September 8, 1997
                                               


                             GSBCA 14227-RELO


                       In the Matter of DONNY FLORES


     Donny Flores, Antioch, CA, Claimant.

     Al LaBombard, Chief, Employee Accounts Division, Austin
Finance Center, Department of Veterans Affairs, Austin, TX; and
Ricky Young, Chief, Fiscal Resource Management Division, Department
of Veterans Affairs, Oakland, CA, appearing for Department of
Veterans Affairs.

GOODMAN, Board Judge.

     Claimant, Donny Flores, is an employee of the Department of
Veterans Affairs who made a permanent change of station (PCS) move
in 1995.  He seeks payment of an additional $604.63, which he
claims resulted from his filing a claim for his relocation income
tax (RIT) allowance in 1997 instead of 1996.  We deny the claim.

     Detailed procedures for payment of the RIT allowance are found
in the Federal Travel Regulation (FTR), 41 CFR 302-11 (1996). 
Claims for RIT allowances are accomplished in two steps.  The first
step is the payment of the withholding tax allowance (WTA) in year
1, which covers the employee's federal income tax withholding on
covered taxable reimbursements.  41 CFR 302-11.7.  Year 1 is
defined as "[t]he calendar year in which reimbursement or payment
for moving expenses is made . . . ."  41 CFR 302-11.5(e).

     The second step is the payment in year 2 of the RIT allowance.
The RIT allowance is authorized to reimburse eligible transferred
employees for substantially all of the additional federal, state,
and local income taxes incurred by the employee as a result of
certain travel and transportation expenses and relocation
allowances for which reimbursement or an allowance is provided by
the Government.  41 CFR 302-11.8.  Year 2 is defined as follows:

     The calendar year in which a claim for the RIT allowance
     is paid.  

          Generally, Year 2 will be the calendar year
          immediately following Year 1 and in which the
          employee files a tax return reflecting his/her
          tax liability for income received in Year 1. 
          However, there may be instances where the
          employee's claims submission and/or payment of
          the RIT allowance is delayed beyond the
          calendar year immediately following Year 1. 
          (Year 1 will always be the calendar year that
          reimbursements are received . . . .) Year 2
          will be the calendar year in which the RIT
          allowance is actually paid.

41 CFR 302-11.5(f).

     The formula used to calculate the RIT allowance requires the
use of two combined marginal tax rates (CMTR) for year 1 and year
2.  A CMTR is a single rate determined by combining the applicable
marginal tax rates for federal, state, and local income taxes,
using formulas specified in the FTR.  41 CFR 302-11.5(j).  

     The WTA was calculated and paid in 1995 (year 1).  Mr. Flores
submitted his claim for the RIT allowance in March 1997.  Thus, for
purposes of calculating the RIT allowance, year 2 was 1997 and the
CMTR for this tax year, rather than 1996, was used.  Mr. Flores
claims that this resulted in a RIT allowance of $604.63 less than
what would have resulted had the claim for the RIT allowance been
submitted and paid in 1996.  Mr. Flores states that he was a new
federal employee in 1995 and that he was not provided guidance
concerning any reporting requirements having to do with his PCS
move before he began his move, and he was not informed that he
should submit his claim for the RIT allowance in 1996.  It was not
until 1997, when he was contacted by the fiscal resource manager of
his agency, that he was introduced to the concept of RIT allowance. 
Accordingly, he requests payment of an additional amount of $604.63
to which he believes he would have been entitled had he filed his
claim for the RIT allowance in 1996.

     Mr. Flores states further: "While I realize that it is my
responsibility to be aware of all aspects of a Permanent Change of
Station, it is difficult for me to reconcile that this agency does
not have a more efficient system to notify employees of deadlines
for RIT claims." 

     Apparently, Mr. Flores familiarized himself sufficiently with
regulations to receive reimbursement of his relocation expenses to
which the WTA and RIT allowance applied.  The above-cited
regulations clearly informed him that he was entitled to submit a
claim for the RIT allowance in 1996, and there is a further
obligation set forth in the regulation that employees submit claims
for the RIT allowance.  41 CFR 302-11.9.  Even so, there is no
deadline stated in the regulation for submission of the claim for
the RIT allowance. 

     The regulation is clear that the RIT allowance is calculated
based upon the CMTR applicable to the year in which the allowance
is paid, which may be a calendar year other than the one
immediately following year 1.  As Mr. Flores did not apply for
payment of the RIT allowance until 1997, he was paid according to
regulation, i.e., pursuant to rates applicable in the year in which
the RIT is actually paid.  His claim for an additional $604.63 is
denied.





                              ____________________
                              ALLAN H. GOODMAN
                              Board Judge