Board of Contract Appeals
                    General Services Administration
                         Washington, D.C. 20405
 
 
 
                               __________
                              June 4, 1998
                               __________
 
                            GSBCA 14429-RELO
 
 
                      In the Matter of LANI GORDON
 
        Lani Gordon, San Diego, CA, Claimant.
 
        Judy Hughes,  Travel Policy, Defense Finance  and Accounting
   Service, Columbus  Center, Columbus, OH, appearing for Department
   of Defense.
 
   VERGILIO, Board Judge.
 
             Under the statutes  and regulations governing  the
        relocation of  federal employees, a  relocated employee
        who receives  reimbursement for the loss in the sale of
        a  residence under the homeowners assistance program is
        not  entitled to a  relocation income tax  allowance on
        that amount.
        The claimant,  Lani Gordon,  as a civilian  employee of  the
   Department of  Defense, changed duty  stations because of  a base
   closure, with a reporting date of  April 1, 1996.  As  authorized
   by the agency, under the  homeowners assistance program (HAP), 10
   U.S.C.    2832 (Supp.  II 1996),  she obtained assistance  in the
   sale of her residence.  On August 8, 1996, she sold her residence
   for  a loss.   Under  the HAP,  she received  a reimbursement  of
   $4,063.60,  from which the  Government withheld federal  taxes of
   $1,448.67.   The claimant  sought reimbursement  of the  withheld
   amount  as a relocation  income tax (RIT)  allowance, pursuant to
   statute, 5 U.S.C.    5724b (1994), and  implementing regulations.
   The agency disallowed her claim, relying on the analysis in Brian
   C. McDaniel, B-240762 (May 13, 1991).
        The rationale of the Comptroller General, relied upon by the
   agency  in   disallowing  the   request  for   reimbursement,  is
   consistent with statute  and regulation.  The  law provides that,
   in  accordance  with   applicable  regulations,  an   agency  may
   reimburse  an  employee  for federal  income  taxes  incurred for
   moving   or  storage  expenses  for  which  reimbursement  or  an
   allowance  is provided.   5  U.S.C.   5724b.   For  this purpose,
   moving  and  storage  expenses means  travel  and  transportation
   expenses  (including those  under section  5724 of title  5), and
   other relocation expenses under sections 5724a and 5724c of title
   5.  5 U.S.C.   5724b(b).
 
        The reimbursement for  losses in the sale of  a residence is
   prohibited  under  applicable  relocation regulations.    Federal
   Travel  Regulation (FTR), 41 CFR 302-6.2(e) (1996); Department of
   Defense Civilian Personnel Joint Travel Regulations (JTR) C14002-
   A.5.  The applicable regulations  recognize that the expenses and
   allowances covered  by the   RIT allowance are  limited.  41  CFR
   302-11.1, -11.3; JTR  C16001, C16003.  Because  the reimbursement
   for the  loss occurs under the HAP, authority apart from 5 U.S.C.
      5724,  5724a, 5724c,  the  RIT allowance  does  not cover  the
   reimbursement.
 
        The  claimant is  not entitled  to  reimbursement for  taxes
   incurred in connection  with the payments received  under the HAP
   relating to losses in the sale of a residence. 
 
                                 ____________________________
                                 JOSEPH A. VERGILIO
                                 Board Judge