B-177789, January 26, 1973

B-177789: Jan 26, 1973

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The United States Civil service Commission by which your civil service retirement annuity is being withheld in satisfaction of your liability for Federal taxes as determined by the Internal Revenue Service. You assert that you do not owe the taxes claimed by the Internal Revenue Service and that your civil service retirement annuity is not subject to being withheld to satisfy the alleged debt. The question of your tax liability is subject to administrative determination by the Secretary of the Treasury or his designee under 26 U.S.C. 6201. Such determination is subject to judicial review as provided in chapter 76 of title 26. 5 U.S.C. 8346(a) provides that civil service retirement annuities are not "subject to execution.

B-177789, January 26, 1973

The Honorable Victor Wickersham c/o Oklahoma State House of Representatives Oklahoma City, Oklahoma 73105

Dear Mr. Wickersham:

We refer to your letter of January 8, 1973, concerning the actions of the Internal Revenue Service, Treasury Department, and the United States Civil service Commission by which your civil service retirement annuity is being withheld in satisfaction of your liability for Federal taxes as determined by the Internal Revenue Service. You assert that you do not owe the taxes claimed by the Internal Revenue Service and that your civil service retirement annuity is not subject to being withheld to satisfy the alleged debt. Accordingly, you request that action be taken to stop the remittance of your annuity to the Internal Revenue Service.

The question of your tax liability is subject to administrative determination by the Secretary of the Treasury or his designee under 26 U.S.C. 6201. Such determination is subject to judicial review as provided in chapter 76 of title 26. United States Code. 26 U.S.C. 7401 et. seq. This Office has not been given authority to determine or to adjudicate questions arising under the Internal Revenue Code.

Regarding the withholding of your annuity payments, 5 U.S.C. 8346(a) provides that civil service retirement annuities are not "subject to execution, levy, attachment, garnishment, or other legal process." However, it has consistently been held by this Office that civil service retirement annuities are subject to setoff for debts due the United States. 21 Comp. Gen. 1000 (1942); See also 39 Comp. Gen. 203 (1959) copy herewith; 27 id. 703 (1948). A similar view was expressed in the case of United States v. United States Fidelity and Guaranty Company. 35 F. Supp. 959 (1940).

In keeping with that rule the Civil Service Commission has included a provision in its regulations under which amounts due to former employees from the retirement fund are subject to setoff based on counterclaims filed by the Government. the regulation authorizing such action is 5 CFR 831.101(b), and the Commission's instructions for filing of counterclaims by Government agencies are contained in subchapter S19 of Federal Personnel Manual Supplement 831-1 (pates 69 and 70). copies of those pages are enclosed. As indicated in the enclosures the Internal Revenue Service would be the appropriate agency to hear nay appeal you may wish to make for payment of all or a portion of your annuity based on your reliance on that income for living expenses.

We note further, that the provisions of the Internal Revenue Code concerning the collection of tax liabilities which exempt certain funds from levy for taxes do not exempt civil service retirement annuities from such levy. See 26 U.S.C. 6331, 6334.

We regret that we are unable to give you more assistance in this matter.

Sincerely yours,

E. H. Morse, Jr. For the Comptroller General of the United States