B-128132, JAN. 30, 1957

B-128132: Jan 30, 1957

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CREECH: REFERENCE IS MADE TO YOUR LETTER DATED APRIL 5. COPIES OF A REPORT OF AN INVESTIGATION CONDUCTED BY OUR REPRESENTATIVES WHICH INDICATED THAT YOUR MOTHER WAS NOT IN FACT DEPENDENT UPON YOU FOR CHIEF SUPPORT. THAT IS. YOU WERE FULLY ADVISED RESPECTING SUCH ALLOWANCES BY LETTER DATED MAY 11. PREMIUMS ON YOUR LIFE INSURANCE OF WHICH YOUR MOTHER WAS THE BENEFICIARY. YOU SAY THAT SUCH OTHER INCOME IS BASED UPON THE NET YEARLY INCOME OF YOUR MOTHER AS SHOWN BY HER FEDERAL INCOME TAX RETURNS FOR EACH OF THOSE YEARS. PREMIUMS ON YOUR LIFE INSURANCE OF WHICH YOUR MOTHER WAS THE BENEFICIARY. WAS GOVERNED BY SECTIONS 5 AND 6 OF THE PAY READJUSTMENT ACT OF 1942. THE FATHER OR MOTHER OF THE PERSON CONCERNED PROVIDED HE OR SHE IS IN FACT DEPENDENT UPON SUCH PERSON FOR HIS OR HER CHIEF SUPPORT.'.

B-128132, JAN. 30, 1957

TO MR. NORMAN O. CREECH:

REFERENCE IS MADE TO YOUR LETTER DATED APRIL 5, 1956, AND ENCLOSURES, CONCERNING YOUR INDEBTEDNESS TO THE UNITED STATES COVERING PAYMENT TO YOU OF INCREASED RENTAL AND SUBSISTENCE ALLOWANCES AND BASIC ALLOWANCE FOR QUARTERS ON ACCOUNT OF AN ALLEGED DEPENDENT MOTHER INCIDENT TO YOUR SERVICE AS A COMMISSIONED OFFICER, UNITED STATES AIR FORCE. ALSO, THERE HAS BEEN RECEIVED YOUR LETTER OF DECEMBER 5, 1956.

BY LETTER DATED AUGUST 11, 1952, I-17000-2159, WE TRANSMITTED TO THE SECRETARY OF THE AIR FORCE, COPIES OF A REPORT OF AN INVESTIGATION CONDUCTED BY OUR REPRESENTATIVES WHICH INDICATED THAT YOUR MOTHER WAS NOT IN FACT DEPENDENT UPON YOU FOR CHIEF SUPPORT. BY LETTERS DATED AUGUST 18, 1954, AND JULY 26, 1955, THE DEPARTMENT OF THE AIR FORCE ADVISED US THAT THE AMOUNT OF YOUR INDEBTEDNESS TO THE UNITED STATES RESULTING FROM THE PAYMENT TO YOU OF INCREASED RENTAL AND SUBSISTENCE ALLOWANCES AND BASIC ALLOWANCES FOR QUARTERS ON ACCOUNT OF YOUR MOTHER FOR THE PERIODS NOVEMBER 13, 1943, THROUGH SEPTEMBER 30, 1949, AND AUGUST 1, 1950, THROUGH NOVEMBER 3, 1953, BY REASON OF YOUR ERRONEOUS CERTIFICATIONS AS TO THE DEPENDENCY OF YOUR MOTHER, AMOUNTED TO $6,442.

RESPECTING THE ASSERTION IN YOUR LETTER OF DECEMBER 5, 1956, AS TO YOUR RIGHT TO RENTAL ALLOWANCE AND TO BASIC ALLOWANCE FOR QUARTERS PERSONALLY, THAT IS, AS AN OFFICER WITHOUT DEPENDENTS, YOU WERE FULLY ADVISED RESPECTING SUCH ALLOWANCES BY LETTER DATED MAY 11, 1955, TO YOU FROM THE CHIEF, ADJUDICATIONS BRANCH, SETTLEMENTS DIVISION, AIR FORCE FINANCE CENTER, DENVER, COLORADO. IN VIEW OF THAT LETTER THERE APPEARS TO BE NO BASIS FOR REDUCING THE AMOUNT OF YOUR INDEBTEDNESS OF $6,442, AS REPORTED BY THE DEPARTMENT OF THE AIR FORCE.

IN THE LETTER OF APRIL 5, 1956, YOU QUESTION THE CORRECTNESS OF THE AMOUNTS SHOWN IN SUCH REPORT AS TO YOUR CONTRIBUTIONS TO THE SUPPORT OF YOUR MOTHER, HER INCOME FROM ALL SOURCES OTHER THAN CONTRIBUTIONS, AND HER LIVING EXPENSES. YOU SAY THAT YOU CONTRIBUTED AN AVERAGE OF $208 A MONTH FOR THE YEARS 1945 THROUGH 1951 AND THAT SUCH CONTRIBUTIONS CONSISTED OF ALLOTMENTS BY YOU TO YOUR MOTHER, AUTOMOBILES PURCHASED BY YOU FOR HER, INSURANCE ON THE AUTOMOBILES, PROCEEDS FROM THE SALE OF WAR BONDS, PREMIUMS ON YOUR LIFE INSURANCE OF WHICH YOUR MOTHER WAS THE BENEFICIARY, AND CASH. AS TO YOUR MOTHER'S INCOME FROM ALL SOURCES OTHER THAN YOUR CONTRIBUTIONS YOU ASSERT THAT SUCH INCOME AVERAGED $152 A MONTH DURING THE 1945-1951 PERIOD, IT APPEARING THAT SHE OWNS A FARM OF 155 ACRES OPERATED BY A TENANT ON AN EQUAL PARTNERSHIP BASIS, AND THAT SHE TEACHES MUSIC. YOU SAY THAT SUCH OTHER INCOME IS BASED UPON THE NET YEARLY INCOME OF YOUR MOTHER AS SHOWN BY HER FEDERAL INCOME TAX RETURNS FOR EACH OF THOSE YEARS. RESPECTING THE LIVING EXPENSES OF YOUR MOTHER, YOU SAY THAT SUCH EXPENSES AVERAGED $347 A MONTH, AS SHOWN BY YOUR MOTHER'S AFFIDAVIT EXECUTED MAY 23, 1953, PLUS DEPRECIATIONS AND INSURANCE ON THE AUTOMOBILES YOU PURCHASED FOR HER USE, PREMIUMS ON YOUR LIFE INSURANCE OF WHICH YOUR MOTHER WAS THE BENEFICIARY, AND COLLEGE EXPENSES OF YOUR SISTER, MARY, WHO GRADUATED IN DECEMBER 1947, SHE HAVING OBTAINED HER MAJORITY IN 1945.

THE PAYMENT OF INCREASED ALLOWANCES TO OFFICERS WITH DEPENDENTS DURING THE PERIOD NOVEMBER 13, 1943, THROUGH NOVEMBER 3, 1953, WAS GOVERNED BY SECTIONS 5 AND 6 OF THE PAY READJUSTMENT ACT OF 1942, 56 STAT. 361, AND SECTION 302 OF THE CAREER COMPENSATION ACT OF 1949, 63 STAT. 812. SECTION 4 OF THE PAY READJUSTMENT ACT DEFINES THE TERM "DEPENDENT," AS USED IN THAT ACT, AS INCLUDING ,THE FATHER OR MOTHER OF THE PERSON CONCERNED PROVIDED HE OR SHE IS IN FACT DEPENDENT UPON SUCH PERSON FOR HIS OR HER CHIEF SUPPORT.' SECTION 102 (G) OF THE CAREER COMPENSATION ACT DEFINES THE TERM "DEPENDENT" AS INCLUDING "THE FATHER OR MOTHER OF SUCH MEMBER, PROVIDED HE OR SHE IS IN FACT DEPENDENT UPON SUCH MEMBER FOR OVER HALF OF HIS OR HER SUPPORT.' THE TERM "CHIEF SUPPORT" HAS BEEN DEFINED AS MEANING "MAIN SUPPORT" OR "PRINCIPAL" SUPPORT, THAT IS, WHERE THE PARENT IS DEPENDENT ON THE OFFICER FOR "MOST" OR THE "GREATER" PART OF THE FUNDS NECESSARY FOR HIS OR HER REASONABLE SUPPORT. RIEGER V. UNITED STATES, 69 C.CLS. 632; ODLIN V. UNITED STATES, 74 C.CLS. 33; GEER V. UNITED STATES, 76 C.CLS. 259; AND WHITING V. UNITED STATES, 80 C.CLS. 662. UNDER THE FORMULA PRESCRIBED FOR DETERMINING WHETHER AN OFFICER WILL BE CONSIDERED AS THE "CHIEF SUPPORT" OR "OVER HALF" OF THE SUPPORT OF THE CLAIMED DEPENDENT, WITHIN THE MEANING OF THE APPLICABLE STATUTORY PROVISIONS, SO AS TO ENTITLE THE OFFICER TO PAYMENT OF INCREASED ALLOWANCES AS FOR AN OFFICER WITH DEPENDENTS, THERE MUST BE A SHOWING, DURING THE PERIOD INVOLVED, (1) THAT THE CONTRIBUTIONS OF THE OFFICER TO THE SUPPORT OF HIS ALLEGED DEPENDENT WERE MORE THAN ONE-HALF OF THE LIVING EXPENSES OF THE ALLEGED DEPENDENT, AND (2) THAT THE INCOME OF THE ALLEGED DEPENDENT FROM ALL SOURCES, OTHER THAN THE OFFICER'S CONTRIBUTIONS, WAS LESS THAN ONE- HALF THE ALLEGED DEPENDENT'S LIVING EXPENSES.

AFTER THE RECEIPT OF THE LETTER OF APRIL 5, 1956, OUR REPRESENTATIVE MADE A REINVESTIGATION OF THE MATTER, INCLUDING PERSONAL INTERVIEWS WITH YOUR MOTHER AND OTHER PERSONS HAVING KNOWLEDGE OF THE PERTINENT FACTS.

THE REPORT OF REINVESTIGATION SHOWS, RESPECTING YOUR CONTRIBUTIONS TO THE SUPPORT OF YOUR MOTHER, THAT YOU HAD A CLASS E ALLOTMENT IN HER FAVOR AT THE RATE OF $125 A MONTH FROM JANUARY 1, 1944, THROUGH APRIL 30, 1947, AND AT THE RATE OF $175 A MONTH FROM MAY 1 THROUGH DECEMBER 31, 1947. YOU HAD NO ALLOTMENT TO HER FROM JANUARY 1, 1948, THROUGH JUNE 30, 1950. YOUR ALLOTMENT TO HER FROM JULY 1, 1950, THROUGH JUNE 30, 1951, WAS AT THE RATE OF $50 A MONTH, AND FROM JULY 1, 1951 THROUGH OCTOBER 31, 1953, SUCH ALLOTMENT WAS AT THE RATE OF $175 A MONTH. DEPOSITS IN A SPECIAL CHECKING ACCOUNT OF YOUR MOTHER WITH THE MOULTRIE BANKING COMPANY, MOULTRIE, GEORGIA, APPARENTLY REPRESENT THE PROCEEDS OF ALLOTMENT CHECKS. THE SPECIAL CHECKING ACCOUNT WAS CLOSED BY TRANSFER TO YOUR MOTHER'S REGULAR CHECKING ACCOUNT IN THE SAME BANK ON MAY 8, 1953, BUT PRIOR TO THAT DATE TWO TRANSFERS WERE MADE FROM SUCH SPECIAL CHECKING ACCOUNT TO YOUR CHECKING ACCOUNT IN THE SAME BANK IN THE AMOUNTS OF $1,000 ON MARCH 6, 1953, AND $500 ON MARCH 17, 1953. A TRANSFER OF $200 WAS MADE FROM YOUR ACCOUNT TO YOUR MOTHER'S REGULAR CHECKING ACCOUNT ON SEPTEMBER 15, 1953, RESULTING IN A NET TRANSFER OF $1,300 TO YOUR ACCOUNT. SINCE YOUR MOTHER INFORMED THE INVESTIGATOR THAT SHE DID NOT DRAW CHECKS AGAINST YOUR ACCOUNT FOR HER OWN BENEFIT, THAT SUM ($1,300) OF YOUR ALLOTMENT DOES NOT APPEAR TO HAVE CONTRIBUTED TO THE SUPPORT OF YOUR MOTHER. THE SPECIAL CHECKING ACCOUNT OF YOUR MOTHER HAD A BALANCE OF $116.40 AT THE CLOSE OF 1951 AND CHECKS DRAWN IN 1952 EXCEEDED THAT AMOUNT, BUT DEPOSITS OF ALLOTMENT CHECKS IN 1952 WERE NOT EXPENDED IN AN APPRECIABLE AMOUNT AND THE ACCOUNT HAD A BALANCE OF $1,267.95 AS OF DECEMBER 31, 1952. SINCE ONLY TWO DEPOSITS OF THE ALLOTMENT CHECKS OF $175 EACH WERE MADE IN 1953, THE $1,300 IS BEING CONSIDERED AS DECREASING THE CLASS E ALLOTMENT CONTRIBUTIONS IN THE AMOUNT OF $1,200 IN 1952 AND $100 IN 1953.

INQUIRY AT THE MOULTRIE BANKING COMPANY DISCLOSED THAT ELEVEN CHECKS FOR $100 EACH REFERRED TO IN ENCLOSURE NO. 24 OF THE LETTER OF APRIL 5, 1956, WERE PAYMENTS ON A LOAN OF $1,340 OBTAINED BY YOUR MOTHER ON DECEMBER 2, 1949, FROM THE BANK. YOUR MOTHER IN A STATEMENT SIGNED BY HER ON OCTOBER 25, 1956, SAYS THAT SUCH LOAN WAS OBTAINED TO ENABLE YOU TO BUY REAL ESTATE IN THE VICINITY OF THE DISTRICT OF COLUMBIA AND THAT YOU PERSONALLY REPAID SUCH LOAN. THUS, IT SEEMS OBVIOUS THAT THE $1,100 DID NOT CONTRIBUTE TO THE SUPPORT OF YOUR MOTHER.

THE REPORT OF REINVESTIGATION DOES NOT QUESTION YOUR ASSERTION THAT YOU CONTRIBUTED $540 BY CHECK AND MONEY ORDERS, OR THAT YOU PURCHASED TWO AUTOMOBILES COSTING $2,200 AND $3,433 (TOTAL COST $5,633), EACH CAR BEING SOLD FOR $500 (NET COST $4,633). LIKEWISE, THE INVESTIGATOR REPORTED THAT YOU PAID INSURANCE PREMIUMS ON THE TWO AUTOMOBILES AS ASSERTED BY YOU, PLUS A NET ADDITIONAL PREMIUM FOR 1952 OF $76.44 ($101.24 LESS $24.80 REBATE). ALSO, THE INVESTIGATOR DOES NOT QUESTION YOUR ASSERTION THAT BEGINNING IN 1951 YOU PURCHASED APPROXIMATELY $700 WORTH OF FURNITURE FOR YOUR MOTHER. THE EXPENDITURES FOR THE AUTOMOBILES, THE AUTOMOBILE INSURANCE, AND THE FURNITURE MAY BE CONSIDERED AS CONTRIBUTIONS BY YOU TO THE SUPPORT OF YOUR MOTHER ONLY IF SUCH EXPENDITURES ARE RECOGNIZED AND INCLUDED IN THE LIVING EXPENSES OF YOUR MOTHER. WHILE YOU ALLEGE THAT SUCH EXPENDITURES WERE NECESSARY AND PROPER LIVING EXPENSES OF YOUR MOTHER, SHE HAS NOT INCLUDED THEM IN HER LIVING EXPENSES. HOWEVER, THE ADDITION OF THE COST OF AUTOMOBILES, THE AUTOMOBILE INSURANCE, AND THE FURNITURE TO THE CONTRIBUTIONS AND TO THE LIVING EXPENSES WOULD NOT MAKE ANY MATERIAL DIFFERENCE IN THE FINAL OUTCOME. THE COST OF THE AUTOMOBILES, THE INSURANCE PREMIUMS AND THE FURNITURE HAVE BEEN ALLOCATED AS SHOWN IN THE TABLE OF YOUR YEARLY CONTRIBUTIONS WHICH FOLLOWS.

THE LIQUIDATION OF YOUR WAR BONDS VALUED AT $400 TO PAY ACCOUNTS WHICH HAD ACCUMULATED PRIOR TO THE GRADUATION FROM COLLEGE AND THE MARRIAGE OF YOUR SISTER, MARY, MAY NOT BE CONSIDERED AS A CONTRIBUTION TO YOUR MOTHER'S SUPPORT SINCE YOUR SISTER, AS SUCH, IS NOT A "DEPENDENT" WITHIN THE MEANING OF THE DEPENDENCY ALLOWANCE STATUTES AND ANY CONTRIBUTION NEEDED FROM YOU BECAUSE OF YOUR SISTER'S LIVING EXPENSES MUST BE CONSIDERED AS A CONTRIBUTION TO THE SUPPORT OF YOUR SISTER, RATHER THAN AS A CONTRIBUTION TO THE SUPPORT OF YOUR MOTHER. LIKEWISE, SINCE YOUR MOTHER RECEIVED NO BENEFITS FROM PREMIUMS PAID BY YOU ON YOUR LIFE INSURANCE POLICIES, SUCH PREMIUMS MAY NOT BE CONSIDERED AS A CONTRIBUTION TO HER SUPPORT.

IN VIEW OF THE FOREGOING, YOUR CONTRIBUTIONS TO THE SUPPORT OF YOUR MOTHER ON A YEARLY BASIS FOR THE YEARS 1943 THROUGH 1953 WERE AS FOLLOWS:

* * * * * * * * * * * * * * (TABLE OMITTED) * * * * * * * * * * * * * *

AS TO YOUR MOTHER'S INCOME FROM ALL SOURCES OTHER THAN YOUR CONTRIBUTIONS, IT APPEARS THAT SUCH INCOME WAS DERIVED FROM THE OPERATION OF HER FARM, FROM TEACHING MUSIC, AS AN ORGANIST, FROM INTEREST, AND FROM RENTAL OF ROOMS. SUCH INCOME MAY NOT BE CONSIDERED TO INCLUDE DEPRECIATION CLAIMED ON YOUR MOTHER'S FEDERAL INCOME TAX RETURNS. WE HELD IN DECISION OF JUNE 13, 1955, B-121975, 34 COMP. GEN. 672, TO THE SECRETARY OF DEFENSE, THAT UNDER THE DEPENDENCY ALLOWANCE STATUTES AMOUNTS CLAIMED AS DEPRECIATION FOR PROPERTY HELD FOR THE PRODUCTION OF INCOME MAY NOT BE EXCLUDED FROM THE INCOME AVAILABLE FOR SUPPORT OF AN ALLEGED DEPENDENT IN DETERMINING WHETHER SUCH PERSON WAS, OR IS, IN FACT DEPENDENT UPON THE OFFICER FOR CHIEF SUPPORT OR OVER HALF OF HIS OR HER SUPPORT. COPY OF THAT DECISION IS ENCLOSED FOR YOUR INFORMATION.

IN CONNECTION WITH YOUR CLAIM THAT, WHEN COMPARED WITH INCOME FOR OTHER YEARS, THE INCOME FROM TOBACCO SALES IN 1946 AS SHOWN ON YOUR MOTHER'S FEDERAL TAX RETURNS FOR THAT YEAR MUST BE INCORRECT, THE INVESTIGATOR REPORTS THAT YOUR MOTHER MADE FOUR BANK DEPOSITS IN 1946 WHICH TOTALED THE EXACT AMOUNT OF THE INCOME FROM SUCH SALES SHOWN IN THE 1946 RETURN, AND THAT THE 1947 TOBACCO INCOME DID NOT PROVIDE A BASIS FOR COMPARISON WITH THE 1946 TOBACCO INCOME SINCE THE 1947 TOBACCO CROP APPARENTLY WAS DAMAGED, SHE HAVING COLLECTED HAIL INSURANCE ON THE 1947 CROP. THERE IS ENCLOSED A COPY OF AN EXHIBIT SUBMITTED WITH THE REPORT OF REINVESTIGATION WHICH SETS FORTH THE INCOME, OTHER THAN YOUR CONTRIBUTIONS, OF YOUR MOTHER ON A CALENDAR YEAR BASIS FOR THE YEARS 1943 THROUGH 1953.

RESPECTING THE LIVING EXPENSES OF YOUR MOTHER, THERE WAS SUBMITTED WITH THE REINVESTIGATION REPORT AN EXHIBIT ITEMIZING SUCH LIVING EXPENSES FOR EACH OF THE CALENDAR YEARS INVOLVED, THE ITEMS SHOWN IN THE SCHEDULE BEING BASED ON ESTIMATES BY YOUR MOTHER. THE COST OF THE TWO AUTOMOBILES, THE AUTOMOBILE INSURANCE AND THE FURNITURE, WHICH YOU CLAIM AS A PART OF YOUR CONTRIBUTION TO YOUR MOTHER, HAS NOT BEEN INCLUDED IN THE EXHIBIT SHOWING HER LIVING EXPENSES BUT CAN BE CLAIMED AS A CONTRIBUTION ONLY IF THE ITEMS SO PURCHASED MAY BE CONSIDERED A LIVING EXPENSE OF YOUR MOTHER. THE LIVING EXPENSES OF YOUR SISTER, MARY, MAY NOT BE INCLUDED IN THE LIVING EXPENSES OF YOUR MOTHER, SINCE A SISTER IS NOT A "DEPENDENT" WITHIN THE MEANING OF THE DEPENDENCY ALLOWANCE STATUTES, AND YOUR MOTHER COULD NOT, BY THE DIVERSION OF HER INCOME, BRING ABOUT A CONDITION OF DEPENDENCY WHICH WOULD OTHERWISE NOT EXIST. THERE IS ENCLOSED A COPY OF THE EXHIBIT SHOWING YOUR MOTHER'S LIVING EXPENSES.

IT WILL BE OBSERVED FROM A COMPARISON OF THE YEARLY AMOUNTS OF YOUR CONTRIBUTIONS TO THE SUPPORT OF YOUR MOTHER WITH THE YEARLY AMOUNTS OF HER LIVING EXPENSES THAT SUCH CONTRIBUTIONS FOR THE YEARS 1943, 1945, 1946, 1948 THROUGH 1950, AND 1953, WERE LESS THAN HALF SUCH LIVING EXPENSES AND THAT FOR ALL OF THE CALENDAR YEARS INVOLVED (1943 THROUGH 1953) HER INCOME FROM ALL SOURCES OTHER THAN YOUR CONTRIBUTIONS WAS MORE THAN HALF OF SUCH LIVING EXPENSES. HENCE, YOUR MOTHER MAY NOT BE CONSIDERED AS HAVING BEEN IN FACT DEPENDENT UPON YOU FOR CHIEF SUPPORT OR FOR OVER HALF OF HER SUPPORT DURING ANY PORTION OF THE PERIOD INVOLVED. ACCORDINGLY, YOU ARE PROPERLY INDEBTED TO THE UNITED STATES IN THE SUM OF $6,442 AND YOU ARE REQUESTED TO REMIT THAT SUM WITHIN 60 DAYS FROM THE DATE OF THIS DECISION OR WITHIN THAT TIME MAKE SUITABLE ARRANGEMENTS FOR ITS LIQUIDATION. SUCH SUM SHOULD BE REMITTED TO US BY CHECK, DRAFT OR MONEY ORDER PAYABLE TO THE UNITED STATES GENERAL ACCOUNTING OFFICE, POST OFFICE BOX 2610, WASHINGTON 13, D.C. UNLESS SUCH PAYMENT, OR SUITABLE ARRANGEMENTS ARE MADE WITHIN THAT TIME, A DEBT CHARGE WILL BE RAISED AGAINST YOU AND THE MATTER WILL BE REFERRED TO THE DEPARTMENT OF JUSTICE FOR APPROPRIATE ACTION.