Board of Contract Appeals General Services Administration Washington, D.C. 20405 October 14, 1999 GSBCA 15086-RELO In the Matter of RICHARD B. MORSE Richard B. Morse, Niceville, FL, Claimant. Judy Hughes, Travel Policy, Defense Finance and Accounting Service, Columbus Center, Columbus, OH, appearing for Department of Defense. GOODMAN, Board Judge. Claimant, Richard B. Morse, is a civilian employee of the Department of the Navy. In November 1998 he accomplished a permanent change of station (PCS) from Arlington, Virginia to Eglin Air Force Base, Florida. Claimant alleges that he was not properly compensated for the income taxes arising from the reimbursement of relocation costs he incurred in the PCS move. He alleges he only received $711.25 as a Relocation Income Tax Allowance (RITA), while his actual tax liability as the result of reimbursement of relocation costs was $4634. Statute and regulation require agencies to pay various relocation benefits and allowances to employees who are transferred in the interest of the Government from one permanent duty station to another. See 5 U.S.C. ch. 57 subch. II; 41 CFR ch. 302 (1998). These payments are, for the most part, considered taxable income to the recipients. In addition, agencies must pay these employees additional money to effectively compensate them for the taxes they incur consequent to their receipt of these benefits and allowances. 5 U.S.C. 5724b; 41 CFR ch. 302-11; Robert J. Dusek, GSBCA 14325-RELO (Dec. 4, 1997). The regulation establishes a two-step process for accomplishing this goal. In the year in which the agency pays the employee relocation benefits and allowances, it also pays a withholding tax allowance (WTA), which is intended to cover the increase in the employee's federal income tax withholding liability that results from receipt of the benefits and allowances. 41 CFR 302-11.5(e), (n), -11.7(a). The WTA is calculated at a flat rate, regardless of the employee's tax bracket. Id. 302-11.5(g). In the following year, the agency calculates a RITA, 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. Id. 302-11.5(f)(2), (m), -7(e), -9(b). The statute requires that the total of the WTA and RITA cover "substantially all" of the additional taxes occasioned by the payment of relocation expenses. 5 U.S.C. 5724b(a). The regulation establishes specific procedures through which the allowances must be calculated. 41 CFR 301-11.8(d), (f), -9(a). It states, with specific regard to the RIT allowance, "The prescribed procedures, which yield an estimate of an employee's additional tax liability due to moving expense reimbursements, are to be used uniformly. They are not to be adjusted to accommodate an employee's unique circumstance which may differ from the assumed circumstances stated in paragraph (b)(1) of this section." Id. 301-11.8(b)(2). Claimant correctly alleges that the amount he received for his RITA did not cover substantially all of the additional taxes occasioned by the payment of relocation expenses. However, he does not mention the amounts he received for WTA. In response to claimant s request for review, the agency has noted that documentation submitted by claimant indicates that in addition to the amount claimant received for the RITA, claimant also received payments totaling $4639.59 for WTA. Apparently, claimant has not understood the process involved or the significance of the amounts he has received. He has not demonstrated that the agency's calculations of the WTA or RITA were incorrect. The amounts received for both the WTA and the RITA exceed the tax liability claimant alleges he incurred as the result of the PCS move. This Board cannot grant claimant the relief requested. ___________________________ ALLAN H. GOODMAN Board Judge