B-161795, JUN. 29, 1967

B-161795, JUN. 29, 1967

TO THE SECRETARY OF THE TREASURY:

WE REFER TO LETTER OF JUNE 12, 1967, FROM THE ASSISTANT SECRETARY FOR ADMINISTRATION IN WHICH HE REQUESTS OUR DECISION WHETHER SELECTEES FOR PARTICIPATION IN THE EXECUTIVE SELECTION AND DEVELOPMENT PROGRAM,BUREAU OF INTERNAL REVENUE, MAY BE REIMBURSED FOR AUTHORIZED EXPENSES INCURRED IN SELLING THEIR HOMES LOCATED AT THEIR OFFICIAL STATIONS AT THE TIME OF THEIR PARTICIPATION IN THE PROGRAM.

THE PERTINENT FACTS ARE SET OUT IN THE ASSISTANT SECRETARY'S LETTER FROM WHICH WE QUOTE AS FOLLOWS.

"THE TRAINING PERIOD LAST SIX MONTHS, DURING WHICH THE PARTICIPANTS ARE IN A TRAVEL STATUS AWAY FROM THEIR OFFICIAL STATIONS. AT THE END OF THIS PERIOD, THEY MAY BE GIVEN PERMANENT ASSIGNMENTS. GENERALLY, HOWEVER, THEY ARE ASSIGNED TEMPORARILY FOR ADDITIONAL TRAINING OR WHILE AWAITING OPENINGS. DURING HIS TEMPORARY ASSIGNMENT, EACH EMPLOYEE IS IN A TRAVEL STATUS, SINCE THE DURATION OF THE ASSIGNMENT CANNOT BE ANTICIPATED.

"IT IS INTENDED THAT EACH PERMANENT ASSIGNMENT BE AT A LOCATION OTHER THAN THE PLACE THAT WAS THE PARTICIPANT'S OFFICIAL STATION AT THE TIME HE ENTERED THE PROGRAM. KNOWING THIS FACT, A TRAINEE MAY START NEGOTIATIONS FOR THE SALE OF HIS RESIDENCE, AND MAY EVEN COMPLETE THE SALE, BEFORE HE IS PERMANENTLY ASSIGNED. IN THIS EVENT, THE PROPERTY IS NOT HIS RESIDENCE AT THE TIME THAT THE LOCATION OF HIS NEW OFFICIAL STATION IS DETERMINED.

"UNDER SUBSECTION 23 (4) OF THE ADMINISTRATIVE EXPENSES ACT OF 1946, AS ADDED BY SECTION 2 OF PUBLIC LAW 89-516, APPROVED JULY 21, 1966, AN EMPLOYEE WHOSE OFFICIAL STATION IS CHANGED AT GOVERNMENT EXPENSE MAY BE REIMBURSED FOR THE EXPENSES OF THE SALE OF HIS RESIDENCE AT HIS OLD OFFICIAL STATION. IN IMPLEMENTING THIS PROVISION, THE REGULATIONS ATTACHED TO BUREAU OF THE BUDGET CIRCULAR NO. A-56 REVISED, DATED OCTOBER 12, 1966, AUTHORIZE REIMBURSEMENT PROVIDED THAT, AS STATED IN SUBSECTION 4.1C,"THE DWELLING AT THE OLD OFFICIAL STATION WAS THE EMPLOYEE'S ACTUAL RESIDENCE AT THE TIME HE WAS FIRST DEFINITELY INFORMED THAT HE IS TO BE TRANSFERRED TO THE NEW OFFICIAL STATION.'"

"A TRAINEE IN THE EXECUTIVE SELECTION AND DEVELOPMENT PROGRAM IS NOT DEFINITELY INFORMED OF HIS TRANSFER TO A SPECIFIC OFFICIAL STATION UNTIL HIS TRAINING IS COMPLETED AND A VACANCY BECOMES AVAILABLE. HOWEVER, THE CIRCUMSTANCES ARE SUCH THAT HIS SELECTION FOR THE PROGRAM IS TANTAMOUNT TO NOTIFICATION THAT HIS OFFICIAL STATION WILL BE CHANGED. WHILE THE INTERNAL REVENUE SERVICE REGULATIONS PROVIDE FOR KEEPING THE TRAINEE'S POSITION OPEN UNTIL HE COMPLETES THE SIX MONTH'S TRAINING, THERE IS LITTLE LIKELIHOOD THAT HE WILL RETURN TO THAT POSITION.

"WE WOULD LIKE TO CONSIDER THAT AN EMPLOYEE'S ASSIGNMENT TO THE EXECUTIVE SELECTION AND DEVELOPMENT PROGRAM CONSTITUTES DEFINITE INFORMATION REGARDING A PROPOSED CHANGE OF OFFICIAL STATION WITHIN THE MEANING OF THE BUREAU OF THE BUDGET REGULATIONS. A GRADUATE OF THE PROGRAM WOULD THEN BE ENTITLED TO REIMBURSEMENT, UPON ASSIGNMENT TO A NEW STATION, FOR THE COSTS INCURRED AFTER HIS ASSIGNMENT TO THE PROGRAM, INCIDENT TO THE SALE OF HIS RESIDENCE. YOUR DECISION REGARDING THE PROPRIETY OF THIS INTERPRETATION OF THE INTERNAL REVENUE SERVICE REGULATIONS IS REQUESTED. WE BELIEVE THAT SUCH AN INTERPRETATION IS FULLY JUSTIFIED IN VIEW OF THE INTENT OF PUBLIC LAW 89-516 TO ENCOURAGE MOBILITY OF PERSONNEL WHEN IN THE GOVERNMENT'S INTEREST. WE REALIZE THAT A TRAINEE WHO SELLS HIS RESIDENCE RISKS DENIAL OF REIMBURSEMENT IN THE EVENT THAT HE SHOULD RETURN TO HIS OLD POSITION OR EVEN IF HE SHOULD BE ASSIGNED TO A DIFFERENT POSITION AT THE SAME OFFICIAL STATION. HOWEVER, THESE POSSIBILITIES ARE SO UNLIKELY THAT WE DO NOT CONSIDER THEM WORTHY OF CONSIDERATION.

"IF YOU ARE UNABLE TO RULE FAVORABLY ON THE EXISTING PROCEDURE, WE WOULD APPRECIATE YOUR DECISION REGARDING A MEANS OF ASSURING THE DESIRED ELIGIBILITY OF THE EMPLOYEES CONCERNED. IT HAS BEEN PROPOSED THAT THE INTERNAL REVENUE SERVICE ISSUE TO EACH PARTICIPANT, AT THE COMMENCEMENT OF THE TRAINING PERIOD, A DOCUMENT FORMALLY ASSIGNING HIM TO THE PROGRAM AND STATING THAT HE WOULD BE ASSIGNED TO A NEW PERMANENT POST OF DUTY AS SOON AS POSSIBLE AFTER THE TRAINING HAS BEEN COMPLETED. AT THE TIME OF HIS PERMANENT ASSIGNMENT, HE WOULD BECOME ELIGIBLE FOR REIMBURSEMENT FOR THE COSTS OF SELLING HIS DWELLING, PROVIDED THAT IT WAS HIS RESIDENCE AT THE TIME THAT HE RECEIVED THE DOCUMENT. THE SERVICE WILL CONSIDER CHANGING ITS REGULATIONS TO ADOPT THIS PROCEDURE IF NECESSARY TO ACHIEVE ITS OBJECTIVE IN THIS MATTER.'

WE UNDERSTAND THAT A PARTICIPANT WOULD NOT BE REIMBURSED UNTIL HE HAD SUCCESSFULLY COMPLETED THE PROGRAM AND HAD BEEN DEFINITELY ASSIGNED TO A NEW PERMANENT OFFICIAL STATION OTHER THAN HIS OFFICIAL STATION AT TIME OF HIS SELECTION AND ENTRY UPON THE TRAINING ASSIGNMENT.

IN VIEW OF THE STATED IMPROBABILITY OF A PARTICIPANT BEING REASSIGNED AFTER TRAINING TO HIS FORMER PLACE OF DUTY AND THE PROPOSAL THAT NO REIMBURSEMENT OF EXPENSES SHALL BE ALLOWED UNTIL AFTER HE IS ASSIGNED TO A NEW OFFICIAL STATION, OUR OPINION IS THAT THE PURPOSES OF SECTION 4.1C, BUREAU OF THE BUDGET OF THE BUDGET CIRCULAR NO. A-56, REVISED OCTOBER 12, 1966, ARE MET WHEN A SELECTEE PARTICIPATES IN THE PROGRAM.

IT IS ASSUMED THAT THE AGREEMENT PROVIDED BY SECTION 1.3C OF THE CIRCULAR WILL BE REQUIRED OF EACH EMPLOYEE UPON HIS ULTIMATE ASSIGNMENT TO HIS NEW OFFICIAL STATION AS A CONDITION PRECEDENT TO AN ALLOWANCE OF REIMBURSEMENT AUTHORIZED BY SECTION 4 OF THE CIRCULAR. IN THAT REGARD, SINCE THERE MAY BE A LAPSE OF CONSIDERABLE TIME BETWEEN THE SALE OF AN EMPLOYEE'S HOUSE AND HIS ENTITLEMENT TO REIMBURSEMENT, WE SUGGEST THAT THE ATTENTION OF PARTICIPANTS BE DIRECTED TO THE REQUIREMENTS OF SECTION 4.3 OF THE CIRCULAR.

THE SITUATION DESCRIBED BY THE ASSISTANT SECRETARY'S LETTER SUGGESTS THAT A QUESTION CONCERNING TEMPORARY STORAGE OF HOUSEHOLD GOODS MIGHT ARISE INCIDENT TO A SALE BY A PARTICIPANT OF HIS HOUSE. IT WOULD APPEAR THAT THE REIMBURSEMENT OF EXPENSES FOR TEMPORARY STORAGE AUTHORIZED BY LAW MIGHT BE ALLOWED UNDER THE SAME CONDITIONS AS THOSE PROPOSED FOR THE ALLOWANCE OF EXPENSES INCURRED UNDER SECTION 4 OF THE CIRCULAR.

WE BELIEVE, HOWEVER, THAT THE DOCUMENTATION OF PARTICIPATION REFERRED TO IN THE LAST PARAGRAPH OF THE ASSISTANT SECRETARY'S LETTER WOULD BE USEFUL IN EVIDENCING AN EMPLOYEE'S ENTITLEMENT TO REIMBURSEMENT. THEREFORE, WE SUGGEST THE INTERNAL REVENUE SERVICE REGULATIONS BE AMENDED TO INCORPORATE THIS PROCEDURE.