Page images
PDF
EPUB
[graphic]

which are now operating in 18 geographical areas around the country. This commitment has grown by about 78% since 1970, in part, at The expense of the Taxpayers in General Program. Investigation will also be made into the tax affairs of known racketeers not included under Strike Force operations.

The Narcotics program is also included within the special qu enforcement side of Intelligence Division operations. Being a concentrated enforcement effort against major narcotics traffickers, this program will reach its full authorized level in FY 1973. The Service's commitment is divided equally between the Audit and Intelligence functions, totalling 542 man-years. Our budget request provides for the full-year effect of resources authorized for the program: 291 man-years above the FY 1972 level, of which 148 are for the Tax Fraud and Special Investigations Activity.

The following table shows comparative staffing levels and workloads for Fiscal Years 1971, 1972 and 1973 for the Tax Fraud and Special Investigations Activity. The 1972 and 1973 columns include man-years diverted to the Economic Stabilization Program and reflect the impact on workload.

[blocks in formation]

* Includes Narcotics program and the investigation of other racketeer activity.

The work program proposed for this activity in FY 1973 will require 3,310 average positions and cost $70,566,000.

Economic Stabilization Program

The Tax Fraud and Special Investigations Activity is also contributing to the Stabilization program. Special agents are involved in making spot checks on compliance with the stabilization guidelines. Intelligence Division staff is also called on to make investigations where a pattern of general noncompliance is suspected.

An estimated 72 man-years, including special agents and related support, will be given over to the Stabilization effort in FY 1972; and in 1973 the nine-month requirement for that program is expected to be about 153 man-years.

Law enforcement programs, such as strike forces and narcotics, are of such priority that all of Intelligence's manpower shift to Stabilization is expected to come out of the Taxpayer-in-General program. As a result the number of tax fraud investigations among the general population will total about 190 less in 1972 and 529 less in 1973 than could otherwise be expected.

3. Alcohol, Tobacco, Firearms and Explosives Regulation and Enforcement

Enforcement of the laws designed to eliminate illicit activities an and to regulate lawful activities relating to distilled spirits, beer, wine, manufactured tobacco products, firearms and explosives is on the responsibility of the Alcohol, Tobacco and Firearms Division. It operates under the functional direction of the Assistant Commissioner (Compliance), offices of Assistant Regional Commissioners (Alcohol, Tobacco and Firearms) and their subordinate branches, branch HT offices (both Enforcement and Permissive) and area offices with local posts of duty.

The objective of the Alcohol, Tobacco and Firearms Division's program is to promote voluntary compliance with Internal Revenue and other laws relating to distilled spirits, alcoholic beverage and nonbeverage products, manufactured tobacco products, and firearms and explosives and to minimize violations of these various laws. The Division is divided into two basic functions.

[graphic]

The Criminal Enforcement function has three significant general objectives: (1) to prevent the manufacture, distribution and sale of distilled spirits produced illegally, (2) to monitor the activities of the legal firearms industry by a system of licenses and occupational tax stamps and to apprehend violators (or prevent violations) of the Federal firearms control statutes while offering assistance to State and local officers in criminal and regulatory areas to help prevent acts of violence with illegally acquired weapons, and (3) the regulation of explosives through a license and permit system and the prevention or investigation of illegal uses of explosives.

The Alcohol, Tobacco and Firearms Division's licensing, tracing, training and enforcement responsibilities have increased dramatically in the firearms and explosives program areas over the past few years due primarily to the Gun Control Act of 1968, the Omnibus Crime Control and Safe Streets Act of 1968 and Title XI of the Organized Crime Control Act of 1970. That these violations are not yet under control is indicated by the fact that homicides involving handguns were up 52% in 1970 over 1969 while the total was up by 8%. Robberies which more often than not are committed with firearms were up 224% from 1960 through 1970. In one State, California, almost 1,300 bombings were committed in the year ending February 1971 according to State records.

The Revenue Control function is charged with accurate determ-
ination and full collection of Federal revenue due from the liquor
or tobacco industries. It is also responsible for the effective
administration of the consumer-related controls of the Federal
Alcohol Adminstration Act and those ecological features concerning
liquor plants and permittee premises which are controlled by the
Service.
Environmental Protection Agency but have been delegated to the

This function also assisted in the administration of Phase
ions.
I of the Economic Stabilization Program as a routine part of inspect-

The Criminal Enforcement function is increasing its productivity. Cases completed during the first quarter of fiscal year 1972 rose 11.4% (from 1, 568 to 1,747). Firearms dealers investigations

rose from 11,197 to 18,235 (up 62.8%) from the corresponding
quarter in fiscal 1971. However, this productivity increase is not
likely to be maintained in view of the continuing requests for assist-
ance from the Economic Stabilization Program and an increase in
service performed for State and local peace officers. Requests for
the tracing of firearms, as an example, are increasing and now
average over 100 monthly at the National Office level alone.

There is some slight indication of an expansion of illicit liquor
violations. Border jumping (moving still sites from one state to an
adjoining one) is becoming more prevalent. The capacity of fer-
menters is increasing gradually and with our reduced force of
investigators assigned to this type of criminal activity, the number
of runs of illicit distilleries is up slightly. New territory is being
explored by established violators thus introducing a new element
of these violations.
into our work, although the 14 southern states still account for most

Time devoted to firearms work is necessarily increasing. In
fiscal 1971, 44.7% of frontline investigator time was spent on this
program. In fiscal 1972 it appears that this will exceed 50%. Time
devoted to explosives work is also increasing and will approximate
15% of total investigator time in fiscal 1973. Obviously we are not
justifies.
able to spend as much time on these two programs as their importance

Revenue Control (Permissive) activity must provide manpower for those actions required by statute to be performed or supervised directly by an Internal Revenue officer. These include maintenance of joint custody of internal revenue bonded warehouses in which were stored 1,2 billion tax gallons of distilled spirits on June 30, 1971, with a potential tax of $12.2 billion. About 30% of this potential tax is collected from distilled spirits plant proprietors each year under the supervision of permissive field officers. In addition, field officers must gauge spirits for taxpayment and supervise denaturation of distilled spirits. Although the alcoholic beverage industry is not seasonal it does have peaks and valleys. We have met this problem by providing sufficient inspectors (on-premises) when possible to cover seasonal

lows and by depending on the detail on inspectors (general) for those periods requiring extra supervision.

In addition to regular work we expect to be called on to provide a considerable number of investigators to help protect the security of presidential candidates and to assist Secret Service in protecting the security of the delegates to the two National Conventions. This work, although begun in fiscal 1972 will extend into fiscal 1973. AT&F field officers are being utilized most efficiently and their productivity is near its maximum. Any extra calis for assistance from other agencies as pointed out above will reduce their effectiveness and workload accomplishments.

The total alcohol, tobacco and firearms program will require 3,952 average positions and cost $71, 705,000. There is no program increase requested for the Alcohol, Tobacco and Firearms Activity in FY 1973.

[blocks in formation]
[blocks in formation]

Economic Stabilization Program

The following table shows comparative workload and manpower
for AT&F in fiscal years 1971, 1972 and 1973. The 1972 and 1973
columns include man-years diverted to the Economic Stabilization
Program and reflect the impact on workload.

1971 Actual

Cases Completed

[blocks in formation]

The Alcohol, Tobacco and Firearms Activity will contribute an estimated 132 man-years in FY 1972 and 254 man-years in FY 1973 to the Economic Stabilization Program. AT&F investigators and inspectors assist in the compliance aspects of that program, making spot checks of Stabilization compliance in the course of their regular duties and other Stabilization compliance investigations as needed. The man-year diversion will result in fewer cases completed in the firearms program in fiscal years 1972 and 1973 than would otherwise be expected.

4. Taxpayer Conferences and Appeals

This activity consists of the Appellate Division, under the
Assistant Commissioner (Compliance) in the National Office.
Offices of the Assistant Regional Commissioners (Appellate),
It offers the taxpayer an independent
and Branch Appellate offices.
administrative review of tax assessments proposed by the District
Audit Division which he contests.

The organizational objective is to offer taxpayers an opportunity
for impartial settlement of disputes with the least amount of delay,
encouraging compliance by maintaining public confidence in the
Service's efforts to administer the tax laws equitably and with as
little inconvenience to taxpayers as possible. This process also
expedites the deposit of revenue into the Treasury.

The effectiveness of the Appellate Division in achieving these
objectives is measured in terms of completing the case workload
with as tule delay as is compatible with efficient use of manpower
and sound settlement practices.

Total manpower requirements in Appellate have been held to a
minimum by applying the test of real need to every position, practice
and procedure, to eliminate any unessential work. The manpower
for FY 1971 and FY 1972 is down 46 and 54, respectively, from
FY 1970, primarily due to reductions in supervisory, and related
secretarial positions in branch offices and overhead positions in
the National Office,

The workload for FY 1973 is estimated at about 33,000 case
receipts in addition to a manageable caseload of about 34,000 on
hand at the beginning of the year. Generally, the cases coming
into the appeals procedures are becoming more complex due to
the trend toward higher income, higher asset, tax returns.

The table below compares the planned FY 1973 level of tax administration for taxpayer conferences and appeals with the levels achieved in FY 1971 and anticipated in FY 1972.

[blocks in formation]

1/ Case disposals for FY 1971 are statistically distorted by two work units involving a total of 1,096 cases.

The columns for FY 1972 and FY 1973 in the above table include
man-years diverted to the Economic Stabilization Program and reflect
the impact on workload.

In FY 1973 the Service's total program for taxpayer conferences
and appeals requires $30,762,000 and 1, 502 average positions, of
which 649 are for Appellate Conferees. This is the same number
of average positions as is in the FY 1372 Plan,

Economic Stabilization Program

Appellate is also lending a hand to the Stabilization Program. It will apply an estimated 17 man-years in FY 1972 and 30 in FY 1973 to that effort. Appellate conferees assist in processing and making, first level recommendations concerning requests for exemption or exception from Stabilization guidelines. These demands have reduced estimated Appellate case disposals by about 600 in FY 1972 and 1,000 in FY 1973, representing about $12 million and $19 million for the two years, respectively, in deferred revenue,

5. Technical Rulings and Services

This activity is comprised of the Office of the Assistant Commissioner (Technical) and subordinate divisions in the National Office. Its objective is to achieve uniform application of the Internal Revenue laws. Effective administration of the taxing statutes and collection of the revenues requires an understanding by Service employees and taxpayers alike of the application of the complex Internal Revenue Code in each case. The Technical Rulings and Services activity provides this understanding by establishing and promulgating the Service's interpretation of the code in all areas of the federal tax statutes and regulations (other than alcohol and tobacco and certain firearms taxes).

This activity accomplishes its mission by

-developing tax return forms, instructions and form letters which are lucid and easily understood

-publishing booklets, pamphlets and other documents which explain tax rules in plain language

-issuing rulings to taxpayers and technical advice to Service field offices which apply the tax law and regulations to specific issues and cases

-publishing precedent rulings and procedures which explain the Service's positions on substantive issues and procedures affecting the rights and duties of taxpayers

-providing coordination of interpretations, applications and developments among Service components

-detecting and recommending remedial action on inconsistencies, abuses, and inequities in the application of tax laws and

-furnishing advice, assistance, and recommendations to the Chief Counsel and Treasury in the development of tax legislation and regulations.

The table below compares the FY 1973 planned production and related manpower needs with the actual output achieved in FY 1971 and anticipated in FY 1972.

[blocks in formation]

The proposed work program will require 891 average positions
and cost $17,004,000. No program increase is reguested for FY 1973.
Economic Stabilization Program

A small contribution of technical manpower is being made to the
Stabilization program, amounting to an estimated eight and 10 man-
years for fiscal years 1972 and 1973, respectively. This manpower
lends assistance to ESP's headquarters in the National Office. The
effect on regular technical workload is expected to be negligible
since these staff diversions are being replaced.

« PreviousContinue »