Request for Relief From Liability]

A Treasury Department official requested that he be relieved of liability for tax funds that were stolen from the U.S. Consulate in Brazil. A complicated network was established in Brazil between the Internal Revenue Service (IRS) and Treasury to convert money collected into Treasury checks. Due to a misunderstanding on the part of an employee, the funds were returned to IRS by registered diplomatic mail. The money was never received by the IRS office. After an investigation, it was determined that the money had been stolen by a mailroom employee. However, there was not enough evidence to prosecute the employee, and he subsequently resigned his job without repaying any of the money. The accountable officer never actually handled the missing money, and there is no evidence that he did not correctly perform his duties. Since the loss was attributable to a theft and not negligence on the part of the accountable officer, GAO held that a waiver of indebtedness could be issued to the officer.