IN THE CASE OF:	  

		BOARD DATE:	  7 April 2015

		DOCKET NUMBER:  AR20150005039 


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.  This case comes before the Army Board for Correction of Military Records (ABCMR) on a remand from the United States Court of Federal Claims (CoFC). 

2.  On 4 September 2014, the CoFC remanded the applicant's case to the ABCMR with a directive to amend the applicant's disability rating for sleep apnea and provide him a retroactive retirement for physical disability.  On 24 November 2014, the U.S. Army Physical Disability Agency (USAPDA) issued the applicant a DA Form 199 (Physical Evaluation Board (PEB) Proceedings) showing a 50 percent disability rating for sleep apnea and retiring him retroactive to 19 January 2000.  Additionally, the Court ordered back pay or other relief owed to the applicant on account of this new rating.  Finally, the Court directed such payments be excluded from gross income due to his membership in an armed service on 24 September 1975. 

	a.  The case was referred to the USAPDA to accomplish the ordered corrections concerning disability retirement.  On 24 November 2014, the USAPDA issued the applicant a DA Form 199-2 (Revised PEB Proceedings) showing his disability rating for sleep apnea and directing his medical retirement retroactive to 23 April 2000, the date he was discharged by reason of disability with entitlement to severance pay. 

	b.  Based on the action of the USAPDA, the Defense Finance and Accounting Service (DFAS) paid the applicant accordingly.  However, DFAS could not pay him the amount of $38,469.31, which was the amount of taxes withheld from his severance pay, without this Board directing such payment. 
3.  The Court ordered the ABCMR to relook the prior denial of his disability retirement.  While this has already been accomplished by the USAPDA, the applicant is still not whole and the taxes withheld remain an issue of contention.  

CONSIDERATION OF EVIDENCE:

1.  The applicant's available records show he was born in April 1952. 

2.  Most of the applicant's records prior to 1992 are not available for review.  According to his Officer Record Brief, dated 6 May 2000, his basic active service date is 27 February 1975.  He was assigned to the U.S. Army Reserve (USAR) Control Group in August 1976; the Illinois Army National Guard in February 1978; the 303rd Ammunition Group-Fort Dix in October 1979; and the 2nd Brigade, 78th Division, Fort Dix in January 1980. 

3.  He appears to have been discharged from the USAR on or about 28 January 1981 to join the U.S. Air Force Reserve (USAFR).  He served in the USAFR through 27 January 1991.  He attained the rank of lieutenant colonel (LTC) in the USAFR on 13 June 1991 as shown in Air Reserve Personnel Center Orders BA-1108, dated 11 November 1991. 

4.  He entered active duty on 5 April 1991.  He held area of concentration 62B (Field Surgeon) and he served in Southwest Asia during the Gulf War. 

5.  On 18 May 1992, he received a letter from the U.S. Army Health Professional Support Agency, Falls Church, VA, informing him that he had been conditionally recommended for participation in the Army Health Professions Scholarship Program. 

6.  He was discharged from the USAFR and reentered the USAR.  He would receive an order on 21 July 1993 terminating his appointment as a Reserve of the Air Force because of appointment in the USAR on 8 September 1992. 

7.  He was appointed as a Reserve commissioned officer of the Army, in the rank of lieutenant colonel (LTC), and executed an oath of office on 8 September 1992. 

8.  On 10 November 1992, the U.S. Total Army Personnel Command, St. Louis, MO, published Orders C-11-001644 assigning him to the USAR Control Group (Officer Active Duty Obligor (OADO)), in the rank of LTC, effective 8 September 1992 by reason of acceptance for appointment in the USAR. 

9.  On 1 April 1996, he was issued a memorandum appointing him as a Reserve commissioned officer of the Army, in the rank of major (MAJ), effective 31 May 1996.  His appointment memorandum credited him with 14 years, 11 months, and 11 days of service in an active status.

10.  On 12 April 1996, he was ordered to active duty as a MAJ with a report date of 14 June 1996 to Walter Reed Army Medical Center to fulfill active duty requirements as an obligated volunteer officer for 5 years.  

11.  In or around 1997, he was diagnosed with sleep apnea which necessitated his entry into the Army physical disability evaluation system.  Accordingly, on 
15 December 1998, a medical evaluation board (MEB) diagnosed him with breathing-related sleep disorder, sleep apnea, and marked cognitive and memory deficits, secondary to and resulting from sleep apnea.  The MEB, approved on 21 December 1998, referred him to a PEB. 

12.  On 13 April 1999, an informal PEB convened and determined his "mixed sleep apnea, obstructive with a central component requiring CPAP [continuous positive airway pressure] with breathing related sleep disorder and cognitive disorder" was unfitting.  The informal PEB rated his condition at 0 percent and recommended his separation with entitlement to severance pay.  He did not concur.

13.  On 27 September 1999, a formal PEB convened and considered his additional medical document.  The formal PEB affirmed the informal PEB's findings and recommendations.  He did not concur and submitted a rebuttal.  

14.  On 14 January 2000, the USAPDA upheld the formal PEB decision.  Accordingly, on 19 January 2000, Headquarters, Walter Reed Army Medical Center published Orders 019-0001 ordering him to report to the transition center for outprocessing and separation with entitlement to severance pay effective 23 April 2000. 

15.  On 21 April 2000, Headquarters, Walter Reed Army Medical Center published Orders 112-0003, amending Orders 019-0001 to show his disability resulted from a combat-related injury as defined by Title 26, USC, section 104. 

16.  On 21 April 2000, in response to his petition (ABCMR Docket Number AR2000036188) to change his medical disability separation to a medical retirement in the rank of LTC, the Board denied his request. 

17.  He was honorably discharged on 23 April 2000 in accordance with paragraph 4-24b(3) of Army Regulation 635-40 (Physical Evaluation for Retention, Retirement, or Separation) by reason of disability with entitlement to severance pay.  His DD Form 214 (Certificate of Release or Discharge from Active Duty) shows he was authorized $137,390.40 of severance pay.  The amount of $38,469.31 was withheld in taxes.

18.  On 6 May 2003, in response to his petition (ABCMR Docket Number AR2002073924) to be placed on the Reserve retired list in the grade of LTC effective January 2000, the Board denied his request. 

19.  In November 2014, the USAPDA corrected the applicant's records and indicated that the CoFC (File Number 07-328C) directed his previous disability findings be amended to reflect permanent disability retirement with a 50 percent rating for sleep apnea effective the date he initially was separated from the Army. Accordingly: 

	a.  On 12 November 2014, Orders 019-001, issued by Walter Reed National Military Medical Center, on 19 January 2000, were rescinded. 

	b.  On 12 November 2014, U.S. Army Garrison, Fort Detrick Army Element, Walter Reed National Military Medical Center published Orders 316-0138 permanently retiring the applicant by reason of physical disability effective 24 April 2000 and placing him on the Retired List in his retired rank of MAJ effective 24 April 2000, at a disability rate of 50 percent.  The authority is listed as Title 10, USC, section 1201. 

	c.  On 24 November 2014, U.S. Army Garrison, Fort Detrick Army Element, Walter Reed National Military Medical Center published Orders 328-0135, amending Orders 316-0138, dated 12 November 2014, to show the disability resulted from a combat-related injury as defined in Title 26, USC, section 104. 

	d.  On 24 November 2014, a DA Form 199-2 was issued.  It shows the PEB finds the applicant is physically unfit and recommends a rating of 50 percent and that his disposition be permanent disability retirement.  The disabling condition is listed as Code 6847, sleep apnea.  

20.  Based on the above corrections, DFAS conducted an audit of the applicant's pay.  However, the amount of $38,469.31 remains contested. 

21.  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.  

22.  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.

DISCUSSION AND CONCLUSIONS:

1.  In 1997, the applicant was diagnosed with severe obstructive sleep apnea.  He was considered by an MEB that referred him to a PEB.  An informal PEB determined he suffered from "mixed sleep apnea, obstructive with a central component requiring CPAP with breathing related sleep disorder and a cognitive disorder."  Based on his unfitness for duty, the PEB recommended his separation with severance pay with a 0% disability rating.  He contested these findings and recommendations at a formal PEB hearing.  The formal PEB affirmed the fitness determination and the applicant’s 0% rating for disability. 

2.  He appealed this determination to the ABCMR but the Board denied his request for a medical disability retirement.  He was discharged with entitlement to severance pay on 23 April 2000.  At the time he had over 17 years of qualifying service toward a non-regular retirement at age 60.  When he received his total severance pay, the amount of $38,469.31 was withheld in taxes.  

3.  The CoFC remanded this case to the ABCMR on 4 September 2014 with specific instructions to provide him with a disability rating for sleep apnea based on the ratings criteria for diagnostic code 6847 contained in 38 C.F.R. § 4.97 (the VASRD).  Additionally, the Court ordered back pay or other relief owed to the applicant on account of this new rating.  Finally, the Court directed such payments be excluded from gross income due to his membership in an armed service on 24 September 1975.

4.  On 24 November 2014, the USAPDA issued the applicant a new DA Form 199 showing his disability rating for sleep apnea and directing his medical retirement retroactive to 23 April 2000.  Additionally, based on the action by the USAPDA, DFAS has paid the applicant accordingly.  However, DFAS cannot pay the applicant the taxes withheld ($38,469.31) without a correction by the ABCMR directing such payment.  

5.  Based on the USAPDA's correction of the applicant’s record to grant him a medical retirement, he is entitled to all pay and benefits that flow from such a correction.  This includes any pecuniary benefits.  As the USAPDA effectively corrected his record retroactive to his separation on 23 April 2000, he is entitled to payment of any amount of money withheld from him when he was separated with severance pay.  Had he medically retired in 2000 instead of separating, the $38,469.31 in taxes would not have been withheld from his retired pay.

6.  As a matter of law, the correction showing the applicant was medically retired entitles him to payment for the taxes withheld in 2000.  Normally, repayment of Federal taxes improperly withheld would come from the IRS.  However, if the Federal taxes were withheld more than three years ago, payment can be made under the provisions of Title 10, USC, section 1552.  According to this provision, payment may be made upon a determination by the ABCMR that the applicant is entitled to this relief as a matter of law to make him whole.  

BOARD VOTE:

____x___  ____x___  ____x___  GRANT FULL RELIEF 

________  ________  ________  GRANT PARTIAL RELIEF 

________  ________  ________  GRANT FORMAL HEARING

________  ________  ________  DENY APPLICATION
BOARD DETERMINATION/RECOMMENDATION:

The Board determined that the evidence presented was 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 the applicant permanently retired by reason of disability effective 23 April 2000
* auditing his pay record and paying him back pay, allowances, and other pecuniary benefits that flow from this correction 



      ___________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.

ABCMR Record of Proceedings (cont)                                         AR20150005039



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ABCMR Record of Proceedings (cont)                                         AR20150005039



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