B-171436, FEB 22, 1971

B-171436: Feb 22, 1971

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THE FINAL DECISION AS TO WHETHER THE MOVING EXPENSES WILL BE ALLOWED AS A DEDUCTION ON CLAIMANT'S INCOME TAX RETURN RESTS WITH THE INTERNAL REVENUE SERVICE. IT SEEMS REASONABLE THAT SUCH DEDUCTION IS ALLOWABLE. GRAINGER: FURTHER REFERENCE IS MADE TO YOUR LETTER DATED NOVEMBER 12. NEENAN SAYS THAT HE AND HIS FAMILY TRAVELED FROM HIS OLD TO NEW STATION VIA THE SCOTT RIVER ROAD WHICH IS A DISTANCE OF 48 MILES. REIMBURSEMENT FOR MOVEMENT OF HOUSEHOLD GOODS WAS MADE ON THE BASIS OF THE 68-MILE DISTANCE. FEDERAL TAX IN THE AMOUNT OF $159.21 WAS WITHHELD ON MR. NEENAN'S TRAVEL VOUCHER BUT THE AMOUNT WAS RETAINED IN A SUSPENSE ACCOUNT AND WAS NOT REMITTED TO THE TREASURY DEPARTMENT. "(C) CONDITIONS FOR ALLOWANCE. - NO DEDUCTION SHALL BE ALLOWED UNDER THIS SECTION UNLESS- "(1) THE TAXPAYER'S NEW PRINCIPAL PLACE OF WORK- "(A) IS AT LEAST 50 MILES FARTHER FROM HIS FORMER RESIDENCE THAN WAS HIS FORMER PRINCIPAL PLACE OF WORK.

B-171436, FEB 22, 1971

REIMBURSEMENT FOR MOVING EXPENSES - AMOUNT WITHHELD FOR TAXES DECISION HOLDING THAT $119.21 WITHHELD FOR TAXES ON THE REIMBURSEMENT FOR MOVING EXPENSES MADE TO THOMAS E. NEENAN INCIDENT TO HIS CHANGE OF OFFICIAL STATION MAY BE PAID. A VOUCHER PROPOSING PAYMENT OF THE TOTAL AMOUNT WITHHELD ($159.21) LESS THE TAX APPLICABLE TO THE MISCELLANEOUS EXPENSES ALLOWANCE OF $200 MAY BE CERTIFIED FOR PAYMENT. THE FINAL DECISION AS TO WHETHER THE MOVING EXPENSES WILL BE ALLOWED AS A DEDUCTION ON CLAIMANT'S INCOME TAX RETURN RESTS WITH THE INTERNAL REVENUE SERVICE, BUT IT SEEMS REASONABLE THAT SUCH DEDUCTION IS ALLOWABLE.

TO MR. PAUL J. GRAINGER:

FURTHER REFERENCE IS MADE TO YOUR LETTER DATED NOVEMBER 12, 1970, REQUESTING A DECISION AS TO WHETHER THERE MAY BE CERTIFIED FOR PAYMENT A VOUCHER FOR $119.21, REPRESENTING AN AMOUNT WITHHELD FOR TAXES ON THE REIMBURSEMENT FOR MOVING EXPENSES MADE TO MR. THOMAS E. NEENAN INCIDENT TO HIS TRANSFER FROM SEIAD, CALIFORNIA, TO FORT JONES, CALIFORNIA, DURING AUGUST 1970.

MR. NEENAN SAYS THAT HE AND HIS FAMILY TRAVELED FROM HIS OLD TO NEW STATION VIA THE SCOTT RIVER ROAD WHICH IS A DISTANCE OF 48 MILES. DUE TO THE ROUGH, LOW STANDARD CONDITION OF THAT ROAD, MOVER REFUSED TO USE THAT ROUTE AND TRAVELED VIA YREKA, A DISTANCE OF 68 MILES. REIMBURSEMENT FOR MOVEMENT OF HOUSEHOLD GOODS WAS MADE ON THE BASIS OF THE 68-MILE DISTANCE.

FEDERAL TAX IN THE AMOUNT OF $159.21 WAS WITHHELD ON MR. NEENAN'S TRAVEL VOUCHER BUT THE AMOUNT WAS RETAINED IN A SUSPENSE ACCOUNT AND WAS NOT REMITTED TO THE TREASURY DEPARTMENT. THE VOUCHER PROPOSES PAYMENT OF THE AMOUNT WITHHELD AS TAXES LESS THE TAX APPLICABLE TO THE MISCELLANEOUS EXPENSE ALLOWANCE OF $200.

SECTION 217, TITLE 26, U.S.C. AS AMENDED BY THE TAX REFORM ACT OF 1969, APPROVED DECEMBER 30, 1969, PUBLIC LAW 91-172, 83 STAT. 487, 577, PROVIDES IN PERTINENT PART AS FOLLOWS:

"(A) DEDUCTION ALLOWED. - THERE SHALL BE ALLOWED AS A DEDUCTION MOVING EXPENSES PAID OR INCURRED DURING THE TAXABLE YEAR IN CONNECTION WITH THE COMMENCEMENT OF WORK BY THE TAXPAYER AS AN EMPLOYEE OR AS A SELF-EMPLOYED INDIVIDUAL AT A NEW PRINCIPAL PLACE OF WORK.

"(C) CONDITIONS FOR ALLOWANCE. - NO DEDUCTION SHALL BE ALLOWED UNDER THIS SECTION UNLESS-

"(1) THE TAXPAYER'S NEW PRINCIPAL PLACE OF WORK-

"(A) IS AT LEAST 50 MILES FARTHER FROM HIS FORMER RESIDENCE THAN WAS HIS FORMER PRINCIPAL PLACE OF WORK, OR

"(B) IF HE HAD NO FORMER PRINCIPAL PLACE OF WORK, IS AT LEAST 50 MILES FROM HIS FORMER RESIDENCE, AND

* * * * * FOR PURPOSES OF PARAGRAPH (1), THE DISTANCE BETWEEN TWO POINTS SHALL BE THE SHORTEST OF THE MORE COMMONLY TRAVELED ROUTES BETWEEN SUCH TWO POINTS." SECTION 3401 OF THAT TITLE PROVIDES IN PERTINENT PART THAT:

"(A) WAGES.

"FOR PURPOSES OF THIS CHAPTER, THE TERM 'WAGES' MEANS ALL REMUNERATION (OTHER THAN FEES PAID TO A PUBLIC OFFICIAL) FOR SERVICES PERFORMED BY AN EMPLOYEE FOR HIS EMPLOYER, INCLUDING THE CASH VALUE OF ALL REMUNERATION PAID IN ANY MEDIUM OTHER THAN CASH; EXCEPT THAT SUCH TERM SHALL NOT INCLUDE REMUNERATION PAID-

"(15) TO OR ON BEHALF OF AN EMPLOYEE IF (AND TO THE EXTENT THAT) AT THE TIME OF THE PAYMENT OF SUCH REMUNERATION IT IS REASONABLE TO BELIEVE THAT A CORRESPONDING DEDUCTION IS ALLOWABLE UNDER SECTION 217."

WHILE THE FINAL DECISION AS TO WHETHER THE MOVING EXPENSES IN THIS CASE WILL BE ALLOWED AS A DEDUCTION ON MR. NEENAN'S INCOME TAX RETURN UNDER THE 50-MILE REQUIREMENT RESTS WITH THE INTERNAL REVENUE SERVICE, IT SEEMS REASONABLE TO ASSUME THAT SUCH DEDUCTION IS ALLOWABLE. THIS IS ON THE BASIS THAT THE ROUTE TAKEN BY THE MOVER (68 MILES) WOULD BE THE MORE COMMONLY TRAVELED ROUTE.

ACTION ON THE VOUCHER WHICH IS RETURNED MAY BE TAKEN ACCORDINGLY.