Claim for Real Estate Expenses Incurred in Residence Purchase

An Internal Revenue Service (IRS) employee requested reimbursement of real estate expenses incurred in connection with the purchase of a residence at his new permanent duty station. IRS denied the claimant's broker's fees allegedly representing the costs of contract preparation and miscellaneous expenses because the claimant failed to provide an itemized account of the broker's services; reimbursement for the loan transfer fee was denied on the basis that such a fee is similiar to a finance charge. The agency also denied the claim for the cost of obtaining a certificate of taxes due, because the Department of Housing and Urban Development indicated that, in the State in question, it is customary for the seller to pay for a tax certificate. The claimant reclaimed the disallowed amounts and submitted with his voucher the real estate broker's statement itemizing services performed; but IRS denied reimbursement of the reclaimed amounts for the same reasons stated in its original determination. GAO held that none of the expenses claimed were reimburseable since: (1) the broker's fee was incurred incident to purchase and covered services customarily performed by the real estate broker; (2) the loan transfer fee was a finance charge within the meaning of the applicable regulation; and (3) the fee for certification of taxes was not customarily paid by the buyer in the relevant locality. Accordingly, the voucher may not be certified for payment.