B-174098, DEC 8, 1971

B-174098, DEC 8, 1971

CIVILIAN EMPLOYEE - SHIPMENT OF HOUSEHOLD GOODS - TERMINATION OF LEASE - REIMBURSEMENT SUBJECT TO WITHHOLDING TAX DECISION REVERSING IN PART A CLAIMS DIVISION SETTLEMENT WHICH DENIED A CLAIM OF MARY L. SMITH FOR CERTAIN RELOCATION EXPENSES IN CONNECTION WITH THE RELOCATION OF HER OFFICIAL DUTY STATION FROM WASHINGTON, D.C., TO SUITLAND, MD., BY THE DEPARTMENT OF THE NAVY. THE EVIDENCE PRESENTED AS TO THE ESTIMATED WEIGHT OF THE SHIPMENT OF THE HOUSEHOLD GOODS SATISFIES THE REQUIREMENTS OF 48 COMP. GEN. 115 (1968), AND THE CLAIM WAS IMPROPERLY DENIED. A SETTLEMENT WILL ISSUE FOR PAYMENT ON THIS PORTION OF THE CLAIM. THE TIP TO THE MOVERS WAS A PERSONAL EXPENSE AND WAS PROPERLY DENIED. THE EXPENSE OF LEASE TERMINATION WAS ALSO PROPERLY DENIED BECAUSE OF INADEQUATE DOCUMENTATION. (SECTION 4.2F, OMB CIRCULAR NO. A 56). THE MISCELLANEOUS EXPENSE PAYMENT WAS CORRECT UNDER SECTION 3.1B(1), OMB CIRCULAR NO. A-56, AND WAS PROPERLY SUBJECT TO WITHHOLDING TAX UNDER THE APPLICABLE IRS RULINGS. THEREFORE, THE CLAIM FOR REIMBURSEMENT OF THAT $20 IS DENIED.

TO MISS MARY L. SMITH:

REFERENCE IS MADE TO YOUR LETTER DATED AUGUST 27, 1971, WHEREIN YOU AGAIN OBJECT TO THE ACTION OF OUR OFFICE IN DEDUCTING INCOME TAX FROM CERTAIN RELOCATION EXPENSES ALLOWED IN CONNECTION WITH THE SETTLEMENT OF YOUR CLAIM FOR SUCH EXPENSES INCURRED BY THE RELOCATION OF YOUR OFFICIAL DUTY STATION FROM WASHINGTON, D.C., TO SUITLAND, MARYLAND, WHILE EMPLOYED BY THE DEPARTMENT OF THE NAVY.

THE RECORD INDICATES THAT YOU SUBMITTED FOR PAYMENT A VOUCHER IN THE AMOUNT OF $276.50 FOR REIMBURSEMENT OF EXPENSES INCURRED BY YOU IN RELOCATING YOUR RESIDENCE PURSUANT TO THE CHANGE OF DUTY STATIONS. BY OUR SETTLEMENT LETTER OF JULY 13, 1971, THE CLAIM FOR $276.50 WAS DISALLOWED AND IN ITS STEAD A CHECK IN THE AMOUNT OF $80 WAS ISSUED IN YOUR FAVOR. IT WAS AT THAT TIME STATED THAT THE GROSS AMOUNT DUE YOU WAS $100 AND FROM THIS WAS SUBTRACTED A SUM OF $20 REPRESENTING FEDERAL WITHHOLDING TAX. PURSUANT TO YOUR INQUIRY DATED AUGUST 5, 1971, WITH REGARD TO THE PROPRIETY OF DEDUCTING THE $20 AS WITHHOLDING TAX, IT WAS STATED BY OUR CLAIMS DIVISION IN ITS LETTER DATED AUGUST 25, 1971:

" *** THE INTERNAL REVENUE SERVICE HAS RULED THAT ALL REIMBURSEMENTS EXCEPT THOSE FOR MOVING THE EMPLOYEE, HIS IMMEDIATE FAMILY AND HIS HOUSEHOLD GOODS AND PERSONAL EFFECTS FROM THE OLD STATION TO THE NEW STATION ARE TAXABLE AS INCOME AND SUBJECT TO WITHHOLDING."

IN YOUR LETTER OF AUGUST 27, 1971, IT IS YOUR POSITION THAT AN ERROR HAS BEEN MADE SINCE THE EXPENSE FOR WHICH YOU HAVE BEEN REIMBURSED IS OF THE SAME CLASS AS THOSE EXCEPTED FROM THE DEDUCTING OF THE WITHHOLDING TAX. PURSUANT TO THIS RATIONALE, YOU HAVE REQUESTED THAT FURTHER REIMBURSEMENT IN THE AMOUNT OF $20 BE CREDITED IN YOUR FAVOR.

YOUR LETTER WILL BE CONSIDERED AS A REQUEST FOR RECONSIDERATION. THE ORIGINAL VOUCHER SUBMITTED FOR PAYMENT IN THE AMOUNT OF $276.50 WAS COMPRISED OF THE FOLLOWING EXPENSES:

HOUSEHOLD MOVE $193.00

TIP TO MOVERS 10.00

MOVE AND RECONNECT PHONE 7.50

COST OF LEASE TERMINATION 66.00

$276.50

OFFICE OF MANAGEMENT AND BUDGET (OMB) CIRCULAR NO. A-56, REVISED JUNE 26, 1969, SECTION 6.4D(3) STATES WITH REGARD TO THE REIMBURSEMENT OF HOUSEHOLD TRANSFER EXPENSES:

"(3) DOCUMENTATION REQUIRED. CLAIMS FOR REIMBURSEMENT UNDER THE COMMUTED RATE SYSTEM SHALL BE SUPPORTED BY (A) THE ORIGINAL OR A CERTIFIED COPY OF THE RECEIPTED WAREHOUSE BILL FOR TEMPORARY STORAGE AND (B) IN SUPPORT OF TRANSPORTATION, THE ORIGINAL BILLS OF LADING OR CERTIFIED COPIES, OR, IF BILLS OF LADING ARE NOT AVAILABLE, OTHER EVIDENCE SHOWING POINT OF ORIGIN, DESTINATION AND WEIGHT. IF NO ADEQUATE SCALE IS AVAILABLE AT POINT OF ORIGIN, AT ANY POINT EN ROUTE, OR AT DESTINATION, A CONSTRUCTIVE WEIGHT, BASED ON 7 POUNDS PER CUBIC FOOT OF PROPERLY LOADED VAN SPACE, MAY BE USED. SUCH CONSTRUCTIVE WEIGHT ALSO MAY BE USED FOR A PART LOAD WHEN ITS WEIGHT COULD NOT BE OBTAINED AT ORIGIN, EN ROUTE, OR AT DESTINATION, WITHOUT FIRST UNLOADING IT OR OTHER PART LOADS BEING CARRIED IN THE SAME VEHICLE."

YOUR CLAIM WAS DENIED ON THE BASIS OF THE REQUIREMENTS OF THIS SECTION SINCE YOU SUBMITTED NEITHER EVIDENCE OF WEIGHT NOR AN INDICATION THAT SCALES WERE UNAVAILABLE FOR THE PURPOSE OF OBTAINING THE WEIGHT OF THE SHIPMENT.

IN B-150433, DECEMBER 17, 1962, WE HELD THAT WHERE THERE IS NO LEGAL OBLIGATION FOR THE CARRIER TO WEIGH THE SHIPMENT, THE QUESTION OF AVAILABILITY OF WEIGHING FACILITIES BECOMES IRRELEVANT. IN THAT CASE, THE MOVE INVOLVED WAS ENTIRELY INTRASTATE AND SINCE THE APPLICABLE TARIFF AUTHORIZED CHARGES ON AN HOURLY RATHER THAN A WEIGHT AND DISTANCE BASIS, THE DISTANCE INVOLVED BEING LESS THAN 25 MILES, APPROPRIATE EVIDENCE OF VOLUME WAS DEEMED TO PROVIDE AN ADEQUATE BASIS FOR REIMBURSEMENT FOR TRANSPORTATION OF THE GOODS ON A COMMUTED RATE BASIS.

WITH REGARD TO THE EVIDENCE NECESSARY TO ESTABLISH ENTITLEMENT TO REIMBURSEMENT BASED ON VOLUME, WE STATED IN 48 COMP. GEN. 115, 118 (1968) AS FOLLOWS:

"SINCE THE EMPLOYEE FAILED TO OBTAIN THE ACTUAL WEIGHT OF HIS HOUSEHOLD GOODS AT THE TIME OF TRANSPORTATION, HE MAY BE PAID AT THE COMMUTED RATE ONLY IF HE IS ABLE TO SHOW THE AMOUNT OF SPACE OCCUPIED BY HIS GOODS AND THAT THE GOODS WERE PROPERLY LOADED IN THE SPACE AVAILABLE. ESTABLISHING THE AMOUNT OF SPACE THAT WOULD HAVE BEEN OCCUPIED BY HIS EFFECTS IF PROPERLY LOADED, THE EMPLOYEE MAY SUBMIT A LIST OF ITEMS TRANSPORTED TOGETHER WITH THE VOLUME OCCUPIED BY EACH BASED ON ACTUAL MEASUREMENT OR A UNIFORM TABLE, PREFERABLY PREPARED BY A COMMERCIAL CARRIER."

THAT PORTION OF YOUR CLAIM FOR MOVEMENT OF HOUSEHOLD EFFECTS WAS DISALLOWED FOR THE REASON THAT A WEIGHT CERTIFICATE WAS NOT FURNISHED. HOWEVER, EVIDENCE OF WEIGHT AS SUBMITTED BY YOU CONSISTS OF A LIST OF ITEMS TRANSPORTED TOGETHER WITH THE VOLUME OCCUPIED BY EACH BASED ON A UNIFORM TABLE PREPARED BY THE COMMERCIAL CARRIER WHICH MOVED YOUR HOUSEHOLD EFFECTS. THIS EVIDENCE INDICATES THAT AN ESTIMATED WEIGHT OF 3,878 POUNDS, DETERMINED ON THE BASIS OF STANDARDIZED TABLES OF VOLUME MULTIPLIED BY 7 POUNDS PER CUBIC FOOT, WAS TRANSPORTED IN YOUR MOVE TO THE NEW DUTY STATION. WE VIEW THIS EVIDENCE AS SATISFYING THE CRITERIA FOR REIMBURSEMENT STATED ABOVE IN 48 COMP. GEN. 115 (1968). IN SUCH LIGHT, YOUR CLAIM FOR REIMBURSEMENT FOR HOUSEHOLD MOVE EXPENSES IS DEEMED PROPER AND A SETTLEMENT WILL ISSUE FOR PAYMENT ON THE COMMUTED RATE BASIS.

AS FAR AS THE $10 TIP TO THE MOVERS IS CONCERNED, THIS IS CONSIDERED A PERSONAL EXPENSE AND AS SUCH, ONE NOT SUBJECT TO REIMBURSEMENT.

WITH REGARD TO THE REIMBURSEMENT OF THE LEASE TERMINATION EXPENSE, THE OMB CIRCULAR NO. A-56 REFERENCED ABOVE, STATES AT SECTION 4.2F:

"F. SETTLEMENT OF AN UNEXPIRED LEASE. EXPENSES INCURRED FOR SETTLING AN UNEXPIRED LEASE (INCLUDING MONTH-TO-MONTH RENTAL) ON RESIDENCE QUARTERS OCCUPIED BY THE EMPLOYEE AT THE OLD OFFICIAL STATION MAY INCLUDE BROKER'S FEES FOR OBTAINING A SUBLEASE OR CHARGES FOR ADVERTISING AN UNEXPIRED LEASE. SUCH EXPENSES ARE REIMBURSABLE WHEN (1) APPLICABLE LAWS OR THE TERMS OF THE LEASE PROVIDE FOR PAYMENT OF SETTLEMENT EXPENSES, (2) SUCH EXPENSES CANNOT BE AVOIDED BY SUBLEASE OR OTHER ARRANGEMENT, (3) THE EMPLOYEE HAS NOT CONTRIBUTED TO THE EXPENSE BY FAILING TO GIVE APPROPRIATE LEASE TERMINATION NOTICE PROMPTLY AFTER HE HAS DEFINITE KNOWLEDGE OF THE PROPOSED TRANSFER, AND (4) THE BROKER'S FEES OR ADVERTISING CHARGES ARE NOT IN EXCESS OF THOSE CUSTOMARILY CHARGED FOR COMPARABLE SERVICES IN THAT LOCALITY. ITEMIZATION OF THESE EXPENSES IS REQUIRED AND THE TOTAL AMOUNT WILL BE ENTERED ON AN APPROPRIATE TRAVEL VOUCHER. THIS VOUCHER MAY BE SUBMITTED SEPARATELY OR WITH A CLAIM THAT IS TO BE MADE FOR EXPENSES INCIDENT TO THE PURCHASE OF A DWELLING. EACH ITEM MUST BE SUPPORTED BY DOCUMENTATION SHOWING THAT THE EXPENSE WAS IN FACT INCURRED AND PAID BY THE EMPLOYEE."

THE NECESSARY DOCUMENTATION REQUIRED BY THIS SECTION WAS NOT FURNISHED TO THE AUTHORIZING OFFICIALS. THE ONLY EVIDENCE WHICH WAS SUPPLIED IN THIS REGARD WAS A CANCELLED CHECK WITHOUT APPLICABLE CORROBORATING EXCERPTS FROM THE LEASE OR OTHER FORMAL DOCUMENTS. ACCORDINGLY, THERE IS NO BASIS FOR PAYMENT OF LEASE TERMINATION EXPENSES.

THE EXPENSE CLAIMED FOR RECONNECTING YOUR TELEPHONE SERVICE, $7.50, IS CLASSIFIED A MISCELLANEOUS EXPENSE BY OMB CIRCULAR NO. A-56, SECTION 3.1B(1). THE MISCELLANEOUS EXPENSE ALLOWANCE IS SEPARATE AND APART FROM THE MOVEMENT OF HOUSEHOLD GOODS OR PERSONAL EFFECTS OF THE EMPLOYEE WHO IS BEING TRANSFERRED. A MINIMUM MISCELLANEOUS EXPENSE ALLOWANCE OF $100 IS SPECIFIED IN THE REGULATIONS FOR A SINGLE PERSON TO DEFRAY THE EXPENSES OF DISCONNECTING AND CONNECTING APPLIANCES, CUTTING AND FITTING RUGS, UTILITY DEPOSITS, NEW AUTOMOBILE LICENSES, AND OTHER SIMILAR EXPENSES. WHILE YOU ONLY CLAIMED $7.50 FOR THIS PURPOSE ON YOUR VOUCHER, NEVERTHELESS WE ALLOWED YOU THE MINIMUM OF $100 AFTER DEDUCTION OF THE TAX CHARGE.

AS WE STATED IN OUR LETTER OF EXPLANATION OF AUGUST 25, 1971, THE ONLY EXCEPTION TO THE DEDUCTION OF WITHHOLDING TAXES IS THE CATEGORY OF EXPENSES INCURRED FOR MOVING THE EMPLOYEE, HIS IMMEDIATE FAMILY AND HOUSEHOLD GOODS AND PERSONAL EFFECTS FROM THE OLD STATION TO THE NEW STATION. SINCE THE ALLOWANCE OF $100 WAS UNDER THE CATEGORY OF MISCELLANEOUS EXPENSES, NOT THE CATEGORY OUTLINED ABOVE WHICH IS EXEMPT FROM THE DEDUCTING OF WITHHOLDING TAX, THE DEDUCTION OF THE $20 FOR TAX PURPOSES WAS PROPER.

IN SUMMARY, THE ACTION OF OUR CLAIMS DIVISION IN DENYING REIMBURSEMENT FOR HOUSEHOLD GOODS RELOCATION EXPENSES IS REVERSED AND A SUPPLEMENTARY SETTLEMENT WILL BE ISSUED IN DUE COURSE. HOWEVER, THE DEDUCTION OF WITHHOLDING TAX FROM THE REIMBURSEMENT ALLOWED UNDER THE CLASSIFICATION OF MISCELLANEOUS EXPENSES IS AFFIRMED.