IN THE CASE OF: BOARD DATE: 24 September 2020 DOCKET NUMBER: AR20190014844 APPLICANT REQUESTS: Correction of her record to show: * cancellation/remission of a $92,004.76 debt from the Defense Finance and Accounting Service (DFAS) * a personal hearing before the Board APPLICANT'S SUPPORTING DOCUMENTS CONSIDERED BY THE BOARD: * DD Form 149 (Application for Correction of Military Record) * Enclosure 1: * DA Form 5892 (Physical Evaluation Board Liaison Officer (PEBLO) Estimated Disability Compensation Worksheet) * Orders Number 25-2000 * Bank statement * U.S. Property and Fiscal Office (USPFO) email * Enclosure 2: * Transworld Systems letter * DFAS letters * U.S. Department of Treasury letter * DFAS report * Enclosure 3; applicant email to the USPFO * Enclosure 4: * USPFO email to the applicant * DFAS case management system tracker * Enclosure 5: * Congressional assistance request * State Adjutant General letter to congressional inquiry * Enclosure 6; applicant letter to the Department of Treasury * Enclosure 7: * Information paper * Sample cover letters * Applicant letter to the Internal Revenue Service (IRS) * JCH tax group letter * Checks * W-2 (Wage and Tax Statement) * Veterans Affairs (VA) adjudication * Orders Number 70-4501 * DA Form 199 (Informal Physical Evaluation Board (PEB) Proceedings) * DD Form 214 (Certificate of Release or Discharge from Active Duty) * DD Form 215 (Correction to DD Form 214) * Enclosure 8; Applicant Department of Treasury dispute and allied documents FACTS: 1. The applicant states in pertinent part: a. She was entitled to severance pay in the amount of $98,194.20. Due to administrative and finance errors, her date of separation was reported to DFAS as 14 May 2018. This caused discrepancies that resulted in her separation and inability to pay her severance pay through DFAS. The California-USPFO paid her direct deposit on 20 July 2018. Further discrepancies between DFAS and the California-USPFO resulted in her outstanding debt to DFAS and to collection agencies. She filed a dispute with the U.S. Department of Treasury on 12 March 2019 in which DFAS concluded on 3 July 2019 as they do not have the authority to reduce or cancel the debt. b. She was medically separated from the California Army National Guard (CAARNG) as an Active Guard/Reserve (AGR) Title 32 Service member on 14 March 2018, Orders Number 70-4501. She received a 10 percent rating for Crohn's disease on 29 October 2017. This rating classified her as a medical separation which entitled her to disability severance pay. c. On 16 April 2018, she called DFAS after receiving a mid-month Leave and Earnings Statement (LES), after her separation date. She asked about the mid-month payment and pay-out of her severance pay. The DFAS representative stated that her severance pay would not be processed until her separation date, which was reflected as 14 May 2018. She told her it was an error and she referred her to her finance office. That same day she contacted the CAARNG-AGR branch office regarding this discrepancy. Staff Sergeant C- sent her paperwork to AGR finance. d. On 18 April 2018, she spoke to the AGR finance Noncomissioned Officer in Charge (NCOIC), Sergeant First Class (SFC) G-, and discussed the discrepancy of her separation date, mid-month payment and severance pay. He stated that he would forward the required documents to the proper department in order to correct the issue. e. On 1 May 2018, she received a call from SFC R-, special actions NCOIC from the U.S. Army Physical Disability Agency in Arlington, Virginia. He was doing a follow up regarding a report that showed she had not been paid severance pay. She explained the separation date error which prevented processing of her severance pay. She notified him of the email and phone attempts she made to the AGR branch office and AGR finance branch to correct this discrepancy. As of this date, she still had not received a resolution or final disposition of the correction or plan of action. He informed her that there was not much he could do since she was CAARNG, Title 32, and not Active Army, Title 10. He did state he was going to try to do what he could. If she found it necessary, she did have the option to file an Inspector General complaint, Congressional or an Army Board for Correction of Military Records dispute if no resolution was being provided. On 3 May 2018, she filed a congressional inquiry with the Honorable Mr. H-. f. Between 3 May 2018 and 20 July 2018, there were numerous phone calls and emails with DFAS and the CAARNG AGR office but she had received little to no information. She reached out to Lieutenant Colonel (LTC) K-, a former squadron commander of hers and at the time brigade executive officer. He provided support by simply sending emails asking for a status. His assistance was instrumental in expediting communication with leadership at the CAARNG AGR office that she would not have been able to obtain without his involvement. g. Numerous emails were sent on her behalf trying to figure out her severance pay amount. Her separation documents had an estimated amount; DFAS would tell her amounts that were significantly lower. She wanted to figure out what was happening and where the miscommunication was. These emails can be found in her dispute packet. h. She was unable to receive her severance pay from DFAS because she was separated prior to payment being processed. The system would not allow payment. She was paid directly from the California-USPFO by direct deposit on 20 July 2018. In December 2019 she received notification from DFAS that she had an outstanding debt. She called DFAS, and they stated that her finance office needed to submit a case management system case to DFAS to correct this debt. She contacted the CAARNG regarding the debt notification and the case management system case and kept LTC K- informed of her status. i. On 3 January 2019, she was informed via email from Major (MAJ) W-, Deputy Financial Manager, CA-USPFO, that a case management system case number (1XXXXXX4) had been submitted to DFAS. An email from Mrs. W-, lead financial services technician to MAJ W-, dated 3 January 2019, stated that the case management system case was referred to the National Guard Bureau (NGB) NGB-FSC active component for processing referral to DFAS out of service debts for action. On 3 March 2019, she received a notice from the U.S. Department of Treasury that she owed $119,606.19. j. On 4 March 2019, she called DFAS. The representative informed her that her debt was due to receiving payment in an out of service status on 25 June 2018. She asked about the case management system case and she stated that there was no case management system case in her account. She emailed MAJ W- on 1 March 2019 informing him of this debt. She called MAJ W- after she sent the email and she expressed her concerns and questions as to why DFAS stated that there was no case management system case. He stated that he was unsure as to why they would state tha; he replied to her email and provided a case management system printout along with email traffic from Mrs. W-. Immediately after, she called the U.S. Department of Treasury and spoke to a representative about the $119,606.19 debt. He told her the amount and outlined her options. He mailed a DFAS report showing a debt amount of $91,685.32 and told her the process of filing a dispute. She and her husband filed for their 2018 IRS taxes that same day. She submitted an IRS disability severance pay tax refund packet, to request a refund of the withheld taxes along with the balance paid that was a result of paying the taxed amount of the severance pay she received. k. On 12 March 2019, she compiled all her supporting documents and emailed them for review to retired Colonel G- who practices law as an attorney. He graciously offered to review her dispute documents at no cost but could not assist her further since he does not practice in this specific field. She sent him the entire dispute via email on 14 March 2019 and submitted the dispute on 18 March 2019 after receiving his feedback. l. On 15 April 2019, she received a notice dated 1 April 2019 that her debt to the U.S. Department of Treasury had been transferred to Transworld System Incorporated collections agency. She called the U.S. Department of Treasury to inquire about this notice and the status of her dispute. She was told that the dispute was at the DFAS level and there was nothing else she could do but wait for the disposition. m. On 29 May 2019, she received a letter from DFAS dated 23 May 2019. It stated that since her account had been referred to Federal debt all further questions and arrangements must be made through their office. The last contact she had with DFAS was made on 4 March 2019. She found this letter to be unusual, as she had made no recent contact with DFAS; all communication was through the Department of Treasury. n. In July she received notices from DFAS and Transworld Systems Incorporated. In a DFAS notice dated 16 July 2019, their final disposition stated that her debt was due to payments received after she entered a no-pay status. Due to her separation date of 14 March 2018 and payment made on 25 June 2018 in the amount of $98,194.20, she had a debt due to separation payment. DFAS stated that they have no authority regarding cancellation or reduction of her debt. The possible remedy was for her to file a petition to the Board. Her debt remains the same unless she receives relief from the Board. o. Her current debt amounts as of 16 July 2019, Transworld Systems Incorporated collections agency is $119,606.19; As of 3 July 2019, DFAS is $92,004.76. Dates and debt amounts conflict with one another. Each agency, email and LES show different debt amounts. 2. A review of the applicant's official records shows the following: a. On 16 June 2004, the applicant enlisted in the ARNG and served through three extensions until her PEB. b. On 8 November 2017, a PEB convened, found the applicant physically unfit, and recommended a rating of 10 percent and her disposition be separated with severance pay. c. On 25 January 2018, Orders Number 25-2000, issued by the Joint Forces Headquarters, CAARNG, promoted the applicant to the rank/grade of SSG/E-6. d. On 14 March 2018, the applicant was honorably retired from the ARNG by reason of disability with severance pay. Her DD Form 214, item 18 (Remarks), is void of a severance pay amount. 3. The applicant provides: a. DA Form 5892 showing an estimated $77,587.20 as severance pay, but final disposition was separated without severance pay. b. Bank statement showing on 20 July 2018, $98,194.20 was deposited into the applicant's account from the USPFO-CA. c. USPFO email wherein the applicant corresponds with Ms. L-W- pertaining to her final computation worksheet submitted for final payment and case management system case as it relates to her severance pay debt. d. Transworld Systems Incorporated letter showing the applicant had an established debt of $119,606.19 consisting of a principal of $91,685.32, accrued interest of $309.44, an administrative fee of $10.00, and $27,601.43 of other fees. e. DFAS letters wherein the applicant was informed her debt of $92,110.45 was due to payments received after she entered a no-pay status, due to separation as of 14 March 2018. She was issued a partial pay dated 25 June 2018 in the amount of $98,194.20. Her debt was due to separation payment. There was no record of returned payments. The organization did not have the authority to cancel or reduce a debt. Her account had been referred to Federal debt and she could arrange to settle the account through that office. f. U.S Department of Treasury letter wherein the applicant was informed she had a debt of $119,606.19 referred to them through DFAS. g. DFAS report showing the applicant's debt was due to payments received after she entered a no-pay status due to separation on 14 March 2018. The payment of $98,194.20 was issued on 25 June 2018. h. Applicant email establishing connection with the CA-USPFO official MAJ W- provided by LTC K- to address the applicant's pay issue. i. CA-USPFO email to the applicant wherein Ms. W- informed MAJ W- that the applicant's debt was due to her being paid after her date of separation and her severance pay was being recouped. Ms. W- sent the request to NGB FSC to request the U.S Treasury Department cancel or adjust the debt. Previous emails show MAJ W- submitting a request on the applicant's behalf to DFAS to resolve the issue though the case management system. j. DFAS case management system tracker showing a request was submitted in the system to void possible debts due to disability severance pay not being issued correctly. k. Congressional assistance request wherein the applicant solicits assistance from the office of the Honorable Mr. H-'s office pertaining to her severance pay issue. l. State Adjutant General letter response to the Honorable Mr. H- that states it is in response to the inquiry pertaining to Congress Member H-'s constituent, the applicant. She states that she is a former member of the CAARNG who was on AGR orders when she was medically separated from the CAARNG. The effective date of her discharge was 14 March 2018. Since that date, she has been unable to obtain her severance pay and she is requesting assistance with resolving this issue. Information provided by the staff for the CAARNG Headquarters indicates that her severance pay request has been processed. m. Applicant letter to the U.S. Department of Treasury wherein the applicant disputed the $27,672.17 difference in her out of service debt and what she received from the U.S Department of Treasury and her attempts to resolve the issue. n. Information paper used to inform personnel separating from the service with severance pay, and possible tax refunds. o. Sample cover letters to be used when submitting the severance pay tax refund. p. Applicant's letter to the IRS wherein she disputed taxes being withheld from her severance pay due to her VA disability rating. q. JCH tax group letter showing the organization processed the applicant's 2018 tax returns. r. Checks paid for 2018 taxes. s. W-2 showing the applicant's earnings of $117,427.47 for 2018. t. VA adjudication showing the applicant was awarded a combined rating of 40 percent for service connected disabilities. u. Orders Number 70-4501, issued by the Joint Forces Headquarters, CAARNG, reassigned the applicant to the U.S. Army transition point for transition processing for discharge from the ARNG AGR, effective on 14 March 2018. v. DD Form 215 showing a correction of the applicant's rank to SSG on her DD Form 214 for the period ending 14 March 2018. w. Applicant U.S. Department of Treasury dispute with allied documents previously summarized in the record of proceedings. 4. See applicable references below. ? BOARD DISCUSSION: 1. After reviewing the application and all supporting documents, the Board found that relief is warranted. 2. The Board agreed that, as the applicant was being discharged for disability incurred in the line of duty, she was eligible for severance pay. The Board further agreed that her status as an AGR Soldier serving on active duty under the provisions of Title 32, U.S. Code, may have caused some confusion in her case. For example, Soldiers being released from active duty with severance pay will normally have the gross amount of that pay recorded on their DD Form 214, which did not happen in her case. If a payment was, in fact, made after she had left her active status in the CAARNG, she still would have been entitled to that payment. Based on a preponderance of evidence, the Board determined collection of the applicant's debt should be cancelled, contingent on a review of available financial records to ensure she was not inadvertently paid severance pay twice. BOARD VOTE: Mbr 1 Mbr 2 Mbr 3 :XXX :XXX :XXX GRANT FULL RELIEF : : : GRANT PARTIAL RELIEF : : : GRANT FORMAL HEARING : : : DENY APPLICATION ? BOARD DETERMINATION/RECOMMENDATION: 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 cancelling collection of the debt described in the DFAS bill dated 7 January 2019, contingent on reviewing available financial records related to her case to ensure she was not inadvertently paid severance pay twice. 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. REFERENCES: 1. Army Regulation (AR) 600-4 (Remission or Cancellation of Indebtedness) states requests for remission or cancellation of indebtedness must be based on injustice, hardship, or both. Paragraph 1-8 (Indebtedness to the U.S. Army that may not be remitted or canceled under Title 10 United States Code, section 4837) states indebtedness to the U.S. Army will not be remitted or canceled when the debt is incurred while not on active duty or in an active status. 2. AR 15-185 (ABCMR) prescribes the policies and procedures for correction of military records by the Secretary of the Army, acting through the ABCMR. The ABCMR may, in its discretion, hold a hearing or request additional evidence or opinions. Additionally, it states in paragraph 2-11 that applicants do not have a right to a hearing before the ABCMR. The Director or the ABCMR may grant a formal hearing whenever justice requires. //NOTHING FOLLOWS// ABCMR Record of Proceedings (cont) AR20190014844 9 ARMY BOARD FOR CORRECTION OF MILITARY RECORDS RECORD OF PROCEEDINGS 1