IN THE CASE OF: BOARD DATE: 13 September 2016 DOCKET NUMBER: AR20150005067 BOARD VOTE: ____X_____ __X_____ ____X____ GRANT FULL RELIEF ________ ________ ________ GRANT PARTIAL RELIEF ________ ________ ________ GRANT FORMAL HEARING ________ ________ ________ DENY APPLICATION 2 Enclosures 1. Board Determination/Recommendation 2. Evidence and Consideration IN THE CASE OF: BOARD DATE: 13 September 2016 DOCKET NUMBER: AR20150005067 BOARD DETERMINATION/RECOMMENDATION: 1. The Board determined the evidence presented is sufficient to warrant a recommendation for relief. As a result, the Board recommends that all Department of the Army records of the individual concerned be corrected by showing his application for remission or cancellation of indebtedness in the amount of $8,275.19 was approved with pecuniary relief including full non-taxable reimbursement of the remaining portion of the recoupment action of $4,136.59 and non-taxable reimbursement of $1,199.90 for the taxes deducted from the partial remission payment he received in April 2015. 2. As a result of this correction, the Defense Finance and Accounting Service shall be notified of the Board's determination regarding the applicant's entitlement to the $10,000.00 Selective Reserve Incentive Program Reenlistment Bonus. Accordingly, this action serves to approve the individual's application for remission or cancellation of indebtedness in the amount of $8,275.19 with full non-taxable reimbursement of the remaining portion of the recoupment action of $4,136.59 and non-taxable reimbursement of $1,199.90 for the taxes deducted from the partial remission payment he received in April 2015, as allowed by law. ____________X_____________ CHAIRPERSON I certify that herein is recorded the true and complete record of the proceedings of the Army Board for Correction of Military Records in this case. IN THE CASE OF: BOARD DATE: 13 September 2016 DOCKET NUMBER: AR20150005067 THE BOARD CONSIDERED THE FOLLOWING EVIDENCE: 1. Application for correction of military records (with supporting documents provided, if any). 2. Military Personnel Records and advisory opinions (if any). THE APPLICANT'S REQUEST, STATEMENT, AND EVIDENCE: 1. The applicant requests correction of his records by cancelling the remaining portion of a debt (i.e., $4,136.59) incurred from recoupment of a calendar year 2013 Selected Reserve Incentives Program (SRIP) bonus. 2. The applicant states that he received an SRIP bonus in March 2012 for reenlisting in military occupational specialty (MOS) 35G (Geospatial Intelligence (GEOINT) Imagery Analyst and assignment to Detachment (Det) 4, 2200 Military Intelligence Group (MIG), Military Intelligence Readiness Command (MIRC). a. He states that his reenlistment required him to maintain Troop Program Unit (TPU) status in the U.S. Army Reserve (USAR). b. The SRIP bonus was recouped when he transferred from TPU status to take advantage of a voluntary Contingency Operations (CO) for Active Duty Operational Support (ADOS) tour with the National Geospatial-Intelligence Agency (NGA) from May 2013 to July 2014. c. The COADOS tour required his transfer to the Individual Ready Reserve (IRR) with subsequent mobilization (MOB) as an Individual Mobilization Augmentee (IMA) on active duty supporting NGA. d. His change in status caused the $10,000.00 SRIP bonus ($7,100.00 after taxes) to be recouped. A total of $8,275.19 was recouped by the Defense Finance and Accounting Service (DFAS) from August 2013 to October 2013. e. He states that the SRIP bonus serves to assist the Army National Guard (ARNG) and the USAR in meeting and sustaining manpower, contributes to quality and skill-match objectives, and helps stabilize the ARNG and USAR through longer service commitments. f. On 29 May 2013, the U.S. Army changed the SRIP policy on bonus recoupment and eliminated the recoupment of any unearned portion of a SRIP incentive for Soldiers transferring to an IMA position. The policy change was effective 1 June 2013; however, it did not have retroactive provisions. He adds that his COADOS and attachment to the NGA was from May 2013 to July 2014. He continues to support NGA at his current assignment (Det 4, 2200 MIG, MIRC) by providing timely, relevant, and accurate GEOINT to the warfighter. g. In response to his inquiry to the USAR Inspector General (IG), the IG found that DFAS followed governing regulations and policies that were in effect at the time by recouping the reenlistment bonus (RB). The IG recommended that he request remission or cancellation of the recoupment action. In March 2014, he submitted his request through the U.S. Army Human Resources Command (HRC) with his reasons (i.e., lack of counseling regarding the impact of his change in status, his active duty status, recoupment amount in excess of the net bonus amount, the change in recoupment policy one (1) month after his transfer, and the USAR IG finding). On 18 April 2014, HRC granted partial relief and cancelled half of the debt ($4,137.60). h. In May 2014, he submitted the HRC remission decision through his local finance office. On 19 March 2015, he submitted a follow-up inquiry through his USAR Bonus Team to the USAR Command (USARC), G-8, Pay Management Division, but he has not received payment. i. The failure of the finance office/DFAS to timely process the remission action has adversely affected his financial situation during his transition from active duty to the USAR. In addition, the change in SRIP policy was to eliminate the recoupment of SRIP bonuses for Army Reserve (AR) Soldiers augmenting active duty operations, which is the case in his situation except for the effective date for the change in policy. j. He requests a personal appearance before the Board. 3. The applicant provides copies of the following documents: * two Office of the Chief, Army Reserve (OCAR) memoranda * DA Form 4856 (Developmental Counseling Form) and email message * DA Form 1559 (IG Action Request) and email message * DA Form 2789 (Waiver/Remission of Indebtedness Application) * DA Form 3508 (Application for Remission or Cancellation of Indebtedness) * DA Form 2823 (Sworn Statement) * 25 DA Forms 702 (DFAS Leave and Earnings Statements (LES)) * bank statement * two NGA memoranda * applicant's cover letters (3) * DFAS letter * HRC letter CONSIDERATION OF EVIDENCE: 1. The applicant enlisted in the USAR on 24 July 2006 for a period of 8 years and then further enlisted in the Regular Army on 15 August 2006 for a period of 4 years. Upon completion of training he was awarded MOS 35G. 2. A DD Form 214 (Certificate of Release or Discharge from Active Duty) shows he was honorably released from active duty on 14 August 2010 and transferred to Det 4, 2200 USAR MIG, Fort Dix, NJ, to complete his Reserve obligation. 3. A DD Form 4 (Enlistment/Reenlistment Document – Armed Forces of the United States) shows the applicant reenlisted in the USAR on 9 March 2012, in pay grade E-5, for a period of 6 years with assignment to Det 4, 2200 MIG. This contract expires on 23 August 2018. a. A DA Form 3540 (Certificate and Acknowledgment of the USAR Service Requirements and Methods of Fulfillment), Annex, A, shows in Section IX (Additions or Changes to this Certificate) the applicant reenlisted for the USAR RB and Student Loan Repayment Program (SLRP)). b. An SRIP – USAR RB Addendum shows the applicant reenlisted in the USAR for 6 years with a bonus amount of $10,000.00, in MOS 35G, which was approved as a bonus MOS and correlated to the unit positon vacancy for which he was reenlisting. He contracted for a lump sum payment of the bonus effective on the date of his reenlistment. It also shows in: (1) Section VI (Continued Entitlement), in pertinent part, continued entitlement to the bonus payment if he was involuntarily transferred because of unit transition; (2) Section VIII (Termination), in pertinent part, his entitlement to the reenlistment cash bonus would be terminated if he: * voluntarily moved to a non-bonus unit or MOS * separated from a USAR unit for any reason other than by death, injury, illness, or other impairment not the result of his own misconduct (3) Section IX (Recoupment), if his entitlement to the reenlistment cash bonus was terminated (as outlined, in pertinent part, in Section VIII, above), it would be subject to recoupment action. (4) The applicant and a Service representative placed their signatures on the document on 9 March 2012. 4. Headquarters, USARC, Fort Bragg, NC, Orders 13-112-00045, dated 22 April 2013, reassigned the applicant from Det 4, 2200 USAR MIG, Fort Dix, NJ, to the USAR Control Group (Annual Training (AT)), effective 22 April 2013, based on his voluntary request. 5. Headquarters, HRC, Fort Knox, KY, Orders Number T-04-303576, dated 29 April 2013, as amended, ordered the applicant to active duty for training (ADT) on 6 May 2013 for a period of 68 days. He was assigned to NGA, Springfield, VA, and attached to NGA, Bethesda, MD. 6. Headquarters, HRC, Fort Knox, KY, Orders Number C-05-307657, dated 22 May 2013, voluntarily released the applicant from the USAR Control Group (AT) and assigned him to NGA, Reston, VA, for duty with NGA, Bethesda, MD, effective 10 June 2013, based on his voluntary request. 7. Headquarters, HRC, Fort Knox, KY, Orders Number A-06-309473, dated 28 June 2013, ordered the applicant to ADOS in support of Operation Enduring Freedom (OEF) on 13 July 2013 for a period of 365 days. 8. He was promoted to staff sergeant/pay grade E-6 effective 1 November 2013. 9. A DA Form 2166-8 (NCO [Noncommissioned Officer] Evaluation Report), covering the period 6 May 2013 through 5 May 2014, shows the applicant's principal duty was Imagery Analyst (MOS 35G3O). It also shows, in pertinent part, in Part I (Administrative Data): * block f1 (Unit): NGA, Springfield, VA * block f2 (Status Code): IMA/MOB 10. A DD Form 214 shows the applicant was ordered to active duty on 6 May 2013, honorably released from active duty on 12 July 2014, and transferred to the USAR Control Group (Reinforcement). 11. Headquarters, U.S. Army Garrison, Fort Belvoir, VA, Orders 177-0003, dated 26 June 2014, released the applicant from active duty and assigned him to the USAR Control Group (Reinforcement), effective 12 July 2014. 12. Headquarters, HRC, Fort Knox, KY, Orders Number C-08-411378, dated 14 August 2014, released the applicant from NGA, Reston, VA, and the USAR Control Group (IMA) and reassigned him to the USAR Control Group (Reinforcement), effective 14 August 2014, based on his voluntary request. 13. Headquarters, HRC, Fort Knox, KY, Orders Number C-08-411813, dated 25 August 2014, released the applicant from the USAR Control Group (Reinforcement) and assigned him to Det 4, 2200 USAR MIG, Fort Dix, NJ, effective 18 August 2014, based on his voluntary request. 14. The applicant is currently serving as a warrant officer candidate. 15. In support of his application the applicant provides the following documents. a. OCAR, Washington, DC, memorandum, dated 26 May 2010, subject: Reassignment of USAR Soldiers on ADOS to the IRR, that updated requirements and provided guidance regarding reassignment of USAR TPU Soldiers performing duty on ADOS tour to the IRR. It shows, in pertinent part, Soldiers who volunteer for an ADOS tour will not be placed in Administrative Unit Identification Codes (UICs) in lieu of transfer to the IRR. b. DA Form 4856, dated 10 April 2013, and email message, dated 22 April 2013, that shows Lieutenant Colonel M---- Y----, Commander, Det 4, 2200 MIG, summarized the conversation he had with the applicant as conditions for supporting and approving the applicant's COADOS tour. The email message forwarded Orders Number 13-112-00045, pertaining to the applicant's COADOS and noted that the applicant would return to his unit after completion of the COADOS. c. OCAR, Washington, DC, memorandum, dated 29 May 2013, subject: Change 1 to USAR Fiscal Year 2013 2nd Half SRIP Policy Guidance from 1 April 2013 through 30 September 2013, implemented changes effective 1 June 2013. It states, in pertinent part, "Soldiers transferring to an IMA positon will result in termination without recoupment of any unearned portion of a SRIP incentive." d. A DA Form 1559, dated 30 September 2013, and email message, dated 24 December 2013, which show the applicant requested IG action pertaining to the recoupment of his RB and reinstatement of his SLRP entitlement. (1) He noted that he was transferred from Det 4, 2200 MIG, MIRC, to the IRR (for 11 days), effective 6 May 20013, and was then placed on COADOS tour with NGA. As a result, DFAS initiated action to recoup his RB and suspend his SLRP. He noted that he was not counseled regarding recoupment of his RB and he continued to serve satisfactorily as a USAR Soldier. (2) On 24 December 2013, the detailed IG, USARC, Fort Bragg, NC, notified the applicant that the IG had no authority or grounds to recommend that his RB and SLRP entitlements be reinstated. The IG noted that the applicant's unit was within USARC policy to offer the option for him to transfer to the IRR and accept the COADOS or decline the tour and remain in his TPU. The policy was not rescinded and remained in effect until after he was transferred. The IG concluded that there were no regulatory violations committed by the chain of command. The applicant was provided alternatives to pursue relief. e. Applicant's requests for remission of indebtedness (three cover letters, dated 10 January 2014, 4 March 2014, and 14 March 2014) with enclosures that included a DA Form 2789, DA Form 3508, DA Form 2823, reassignment orders, bank statement, LESs, and two NGA letters of recommendation. The applicant requested remission of the recoupment of his $10,000 lump sum RB. f. By letter, DFAS, Indianapolis, IN, dated 29 January 2014, notified the applicant HRC was the appropriate agency to process his application for remission of indebtedness. g. A memorandum from HRC, Fort, Knox, KY, and email message, dated 18 April 2014, show the applicant's application for remission or cancellation of indebtedness in the amount of $8,275.19 was reviewed and partially approved in the amount of $4,137.60. It also shows the review determined that no grounds exist to remit or cancel the remaining portion based on hardship and/or injustice. h. NGA, Springfield, VA, Special Order Number 14-077, dated 14 July 2014, DD Form 2414 (Joint Service Achievement Medal Certificate), and Citation, show the applicant was awarded the Joint Service Achievement Medal (1st Oak Leaf Cluster) for meritorious achievement as a Full Motion Video Analyst, Counterterrorism Airborne Analysis Center, NGA, from 6 May 2013 to 12 July 2014. 16. In the processing of this case, an advisory opinion was obtained from the Acting Chief, Manning Division, USARC, Fort Bragg, NC. The advisory official stated: a. the terms of the applicant's RB provided for termination of eligibility for the incentive if a Soldier separates from the Selected Reserve (SELRES) unit or the IRR of the USAR, or the ARNG or the United States (ARNGUS) for any reason. Separation includes discharge or transfer to the IRR, Inactive National Guard, Standby, or Retired Reserve; and b. the applicant separated from the SELRES on 10 June 2013 in order to accept a COADOS tour. This was a violation of the contract. Therefore, he did not meet the contractual obligation to receive the entire bonus. The advisory official recommends the Board deny the applicant's request for payment of the RB. 17. On 10 July 2015, the Chief, Case Management Division (CMD), Army Review Boards Agency (ARBA), provided the applicant a copy of the advisory opinion. It is noted, in pertinent part, that the third paragraph of the CMD memorandum indicated, "[i]n your case, we received a criminal investigation report from the United States Army Reserve Command, 4710 Knox Street, Fort Bragg, NC 28310 (copy enclosed)." 18. On 27 July 2015, the applicant provided his response. He noted that the CMD memorandum referenced a criminal investigation report; "[h]owever, no such criminal investigation report was attached." He requested clarification/ information pertaining to the referenced criminal investigation report, he elected not to provide repetitive information that he had previously submitted to the Board, and he chose to focus on the advisory official's comments. a. He noted that the advisory opinion indicated that he separated from the SELRES on 10 June 2013 in order to accept a COADOS tour, in violation of the contract. As a result, he did not meet the contractual obligation to receive the entire bonus. b. The applicant also referenced information from the Office of the Secretary of Defense, Personnel and Readiness (P&R) website concerning military compensation (recoupment). It shows, in pertinent part, on 6 February 2009, the Deputy Secretary of Defense authorized the Under Secretary of Defense (P&R) to establish additional exceptions if repayment would be contrary to a personnel policy or management objective, would be against equity and good conscience, or would be contrary to the best interests of the United States. c. The applicant stated: (1) in January 2013, he received a lump sum (net) payment of $7,100.00 as a result of Federal and State taxes being deducted from the $10,000.00 RB; (2) in April 2015, he received the partial reimbursement of $4,137.60 of the RB. However, he only received a net payment of $2,937.70 as a result of $1,199.90 of Federal and State income taxes being deducted. In effect, he was taxed twice on the portion of the RB that was reimbursed, which is an injustice; and (3) he now requests full (non-taxable) reimbursement of the remaining portion of the recoupment action of $4,136.59 and non-taxable reimbursement of $1,199.90 for the taxes deducted from the partial remission payment he received in April 2015. 19. With regard to the ARBA, CMD, memorandum, dated 27 July 2015, the CMD official was consulted and confirmed that the reference to a criminal investigation report was erroneously included in the memorandum due to an administrative error. A careful review of the applicant's file revealed no evidence of a criminal investigation report associated with the advisory opinion or his ABCMR case file. REFERENCES: 1. Title 10, USC, section 1552 states: a. The Secretary of a military department may correct any military record of the Secretary’s department when the Secretary considers it necessary to correct an error or remove an injustice. Except when procured by fraud, a correction under this section is final and conclusive on all officers of the United States. b. No correction may be made under subsection (a)(1) unless the claimant or his heir or legal representative files a request for the correction within three years after he discovers the error or injustice. However, a board established under subsection (a)(1) may excuse a failure to file within three years after discovery if it finds it to be in the interest of justice. c. The Secretary concerned may pay, from applicable current appropriations, a claim for the loss of pay, allowances, compensation, emoluments, or other pecuniary benefits, or for the repayment of a fine or forfeiture, if, as a result of correcting a record under this section, the amount is found to be due the claimant on account of his or another’s service in the Army, Navy, Air Force, Marine Corps, or Coast Guard, as the case may be, or on account of his or another’s service as a civilian employee. 2. Department of Defense (DOD) Financial Management Regulation, Volume 7B, paragraph 2411 (Processing correction of record cases), sub-paragraph 241101 (Amounts Previously Paid and Reported), states when amounts previously paid and reported as Federal Income Tax Withholding (FITW) wages are not subject to FITW as a result of the correction, the member is provided either a corrected Internal Revenue Service (IRS) Form 1099-R for the 3 calendar years before the year that the correction action is made or a letter citing the "before" and "after" amounts for each calendar year involved. The member then may obtain a tax refund, if any is due, from the IRS based on his or her total tax liability for 3 years. In accordance with 52 Comp. Gen. 420 (1973) (a Comptroller General decision), a claim for the refund of income taxes paid in years prior to the 3-year period may be treated as a claim for pecuniary benefits under Title 10, USC, section 1552 and paid pursuant to the record correction. 3. DOD Financial Management Regulation 7000.14-R, Volume 7A (Military Pay Policy and Procedures - Active Duty and Reserve Pay) governs active duty and reserve military pay. a. Chapter 56 (Ready Reserve Accession, Affiliation, Enlistment, and Reenlistment Bonuses) establishes policy guidance pertaining to the accession, affiliation, enlistment, and retention bonuses for members of the Ready Reserve. Paragraph 5608 (Selective Retention Bonus – Repayment), states that a member who does not complete the term of enlistment within the element of the SELRES for which the bonus was paid to the member under this section will be subject to the repayment provisions of Chapter 2. b. Chapter 2 (Repayment of Unpaid Portion of Bonuses and Other Benefits), paragraph 020204 (Conditions under review by the Secretary of the Military Department), provides that under circumstances not specifically mentioned in this chapter, the Secretary of the Military Department concerned has the discretion to, at some point in the process, render a case-by-case determination that the member's repayment of, or the Military Department's full payment of an unpaid portion of, a pay or benefit is appropriate based on the following: * contrary to a personnel policy or management objective * against equity and good conscience * contrary to the best interest of the United States 4. Department of the Treasury, IRS, Publication 3 (Armed Forces? Tax Guide) states reenlistment bonuses are included as part of a member’s gross income and are taxable. 5. Army Regulation 15-185 (Army Board for Correction of Military Records (ABCMR)) prescribes the policies and procedures for correction of military records by the Secretary of the Army, acting through the ABCMR. Paragraph 2-11 states that applicants do not have a right to a hearing before the ABCMR. The Director of the ABCMR or the chair of an ABCMR panel may grant a formal hearing whenever justice requires. DISCUSSION: 1. The applicant requests a personal appearance hearing. By regulation, an applicant is not entitled to a hearing before the ABCMR. Hearings may be authorized by a panel of the ABCMR or by the Director of the ABCMR. In this case, the evidence of record, the independent evidence provided by the applicant, and the analysis of the information in an advisory opinion, are sufficient to render a fair and equitable decision at this time. 2. The applicant contends, in effect, that his records should be corrected to show entitlement to the $10,000.000 RB by full remission/cancellation of any remaining debt, along with non-taxable reimbursement of the remaining portion of the recoupment action of $4,136.59 and non-taxable reimbursement of $1,199.90 for the taxes deducted from the partial remission payment he received in April 2015. 3. The applicant reenlisted in the USAR on 9 March 2012 for a period of 6 years in MOS 35G with assignment to Det 4, 2200 MIG and, in pertinent part, lump sum payment of a RB in the amount of $10,000 on the date of his reenlistment. He received a lump sum (net) payment of his RB in the amount of $7,100 after taxes were withheld. His contract termination date is 23 August 2018. (Reenlistment bonuses are considered gross income and are taxable wages by the IRS.) 4. The pertinent provision that would subject the RB to recoupment action was his voluntarily movement to a non-bonus unit. a. On 22 April 2013, the applicant was assigned to the USAR Control Group (AT) based on his voluntary request. b. On 6 May 2013, he was ordered to ADT for a period of 68 days, and assigned/attached to the NGA. c. On 29 May 2013, changes to the Fiscal Year 2013 2nd Half SRIP Policy Guidance were announced and implemented, effective 1 June 2013 (emphasis added). In pertinent part, a change pertaining to Soldiers transferring to an IMA positon would result in termination without recoupment (emphasis added) of any unearned portion of an SRIP incentive. d. On 10 June 2013, he was released from the USAR Control Group (AT) and assigned to NGA based on his voluntary request. e. The advisory official confirmed the applicant separated from the SELRES on 10 June 2013 in order to accept a COADOS tour in violation of his reenlistment contract. f. On 13 July 2013, he was ordered to ADOS as an IMA in support of OEF for a period of 365 days based on his voluntary request. g. In August 2013, DFAS initiated recoupment action. h. In April 2014, HRC partially approved remission/cancellation of his indebtedness in the amount of $4,137.60. i. He received a net payment of $2,937.70 with a deduction of $1,199.90 for Federal and State income taxes, which constitutes a duplication of taxes as he had previously paid taxes on the full RB at the time of his reenlistment. 4. The evidence of record shows the terms of the applicant's reenlistment contract were effective 9 March 2012 and that he voluntarily transferred to the USAR (AT) on 22 April 2013, which effectively terminated his entitlement to the RB. The change in the SRIP was retroactive to 1 June 2013, which was prior to the date he was ordered to his COADOS tour (13 July 2013). As such, recoupment of his SRIP bonus is contrary to good conscience and against the best interest of the Army. The applicant has continued to serve the intent of his USAR enlistment contract though he did voluntary transfer from the SELRES to accept a COADOS and then returned to his SELRES unit. It is fair to assume he was not aware of the financial implications of his decision to transfer from his SELRES unit to the IRR so as to accept the COADOS. 5. The circumstances surrounding this case support a conclusion that it would be in the best interest of the government to provide pecuniary relief by showing the applicant's entitlement to the full $10,000 RB incentive with no recoupment. Based on receipt of a partial recoupment payment in 2014, the applicant should receive the difference with no taxes subtracted from the recoupment as he first paid taxes on the RB in 2013. In addition, he should be given pecuniary relief with reimbursement of the excess Federal and State taxes paid in 2014. 6. The applicant is advised to review and comply with his enlistment contract until its termination on 23 August 2018. A recommendation to grant relief will not prohibit Government agencies from recouping his bonus in the future if he fails to complete the terms of his enlistment contract. //NOTHING FOLLOWS// ABCMR Record of Proceedings AR20150000953 Enclosure 1 ARMY BOARD FOR CORRECTION OF MILITARY RECORDS RECORD OF PROCEEDINGS ABCMR Record of Proceedings (cont) AR20150005067 2 ARMY BOARD FOR CORRECTION OF MILITARY RECORDS RECORD OF PROCEEDINGS Enclosure 1 ABCMR Record of Proceedings (cont) AR20150005067 2 ARMY BOARD FOR CORRECTION OF MILITARY RECORDS RECORD OF PROCEEDINGS Enclosure 2