B-112491 April 17, 1953

B-112491: Apr 17, 1953

Additional Materials:

Contact:

Edda Emmanuelli Perez
(202) 512-2853
EmmanuelliPerezE@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

Andrews: Reference is made to memorandum dated March 11. That John and Ruth Puncsak were entitled to the refund of $139.90. The subject check was issued to "J. and R. The check was received by Joe and Rose Puncsak who endorsed it in their full names but allege that Joe Puncsak lost it before he could cash it. No notice of change of address apparently was given by them to the Director of Internal Revenue. It appears that the proximate cause of the check falling into the hands of the persons not intended was the administrative failure to issue the check in the full name of the intended taxpayers as given in the heading of their return. If it is administratively determinated that they are entitled to the amount involved at this time.

B-112491 April 17, 1953

The Commissioner of Internal Revenue Department of the Treasury

Dear Mr. Andrews:

Reference is made to memorandum dated March 11, 1953, from Fred A. Clark, Acting Head, Collection Division of your Bureau in regard to the receipt and endorsement by Joe and Rose Puncsak, 319 Rio Verds Street, San Francisco, California, of 1951 income tax refund check No. 18,452,244, drawn April 2, 1952, for $139.90, to the order of "J. and R. Puncsak" but intended for John and Ruth Puncsak.

An examination of the record indicates that John and Ruth Puncsak, husband and wife, and Joe and Rose Puncsak, also husband and wife, submitted joint income tax returns on Form 1040 for the year 1951, with the address in each case stated as 319 Rio Verde Street, San Francisco, California, and that John and Ruth Puncsak were entitled to the refund of $139.90, while the return of Joe and Rose Puncsak reflected a balance of tax due by them rather than an overpayment. Each couple signed their respective return in the heading and at the end with their full names as given above. However, the subject check was issued to "J. and R. Puncsak," at the address given, using initials of the christian names only and not the full names as given in the heading of the return of the intended recipients. It appears that upon arrival of the check at the address given, the check was received by Joe and Rose Puncsak who endorsed it in their full names but allege that Joe Puncsak lost it before he could cash it. While the record does not disclose when John and Ruth Puncsak moved from the address in their return, and no notice of change of address apparently was given by them to the Director of Internal Revenue, it appears that the proximate cause of the check falling into the hands of the persons not intended was the administrative failure to issue the check in the full name of the intended taxpayers as given in the heading of their return. In view of that fact, and since it does not appear that the rightful payees participated in the proceeds of the check, a new check may be issued to them at their current address which appears to be 1557 Mission Street, Apartment B, San Francisco, California, if it is administratively determinated that they are entitled to the amount involved at this time.

Inasmuch as the check was negotiated by persons of the initials and surname given thereon, residing at the address stated on the check who received the same due to the failure to state the full christian names of the intended payees, there would appear to be no basis for instituting reclamation proceedings against the cashing bank. 26 Comp. Gen. 834, 839. However, a charge will be noted on the records of this Office against Joe and Rose Puncsak.

Furthermore, a charge is required to be raised on the books and accounts of this Office against the accountable officer responsible for the erroneous payment, and appropriate administrative action should be taken to effect collection of the amount of the erroneous payment as in other similar cases.

It is requested that this Office be advised when recovery shall have been effected.

Sincerely yours,

Lindsay C. Warren Comptroller General of the United States