B-163013, JAN. 9, 1968

B-163013, JAN. 9, 1968

EMPLOYEE - TRANSFERS - PUBLIC LAW 89-516 - HOME SALE/PURCHASE EXPENSES DECISION TO CERTIFYING OFFICER OF BUREAU OF MINES, INTERIOR, CONCERNING CERTIFICATION OF REIMBURSEMENT OF EXPENSES INCURRED BY EMPLOYEE ON TRANSFER FROM WASHINGTON, D.C. TO DENVER, COLORADO. AN EMPLOYEE WHO CLAIMS REIMBURSEMENT FOR A PURCHASERS CHARGE ON V.A. LOAN ($56) AND A LOAN COMMISSION ($925) INCIDENT TO SALE OF RESIDENCE IN HYATTSVILLE, MD. MAY NOT BE REIMBURSED FOR CHARGE ON V.A. LOAN SINCE IT IS CUSTOMARY PRACTICE IN AREA THAT THE PURCHASER AND NOT THE SELLER BEARS THE CHARGE OF PROCURING A V.A. LOAN. ALSO THE LOAN COMMISSION WHICH REPRESENTS A MORTGAGE DISCOUNT (POINTS) IS NOT A REIMBURSABLE ITEM OF EXPENSES UNDER SEC. 4.2D, BOB CIRCULAR NO. A- 56. CONCERNING QUESTION AS TO PROPRIETY OF WITHHOLDING COLORADO INCOME TAX ON REIMBURSEMENTS FOR SALE OF HOMES, MATTER IS NOT WITHIN GAO JURISDICTION. IT IS NOTED THAT THERE IS AGREEMENT BETWEEN TREASURY AND COLORADO FOR WITHHOLDING INCOME TAX. QUESTIONS CONCERNING SCOPE OF AGREEMENT ARE FOR TREASURY DEPT.

TO MR. J. E. FOWLER, JR.:

WE REFER TO YOUR LETTER OF NOVEMBER 29, 1967, WITH ENCLOSURES, REQUESTING OUR DECISION CONCERNING THE PROPRIETY OF CERTIFYING FOR PAYMENT TWO ITEMS APPEARING ON A VOUCHER IN FAVOR OF MR. ALAN P. GRANRUTH, AN EMPLOYEE OF THE BUREAU OF MINES, STATIONED IN DENVER, COLORADO.

BY TRAVEL AUTHORIZATION DATED JULY 17, 1967, MR. GRANRUTH WAS DIRECTED TO TRAVEL ON A PERMANENT CHANGE OF OFFICIAL STATION FROM WASHINGTON, D.C., TO DENVER, COLORADO. INCIDENT TO SUCH CHANGE OF STATION MR. GRANRUTH SOLD HIS RESIDENCE IN HYATTSVILLE, MARYLAND, AND CLAIMS THE ITEMS IN QUESTION AS REIMBURSABLE EXPENSES INCURRED INCIDENT TO SUCH SALE. THE TWO ITEMS IN QUESTION ARE DESIGNATED AS (1) PURCHASERS CHARGE ON VA LOAN -- $56 -- AND (2) LOAN COMMISSION -- $925.

CONCERNING THE $56 ITEM REPRESENTING PURCHASERS CHARGE ON VA LOAN MR. GRANRUTH ALLEGES THAT WHILE THE CHARGE IS DESIGNATED AS A PURCHASER CHARGE, IN FACT, IT IS A CUSTOM OF THE AREA FOR THE SELLER TO BEAR SUCH EXPENSE. WE DO NOT CONCUR IN THE VIEW EXPRESSED BY MR. GRANRUTH. OUR UNDERSTANDING IS THAT UNDER THE CUSTOMARY PRACTICE IN THE AREA (HYATTSVILLE, MARYLAND) THE PURCHASER AND NOT THE SELLER ORDINARILY BEARS THE CHARGE FOR PROCURING A VA LOAN. ACCORDINGLY, THE $56 ITEM SHOULD NOT BE CERTIFIED FOR PAYMENT.

SIMILARLY, THE $925 ITEM ENTITLED LOAN COMMISSION APPEARS TO REPRESENT A MORTGAGE DISCOUNT (POINTS) WHICH UNDER THE EXPRESS LANGUAGE OF SECTION 4.2D OF BUREAU OF THE BUDGET CIRCULAR NO. A-56, REVISED OCTOBER 12, 1966, IS NOT REIMBURSABLE. SEE DECISIONS OF OCTOBER 23, 1967, B-162571, AND OCTOBER 26, 1967, B-162494, IN REGARD THERETO. WE NOTE THAT THE ACTING DIRECTOR OF THE DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT FHA ADVISES IN A LETTER OF OCTOBER 11, 1967, TO THE CHIEF, DIVISION OF FINANCE, DEPARTMENT OF THE INTERIOR AS FOLLOWS:

"THE FOLLOWING ITEMS THAT APPEAR TO BE REASONABLE ARE: V.A. APPRAISAL, TERMITE INSPECTION, PENALTY FOR PAY-OFF FIRST TRUST (FHA), PREPARATION OF RELEASE, TRUSTEES FEE RELEASE, RECORDING DEED OF RELEASE, FEDERAL STAMPS ON DEED, SERVICE CHARGE, AND LENDERS INSPECTION FEE.

"THE LOAN COMMISSION WHICH IS A NORMAL CHARGE TO THE SELLER IS CUSTOMARILY CHARGED BY LENDERS FOR MAKING FHA AND V.A. LOANS. THIS CHARGE WILL VARY DEPENDING ON THE AVAILABILITY OF FUNDS IN THE MARKET PLACE.

"ACCORDING TO BUREAU OF THE BUDGET CIRCULAR NO. A-56 POINTS ARE NOT A REIMBURSABLE ITEM.

"IN ACCORDANCE WITH V.A. REGULATIONS THE VETERAN PURCHASER IS ALLOWED TO PAY UNDER PURCHASER'S CHARGES FOR THE DEED, TRUST, TAX CERTIFICATE, AND NOTING FEE. THE SELLER MUST PAY FOR THE SETTLEMENT FEE AND THE NOTARY FEE. (REIMBURSABLE ITEMS)"

THE VOUCHER TRANSMITTED WITH YOUR LETTER IS RETURNED HEREWITH.

CONCERNING YOUR FURTHER QUESTION AS TO THE PROPRIETY OF WITHHOLDING COLORADO INCOME TAX IN THE CASE OF EMPLOYEES WHO ARE TRANSFERRED TO DUTY STATIONS IN THAT STATE AND WHO ARE ENTITLED TO REIMBURSEMENTS INCIDENT TO THE SALE OF THEIR HOMES IN OTHER STATES YOU MAY BE ADVISED THAT SUCH A MATTER IS NOT WITHIN THE JURISDICTION OF THE GENERAL ACCOUNTING OFFICE. WE POINT OUT THAT THE DETERMINATION AS TO WHAT INCOME IS TAXABLE IN A PARTICULAR STATE DEPENDS UPON THE TAX LAWS OF SUCH STATE; ALSO, WHETHER SUCH INCOME SHOULD BE WITHHELD DEPENDS UPON THE TERMS OF AN AGREEMENT BETWEEN THE DEPARTMENT OF THE TREASURY AND THE PARTICULAR STATE INVOLVED. WE NOTE THAT AN AGREEMENT WAS EXECUTED BETWEEN THE DEPARTMENT OF THE TREASURY AND THE STATE OF COLORADO FOR WITHHOLDING OF THE COLORADO INCOME TAX FROM WAGES PAID FEDERAL EMPLOYEES IN THE STATE OF COLORADO. SEE APPENDIX 2 TO PART 3 OF THE TREASURY FISCAL REQUIREMENT MANUAL. ANY QUESTION CONCERNING THE SCOPE OF THE AGREEMENT IS A MATTER WHICH SHOULD BE TAKEN UP WITH APPROPRIATE OFFICIALS IN THE DEPARTMENT OF THE TREASURY.