B-131981, JUN. 21, 1957

B-131981: Jun 21, 1957

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160 REPRESENTING EXPENSES YOU SAY WERE INCURRED BY YOU DURING THE PERIOD OF YOUR SUSPENSION FROM SERVICE BY THE DEPARTMENT OF THE AIR FORCE. MAY HAVE BEEN CITED ADMINISTRATIVELY AS AUTHORIZING YOUR SUSPENSION AND REMOVAL YOU WERE RESTORED TO DUTY UNDER THE ACT OF JUNE 10. WE CONCLUDED THAT THE BACK PAY PROVISIONS OF BOTH STATUTES HAVE SIMILAR PURPOSES AND THAT UNDER EITHER STATUTE THERE IS REQUIRED TO BE DEDUCTED FROM THE BACK PAY DUE ONLY THE INTERIM NET EARNINGS OF THE EMPLOYEE. IN DETERMINING WHETHER EXPENSES DEDUCTIBLE FROM INTERIM GROSS EARNINGS ARE LEGITIMATE AND REASONABLE. THAT RULE RELATES TO BUSINESS DEDUCTIONS WHICH NORMALLY ARE PERMITTED IN COMPUTATION OF AN INDIVIDUAL'S INCOME FOR FEDERAL TAXATION PURPOSES.

B-131981, JUN. 21, 1957

TO MR. JAMES S. MARTINDALE:

YOUR LETTER OF MAY 20, 1957, REQUESTS RECONSIDERATION OF OUR SETTLEMENT OF APRIL 5, 1957, WHICH DISALLOWED YOUR CLAIM FOR $2,160 REPRESENTING EXPENSES YOU SAY WERE INCURRED BY YOU DURING THE PERIOD OF YOUR SUSPENSION FROM SERVICE BY THE DEPARTMENT OF THE AIR FORCE, TINKER AIR FORCE BASE, OKLAHOMA.

WHILE, AS YOU SAY, THE ACT OF AUGUST 26, 1950, PUBLIC LAW 733, 64 STAT. 476, MAY HAVE BEEN CITED ADMINISTRATIVELY AS AUTHORIZING YOUR SUSPENSION AND REMOVAL YOU WERE RESTORED TO DUTY UNDER THE ACT OF JUNE 10, 1948, PUBLIC LAW 623, 62 STAT. 354. IN OUR DECISION OF NOVEMBER 3, 1955, B- 125362, 35 COMP. GEN. 268, WE CONCLUDED THAT THE BACK PAY PROVISIONS OF BOTH STATUTES HAVE SIMILAR PURPOSES AND THAT UNDER EITHER STATUTE THERE IS REQUIRED TO BE DEDUCTED FROM THE BACK PAY DUE ONLY THE INTERIM NET EARNINGS OF THE EMPLOYEE. HOWEVER, IN DETERMINING WHETHER EXPENSES DEDUCTIBLE FROM INTERIM GROSS EARNINGS ARE LEGITIMATE AND REASONABLE, REFERENCE GENERALLY MUST BE HAD TO THE USUAL RULES OF EVIDENCE UNDER THE INTERNAL REVENUE LAWS APPLICABLE IN ESTABLISHING NET EARNINGS. YOUR STATEMENTS CONCERNING AN "EARLIER RULING" OF OUR OFFICE APPARENTLY REFERS TO OUR DECISION OF FEBRUARY 15, 1955, B-122555, 34 COMP. GEN. 382, WHEREIN WE STATED THAT THE TERM "NET EARNINGS" AS CONTAINED IN PUBLIC LAW 733 REASONABLY WOULD PERMIT AS DEDUCTIONS THE ORDINARY AND NECESSARY BUSINESS EXPENSES INCURRED IN CONNECTION WITH THE GROSS AMOUNT EARNED BY AN EMPLOYEE DURING THE PERIOD OF HIS SUSPENSION. THAT RULE RELATES TO BUSINESS DEDUCTIONS WHICH NORMALLY ARE PERMITTED IN COMPUTATION OF AN INDIVIDUAL'S INCOME FOR FEDERAL TAXATION PURPOSES.

GENERALLY WE WOULD GIVE CONSIDERATION TO SPECIFICALLY IDENTIFIED AND JUSTIFIED EXPENSES WHICH AN INDIVIDUAL MIGHT INCUR IN OBTAINING THE PARTICULAR TYPE OF INTERIM EMPLOYMENT INVOLVED. SUCH EXPENSES USUALLY COULD INCLUDE EMPLOYMENT AGENCY FEES, LICENSES, FEES FOR HEALTH CERTIFICATES, AND SPECIAL UNIFORMS, EQUIPMENT OR TOOLS, ETC., DEPENDING UPON THE NATURE OF THE INTERIM EMPLOYMENT. GENERALLY, SUCH EXPENDITURES SHOULD BE REPORTED BY RECEIPTS. HOWEVER, THE BROADLY DESCRIBED CATEGORIES YOU LISTED WITH YOUR CLAIM ARE NOT SUFFICIENTLY IDENTIFIED IN DETAIL NOR ARE THEY JUSTIFIED OTHERWISE BY YOU FOR PURPOSES OF AN ALLOWANCE BY US AS IN THE NATURE OF REIMBURSEMENTS IN ADDITION TO THE NET PAY OF $1,700.75 WHICH THE RECORD SHOWS YOU WERE PAID BY THE DEPARTMENT OF THE AIR FORCE.

THE FOREGOING SPECIFICALLY REFERS TO YOUR ITEMS NUMBERED 1, 2, AND 3. TO ITEMS 4 AND "TRAVELING EXPENSES TO NEW JOB" AND "MOVING EXPENSES," SECTION 39.23 (A/-15 OF THE INTERNAL REVENUE REGULATIONS (TITLE 26, CODE OF FEDERAL REGULATIONS) PROVIDES THAT AN INDIVIDUAL'S EXPENSE IN SEEKING EMPLOYMENT OR PLACING HIMSELF IN A POSITION TO BEGIN WORK ARE NOT DEDUCTIBLE FOR PURPOSES OF TAXABLE INCOME. ITEM 6 IS DESCRIBED BY YOU IN SUCH GENERAL TERMS THAT WE CANNOT EXPRESS AN OPINION THEREOF. AS TO ITEM 7, THE TRAVELING EXPENSES YOU INCURRED IN RETURNING TO DUTY AT TINKER AIR FORCE BASE, IT SUFFICES TO SAY THAT NEITHER OF THE STATUTES, PUBLIC LAW 733 NOR PUBLIC LAW 623, CONTAINS ANY PROVISION, EXPRESSLY OR IMPLICITLY, FOR ALLOWING SUCH EXPENSES.

ACCORDINGLY, BASED UPON THE PRESENT RECORD, THE SETTLEMENT OF APRIL 5, 1957, IS SUSTAINED.