B-240762, May 13, 1991

B-240762, May 13, 1991

CIVILIAN PERSONNEL - Relocation - Taxes - Allowances - Eligibility DIGEST: A transferred employee sold his residence at his old duty station and received reimbursement from the federal government for the loss on the sale of his home under the Homeowners Assistance Program. He claims a Relocation Income Tax (RIT) allowance under 5 U.S.C. Sec. 5724b (1988) on the additional taxes withheld from his pay. The claim is denied since the taxable income received under the Homeowners Assistance Program is not included in the allowable items for which a RIT allowance is payable.

Brian C. McDaniel - Relocation Income Tax Allowance - Taxes Not Included:

A decision is requested on whether Mr. Brian C. McDaniel, an employee of the United States Army Corps of Engineers, is entitled to a Relocation Income Tax (RIT) allowance for reimbursement he received under the Homeowners Assistance Program. /1/ For the following reasons, the claim is denied.

BACKGROUND

Mr. McDaniel was transferred from a position with the Army Corps of Engineers at Minot Air Force Base, North Dakota, to a position with the Corps of Engineers at Huntsville, Alabama, in January 1989. In addition to the usual reimbursement for transportation, travel, and relocation expenses, under the provisions of 5 U.S.C. Secs. 5724 and 5724a (1988), Mr. McDaniel was reimbursed $23,350 for a loss on the sale of his home in Minot, North Dakota. The additional reimbursement is authorized under the provisions of the Homeowners Assistance Program, 10 U.S.C. Sec. 2832 (1988), as amended. Under the program, the Secretary of Defense may exercise the authority provided in the Demonstration Cities and Metropolitan Development Act of 1966, 42 U.S.C. Sec. 3374 (1988), and provide financial help to eligible homeowners serving or employed at military installations which are ordered closed or partially closed.

Mr. McDaniel was deemed eligible for the program and chose one of the available options, namely to take a cash payment to cover part of the loss he sustained resulting from a private sale of his residence. This cash payment resulted in an additional federal income tax of $4,670 and in social security taxes of $1,753. Mr. McDaniel's claim for a RIT allowance for those taxes was denied by his employing agency on the basis that a RIT allowance only applies to certain travel and transportation expenses and relocation allowances which are furnished in kind, but does not apply to the Homeowners Assistance Program, an entirely different program that covers the loss of home property value when bases are closed. Mr. McDaniel states that such a determination is unjust and unreasonable and requests that this Office render a decision.

OPINION

The statutory authority for payment of a RIT allowance is codified at 5 U.S.C. Sec. 5724b (1988). Section 5724b authorizes reimbursement of substantially all federal, state, and local income taxes incurred by an employee arising out of reimbursement for travel and transportation expenses and authorized relocation allowances under 5 U.S.C. Secs. 5724, 5724a, and 5724c (1988). See Federal Travel Regulations, 41 C.F.R. part 302-11 (1990). Section 302-11.3 of the regulations provides that the RIT allowance is limited by law as to the types of moving expenses that can be covered. Subsections (a) through (i) of that section list the types of moving and relocation expenses or allowances which may be included in the computation of a RIT allowance. Only those expenses and allowances which are reimbursable under the Federal Travel Regulations in the first instance may be included in the RIT allowance computation. 41 C.F.R. Sec. 302 11.5(c). See Carolyn S. Fleming, 69 Comp.Gen. 308 (1990).

Since Mr. McDaniel was reimbursed for the loss on the sale of his residence under the Homeowners Assistance Program and not under provisions of the Federal Travel Regulations, there is no authority for payment of a RIT allowance under these circumstances. Similarly, we have held that Federal Insurance Contributions Act amounts that are withheld from an employee's salary are not reimbursable as a RIT allowance, since they are also not listed in the Federal Travel Regulations as a covered moving expense. Carolyn S. Fleming, 69 Comp.Gen. 308, supra.

Accordingly, Mr. McDaniel's request for payment of a RIT allowance for the federal income and social security taxes withheld from his Homeowners Assistance Program cash payment is denied.

/1/ The request was submitted by the Per Diem, Travel and Transportation Allowance Committee, and has been assigned PDTATAC Control Number 90-05. We point out that our award of proposal preparation costs here is in addition to our earlier award to Tolen of its costs of filing and pursuing its bid protests including attorneys' fees.