BVA9505684 
DOCKET NO.  93-11 588     )       DATE
          )
          )

On appeal from the decision of the
Department of Veterans Affairs Regional Office in Fargo, North
Dakota

THE ISSUE

Entitlement to waiver of recovery of an overpayment of improved
disability pension benefits, to include whether this overpayment,
currently calculated as $17,152, has been properly created and
assessed against the veteran.

ATTORNEY FOR THE BOARD

Anna Bryant, Counsel

INTRODUCTION

The veteran had active military service from May 1943 to November
1945.

This appeal arises from a July 1991 determination of the
Committee on Waivers and Compromises (Committee) of the Fargo,
North Dakota Regional Office (RO),

which denied the veteran's claim seeking entitlement to waiver of
recovery of an overpayment of improved disability pension
benefits, in the calculated amount of $17,152.

Initially, the veteran had requested a personal hearing in
connection with this appeal; however, this request was
subsequently withdrawn by the veteran's representative on
instructions from the veteran.

REMAND

Preliminary review of the evidentiary record reflects that in
March 1989, the veteran appointed Disabled American Veterans
(DAV) as his representative, evidenced by VA Form 23-22,
Appointment Of Veterans Service Organization As Claimant's
Representative.  That organization received a copy of the
statement of the case in February 1993. On March 4, 1993, the RO
received arguments on behalf of the veteran from a private
attorney, who indicated that he was representing the veteran in
the appeal of the determination denying his request for waiver of
recovery of the assessed overpayment at issue before the
Department of Veterans Affairs (VA).  Not more than one
recognized organization, attorney, or agent will be recognized at
any one time in the prosecution of a claim.  38 U.S.C.A.
§ 7105(b)(2) (West 1991).  The matter of representation must thus
be clarified.

The evidentiary record in this case reflects that the overpayment
of improved disability pension benefits, calculated as $17,152,
resulted from the retroactive termination of the veteran's
pension benefits after it was learned by the RO that the veteran
had failed to report countable income for pension purposes.  The
veteran was awarded and paid pension benefits during the period
at issue based upon his Eligibility Verification Reports (EVRs)
that his sole source of income consisted of his Social Security
benefits and that he had no net worth.

The Board notes that in an April 1990 EVR, the veteran reported
that his annual income consisted of monthly Social Security
benefits of $357.80.  He further noted unreimbursed medical
expenses of $3,049 during the calendar year April 1, 1989 to
March 31, 1990.  An EVR received in April 1991, the veteran
indicated that his annual income included monthly Social Security
benefits of $384.90 and interest and dividends of $180.77 for the
period April 1, 1990 to March 31, 1991.  Pursuant to a request
for clarification in September 1991, the veteran submitted an
amended EVR later that same month, wherein he reported that he
had total interest and dividends of $130.28 and that his spouse
had earned income of $299 during the period April 1, 1989 to
March 31, 1990, and that from April 1, 1990 to March 31, 1991 he
received interest and dividends of $180.77.  The veteran also
reported unreimbursed medical expenses of $4,314.28 for the
period April 1, 1989 to March 31, 1992.

Accompanying the veteran's amended September 1991 EVR were copies
of his Federal income tax returns completed for the calendar
years 1989 and 1990.  The income tax returns reflected interest
and dividends income of $7,296 in 1989 and $2,982.38 in 1990.  As
a result of this information, action was taken by the RO in March
1992 to retroactively terminate the veteran's pension award,
effective April 1, 1989, on the basis of excessive income.  This
action resulted in the creation of an overpayment in the
calculated amount of $17,152, representing benefits paid for the
period April 1, 1989 to March 31, 1992.

The Board observes that the Committee has denied the veteran's
claim for waiver of recovery of the assessed overpayment on the
basis that he was at fault in the creation of the overpayment and
recovery of the indebtedness would not be against the principles
of equity and good conscience.  In this regard, it has been
maintained by and on behalf of the veteran that the portion of
the assessed overpayment due to receipt of income from the sale
of property was not properly created.  It is asserted that the
payment of $7,166.07 indicated on the veteran's 1989 Federal
income tax return was not received by him.  In this regard, it is
argued that pursuant to a contract of deed with the Montana Bank
of Sidney, the entire amount was paid to that bank in accordance
with a Settlement Agreement.  In addition, the veteran further
argues that he has not received an amount in excess of the sales
price of the real property sold pursuant to the terms of the
contract for deed and, therefore, the proceeds of $7,166.07 were
not countable income for pension purposes under 38 C.F.R.
§ 3.272(e) (1994).

It is asserted by the veteran that the overpayment amount of more
than $17,000 is incorrect since the total of VA pension benefits
he received was less than $10,000.  Although an audit was
prepared by the RO in April 1992, it does not appear that such
was provided to the veteran.  In addition, the veteran points out
that he is willing to furnish income tax returns to assist in the
consideration of this case.  The overpayment period extends from
April 1, 1989 through March 31, 1992.  The claims folder contains
tax returns from 1989 and 1990.  Returns for 1991 and 1992 would
be of assistance.

The underlying question of proper creation of the overpayment
relates directly to the existence of the indebtedness at issue
and, therefore, it is "inextricably intertwined" with the
question of whether recovery of the indebtedness should be
waived.  It should thus be considered by the RO in conjunction
with the issue of waiver.  Harris v. Derwinski, Vet.App. 180
(1991).

We recognize the VA's statutory duty to assist veterans in the
development of facts pertinent to their well-grounded claim.  38
U.S.C.A. § 5107(a) (West 1991); 38 C.F.R. §§ 3.103(a), 3.159
(1994).  Accordingly, further appellant consideration will be
deferred and the case is REMANDED to the RO for the following
actions:

1.  The RO should contact the veteran and
request that he clarify the matter
regarding his choice of representative.  He
should also be furnished the appropriate
form, in the event he chooses to change his
representation and that individual or
organization should be provided on
opportunity to review the veteran's records
and advance any additional argument.  In
the event the veteran designates an
attorney, all contacts with the veteran
must be made through that attorney.

2.  The veteran should be asked to provide
copies of his 1991 and 1992 Federal income
tax returns.

3.  The RO should review the entire record
and specifically consider the question of
whether the overpayment at issue has been
properly created and charged to the
veteran, in light of the arguments noted
above and in accordance with the provisions
of 38 C.F.R. §§ 3.271 and 3.272(e) (1994).
Any necessary development to assist in this
determination should be undertaken.  If the
determination is made that there is a
properly created overpayment, the decision
by the RO should fully explain the reasons
underlying that determination.  The veteran
should also be provided a written paid and
due audit covering the entire overpayment
period.

4.  After the above development has been
completed, the veteran should be afforded
the opportunity to complete and submit a
current Financial Status Report, (VA Form
4-5655), in the event there has been any
significant change in his financial status
from that previously reported.

5.  Thereafter, the Committee should again
consider the veteran's request for waiver,
in light of each and every element of the
principle of equity and good conscience set
forth by 38 C.F.R. § 1.965(a).  A formal,
written record of the Committee' s
decision, including an analysis of the
various elements to be considered, should
be prepared and placed in the claims
folder.

6.  If the determination remains
unfavorable to the veteran, he and his
representative should be furnished a
supplemental statement of the case in
accordance with 38 U.S.C.A. § 7105 (West
1991), which fully sets forth the
controlling law and regulations pertinent
to this appeal, including 38 C.F.R.
§§ 3.271 and 3.272(e) (1994).  This
document should further reflect detailed
reasons and bases for the decisions
reached.

When the above development has been completed, the veteran and
his representative should be afforded the opportunity to respond
thereto.  Thereafter, the case should be returned to the Board
for further appellate consideration, if otherwise in order,
following appropriate appellate procedure.  The purposes of this
REMAND are to accord due process of law and to further develop
the record and the Board does not intimate any opinion, either
factual or legal, as to the ultimate disposition warranted in
this case.  No action is required of the veteran until he
receives further notice.

          N. R. ROBIN
          Member, Board of Veterans' Appeals

The Board of Veterans' Appeals Administrative Procedures
Improvement Act, Pub. L. No. 103-271, § 6, 108 Stat. 740, ___
(1994), permits a proceeding instituted before the Board to be
assigned to an individual member of the Board for a
determination.  This proceeding has been assigned to an
individual member of the Board.

Under 38 U.S.C.A. § 7252 (West 1991), only a decision of the
Board of Veterans' Appeals is appealable to the United States
Court of Veterans Appeals.  This remand is in the nature of a
preliminary order and does not constitute a decision of the Board
on the merits of your appeal.  38 C.F.R. § 20.1100(b) (1994).