RECORD OF PROCEEDINGS
AIR FORCE BOARD FOR CORRECTION OF MILITARY RECORDS

IN THE MATTER OF:	DOCKET NUMBER:  01-01780
		INDEX CODE:  128.00
		COUNSEL:  NONE

		HEARING DESIRED:  NO

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APPLICANT REQUESTS THAT:

His December, 2000, and January, 2001, pay statements be changed to reflect that he received his backpay payment in December, 2000, vice January, 2001; and, that he receive an amended W-2 to reflect the same.

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APPLICANT CONTENDS THAT:

The Air Force owed him $2,439 in backpay which was transferred to his bank account on 29 Dec 00.  However, the Air Force recorded the payment on his January 2001 Leave and Earnings Statement (LES) as having been paid 2 Jan 01. His taxable income in 2000 placed him in the 15% tax bracket.  His taxable income in 2001 will place him in the 28% bracket.  The 13% difference means that for tax year 2001 he will pay $317 more in taxes on the $2,439 that he earned in 2000.

In support of his request applicant provided a personal statement, his bank account summary, and an AFSLA/JACA memorandum, dated 25 Jul 00.  His complete submission, with attachments, is at Exhibit A.

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STATEMENT OF FACTS:

On 2 Aug 00, applicant was appointed a first lieutenant, Reserve of the Air Force and was voluntarily ordered to extended active duty on that same date.  He is currently serving on EAD in the grade of captain, having assumed that grade effective and with a date of rank of 2 Feb 01.

Additional relevant facts pertaining to this application, extracted from the applicant’s military records, are contained in the letter prepared by the appropriate office of the Air Force.  Accordingly, there is no need to recite these facts in this Record of Proceedings.

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AIR FORCE EVALUATION:

DFAS-GAM/DE recommends denial.  DFAS states that in late December, 2000, an electronic funds transfer (EFT) was created to pay backpay to his bank account.  The EFT was forwarded to his bank on 29 Dec 00 with an authorized payment date of 2 Jan 01.  Apparently the bank credited the payment to his bank account on 29 Dec 00.  His earlier request that DFAS issue a W-2c to reflect the payment as 2000 income was denied because the early payment was not authorized by DFAS.  The Operating Guidelines issued by the Automated Clearing House, which pertain to EFT payments made by the Federal Government, specifically obligates a financial institution to post transactions to consumer accounts as of the payment date and requires employees’ statements to reflect that posting date.  By crediting the EFT payment to his account prior to the authorized payment date, the bank used its own funds because it did not have authority to issue the Government payment on that date.  Although he received the money in 2000, the money he received was not from the government; in effect, the bank lent him such monies until the approved payment date (see Exhibit B).

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APPLICANT'S REVIEW OF AIR FORCE EVALUATION:

Applicant responded and states that in citing its own regulations the advisory ignores the plain guidance of the Internal Revenue Service (IRS), which provides that income, although not actually reduced to a taxpayer's possession, is constructively received by him in the taxable year during which it is credited to his account, set apart for him, or otherwise made available so that he may draw upon it at any time.  DFAS argues that granting his requested relief would entail an "extensive workload" on the agency.  There is only one case before the Board, tied to a specific set of facts and circumstances.  The bulk of the inappropriate actions, which resulted in the late payments, have been within the Air Force and DFAS, not his financial institution as cited by DFAS.  His repeated efforts to remedy the problem of being underpaid for 5 months were rejected and dismissed (see Exhibit D).

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THE BOARD CONCLUDES THAT:

1.  The applicant has exhausted all remedies provided by existing law or regulations.

2.  The application was timely filed.

3.  Insufficient relevant evidence has been presented to demonstrate the existence of probable error or injustice.  We took notice of the applicant's complete submission in judging the merits of the case; however, we agree with the opinion and recommendation of the Air Force office of primary responsibility and adopt their rationale as the basis for our conclusion that the applicant has not been the victim of an error or injustice.  We note that the applicant based his request upon what he believes will be an increased tax burden for his 2001 Federal income taxes.  Inasmuch as the increased tax burden he provided is merely his estimation, it is our opinion that until he files his 2001 federal income taxes, an injustice to him has not yet occurred.  Once he has filed his 2001 taxes and if is able to show that an injustice actually occurred, he may resubmit his application and we will be willing to reconsider his request.  Otherwise, in the absence of compelling evidence to the contrary, we find no basis to recommend granting the relief sought in this application.

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THE BOARD DETERMINES THAT:

The applicant be notified that the evidence presented did not demonstrate the existence of probable material error or injustice; that the application was denied without a personal appearance; and that the application will only be reconsidered upon the submission of newly discovered relevant evidence not considered with this application.

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The following members of the Board considered this application in Executive Session on 24 Oct 01, under the provisions of AFI 36-2603:

	Panel Chair
	Member
	Member

The following documentary evidence was considered:

    Exhibit A.  DD Form 149, dated 18 Jun 01, w/atchs.
    Exhibit B.  Letter, DFAS-GAM/DE, dated 30 Aug 01, w/atchs.
    Exhibit C.  Letter, SAF/MRBR, dated 14 Sep 01.
    Exhibit D.  Letter, Applicant, dated 15 Oct 01.