B-133942, APR. 15, 1958

B-133942: Apr 15, 1958

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ZOLTAN GROSS: WE HAVE CONSIDERED YOUR ATTORNEY'S LETTERS OF MARCH 3 AND MARCH 25. THE AMOUNT OF $75 WAS WITHHELD FROM THE SETTLEMENT BECAUSE OF LACK OF EVIDENCE THAT THIS AMOUNT WAS INCURRED IN CONNECTION WITH YOUR (INTERIM) EARNINGS DURING THE PERIOD OF YOUR SUSPENSION FROM FEDERAL EMPLOYMENT. PARTICULARLY IN THAT THE ACCOUNTING FEES IN THE AMOUNT CLAIMED HAVE NOT BEEN QUESTIONED BY THE INTERNAL REVENUE SERVICE. WE ARE DIRECTING OUR CLAIMS DIVISION TO ISSUE A SETTLEMENT IN YOUR FAVOR FOR $75. SHE SAYS THAT SINCE YOU WERE NOT ACTUALLY IN THE EMPLOY OF THE GOVERNMENT DURING THE PERIOD OF TIME FOR WHICH THIS DEDUCTION WAS MADE. YOU ARE ENTITLED TO A REFUND OF THIS SUM. THE RECORD REVEALS THAT $87 WAS DEDUCTED FROM THE AMOUNT DUE YOU FOR INSURANCE DURING THE INVOLVED PERIOD.

B-133942, APR. 15, 1958

TO DR. ZOLTAN GROSS:

WE HAVE CONSIDERED YOUR ATTORNEY'S LETTERS OF MARCH 3 AND MARCH 25, 1958, ON YOUR BEHALF. YOUR ATTORNEY'S LETTER OF MARCH 3, REQUESTS RECONSIDERATION OF THAT PART OF OUR CLAIMS DIVISION SETTLEMENT OF DECEMBER 12, 1957, CONCERNING THE WITHHOLDING OF AMOUNTS REPRESENTING ACCOUNTING FEES AND FEDERAL EMPLOYEES' GROUP LIFE INSURANCE PREMIUMS. THE AMOUNT OF $75 WAS WITHHELD FROM THE SETTLEMENT BECAUSE OF LACK OF EVIDENCE THAT THIS AMOUNT WAS INCURRED IN CONNECTION WITH YOUR (INTERIM) EARNINGS DURING THE PERIOD OF YOUR SUSPENSION FROM FEDERAL EMPLOYMENT. UPON THE BASIS OF THE INFORMATION SET OUT IN YOUR ATTORNEY'S LETTER OF MARCH 3, 1958, PARTICULARLY IN THAT THE ACCOUNTING FEES IN THE AMOUNT CLAIMED HAVE NOT BEEN QUESTIONED BY THE INTERNAL REVENUE SERVICE, WE ARE DIRECTING OUR CLAIMS DIVISION TO ISSUE A SETTLEMENT IN YOUR FAVOR FOR $75.

YOUR ATTORNEY'S LETTER OF MARCH 3, 1958, ALSO QUESTIONS THE PROPRIETY OF CREDITING YOU WITH $130.50 PAYABLE TO THE TREASURER OF THE UNITED STATES FOR GOVERNMENT LIFE INSURANCE. SHE SAYS THAT SINCE YOU WERE NOT ACTUALLY IN THE EMPLOY OF THE GOVERNMENT DURING THE PERIOD OF TIME FOR WHICH THIS DEDUCTION WAS MADE, YOU ARE ENTITLED TO A REFUND OF THIS SUM. THE RECORD REVEALS THAT $87 WAS DEDUCTED FROM THE AMOUNT DUE YOU FOR INSURANCE DURING THE INVOLVED PERIOD. THE REMAINING AMOUNT OF $43.50 REPRESENTS THE GOVERNMENT'S SHARE OF THE COST OF THE PREMIUMS FOR THE PERIOD. IN THAT CONNECTION WE HELD IN 36 COMP. GEN. 225, AS FOLLOWS--- QUOTING FROM THE SECOND PARAGRAPH OF THE SYLLABUS:

"UNDER THE BACK PAY ACT OF AUGUST 24, 1912, AS AMENDED, 5 U.S.C. 652, WHICH PROVIDES THAT EMPLOYEES ARE TO BE REGARDED AS RENDERING SERVICE DURING PERIODS OF UNJUSTIFIED REMOVALS OR SUSPENSIONS FROM THE SERVICE, EMPLOYEES ON REINSTATEMENT ARE REGARDED AS HAVING BEEN COVERED BY THE FEDERAL EMPLOYEES' GROUP LIFE INSURANCE ACT OF 1954 DURING THE PERIOD OF SEPARATION, AND DEDUCTION OF PREMIUMS FROM THE EMPLOYEE'S BACK PAY IS REQUIRED.'

THEREFORE, SINCE THE ACT OF AUGUST 24, 1912, AS AMENDED, 5 U.S.C. 652, REQUIRES THAT EMPLOYEES COMING WITHIN THE PURVIEW THEREOF ARE TO BE REGARDED AS HAVING RENDERED SERVICE DURING PERIODS OF UNJUSTIFIED REMOVALS OR SUSPENSIONS FROM THE SERVICE, IT FOLLOWS THAT DEDUCTION OF PREMIUMS FROM THE EMPLOYEE'S BACK PAY IS REQUIRED.

YOUR ATTORNEY'S LETTER OF MARCH 25, 1958, REQUESTS INFORMATION REGARDING THE REPORTING, OSTENSIBLY FOR FEDERAL INCOME TAX PURPOSES, THE AMOUNTS RECEIVED BY YOU AS A RESULT OF THE SETTLEMENT REFERRED TO ABOVE. IN THAT CONNECTION WE CAN ONLY ADVISE YOU THAT MATTERS OF THAT TYPE COME WITHIN THE EXCLUSIVE JURISDICTION OF THE INTERNAL REVENUE SERVICE. THEREFORE, QUESTIONS OF THE TYPE PRESENTED IN YOUR ATTORNEY'S LETTER OF MARCH 25, 1958, SHOULD BE DIRECTED TO EITHER THE OFFICE OF THE DIRECTOR, INTERNAL REVENUE SERVICE TO WHICH YOU FORWARD YOUR TAX RETURNS, OR TO THE COMMISSIONER OF INTERNAL REVENUE, WASHINGTON 25, D.C., FOR CONSIDERATION.