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B-211262 1 (1983-08-12)

handle is hein.gao/gaobadlgj0001 and id is 1 raw text is: THE COMPTROLLER GENERAL DECISION N OF THE UNITED STATES 7 WASHINGTON, O.C. 20548 U~NIT FILE: B-211262 DATE: August 12, 1983 MATTER OF: Robin J. Zeldin DIGEST: Transferred employee claims reimbursement of loan discount fee and VA buy down charge paid in connection with the sale of his old residence. Regardless of their treatment for tax purposes or their char- acterization under the Truth in Lending Act, payment is precluded by the prohibi- tion in FTR para. 2-6.2d against reim- bursement of points and mortgage discounts. By letter of March 18, 1983, an authorized certifying officer with the Internal Revenue Service requested an advance decision on the reclaim voucher of Mr. Robin J. Zeldin for reimbursement of real estate sale expenses disallowed by the agency on the basis that they are part of the finance charge. Regardless of their characterization for purposes of the truth in lending laws or for tax pur- poses, the expenses may not be reimbursed in view of the specific regulatory prohibition against reimbursement of points and mortgage discount charges. Mr. Zeldin, an employee of the Internal Revenue Service, was transferred from Elkhart to Lafayette, Indiana, effective November 16, 1981. He sold the residence at his old duty station on December 27, 1982. In reimbursing Mr. Zeldin for real estate sale expenses his agency disal- lowed Mr. Zeldin's claim for a 6 percent loan discount fee in the amount of $2,520 and a Veterans Administration buy down charge of $2,297.76. Reimbursement was denied on the basis that these expenses were part of the finance charge. Mr. Zeldin has reclaimed these amounts stating that they are not finance charges since they cannot be deducted from income tax as interest. Mr. Zeldin has cited various Internal Revenue Service Revenue Rulings to support his contention that the disallowed expenses are not deductible as interest by the seller. A Federal employee's entitlement to be reimbursed for the expenses incurred in connection with the purchase of a residence at a new duty station or the sale of a residence

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