B-129030, OCT. 1, 1956

B-129030, OCT. 1, 1956

TO MR. JOHN P. WITSIL, ATTORNEY AT LAW:

REFERENCE IS MADE TO YOUR LETTER REQUESTING RECONSIDERATION OF SETTLEMENTS DATED JULY 13, 1956, WHEREIN JOSEPH A. SORRICK AND THE ESTATE OF EARL WALKER WERE ALLOWED CERTAIN AMOUNTS REPRESENTING RETROACTIVE COMPENSATION UNDER THE PROVISIONS OF THE ACT OF AUGUST 24, 1912, AS AMENDED BY THE ACT OF JUNE 10, 1948, 62 STAT. 355.

THE RECORD SHOWS THAT MR. SORRICK AND MR. WALKER WERE PLACED IN A SUSPENSION STATUS FOR NOT MORE THAN 30 DAYS EFFECTIVE OCTOBER 15, 1953, BECAUSE OF DELIBERATE AND WILLFUL VIOLATION OF ADMINISTRATIVE REGULATIONS. BY NOTIFICATION OF PERSONNEL ACTION MR. SORRICK AND MR. WALKER WERE REMOVED FROM THEIR POSITIONS EFFECTIVE NOVEMBER 13 AND NOVEMBER 27, 1953, RESPECTIVELY. FOR THE PERIOD NOVEMBER 16 TO NOVEMBER 27, 1953, MR. WALKER WAS IN AN ANNUAL LEAVE STATUS. ON JANUARY 21 AND JANUARY 24, 1955, MR. SORRICK AND MR. WALKER WERE RESTORED TO DUTY EFFECTIVE NOVEMBER 14 AND NOVEMBER 28, 1953, RESPECTIVELY, AS A RESULT OF A RECOMMENDATION BY THE CIVIL SERVICE COMMISSION STEMMING FROM A FINDING BY THAT BODY THAT, UNDER SECTION 14 OF THE VETERANS' PREFERENCE ACT OF 1944, 5 U.S.C. 863, THE EMPLOYEE'S REMOVAL WAS PROCEDURALLY INVALID. THERE WAS NO PROCEDURAL DEFECT FOUND WITH REGARD TO THE SUSPENSION ACTIONS WHICH PRECEDED THESE REMOVALS, AND THEREFORE THERE WOULD BE NO AUTHORITY TO PAY FOR THOSE PERIODS.

BY SETTLEMENT OF JULY 13, 1956, MR. SORRICK RECEIVED COMPENSATION FOR THE PERIODS NOVEMBER 14, 1953, THE EFFECTIVE DATE OF HIS RESTORATION TO DUTY, TO FEBRUARY 20, 1955, AND FROM FEBRUARY 24 TO MARCH 24, 1955, THE DATE OF HIS ULTIMATE SEPARATION FROM THE SERVICE AFTER 30 DAYS NOTICE. HIS CLAIM IN THE AMOUNT OF $2,322 REPRESENTING ALLEGED PROPER DEDUCTIONS IN ARRIVING AT "INTERIM NET EARNINGS," WAS DISALLOWED SINCE IT HAD NOT BEEN SHOWN THAT THE ITEMS OF EXPENSE INVOLVED WERE ORDINARY AND NECESSARY BUSINESS EXPENSES INCURRED IN CONNECTION WITH THE GROSS AMOUNT REPORTED AS EARNINGS DURING THE PERIODS. BY SETTLEMENT OF JULY 13, 1956, MR. WALKER RECEIVED COMPENSATION FOR THE PERIOD NOVEMBER 28, 1953, THE EFFECTIVE DATE OF HIS REMOVAL TO FEBRUARY 19, 1955, AND FROM FEBRUARY 23 TO MARCH 24, 1955, WHEN HE WAS SEPARATED AFTER DUE NOTICE.

IN THE MEMORANDUM TRANSMITTED WITH YOUR LETTER YOU QUESTION THE ACTION TAKEN BY OUR OFFICE IN NOT ALLOWING COMPENSATION FOR THE PERIOD OCTOBER 15 TO NOVEMBER 14, 1953, WHILE THE EMPLOYEES WERE SUSPENDED FROM DUTY. THAT REGARD YOU CITE BAYARD VASEY V. THE UNITED STATES, 128 C.CLS. 754, AND B-121568, DATED MAY 4, 1955, 34 COMP. GEN. 568. IN BOTH OF THOSE CASES THE EMPLOYEES WERE RESTORED TO DUTY BY ORDER OF THE CIVIL SERVICE COMMISSION BECAUSE THE EMPLOYING AGENCY FAILED TO FOLLOW THE PROCEDURAL REQUIREMENTS OF SECTION 14 OF THE VETERANS' PREFERENCE ACT OF 1944. THE CASES HERE UNDER CONSIDERATION THE EMPLOYEES WERE RESTORED TO THEIR FORMER POSITIONS AS A RESULT OF A DETERMINATION BY THE CIVIL SERVICE COMMISSION THAT THERE WAS A PROCEDURAL ERROR ONLY IN THEIR REMOVALS AND THAT THEY WERE ENTITLED TO COMPENSATION ONLY FROM THE DATE OF THEIR DEFECTIVE REMOVAL UNTIL THE DATE OF THEIR FINAL SEPARATION FROM THE SERVICE. HOWEVER, THERE WAS NO PROCEDURAL DEFECT FOUND WITH REGARD TO THE SUSPENSION PERIOD OCTOBER 15 TO NOVEMBER 14, 1953. THE OTHER CASE CITED BY YOU, B 127039, DATED MARCH 16, 1956, 35 COMP. GEN. 520, WOULD NOT BE APPLICABLE AS THAT CASE HAS TO DO WITH THE RECREDITING OF ANNUAL LEAVE OF A PERSON WHO WAS RESTORED TO DUTY AFTER BEING SUSPENDED FOR SECURITY REASONS UNDER THE ACT OF AUGUST 26, 1950.

THE LAST 30 DAYS THE CLAIMANTS WERE ON THE PAYROLL IN A PAY STATUS CONSTITUTED THE 30-DAY ADVANCE NOTICE OF SEPARATION REQUIRED UNDER SECTION 14 OF THE VETERANS' PREFERENCE ACT. IT HAS BEEN HELD THAT FOR THE 30 DAYS PERIOD OF ADVANCE NOTICE PRIOR TO SEPARATION FOR CAUSE AN EMPLOYEE IS ENTITLED TO COMPENSATION.

REGARDING THE DISALLOWANCE OF THAT PART OF MR. SORRICK'S CLAIM REPRESENTING TRAVEL AND PER DIEM INCURRED AS A RESULT OF OTHER EMPLOYMENT DURING HIS PERIOD OF REMOVAL YOUR ATTENTION IS INVITED TO SECTION 162 OF THE INTERNAL REVENUE CODE OF 1954, WHICH PROVIDES IN PART AS FOLLOWS:

"SEC. 162. TRADE OR BUSINESS EXPENSES.

(A) IN GENERAL.--- THERE SHALL BE ALLOWED AS A DEDUCTION ALL THE ORDINARY AND NECESSARY EXPENSES PAID OR INCURRED DURING THE TAXABLE YEAR IN CARRYING ON ANY TRADE OR BUSINESS, INCLUDING---

"/2) TRAVELING EXPENSES (INCLUDING THE ENTIRE AMOUNT EXPENDED FOR MEALS AND LODGING) WHILE AWAY FROM HOME IN THE PURSUIT OF A TRADE OR BUSINESS;

WHILE THE WORD "HOME" IS NOT DEFINED IN THE INTERNAL REVENUE CODE IT IS DEFINED IN THE INTERNAL REVENUE SERVICE PUBLICATION NO. 17, YOUR FEDERAL INCOME TAX, 1955 EDITION, ISSUED BY THE COMMISSIONER OF INTERNAL REVENUE, AS THE TAXPAYER'S PLACE OF BUSINESS, EMPLOYMENT, STATION, OR POST OF DUTY. IT IS NOT LIMITED TO A PARTICULAR BUILDING OR PROPERTY BUT INCLUDES THE ENTIRE CITY OR GENERAL AREA. A PERSON IS NOT IN A TRAVEL STATUS AND HE IS NOT "AWAY FROM HOME" WHILE HE IS LOCATED IN THAT PLACE EVEN THOUGH HE MAY BE AWAY FROM HIS RESIDENCE. FURTHERMORE, UNDER THE SAME REFERENCE, COMMUTING EXPENSES AND OTHER COSTS OF TRAVEL BETWEEN THE HOME OF A TAX PAYER AND HIS PLACE OF EMPLOYMENT OR BUSINESS ARE NOT DEDUCTIBLE. IF A TAXPAYER PREFERS TO LIVE AT A PLACE DISTANT FROM HIS PLACE OF BUSINESS OR EMPLOYMENT HIS EXPENSES OF TRAVELING BACK AND FORTH ARE NOT FOR BUSINESS PURPOSES AND ARE NOT DEDUCTIBLE.

IN VIEW OF THE FOREGOING, IT MUST BE CONCLUDED THAT THE ACTIONS TAKEN WITH RESPECT TO THE CLAIMS OF MR. SORRICK AND MR. WALKER ARE CORRECT AND, UPON REVIEW, MUST BE SUSTAINED.