSION OF FUNDS FOR WHICH FOREIGN SERVICE OFFICERS ARE ENTITLED TO REIMBURSEMENT, DECISION OF OCTOBER 30, 1931, A-39240.