CHECK DATA AND STATEMENTS OF DEPOSITARY ACCOUNTS TO BE FURNISHED BY DISBURSING OFFICERS; PROCEDURE FOR SAFEGUARDING OF CHECKS; CHECK CANCELLATION; CHECK CORRESPONDENCE; ETC.

[General Regulations No. 91-Revised-Supplement No. 1]

JUNE 2, 1943. The heading of section 3, General Regulations No. 91-Revised dated September 24, 1940, 20 Comp. Gen. 939, and paragraph (d) of the said section are hereby amended to read as follows:

3. Undelivered Negotiable Checks, Issuance of Substitute Checks, and Unused Blank Checks.

(d) In cases where there are errors in the names or designations of payees of checks drawn on the Treasurer of the United States or other depositaries, and if the amounts of the checks are properly due and such checks are otherwise negotiable within a reasonable time (allowing for the negotiation thereof) before the close of the fiscal year next following the fiscal year in which issued, the issuing disbursing officer may, when one of such checks is returned to him, issue in the name of the authorized payee a substitute check in lieu of the returned check. Such substitute check should bear the same symbol number, date, check number, and amount as the original returned check. The returned check should be marked distinctly on the face thereof, "Nor NEGOTIABLE-SUBSTITUTE ISSUED UNDER SAME NUMBER," and should be promptly forwarded by the disbursing officer to the General Accounting Office with his statement, in duplicate, covering the circumstances requiring the issuance of the substitute check. If the error was in the mechanical preparation of the check rather than in the related voucher, the original of such statement will be filed with the check thus forwarded and the copy will be made a part of the related voucher. Where the name and designation of the stated payee on the substitute check differs from the name and designation of the payee as stated on the voucher upon the basis of which the original check was issued, the substitute check should be issued only with the approval of the officer who originally certified to the correctness of the voucher involved. Such approval should be in the form of a certified statement which should be forwarded to the disbursing officer, and be attached to the voucher if the same is still in the possession of the disbursing officer; otherwise the disbursing officer should forward the statement to the General Accounting Office, in duplicate, where the original copy will be filed with the voucher in question and the copy thereof will be placed on file with the check in lieu of which the substitute was issued. An appropriate notation will be made on the copy of the non-negotiable check to reflect the action with reference to the original check. The paid substitute check will, upon receipt thereof from the Treasury Department, be filed with the "non-negotiable" check of the same number, date, etc., thus completing the record.

Transactions relating to the issuance of substitute checks in accordance with the procedure outlined above will not be required to be reflected on the accounts current of the officers involved, since such transactions do not change the accountability status of the said officers.

In all other cases, especially where the original issuing disbursing officer is no longer disbursing at the particular station where the returned check was issued, or where the required statement of the certifying officer is not procurable, the checks involving errors in the names or designations of payees should be forwarded to the General Accounting Office, accompanied by complete statements of facts, in order that authorizations may be placed thereon, making them payable upon indorsement by the rightful payees in the usual manner.

LINDSAY C. WARREN, Comptroller General of the United States.

ACCOUNTING FOR LIABILITIES OF THE UNITED STATES FOR INTERNAL REVENUE TAXES WITHHELD AND OTHER DEDUCTIONS FROM PAY OF FEDERAL EMPLOYEES, INCLUDING THOSE IN THE GOVERNMENT OF THE DISTRICT OF COLUMBIA

[General Regulations No. 96]

DECEMBER 15, 1942.

1. Section 466 of Part II, Subchapter D, entitled "Victory Tax on Individuals," as set forth in the Revenue Act of 1942 (Public No. 753, approved October 21, 1942, 56 Stat. 888), provides that

"There shall be withheld, collected, and paid upon all wages of every person, to the extent that such wages are includible in gross income, a tax equal to 5 per centum of the excess of each payment of such wages over the withholding deduction allowable under this part.

* * *"

Section 467 of said Part II, 56 Stat. 891, provides that—

"The tax required to be withheld by section 466 shall be collected by the person having control of the payment of such wages by deducting such amount from such wages as and when paid. As used in this subsection, the term 'person' includes officers and employees of the United States, * the District of Columbia, or any agency or instrumentality of any one or more of the foregoing."

Subsection (b) of section 465, 56 Stat. 887, defines wages as meaning—

* *

66* * * all remuneration (other than fees paid to a public official) for services performed by an employee for his employer, including the cash value of all remuneration paid in any medium other than cash; except that such term shall not include remuneration paid (1) for services performed as a member of the military or naval forces of the United States, other than pensions and retired pay, (2) for agricultural labor (as defined in section 1426 (h)) [of the Internal Revenue Code], * * * [and] (7) for services performed as an employee while outside the United States [including the Territories of Alaska and Hawaii, and the District of Columbia] (as defined in section 3797 (a) (9)), unless the major part of the services performed during the calendar year by such employee for his employer are performed within the United States."

Section 476 of said Part III, subsection (e), 56 Stat. 893, Refunds and Credits, provides, with respect to excessive withholdings, that

"Where the amount of the tax withheld at the source under Part II of Subchapter D exceeds the tax imposed by this chapter (after allowance of the credits ***), the amount of such excess shall be credited against any income tax or installment thereof then due from the taxpayer, and any balance thereof shall be refunded immediately to the taxpayer.'

2. In order to establish uniformity throughout the several departments, establishments, and agencies of the Federal Government, and of the Government of the District of Columbia, procedures are hereby prescribed for deducting, accumulating, and accounting for the Victory tax withheld from the wages and other remuneration of employees to whom the provisions of the Revenue Act of 1942, supra, apply.

3. All pay rolls and pay vouchers for personal services of employees, covering wages payable on a regularly established pay day on and after January 1, 1943, will be subject to the Victory tax deduction of 5 per centum upon the gross amount (cash, plus value of allowances in kind, less an allowance in accordance with section 466 of the Revenue Act of 1942), as follows:

If payment of any wages is for a period less than the full period of any of the above pay periods, the allowance shall be computed on the basis of the employee's regular pay period, divided by 365, and multiplied by the number of days, including Sundays and holidays, which have elapsed since the date of the last payment of such wages, or, if the employer so elects, the tax to be deducted may be determined in accordance with the table set forth in the Revenue Act of 1942 and Supplement No. 13 of General Regulations No. 54, dated November 23, 1942. [Supp. 13 omitted from publication as having been superseded by Supp. 16, June 12, 1943, 22 Comp. Gen. 1156].

4. The Victory tax withheld will be shown on the pay rolls and pay vouchers opposite the name of each employee concerned, in a deduction column for such purpose captioned "Federal Tax," and the total thereof will be included in the gross amount of the pay roll to be charged to the appropriation(s).

5. Adjustments for clerical errors in stating on the pay roll the amount of the tax withheld from an employee will be effected on the subsequent roll in the same manner as provided for adjustments of retirement fund and other deductions, that is, if the deduction is more than the prescribed amount, the adjustment will be shown in red ink in the column provided for "Federal Tax" and opposite the name of the employee concerned. The effect of this entry will be to reduce the total of the tax deduction column, with a corresponding increase in the amount payable to the said employee. If the deduction is for less than the prescribed amount, the adjustment will be made on the subsequent pay roll by entering the additional amount in the column provided for "Federal Tax" and opposite the name of the employee concerned, the effect of the entry being to increase the total of the deduction column, with corresponding reduction in the amount payable to the said employee.

"

6. When scheduling such pay rolls in the gross amount to the disbursing officer for payment, the total amount of Federal tax deductions as shown on each pay roll or pay voucher should be scheduled on Standard Form No. 1096 for credit to account [symbol of department or agency] F-5859-Special Deposits, Victory Tax Withheld from Salaries of Federal Employees [name of department or agency]," F-5859-Special Deposits, Victory Tax Withheld from Salaries of District of Columbia Employees," as the case may be. (See General Regulations No. 87, dated June 25, 1936, 15 Comp. Gen. 1159.) In cases where the disbursing officer paying the rolls, etc., deposits his deductions in a collectionchecking account, reference by check number should be made on the pay roll to the check issued for the total of such deductions.

or

7. The disbursing officer, taking credit in his accounts for the gross amount of the pay rolls as chargeable to the indicated appropriation (s), will immediately recharge his accounts with the total of the said deductions as pertaining to the account "[symbol of department or agency] F-5859-Special Deposits, Victory Tax Withheld from Salaries of Federal Employees [name of department or agency)," or F-5859-Special Deposits, Victory Tax Withheld from Salaries of District of Columbia Employees," as the case may be. The Victory tax deductions so recharged in the accounts of the disbursing officer will be accumulated therein until the amounts are required to be paid over to or for the account of the Collector of Internal Revenue for the district within which the withholding agent (the administrative officer responsible for pay rolls upon which the deductions are made) is located.

8. In the event of a change of disbursing officer, the amount so accumulated in the accounts of the outgoing disbursing officer will be transferred to his successor. 9. Cancellation of transactions pertaining to pay rolls and pay vouchers will be accomplished in the following manner:

(a) The check for the net amount drawn to the order of the employee will be canceled and the amount thereof will be credited to the appropriation from which the said roll was paid. (See in this connection General Regulations Nos. 80, 14 Comp. Gen. 940, and 91-Revised, 20 Comp. Gen. 939.)

(b) Adjustment of overpayments to the Victory Tax Special Deposit Account, the Savings Bond Special Deposit Account, and the Retirement Fund, occasioned by the canceled payment, will be accomplished on the current pay roll as follows:

(1) If the pay roll on which the adjustment is made is chargeable to the same appropriation to which the canceled item was charged, the adjustment will be effected by recording the amounts of such overpayments as reverse entries (red ink) at the end of the pay roll, in the applicable deduction columns. The adjusted totals of such deduction columns will be added to

the total of the "Net Amount Paid" column on such roll to produce the adjusted gross amount chargeable to the indicated appropriation (s).

(2) If the pay roll on which the adjustment is made is chargeable to an appropriation different from the one to which the canceled item was charged, the adjustment will be effected by recording the amounts of such overpayments as reverse entries (red ink) at the end of the pay roll, in the applicable deduction columns, and the total of such items as a positive entry (black ink) in the "Other Deductions" column. The amount entered in the "Other Deductions" column will be listed on a Schedule of Voucher Deductions, Standard Form No. 1096, for credit to the appropriation(s) from which the overpayments were originally paid into the special deposit accounts and the retirement fund.

10. The deductions for the Victory tax will be recorded in the administrative appropriation and fund control accounts in the same manner as provided for other special deposit accounts, and under the fund accounts hereinabove prescribed for Victory tax withheld.

11. Until such time as a standard form of disbursement voucher is prescribed by the Comptroller General for accomplishing the payments of the accumulated Victory taxes at the end of the quarter, Standard Form No. 1047 will be used for such purpose, by showing thereon in the space provided for "Remarks" the legend "Victory Tax Withheld from Compensation of Employees Paid During the Quarter Ended

12. Subsequent instructions will be issued directing the method for disposing of the check in payment of the accumulated tax for each quarter and the routing of the Victory tax return forms required to be furnished by the "withholding agent."

13. In view of the necessity for establishing a record for accumulating the current Victory tax deductions (from the pay of civilian employees) to the end of each calendar year, and in order to effect administrative economies in the maintenance of a record of other current deductions (from the pay of civilian employees), for retirement fund, bond purchases, etc., there is hereby prescribed Standard Form No. 1102, entitled "Individual Earnings Record," which provides space for showing the amount of the individual's earnings, deductions, and net amount paid. The size of the card will be 11 inches wide by 8%1⁄2 inches long.

14. Commencing with the pay rolls paid after December 31, 1942, such form will be used by all agencies of the Federal Government, including the Government of the District of Columbia, except those for which a special form has recently been prescribed for the same purpose, in lieu of other forms heretofore used for accumulating earnings and current deductions according to individual employees.

15. The upper portion of the "Individual Earnings Record" provides for showing the employment status of the employee and information as to deductions for purchase of war savings bonds. The lower portion of the said form provides for showing, in columns especially spaced for stencil (addressing) machines, the detailed data upon which the employee's gross pay is computed; deductions for retirement fund, Federal (Victory) tax, and purchase of war savings bonds, and a blank column for any other class of deduction; purchases of bonds and/or refunds of bond deductions, the unapplied balance in the individual's bond purchase account, and the serial number of the bond issued; and a wide column for "Remarks."

16. Every item on every pay roll must be accurately recorded on the Individual Earnings Record, Standard Form No. 1102.

17. Supplemental pay rolls and pay vouchers, as well as cancellations of payroll entries, including canceled salary checks, must likewise be recorded on the Individual Earnings Record to which they pertain. With respect to cancellations, the amounts thereof will be entered in red ink (minus) and the total of the canceled deductions, plus the amount of the canceled checks, will be entered in red ink (minus) in the "Gross Amount Earned" column.

18. The current deductions for the retirement fund will be totaled for the fiscal year and the amount thereof carried to the Retirement Record Card, Civil Service Commission Form No. 2806.

19. The current deductions for the Federal (Victory) tax will be totaled for the calendar year, and the amount_reported on the receipt and informational forms prescribed by the Treasury Department (Bureau of Internal Revenue) for such purpose.

20. Since the Individual Earnings Record will be used in lieu of forms heretofore provided for recording pay-roll deductions for the purchase of war savings bonds, it is necessary that all of the data as to such deductions, the application thereof (to the purchase of such bonds or refund to the subscriber-employee), the computation of the unapplied balance, and the bond number of the bond issued, as well as the disburing officer's voucher number of the pay roll, be shown on the said record.

21. Instructions heretofore issued directing that vouchers for refunds of unapplied balances be supported by the subscriber-employee's pledge card are hereby amended to require that the detailed information on which the amount to be refunded is based be shown on the refund voucher (Standard Form No. 1047) in the space provided for "Remarks." In this connection, the pledge cards which show the names and addresses of the owner and co-owner or beneficiary may be filed according to the dates that the bonds would be issued under the program of deductions and could thereby serve as a tickler for use in connection with the preparation of the schedules of bonds to be issued. The said pledge cards should be retained in the administrative offices until completion of the subscriber-employee's bond purchase program.

22. Upon receipt of these regulations, each department, independent establishment, and other governmental agency is requested to make requisition at once upon the Public Printer for a supply of the standard form herein prescribed, No. 1102, "Individual Earnings Record" card. In so doing, it is understood and agreed by said departments, independent establishments, and agencies that they thereby consent to the plan of combining all the requisitions submitted and printing the total thereof in one edition to be delivered to the respective departments, independent establishments, or agencies, or placed in stock at the Government Printing Office, subject to their order, or partly delivered and partly placed in stock, as the case may be, and that they authorize the Public Printer to prorate the cost of printing and to render bill against each department, independent establishment, or agency for its proportionate share on the basis of the number of forms ordered by it.

LINDSAY C. WARREN,

Comptroller General of the United States.