B-242946, Jun 12, 1991

B-242946: Jun 12, 1991

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His expense is not customarily paid by purchasers in the area and was not necessary to complete the transaction. The radon test was for the employee purchaser's own personal benefit and protection of his property interest and. Is not reimbursable. Harrison: The issue in this case is whether Mr. Harrison states that the IRS contract relocation services company requires a radon test be conducted on a residence the company is purchasing. The charge for the radon test was $94. The agency states that it is the practice of its contract relocation services company to charge the expense of radon testing to the seller. Incidental charges incurred in the purchase of a residence are reimbursable only if they are customarily paid by the purchaser at the new official station.

B-242946, Jun 12, 1991

CIVILIAN PERSONNEL - Relocation - Residence transaction expenses - Inspection fees - Reimbursement DIGEST: The employee paid for the cost of a radon test incurred incident to the purchase of a residence at his new duty station. His expense is not customarily paid by purchasers in the area and was not necessary to complete the transaction. The radon test was for the employee purchaser's own personal benefit and protection of his property interest and, hence, is not reimbursable.

Larry E. Harrison:

The issue in this case is whether Mr. Larry E. Harrison, an employee of the Internal Revenue Service (IRS), may be reimbursed for the cost of a radon test he incurred incident to the purchase of a residence in connection with his permanent change of station in August 1990. /1/

Mr. Harrison transferred from Jackson, Mississippi, to Cincinnati, Ohio. Mr. Harrison states that the IRS contract relocation services company requires a radon test be conducted on a residence the company is purchasing. He states that the relocation company required such test prior to purchasing his former residence in Jackson. Therefore, he made the same requirement a condition of the purchase of his new residence in Cincinnati. Mr. Harrison says that he does not anticipate living in the Cincinnati area for the remainder of his career with the government and did not wish to purchase a residence that would not meet the requirements established by the IRS' contract relocation services company. The charge for the radon test was $94.

The IRS denied the claim. The agency states that it is the practice of its contract relocation services company to charge the expense of radon testing to the seller. Therefore, the IRS considers the radon test expense incurred by Mr. Harrison to be for his own personal benefit.

Incidental charges incurred in the purchase of a residence are reimbursable only if they are customarily paid by the purchaser at the new official station, to the extent they do not exceed amounts customarily charged in the locality of the residence. /2/ Consistent with this regulation, where an inspection expense was not incurred to satisfy an obligation customarily assumed by purchasers in the locality where the property is located and was not necessary to complete the sale and purchase transaction, this Office has held that the inspection was for the employee-purchaser's own personal benefit and protection of his property interest, and, hence, not reimbursable. /3/

We have been informally advised by officials at the Cincinnati office of the Department of Housing and Urban Development (HUD) that it is not the customary practice in the Cincinnati area for the purchaser to pay for a radon test. Rather, the payment of such a fee is negotiable between the seller and the purchaser. Further, IRS reports that it is the practice of its contract relocation services company to charge the expense of radon testing to the seller.

Here, Mr. Harrison did not incur the radon test expense to satisfy an obligation customarily assumed by purchasers in the Cincinnati area and such test was not necessary to complete the sale and purchase transaction. The requirement for a radon test was included in the sales agreement at his own request. Hence, it was for his own personal benefit and protection of his property interest.

Accordingly, IRS properly denied Mr. Harrison's claim for reimbursement of the cost of a radon test he incurred in the purchase of his residence in Cincinnati.

/1/ The question was submitted for decision by Ms. Georgia Fannin, Authorized Certifying Officer, IRS, Department of the Treasury.

/2/ 41 C.F.R. Sec. 302-6.2(f) (1990).

/3/See Louis H. Schwartz, B-231485, Jan. 19, 1989; Ronald M. Pearson, B-230402, Mar. 23, 1988; Wayne V. Girton, B-185783, Apr. 29, 1976.