[Entitlement of IRS Employee to Reimbursement for Loan Origination Fee]

The Internal Revenue Service (IRS) requested a decision as to whether it could reimburse a transferred employee for loan application and reservation fees and a processing-closing fee incurred with the purchase of a residence. The certifying officer disallowed the application and loan reservation fees because they were finance charges; however, he allowed the processing-closing fees as a loan origination fee. GAO determined that: (1) the loan reservation fee was a nonreimbursable commitment fee; (2) the processing-closing fee was a nonreimbursable loan origination fee; and (3) the loan application fee was a reimbursable real estate purchase expense. Accordingly, IRS may reimburse the employee for the loan application fee only.