BNUMBER:  B-272278
DATE:  December 2, 1996
TITLE:  Roseann R. Bindner

**********************************************************************

Matter of:Roseann R. Bindner

File:     B-272278

Date:December 2, 1996

DIGEST

An employee received overpayments of compensation over a period of 
years and was granted partial waiver of the debt under 5 U.S.C.  sec.  5584 
(1994).  Her appeal of the denial of waiver of the balance of her debt 
is denied.  In addition, since money had been withheld and taxes paid 
on those overpayments, the employee seeks waiver of the amount of 
money she paid in taxes because she was unable to recover it from the 
taxing authorities for the year in which the debt was repaid.  The 
application of the tax laws to an individual's income is a matter 
solely within the jurisdiction of the taxing authority, and an 
individual's income tax liability on the overpayments does not permit 
partial waiver of a debt not otherwise appropriate for waiver.  Fort 
Polk Employees, B-261699, Oct. 25, 1996, and decisions cited.

DECISION

This decision responds to correspondence from Ms. Roseann R. Bindner, 
who is seeking reconsideration of Settlement Certificate Z-2942821, 
Apr. 18, 1996, which denied waiver of a part of her debt due the 
United States.  We conclude that the settlement was correct, and it is 
sustained.

Between February 23, 1986, and January 2, 1993, Ms. Bindner was 
involved in a series of within-grade pay increases, promotions, as 
well as a reduction in grade with pay retention rights.  A number of 
errors occurred in both the timing of the various pay adjustments and 
in the calculation of those adjustments.  As a result, the agency 
determined that she had been overpaid a total of $722.40, and denied 
her request for waiver.  On appeal to this Office, we waived 
collection of $29.96 that had been overpaid to her in January and 
February 1987 because she was not aware of the erroneous payments 
during that period.  However, we denied waiver of $692.44 for the 
period of February 2, 1992, through January 3, 1993, because she was 
aware that she was receiving erroneous payments at that time.  We find 
no errors of law or fact in our settlement action. 

Ms. Bindner also states that she refunded the full amount of the debt 
in 1994, and then discovered that, for tax reimbursement purposes, the 
only way she could report that repayment was to list it as a 
miscellaneous deduction on Schedule A of her Federal income tax 
return.  However, because the amount she repaid did not exceed 2 
percent of her adjusted gross income that year and she had no other 
miscellaneous deductions, she could not recover the amount she paid in 
taxes on that overpayment.  The IRS also told her that she could not 
file an amended 1992 return showing the repayment.  As a result, she 
now seeks relief for the additional taxes she had to pay on the amount 
she repaid.

We have held that application of the tax laws to an individual's 
income is a matter solely within the jurisdiction of the taxing 
authority and that the amount withheld or required to be paid as taxes 
on an overpayment of compensation is based on the individual's 
situation in any given year.  Therefore, considering the many possible 
tax liability variables that may apply in individual cases, we do not 
believe that the individual income tax consequences permit partial 
waiver of a debt that does not otherwise meet the requirements for 
waiver.[1]

Accordingly, waiver of repayment of the amount paid as income taxes on 
the overpayment required to be repaid by Ms. Bindner is denied.

Robert P. Murphy
General Counsel 

1. Fort Polk Employees, B-261699, Oct. 25, 1996, and decisions cited.