Board of Contract Appeals
General Services Administration
Washington, D.C. 20405
_________________
February 14, 2001
_________________
GSBCA 15316-RELO
In the Matter of BRIAN JOHNSON
Brian Johnson, El Paso, TX, Claimant.
Edgardo Aviles, Accounting Services Division, United States
Customs Service, Indianapolis, IN, appearing for Department of
the Treasury.
NEILL, Board Judge.
Mr. Brian Johnson is an employee of the United States
Customs Service. In April 1999, his agency notified him that he
must refund part of a withholding tax allowance (WTA) previously
given to him in connection with a permanent change of station
(PCS) move in 1997. Mr. Johnson steadfastly denies this debt and
contends that, if such a debt does exist, it should be waived.
In April 2000, Mr. Johnson's agency demanded that he refund the
WTA overpayment. Mr. Johnson thereupon referred the matter to
this Board for review. He continues to contend that there is no
debt to the agency and that any alleged debt should be waived.
Because Mr. Johnson has failed to demonstrate any error in the
agency's calculation of the amount he owes, we deny his claim for
relief. As to his request that the debt be waived, we defer to
the agency's decision regarding that matter.
Background
In its initial letter to Mr. Johnson, the agency offered the
following explanation of why it had concluded that it was due a
refund from him:
Under Public Law 98-151, the U.S. Customs Service is
authorized to reimburse employees for additional
federal, state and local income taxes incurred as a
result of including certain relocation reimbursements
as income. The process to reimburse employees for
these taxes involves two steps: (1) a withholding tax
allowance (WTA) and (2) a Relocation Income Tax (RIT)
allowance.
The WTA is an estimated payment made to the Internal
Revenue Service (IRS), on your behalf, by the U.S.
Customs Service. The WTA payment is made to the IRS at
the time your travel vouchers are processed and
reimbursement is made to you. Such payment is intended
to cover the additional tax liability that you incurred
as a result of your relocation.
The employee must file a RIT claim as required by law.
The Accounting Services Division (ASD) then computes
the gross RIT allowance to determine if this estimate
was low or high. If the WTA estimate was less than the
gross RIT allowance, the employee is due an additional
allowance. If the WTA estimate was greater [than] the
gross RIT allowance, the employee is required to remit
the amount of the overpayment to the U.S. Customs
Service.
In processing your 1998 RIT claim, the ASD computed the
gross RIT allowance to be $1,379.47. The WTA payments
made during 1998, related to [your] move . . . were
$2,909.20. Therefore, the WTA payments exceeded the
gross RIT allowance in the amount of $1,529.73 and the
overpayment is due upon receipt of this letter.
Enclosed with this letter from the agency was a printout
purporting to show how the overpayment was computed.
Notwithstanding this explanation offered by the agency, Mr.
Johnson sought additional information on precisely why the agency
paid a WTA in excess of the RIT later found to be due. One
unidentified employee of the agency's accounting division
allegedly told Mr. Johnson that the overpayment was due to a
"glitch" in the computer programming.
In a demand letter dated June 6, 1999, the agency
erroneously advised Mr. Johnson the it intended to offset the
debt against his salary under the salary offset procedure
provided by 5 U.S.C. 5514 and 31 CFR 5.11 pt. 5, subpt. B.
This process offers debtors an oral hearing.
Mr. Johnson requested a hearing and, in doing so, stated
that he did not pretend to understand the RIT or how it affected
him but believed that the agency's accounting services division
was equally unable to explain how the alleged debt came about.
The request for a hearing was eventually
denied.[foot #] 1
----------- FOOTNOTE BEGINS ---------
[foot #] 1 In its report to the Board on this case, the
agency says that in its demand latter of June 6, 1999, it
incorrectly advised Mr. Johnson of his rights. In a letter,
which Mr. Johnson states he received on April 10, 2000, the
(continued...)
----------- FOOTNOTE ENDS -----------
Upon receipt of the agency's letter on April 10, 2000, Mr.
Johnson and his supervisor conferred by telephone with an
official of the agency's accounting services division. This
individual was apparently knowledgeable regarding the procedure
for calculating an employee's WTA and RIT. His explanation,
however, proved to be unsatisfactory to claimant. When the
possibility of a waiver was mentioned, this official is said to
have given Mr. Johnson the address of this Board and recommended
that he refer the matter to us for action. On May 5, 2000, Mr.
Johnson filed his request for review with this Board.
The agency, in response to the Board's docketing order,
filed its report with the Board. The report states that the WTA
and RIT for Mr. Johnson's PCS were calculated in accordance with
Part 302-11 of the Federal Travel Regulation. A summary of these
calculations and supporting documentation were furnished with the
report. Mr. Johnson was asked by the Board if he cared to
comment on the agency report. By letter dated September 26,
2000, he replied that he did not wish to reply to the agency
submission.
Discussion
The explanation of the nature and purpose of the WTA and RIT
provided to Mr. Johnson by the agency in its first letter to him
was a fair summary of what, in fact, is a relatively complicated
procedure. His indignation over the inaccuracy of the WTA,
therefore, is puzzling. As the agency explained, the WTA is
nothing more than an estimate and the purpose of the RIT is to
determine whether that estimate was too high or too low. As this
Board has previously observed:
The WTA is calculated at a flat rate, regardless of the
employee's tax bracket. [41 CFR] 302-11.5(g). In the
following year, the agency calculates a relocation
income tax (RIT) allowance which makes further
adjustments in payment, to reimburse the employee for
any added tax liability that was not reimbursed by
payment of the WTA, or to cause the employee to repay
any excessive amount of WTA, based on the employee's
actual tax situation. Id. 302-11.5(f)(2), (m), -
11.7(e), -11.9(b).
William A. Lewis, GSBCA 14367-RELO, 98-1 BCA 29,532, at
146,220-21.
----------- FOOTNOTE BEGINS ---------
[foot #] 1 (...continued)
agency corrected this error and advised Mr. Johnson he would be
charged interest on his debt from the date of that letter rather
than from the date of the demand letter of the previous year
which incorrectly advised him of his rights.
----------- FOOTNOTE ENDS -----------
In the event of overpayment of WTA, this Board has
consistently upheld an agency's right to a refund of the excess
WTA when based upon a properly calculated RIT. E.g., Catherine
S. Cunningham, GSBCA 15035-RELO, 00-1 BCA 30,807; Jeffrey P.
Nielsen, GSBCA 15069-RELO, 00-1 BCA 30,746; Elizabeth Atkeson,
GSBCA 15093-RELO, 00-1 BCA 30,656 (1999); Linda R. Drees, GSBCA
14436-RELO, 99-1 BCA 30,198 (1998); Robert J. Dusek, GSBCA
14325-RELO, 98-1 BCA 29,440 (1997). Given the nature of the
WTA/RIT process, it should come as no great shock to Mr. Johnson
that his WTA was found to be erroneous in the amount paid.
However, it does not necessarily follow from such an error that
there has likewise been an error in the actual calculation of the
WTA. See Patricia Russell, GSBCA 14758-RELO, 99-1 BCA 30,291,
at 149,806. Nevertheless, he insists that there has been no
overpayment but offers us no explanation of why this is true.
The agency, for its part, has provided us with evidence of its
own calculations which support the conclusion that an overpayment
in the amount of $1529.73 was made. Mr. Johnson has not
challenged the agency's submission. Indeed, he has indicated to
the Board that he does not wish to reply to the agency's
submission.
Federal employees seeking relief from this Board in matters
involving relocation or travel bear the burden of showing us why
they should prevail. Board Rule 401(c) (48 CFR 6104.1(c)
(1999)). Because Mr. Johnson has failed to carry this burden, we
deny his claim for relief.
As to Mr. Johnson's request that we waive his debt to the
agency, we have previously held that this Board does not have the
authority to 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 "erroneous
payment" of such an allowance if the head determines the
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); Patricia Russell, 99-1 BCA at 149,806. Mr.
Johnson's agency, however, has advised us that it generally does
not waive debts related to relocation income tax and that, given
the facts of this case, it finds no basis for making an exception
for Mr. Johnson. The Board has no power to review the agency's
decision not to waive repayment.
_______________________________
EDWIN B. NEILL
Board Judge