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before last at a quarter to 6 and that was the first definite word that I have had concerning this meeting.

Mr. COOPER. I suppose this letter was written for the subcommittee. It is dated May 20, 1952: Mr. JOHN J. CURRANS,

Chairman of the Committee on Cooperation With the United States Treasury

Department, 3829 West Pine Boulevard, St. Louis, Mo. DEAR MR. CURRANS : In Mr. DeWind's absence I wish to acknowledge your letter of May 17 which will be brought to his attention upon his expected return to Washington tomorrow. Meanwhile, let me say that it appears the hearings originally contemplated to commence Thursday, May 22, will be postponed probably until the first part of next week. It appears also that the full Ways and Means Committee may hold the hearings instead of the subcommittee. I would expect that both of these matters will come to your attention through the newspapers by the time your receive this letter. Very truly yours,


Assistant Counsel. I assume he is the assistant counsel for the subcommittee.

Mr. CURRANS. That letter there had no reference to this bill H. R. 7893. The letter I wrote to Mr. DeWind was in connection with registration of all those preparing income-tax returns for a fee. I knew nothing at all of this bill until Mr. Irving called me the other night. Even then I did not know anything about it. I did not know the contents of this bill and was not therefore prepared to answer any questions or prepare a statement in connection with this bill. I was prepared to render a statement in connection with this registration on the national level which we thought was a very good idea and which was a culmination of approximately 3 years of conferences with the different officials of the Treasury Department.

Mr. COOPER. The clerk advises that the announcement of the hearings stated that any statements received by next Saturday would be included in the record.

Mr. CURRANS. Saturday of this week?
Mr. COOPER. That is right.
Mr. CURRANS. Yes, sir.
Mr. COOPER. Thank you for your appearance and the information
given the committee.

Mr. CURRANS. Thank you, gentlemen.
(The information referred to follows:)

SUMMARY STATEMENT CONCERNING THE PROVISIONS OF H. R. 7893 Submitted by John J. Currans, chairman, Committee on Cooperation With United

States Treasury Department, National Society of Public Accountants


Section 101. Disallowance of unsubstantiated deductions

We suggest modification of this proposal. While the intent is understandable, it could work undue hardship in instances where the deductible expenses are proper but of such a nature as to make it impossible to substantiate or to be permanently recorded in detail. Sec. 107. Persons assisting in preparation of returns

(a) We do agree that persons assisting in the preparation of returns, for a fee, be required to state his name and address and that the taxpayer also be

required to state the name and address of such person in the space to be provided on the return.

(b) We do not think a violation of this section is serious enough as to warrant any sort of secondary liability or the imposition of a sanction for noncompliance on the part of the taxpayer.


Section 302. Unauthorized practice before the Department of the Treasury (sec.

302 amended by sec. 292) This section is too broad in its scope and we are unequivocally opposed to it as written. It makes no definite provision recognizing that certain representation is not required to be licensed, which representation has proven to greatly facilitate the audit of returns and consequently saves both the Government and the taxpayer time and expense.

Under the present regulations of the Department, it is made clear that no one may appear before the Department in any matter constituting practice without being properly enrolled. Moreover, the conference and practice requirements of the Bureau of Internal Revenue contain detailed rules governing its employees as to the manner of proceeding in cases in which unlicensed representatives appear. In order to emphasize these rules, the Department has recently issued instructions to its employees calling their attention to the requirements as to enrollment and repeating the rule that employees of the Department shall call upon practitioners who appear before them in any manner constituting practice to produce their enrollment cards. There would appear to be a question on the adoption of this proposal even from the viewpoint of the Government.


(Sec. 302 amended by sec. 292)

In order to comply with this proposal, one must be in possession of a Treasury card.

1. (a) Issuance of Treasury cards at the present time is somewhat narrow in scope.

(b) In order for a public accountant to secure a Treasury card, he must take an examination, much of which is not given by the Treasury Department.

(c) Emphasis is too much on theory without proper recognition of practical experience.

(d) The percentage of those successfully passing the examination is negligible.

II. (a) Nonenrollees vastly exceed enrollees.

(6) Many thousands of honorable and experienced full-time practicing public accountants are not presently enrolled.

Who: (u) Render valuable service to the Treasury Department.

(6) Assist taxpayers with well-prepared tax returns and related services in the field of Federal taxation.

III. Thousands of reputable qualified nonenrollees would be deprived of a livelihood if this section were enacted as written.

(a) It does not appear necessary to take such drastic action in order to eliminate the undesirable practice of a few.


It is suggested that all full-time practicing public accountants be registered with the Treasury Department.

I. (a) A provisional Treasury card be issued to such persons permitting them to practice before Treasury up to the level of the State director of revenue so that they could be disciplined for violations of such regulations as might be promulgated.

(6) The initial registration could be facilitated through the office of the State directors of revenue, with the voluntary cooperation of the National Society of Public Accountants and the associations of public accountants in their respective States.


House of Representatives, Washington, D. C.: The National Society of Public Accountants wishes to go on record as being opposed in part of H. R. 7893 because certain sections thereof discriminate generally against approximately 200,000 public accountants in the matter of practice before the Treasury Department. By permission, a more detailed statement of particulars will be filed with your committee Saturday morning, May 31, by John J. Currans, who represented the society before the committee Wednesday, May 28. There are principles in this proposed legislation of which we approve, and the National Society of Public Accountants offers their services to assist drafting suitable amendments.

JAMES E. KEYS, President.



Mr. COOPER. The chairman advises that the next two witnesses are here to appear on Mr. Curtis' bill. The next witness listed is Mr. Montgomery Angell. Is Mr. Angell here?

Mr. CURTIS. Mr. Chairman, I appreciate the committee granting us this hearing. In order to save the time of the committee and to make a little more orderly hearing, I would like to ask the unanimous consent that Mr. Angell and Mr. Sutherland appear as panel witnesses, that they give their statements and then the questions be directed at both after they are finished.

Mr. COOPER. Without objection, that will be ordered.

Mr. CURTIS. Mr. Chairman, I have a further request. This bill to which they will speak is just a brief bill, two pages on each side. I ask unanimous consent that H. R. 6127 be printed in the record at this point.

Mr. COOPER. Without objection, it is so ordered. (The bill referred to is as follows:)

[H. R. 6127, 82d Cong., 2d sess.]

A BILL Providing for the collection of internal-revenue taxes and the administration of

the internal-revenue laws by an agency independent of the Department of the Treasury

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That there is hereby established as an independent agency in the executive branch of the Government an Internal Revenue Commission made up of three Commissioners. The Commission shall elect a Chairman from among its members. The Commissioners shall be appointed by the President, by and with the advice and consent of the Senate. One Commissioner shall be appointed for a term of nine years, one Commissioner for a term of three years and one Commissioner for a term of two years. (At the end of said terms their successors shall each be appointed for a term of nine years.) The Commissioners shall be appointed without reference to political affiliations and solely on the ground of fitness to perform the duties of the office; however, not more than two Commissioners shall be of the same political party. The Commissioners shall receive the same compensation as is paid to Justices of the Supreme Court of the United States.

SEC. 2. The Office of Commissioner of Internal Revenue is abolished, and there shall be transferred to and exercised by the Internal Revenue Commission

(a) All functions which under the law now existing are vested in the Commissioner of Internal Revenue.

(b) All functions of the Secretary of the Treasury, the Under Secretary of the Treasury, any Assistant Secretary of the Treasury, the General Counsel for the Treasury, the Department of the Treasury, or any officer or employee thereof, in relation to the administration of the internal-revenue laws and laws relating to distilled spirits, wines, fermented liquors, and industrial alcohol.

(c) All functions in relation to the administration of internal revenue which prior to the promulgation of Executive Order 6166 on June 10, 1933, were vested in the Secretary of the Treasury, the Under Secretary of the Treasury, any Assistant Secretary of the Treasury, the Solicitor of the Treasury, the Department of the Treasury or any officer or employee thereof, or in the office of the Commissioner of Internal Revenue, the General Counsel for the Bureau of Internal Revenue, or any officer or employee thereof, and which pursuant to the promulgation of such order were transferred to the Department of Justice.

SEC. 3. The Bureau of Internal Revenue and its functions, and the Assistant General Counsel for the Bureau of Internal Revenue, and his office and functions, are transferred to the Internal Revenue Commission. Upon such transfer, the Assistant General Counsel for the Bureau of Internal Revenue shall be known as the General Counsel for the Internal Revenue Commission.

SEC. 4. In determining the legal effect of (1) anything done or omitted to be done prior to a transfer under this Act of an officer, agency, or function, or (2) anything done or omitted to be done, after such transfer, in respect of any such prior act or omission or the subject matter thereof, the officer or agency to which functions are transferred under this Act shall be deemed to stand in the shoes of the officer or agency from which such functions are transferred.

(b) No suit, action, or other proceeding lawfully commenced by or against the head of any agency or other officer of the United States, in his official capacity or in relation to the discharge of his official duties, shall abate by reason of any transfer under this Act, but the court, on motion or supplemental petition filed at any time within twelve months after such transfer takes effect, showing a necessity for a survival of such suit, action, or other proceeding to obtain a settlement of the questions involved, may allow the same to be maintained by or against the head of the agency or other officer of the United States to whom the transfer is made.

SEC. 5. Wherever in this Act an office or agency is transferred, such transfer shall include the personnel, records, and property (including office equipment) of such office or agency.

SEC. 6. (a) Whenever the employment of any person is terminated by a reduction of personnel as a result of a transfer under this Act, such person shall thereafter be given preference, when qualified, wherever an appointment is made in the executive branch of the Government, but such preference shall not be effective for a period longer than twelve months from the date the employment of such person is so terminated.

(b) Any transfer of personnel under this Act shall be without change in classification or compensation, except that this requirement shall not operate after the end of the fiscal year during which the transfer is made to prevent the adjustment of classification or compensation to conform to the duties to which such transferred personnel may be assigned.

SEC. 7. Section 1 of this Act shall take effect on the date of its enactment. The remainder of the Act shall take effect on the expiration of sixty days after the date on which the Internal Revenue Commissioners qualify and take office.



Mr. ANGELL. Montgomery B. Angell, attorney at law, New York City. Perhaps, Mr. Chairman, I should go into a little more detail as to my identity. I am a partner of Davis, Polk, Wardwell, Sunderland & Keindle, attorneys at law, New York City, and for the past 25 years I have been charged with responsibility by my firm of our department on taxation. During those 25 years I have been constantly in touch and practicing before the Bureau of Internal Revenue,


before the Tax Court of the United States and the district court and the Federal appellate courts.

I am here today because I understand that the committee, at least indirectly, is interested in and perhaps considering the advisability of a major change in the organization of the Bureau of Internal Revenue, namely, the setting up of the Bureau as an independent agency so far as administration and enforcement of the tax laws is concerned.

Mr. COOPER. Let me inquire for information now. You gentlemen are here to appear in support of the bill H. R. 6127 introduced by Mr. Curtis ?

Mr. ANGELL. We are.

Mr. COOPER. I invite attention to the fact that that bill is not even pending before this committee. It is referred to another committee of the House, the Committee on Expenditures in the Executive Department.

Mr. CURTIS. Mr. Chairman, may I speak at that point? That is true. This matter was taken up in detail as to the request for witnesses before this committee with the subcommittee. Then it was decided that the full committee hold the hearings. I had a conference with the chairman, Mr. Doughton. He referred the matter to this committee and on last Monday morning I stated the proposition and explained that the bill, although it dealt with the Bureau of Internal Revenue, had been referred to another committee, but I asked the privilege of bring two or three witnesses here to speak on it because it dealt with the subject matter arising out of our investigation and in which this committee is interested. Mr. Doughton entered an order last Monday morning permitting them to be heard.

Mr. COOPER. You may proceed.

Let the other gentlemen give their names and capacity in which they appear.

Mr. SUTHERLAND. My name is W. A. Sutherland, member of the law firm of Sutherland, Tuttle & Brennan, with offices in Atlanta and Washington. I have been actively engaged in the tax practice since 1923. I have been interested in the public phases of taxes for the last 15 or 20 years and have been actively working most of that time with the American Bar Association's tax section and the National Tax Association.

I too am interested in Mr. Curtis' bill and appear here to speak in favor of it.

Mr. COOPER. Mr. Curtis, are they the two witnesses you want to present now?

Mr. CURTIS. Yes.
Mr. COOPER. You may proceed.

Mr. ANGELL. In view of the experience that I have had over the past 25 years, I have come to a well-considered and I think carefully thought-out conviction, that the administration and enforcement of the revenue laws can be accomplished properly and efficiently and fairly and unprejudicedly by the setting up of the Bureau as a separate unit so far as enforcement and administration is concerned.

I have not had an opportunity of preparing a comprehensive statement covering my views and I should like leave of the committee to prepare such a statement and file it as part of your record of this hearing.

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