in the most exceptional cases that that occurs; and they do not want their names used; they want to keep out of it; they do not want the slightest point made of it at all, or any publicity whatsoever.

Commissioner BLAIR. We often get intimations, but they are so indefinite that we can not act on them; but occasionally a taxpayer comes up and gives us something definite, and we catch the man every time when the taxpayer does that.

We have to have help from outside people, and a great many of them do help us in that respect, because the fellow that is doing the grafting does not come to us; he goes to the taxpayer outside.

We

We had a case of a woman who telephoned a taxpayer in New York, saying that there was an overassessment going out, and saying that for a consideration she would get the returns out and close them out. A taxpayer called immediately on the phone. arranged to have one of our secret-service men pose as the taxpayer. She came up, delivered the papers, and took the money, and of course we got her.

Take this Rickmeier-Underwood case in which they pleaded guilty recently. There was a tax there of considerably over a million dollars that the man on the inside proposed to the man on the outside, or the reverse, that they would get relieved of. A very reputable lawyer, who represented the taxpayer came immediately to me and told me the facts. They were wanting $160,000 to turn the deal. I got the fake money from the Treasury, with the exception of $2,000, which I got myself, and sent a man over. He came up there and delivered the papers, and we got him. He has pleaded guilty.

We have numerous cases of that kind. We are catching every one

we can.

Senator COUZENS. One of the complaints that were spoken of, I think, by one of the Senators, and also by Professor Adams, was on the question of your decisions, made by the Board of Appeals. Complaint is made that these decisions are not published. Is there any reason why all of these decisions should not be published?

Commissioner BLAIR. We publish all decisions now. We formerly did not do it. The committee has so much work that it can not sit down and write a long legal opinion. If you turn these committeemen loose to write opinions they would want to write a real judicial opinion.

Senator KING. To prove that they are lawyers?

Commissioner BLAIR. Yes. We have a number of cases coming over the desk every day, and they can not write those long opinions, but we have a list of secret rulings, and things of that kind. Last December I made an order that every ruling that had not already been passed upon should be published, and they are all published now. I think, perhaps, that should have been done a long time ago. It has been the custom since.

Senator JONES of New Mexico. Were all of these decisions in all cases made public?

Commissioner BLAIR. Yes; they are published in a weekly bulletin which we get out.

Senator KING. Each one of these refunds is shown, together with the amount?

Commissioner BLAIR. No; that is not the decision of the com

mittee.

case.

These are the decisions as to the facts and the law in the

Mr. HARTSON. There are no amounts or taxpayers' names mentioned in these rulings. They are solely for the purpose of informing the taxpayers generally throughout the country of the position taken. by the bureau.

Senator KING. Suppose John Jones should pay a tax of $100,000. and it goes through the regular machinery that you have provided for it, and then later it has been decided that he has been overtaxed $50,000, or suppose it develops that he has not been taxed enough and he has to pay another $25,000. Is there a publication of that decision?

Commissioner BLAIR. If the committee passes on it, or the solicitor passes on it, the substance of the opinion is published. The principle is published.

Senator JONES of New Mexico. The name and the amount involved are not published?

Commissioner BLAIR. The name and the amount involved are not published, but the principle on which it is decided is published, so that every taxpayer who has a similar case has knowledge of that opinion.

Senator KING. Suppose it does not reach the higher tribunal; suppose I am an applicant for a refund, and my case goes along for a little while and you decide that I am entitled to $25,000, and that it is paid to me?

Commissioner BLAIR. If it is a question of audit, or a mistake in audit or something of that kind, that is not published. That is not committee opinion. There is no opinion rendered.

Senator KING. I have had many complaints to the effect that opportunities for fraud exist, and fraud has been committed there, in which some of these subordinates have ordered refunds and their decision has not gone to the higher officials there, and the money has been paid out, and perhaps it was illegally paid out. Senator COUZENS. Could that happen?

Senator KING. The subordinate official was passed over, or was corrupt and did not stand up sufficiently for the rights of the Government.

Commissioner BLAIR. It would be very difficult for that to happen. The reaudit must be reviewed, and it must pass through so many hands that it would be most difficult to corrupt everybody along the line.

The CHAIRMAN. How many hands does it pass through?

Mr. BRIGHT. Five-that is, in the simple cases.

The CHAIRMAN. Yes.

Mr. BRIGHT. Going through the simple process that Senator King referred to, of the audit coming in the auditor's hands who made the original audit, passing through his unit sheet, and then the section sheet to a review section, and there reviewed by the reviewer and approved by his chief.

Senator KING. Not connected with the first audit?

Mr. BRIGHT. Not connected with the first audit.

Doctor ADAMS. Am I not correct in stating that any refund or any change involving over $50,000 must be submitted to the solicitor's office?

Commissioner BLAIR. Every refund involving over $50,000 must go to the solicitor's office.

Senator KING. Who is the chief solicitor?

Commissioner BLAIR. Mr. Hartson. I do not know the names of the other members of the committee very well. You asked a question about the committee on appeals and review. That is simply a committee designated by the commissioner to act for him. Of course, the law provides that all appeals shall be made to the commissioner. The commissioner can not hear them; it is physically impossible, of course; so this committee is designated by the commissioner, and I want you to see how the work is increasing for various reasons.

During the last month the committee on appeals and review passed on as many cases as we passed on in the whole of the years 1920 and 1921 together. That is partly due to 250-D, allowing repeals, and due to the greatly increased output of the unit, the auditors.

Senator KING. And I suppose due also to the fact that precedents have been established and cases fit those precedents.

Commissioner BLAIR. Yes, sir; and they take them up with that committee.

Senator COUZENS. Are the hearings on those appeals before this board of appeals held in public or secretly?

Mr. HARTSON. They are privately held; necessarily so, because at the time of the hearing on an appeal there is a complete, open discussion of the tax liability, the amount, and the name and everything connected with it. If the taxpayer desires to have some person or persons present it is entirely proper for him to bring anybody he wants to bring with him.

Senator COUZENS. Of course he can, but what I am thinking about is this: If all of these details are gone into in a regularly established court, why should they not be gone into in public so far as the Internal Revenue Bureau is concerned?

Mr. HARTSON. Because the law permits it.

Senator COUZENS. Do you not think it would be a good thing to correct the law or amend the law so that you would have the same publicity that takes place in a Federal court or a State court?

Commissioner BLAIR. The new revenue bill has a provision which creates a court for the hearing of these cases. I do not know whether there is any provision in that that they shall be held in private or not.

Mr. HARTSON. It is a question of whether the taxpayer has any rights of a confidential nature in regard to his own private business. Senator COUZENS. He certainly has not when he is using a public tribunal, in my judgment.

Mr. HARTSON. There is a difference of opinion on that.

Senator JONES of New Mexico. It seems to me that when any question is raised calling for a decision as to the amount of tax that he ought to pay he ought to be willing to have that question decided in the open. You may say what you please about the ordinary tax returns which never raise any question, and which do not require any judicial decision. So far as I am concerned I am perfectly willing to have them all a matter of public record, but it seems to me that quite a distinction can be drawn just along that line; but whenever a taxpayer calls for a readjustment contrary to the audit of the bureau that readjustment should be made in public.

Mr. HARTSON. I think that might be. I can easily conceive how that may be helpful from the standpoint of the bureau.

Senator KING. I am in favor of publicity. If you set up a court of review at all, then any man who says, "I have been wronged by the Government," ought to submit his evidence there as anybody else would.

Senator JONES of New Mexico. In the open.

Senator KING. In the open.

Senator JONES of New Mexico. The thought had not occurred to me before, but I think we might draw a line there in making these returns public.

The CHAIRMAN. The only trouble about that, in my judgment, is, that if you publish the returns, it will show that a comparatively few men are making a great deal of money and have a very large return, which will give demagogues a chance to go out and harangue the multitude for the purpose of stirring up the classes against the few.

Senator JONES of New Mexico. Yes; I appreciate the force of tnat; but is there any distinction between making these returns generally public and making the proceedings on review public?

The CHAIRMAN. I think so; yes.

Senator KING. Senator Watson--of course, this is purely academic. -here is the answer, whether it is complete or hot: I think the public has a wrong idea in most instances as to the earnings of a man. When a man dies, it is published immediately that he is worth $25,000,000 or a hundred million, and when you come to get the inventory of his estate, it is found that he is worth only five million. I remember some years ago when Governor Flower of New York died, it was reported that he was worth $25,000,000, and when his estate was probated it was found that he was worth only $400,000 or $500,000. The public has an exaggerated idea of these fortunes, and if you publish these returns, you will find that instead of exciting the multitude to anger and resentment at the big incomes, the public will say, "Well, they are not such big incomes, after all."

Senator JONES of New Mexico. The estate tax returns are made public, are they not?

Mr. HARTSON. There is some question about that, Senator Jones, as to whether the law applies to the estate tax or not. whether it does.

I doubt Senator COUZENS. One of the Rockefellers died recently, and I saw every item of his estate listed in the New York Times.

Doctor ADAMS. And in the New York probate court.

Mr. HARTSON. And they are not ordinarily private records in the States.

Senator COUZENS. What difference does it made whether you publish it after a man has died or when he is alive? What is your opinion about that difference?

Senator JONES of New Mexico. The dead man can not make a kick. Mr. HARTSON. Of course, it is all a matter of public record in every State in which a man dies. His estate has to be probated, and an inventory made by appraisers has to be filed as a matter of public record, and can be inspected by anybody.

Senator COUZENS. I ask you, Mr. Solicitor, what is the difference in publishing a man's record after his death and not publishing it when he is alive?

Mr. HARTSON. You are asking me on a question of policy? On the question of policy, I see no distinction, in principle.

Senator COUZENS. What part, if any, do your deputy collectors play in the decision of these cases. Do they play any part at all?

Commissioner BLAIR. The deputy collectors' play a very little part. Mr. Nash can tell you more about the deputy collectors than anybody else in the United States. He has charge of them.

Mr. NASH. The smaller income-tax returns, those of incomes of $5,000 or less are audited in the collector's offices, and the assessments are made there, and whatever small adjustments there might be. The forces in the collector's offices comprise both clerks and deputy collectors. The clerks are civil service employees. The deputy collectors are the personal appointments of the collector. There may be some deputy collectors assigned to the work of auditing these smaller income tax returns. Whatever decisions they make would be based upon regulations or Treasury decisions which have been published. It would be a very rare case where they would be called upon to make an original decision.

Senator COUZENS. You say "the small returns."

How small?

Mr. NASH. Returns where the net income is $5,000 or less. Senator COUZENS. In such a case the deputy collector has a right to make a settlement, based on rules issued by the Treasury Department?

Mr. NASH. Yes, sir.

Commissioner BLAIR. Those are rules made by the collector's office all of them.

Senator COUZENS. Does it not appear strange that any clerk out of the six or seven thousand employed in the Internal Revenue Bureau, or any deputy collector, may know the income and the income tax paid by any citizen, and any Member of Congress can not obtain the same information? I mention this because I do not think there is any secrecy about these things. You can not pledge this number of employees to secrecy as to the income tax paid by an individual any more than you can pledge the executive session votes

of the Senate to secrecy.

The CHAIRMAN. Well, that is rather a forcible illustration.

Senator COUZENS. Well, we are a little below the average, I will admit; but it seems to me that if all of the clerks of the Internal Revenue Bureau have access to all of these records, and the public. has not, it creates a perfectly ridiculous situation. A thousand dollar or a twelve-hundred-dollar clerk can have all of this information, and yet the public, whose interest is paramount, may not have it. In other words, that situation invites bribery and things of that sort in an effort to obtain this information.

Commissioner BLAIR. Of course, that is a matter entirely for Congress; but this might be said in answer to that: You are, a chemist; you are manufacturing chemicals; you have secret processes and you have clerks in your employ to whom you are paying $1,200 a year and you have laborers who are working and mixing those chemicals and making your product every day. They know all about what is in it, but the public does not know it, because it is Senator KING. Some little loyalty on the part of the employees? Commissioner BLAIR. Yes. Of course, they reveal it sometimes, as they sometimes do in income-tax matters.