. ANNUAL REPORT - Internal Revenue Service · 56 Distilled spirits: Distilleries llnd intetnn.1...

'. \ II J

. ANNUAL REPORT

OF THE

COMMISSIONER OF •

INTERNAL REVENUE

FOR Hili FiSCAL YEAR .ENDED JUNE 30

1936

j

UI'IITElJ :>TAll::S

~ f,rIu 20 eoM. ~ ,':",:",,",). \

COVERNMENT PRINTINC OFFICE

WA$!'JINGTON: 19J1>

. ~ ..

'J / I'\\\ l'

~ i

CONTEN'J'S

j Pq,Introductiull _ 1

,0-", " collcctions _ 1 Co~t of adminietmtiOiL ._. _j 4 IncomeReturllsTax Unit:closcd _ ,,- Back taxes ' • , _

Claims and ovcrassCSSlllcnts _ ,7• J

• .. ~ ,. Statutory notices of deficiency _ 9 Reopened cases involving rejected claiJns for refond. _ 9 Returns received, closed, and pending ~ _ 10Returns pending in liVashington _ 11Field sel'vice _ J2 Significaut comparisons between fiscal years 1935 aDd 1936 _ J2 Cleveland division authorized to issue staLutory not,iccs of dcfidcnCICS_' 14Accelcration prograIn _ I5Depreciation _~ 16

MiSC0llancO\lS Tax Unit:Bstate Tax Division _, , Tobacco Di\'isioll - _- _ ].]B, Bituminous Coal and Silver Tax Division _ 10TnEASURY DEPARTMENT Sales Tax Division _ 21 Capital Stock Tn,x DivisioD _Document No. 3082 'GProcessing Tax Divisioll____________________ . _ 26Social Security Division _I r;lerfiaZ H6lICfI'IlC Z9

AccollnL8 and Collections Unit • _ 30u AleohorTax Unit- _ 31 Offil Yfoetl'$ ] !)~& ond 193G, by objects of taxation_ _______ 108 8. Internal-revenue till! on lllo.nufr.ct.urer! products from Puert,o Rico,

fiscal years 1935 o,nd 193(;, b~- object-s of taxation________________ lOfl

= ;, '''

v IV CONTE:STS CONTENTS

INCOME TAX AUDITTo'. P"l:e 9. Summary of work o.ccomplished by Income Tux Unit [or fisl'1lJ year.'!' 1932 to 1936 _, 10.

10. Inllome-tllx returns closed dnring the fiscal year ]936, by till' Yl'Il.T5 __ 109 11. Income-tax returns received and disposed of during thl' fiscal ye.'!)'

1930, by tax ycars____________________________ _ _ 110 12. Regular income-tal: aasesBlllente during the fiscal )'ral' J936, by taxycarB______________________________________________ _ _ 110 13. Income-to.x assessments b,v field agreements (Mim. 35&2), JUJJe 1£.135

through May l!:136, by b,. years _ 112 14. Jeopardy income-to.x assessments during the fisl'll.\ year 1936, by taxyears _

ll2 15. Tax items appcaled to t,he United Statcs Board of Tn Appell.L~ during

the fiscal year 1936, by tax years _ 113

TOBACCO, ClGARS, ClGARI"rTl'S, ETC.

16. Manufactured tobacco: Number of factories operated, 'lenI tobacco and ot,her materials used, calendar year 1935, by collection districts

~ and by Sto.tCiI _ 114 17. M:lTI'l[actul'~d tohacco: Quo,ntity mo,nnfaetured, on hand B,t com

ill

36. Prodnction and wIthdrawals of uncolorcd Olcolllargarine, year ended June 30, 1!:l30, by collcetion dis~riets-------------------------- 142

37 Production aud withdrawn.ls of oleolllargarin2

opemtcd, by States, fiscal yeur 1936 _ 15357. Distilled spirits: Product.ioll, by kinds und by months, fi~cllol Yl'lIor 193(,_ 15358. Distillcd spirit,s: Production, by kinds and by St"ltes, fisca.l ycar wao_ 15450. Distilled spirits: Withdrawals, tax-paid, by kinds and by months, fiseal

year 1936 _ '"

VI CONTENTS

'fable Page 60. Distilled spirits: Wif.hdrll.wals, tn.x-pll.id, b~' kinde and by Stll.tes, fiscal year 1930 _ 155 61. Distilled spirits: Bottled in bond withdmwals, tn.x-pn.id, by kinds !loud

by States, Iisenl year 1936 _ 155 62. Distilled spirits: St,Qcks remaining in bonded wn-rehouses, by kinds aud

by States, June 30, 1936 _ 156 63. Distilled spil'its: Stocks l'Cffialning illlJonded warehouses, by kinds, aud

by years and seasons of production, .Tune 30, 1\l36 _ 156 64. Distilled spirits: Losses in bonded wn.rehouscs frolllicakll.gc ll.nd evapo

I'M.ion, by kinde of spirits ll.nd by States, and ot,hcr losses, by kiuds ofspirits, fiscal year 1936 _ 157

65. Distilled spirits: Cnl.ins ll.nd molasses used in production, by States, 157

66. Di~~[i~Lle:;i~~~~-Matcrials- i~s~d- -i~- -th""e- pr~d-u-c-ti~l~ - ~f -b;~~(j.\, ~ -bykinds and by States, fiscal year 1936 _ 158

67. Rectified spirits and willes: Plants operated, materials dumped for rectification, ane! production, by States, fiscal year 1936 _ 158

68. Rectified spirits and wines: Materials dumped for rectification, bykinds and by months, fiseal year 1936 _ 159

69. Rectified spirits and wines: Produdion, by kinds Mid by months,fiscal year 1936 _ 159 70. Cereal beverages: Plants opcmted, production, and withdrawals, by

Stateb, ye[J.r 1936 _fis(~ll.l l59 71. Fermented lImIt liquors: PrOduction Imd tll.x-pll.icl withdmwals, by

months, fiscal year 1936 ~ _ 160 72. Fermented malt liquors: Breweries operated, production, withdrawals,

losses, aDd ~tocks on J)1I.lld June 30, by States, fiscal y=r 1936 _ 100 73. Fermenteo m[J.lt liquors: "'ithdmwah, t,ax-paid and tax-free, by

Stll.tes, fiscal year 1936 _ 16I 74. :Ferlilcnted lllaH liquors: Materill.ls used in productioll, by kinds and

by Sf.[J.tl~s, fiscal year 1936 _ 162 75. Still wine: Production and tax-paid wH,hdrawalg, by months, fiscal year 1936 _ 162 76. Still wine: Bonded wineries ll.nd bonded storerooms operated, pro

duction, withdrawah:, losses, and stocks Oll huud June 30, by Stat,es,fiscal ye[J.r 1936 ~ ~ ~ _ 163

77. Still wine: Tax-paid withdrmvws alld stocks all haud June 30, byalcoholic gmdes and by St,ates, fiscal year 1936 _ 164

78. Stm wine: Amelioration and fortification occurriug after fermentation, by States, fisml year _1936_~ 164

79. Sparkling wine: Prodnetion and tux-paid withdrawals, by months, ~ ~-fiscal year H136 105 80. Sparkling wine: Number of !JrodUeel'B, production, withdraWll.ls,

losses, and .~tocks on !land June 30, by StateB, fiscal year 1936 _ 165 8]. Sparkling wine: Tax-paid ,,·ithdrawals and docks on hand June 30,

by size of container and b~' States, fiscal year 193(L _ 166 82. Enforcement, Alcohol Tax Unit: Seizures and persons arrested, by

months, fiscal year 1930 _ 166 83. EnforceIllenl;, Alcohol Tax Unit: Seizures ll.nd persons arrested, by

States, fiscal year 1936 _ 167

MISCELLASEOUS STATISTICS

84. Moneyg paid to collectors as proceeds of In rem ('ctions, judgmeuts reeoyered in ci\'il suits, fines and penr,lties imposed in erimiual actions, alld co."ts, r,s reported by clerks of Uuited Stut,e8 eourt8 ([orIll 158), yenr ended June 30,1936 _ 168

Expenses of tlie Intern:~l Revenue Servicc, fiscll.l year ended Juue 3085. 1936 ----~ 170 S"IHmmy of intR.rnal-nn·enuc staIllps issued to collector8 of internal

revenue and the PO.stllliuter General for the year ended June 30 86.

1030_________________________________________________ ' 183 87. Cost of printing Imd binding for the Internal Revenue Bure;ti-::i:l~dServtc(), fiscal years H135 and 1936 _ 183

ANNUAL REPORT

OF THl:

COMMISSIONER OF INTERNAL REVENUE

TREASURY DEPARTMENT,

OFFICE OF COMMJ5510NER OF INTERNAL REVE:-:uE, Washington, D. C., October 15, 1936.

Sm: I hll,ve the honor to submit the following report for the fisca.l year ended June 30, 193G:

COLLECTIONS

Total eollections of internal-revenue tuxes during the fiscal yea.r 1935 amounted to $3,520,208,381, compared with $3,299,435,572 for the fiscal, year 1935, an increase of $220,772,809, or 6.7 percent. The detll,il of the administration of tbese taxes appears in the following text and the detail of receipts in the stll,tistiClll tables ll,ppended to this report.

Income-tax eollections during the fiscal yell.l' 1935, which include the third anu fonrth payments for the calendll,r year 1934 and the first and second payments for the cll.lendnr year 1935, amounted to $1,412,lJ38,304, eompa.red with $1,099,230,383 in t,he preceding fiscal year, an increa.se of $313,707,921, or 28.5 percent.

The major part of this increase is due to the eontinneu trend toward higher indiviuual incomes and corpora.te earnings, to collection of ba.ck taxes on ineome, und to adjustments of depreciation allowances.

Collections from miscelillneous intenlll.1 revenue, exclusive of agri cultural u,djustment taxes, amounted to $2,035,632,870 during the fiscM yell,r 1935, as eompll,red with $1,673,982,831 in tbe fiscal year 1935, un increll,se of $361,650,039, or 21.6 pereent. The estate and gift tll,X collections were greu,ter in the fiseal year 1936, due to the' increll,se in value of estll,tes, ll, lll,rger volume of gifts, and to tbe upward revision of rll,tes of tax under tbe Revenue Act of 1934. Collections> of taxes on alcoholic heverages, tobacco manufactures, issnes o{ securities and stock transfers, and the IUanufacturers' exeise taxes' 1l1so showed substantial increll,ses. Modemte increases from certain other sources were more than offset by the loss in revenue uue to the repeal of the tllX on checks, effective Jumlll.lY 1, 1935, and to the reduclion in the rate of tax on crude petroleum from one-teuth of 1 cent to one twenty-fifth of 1 cent per barrel, effective Scptember 1, 1935.

~gricultum.l ndjustment I,ax colleetions amounted to $71,637,207 durmg. the fiBea} yea.r 1936, ll,S compll,red with $526,222,358 in the precedmg year, a decrellse of $454,585,151, or 86.4 percent. This decrease Wll,s due chiefly to court injunctions granted tll,xpll,yers to restrain nollection of proccs:;mg taxes; to the United States Supreme Court's decision of JanUll,I'.Y 6, 1930, that the Agricultural Adjustment Acts and t.he taxes imposed by them were unconstitutional; and to the repeal, effecti...-e February 10, 193G, by the Seventy·fourth Con-

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2 REI'ORT OF COMMISSJOl':ER OF II\'TER?'AL REVENUl::

gross of tho Kerr Tobacco 1\.(;1" tho Bankhosd CoLLon Ad" I1nd the Potuto Act.

A 6ummury of Lf1.X collections b:~.. mOllths appears in [·able 4 of this '"1)OTt. A summury compurison of tux collections by quarl.nf'S is llS Co lows:

I MiSQllUnllOOllS A8rlc~l~unl!-Q..vl.erClldro- lIIcom8 l.aI;es ;lIl""pa!-re\'CDue l>4IWlmclIL I Total ocJl""UollS-~u Sept, .0. J934____ •••. ___ •_____ n.c_ 31, ]g3L••••.•.....••• ____ loh,. 31, 1935._ •••••••• _••.•.•. Ju.oo:lO, 1935. ,_.,, ______

0

Fi=ll""" Il13L. ____ . __

Bepl. 30, l~J~ .. _.•.••••••..•••• Doo. 31, 19:>5-.••••_.... ._ .•• MOl. 3\. 1936___ •••••.•• ____ .•. 1LW.3lI,19.6_ •• _••••..••.••.••

Fis.efl1 :rea.r 103&-_~_ ••• ___

!Z15, 90~, ~59.lIIJ 1$465,12.1,061.&51 201,773, :l.>U, il'l 382, 3n, ~Ol.~~ 377,5;18, 583. l~ 'i19, OS2, 81l $6;,102,:'.47 collecle,l [rom gUll"" during Ihe Much W35 l '.SSI.:Il/l.1~ 1.4Ii1l,6H.Zt lJOIU6, conl6In~', and case stamp' __ ...•••__ • 6,1111.,,14,11 8,1Jf,~.1211.03 2,~!i2,61' PI Wiooo, lmpnrlod, ttcise !'er bulllDn.

• __ ••• 1~12, 117. S1r, ~ $7:18. ~22. 2'lO 75 $IM, 41)1, 353 41•• _•• ~~, 112, 1500 4' ~;4" 4Ie.\\1' 14 14, 3lJ,1, 567 72

••••• I,OOIl.230 382 70 1,~I2,0:l8.303 ~ 31~,'07.021 IQ•• __ • __ ~51i1.l. of refunds and repnyments, llnd interest ullmvcu on elleh class 01 tux during lhe fiscul yeuTS 1935 j},nu 10313:

01 ...... n! Inx

l!~!undillg lnternal-revtlluc roll""lin"": j~""mu 14«1''--_._••. __ •• Mi5oollnQeu~~ interHa.i· ",,""nu~ tn.,e",

Hltumi",,,.. mal ••_. Cnj,ltnl SIf>C~ ..•. ____ DistlHecl tiril.S...-. l::s1nl~ an b'itl__ ••• 1.~l 3.413 3, ,08. 18135.004.25 H,:lC7. 7~4,317 207,320.402.212 _._. __ ...._... ,. 1, T7.. 300.07~

10.33'\ 7GM (,445.05 ---.--_.._._.' ._.__.._----.'" _._._--_._.•.. - _..__ .I,Q7Il,0ll2_~1,:tH 1.650,071.91'."" ~

~

B. Q22.113• 8,3,9 1,424. tJ.XI. H 'l, 014. 742. ~~ It,&M.M1.314

-- -_._-_.._.. .__ .-._--_._I,Ull32 .."'~ ---M ---" !l, 415 1, 4~6, 049.117 2, 081, 6,0. 02 I~, 505. 05 ~922. 637, :L'l~

== ~

7,267, Mil 7T1115,851 2tr.lel 57, S48. 2O'l. 91 1'1, 791,820. 01l 15, 002, ~O 8-l

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4 REPOR'r OF COMMISSIONER OF INTERNAL nEVEKUE

Addiliona,l a.ssessmenk-The odllitio[tall1sscssments resulting from offiee undits Dud field investigations made dnring the fiscnl years 1935 and 1936 wore D,S follews:

AdditilJTwl aBBeB~melll~ ali,ring the fi~~alll~17r~ 1935 and 1.9$0, by clas8 0/ tax

lG3GCllISS or tllX 1035

Inoomc laxcs. _._ $210, 631. 4&3. 2U $~51, 7ro, O~~ ~5

Miscellaneous inLernnl ,-nCnlle:Estate. "_ .... .. ..•... • ._ ~I, 219. 891. {2 SO, 049, S?I. 3JOift. ..•_•...• _. ._ ' .•• _.. __ •. . . .• J, ,t2, 121 06 'l'ob,,~co •...•. ••••_._..._

3~~, 362. "-l 26, 2S1. 37

G, J.I~, i'll'. 9~\ 9,871.0%,82 'I, (;;~. ['l

\,2(1(1,U:I.,99~~~t;;j~';-t~·"i::::·: :.:: ::::::::: :::. ::. :::: :::: :::: ..:::::.-:::: l,~7~,I?~.:;:;Liquors ..••• . _•.•. " •. . _ l8"B.,o;,•. ~, n, OOO,1l6, 17 ],fis~ellaneous ..•• . __ ._ . ._ 2~, 112, 4S3. Il'j 32, [,(;2, 038, 90 Bituminous cO'II __ ••••..•••..••••..••••. _._ 1, 183, g2S, 03

;;" ;-75, 2~1. 91 ~I, 806, 335, 67Totul mi,relluneous internsl .eHllllC_•• _

Jl3, "0_, 778. 17 4:3,,)09,375.22 IS, 600, )32. ~7

To(al income ,md miscellalleous ir,terIlll.l ,evenUe••• 10,706,600.19

AgTiC~(~:a~:~:;t~'~.l:~:.t~~~e:•••~:: :::: ::::::: -:: : ::::_:: ::::: ::::::: 1_ 332,105,910.44 45i, 216. 071. n COST OF AllJ\-lINISTRATION

The amOlmt expended I1nd obliguted in Il,dministering the intern1l1revenue lfl.ws exclnsive of the Agrieultul'Ill Adjustment Act,s for the fiscal year 1936 was S48,O{i5,039. This does not include the amounts expended for refunding taxes illegally or erroneo11s1y eollected and for redemption of stamps, expenses which UTe not Il,dministrlltive. The amount cxpended and obligated in Ildministering the reyenne provisions of the Agricultural Adjustment Art. WlIS $3,718,346 for the fiscal yelU' 193(), A compll,rison for the fiscal yeill's 1\)35 and 193() of the lilnounts expended or obligl1.ted for admlnistrative expenses, . thc taxes eollected, and the cost of colleeting each $100 of revenne undel' the various r.PDroDrill,tions is as follows'

" EIPllnd.d ~nd opligatoc! I Collectc

193,1 I

1~~G W:J~ lQ~G

_ $42,719, j.18. ()() $,8, Oll5, 039. ~7 $2,773,213,213,94 $3,443,5il,174,39

a, 74~, 502. 00 3, ~58, 7J(), ~1 ~2J,S8IJ,lQ561 ro, ~17, 20:!- 3g

1, W5, J72.lMJ HJ, 6:''l. Z8 4, 342, 249, tI-:l JT 7W,Ol>!. 3J -----. 3, 2~~, t35, ~72, 18 13, 52{1, 208, 3~ I. O~4T,571,fJI2.00 I ~l,7!IJ,Jl:I5.70

CO"t 01 col· lecting each

$100 or ,"'HUUOAppropriation

l"J~ 11\l3~

Collecting (he'inl.llrnaln"",re"euue. _____________ U.J~

A\lvan"", to Agricul. lur,,1 AdJu"tm~"t Ad-mini'lrol.ion of onl· atio~ n"

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6 REPORT OJ

Assessment.s bllSed on arreelnonts executed ""hoe. qnenttomeilin~ofOo_dayletters__ . ___ ._. _______ 4,aI2,OO~.05

Amountn,,",e,,",ed

~.S li,UI,9H,40 3.l Asse.."ments listed incos,," where taxll'lyern lleithor

e'"cuted agreements llor filod appeals_-. __ .• ____ 13,780,4&0.53 8, ~ 21,763,393.1)5 12.6 Asoe,o;smellts ]i.o;ted in ~l'l"laled ca.'es, after trial on

tbe m~,-;ls an,l decision by tll~ Hoard of '1'a.. Ap. peals, or UpOII stipulation before the Board. 01 cases "etllod by Techllical Sta!! and/or Gelleral counscL_______ ·_' ___ •______ ,· ____ •• ____ •______ 1 B9,400,400.7~ I ~7'5l.B'2W.391 33.la'll

Abatement Md eredlt claims re)ootoo_________ .___ 887, ~OO, 73 0, G 2, 743,l30. 7~ I. 6

Total____ •• ______ _______ ___ ____ _______ ____ ___ 155, 212, ow. 00 100. 0 172, 91g, 786, f>8 100. 0

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8 HEl'ORl' OF COMMISSIONER OF IKTEIL.'AL REYENUE

Iu IIddition to the amount of rc,enuc thus mude llYI\ilnblo, tllxes were o.l.so !LSSCSSCU under the "jeopardy provisions of the several revenue uct::l, us follows:

Additional revenue aS8essed under llie jCQpardli l'rovisilms oj revenue acts dUT;ng fised years 19S5 and 19S(J

Jga6 I 1(130

Umlor lmnlcrul'lc~· nlld 5JJlOnl.... •• • • __ ._._ 7, Z~l. oll(l. 1.. I ct, 779, SA 11

I Includ03 $M,lrJ~,~OO."O n,"""md agaimt one ~roup 01 ",,~ocjat

Credit. ••• _•••. _•• _•••••••••••.•••••••••••••••.•••••••••••.•••••..•• Abat" moot •• _•••••••.•••••• ._•• __

27, 22ll, ~76, :12 1U.777,m6,33 Uelun

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10 REPORT OF COMMISSIONER OF INTERNAL REVENUE

RetU-r718 received, closed, and pending

The followin~ table shows, by tax )'Cll.I'S, the number of returns recoivod fl.ud closed dllring the fiscal yoars 1935 and 1936 and tho' DumbOl' pcntling llt Lhe bC:f;inuing and end of each year:

On hond ltueolved 01.,.1>1 On hand Received Closed On h~nd July I, d\lfln~ during JUDn 30, (IT2, nl l,lM

III'!>_ ••• _•• _•••_. __ •• _. '" '" 2,741 2, ~~I 1,322 1,62S1ll29••••• _____________ ,.""'" "" '"'''" 2,2145,4i7 1.584 2.936 1.162'.m I, '"~ "" Ill3O•• ___ •• __ •• _•• ____ • t,29B 2, 47~5.100 6,405 •. m 1,03V114 3117,103 14,090IlKW __ •__ • ________ •• ___ 015,2aO 5111,078 311, !lIS 1,440.070 I, ~M1, 400 123,7621035. ____ • __ • _____ • ___ I, 2111 73Q 1,016,579 200,151---------- ------_ .._ ...----------

TotaL_•• ____ •• __ 363,670 I,O(>(l,~I, ~SO, 2'1li 4ro,~ :l, 758, 042 2,810,93tI 350,097

Returns pending for the tax yen.rs 19]7 to 1933, inclusive, n.re considered by the Income Tax Uuit lLS prior year return", All 1934 returns either have been investiO"uted 01' were under invostigationprior to June 30, 193G. '" ,

The prdimimLry work in Washington upon returns lor 1035 '(filed on or before Mll.rch 15, 1936) was 8.'\-podited in order to hll.ve Il. s\1bstfLutill.lllumber of returns for I:JJ.ll.t year witll the field forces at a dn.te well in IldVILllCe of June 30, 1936. 'On tJlIl.t date there were Il.ctUiLlly 199,504 roturns for 1935 ill tho field divisions, [l.S compared wit,ll 35,588 returns lor J934 pending in t.he Il.gents' olHees [l.S of Jnllo 3D, 103f). There were 78,797 additionn.I 193fi returns in ttll.I1sit to the field on tho lust dfLy of .the fiscll.l :.venr, making Il. tot'll.l of 278,301 01 the 1935 r(Jturns avnilohle for immedill.te attention by the field forces. Tho 6ubstuntinl balnnce of 1035 returns will reneh the field divisions in the immodin.te fnture.

REPORT OF COMMISSIONER 01-' INTERNAL REVENUE 11

Returns pending in. Washington

The following tll.blc presents fLn uunlysis of the rotllrns, original and reopened, pending 1Il the seYernlliivisions and scctions:

70101 Spe

12 REPORT OF COMMISSIONER OF INTERl"AL REyENUE

Held se7't"ire

During the fiscul year, 916,800 rctmns were S811t to the field, whi(.lh, in addition to the 356,90() returns on h:~lld fit the beginning of the year, made lJ, total of 1,273,706. Of this lillmbcr, SS5,U-14 wore disposed of, leuying- lJ, hllll1IlCe of 387,762 returns pendillg .June 30,1936.

Of the rcturnsdiRpo~edof, 450,002, or 51 percent, were inYcsligated, 317,99S wore returned to 'Vftshington withont cXlHniuution, llnd 117,9H WE're transferred to other dl,-i,;10ns or to collel~t0rs' nffi(.lCS.

The roturns ill tlw field on JUIW 30, 1936, llyolnld tax yours as follows:

Number of Tax yr

14 REPORT OF COMMISSIONER OF JNTERNM, RE\·lC"'·UE

During ]\)36, the number of returns closed by tJlO Income TIL" Unit WM 2,810,\)3\), us eOIll]lored \\ith 1,950,5U2 during 1935, an increase oj 860,487_

During 1930, the number of ret-urns closed on tlgreelnonts executed by taxpuyers WllS 166,251, as compa.red \\-'1[·h 123,857 during 1935, an incrwse of 45J ,394.

The balnnce of cloims on hand as of Juno 30, 1036, "'os 2G,605, compllrou witJl 22,838 on June 30,1935, an incre(Jse of S,7G7.

During 1936, final noLices of deficiency wore rolell.sed in 17,212 to,x-year ellses, os eompareu \\'i.1.h 14,52\) uuring 1035, an increase of 2,083.

Pctilions to tlH\ Unibed Sto.tes Board of Tn,x ApPoltls wero filou UUl'illg 1936 in 5,297 tax-year cases, us comparod with 4,540 during. 1935, (J,n increase of 757.

'J'Jwre WUl'e ]09,4Gl of the 1934 o.nd prior year roturns on hand in field ollicos ,Juno 30, 1936, us compared with 33G,05\) fOI' the yoar ondod Juno 30, HI35, a decrease of 227,198.

Thore woro 387,752 returns for ull :rears pending in the field on June 30, HJ30, liS eompareu with 356,906 os of June 30, 1935, an increase of SO,S5(J.

Thoro woro 152 original oudit CiLSes inYolving 1922 to 1028.pending on Juno 30,1036, liS oornpo.red with 245 on June 30, 1935, a deerease of 88_

During tho fiscul your ended June 30, 103G, 01(\,800 returns were sent to the field, ns compared wit.h 567,298 forwarueu during tJlC fiscnl yeor ended June 30,1035, an inerease of 849,50£.

Tho fiold forcos disposed of 885,944 returns during tJle fis

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16 REPORT OF COMMISSIONER OF IN'l'ERN"AL REVENUE

Depl'eciai'ion

Dcpreeiation deductions cluimed by taxpayers on returns filed were· closely examined during the fiscal year. As a result of this ltttell~ion there were disallowed dnring t,ho fiSCllr yeoI' ended June 30, 193£, $221,551,488 in depl'eciot,ion deductions t'llken by t,uxpl1yers. Additional tux l'esultiug from such disallowances wu.s recommended in the (Lmount of £29,238,951, of which $21,851,292 WIlS Ilgl'eed to hy t,he t,uxpnyel's.

MISCELLANEOUS TAX UNIT

The Misoellaneous Tux Unit, is concerned with t,he udministration of all internul-l'cvenue tfl,XClS except the income and excess-profit,s t,axcs, the tuxes applicable to alcoholic bevemges, and those imposed under title IX of t,hc SOCi111 Security Act. The organization consists of seven divisions, the titles of which :1re indien,t,ive of the geneml type of t,/lxes adnnnistered in t.he l'espeet,ive divisions. During {,he fiscal yefir the Social Security Di.... ision was orgfioized t,o lldministert,\18 taxes imposed under title VIII of the Social Seeurit,y Aet and the taxes imposed under the Carriers T:lxing Act.

There was a suhstantial increase in t,he volume of work of the Miscellaneous Tax Unit" w11ieh is reflected in det,ail in the tables 6hown in connection with t,he Sepllrtlte work of the fClspective divisions. ,

E8tate Tax Division The Estate Tux Diyision is eoneerned with tbe administTat,ion of

1,he ll

-- -- ---- -----


In nddition t,o the above, taxes of $3,054,630 in estate-tax cases n.nd $3,075,270 in gift.-tflX eases wore nbllted fiS nncollectible. A refund of $18,705, not ineluded in this tuble, Wtl.S allowed by a spceiill act of Congress under Private Act No. 358, Seventy-fourth Congress.

'lobacco Division

The Tobacco Division is responsible for the fldministmtion and enforcement of the laws imposing taxes upon nnd regnlating the manufaeture, sllle, and expol't,ation of tobacco, SHUtt', ciglll'S, Ilnd cigarettes, and cigul'ett,e p11.pel'S and tuhcs.

CoUections of tobacco taxes for the fiscal year 1936 I1.mountcd to $';Ol,16?,7:28. T~is Ilmount l'erresents the largest ye:~rly eollection from th!:> source SInce the first mtcrnal-revcnllc tllxes 111 I&G3. The collection" show an increase of 841,987,103, or approxunately 9 per~ cent over the eollections for thc previous high in 1935, '

A detfliled finalysis aud comparisou of the tobacco taxcs collected dnring the fiscul :-/ears H.l35 and 1936 foHow:

Tobacco ia~e8 cQllccled during Ou flsco.l years 1935 (J.11,d 1936

Incr~ao" (+) or d.eCl'l'aso (_) Source m


The Coal Act, llPPFoved August 30, 1935, imposed upon t,hc sll.le or other disposal of ull hituminous cOlll produced within ~he United States /lnd effective fiS of Novemher 1, 1935, Iln excise tax of 15 percent on the sllle price at the mine, such tax being pllytlble monthly by the producer. n1emhership in tho coal code, however, as prm-idcd for in the net, entitled such producers to a right of a drawback equal to 90 percent of the tax payuble.

Coal fa,x.-The first puyment of the cOllI tllX was due llnd payable Janufi,ry 2, 1936. :Many Jllrge producers, however, filed suits contesting the constitutionality of the lid, and obtll.ined orders restraining collection of the tllX. On May 18, 1936, the Supreme Court of the United Stll.tes declared the ad to be invlllid.

Four hundred and nine claims for refund of the tax, amounting to $412,067, havc been received since the act was invalidll,ted, of which 354, totaling $370,171, have been allowed to date. In addition to these refund claims, 213 collcetor's blunket office clums for abatement of outstanding assessments, amounting to approximately£8,000,000, have also been allowed.

During the yCllJ' the division prepared for certification 435 coal-tax assessmcnt lists. These carried 2,785 items, totaling £1,183,931, listed hy the Unit and 10,640 items, Ilggregating $9,895,502, listed bycollcctors.

Returns totaling 10,275 were filed, qn 4,263 of which the tax shown to' be due was paid.

'Collcctions amounted to $729,218. An analysis of claims for the refund and abutement of the coal tax is

shown in the following tahle:

Ta~payern' Collccl"rs'Relnnd Uncollectible TotalabatemeDl. abaternenf./;

Num-I Amount INum'l AmoUDl IN= Amount INum'IAmOUDt INurn Amoun~,,, her 0, '""' I-I I-I I-I

her ber ber

1-1-1-11-July 1.

R~~15v';d:::: -"4Qii U04;aii""7i '''004 i666;"058.·38 "'iii4 $ii;ii6;~iiO.-88I··---il·-m·iiITiiiilig;iii7;400;iO Reopened... 7 7,741.09 •••••__ •• _•••• •••••• __ •••• •••••• ...... 7 7.741.09 Allowed __ ••• 354 370,171.2\l •• __••• ••• 2138.ne,1l89.M __ •••••• _. 6678,(87,160.00Rejeoted .• __ 10 9,307.51 43.402.33 • ._. __ • •• _•• a 12,709.84On band

June 30,19311. •

451 32,688.021 500/662,656.05 1.24 34. II 6071 695,Z19,42

SlaluB of clai1n3 on hand Am.""tAwaiting evidence number__ 4

$2, 657, 72 Not yet reached for coneiderll.tion +_do 603 692,621,70 TotaL do 607 695, 2i!J. 4~

The Silver Purehuse Act of 1934, approved June 19, 1934, provides for tho imposition of a tllX equal to 50 percent of the not profit realized on the transfer of 1m intercst in silver bullion, with certalll exemptions and rights of abatcment applicable to certain transfers to the United

_States Government Il,nd to transfers by persons rogularly engaged in the business of furnishing silver for industrial, profcssionlll, or artistic use.

REPOR~' OF COMMISSIONER OF INTEHNAL REVENUE 21 ,

Silver tax.-Thc silver-tux collections for the fiscal year 1936 amounted to $685,188, as comp~red with $1,149,390 for' the fiscal year 1935. DUl'ing the last ha1£ of the eurrent pcriod the world market price of silver reIIlained pmctically stationary, after having dropped from higher levels, This eoudition materially affected the profits on trfLllsfers in silveI' bullion, with a resultant decrease in the tax.

The field force of examiners has produced excellent results, report~ ing on 357 examinations and andits, and is credited for a consideruble portion of the tax collccted.

During the fiscal yeur the Division certified 321 silver-tflx assessment lists to the Commissioner, These cal'licd 2 items totaling $365,043 listed by the Unit and 68 items aggregl1ting $130,825 listed by collectors,

The total amount of the assessment lists certified is $495,868, us -compared with $441,061 for the fiscal year ended June 30, 1935.

An 1l.Illl.lysis of cluims for the refund and ubn,tement of the silver tax is shown in the follo"''ing tll,hle:

Tol,alAbatement Redernpl.ion I UncolleclibleHefund

;»um'l Amount IKnm-1 AmolHlt INnrn-1 Amount IKum'l !l.mount IKurn'l Amountber ber bet ber " ber

--------1--,----,--,----,--,----,--,----,--,---- \ Dn lland July 1,

1935_ 70 $.0, 070. 4072 $1,03(,.12'I $170. ali "I i&:J, B6-1. 22 ----•• ,-- .--- .--Recci.-ed .• __ •__ •__ 267546.513.1631 135,01.1.27 193 371, .ISO. 76 43 (la. 087. 13 ••••• _Allowed _ 23U B. 1360. 8.1 25 10, ~:H. 7B "_" 27U 20,4:;'1.4(,"11' 2480 87Rejcctod __ "._ • _ ~5 134, 51 L 84 ZJ 3M, 2/;2. 06 W :;2, WO. 52 _._ •• _, •••• _••• _. 08531, JOO. U Dn hand June 30,

1\IJ6. __ •• __ • __ •• _ 10.07 __ ..._ 5 T.lS.li81 363.62 3 364.W

Included as part of t.he administrll,tion of the coal and silver taxes was the preparation of the regulations relating to the coal tax and forms for the return of tbe tax, also the prepll,ration of Trco.smy -decisions and various rulings with resped to hoth coal and silver.

Sales Ta,x D-ivisl:on

Among the taxes administered in the Sales Tax Division are the mn,uu£llcturcrs' eXl,;ise taxes, tlHl documcnt,ary staInp tuxe3, the oecnpational specia.l taxes, il.nd the taxes I1ppli~o.hle to electlical energy, admissions nnd dues, telegraph, telephone, cable I1nd radio messages, 'Eittfe-deposit boxcs, narcotics, pistols and reYolvers, tmnsportat,ion 'of oil hy pipe line, the processing of coeonut und other vegetable oils, the production and refining of crude petroleum, and the t.ransfer of machine guns. The yield from the taxes udministered hy the Sales Ta.x Division amounted to £538,835,341, an increase of £47,358,202 oycr the preceding fiscal year. The principal incrcascs in colleetions wero those relating to documcntll.:ry stamps, the Inannfacturers' cxcise taxes, the ta,xcs 'on ndmissions, Il,nd the tl1xes on thc proccssing Qf coconut and other oils.

------

----

---------------

--- -

------

REPORT OF COMMISSIONER OF INTERNAL REVENp-E 23

Trensury decisions hll.ve heen issued nmcnding various articles of Reg-ulntions 44 ond 46, to give effec"t to omendments made to certain sections of the Reyenue Act of 1932.

Doe'u,menlm'y stamp taxes.-The docuIOcntary stamp tllXCS include those on issues and t,runsfers of bonds of corporations, issues llnd trons/crs of stock and similar interests, sales of produce 01' merchandise for future dclivclT, decds of conveyance, pnssnge tickets, and foreign insurn,nee polieies. '}'he incrcascd activity in t,hc stock morket and in ncw issues of s~ocks and bonds by corporations caused an inerense in the administrative work relative to the taxes involved. The amount of revenue derived from the doeument:llT stamp tllxes, exelusiye of plll,ying eards, inercased from $37,632,684 for the fiscal year 1935 to S64,160,999 for the fiscal year 1936.

A decision of mueh importance in the administration of the stamp tax on transfers of s~ock wus rendered by the Supreme Court on Noyemher 11, 1935, in the easc of Raybesios-llfa,nhaifan, Inc., v. Un'ited StateB-, involving the applicntion of the tax on trunsfers of rights to receive stock. The plaintiff corpom.t.ion had purchased nssets of other corporations in consideration of the issuance of stoek and hud issued SUdl stock direct to stockholders of the vendor corpomtions. It had been held by the Goyernmcnt thnt such direct issuance involved a transfer of the right to receive the stoele on the part of t,lle vendor eorIJorations. The Supreme Court upheld this view, stn,ting thtlt thc lung-unge of the taxing statute discloses the general purpose to tnx every tronsaction whereby the right to he or become a shareholder or t.o receive any certificlLte of stock is smTcndercd by one und yes ted in another.

Another cose of impOltanee was that of Mississippi Cottonseed Products CO. Y. Sheldon, Collector, involving the ll,ppliclLtion of the tax on renewaIs of bonds, decidBd in the Circuit Court of Appeals for the }.'ifth Circuit on January 8,1936, which rc,ersoo the dccision of the lower eourt and held tllllt. there is no distinetion to be drawn, within the meaning of the taxing law, between a renewal of 0. bond nnd an extension of the date of maturity of ll, bond.

Playing cards.-Thorc w('.re 76 mllIlufacturers, repaekers, or importers of }lluying 'co,rds registered during the fiscal yell,r, and there were lllanufnctured, repn,eked, 01' imported a ~otal of 47,94l,021 paeks of ca.rds, liS compared with 47,880,952 packs in the fiscal ycnr 1935.

During the current fiscal .rea.r tho Miscellaneous Tax Unit has eont,inuBd making inYestigations of extensive violntions of the IIl,W ond suppressing illieit sules of miniature playing enrds, which were h.ei.ng sold in llirge quon.t,ities, mostly by streot peddlers in tho larger clt'les of the eountry, ",nt-hout haying the lO-cent stamp attached to each deck of cards, as required by law.

Oleonwl'UU7'ine; adulterated, pl'oeessed, or renovated buttcr.-Dming thc current fiscol year the Bureau eont,inued invesT,igations of extensive violations of the oleomargarine act in New York and the New England Stn,tcs, involving the monufacture of scveral hundred thousand pounds of ll, product wbich was sold as butter but found, upon examIllation, t,o be colored oleomargarine. Assessments of oleomargarine taxcs wcre nw.de as a result of investigation, convictions for violutions of the low were obtained in cases tried in the COOl'ts, [md further prosecutions h::J,vc been instituted.

22 REPORT OF COMMISSIONER OF II\'TERNAL REVEI\TUE

A eomparison of the various taxos eolleeted during the fiscnl years 1935 find 1936 is 8ho\\'Il in the following table:

Mi8cellaneous taxes cQllected durinrl the fiscal years 1935 and 1936

Incrna.o;e (+) orSource ,roo'ro,

$17,934, n6. 98 15.747,362, .19 3,9-\0,544.00 4,351,2\)9.40

41, \183, 982. 97

S4, 800. 77 898.121.82

1,066,053.91 I--~-~

2.048.976. 00 ~

3,992.55 4. {l'lS. H 4,52". fI,'l 1,003.58

14.450.40

309 256,051.50 9: 470. 721. 47

32, 577,2M. 30 18,411.025.22

I, 3Zl1, 508. 88 2,317, SI9. 30

25, 645, 138. 70

TotaL_••••• __ ••••••••• •••••••• __ 1-300,016,221. 46

.Admlssions ..•• •• _•••• __ •__ ••••••••• •••• 1 15.379,397. 16 Dues end iuitiation lees .•• ••••••• ••••••••••. _ 5,784,40(.00

TotaL ••••••••• ••••••_. •••••••••••. 21,163,892.15

Pistols end rovolvers•••••••• •••••• ••• ••• ••• 110, 237. 83 N ercoUcs••_••_•••••• •• •••• _. __ ••.••••_ 530, 613, 00 Delinqnent under repealed lows_••••• ._......... 383, SIl8. 24

TotaL_ •••• ._•••••••• •••••••••• ••••_. 1,024, 7W- 07

Coconut, etc., oils processed.• ••••••••• •__ •• 24,457,091,25 Crude petroleum pro""ssed, retlnod, etc••••_•••••••• __ 1, 759. 789, 67 NatIonal Firearms Act••••••• ••••••••• ._. 3,015.33

TotaL _••••••• __ •• __ •••••• ••••• ••••••• 26, 224, 896. 25

Total mlilCCllaneaus ta~os ......_•••_•••••••• 401. 477, \3.8. 80

~28, 1~2. f058. 42 +$10, 'l'17, BSI. H +17. 307, 4311- ,I:;'3J, OM, 798. 14

2, g~3. 541. ~7 -1,007.001.63 -007, GOO. 00~.I43, ~98. U

+26, 020, 714. 4068,304, 6g7. 37

-28••93.51M. 307. 20 015. 000. IJ8 +17.~68.B6

+It)5, 752, 22l,ZJI,800.13

2,293,804.01 +154,827.~1

4,6&1.11 +rm.56 +1,045..175, on 61 +I.O,';G.56·5, 58~. 50

148. 40 -856.18

16,3&8. 6\ +1,918.21

MO,080,3~5.31 +39,82".283.72 0.793.00.\. 42 +~14, 27~. 95 3~,"75,179.25 +OO7,91'_.g5 10. !Ill.,. r,og. 38 +1, 3g3, 5s{' 16 1, ZlI2, 73S. 27 -311, 770. 51 1,007,400.57 -32U, 200. 73

25, 565. 73 -25, 01 n. 582. 97 415.510. S22. 9J +111, 554. (j(ll. 47

17,112,175,46 +1. 7a2. 778. 30 6,000,023.2\ +:lO6, 428. 22'

2:l. 203,003. 67 +2,039,206.52

00, 627. I};\ +389. 81 .'54,028. 39 -26, 084. 61 ' 61,715,84 -322,152.40

676,371.87 -343,34.1.20

27,691,0/;0.79 +3, 23.'l, 989. 54 1, 163. 704. 57 -596,035. 10

5,341. 72 -2.673.61

28, 800, ) IT. 08 +2, 6.35, 280. 8.'l

5:i3, 83.1, 340. 54 +47, 358, 201. 74

, Include~ t""os 01 $00.028.56 on solt drinks anel. $1,687.28 on yachts and hoels,

Manufacturers' excise taJ':es,-Investig:l~ions conducted by tl speci.al field force opero.ting under the supervision of the IvIiscelialleous Tax Unit, htlvc produced BxeeUent results in connect,ion with the tll,xes on lubricating oil ond gasoline; the taxes on ll,utomobiles, tires ond tubes, furs, jewelry, mechanical rofrigeru,toI'S, radios, ond various other articles; the processing tax Oil cer~uin oils; ond the toxes on admissions and ducs. During the fiscal year this field force report.ed for assessment a totol of $11,127,015 in delinqucn~ 01' udditionalmanufo,cturers' tlnd miscello,neous exeise to,xes, penalties ond interest, whieh is an increase of $4,999,926 over the n.rnount reported dlll'ing the previons fiscal yCOT.

24 R~PORT OF COMMISSIONER OF I;\'TERNAI, REVENUE

The work of revising Regulations No. g, relating to the tax on OlCOIlllll'gal'ine, adulterated hutter, and proees"ed or renovated botter, wns completed during the year find t,he rc\ised reguln.tions wel'e distl'ihuLed in April 1936,

There were produeed during tIl(] fiscal yen.r 2,773,194 pounds of colored [Lnd 3G8,904,422 pounds of nneolored o]eolllilrgal'ine, fl.;; eompared with ::.',904,071 pounds of colored and 350,015,555 ponnds of uncolorf'd oleomlugmIDc in the fisnd yellI' 1935, !l decrease of 4.54 percent find fUl incre[lse of 5.14 percent" respectively. (See p. 142 for :ldditionnJ stfLti.'1tics.) At the beginning of the fiscnl yefLr there were 43 rnnnufueturers of oleomargarine engaged in bosiness. At the close of the fiscal year 42 mllnufactul'ers of oleomargarine were engaged in business. DUling th£' fiscnl year 15,369 returns wem filed hr manufactnrers and wbolesule dealers in oleornargfl,rine.

Dunng the fiscal :rear, 1,471,754 pounds of oleOmll'l'garine were withdrawn, tax free, II>r export, ns eOlllpllred witll 1,408,827 pOllnds withdrflwn during the preceding yeflT. There were withdritwn, ~iJ,X free, during the year for the nse of the United States, 781,29::? ponnds of ('.(llored oleom;ll"garine, 11S compared with G80,921 pounds so withdrllwn dnrulg" the pre,~ions year.

Only 1 registercd lllflnofilcturer of l1.dnltemted bntter WIlS engiLged in bl1siness during the fiscal y~flr. Fiye mannfacturers. of process or renomted buUllr wcre in bnsiness und produced n totul of 2,252,820 pounds of prOce:3S or re[ll)\~n t,lld bn Lter, us compllred wi th a prod netion of 1,844,561 ponnds in the previous fiscnl yeoI'.

},£i~;ed fiOlll'.-'fwenty-six makers, p,lckers, or repnekcrs of mixed flour wcre engaged in business dnring the fiscal yeur and made, plwked, or repackcd n totill of 19,138,5!J4 pounds of mixed flonr, tiS compared with 16,358,5Jf, ponnds in the fiscal year 1935.

Fil'ea-rms.-In IJccordancc with the requirements of the National Fin'iu'ms Act, t.l,cre were registered with t,be Bureau of Internul Rc\-cnlle dnring the nscnl)"Mr 5,902 mitclllne gnns nnd other firenrms subjcet to the provisions of the act, and the transfers of 10,715 firearms werc made through proper llpplicat,ions. Thc total nnmbm' of firearms regifltered from ·July 26, 1934, t,he e1fect,i\"1'- date of. the aet, t,o .June 30, 1936, was 31,lfj,3. The reeord-s of regist.l"Ot,ions nre used in cascs of atTests of person.s in whose posses"ioll firearms ha\"e been discovered. Collecl-ions of ktxes under the National FiJ'carms Act (inehlding' t.he speeial taMS) alnonnted to £.5,342.

Narcotu/J.-The colledion of taxes on narcotics (inclnding- spf:'ci,d caxes) amounted to S554,028, which represented a decreilse of $20,585 tLS compured with the fiscal veal' 1!J35.

Claims.--Claims for refnud and ilhatement of taxes and for the rcdemption of st,amps roceiyed and adjusted in the Stlles TuX Di\-i· sioB during the fiscal year nre shown ill che following tnble:

0REPORT OF COMMISSIONER OF INTERNAL REVENUE ""

R~.demption UneollQcl.ibleRcrUll~ ,\.bmtement

C18im.

Kum-I ,\.mount !:,8nl.6G 111~ 81, 272. jgl 3J 4,17ll.~3 0~b.lldJuIle3G,1'''~.• 13,Od025.134.USll.lO ~,331 ~,17;.o?:;'~G 1,3401 409,82G,73 258 7G,(;.>5.;~

Oredit ca,se8.-Therp were on hand at thf:' beginning of the fisenl )'eur 193G, 4,513 silles tfLx (,J·p.dit cases, invohing $1,870,370. Dnring t,Le year 11,686 caseS, invol\"ing $5,653,925, were recei"ed, nnd 11,141 Ci\.SC;;. inYolving S3,654,634, were disposed of. Of t,his nnmber, 10,347 enses, involving £3,388,381, wcre allowod, while 794 cases, in tiJe amoont, of $2ti6,~53, were rejeett'd. At t.he close of the ye,ll' there J"f:'maincd on h\l.nd 5,058 sol]es tax eredit clLses, involvillg $3,801],661.

OjJe7'S i'h compl'Ofwise,-There were on hand at the dose of the fiscal yeu,r eoded June 30, 1935, 5,837 offeN in eompromise, ,If,'gl'egnting $640,783, snbmit.ted in conncclilJTl with vn,rion:> rrllscelhl.Jleol1s tnxes. A tutnl of 12,7-55 offers, aggreguting £440,97G, wus recei\'ed during the current fise,al yeu,r; 11,.541 oUel's, in the nmoun(, of $204,690, \\'cre fl.ccepted; 3,020 olIers, alltonnting to $373,108, wm'e rejected; fiod 40 offers, alliounting to $27,278, were v.ithdrawn. At the dose of the fiscul yenr there were on hand :3,973 offe!'s, i1.mounting to $476,683.

A3sessmcnls.-A total of $1,019,418,456, representing- 1,140,4\19 items, wus Ilppmved by the COlllmi&8iouer on the 2,625 mist;olluneoos asscssment lists, which inclnded ol'iginal Imd [I.ddit,ionlll assessments of all miscellaneous intenwl-revonne i,axes, except silYcl" tax ilnd the processin~ fl,nd related taxes. There were indnded in the list 49,409 additional [lssessments resulting from office '-l.lJdit. and field investiCTfLt.1on5, roprcsentinj!; ~, tax of $49,088,781. The interest paid f~d assessed on the miscelluncous tiiS. lists nppro\Ted hy the COllunissiollcr omo\lnt,ed lo $G,809,7I8,1

Field reports 'Gi!ld Tcturn/J.-Thore were on ]mnd ut thc close of tho fisct'll. yeitr ended June 30, 19:35, 28:3 field rCI}()l"ts, eon:ring ...dditionnl tax III the nmoullt of $4,747,GI5, submitted in cOlHH',ction with vnrious miscellaneous and Bilies ta;.,:e5, A total of 10,215 reports,

I A~ 8 ln~!Ler o!8d,nimstrati,," OO","~1l!8nC", ,b~ SnJ... Tox llivisioll coru~lele.; a"'••...".01." schedlll.,. Claim. 8nd "c"ilIes,,,, of "vero.'l>~,.;",ent, an(\ p..."" 0lli!l;e lor Lhc ES~8U ·t'1ll Dh']s!en, lbe Tohuc[-(, l>Lvisicn, UJl~ I.lle Cal'ita! "!I.ock Ta. Lllvli;lon,

I 26

1 ,Il.EPORT OF COMMISSIONER OF INTERNAL REVENUE 1

representing additiolllll tax of $27,130,061, wus received during the current fisco.l ycal'. A totn,l of 16,092 field reports, amount,jng to $20,428,951, WfiS exo.mined and elosed, while 2G8 reports, coveriog $4,628,632, were ,awaiting o.dditional evidence. There were under consideration 112 reports in the amount of $6,301,990, leaving 26 reports covering $518,103 not l'el1Ched for considcro.tion. In addition to the foregoing, t1 total of 533,938 sales tax retmlls, in the tatOoI amount of $471,046,031, were reecivcd find cxo.mined in the EUl'et1u during the oun-ent fiscal yefLl'.

Capital Stock Tax Division

The eollections of capitul stock taxes during the fiscal yeal' 1936 amounted to $94,942,752, on inereDse of £3,434:,G31, or approximately 4 percent over the eollections for the precediug ycar. ,

During the fiscal yeo.r returns were reeeivcd o.s follows: 402,555 ta.xnble ond 158,298 nontaxable domestic corporation returns, 177 tD,xnble Dnd 507 nontaxnblc foreign corpol'l1tion returns, n totol of 501,537, as compared with 511,973 returns filed for the preceding ycar. As a result of the lludit of the returns, 5,908 o.sscssments, involving a tot01 of $1,101,721, were In:l.de.

A summo.ry of the claims relating to the capitol stoek taxes whieh were received llnd o.djusted during the year is shown in the following table.

UncollocUble Tota.lAbatementRefund

Cla]= Num- N=i\'um- AmonntAmountAnlount ,.mantle ber,.. ,"A N"~

'00 $152, 034. 69$11,1159, (l.$57,798,75 3 $.!!2, 576. 89 84On haud. Jull' 1, 1935__ ••• 9,422 3, GS3, 069. 553,457,779 18 1,001 171,810.8'1 0112 53,479. 53Received_ •• _____ ••••• ____ 7,459 '" 3,739.'l7 _____ 255, 2ll1. 85 251,522,50Reopened._ ••••• ________ . ~ 7,700 '" 782,850.84Allowed••• ______ •••••••_ 5,853 '" 5'1O'301.~1 97 181,588.93 034 "'w:osH 1,622 3, 088, 718, 93ReJected••• _.••_______••.• 1,417 ~,043, 434, 4() 2011 45,1):)9,00 4 m. ~ 218, 706, 323,9:>8.183,331,22 220 31,503.111 103On hand, June 30, 1036__ ""'

Scction 105 of the Revenue Act of 1935, llpproved August 30, 1935, imposed a new eo.pital stock tux ond provides thllt scction 701 of the Revenue Aet of 1934, under whieh 0. ellpital stock to.x WllS previously imposed, shoU not apply with respeet to llny year oiter the year ended Junc 30, 1935. The Revenue Act of 1935 iuereDsed the mtc of tax from $1 to $1.40 for ellch full $1,000 of adjusted declared value, and provided for 0. new declaration of vulue for the first year with eertain credits in the cuse of corporations organized under the Chinn Trade Act of 1922. Section 401 of the Revenue Act of 1936 llmended seetion 105 of the Re.....enue Act of 1935 hy reduciug the ro.te of tD,X from £1.40 to $1 for Meh full $1,000 of declltred value.

Process1:ng Tax Division

The Proeessiug Tux Division WitS eoncerned with the lldministmtion of the processing tn-x, ·floor stocks tltX, Itnd compf'Jlsat,ing tllX imposed under the provisions of the Agrieulturlll Adjustment Act, as amended' the tux on the ginning of cotton imposed under the Cotton Ad; npproved April 21, 1934; thc tux on the sale of tobo.eeo imposed under

REPORT OF COllMISSIONER OF INTERNAL REYE~UE 27

the Tobo.cco Act, upproved June 28,1934; fdid the tux with respect to pototoes imposed by the Potuto Aet of 1935, o.pproved August 24, 1935. .

A number of changes affeeting the processing lmd rehLted taxes were brought llhout by the enactment of amendments to the AbTJ'i~ cultun)l Adjustment Act, approved August 24, 1935, llnd the promulgil,tion of regullLtions by the Seeretllry of AgTiculture.pursuo.nt to the llct.

On Januo.l'y 0, 1930, the Snpreme Court of the United StlLtes deelo.red the tuxing provisions of t,he Agrieulturul Adjnstment Act to be invalid. Tho colleeiion of ta.xes.under the act was immediately suspended. The collections shown in the following table include tuxes ou processing done through Noyember H135. Injnnctions obtnined by more than 1,800 processors nnd other persons prevented the collect,ion of llpproximotely $213,000,000. The Revenue Act of 1930, o.pproved Jnne 22, HI30, reenllcted eertil.ln provisions of tbe Agrienltnrnl Adjustment Act, rolnting to claims, llnd authorized consideration of elo.ims for refund of taxes collectod thereunder, find elo.lms for payment with respect to eertllin floor stocks held on January ti, 1930.

Acts of Congress, approved Februllry 10, 1930, llnd March 2, 1936, repeaJ~d the eotton, tobucco, o.nd potato aets and extinguished any outste,nding linbility under:these acts.

Collect'i,ons,-An analysis of the colleetions of processing, componsllt,ing, und floor stocks tllxes find the tllxes on the ginuing of cotton, sllle of leaf tobllceo, llnd the so.lc of potatoes, is shown in the following to.ble: .

Commodity 1935 '"~

Wheat: I'rooossinl[ ta,_ ••••_••• _••••• _•• _••••••_••• _ _._._ ....._. __ •• __ •• n2J, 004.

••

28 REPORT 0.12. 8~

j'Joor tn, (retail) ••.••••••••••• : ••••••••••• ~.: ••••. '":•. "_' .•••• _. 370, 731. 40 '_.811. Iii

- 'retaL ••••••••••••• : •••••••••••• , , "~'" 71, oro, 070. (1,\ 30, 357, 599, 06 Peanuts: . '.

l'roces&lng tax... ••• •••• ••••. •••. •••• ••••• •••• •••• ••••. •••• ••••••• COlhl"lnsatlng tax .••.••.•c••••••••••••••••••••• , •••••••••••••••• _'

3, 500. ,\23. 30 2011202

l~ 600. 4Il 2, Mi. $

TotaL•••••_-• ' Rice:

I •

' ••••••••••••••••••••_._ ,~.

_

3, ~71, 9&1, 01. • 138, 051. 04 '

, • PrOOOSl;]ng tn%•••c·•••••••••••·.'_ .•••.••••-••••••••c••••••':•.• :~.... I, $2- M , ,\10,702_ 23

Compensating tnx••••••.••••••••.••••••••••••••••••••••••;."'". '27, 637. 4.2 • 1~, 928; ~_,

TotnL•.•••••••••••••••••••••.••••••••••••••••••••.••••~........ 29, ua 07 . MO, 721. Oi R)'e:

Prooossing ta•••••.••••••••••••••••••••••••~......................•••••••••••••••••• 1:l\l, 130. a COIUP\l1iSllllng In•••••••••••••••••••••.•••••••.••••.•••••••••••••••••• _•••.••. _ :Ill, us. J7

Total •••••••••••_•••••.•••••••.•••.••••••••••••••••••••••••••.••.. _••.•••. __ • 175,475.as

COtlon ginning ta, _..... 1.1IO'~7~. S6 oI5I,:!:l3. ro Tobllcco saJes ta._ .••••••••••..•••••••••••.•••.•••••••••••••••••..• __ • 3, 231, 37~. n 1,214.BSIl.1W J'QIllI sale:o Uu_.......... .•.. _-. _. ..:l.llOO. !i4

O....,dIQlal._•••••••••.•••.•••••••••.•••••••.•••.•••••••••••••••• r.2tl,m~24 ;1, fI3"i. 200. liV 23l 8.:1-,15 3:17 U.4\18 l'..p'rlUldlute _._._.- ••...••..••.•...• J.t711 NO lOG 18 1.n3 S"Pr""n~ aod ~uKar b""U. .•.•••.••..••.• 0, IIIlS I, ~3 3, J8l 1,2:>1 IS,016I'OllOUU;_._ ..••••.•••...••. _.............. ~~ J17 _. _...... -....... 671 HI"" •••••••••••••••••• _.............. 2,a

So~ui.l Security Di.l!i~on

The SociHl SllcurityDi"islOIl wus cre(ltcd October 1, 1935; for the purpOse or ildmiriistering tl.w l.uxes imposed under the Carriers Ta.....ing Act, approvod August 29,1935 (49 S(u'l-, 9(4), und the ~a..'\es imposed under·title VIII of the Socinl Security Act; llpproved August 14, 1935 (49 Stut. 620). . ' .

Under the Carriars Tll:o:illg Act (III excise tux is imposed upon ~'e(lrriers", us that term is dclilled in sect,ion 1 (a) of tho (lct, llnd lln mcoI1l~ tax is imposoll lIPOli their einplQ)'ees Ilnd employees' repre. SentutlYes. Theso taxes becllllle .effectiye :Mnrch 2, H136, and llre collected by meuns of lJlIl1rterly retUl'lls. The first returns were due June 30,1936. .

Effect,ivtl ,Junuo:ry 1, 1m~7, there ore imposed under title VnI of the Sociul Security Act lUI exeise tllX upon omployars, find on income t,ax IIpon their emplo}'oes. ,

In the portion of the fisclll yeor eJlding JUlle :30, 193G, during which this division hu.s beon in OIHll'u.tion, l'egnlllt-ioIlS und forms ho.ye been prolllnlo-:l toll under tho CllIriars Tn,xing Aet. During the Slime periodconsid~!~blo study WIlS lIlll,de in order to llsl:f',rtuin tho ,"ll,riolls pJ'oblelns,thut would eonrront [,llxpnyCl's lind the BUTellu in eOIlllCeiioll with the fldministrntion or tlw tilX'es imposell under titJe VIII. Numerous conferOllCCS wore llOld with Vlll"lOUS dnsses of tnxp:l)'61'S

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, 30 REPORT OF COMMISSIONER OF INTERNAL REVENUE

so t111t they could acquaint the Burenu with their prohlems. Ten

t.ativc dmfts of the regulations to be used in conncctiou with the administmtion of these tnxes have been prepared and these reO'ulations will be promulgnted prior to January 1, 1937. ~

ACCOUNTS AND COLLECTIONS UNIT

There were filed in collectors' offiees during the fiscul YCllr 1936, 8,429,852 tax retuMls, as compnred with 8,313,342 tu.x returns filed during the fiscal yellr 1935, an increose of 11£,510. Of the total ,,retUnlS filed in 1936, 5,813,499 were income-tnx returns, llS compared with 5,295,352 filed in the fiscill yellr 193'5, an incrense of 518,147.

A toto.1 of 11,144,798,920 revenue stflIDIlS, valued nt $1,050,861,227.34, was isslled to collectors of internal re,enue and the Postmaswr Generl11 durinO' the fisnl1 year 193£, compared with 10,432,005,552 stamps, valued at $941,713,G82.42, issued during the fiscal ycor 1935. Revenue stamps returned by collectors of internal revenue and by the Postmaster General, and credited to their uccounts, amounted to $41,901,554.73. The returned stamps were of various kinds and denominations, including pa,rtl~y used books and stamps for whicb there wns no s111e. Tbere were 12 applicutiom; allowed for restamping pnckoges from which tbe originol stamps hud been lOE;t, ffiutililted, or dest,royed. ,

During the-fisco.l yeor, 74,953 income-tox returm; were investigated by field deputy collectors llnd 5,828,893 informa,tion rl:lturns were Yerified. -At the close- of buSiness ,Tune 30, 1936, there were outstanding in the 64 collection districts for field investigation 4,276 income tax returns, compllred with 6,856 as of June 30, 1035. The numher of information returns on lmnd June 30,1936, wos 2,943,99D, compured with 1,872,991 as of June 30, 1935. On Junc 30, 1936, there were 57,380 wnrrnnts for distra.mt in tbe hands of the collectors' field forces for collection, compared with 62,132 os of June 30,1935.

After ba,ving t,oken the neceSSlllY administrlltivc action, collectors of internal revenue during tbe fiscol yellr transmitted to tbe Bureau or otherwise di;;po;;erl of 393.836 c1llims, as compflred with 238)251 in 1935, an inereose of 155,585. The number of cllli.ms on bllnd in collectors! offiees D.S 11t "the end of tbe fiscll1 yeor WilE; 18,400, com1lured with 7,481 as o.t the close of the previous fiscol yellr. The la,rge increuse in the number of outstauding claims on -hand in coHedQrs' offices wos due principoJlY to the fllct that mllny clilims for refund in volving the proccssmg tuxes were held hy collect-ors pending the enactment of new legisla.tion with respect to the refund of sucb toxes.

During the fiscal year 117,841 WnlTllnts for distraint were served by deputy collectors of internal revenue, which resulted in the coIleetion of $34,341,375. An average of 1,970 deputy collectors made u totlll of 402,743 revenue-producing investi.gations, including the sen-inO' of Wllrronts for distraint, compared with 576,120 such invest!gt1tion~ made by on nverage of 2,205 deputy collectors in the preceding fisco.l vear. '1'he tota.1 amouut collected and reported for assessment by fiefd deputy collectors was $79,000,410, us compared with $81,001,961 in the previous fiscal ycar. The average number of investigatiDns ml1de per deputy nnd the average nmount of tax collected and report-ed for llssessment were 235 and $40,135, respectively, as compared wit-h 2M nnd $36,735, respectively, in the fiscal year 1935_

The snpervisors of accounts a.nd collect,ions submitted 102 reports covl:lring their l:lxaminations of the accounts of collectors of internal

REPORT' OF COMMISSIOr-;'ER OF Ir-;''l'ERNAL REVENUE 31

nwenue during the- fif;col yellT 1930, compured with 105 reports submitt-ed during the fiseal ~'ellr 1935. EvelY c.ollector's office WIlS exommed llt le.lst once illld fi11 hut 29 of the collectors' offices were exoIllined twice during the yell!. Eight new collectors a.nd three acting collectors were iustlllled. , In administering tbe personnel of the sev9,ral collection districts the proyii:'ions of tbe Clllssification Aet of 1~3Y lUld amendntOlY acts, ond decisions of the Comptroller Geuel'll] l'ehtting thereto, have heen closely llubercd to. Tbe policy bllS becn continued of making such 11llpomtlnents as hllve bcen llutborized in the field collcction sl:llTice ot the minimum solary rate of the opproprillt.e grllde and all applications for positions haYl:l beeu cllrefully s(:rutinizfld ond investigateu with tl view to mo.intnining tho usual higb StllIlUUl'd of requirement for employmcnt.

The Disbursemcnt Accounting Division administrlltively examined and recorded 1,425 monthly accounts of collectors of internal rcYenue, internal-revenue agcnts iu charge, district supcrvisol's, incluuing the Philiplline broneh of the district of Maryland nnd the internal-re\-enuc salilry payments made by the collector of customs and the regionul disbursing clerk, Son Juan, P. R., comprisi.ng a total of 120,3g3 vouchers, in addition to which 4,107 expense Youellel's of employees and 12,717 vouchers covering possenger and freight transportation aud miseelloneous expenses were auuited ond pnssed to the emef disbursing officer, Trctlsury Depa.rtment, or General Accounting Ofllee for payment. The monthly ptly rolls of tho Buretlu were examined and recorded currently.

ALCOHOL TAX UNIT

Collcctions from the liquor taxes amounted to $505,404,037 in thefiscal year 1936, os compared with $411,021,772 in the previous fi;;elll ycm·, lln increllse of $94,4402,265. Approximately 61 poreent of this mcmase wns nccounteu for hy distilled spiIits, the reyenue from which increased nearly 31 percent over 1935. Taxes collc-eted from fermented mo.lt liqnors yielded more than any other liquor ta,x, c

III 32 REPORT OF COM~HSSIO;XER 01" INTERNAL RE\'ENUE

Procedure Dit!ision.-This division is responsible for plonning and de\'eloping procedure for the Alcohol Tax Unit ond eoordino.ting t18 procedure of the heu.dquo.rters office with thot, of the various offices of the di:st.:rict supervisors; nnd directing- the eXllmilllLtion of the o.udit of bonded o.ceounts made by the varions field offiees of the Unit. This division is 0180 eho.rgcd" with the lldministru.tion of regulntions relating to t,he bottles l1uthorizeu by low for use in the sule of liquor DJ, retail.

DUTIng the fisco.l year vorions reports required to be rendered by tlist.iJ]eries, w:lrehouses, winories, hreweries, industrial ukohol phmts Dod l\-l~rehouses, and mfUluftletnrers find user;; of denatnred il/eohol were revised to simplify the reporbing of operations by tbe indusbty o,nd t.l1O audit of ~>Hdl fleeonnts by Govemmcnb employees.

A new sysbem of nccounbing for red strip sbHmps llSed bot.h in tbe United Stat,es and abrolld WHS de\'eloped anli put iIlt,o efrect.

The honded aceounL,;

34 REPORT OF ·COMMISSIONER OF INTERNAL REVEKUE

An extensive program wus Juid out and the work started on determining tlla character and composition of congeners in whisky which ore formed during rermclltl~tion Ilnd stOI"ll~o. It is (l>.:pectod that this st.udy will shed considerll.blc light upon tne figinO' of whisky llnd the possible development of improved mothods for detcnnining whether the whisJ..-y on the IlUll'kot is genuino or illicit.

Satisfactory progress was made on tho problom of developing an effective method for detormining whether ruce horsos havo boon stimulll,t,cd with llll.rcotics or othor drugs.

Yeast is necessury in prouucing Illl:oh01 by forment,atien, find un effort is being mnde to dovolop n mothod for detecting yoast £lolls in the nir which would be of ussiStllIlCO in loeltting llloon51lino plllUts.

Audit Di'/.II:sion.-Thc Audit DiYisioll pcrforms !,he work of t,he beadquarters oHice of the Alcohol Tux Unit rcl8ting to plnnt operation, tax aecounting, asscssmonts, clnims, llnd compromi"es. H supervises generully the work rchtUng to tho mllnufaetme, stomge, tax payment, salo, and use of lllcohn], denotured nleohol, distilled spirits of all kinds, wincs, IUld beol'; and ndministcrs the pro\-isions of the iuternal-r~wenue IltWS and the l'egulations pertaining thereto.

Alcohol.-Dunng the fiscnl yellr 1036, there were 1%,120,230 proof gallons of alcohol produced lltindustrialaleohol plants, an increase of 15,480,316 proof gullons, ns compnred with the preceding yenr.

'Withdrawals of alcohol from \\'arehouses upon rayme.nt of tax amounted to 24,052,532 proof gallons, an increase 0 7,061,560 proof gallons as compared with tho preceding yenr.

A total of 175,880,208 proof gollofls of alcohol was \\ithdTl:l\m for tax-free purposes during the yeu.r, including \\ithdmwals for denaturation, for export, and for the use of the United States, hospituls, laboratories, colleges, nnd other cdueotional institutions. This is nn increase of 9,781,481 proof gallons as compared \\ith the qUlUltity \\ithdruwn to.:'i-free during the prceeding year, and reflects the increascd uso of alcohol for industrial purposes.

Denatured akolwl.-Dul'ing the fiscal year 1036 there were \\ithdrawn from bond, free of tux for dcnoturution, 174,354,781 proof gallons of alcOLlOl and rum, as comparcd ",-ith 165,233,606 proof"gallons dUling the pre"ious yeoI'. . There were 101,477,843 ",inc gallons of denatured alcohol produced during the fiscal year, of which 30,52.2,358 \\ine gallons wore com

pletely deno~urod and 04,955,485 wine gallons were specially dena~ured, as compured with 97,031,074 wine gallons of denotured alcohol produced during the previous fiscal ycor, of which 38,746,679 wine gallons were completely denatured and 58,284,305 wine gallons were speciolly denat.ured.

Fermented malt liquor.-During the fiscol year 1936, 51,812,062 b~ITels of fermented mult liquor were produ~ed, os compared \\ith 4;5,228,605 burrels produced during tho preeedmg yeur. The production of cereal Lenmtges contoinin~ Joss than one-half of 1 percent of a.Icohol by volume hus boen practically discontinued sinee the repelll of the eighteenth amendment. Only 110,062 barrels of such liqnor were produced during tho liscol year.

Distilled spirits.-There were' wi~bdrn....-n tax-paid from internal revenue bonded warehouses ;6,330,524 tllxu.blo gnlJons of distilled spirits other t.lmn alcohol (including brandy tux-pnid diree~ from fruit distilleries), an incrense of 18,247,503 gnllom; os compared wi~h t,)lCquantity withdmwn tnx-poid during tho preccding yellr. j

REPORT OF COMMIBBIONER OF I~TERNAL REVENUE 35

Wi1Ms.-During the fiscol year, 170,875,617 gitllons 1 of still wines were produced, eompured "'ith 91,929,579 gallons! produced the preceding yeM. Ta:-.:-paid "'itbdruwltls of still wines omounted to 47,474,404 gflllotls, or an increllse of 12,057,892 gallons 1 o,·er the fiseol vear 1935. Tux-paid \\ithdrawols of sparkling \\incs umounted to 5,799,429 taxable units,2 which wos an incrcase of but 523,166 taxable units 1 oyer the preceding YCllr.

Rectified produets.-During the fiscal year 1936, there were 32,816,739 proof gallons of distillcd spirits dumped for reet.ification and 32,448,806 proof O"ullons of rectified products were produced therefrom.

Assessments.-During tho fisenJ ylllir, 15,195 report.s of violations of tbe internal-revenue laws pertaining to ldcoholic liquor~ by illicit operators, nnd 752 reports of violations hv est.ablishod plant.'l :.Llld q llulified dealers wero received from the field OfHC6S and Qudited, und the tux liahilities disclosed therehy wore nssessed, incJudwg ad vulorem penalties. There woro also cortilied to the Comntissionel' for assessmen t 23,377 it.ems, totllling $13,000,116.17, listed in tho Burcau, and 271,425 items, aggregating S36,701,484.li, listed by collectors.

Claims reecived and disposed of during tho fiscal yeur 1936 ore sbown in the following table:

Stattment of dailll~

Il~p-.lon . - Retund

-- ~~~

'.'"

Abo.Ul· m~QI

-- 1. 2~3 .~.

Un""l·leaible --

,."" ~.'"

'rail'!

--- .~-.'"

Amonm

$3. -In, 2M. 19 19. 2!lI, lI3J. 50

On hIlnd Iuly J, 103.>.•••••••••.•••••• R """ivOO during year. ____ •••_•••_.••

.~

ol, til

TotaL _. __ •• _•••• __ •• ___ ._•••••

AUowOO .••• __ •• _•• _._ ••••••••••• _•••• Rejocted .. ______ . ___ ._ ••••. _•.••••••• On w...,d IUD. all. 1'030.•_•••• _••• _••••

~,831

'. '".~ l. 'li6

.~.- '.'"M'... --

1,QS7

'.'"m .,~

"'" ",~,

'" 1,7OS ~1.S92

M.1-I2 1.737

'" 913

Z!,121.2S7.69

14.147.94(.571,600. nll.ll\I 1I,912,62t.U

Talal. •••••• _••••••••• _••• _•••• t, 1i31 .~. 7,087 2.,O2ll .!,~ :n,721.2S7.1J9

-- Offers in compro7llise.-At tilC heginning of the fiseol year there

were on hund 9,449 offers in compromise, uggregating 5320,073.40, During tbo yenr, 104,845 offers, amounting to $1,438,098.65, were r~j\'cd, of which 503 were fOIV.'ardcd to the DepurLment of Justice and 1,163 wero roturned to the field offices. During the yeor,106,141 offers, aggregating SI,335,293.19, were accepted, und 3,763, totaling £123,;00.81, were rejected, leaTing 2,724 olfcrs on hond at the end of the fiscal yeur 1936.

OFFICE OF THE ASSISTANT GENERAL COUNSEL

The aetidties of the Office of the Assistltnt Geneml Counsel for the Bureau of Internlll Rovenue emhrace the wholo field of Fedcml tux.ntion in connect,ion wit.h HlC preparation and presentation to the Un~ted Stnt.es Doard Qf Tux APPOllls of derense in all appeals; the l'eYleW of refunds, credits, a.nd a.bntoments, in excess of $20,000; the deciding and udvising ill various udminisl.mj,i,-e 111111 internal-revenue tax matters refoITed 0)' tho Secre~ary, Under Se{:l'etllry, or an Assistant Secret,nry of tho TrefJ,sury, the Gcnel'l1.1 Counsel for thc Department of tho Treasury, tho Commissloncr or t1m aS5Jstnnt to tIm Commissioner, tho hea.ds of the adlllinistn\tivo units of tho UUrl1lm, coHo(Jtors of ." -,• no....",J IUJ~ nKUI'l)1l.

'lIMl l1im.. ",'r""uou' th.,••,.

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---


internill reyenne, oth~r brancIles of the Government, and individua.I con8spondcnce. Also the preptlTa,tion Ilt the request of the Deportment of Jnstice or' of United Sttltes ottorncy:> of dut-a for use in the prosecntion or defense of tux CtlSes (civil arid criminul) in suit., and othen..-isc complying'with 'their reqnest for llssistonce in STIch CfLSeS; and the prcpllmtion, revision, find publictttion of regulations, Treasury decisions, mimeogrllphs, nnd rulings for the guidtlnce of the officers and employees of t,he Burean of Internal Revenue tlnd other interested persons. Tlie office is divided into six divi"ions, viz, Appeals, Civil, Interpretu,tivc, PennI, Review, and:Legishl.tion lllld Reguhttions.

Assistant General Cou'ngel'g' comm'iUee.-The Assistllnt General Counscl's committee, consisting of four members, receives and passes upon ull Cllses from '1111 divisions of the office refened to it by the Assistllnt General Connsel, the gcneru.l assistants, llnd the special ussistants. ,At the beginning of'tbe fisen'! ycar 1936 the committee hnd on hond 19 cases;,dnring the year it received 202, closed 204, and hod 17 CilSCS pending nt the close of the fiscal .'leur. , Re01'!Janization Sedion.-Thc reorganization seetlon is chnrged with t.hc duty of protecting the interests and claims,of the United State!'! in bankruptcy und rcceiYcrship proce(lllings, inclnding particularly proeeedings institnted under sections 77 ond 77B of the N ationnI Bonkruptcy Act.. These amendments contain prm:isions unthori'ling the Secretary of the Treasul'Y-~'fei-"a.cceptqr reject plans of reorgnni'lfLtion in-rcspect of ,the interests' llnd clalln13 of thc United States where the United Stot.es is.fl.,crcditor: or stockholder.orthe reorganizing corporntion. Thc work of._ the R"eorgaui'lO,tion Se,ct;iqn consists in tJle {orwording of information, to .the ynrions govel'llmcntnl depnrtment!'! a.nd agencies regarding' tbe institntion of reorganizlltion .proceedings and of recciving in return ,informp:tion regardi~g .claims against such corporlltion; It' ascertains the existence of ontstnnding or pending tax clnims and.commnnicntes vi,ith.. the collectors'of interiml revenue regarding the filing 'of proofs o( such 'claims.' The section eOITesponds und holds conferences :viith-ii,tturneys for the dehtor COl-pomtions rcgllrding plons- of reorgllllizution; it ad-vises und Coopcrfl.tes \,,,ith United Stutes llttoweys rego.rding, the, prepnroMon"find cononct ofreorgonizotion cases llrismg nnder section 77 mid section 77B; fino it Ilssembles und 'submits to the: Secretory of the Trellsury dattl fur his gllidllnce in the lIcceptll.nee or rejection of plans of rcorgnnization: The Unit,ed St·ni,es,is considered tollllye lin interest in nil reorganization proceedings nntil, lIft.er receipt of. informution from various department.s'ond lIgeneies of !,he Govennnent, it definitely appcurs to th!" contmry.

The following sl.llt.ement. shows the reorgunizut.ion cases hondled from July], ] 935, t.o ,Tuue 30, 1Q36:

Cl>rpl>rale reorgan'izaliofl ~aus Cases pClll'ling July I, 1935 1,490 New CaBeS, fu;.c&.l year !g3(j ~ 1,844 Cases closed during} ear ______________________ ___ _____ __ ___ __ __ 556 Cases pendmg June 30,1936 2,778

ln the 556 cllrpomte 77 und 77D reorgnnizution cuses closed durigg the 1936 fio:;cnl yell!', clnims were Hied in tbe n.mount of $10,273,992.60 llnd Wem settled (or the sum of ·$3,895,793.82. In some of tJlCse cnSl'S cllsb, stllcks, llnd honds were pllleed in escrow to secure the

REPORT OF COMMISSIONER OF Ir"TERr"AL REVENUE 37

puyment of the deficicncies in tax when finaIly determined hy the courts. '

The number of bonkruptcy and receivership eases closed during tbe yes.r ws.s as follows: Cases pending July 1,·1935 ~---------------------- 1,736N"ew cases, fiscal yea.r 1936 ~, ~ . ___ ___ J, 144 Cascs clo~cd duriug year 1,020 Cases eliminated • __ 35 ClLses pendiug June 30, 1936. . 1,821>

in the 1,020 cases closed relating to bankruptcy and receivership, c10ims were filed in thc 11mO\lnt of $6,144;S5G.SI, find the S11m of $1,319,051.36 vms collccted.

Dnring the fiscal yeor 1,078 ne'w, bankruptcy lmd· receivership cases, other thun reorgnnization coses.under sections 77 Imd 7iB, were received, and GG cuses were added ill which the debtDr componics were originolly involved in reorgnnizat.ion proceedings bnt Int-er went into liqUidation. The 35 bankruptcy or recei\'crship coses which were eliminated were fonnd to be involved in reorgtmizn-Hon proceedings. "

Appeals Division.-This division has immediate cbarge for the Commissioner of all l:uses involving income, estote, IlIld gift taxes filed with !,he Doard ('I( Tnx Appeals, including those appeoled from BOllrd tlecisions to appellate courts. Tbe progress of the work during the fiscal yC;lr is shown by the tobles which follow:

, TABLE A.-Rer-ord 01 co~e~ appealed to the Uniled SIale8 Board 01 Toa; ApIJeals,

i'ic/udi'ig those appealed Iro!!/. Board dedsioris to appel/ale CQurt6, fiscal '!)ea'1"8 f.•••.•••••••••••. Dy ~grooiO, 3Il6 oSlal;e. _.••__ :112 2:':' 1[

----

---

-------

--- -----------


TABLE C.-Slat liS of ca~cs pefld~no be/are the United Blates Board of T= Appeals, . .Fu.nc 30, 1936

Js~ue not )'et joined ..: ' 1, Jl[l AW:kit.iIlg spedlll actiou;

Referred to Special Adjustment ScctlOll _ 105Refener! to Interpretative Division . __ . _ 1Reft::rred to Technical Staff _ 3, 787 On rescn'c calendsr. . _ 356Mi6ceUaueous __ • • • _. • _ 476

In procl.\l>S of preparation f0r t,rialOn \Vasbington calendar • __ 241On fidd calendar _ 400

Ready for trial hut nat set:On ·W>l.shin~tan calendsr _ soOn field caltmdar ~ _ G58

Set for trial:On Washington calendar : _ 46On ficld calendar _ 3,53

Trje1~;;.i~~~r~e~rs~~xb~PE~~~s~ __._ _________________ _ _ 007Decided and subject to appeaL __ ______ __ _ _ 455In process of closing _ 398 TotaL 9, 478

TilBLE D.-Ca8es in apJleZlal~ COl/rIB'On appeaZ frO!fl der.i~ion8 of tile United Stales Board of TaJ: ApIJelJl~ .

In eir_ In elr_In .~". In Sn-Case. prnm~cuil eM'... premocui'

oourl\ ' rouus' COUllc.= I Pending beginnin~or fiscal year, Olo""d during tlsc"l nar:,U,APPOOled by Commis'ioner. Favornblo to Comn'i"'ioner. ...

--

" ~ ,, ~,,\vreBled by tEl' ~a}'.rs .. ____ 7.'J2 Favorable to taxpayors. ____Modified ____ . ____________•.APP\'Qled by bol . _____ ..... " 0 ---'" ---TotaL ____ . __ .. __ . _______ . TotaL_. ____ .••••• _____ .•l,OOS 71J ..•

APPl'Bled durln~ fi~c81 year: ~~

Panding end of flscalyear: ~~

By Cowmilul( Peroon'· .~

Deficiency Overpay-m~'

Def~ull .• ____ . _. __ .. ____ ... _.. _ Veei.ion on "'t';lS. . _______ . __.

___________ _______ __ ____

______________ _____________

41

10

=


permissible nnder the llmenclments to clcction 3ISG of the Re...ibed Sta.tntes, cont.llined in section 613 of the Revenue Aet of 1928 and in soot~on 509 of the Reyenue Act of 1!J34. This work was tI'IlDSfelTed from the Intel'pl'etnt.iYe DiYision on April 8, 1D36.

The mlljor Ilctirit,ies of the diyision during t,he fiscal year are shown in the following tables:

C(l8eB recei,'cd (Hid dl:spQoed Q.{ durinfll/'e ji8col yea' 1986 1

Pending Jnl~" 1,19.::;5:In court (exclush'G of lien cases)Not pending in CQuri, Cll~e!'i in court im'olvi1lg liens

TotaL .

-Clo~cd dnring t.he ~'ell.r: Cases (exclnsh·e of lien ea~e"L C~cs involdllg liens .

TotaL ______________ __

'Pending June 30, .1935_ _____ __

Pending Jul); I, 1935 , R,

Comp7'Omiu. Section.-The Compromise Section is charged with the i'esponsibifity of considering 0.11 offers submitted in compromi8(l of tax liability arising in the Miscellaneous Tux Unit of the Burellu, except t.hose InvolYing crimiual prosecution-, fmud penalties, or specific penaHies. It. is also charged with passing \lpOn le~lll problems arising

the eollection of taxes from banks -in licluida.tlOn, from taxpayers who have made assignments of assets for the benefit of creditors and from estates of der-eased taxpayers.

The work o,f the section is divided into five classes, the number of ~uses pending-June 30, 1936, lind the tax lillbility involved being shown III the foUowmg table:

I. "'""~ __________~----.,.---.,..,.~,':'llillber I Lla!>llll,y Ca.'holfe"iuMmpromise_••• ••_. __ •. .. _ .•. 1n,lnJlment Oll"e"iI1 compromi"" , --.- -- •. ---.-. l)eoO

42 REPORT OF COMMISSIONER OF INTERNAL REYENUE

The work of the section for the fiscnl :rOlll' ending June 30, H136, isshown in the following tabla:

N~mb

44 REpORT OF COMMISSIONER OF INTERNAL REVENUE

Public deciSions, promnlgo.ted under Treflsury D.eeisionr;; 4264 and 4583, during the fiscR.l yelll', by months, were fiB follows' '

E'lUle and

-- ---

------

46 REPORT OF COMMISSIONER OF INT.I:!;l Iflii

1=1=1 1 1=1 _Disposed of;

Closed by agreement_. __ Clolldar.~n._.__ .• .. _ 9~ay apllJ,:l"Dt __ ••. _. __ -. .• ••.. __ •. •• __ • _._. __ .•• (" ~7 \l8C)ose']-lJefense •__ .. •__ •••_••• _. ••.• __ •. • _•.• __ •• _ Closod-No apoeal filed. __ •••• __ ._ ___ _ 30 ._ .~ppeaI fll"d .•

"I··... _ 3~ ._. __ ...

.~ppeal~ PO-day ca. ehan~rd ~'of ~.l't., I, tt'3~, to ,,110"' n,{ dell. ciencie. "ner ellminoUD. Sh,te inlle;; t""oo u>., "",

There were 4,781 investigations of applieutions of aUol1leys and agents to practice before the Trensury Department and 97 investi gations of charges Il.gainst enrolled u,gents unn HUnrneys, resultinl? ill the disbarment of 11, the suspension of 6, the rcprimand of 5, and rojection of applications of 34.

During the fiscal yenr 175 cascs of chllrges a,gumst employees of the Bureflu of InteTDul Revenuo were inYestigll.teu, J'l;l8ulting in the separation from the i>en-:ice of 103 employees tlDd the prosMution of 14, of whiclJ number 7 have been eonncted, 3 aeqnitted, ond 2 indict· ment-s dismissed. Thc other two cases have not yet- beeD tried.

There were 4,546 cuse~ of miseel1uneous character investignted, including investigations of 11 number of cases for the Bnreo.n of Nul'cohes, the Cnstoms Sen-:ice, nut-ioDal bunk examiners, and perSOfiS under consideration for alJpointmeDt to various position!'; ill t,],.,.

'i,

"I I

r'\ III

http:Nore\'(lmme>ldar.~n._.__.�

48 REPORT OF CO:lIMISSIONER 010' INTERNAL REVENUE

Treflsury Department. Included in titis nnmber were applicants for appointment to the positions of reyemle agents and deputy col· lectors find to various capacities in the Treasurv Department froUl the reliet rolls. .

WORKS PROGRESS ADMINISTRATION PROJECTS

The WOl'ka ProgreSs AdministJ'ation projects administered by t,he Bureau of Int.ernal Re,'enue arc undel' the supervision of tho Accollnts llnd Collections Unit, the Income Tax UIUt, and the Alcohol Tax Unit. The expenses of these projects arc paid from funds appropriat.ed to the Works Pro~ress Aununistration, and the workers wore recruited find employed III accordnnce with the regulations of the Works l'rogress Administ.ration and the United States ElllploYment Sen"icc of the Depart-ment of Lnbor. All workers were paId the securit,y wage rat,es as stipulated in the Exeeuthe order. of r..1.ay 20, 1935, lind its amendments. .

From tbe inaugurntion of those llrojects in August and September 1935 to June 30,1936, recommendations were made for assessments of additional taxes amounting to $lG,41H,813. The tQtlll expended WId obJigllted for the three projects for the S,Ime period amountod to $3;390,326, a net return of $13,104,487. Theaip.ount Illready collccted or agreed tQ by the 1a:xplly(~I'::i totillcd $5,836,:.117, n. sum far in excess of the co~t of the projeds, .

Accounts and Collections Umt (misccllll.lIeous tnx) project: Begin~ lung September 3,1935, im.d contillu.Lng tli"roLigb' June 30,1936, there was condueted in tbe field colloctioll service of the Bureau a "Survey of miscellaueous taxes." This prol'ect was clllTied- -on .under the direction of the (lollec·tors of interna re'"enue in 21 of tbe' collection districts ill the United States nnd im'oh-cd an intensii,-e. cnnye.ss to effect the collection of delinquent and deficient stamp taxes and tlUes on sporting goods, cosmetics, admissions and dues, radios, electl'ie refrigerntoQrs, je,,'elrT, and furs. The number of pJ":)ons employed ill this project averaged approximntoly 1,800 weekly. At the close of tho fiscE!1 year, salaries nn~ operatillg OAllenses e0J?-llect~d with this project tQtaled £1,803,121, while the amount of mlscclhllleous tiues ilSsessed nnd recommended for assessment wl!-s $13,911,808. The sum of $3,411,477 wlis colleeted, and it is cxPe:cted that tl lurge portion of tho remainder.-will be colleeted.· -

Income Tax Unit (income taxes) project: The Ineome Ta:t Unit project was cOll(lucted in 28 ro....mlUO agents' di....isions. The tempomry ill\"CBtigators, nnmbering 546, since their oppointment on or about September 3,1935, handled 104,158 returns. Of these retunls, 79,135 wore Ilecepted as filed, additionnl assessments were recommended "ith respect t.o 23,210 retums, and overnssessment.

__

_

--0

=-

--------=

_.

-~---------

--

--

!!

------

--

------- -

IF ~.

"..

RECEIPTS FROM INCOME AND MISCELLANEOUS INTERNAL REVENUE TAXES '" TAuLF, l.-Rer..eipts from 8perified ,lQUrC8S of intemol relJent/c, fiscal year ended June 30, 1936, by collection districts, Stales, ond 'l'errilorie:J '" Income tn:","

Collo,..Uon districts CorpornLioD IndivlduEli Total

Alabama. ________ Arioona. ________ ••••••• Arl

~,0/ in/emal rtl'Cmte, ji3ralllea, endcd June 30, 1986, bv eolleel'il1 di~lricla, Slatu, and TeTri· ...torj1.51

ConnllCtlQuL.._....._... . __ .. _ 107, ~, 42 61, lU, 'rI 21. 34S.llIl •• • __ ••••••• 67,310.30 __ •• __ • •••• _•••• _ lLO.9

--

T.lb~ l.--R«ripta from apl!dficd aOllrl!U Gj internal reTllmUe, ~~al year mded Jll~ SO, 19S6, b!l collectian diatril:u, 8(ot~, and Tern'. 01 toriu--Colltinucd C7.>

Distilled 11'Irlt.-ConUouod

RccllOor.Man"lnCo HeL.lI dc~l~l1lH~l/l.1l liquO(1-----,------1 \\'hol=le liq·I",...", of lu medinnal

per )'eDr d~A>e"', ItIIl..essthansool 600hlllTels uDrd08lers,.1I1~'. sro $I,lrit.eT }' laIsrr.................... ..... M.;l] 1, ns. 02 2. 1110.&; 13, (,63. 95 2:?S, Vt~.1T.l"'."1 ~a"" M~.;D, 00' : ::::::::::::: :::: T""nlj·..,lghtb )/ew YOtL .•:.............. 68..33 lH,7. Q:l 4.0H. 01. • .. 100,091.77 l'.'ortbCeml;nll•.••••••••.•... _ : ,......... 1!lOO _ _............. 6,100.97 71:1.212.12 ......-i ~i 34' :::::::~::::::::::

10, B62. 20 Il-(~.OO~[~i'{ll~IAO~~~~::::::::::::':::::::::::::::.::::::::: ..... ioo~~~' -i; ioi-i:2i' .... 'i;500:00' 12, ~~l ~~ 42, 1~4.1~ 343. 7~ To,ntl, Ohlo ._._ _.••••.••.•.••...•••••••••••. ' •••..••••.••••_ I \. 448. 37 J ~3,377.8\ OO.~ ElevcnLhOblo .•.••••: 425.32.............. 11, M.'l. 54 "4A.S5I.5f; F.1~hl ..ntn Onio._._...................... lOB..3-l 'a,S3S.fA !mOO jfi,2:l3.63 )7" l>ls, 6l\ ·liO:4.'5!>0. OJ

·32,~i1.4n roll. 00~~:~~~::.-.-.-::::::::::.::::::::: ::::::::: ::::::: --9 i:68' '.~~; -. . 11. m.: f: . 41,I8U1 3r,2.6J 65.00 First J'rnmyl vAni •.•• : :.:.. 1:l':I.11 2, IlOL 0.', a. 110. 71 4, 9F

00 TAIlL"ll l.-Rtellip/$ from specified $OUTC8S of internal Tevenue, fiscal year ended June 90, 1996, by collection distTictB, States, r.md Terri. tll

lorier--Continued

Wlne.l, cordial., etc. (deBI~n III purchL"" IlquordooleTS' 8peciiIJ. I·BI 81,EIJIlPS)

AlIl.bama.•.•. _._•••••••••••••••.. _ _-. ••••••••••.•••••_ __ . ••••• ••• • .•••• • •••••• .. .. _ ._•••_............ .•

Totallrolll will.

Bnllldy fer to.U1rlng, pllr jAuO! geJIl>n. 20 oo.n18

DomesticCcUa"""d by

1IlloorneJ nl~aDWl coUe~I.or.

Impd .._•••••• __ ..•• _..•••..•••• •••••••••••.•••..• .•• 5,893. 71 lI, oo:l, H 17,462.81 ...•••• .• "'_'. 25,359.96MB8SeCI,llS8u,"__ •••••••••••• __ •• •••••••••••• __ • __ ._••••••_••• __ ...... _ J8, 862. 22 10. 192, 10 113, 8~7. 44 '_" __ '. J22, 911. 76 Mich'gllll .••••••••••_. __ ._........••••.. ._••• _••••••••••_. _. __ ••••_•••.. ••••. •••.. I, 191. 17 M7.87 109, SSG. g5 3, 516, 88 115, )42. 87

~~~~~~~~~~~~~~~~~~~~i~~~~~~~~:~~~~~~i~~·~~~~~~~~~~~~~~ ~~~~~~~~~~[~~~~~~~~~~~~~~ ::::::.~~~~~: ... ~:::::~. i~' ~:;~ ~ :::::~~1j~~ ~ ~~~~~~ ~; ~: n NtbrMke._•••••..•.••••• ._ •••••. •••••••.. _..•_•••••••••• ... _••••••• __ •••• __ ••• _ a. r.:I •• __ ••• _•• _•••_... 630. 50 _.••••••_••• __ ••.• CH. (Y.l N.~ede •••. _._. ••••••••• ._.. .••••••••••••••• ...••••._ __ •••• __ ••• ._•••••••••••.. .••. "_ •• _ 3, WIl. '0 ••••••• __ •• _. _'_'. 8, 5\1!l. (0

~J~ ~~~!je~~~"::::::::::::::::::::::::.:_:::::::::::::::.:::::: :_: :::::::::::::::::: ::...-.::::::... :: :::::::::::::::::: .-.... 'iss;60S:~- ....--.... '555:88' .. i~9;ilii::ii

.----FW h N I,rooy ••••••••••••••••••••••••_••••..•..• _••••••••••••••••••• __ ••••• •••_•••••_....... 4,;!.l2. 63 135, 5M. 61 _.•••• -" 130, DIlB. 24 New M k.., .•.•••••••••••_. __ ••••• . _.. _. _. _•• _..••_.. _•••••••••••• __ •__ •• _••• , ••••••_.••••_.. . •••• _.•"_" _.__ I, 124. ~3 ••••.••" •••. "'.. I, 124. 83 First No York.•_.__ •••••••••••_.......... ••••••••.. . _. _••_ ""._' ••••• ••. •__ • . _ ••••.•.. __ __ •• 4aa, G98, 07 4, BOl. Sfj 43El, 5112. ~ S.rood :-lew Y nrk•••••• ._••• ._ .•.•• ••••••• •••••...•.•.... 2e~ 378. 95 1S'l, 02L 06 497, 133, 52 2, 706. 9.5 05,20l.:iII

~ Third .'01.... York__ •••••• _•••••••• _. __ •.•••_•• _••• __ •__ ••.•••••.•••••..••••..•_._._ ••• 4();l 003 13 I, 176, 10 ,10(, 2i1\1,1IJ _ FQune~ntn Now York_. •••••••••.••••••_•••• .•• -. •••... ••••::: -- ••••••••• "9:88' ..... 133. 2Il 8~ 7'019: D7 .. " •••••••_"._.. 82, 9nm ~ T nly-~r'>7 H 6,442. 38 116, B41. 86 Ponngyl~eni8___ ____ .....•••.. __ ...•••• __ ._•••••••_•••• _••••••••••••_•••• _••• _. ••••..•. 10, Glll. 90 4, ;!.le. 01 8.2, S81.!~ •• ._ __ ••• '.. 97, 389. 'ZI 1 e!"" _ •••.•... _•• __ •••••••• __•.... __ • • __ _•• _••••_......... 1,231. 95 516, 06 ~,~OO, us I" _.. 7, 214, lIB Wt1Shington_...... .••.•. ••••• ••••••.••••.•••_. _•• _•• ••• __ •• •• __.... 1,205. 74 2, ~2fl. 45 31, 186. 2Il ••••.•••••_••••.•_ ;!.l, DI8- 48

1St,lI wine!' per gellol> (In,ed by 8kDbo,i~ oontllnt). Up to 14 percent, 10 cents; tl> 2J per ""nt, 2O

~,{~~. Z'! 8, ~lQ, 7~5. M

af i11lernal revmlle, fiscal year ended JU1U; 30, 19.313, ,by cDlfeetiofl, district., Slales, ana Terri-o wriu---Continued" " ,.' ., '

27,184,06 2II,619.J4¥';,"I~~dNr;;;wY~ik~~::::::::.-:.-::~::::::::~::::::::::::J-··ii:561:537.-n-I:::::::::::::: 00000 3, HI!. 97 76, 7\lC1. 57 n, &12, 375. 27 1:1, ~Ill, 052. 58 Fourteenth New Ynrk __ • •••• ••• _. 6, 572, ~25, 02 •• .• _ 1.450.00 13,697. M 161. ~,,\2 0. 74Q, O~& 20 9.~2~,~02. 22 TwentY·first New Yort • _". _. • __ • ____ 3, 267, ,1M. 40 16. 67 910.42 5. roL 68 44. 485. 01 3,318,W3,08 ~,6:;8, 003. 20 'rwenly-ei~hlh No,," York. __ ".. __ . • ..... 7.682. 2m, ~~ . • • 2,091. f,(l O,O·IX

. ANNUAL REPORT - Internal Revenue Service · 56 Distilled spirits: Distilleries llnd intetnn.1...

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Transcript of . ANNUAL REPORT - Internal Revenue Service · 56 Distilled spirits: Distilleries llnd intetnn.1...