B-131423, JUL. 29, 1958
Highlights
ARMY (RETIRED): REFERENCE IS MADE TO LETTER OF JUNE 19. CONCERNING THE WITHHOLDING TAX WHICH WAS PAID ON AN ENLISTMENT ALLOWANCE AND WHICH YOU HAVE REFUNDED ON THE BASIS OF A DETERMINATION THAT YOU WERE NOT ENTITLED TO THE ENLISTMENT ALLOWANCE. YOU SAY THAT YOU WERE PAID LESS THAN $300 ENLISTMENT ALLOWANCE BECAUSE OF THE TAX WITHHELD BUT THAT YOU REFUNDED $300. YOU NOW QUESTION WHETHER ANY MONEY IS DUE YOU ON ACCOUNT OF HAVING RECEIVED ONLY THE PORTION OF THE ENLISTMENT ALLOWANCE REMAINING AFTER DEDUCTION OF THE WITHHOLDING TAX. IT APPEARS THAT THE ENLISTMENT ALLOWANCE YOU WERE PAID IN 1950 WAS RECEIVED UNDER CLAIM OF RIGHT AND WAS TAXABLE INCOME IN THAT YEAR FOR WHICH TAXES WERE WITHHELD AND FOR WHICH PRESUMABLY YOU RECEIVED CREDIT ON YOUR INCOME TAX LIABILITY FOR THAT YEAR.
B-131423, JUL. 29, 1958
TO CAPTAIN NEWELL E. HOUSTON, U.S. ARMY (RETIRED):
REFERENCE IS MADE TO LETTER OF JUNE 19, 1958, CONCERNING THE WITHHOLDING TAX WHICH WAS PAID ON AN ENLISTMENT ALLOWANCE AND WHICH YOU HAVE REFUNDED ON THE BASIS OF A DETERMINATION THAT YOU WERE NOT ENTITLED TO THE ENLISTMENT ALLOWANCE. YOU SAY THAT YOU WERE PAID LESS THAN $300 ENLISTMENT ALLOWANCE BECAUSE OF THE TAX WITHHELD BUT THAT YOU REFUNDED $300. YOU NOW QUESTION WHETHER ANY MONEY IS DUE YOU ON ACCOUNT OF HAVING RECEIVED ONLY THE PORTION OF THE ENLISTMENT ALLOWANCE REMAINING AFTER DEDUCTION OF THE WITHHOLDING TAX.
IT APPEARS THAT THE ENLISTMENT ALLOWANCE YOU WERE PAID IN 1950 WAS RECEIVED UNDER CLAIM OF RIGHT AND WAS TAXABLE INCOME IN THAT YEAR FOR WHICH TAXES WERE WITHHELD AND FOR WHICH PRESUMABLY YOU RECEIVED CREDIT ON YOUR INCOME TAX LIABILITY FOR THAT YEAR. HENCE THE AMOUNT WITHHELD FOR TAX PURPOSES MAY NOT BE REGARDED AS NOT INCLUDABLE IN THE COMPUTATION OF YOUR DEBT ARISING OUT OF THE ENLISTMENT ALLOWANCE PAYMENT. SEE UNITED STATES V. LEWIS, 340 U.S. 590, AND HEALY V. COMMISSIONER OF INTERNAL REVENUE, 345 U.S. 278. ANY ADJUSTMENT IN THAT RESPECT WOULD BE FOR CONSIDERATION BY THE INTERNAL REVENUE SERVICE OF THE TREASURY DEPARTMENT.
OUR OFFICE HAS NO JURISDICTION TO CONSIDER YOUR RIGHTS UNDER THE INCOME TAX LAWS AND HENCE THE MATTER SHOULD BE TAKEN UP WITH THE APPROPRIATE DISTRICT DIRECTOR OF INTERNAL REVENUE.