Claim for Pro Rata Reimbursement of Real Estate Expenses

GAO was asked to determine whether a reclaim voucher submitted by an employee of the Internal Revenue Service may be paid. The record showed that, at the time of the employee's transfer, the employee owned a house which was situated on approximately 6 acres of land. Although the claimant listed the entire property for sale, he was unable to sell the entire parcel due to poor economic conditions. Upon the advice of his realtor, the employee subsequently divided the property into two sections in order to enhance his prospects for a sale. One section included the employee's house and 2 acres of land; the other section included the remaining 3.9 acres. The employee has already been reimbursed for the expenses incurred in selling the house and the 2 acres. The reclaim voucher is for the real estate commission and miscellaneous costs in connection with selling the adjacent 3.9 acres. The record also showed that the Internal Revenue Service disallowed a previous claim by the employee for a recording fee incident to the purchase of his mobile home lot on the basis of its regulations. In his request for reimbursement, the employee contended that the parcel of land which did not contain the house was reasonably related to the residence site. GAO held that, under Federal regulations, an employee is entitled to pro rata reimbursement when he sells or purchases land that reasonably relates to the residence site. However, after an examination of the record, GAO does not believe that the land which was sold separately from the house was reasonably related to the residence site. GAO has consistently held that, where an employee has divided his property into separate parcels for sale purposes, it must be concluded that parcels other than that upon which the house is located do not relate to the residence site. Therefore, the reclaim voucher may not be paid. However, with regard to the employee's previous claim for reimbursement of a recording fee incident to the purchase of his mobile home lot at his new duty station, GAO held that the disallowance of the claim was inconsistent with Federal regulations. Therefore, the claim may be certified for payment if the recording fees are customarily paid by the purchaser and if they do not exceed amounts customarily charged in the locality of the residence.