RECORD OF PROCEEDINGS

IN THE MATTER OF:	DOCKET NUMBER: BC-2020-01543

XXXXXXXXXXXXXX	COUNSEL: NONE	 

  	HEARING REQUESTED: NO

APPLICANT’S REQUEST

Her debt in the amount of $6,352.36 be waived.  

APPLICANT’S CONTENTIONS

In 2018, she was notified by the Defense Finance and Accounting Service (DFAS) she incurred a debt for $6,352.36.  DFAS initially could not tell her the reason for the debt.  At first, they stated it was an overpayment, which did not happen.  She was then told it was due to a payment made to the Internal Revenue Service (IRS) in her name.  Their tax return in 2016 was $62.80.  She submitted a waiver.  Her waiver was denied by DFAS and they started garnishing her pay and allowances.  She went to her inspector general’s (IG) office but they could not assist her and advised her to file a BCMR application.  

The denial of her waiver is an injustice and the attachment they sent with her denial was for a claim that belonged to another member who retired in 2002.  The error is 100 percent on the part of DFAS.  The error created a hardship to her due to lost pay and allowances and time and stress in trying to figure out where the debt was from.  

The applicant’s complete submission is at Exhibit A.

STATEMENT OF FACTS

The applicant is a chief master sergeant (E-9) in the Air National Guard (ANG).

The applicant performed a period of active duty, under Title 10 orders, from 17 Jun 15 to 29 Feb 16.  

In a letter dated 30 Jul 19, the DFAS Remission and Waivers Branch informed the applicant her request for a waiver of her debt for $6,352.36 was denied.  DFAS stated per 10 U.S.C. § 2774, for waiver approval, a collection must be determined to be against equity and good conscience and not in the best interest of the United States.  Generally, a person who receives an erroneous payment from the Government acquires no right to the money.  The recipient of the payment is bound in equity and good conscience to make restitution.  A waiver is not a matter of right but is available to provide relief as a matter of equity if the circumstances warrant a waiver.  DFAS determined the applicant’s debt occurred due to the over-deduction of federal income tax withholding (FITW) paid on her behalf to the IRS for FY16, after her separation from active duty.  The over collection of FITW could not be refunded in Jan 19 since the collection was made in 2016 and reported to the IRS.  After all adjustments were made to her military pay account, she was indebted for $6,352.36.  Withholding taxes collected in a prior year cannot be refunded in accordance with IRS regulations and she should have received the benefit of the over collection when she filed her 2016 taxes.  Additionally, in order for a debt to be considered for waiver, the debt must have resulted from the erroneous payment of pay and allowances.  Since the over-deduction of FITW is not an erroneous payment of pay and allowance, her request cannot be considered under 10 U.S.C. § 2774.  The applicant was advised that prior claims appeal board decisions are used in establishing precedent in making a waiver determination and DFAS cited the attached case dated 31 Mar 04, in which a retired member’s waiver request was denied.  In that case, the board determined waiver of a debt was not appropriate since the member was able to request refund of excess withholding from the IRS.  The Comptroller General has consistently determined a tax liability is a matter between the member and the IRS.  

For more information, see the excerpt of the applicant’s record at Exhibit B and applicable authority.  

APPLICABLE AUTHORITY

Per 10 U.S.C. § 2774, certain federal employees and members of the uniformed services may be eligible for the waiver of collection of erroneous payments of pay and allowances.  For waiver approval, a collection must be determined to be against equity and good conscience and not in the best interest of the United States.

DODI 1340.23, Waiver Procedures for Debts Resulting from Erroneous Pay and Allowances, Waiver Application, The fact that an erroneous payment is solely the result of administrative error or mistake on the part of the Government is not sufficient basis in and of itself for granting a waiver.  

AFI 36-3034, Remission of Indebtedness, In accordance with 10 U.S.C. § 9837, Settlement of Accounts: Remission or Cancellation of Indebtedness of Members, the Secretary of the Air Force (SecAF) is authorized to remit or cancel any part of the indebtedness of a person incurred while serving on Title 10 active duty if the SecAF considers such action to be in the best interest of the United States.  Paragraph 2.1.3, states applicants who previously applied for a waiver and received a decision on the merits of the waiver are no longer eligible for a remission.   The applicant previously submitted a waiver application for her debt.  On 30 Jul 19, the DFAS Remission and Waivers Branch denied her waiver request stating it did not meet the criteria per 10 U.S.C. § 2774.  

FINDINGS AND CONCLUSION

1.  The application was timely filed.

2.  The applicant exhausted all available non-judicial relief before applying to the Board.

3.   After reviewing all Exhibits, the Board concludes the applicant is not the victim of an error or injustice.  The Board finds a preponderance of the evidence does not substantiate the applicant’s contentions.  In this respect, the applicant has provided insufficient evidence to show her debt was not the result of an FITW and an IRS matter.  Accordingly, as pointed out by DFAS in their 30 Jul 19 letter, the applicant’s request does not meet criteria for a waiver per 10 U.S.C. § 2774.  Further, this Board, which serves on behalf of the Secretary of the Air Force, in the correction of military records, is without authority to correct records involving FITW or IRS matters.  Therefore, the Board recommends against correcting the applicant’s records.  

RECOMMENDATION

The Board recommends informing the applicant the evidence did not demonstrate material error or injustice, and the Board will reconsider the application only upon receipt of relevant evidence not already presented.

CERTIFICATION

The following quorum of the Board, as defined in Air Force Instruction (AFI) 36-2603, Air Force Board for Correction of Military Records (AFBCMR), paragraph 1.5, considered Docket Number BC-2020-01543 in Executive Session on 22 Jan 21:

 , Panel Chair
 , Panel Member
 , Panel Member

All members voted against correcting the record.  The panel considered the following:

Exhibit A:	Application, DD Form 149, w/atchs, dated 22 Apr 20.
Exhibit B:	Documentary evidence, including relevant excerpts from official records.

Taken together with all Exhibits, this document constitutes the true and complete Record of Proceedings, as required by AFI 36-2603, paragraph 4.11.9.