Appropriation Bill, 1931 SUPPLEMENTAL HEARINGS BEFORE THE SUBCOMMITTEE OF THE SEVENTY-FIRST CONGRESS SECOND SESSION ON H. R. 8531 A BILL MAKING APPROPRIATIONS FOR THE TREASURY FISCAL YEAR ENDING JUNE 30, 1931 99687 REFUND OF TAXES Printed for the use of the Committee on Appropriations UNITED STATES WASHINGTON: 1930 EX OFFICIO MEMBERS FROM COMMITTEE ON POST OFFICES AND POST ROADS GEORGE H. MOSES, New Hampshire. PORTER H. DALE, Vermont.. DANIEL F. STECK, Iowa. II KENNEDY F. REA, Clerk TREASURY DEPARTMENT APPROPRIATION BILL, 1931 SATURDAY, MARCH 1, 1930 UNITED STATES SENATE, SUBCOMMITTEE OF THE COMMITTEE ON APPROPRIATIONS, Washington, D. C. The subcommittee met, pursuant to call, at 10 o'clock a. m., in the committee room, Capitol, Senator Lawrence C. Phipps presiding. Present: Senators Phipps (chairman), Jones, Oddie, Överman Harris, Glass, and McKellar. COLLECTING THE INTERNAL REVENUE-REFUNDING TAXES ILLEGALLY COLLECTED STATEMENT OF ASSISTANT SECRETARY WALTER E. HOPE (IN CHARGE OF FISCAL OFFICES); E. C. ALVORD, SPECIAL ASSISTANT TO THE SECRETARY; HARRIS F. MIRES, ASSISTANT TO THE COMMISSIONER OF INTERNAL REVENUE; AND FREDERICK I. EVANS, HEAD OF THE ADMINISTRATIVE DIVISION, BUREAU OF INTERNAL REVENUE Senator PHIPPS. The committee will come to order. Senator McKellar desires to make inquiries in regard to the amounts provided for refund of overpayments of taxation. Senator ODDIE. On what page is that? Senator MCKELLAR. Look at page 264 and the following pages in the House hearings. I quote therefrom as follows: The CHAIRMAN. You say that the refunds are at the rate of $11,700,000 per month. You are estimating this upon the basis of $11,700,000 per month, whereas it has been running at the rate of about $8,000,000. Mr. MIRES. At the rate of about $8,250,000 per month. There is a large case which we expect to adjust and settle during this fiscal year which will result in a refund of approximately $31,000,000. What case is that? Mr. MIRES. The United States Steel case. Senator McKELLAR. Has it been settled? Assistant Secretary HOPE. No, sir. Senator MCKELLAR. Could you give us the facts in reference to that case? Assistant Secretary HOPE. I would rather have some one who is familiar with the details of the case, if that is what you want, answer that question. Senator MCKELLAR. The facts as to the settlement of the case? Assistant Secretary HOPE. I think perhaps Mr. Alvord could give you the facts. 1 Mr. ALVORD. I will be glad to answer that question. Do you want me to answer it now? Senator MCKELLAR. Yes; just take it now. First, before you go into this case, Mr. Alvord, in December of 1928, if I recollect, the Treasury Department made a refund to the United States Steel Corporation of something like $33,000,000, did it not? Mr. ALVORD. We made a refund for 1917 totaling, I think, about $24,000,000. Senator MCKELLAR. $24,000,000? Mr. ALVORD. Yes. Senator MCKELLAR. Well, there were refunds Senator PHIPPS. You mean credits? Senator MCKELLAR. Credits and abatements, amounting to about $59,000,000, was it not? Mr. ALVORD. My recollection is it was about $42,000,000 only. Senator MCKELLAR. Will you get the exact figures? Mr. ALVORD. I will give you the exact figures; yes. Senator MCKELLAR. That was done in December, 1928, if I recollect, and you will give me the exact figures? Mr. ALVORD. Yes. Senator McKELLAR. The exact amount of the refund in money, and the exact amount of credit on taxes, and the amount allowed for depletion or abatement? Mr. ALVORD. Yes. Senator MCKELLAR. Now, will you explain the item of $31,000,000, and, if you have the full case, the facts, I would be willing for you to put that in the record. Mr. ALVORD. Senator, the case to which you first referred was the case for 1917. Senator McKELLAR. Yes. Mr. ALVORD. Involving the United States Steel Corporation and all its subsidiaries. Senator MCKELLAR. Yes. Mr. ALVORD. At that time we were also working on years subsequent to 1917. We now have almost in the course of completion the cases for the years 1918, 1919, and 1920. Senator MCKELLAR. Yes; and you say that the cases for 1918, 1919, and 1920 will amount to a refund of something like $31,000,000? Mr. ALVORD. A total refund of approximately $21,000,000, excluding interest. The exact amount of interest can not be computed, but will probably bring the amount up to more than $31,000,000. Senator McKELLAR. How much taxes did the United States Steel Corporation pay in 1917? Mr. ALVORD. Senator, I did not bring the 1917 file with me. Senator PHIPPS. You want a comparative showing, do you not, of what they have been doing, year by year? Senator MCKELLAR. Yes; for 1917. I want just to use them for comparison. In 1918, what tax did the United States Steel pay? Mr. ALVORD. The United States Steel case involves not only one corporation, but the entire consolidated group, the Steel Corpora tion and something better than 200 subsidiaries. The entire taxes paid by the entire group in 1918 on the original returns which the Steel Corporation filed, were $245,561,180.44. That was the tax shown on the original return. Senator MCKELLAR. When did they make a claim for refund? Mr. ALVORD. There were several claims for refund filed. They are all in here; but may I continue? Senator MCKELLAR. Just one moment, and I will be glad to have you do that. Did either of the subsidiaries make a claim? Mr. ALVORD. The parent made the claims on behalf of the subsidiaries, naming the subsidiary in each case. Senator MCKELLAR. The parent company made the claims, and that was like it was done in 1917? Mr. ALVORD. Yes; as in 1917. Senator MCKELLAR. The same way? Mr. ALVORD. Yes. Senator MCKELLAR. You have a list of the parent company and the subsidiaries in your files there. Mr. ALVORD. Yes. Senator MCKELLAR. And you have a list of the claims made? Senator MCKELLAR. Will you present that? Mr. ALVORD. I am not sure that I have all the claims made. I have a list of the dates on which the claims were made. Senator McKELLAR. Yes. Mr. ALVORD. I am not sure that I have all Senator MCKELLAR. Proceed with what you have there. Mr. ALVORD. As I say, the taxes shown on the original returns were something in excess of $245,000,000 for 1918. We then made additional assessments from time to time against the corporation. Senator MCKELLAR. How many of those additional assessments were there, and how much? Mr. ALVORD. There were, in all, five additional assessments. Mr. ALVORD. Three in 1921, two in 1926, totaling $29,477,513.92. assessments paid? Mr. ALVORD. Yes. Senator PHIPPS. And paid under protest? Senator PHIPPS. And the Steel Corporation waived the periodthe expiration of the time? You say additional assessments were made in 1926 and 1927. That was after the time limit had run out? Mr. ALVORD. Yes. They waived the statute of limitations. Senator PHIPPS. But they waived the limitation and made the payments on the assessments? Mr. ALVORD. Yes. Senator PHIPPS. So that the twenty-nine million odd is in addition to the $245,000,000 original, and they paid it all? Mr. ALVORD. That is right, sir. Senator PHIPPS. So that the $31,000,000 is for what period? Mr. ALVORD. The $31,000,000 is for the three years. I will give you the payments as I go along, if you would like to have it. Senator MCKELLAR. How much did you return for 1918? |