Board of Contract Appeals General Services Administration Washington, D.C. 20405 ________________________________ July 23, 1999 ________________________________ GSBCA 14756-RELO In the Matter of JERRY B. RODEN, JR. Jerry B. Roden, Jr., Brunswick, GA, Claimant. Joseph D. O'Leska, Jr., Assistant Commissioner, Office of Financial Management, Immigration and Naturalization Service, Washington, DC, appearing for Department of Justice. WILLIAMS, Board Judge. Claimant, Jerry B. Roden, Jr., received an overpayment of his permanent change of station (PCS) expenses in the amount of $3179.45 because the agency erroneously failed to withhold income taxes from his PCS reimbursement. The agency has sought repayment of this amount, and claimant objects because he had advised the agency that he believed an overpayment had been made, but the agency had, on two separate occasions, confirmed that the amount of his reimbursement had been correct. Alternatively, claimant is seeking a waiver of the repayment obligation. Because income taxes should have been withheld from claimant's PCS reimbursement, he is liable for the repayment of the amount of those taxes. The fact that he was erroneously advised that his original reimbursement was accurate does not entitle him to relief. To the extent that claimant is seeking a waiver of this debt, this Board lacks jurisdiction over the claim. Background In August 1997 claimant, an employee of the United States Department of Justice, Immigration and Naturalization Service (INS), was transferred from New Orleans, Louisiana, to Glynco, Georgia. In conjunction with this transfer, claimant was reimbursed in the amount of $12,932.84. Claimant calculated this amount to be in excess of that authorized in his travel orders, so he contacted the Dallas, Texas, finance office of INS on two occasions. He was consistently advised by the agency that the amount he had been reimbursed was, in fact, correct. In fact, due to agency error, claimant was overpaid $4135.92, the amount of taxes which should have been withheld but was not. Claimant's 1997 Form W-2 also indicated that taxes had been withheld and remitted to the proper tax authorities, but this had not been done. On January 21, 1998, claimant received official notice that he had been overpaid in the amount of $4135.92 because taxes had not been withheld. This amount was subsequently reduced by offsetting $956.47 from a later relocation income tax allowance reimbursement, making the total amount due $3179.45. The agency's error in failing to withhold the taxes occurred due to an electronic systems error which also caused overpayments to eighteen other employees during the same period. All of the other employees either have repaid or are in the process of repaying the overpayments through payroll deductions. Discussion Statute requires agencies to reimburse Government employees for "substantially all" of the income tax liability they incur as a result of having been repaid by their agencies for expenses of relocation from one duty station to another. See 5 U.S.C. 5724b(a) (Supp. II 1996). The Federal Travel Regulation (FTR) contains complex procedures for implementing this command. 41 CFR 302-11 (1997). The regulation provides for reimbursement through a two-step process. In the year in which an agency repays an employee's relocation expenses, it shall also pay a withholding tax allowance (WTA), which gives the employee more or less enough money to pay income taxes on (a) the amount of repayment of expenses and (b) the amount of the allowance itself. 41 CFR 302-11.7. In the following year, a relocation income tax (RIT) allowance which more precisely considers the employee's own tax circumstances is calculated.[foot #] 1 Id. 302-11(d), 11.8(f); see Patricia Russell, GSBCA 14758-RELO, 99-1 BCA 30,291; John F. Stinson, GSBCA 14625-RELO, 99-1 BCA 30,246; William A. Lewis, GSBCA 14367-RELO, 98-1 BCA 29,532; Robert J. Dusek, GSBCA 14325-RELO, 98-1 BCA 29,440 (1997). The WTA is itself subject to tax withholding requirements. The regulations provide: (f) Determination of employee's withholding tax on WTA. Since the amount of the WTA is considered income to the employee, it is subject to the same tax ----------- FOOTNOTE BEGINS --------- [foot #] 1 This summary of the regulatory provisions was set forth in Patricia Russell, GSBCA 14758-RELO, 99-1 BCA 30,291. ________________ ----------- FOOTNOTE ENDS ----------- withholding requirements as all other moving expense reimbursements (See Treasury Financial Manual, Section 4080, Moving Expense Reimbursements, for withholding requirements.) (g) End of year reporting. At the end of the year, agencies generally are required to issue IRS Form(s) W-2 for each employee showing total gross compensation (including moving expense reimbursements) and the applicable amount of Federal taxes withheld. For tax reporting purposes the WTA is to be treated as a moving expense reimbursement. The total amount of the employee's WTA's paid during the year as well as the amount of moving expense reimbursements should be included as income on the employee's Form W-2. The Federal tax withholding amount applicable to the moving expense reimbursements and the WTA should also be included on the employee's Form W-2. . . . 41 CFR 302-11.8(g). In the instant case, the agency calculated the WTA correctly and included that in claimant's reimbursement. However, the agency erroneously issued a Form W-2 for 1997 which reflected that $4135.92 had been withheld and remitted to the proper tax authorities when in fact nothing had been withheld. Claimant, thus, received reimbursement in an amount which included taxes which should have been withheld, and he was overpaid. In fact, claimant does not deny that he was overpaid. However, claimant contends that he should not have to repay this amount since the agency erroneously advised him that his original reimbursement was correct. As we have held on numerous occasions, an agency's erroneous advice cannot confer a benefit or entitlement not otherwise authorized by statute or regulation. E.g., Roland J. Landis, GSBCA 13690-RELO, 97-2 BCA 29,157. Nor does this Board have the authority to waive this debt. As the Board recently recognized in Patricia Russell, 99-1 BCA at 149,805: The Board may not waive a debt which is owed by an employee to an agency and which arises out of a previously-made payment relating to relocation allowances. The head of the agency may waive repayment of an employee's claim arising out of an "erroneous payment" of such an allowance, if the head determines that collection of the debt "would be against equity and good conscience and not in the best interests of the United States." 5 U.S.C. 5584(a); Randall L. Thurman, GSBCA 14067-RELO, 97-2 BCA 29,160; R. Patrick Comey, GSBCA 13640-RELO, 97-1 BCA 28,922. . . . Decision The claim is denied. ________________________________ MARY ELLEN COSTER WILLIAMS Board Judge