B-170029, SEP. 1, 1970

B-170029: Sep 1, 1970

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PREPAYMENT OF A TRACER FEE TO COMMERCIAL MONEY ORDER VENDORS TO LOCATE THE TAX PAYERS WHOSE TAX REMITTANCE HAVE BECOME DETACHED FROM THE MONEY ORDER WOULD BE CONTRAVENTION OF THE ADVANCE PAYMENT PROHIBITION IN 31 U.S.C. 259 AND THEREFORE IN THE ABSENCE OF STATUTORY AUTHORITY FOR SUCH PAYMENT OR IN THE ABSENCE OF MEETING THE CONDITIONS IN 41 U.S.C. 255. SECRETARY: REFERENCE IS MADE TO LETTER OF JUNE 9. SO THAT THE AMOUNTS ARE RECEIVED AND DEPOSITED WITHOUT CREDIT TO THE PAYERS. WE ARE ADVISED THAT THE RENDITION OF THE SERVICE REQUESTED WOULD BE VERIFIED LATER. THUS THE QUESTION PRESENTED IS WHETHER PREPAYMENT OF THE TRACER FEE WOULD CONSTITUTE AN ADVANCE PAYMENT IN VIOLATION OF 31 U.S.C. 529.

B-170029, SEP. 1, 1970

ADVANCE PAYMENTS - TRACER FEE FOR COMMERCIAL MONEY ORDER VENDORS DECISION TO THE SECRETARY OF TREASURY HOLDING THAT THE GOVERNMENT MAY NOT MAKE ADVANCE PAYMENTS OF CERTAIN FEES REQUIRED BY COMMERCIAL MONEY ORDER VENDORS FOR TRACER SERVICES TO BE PERFORMED FOR IRS FOR TAXPAYERS WHO USE COMMERCIAL MONEY ORDERS THAT BECOME SEPARATED FROM THE RETURN. PREPAYMENT OF A TRACER FEE TO COMMERCIAL MONEY ORDER VENDORS TO LOCATE THE TAX PAYERS WHOSE TAX REMITTANCE HAVE BECOME DETACHED FROM THE MONEY ORDER WOULD BE CONTRAVENTION OF THE ADVANCE PAYMENT PROHIBITION IN 31 U.S.C. 259 AND THEREFORE IN THE ABSENCE OF STATUTORY AUTHORITY FOR SUCH PAYMENT OR IN THE ABSENCE OF MEETING THE CONDITIONS IN 41 U.S.C. 255, THE PROPOSED PROCEDURE MAY NOT BE AUTHORIZED.

TO MR. SECRETARY:

REFERENCE IS MADE TO LETTER OF JUNE 9, 1970, FROM THE ASSISTANT SECRETARY FOR ADMINISTRATION, REQUESTING A DECISION AS TO THE PROPRIETY OF ADVANCE PAYMENT BY THE GOVERNMENT OF CERTAIN FEES REQUIRED BY COMMERCIAL MONEY ORDER VENDORS IN CONNECTION WITH TRACER SERVICES TO BE PERFORMED FOR THE INTERNAL REVENUE SERVICE.

THE ASSISTANT SECRETARY STATES THAT MANY TAXPAYERS USE COMMERCIAL MONEY ORDERS TO PAY THEIR TAXES TO THE INTERNAL REVENUE SERVICE AND THAT LARGE NUMBERS OF THESE REMITTANCES BECOME SEPARATED FROM THE DOCUMENTS TRANSMITTING THEM TO THE TREASURY, SO THAT THE AMOUNTS ARE RECEIVED AND DEPOSITED WITHOUT CREDIT TO THE PAYERS. IN ORDER THAT SUCH A PAYMENT BE CREDITED TO THE PROPER TAXPAYER, CERTAIN INFORMATION MUST BE OBTAINED BY MEANS OF A TRACER INITIATED BY THE INTERNAL REVENUE SERVICE WITH THE MONEY ORDER VENDORS, SOME OF WHOM REQUIRE THAT THE FEE INVOLVED (CURRENTLY ABOUT ONE DOLLAR) ACCOMPANY THE APPLICATION FOR A TRACER. WE ARE ADVISED THAT THE RENDITION OF THE SERVICE REQUESTED WOULD BE VERIFIED LATER.

THUS THE QUESTION PRESENTED IS WHETHER PREPAYMENT OF THE TRACER FEE WOULD CONSTITUTE AN ADVANCE PAYMENT IN VIOLATION OF 31 U.S.C. 529, WHICH READS, IN PART, AS FOLLOWS:

"NO ADVANCE OF PUBLIC MONEY SHALL BE MADE IN ANY CASE UNLESS AUTHORIZED BY THE APPROPRIATION CONCERNED OR OTHER LAW. AND IN ALL CASES OF CONTRACTS FOR THE PERFORMANCE OF ANY SERVICE, OR THE DELIVERY OF ARTICLES OF ANY DESCRIPTION, FOR THE USE OF THE UNITED STATES, PAYMENT SHALL NOT EXCEED THE VALUE OF THE SERVICE RENDERED, OR OF THE ARTICLES DELIVERED PREVIOUSLY TO SUCH PAYMENT. *** "

THE QUOTED CODE SECTION PROHIBITS ADVANCES OF PUBLIC MONEYS FOR SUPPLIES OR SERVICES UNTIL THE SUPPLIES HAVE BEEN DELIVERED OR THE SERVICES RENDERED, UNLESS SUCH ADVANCE PAYMENTS ARE AUTHORIZED BY THE APPROPRIATION CONCERNED OR OTHER LAW. IT IS CLEAR FROM THE ASSISTANT SECRETARY'S LETTER THAT THE SERVICES INVOLVED HERE WOULD NOT BE RENDERED UNTIL AFTER PAYMENT THEREFOR WAS MADE BY THE GOVERNMENT.

THUS, WHILE THE PROPOSED ADVANCE PAYMENT OF TRACER FEES MAY BE ADVANTAGEOUS TO THE GOVERNMENT, IN THE ABSENCE OF A SHOWING THAT SUCH PROCEDURE IS "AUTHORIZED BY THE APPROPRIATION CONCERNED OR OTHER LAW," PAYMENT OF THE TRACER FEE IN ADVANCE OF THE RENDITION OF SUCH SERVICE WOULD BE IN CONTRAVENTION OF 31 U.S.C. 259, AS INDICATED IN THE ASSISTANT SECRETARY'S LETTER.

SECTION 305 OF THE FEDERAL PROPERTY AND ADMINISTRATIVE SERVICES ACT OF 1949, AS AMENDED, 41 U.S.C. 255, PERMITS ADVANCE PAYMENTS UNDER CERTAIN CONDITIONS. HOWEVER, THE PROPOSED PROCEDURE INVOLVED HERE, AS SET FORTH IN THE ASSISTANT SECRETARY'S LETTER DOES NOT APPEAR TO MEET THE CONDITIONS SET FORTH IN SECTION 305 AND THE APPLICABLE GSA REGULATIONS (41 CFR 1-30.1 AND 1-30.4). ACCORDINGLY, YOUR DEPARTMENT MAY NOT MAKE ADVANCE PAYMENTS OF TRACER FEES TO COMMERCIAL MONEY ORDER VENDORS AS PROPOSED UNLESS SUCH CONDITIONS CAN BE MET.