Introduction This report of the Commissioner of Internal

Revenue reflects a year of progress and

achievement. The IRS realized record highs

in collections, in audits and in cases

recommended for prosecution.

Gross collections rose to $302.5 billion,

passing the $300 billion mark for the first

time.

Over 2.5 million tax returns of all types

were audited, 80,714 more than 1975 and

more than any year since 1968.

Criminal prosecution was recommended in

more than 3,100 cases.

In assisting taxpayers with their tax

problems, we answered the questions of

over 38 million people who telephoned or

visited our offices. These are achievements

of which we can be proud.

We tried to improve our forms and

instructions and to reduce the paperwork

burden of taxpayers. To administer the

complex tax laws, the IRS has developed

hundreds of forms and reports which affect

some 125 million taxpayers each year. The

sheer volume of this paper makes the

Revenue Service acutely aware of the

benefits of even small reductions in its

forms. Our prograrn for paperwork

reduction was stepped up with a line-byline review of the major tax forms to delete

any unnecessary items. For example, Form

5500, a pension reporting form, was cut

from seven to 4-1/2 pages. Employment tax

regulations were amended to provide for

an annual, rather than a quarterly filing for

the railroad retirement tax returns. For

other activities, forms were made simpler

and the procedures were made e

,

asier.

But our best efforts toward forms

simplification were dwarfed by the new tax

laws that made our major forms, the 1040

and 1040A, even more complicated.

Obviously, the key to a simpler tax form is

a simpler tax law.

In other activities progress was more

noticeable. Collection of delinquent taxes

was up $700 million to reach $3.5 billion.

We processed slightly fewer individual

income tax forms last year than in 1975,

but overall we processed 127.1 million tax

returns of all types, an increase of more

than a million over 1975.

With improved data retrieval equipment, we

are now able to handle inquiries and

requests about tax accounts much faster.

In 1976, we processed an average of 2.4

million inquiries per month at each service

center.

This report, issued during our bicentennial

year, covers the achievements and

progress I have mentioned. The myriad of

other activities shown in the report, reveal

three things pertinent to our country's

200th anniversary celebration. First, our

forefathers, 200 years ago, built well. The

political system designed for free people

which they set in motion is still sound.

Second, the statistics in this report show

that the people of this country still comply

voluntarily with our broad-based and

complex tax laws. Third, the statistics

speak of a strong and dedicated work force

of career civil servants in the IRS.

It is appropriate that the cover of this

report depict the great leaders of this

country who have contributed to its

strength and to the tax systefn. George

Washington, our first president, and

Alexander Hamilton, our first Secretary,of

the Treasury, saw the need for the central

government to have the authority to raise

revenues. Abraham Lincoln was president

when the first income tax law was enacted,

and it was he who appointed the first

Commissioner of Internal Revenue.

Woodrow Wilson was president in 1913

when the constitutional amendment passed

and the enabling legislation created the

Federal inco tax that has led to today's

tax system.

I am glad~'~o submit this, my final report to

the American people.

pv,.~ C, At".,.vc~

Donald C. Alexander

Commissioner

P.
I 4

Contents

Introduction

Chapter 1. TaxpayerAssistance

5

Chapter2. Collecting the

Revenue 11

Chapter 3. Insuring Compliance 23

Chapter 4. Technical Activities 37

Chapter 5. Employee Plans and

Exempt Organizations 43

Chapter 6. International

Programs 47

Chapter 7. Legal Activities 53

Chapter8. Planning and

Research 65

Chapterl). Internal Management 75

Chapter 10. Appendix 87

Organization Chart 88

Map of Regions, Districts,

and Service Centers

Chronological List of

89

IRS Commissioners (1862-1976) 90

Principal Officers of the IRS 92

Audit Charts and Tables 97

Statistical Tables 129

index 159

Addends:

Statistical data used in the text and tables of this

volume are ona fiscal year basis, unless

olherwise noted. For example, data headed

"1976" pertains to the fiscal year ended June

30,1976.

in certain graphs and Charts, to illustrate the

ext, figures have been rounded and may not add

precisely to the printed totals in the statistical

tables which are based on unrounded figures.

Fiscal year 1976 transitional data to this Annual

Report are ina separate appendix, tilled,

"Transitional Quarter Appendix to the 1976 A nual Report of the Commissioner of Internal

Revenue, July 1-September 30, 1976".1 ;

Chapter 1.

Taxpayer Assistance

"Thousands Of Internal Revenue Officer, and employees Must be mobilized and intensively drilled so that they may 90 knh Ploperly OQUIPPed to disseminate among the ta~-Paying Public correct tax procedum--. intOmation as to

Daniel C. Roper

Commissioner of Internal Revenue 191

a
I 6

Assisting

Taxpayers

The American Tax System depends upon

self-assessment and voluntary compliance.

Every year taxpayers must determine their

correct tax and file returns reporting It.

Recognizing that taxpayers do not find this

task easy. the Internal Revenue Service

tries to help them to be in

a better position

to prepare their own returns.

During 1976, the IRS continued to expand

assistance to taxpayers through

a program

designed to offer qual

ity

service, and to

make taxpayer assistance readily available

to taxpayers. Special training in basic

tax law requirements was given to

in crease the effectiveness of taxpayer

service personnel.

Before the 1976 filing period,

a standard

quality review system was implemented

nationwide. The methods for providing

taxpayer assistance were systematically

monitored and measured, to insure the

assistance was accurate, courteous, and t

imely. in over 600,000 contacts rando~nly

sampled during the 1976 filing period

(reviewing service prepared returns,

observing walk-in inquiries, monitoring

responses to taxpayer telephone inquiries,

and reviewing referrals and

correspondence), taxpayer assistors

achieved an accuracy rate of about 90

percent.

The Service also gave special attention to

the Taxpayer Service Specialist position in

1976. This professional position we.--, c

reated to provide

a more highly qualified I

ax assistor to handle the more complex

technical inquiries. Initially, just over one

quarter of the Taxpayer Service

Representatives JSR's) were converted to

Specialists.

Concurrently the TSR training courses were

revised; and local training supplements

were developed to make the course

content better fit the job requirements.

A

Taxpayer Service Sampling Survey was

also implemented at the beginning of the

filing period to determine the content of

actual questions asked by taxpayers to

gear quality and training efforts to

significant work areas.

Specific criteria were issued for locating

Taxpayer Service offices, emphasizing

convenience to public transportation and

first floor locations. Low noise level and

taxpayer privacy were important

considerations in selecting locations.

During the 1976 filing period, walk-in

service was offered in about 740

permanent offices and in over 220

temporary filing-period- only offices. More

offices were located in the inner city (133

in 1976 versus 11

2 in 1975), and in

suburban and rural locations (185 in 1976

compared to 92 in 1975), for taxpayer

convenience. Extended hours service was

offered in most IRS offices, for taxpayers

unable to call or visit during normal

business hours.

The Service again provided special

assistance to taxpayers speaking foreign

languages, with 117 offices (and over 390

employees) offering tax assistance in

Spanish arid 148 offices (and over 500

employees) providing help in other foreign

languages.

Under the Volunteer income Tax

Assistance Program (VITA) the Service

trained over 20,000 volunteers who

provided free tax assistance to elderly,

Spanish-speaking, low-income, and other

taxpayers in their communities. Over

150,000 individuals attended approximately

3,000 IRS sponsored classes on taxes.

An IRS instructor conducting

a training class for

Volunteer income Tax Assistance (VITA)

volunteers. The training provides the VITA

volunteers with sufficient tax information to

assist elderly and low. income taxpayers in their

own neighborhoods to fill out their tax returns

properly, Over 20,000 VITAS were trained by the

IRS in

1

976.

A major effort to raise the level of public awareness about the Earned Income Credit (EIC), which benefited low-income

taxpayers, was emphasized in Taxpayer Service contacts and through liaison with other Service activities. This program included notices sent with the cooperation of other government agencies (Health Education, and Welfare, Agriculture, Labor) to taxpayers who were eligible for the EIC. Notices were also sent by IRS to taxpayers who filed tax returns without claiming the EIC, but who apparently qualified based on tax return information. The Earned Income Credit was allowed to about 6 million

taxpayers fora total of approximately $1.2 billion, averaging out to some $203 per taxpayer.

During 1976, the Service received about 38 million written, telephone, and walk-in inquiries. The total consisted of over 28 million telephone calls, more than 9 million walk-in inquiries, and over 150 thousand written inquiries. More than 60 percent of these inquiries occurred during the filing period from January 1 through April 30 1976. In that period, the IRS received

almost 17 million telephone calls, over 6 million walk-in inquiries, and

over 60,000 written inquiries, for

a total of over 23 million requests for assistance.

Toll-free telephone service was again offered nationwide.

Under this system, any taxpayer in the United States may call the IRS for assistance without having to pay a long- distance telephone charge. Toll-free

numbers are listed in the income tax return packages Provided to taxpayers. Taxpayers may also use the toll-free network to call for information or clarification of the bills and notices they receive relating to their accounts. These notices are accompanied by an enclosure which lists a toll-free telephone number and suggests that the taxpayer use the number to obtain

assistance or further explanation.

The toll-free telephone system has

Provided taxpayers with greater

telephone access to IRS offices and has made an IRS office as close to taxpayers as their own telephones.

The Service increased its efforts to employ and train seasonal employees called WAE's (When Actually Emplo~ecl). WAE's are regarded by the IRS as Permanent employees that are willing to work on an as needed. less than full year schedule. Their training is identical to full schedule IRS employees and they are available to be called during peak workload periods. It is understood they will be furloughed when work diminishes. More than 1600 WAE personnel were trained as a reserve cadre for peak periods. This type of work force permits sufficient flexibility to cops with a

wide range of work situations in an economical manner.

Tax Form

Improvements

The Service continues in its efforts to

ensure that the number and content of

reports it requires of the public are kept to the absolute minimum needed to meet the requirements of the law and to permit efficient administration of the tax system. We continued to resist outside efforts to require nontax data on tax forms.

This year we,stepped up our-simplification effort with a ine-by-line review of the major return forms in an attempt to delete

unnecessary items and to insure that the forms did not place an undue burden on the public. Our efforts resulted in the elimination of lprger numbers of forms and questions thanlin previous years.

Revenue;AdljUstment Act

Because the Revenue Adjustment Act of 1975 was enacted on December 22, 1975, after the tax forms were sent to print and because the new laws contained vaii~us, and in some cases. retroactive effective dates. we had 10 communicate the Provisions of the Act to taxpayers who had already filed fiscal year returns as well as those who were about to file their calendar year returns.

7
B

New Pension

Forms

Privacy Act

Impact

We revised or developed forms, special

instructions, tax computation worksheets a

nd issued press releases to notify

taxpayers of the tax law changes. Among

the forms developed were Form 1040FY

(1975.76), Fiscal Year Tax Computation

Schedule; Form 1040ES

'

Estimated Tax

Vorksheet; and Corporation Estimated Tax,

-W

Form 1120-W (FY 1975-76), Form 1120

(1976), Form 1120-W (1976-77). C

During 1976, new pension forms were

developed to implement the Employee

Retirement income Security Act of 1974.

Of major importance were three forms

requiring the joint efforts of the

Department of Labor and IRS: Form 5500,

Annual Return-Report of Employee

Benefit Plan (with too or more

participants); Form 5500-C, Annual

Return-Report of Employee Benefit Plan

(with fewer than 100 Participants none of

whom is an owner"employee)~ and Form

5500-K, Annual Return-Report Of

Employee Pension Benefit Plan for Sole

Proprietorship and Partnerships (With fewer

than looparticipan

is

and at least

1 owneremployee). The final vets ion of the forms

reflected IRS and DOL response to over

1600 public comments received as

a result

of publishing the proposed forms in the

Federal Register for comment. The new

Pension Law also required the development

of annual information return Form 5329,

Return for Individual Retirement Savings

Arrangement. which is required to be filed

by individuals who have established

Individual Retirement Accounts.

September 28, 1975, was the ellective date

of the pr*vacy Act of 1974 provisions that

affected many forms, letters, and notices

which request information from individuals.

The Privacy Act Specifies, in part, that we

Must inform the taxpayer of the authority

for the request, of whether compliance is

mandatory or

volu

Mary of the principal

pu Or

hich we ir~itend to use the

int=ion,wi the routine uses which may

be made of the in 'formation, and of the

effects on the taxpayer of not providing all

or part of the information.

To Comply with the provisions of the Act

which affected over 200 major tax forms,

we provided detailed information about the

Act on Form 1040 and 1040A instructions

to cover all forms, schedules, and

=Jingnstathements taxpayers use in io it

their individual lax returns.

For filers in need of this information. new

Publication 876, privacy Act Notification,

was developed between the effective date

of the Privacy Act and the date filers

received their Form 104011040A packages

In August 1975, Notice 403, the Privacy

Act of 1974, was developed and sent to

taxpayers who

m

ust

furnish their

social security numbers for tax

administration purposes.

communications

With Taxpayers

During 1976, the Service's program to

improve form letters, computer notices,

and other similar taxpayer communications

continued to be

a major objective.

A

special unit of writer-editors continues to

review all Such standard communications

to ensure they are personalized and

understandable to the average taxpayer.

National office units and field offices

reviewed

a total of 1800 form letters

and notices during the year and were

able to eliminate 479 of them as

duplicative or unnecessary.

The Service continues to inform taxpayers

of their rights under the tax laws and to

provide complete courteous responses to

taxpayer inquiries.

Tax

Publications

To reinforce information provided taxpayers

during direct contact, and to assure

nationwide consistency in the application

of the tax laws, the Service also er of distributes, free of charge, a numb

publications.

Taxpayer Publications explain the tax law. Each

year the IRS publishes numerous pamphlets and instructional Packages to assist taxpayers in fiting returns. The Publications and forms pictured are only a small portion of the tax literature available to the taxpayer.

The major IRS publications are Publication

17, Your Federal Income Tax, Publication

334, Tax Guide for Small Business, and

Publication 225, Farmer's Tax Guide. Also,

the Service has issued publications dealing

with special tax problems, such as

reporting the sale of

a personal

residence or computing the value of

donated property.

New iax publications developed in 1976

included Publication 591, Tax Credit for the

New Home Buyer, Publication 592, The

Federal Gift Tax, Publication 593, Income

Tax Benefits for U.S. Citizens Who Go

Overseas, Publication 595, Tax Guide for

Commercial Fishermen, Publication 596,

Tax Benefit for Low-income Individuals,

Publication 597, Information on the United

States-Canada Income Tax Treaty,

Publication 598, Tax on Unrelated Business

Income of Exempt Organizations.

Besides our own review. we solicit

suggestions from taxpayers, practitioners,

organizations, industry groups, and other

interested parties for improving tax forms

and instructions and reducing reporting

requirements. This year for the first time

we helda public hearing on Form 1040 and

1040A. Announcements were published in

the Federal Register and in the Internal

Revenue Bulletin Local newspapers ran

articles inviting all interested persons

to present their comments, and public

interest groups were encouraged to

participate. Nonetheless, only two

speakers participated.

Among the changes made on the 1975

return was the addition of address

information boxes requested by the Census

Bureau for Revenue Sharing purposes.

A

line was added for the new earned income

credit for certain individuals with less than

$8,000 adjusted gross income, and for the

new deduction of $30 for each personal

exemption other than exemptions for age

and blindness. Also, optional tax tables

were expanded to cover adjusted gross

income of up to $15,000.

The Mass

Media

The Service continued to use the nation's

mass media to furnish tax information to

the public. In 1976, over 17,900 radio and

TV stations, daily and weekly newspapers,

and magazines' received material prepared

by the IRS to inform and assist taxpayers.

Service personnel participated in 6,432

interviewd', answered 19,243 media

inquiries, and made 5,642 talks to citizen

groups.

9

~1
10

Nearly 8,200 news releases were issued to

the media. These releases covered such

topics as services available to taxpayers,

appeal rights, correct filing of returns, the

Presidential campaign fund check-off, tax

advice for disaster victims, earned income

credit, pension benefit plans, the real

estate allowance, the personal exemption

allowance, as well as numerous releases

relating to rulings, procedures, regulations,

and other legal interpretations, positions,

and announcements.

Some of the releases, as well as radio and

TV scripts, were translated into Spanish for

use in areas where it is widely spoken as a

second language. Tax question-and-answer

columns were written for nationwide

distribution to weekly newspapers and

magazines.

The Service also produced and distributed

to field offices two color films; one

covering audit and appeals procedures,

and the other providing tax information to

assist small businessmen. These IRS films

were shown on 152 occasions by TV

outlets and 2,430 occasions by civic

associations and educational groups from

January through June of 1976.

Electronic

Tax Service

The Integrated Data Retrieval System

(IDRS), which links all district and area

offices and Puerto Rico through video

terminals to computer files at the IRS

service centers, processed 282.2 million

inquiries during 1976.

The installation of large computers and

related components with faster processing

capabilities has enabled the Service to be

more responsive to taxpayer requests and

has caused rapid growth in the use of the

equipment. The IRS service centers

processed an average of 2.4 million

inquiries per service center each month

during the last half of 1976 compared to

1.8 million in the same period in 1975, an

increase of 33 percent.

Chapter 2

Collecting the Revenue

When the Internal

an 1864 tax bill for

i!rvenue Presented Mark Twain with $36 82

Penalty, he Plus a $3.12 delinquency

This is perfecily

wripte

gorgeous

his ed110'r "I am taxed on my income

never my life ~ left SO ImPOMint in

Mark Twain's Letters.

Albert a. Paine, Edlt.r

Harper & RPw. 1917
12

Receipts Gross revenue collections in FY 1976

totaled $302.5 billion an increase of $8.7

billion (3.0 percent) over fiscal 1975,

Collections passed the $300 billion mark

for the first time. just four years after the

$200 billion level was achieved and

$100 billion line thirteen years after the

was crossed. The growth in collections was

the smallest in five years due, partly, 10 tax

reductions for individuals and corporations

under the 1975 Tax Reduction and

Revenue Adjustment Acts.

Income taxes accounted for over twothirds of all tax receipts. Individual income

taxes amounted to $159.0 billion, up $2.6

billion (1.6 percent) over 1975. Corporate

income taxes were $46.8 billion, an

increase of $1.0 billion (2.3 percent).

Employment taxes of $74.2 billion

registered the largest dollar increase for

the year

'

rising $4-1 billion (5.8 percent).

An increase in the social security wage

base and higher wage and salary levels

were major factors affecting this area,

Excise tax revenue of $17.3 billion rose

$0.4 billion (2.4 percent). Receipts from

this source reflected

a general increase

despitea reduction in manufacturers' tax

on trucks and buses. the continued phasing

out of the telephone excise tax, and repeal

of the sugar tax.

collections of $5.3 Estate and gift tax

billion recorded the largest rate of increase

of any major tax category for the year,

advancing 13.2 percent (SO.6 billion). Both t tax components of this the estate and gif

combined tax class were higher.

Returns Filed and Refunds Issued

Individual Income Tax* January-June

tages) (Cumulative 000's, cumulative percen

1975 Jan Feb Mar

Returns Filed

~7.lurne

Percent

Refundsissued

volume

Percent

Apr May June.

54,252 81,244r 9,721r 37,266

11.7 44.7 65.1

2,336t 21,989 41,494

3.6 34.0 64.1

1976

Returns

volume

Filed

8,02 34,4~O50,800

Percent

Refundsissued

9.8 42.0 61.9

2,2632

0 , 564 40,364 volume

Percent 3.5 312 63.2

_7%,Unna -p,.c.,..d by Net lo,al co,puter r-w and

scheduled to, as~7c, by Ftegional DiSbunsing centers, in- c 10 s T.

I'des only 1040 and 1040A- ExcludRebatasneft,ndlS.

,Fa~jt;.d82,370 83,278

97.6 98.9 100

58,402r 63,598 64,730

90.2 98.3 100

80,031 81,185 82,096

97.5 9B.9 100

62,614 63,837 56,802

89.0 98.1

13

During Fiscal Year 1976 the Internal Revenue Service paid refunds of $34.7 billion to 68.0 million taxpayers whose payments and credits exceeded their tax liabilities. In Fiscal Year 1975 a total of 122 5 million refunds totaling $40.1 billion were paid. In both fiscal years the number And amount of individual refunds were affected by the Tax Reduction Act of 1975. Included in 1976 data are 4.2 million checks totaling $0.9 billion for the new Earned Income Credit EIC). For further details on EIC, see Table 19 in the

Appendix. In Fiscal Year 1975 we paid $7.9 billion in 1974 Tax Rebates and generated 54.7 million extra checks for rebate

refunds alone. This accounted for the

unusually high volume of individual checks issued in Fiscal Year 1975.

IRS Service Centers received 127.1 million tax returns in 1976, compared to more ,

han 126 million in 1975. Individual and

fiduciary returns totaled 84.1 million

compared to 85.5 million in 1975. The decrease is attributed to economic

conditions and the increase in the standard deduction which changed the filing

requirements and thus decreased the filing Population, Nearly 28 million individual

taxpayers. 34 percent of all individual I

Hers, used the short Form 1040A in 1976

as compared to more than 22 million in 1975, an increase of 24 percent in the

number of Forms 1040A filed. The Service received 54.5 million Forms 1040, an 11 percent decrease from the 61.4 million in 1975. The reduction in Form 1040 filers

and the increase in Form 1040A filers was triggered by a Form 1040A mailout

to some 13.8 million individuals who had

previously filed Form 1040, but whose income indicated that they could use the short form.

Number of returns filed, by principal type of return (Figures in Thousands. For details, see table.7, in Appendix)

Type of Return

Grand Total

Income Tax, Total

Individual

Declaration of estimated tax

Fiduciary

Partnership

-

Corporation

list.t. Tax

GIft Tax

Employment Tax

ExemptOirg- anization

Employee Plans

Alcohol, Tobacco,

-and Firearms

Excise Tax

Supplemental Documents

ny

pone,

'The classification

The

of yet- has been changed trom prior

cludes natums

supplentennii

not

Doc-nt. cat7

-

pnn,io,ay counted, In

, cry in 1976 in

Fom 1040XWhchhcmaa.,th.197

n ad III- it includes

5GM dToMlby931,634.

1975,

126,049

96,311

84,004

7,543

1,514

1,138

2,112

216 -

260

24,757

374

1976

127,087

95,237

82,495

7,844

1,610

1,143

2,144

236 -

302

24,677

474

1,104 -

602

825

1,600

782

512

580

3,987
14

Gross Internal Revenue Collections

(Dollars in thousands. For details see table

1 in appendix)

Source

Grand total'

income taxes, total

Percent

of 1976

Collec. lI?ns

increase or

Decrease

1976 Amount 1975

3.0 100.0 293,822,726 302,519,792 8,697,066

68.0 202,146,097 205,751,753

C.rp.,at,.n 15.5

Individual, total

11.7

_;Wthh.Id by employers' 40.8

Other' -PI.Y.-taxes, total 24.5 T.

Old-age survivors disability

and hospital insurance,

total

3,605,656 1.8

46,782,956 1,036,29M6 213. 45,746,660

52.5 1156,399,437 -

1158,968,797 2,569,360

-

1.0

123,440,963 1,337,826 1.1 123,103,137

35,527,834 1,321,5J3 3.6 34,296,301

70,140,809 74,202,853 4,062,044 5.8

5.7

23.5 67,136,584 70,983,718 3,847,134

Federal insurance

contributions 22.3

Self-employme

insurance cc ributions 1.2 contnt

Unemployment insurance 0.5

Railroad retirement U.5

Estate and gift taxes 1.8

Excise taxes, total-

5.7

Alcohol

Tobacco

Other

1.8

63,720,164 67,465,480 3,745,316 5.9

3,518,238 101,818 3.0 3,416,420

1,562,752 `174,670 12.6 1,388,082

40,241 2.5 1,616,143 1,656,384 -

4,688,079 5,307,466 619,387 13.2

17,257,720 409,979 2.4 16,847,741

5,350,858 5,427,722 76,874 1.4

0.8 2,315,090 2,487,894 172,804 7.5

3.1

WS,*fad to ,cl,de amount, tran-finlred

'no of

.

to me , d

'Eltunared -Collections of individual income tax ,Hhheld

an not reported separa sly from old-aae. sury-read sablilly a I-1 .. . a and = hospital insurance (AASDHI)

laries. similarly collections of individual income lax net

withheld are not reported separately from 0ASIM-11 taxes on

qer~ employment no.me, Th. --, of 0ASDHI tax

Collections shown is Wood on estimates mado by the

The Tax Dollar

Where It Came From

Fiscal Year 1976(Gross Collections)

j,_181,794 9,342,104 160,310 1.7

Secreta,7 of the Treasury pursuant to the provil on, of sec.

2oi(s)o the socts, security Act as amended. and includes

all OASDHI taxes Th. allm-t-I shown for the two classes

of individual inc~m. ul.., a,. dluvewi by subtracting the

OASDHI tax estimate, from M-mbined lotats rePorfuld

Election Fund ~lrcludlus Presidential mounting 10

$31.656,525.

-includes presidential Election Fund mounting 1.

$33,549,118,

Individual

Income Taxes 52,51

Employment

Taxes 24.54:

Corporation t

Income Taxes 15-50

ExciseTaxes 5.70

Estate and

Gift Taxes 11.8*

_j

Net Internal Revenue Collections (Including tax rebates) through June 30, 1976 (Dollars in thousands)

Source

Grand total

Corporation income taxes

Collections

28,174,331 -158,968,797 130,794,466

74,202,853 439,573 73,763,280

302,519,792 34,375,979 268,143,813 100.0 -

46,782,956 5,374,727 408,229 15.4

Individual income taxes

Employment taxes, total

Old-age, survivors, disability and hospital and insurance

Railroad retirement

Unemployment insurance

Estate and gift taxes

Excise taxes

'1includ,inwhle, brud.hr.

of-do.

The Tax Dollar

Where It Came From

Fiscal Year 1976(Net Collections)

70,983,718

1,656,384

1,562,752

5,307,466

17,257,720

Corporation-TTEi- Employment

axes Y.M.-in, 27.60 ome Taxes 15,40

Excise Taxes 6.30

Estate and Gift Taxes 2.00

:ndividual

ncome Taxes 48.84

Not Collections

ffe- fund per.

cerif 0

Total

48.8

27.5

407,628 70,576,090 26.3

348

31,597

90,957

1,656,036 0.6

1,531,155 0.6

5,216,509 2.0

296,390 16,961,330 6.3

15
16

Pipeline At the ten Regional Service Centers,

tax returns are:

4. -1-eho-een~hhe

ch... ..-w2, Eh-oo-0-Phheoehe--"

e,,,eo ene o0ooo

Once a tax return reaches one of ten IRS

Service Centers it travels through a series

"the of processing steps known as

pipeline." While many parts Of the pipeline

3. R,h.-e$Wedbytyoe,t-h

shown here are ;automated for faster

processing and faster refunds, People are

involved every step of the way.

Tax Reduction

Act of 1975

The Tax Reduction Act of 1975, P.L. 94-12, provided for allowable credits for Earned

Income, Personal Exemptions, and

Purchase of Residences. The Earned

Income Credit is in effect a negative

income tax; it provides for a 10 percent

refundable credit with a maximum of $400 reduced by 10 percent of Adjusted Gross

Income over $4,OOD. The Personal

Exemption Credit provides for an additional $30 personal exemption tax credit. The

House Purchase or Residence Credit

provides for a maximum of $2,000 tax

credit on the Purchase of a new principal

residence, the construction of which was

commenced prior to March 26, 1975 and

Purchased between March 12, 1975 and

January 1, 1976.

Data on these several credits for Tax Year

1975 is shown in the following table:

Tax Reduction Act of 1975

Selected Credits

(through June 30, 1976) -

Earned Income

C,.d,ts

Personal Exemp-

(ion Credits

Residence

Credits

Number Amount

6.0 million $1.2 billion

190.5 million $5.7 millbon

472thoutathd $653million

Tel, s 19 in the Appendi, sh- district date for int-ah- .

" bout the aeolical,on of the Earned income Cr.dht.-W

Trees ury Department Awards honored 36 Internal Revenue Service employees in

recognition of exceptional "Suggestions,

achievements, and other noteworthy

17

Presidential

Election

Campaign

Fund

During Fiscal Year 1976 a total of 21.1

million individual income tax returns had

designations for the the Presidential

Election Campaign Fund (PECF); this was

25.5 percent of the returns processed by

the Internal Revenue Service in that period,

The total amount designated in Fiscal Year

1976 was $33.5 million. In Fiscal Year

1975 there were 19.9 million individual tax

returns with PECF designations totaling

$31.7 million.

The cumulative amount credited to the

Presidential Election Campaign Fund since

the check-otf was initiated in 1972 is

$95.2 million.

lishments" during the Past year. Deputy

=Ommlpssioner William E. Williams (front row,

third from left) met with recipients after Treasury

ceremonies.
18

Mathematical

Verification

During the year, the IRS Checked the

mathematics on 83

'

0 million individual

returns. The IRS calculated the tax on 1

million returns, manually verified the tax On

2.6 million returns and computer verified

I

he accuracy of taxpayer's calculation

Olon

lax on 79.3 million returns. This verificati

of returns detected an increase of more

than 3 milliOn efrOrs over 1975. The

Service believes this increase is a result Of

the Earned Income Credit and the Personal

Exemption Credit features of the 1975 Tax

Reduction Act-new provisions that made

the law more complex and the forms MOre

difficult. As a result of computer

verification, 3.9 million taxpayers had

decreases in the tax liability shown on their

returns totaling $311 million, an average of

Individual IncomeTax Returns

Mathematically Verified By Computer

(InThousands)

$81 per return. These decreases resulted

in either a larger refund for the taxpayer or

a smaller tax due billing. On 3.1 million

returns, errors by taxpayers. increased their

I

ax liability by $492 Million, an average of

approximately $156 per return. The results

of this year's computer mathematical

verification program are shown in the

table below.

In addition to mathematical verification of

returns, the Service also used its

computers to check the estimated tax

credits claimed on individual returns. This

verification determined that taxpayers

underclaimed $195 million in estimated

credits and overclaimed credits by

$418 million.

Number verified by computer

N umber ofreturns on which ma-ematical errors

were detected

Percent ofreturns with mathematical errors

F~at ums with increase:

Number

Amount

Average amount (dollars)

Returns with decrease.

Number

Amount

Average amount (dollars)

1975

81,067

3,771

4.7

11976

79,312

7,001

8.8

2,014 3,144

$270,095 $491,916

$134.14 $156h47

1,757 3,857

$163,251 $310,682

$92.91 $80.56

Income

Sources

on

Magnetic Tape

Reporting

Requirements

for

Railroad

Retirement

During 1976, the IRS received more than

462 million information documents

fro

businesses and organizations requiredmto report payments of wages, interest, and

dividends. Nearly 217 million of these

documents were submitted on magnetic

tape in 1976 as a result of the Service's

program of actively encouraging all

organizations which have tape capability or

access to computers to report on tape. The

increase in the number of reporting en tities to 28,258 reflects a shifting by many

organizations from paper filing to magnetic

tape filing.

Information Documents

Reported on Magnetic Tape

Tax

Year

1966

1967

1968

1969

1970

1971

1972

1973

1974

1975

Documents Report!ng

(Thousands) Entities

26,248

36,492

47,686

591

1,048

2,426

58,951 2,963

68,300 4,637

91,449 8,504

115,008 12,758

144,533 13,128

185,554r 21,862r

216,756 28,258

r Revised

Treasury Decision 7396 was approved on

January 5, 1976. Employers filing Forms CT-1, Employers Quarterly Railroad

Retirement Tax Return, will no longer have to file the returns after each quarter of the

year. The new requirement reduces the filing of the return to once a year.

Requirements for periodic depositing of

taxes remain unchanged.

This reduction in the frequency of filing the

CT-1 return is beneficial to the employers

by reducing the cost of preparing the

returns. The Service will realize a similar

savings in the cost of processing the returns.

The first annual CT-1 for tax year 1976 is due February 28, 1977.

19

Delinquent

Taxes

and Compliance

In its mission to maintain the highest

degree of voluntary compliance with the

tax laws, the Service makes every

reasonable effort to secure delinquent

returns and to collect delinquent taxes.

These activities are constantly monitored

to ensure appropriate and uniform

application of the laws, and to protect the rights of taxpayers.

During 1976, the Service reduced both the

number of outstanding delinquent accounts

assigned to district offices and the dollar

value of those accounts. Compared to

1975, the number of delinquent accounts

cases assigned to district offices declined

by over 21 percent, while the total dollar

value of these accounts was reduced by

nearly 12 percent.

IRS782-Cori

Since nonpayment of business taxes

withheld from employees'wages continues

as the foremost delinquency problem

facing our collection activity, we have

developed several programs to deal with

those violations. The Delinquency

Preventi6n Program, identifies potential business delinquents at a time when the

situation can be reviewed and the causes

of the Problem corrected. The new Federal Tax Deposit System, which reduces

processing lime by more than half, is

presently implemented in several Service

Centers witp full implementation scheduled

before the end of calendar year 1976. The Trust Fund Compliance Program was

revisecitto allow institution of civil

measures as well as criminal prosecution

of chronic noncompliance cases, to

Provide uniform criteria for selection of

cases, and expand the number of those

cases which can be monitored.
20

Program

Accomplishments

In

1

976, the collection activity disposed of

over 2.7 million delinquent accounts

receivable, including

app

roximately

327,000 cases in which the taxpayer, when

notified of a delinquency. contacted the

IRS field offices to resolve the matter

("notice cases"). The remaining 2A million

delinquent accounts required field contact

by district employees~ Approximately 59

percent of these field contacts involved

business taxpayers.

Nearly $3.5 billion in delinquent taxes was

collected during the year, an increase of

approximately $700 million over 1975

District personnel also disposed of over 1.3

million failure to file investigations,

including 300,000 categorized as

returns compliance program leads. For

1976 approximately 785,000 delinquent

returns were secured involving nearly $540

million in additional taxes.

New Revenue Agents receive intensive

classroom and on-the~ob training in tax law,

research. report writing, audit techniques, fraud

discovery, and taxpayer relations. This

Most new Revenue Agents enter the IRS with a

bachelor's degree, including at least 24 credits

in accounting and related subjects. Many also

hold master's degrees in fiscal or public

administration. The IRS training provides specific

orientation in the Revenue Code and related tax

laws.

instruction prepares new agents for their

complete scope of responsibilities when they

reach assignments.

Collection

Initiatives

Repeater delinquents have always been a

primary concern of the Service, During

1976, 21 percent of delinquent individual

income taxpayers were "repeaters," while

the rate for business taxpayers was 55

percent. Because of the high business

repeater rate and the fact that these

taxpayers are required to hold "in trust"

the withheld taxes of their employees, the

Service continues to stress the importance

of bringing business "repeaters" into

voluntary compliance, primarily through the

Trust Fund Compliance Program. At the

beginning of 1976, there were 224,000

taxpayers with delinquent trust fund

accounts amounting to over $756 million.

Of these accounts, 2,800 had a balance

due of $25,000 or more. At the end of

1976, the number of taxpayers with

delinquent trust fund accounts had been

reduced to some 143,000 with an

outstanding balance of approximately $630

million. The number of delinquent trust fund

accounts over $25,000 also declined to

slightly over 2,300.

As early as the fall of 1974, the Service

began a review of collection policies and

procedures, This continuing reappraisal is

based on internal studies, as well as

recommendations from outside sources

such as congressional committees, public

interest groups, and the Administrative

Conference of the United States. By the

end of 1976, several new initiatives had

been considered, tested, and adopted. The

primary objective of the initiatives is to

ensure that collection matters are handled

in a fair, impartial manner.

Some of the more important changes

developed as a result of the initiatives are

as follows:

In an effort to streamline the collection

process, the Service has reduced the

quantity of financial information required

from most taxpayers involved in collection

21

proceedings. Several arrangements for

satisfaction of tax liabilities can now be

made by telephone or correspondence,

rather than requiring field or office

meetings. The increased use of post dated

checks and of payroll deductions have also

reduced the necessity for additional

contacts and should reduce the number of

defaulted agreements.

Notices sent by mail are being revised to

provide for clearer communications with

taxpayers. In addition to sending taxpayers

IRS Publication 586, The Coliection

Process, which presents the procedures

followed by the Service in collecting

income taxes and explains the taxpayer's

rights under these procedures. A similar

publication is being developed for

business taxpayers,

Taxpayers are now notified whenever a

Notice of Federal Tax Lien has been filed

against their property. Other procedures

have been instituted to ensure that these

liens are promptly and properly released

without taxpayers having to request

the release.

The other implemented program changes

include recognizing taxpayer differences,

such as, ability to pay, past delinquency

record, and the source of taxpayer's

income, as well as increasing managerial

involvement prior to initiation of

enforcement action, and protecting the

rights of third parties involved in

collection actions.
22

tax, penalties and interest resulting from direct enforcement Chapter 3

tho dollars)

Item

Additional tax, penalties, and interest assessed,

total

1975 1976

5,165,885r 5,092,524

From examination of tax returns, total 4,526,347 4,447,318

Income tax, total

Corporation

3,839,758 3,696,151

2,596,803 2,308,766

-Individual and fiduciary 1,242,955 1,387,385

Estate and gift tax 482,250 472,491

Employment tax (including withheld income tax) 131,082 191,140

Excise tax 73,257 87,536

From delinquent returns secured, total 639,538r 645,206

By district collection divisions 510,298r 539,904

By district audit divisions 129,240 105,302

Delinquent taxes collected, total Z819,752 3,492,496

rRev,sed.

Insuring Compliance

"/ question whether anii People ever paid a tax more honestly and accurately, W I q-sliO6 still more

whether any free paq,le enrimposed upon

themselves, thh)U~h their Chosen repressmar,,, taxes Sq Mck and fast".

Senator Justin S. Morrill

Chairman Subcommittee on Taxation 1865
24

Audit of

Returns

The IRS audits tax returns in order to help

ensure the highest possible degree of

voluntary compliance with the tax laws.

While audit activity is the primary method

that the IRS uses to encourage voluntary

compliance, every return is subject to

scrutiny by IRS employees and Computers.

Whena return is received in one of the 10

IRS service centers, it is first checked

manually for completeness and accuracy

and for certain obvious errors such as the

claiming ofa partial exemption or duplicate

deductions. Then the service center's

computers check the accuracy of the

taxpayer's arithmetic (see Mathematical

Verification. page 18) and pick up other

errors which may have esaped manual

detection, such as the failure to reduce

medical deductions by3 percent of

adjusted gross income.

Returns Selection

The primary method used by the IRS in

selecting returns for audits is

a computer

program of mathematical formulae

- the

Discriminant Function System (DIF)

- which

measures the probability of tax error in

each return. Returns identified by the DIF

system as having the highest error

potential are selected for audit. Since this

system was introduced in 1969, the IRS

has reduced the number of taxpayers

contacted whose audit would result in no

tax change (all taxes) from

a peak of 43

percent in 1968 toa historic low of 22

percent in 1976. The Service is continuing

its efforts to reduce the number of no

change examinations and repetitive audits

that result in no changes. In 1976,

procedures were implemented to dispense

with an examination in certain

circumstances when the taxpayer has been

audited for the same issue in either of two

prior years and the audit resulted in little or

no change in tax.

Returns may also be chosen for audit

under the Taxpayer Compliance

Measurement Program (TCMP),a

computerized system which makesa

random selection of returns within income

classes for research purposes, such as

updating DIF formulae on more current

taxpayer filing and reporting

characteristics. Audits conducted under

TCMP must be more intensive than most in

order to develop the information required

by TCMP.

The computer selection of returns is

complemented by manual selection in

various instances. For example, if the

IRS is auditing the return of

a

partnership (or of one business partner),

the returns of the partners (or additional

partners) may also be audited. Other

returns may be manually selected as

a

result of information from other

enforcement activities, news reports, or

criminal investigations. The IRS also

screens returns with adjusted gross

income above certain limits, and some

returns of taxpayers who submit claims

for refund or credit after filing their

returns.

Results of Audit Activity

The IRS audited 2,546,419 tax returns of all

types in 1976, 80,714 more than the

2,465,705 audited in 1975. The 1976 total

was more than in any year since 1968,

when 2,903,722 were examined. Of the

total returns audited in 1976, 141,2G4 were

examined in service Centers, compared to

112,550 last year. The remainder were

examined in district offices by revenue

agents, tax auditors, and employee plans

and exempt organizations (EPIEO)

specialists. Examinations conducted by

revenue agents and EP/EO specialists

under field audit techniques totaled

779,770 returns,

a decrease of 32,566

returns or4 percent from last year.

[Examinations of Employee Plans

decreased about 36,000 returns, (this

decrease is largely due to

a change in

methodology used in reporting referrals

from Audit Division), and Exempt

Organizations decreased about 4,000

returns with an increase of about 7,000

examinations in other tax areas.]

Number of Returns Examined (Thousands)

Fiscal years 1972 thru 1976

Type oil Return

Revenue Agents Grand Total

Income Tax Total

Individual

Fiduciary

Corporation

ExemptOrganizations

Employee Plans

(990P and 4848)

Estate and

G Ift Tax

Excise

& Employment

Tax Auditors

G rand Total

Income Tax Total

Individual

Fiduciary

Corporation

Exempt Organizations

Employee Plans

(990P and 4848)

Estate and Gift -fax

Excise and Employment

Service CenterGra

Income Tax -Individual

ExciseTax

Total Grand Total

Income Tax Total

Individual

Fiduciary

Corporation

Exempt Organlzations

Employee Plans

(990P and 4848)

Estate and Gift Tax

Excise and Employment

--------------- '1574 1`16ASad Data * Lose than 5oo

NA

257

136

18

NA

40

158

1972 1973 1974 1975 1976

593

424

2647

135

18

NA

35

1331 -5

122

49

167

688

411

2605

122

222

41

136

1,103 1,183--8

315

222

134

20

42

59

165

689

306 -5

134

19

42

49

133 -1 -

10

32

80

113

105

12

155

22

65

62

206

817

355

12

-153

42

21

65

50

156

1,419 1,640 1,625

1,073 1,143 ~,377 1,486

1,072 1,143 1,376 1,483821 -

12

780

327 -

18

167

17

30

so

171

1,s6l

1,560

53

141

1356

1,696 1.771 2_1P_q

9 Ast. 546

1,497 Z,0*4 1,963 _

2,197 2,255

T,336

1 404 1,762 1,443 2,022 5 18

168

17

30

61

230

1

25
Examinations conducted by tax auditors

under office audit Procedures numbered

1,625,445 returns, an increase of 86,277

returns or6 percent over last year. Audit

coverage of income, estate and gitt tax

returns increased to 2.59 percent

compared to 2.55 percent achieved in

1975.

The Service's examination program

resulted in $5.2 billion of additional tax and

penalties recommended, While

recommendations exceeded $5 billion for

the fourth straight year, the total was about

$156 million below last year.

During 1976, assessments totaled $4.4

billion, including $3.7 billion in assessed

tax and penalties and $717 million in

interest. In 1975, assessments amounted

to $4.5 billion, of which $3.8 billion

represented tax and penalties and $695

million represented interest.

Examiners are required to determinea

taxpayer's correct tax liability-no more,

no less. This means that examiners look for

indications that taxpayers have overstated,

as well as understated, their tax liability. In

1976, Service examinations disclosed

overassessments on 137,455 returns,

accounting for refunds of $290.5 million.

Service Center Programs

The IRS service center review program

began in 1972. It is generally limited to the

verification or resolution of issues which

can be satisfactorily handled by service

center personnel through correspondence

with the taxpayer. More than 1,882 000

returns were checked in service c~nters in

1976,

a 42 percent increase over 11375.

Most of these returns involved obviously

unallowable items, such as medical

expenses not reduced by the 1 percent and 3 percent limitations. Approximately

1,474,000 returns were corrected in

1976, compared to approximately 952,000

in 1975.

The service centers also conducted

correspondence examinations of returns

selected under district office criteria

involving issues such as charitable

contributions or interest payments, which

generally can be resolved through

correspondence with the taxpayer.A total

of 141,204 returns in this category were

examined during 1976, an increase of

nearly 25 percent over the 112,550

examined in 1975.

Computer Assisted Audits

The Service has an ongoing program to

use computers in audits of tax data in

automated accounting systems. Both

generalized computer programs and

specifically developed programs are used

to retrieve and analyze data essential to an

examination. These computer programs

permit an automated "eye-balling" of

massive data files with the printout of only

those items of possible audit interest. Both

taxpayers and the IRS save time and

expense since computer assisted audits

can be done ina fraction of the time

needed to do the same job manually.

Over 8,000 applications of these computer

audit techniques were performed in 1976,

double that of 1975. These are done by

computer audit specialists, experienced

revenue agents who have received

intensive training in computer

hardware, programming languages, and

audit techniques.

The Program Audit Library (PAL),a system

of generalized computer programs

developed by the Service and designed

specifically for tax audits, was expanded

in 1976 to include statistical sampling

techniques. PAL also includes programs

for data selection, stratification,

and summarization.

Recommended Additional Tax and Penalties (millions)

Fiscal years 1972 thru 1976

Type of Returns

1972

~2,~

761.3

-

16.3

1973

~,798.6 5,iil?.7

15.3 -

3,888.4 -4.8

3,955.4 4,790.0 -3,91 -5 3,693.4

Revenue Age ----- nta Grand Total 3,177.8

Income Tax Total

Individual

Fiduciary E lp.,ati.r,

Exempt Organizations

Employee Plans

(990P and 4848)

Estate and

G ift Tax

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

Excise& Employment

TaxAuditors GrandTotai

Income Tax-Tot al

Individual

Fiduciary

Corporation

Exempt Organizations

Employee Plans

(990p and 4848)

Estate and Gift Tax

Excise and Employm ant

So-Ice Cantor Grand TotalIncome Tax-individual

ExciseTax

Total Grand Total

--- -

Income Tax Total

Individual

Fiduciary

Corporation

Exempt Organizations

LmP)Oyee Plans

(990P and 4848)

Estate and Gift Tax

Excise andEmpjoym..t

'1074 NOW Dwa

658.4

-15.2

881.5 -

15.2

4,611.3

926.7

21.0

947.8

71.2 1,828.6 3,068. 8_3 888.1

4.3

NA

43Z2

_~33.1

235.4 -

222.3

221.9

13.2 -

NA

690.4 -

152.7

269.9

T48.6

--

248.1

.1

.3

6.8

6.3

2.931.9 2,660.0

4.8 32.5

.4

564.3

195.4

297.3 -273.6

F732

.2

.3

.4

611.2 -

287.6

355.5 -

327.0

Y25.6

.1

.3

13.3

1.1

-581.7 --

237.5

415.3

-380.6

il

.3

1.1

-

9.9

11.4

3,413.1 -

5,068.4 5,909.2

5

.310.5

2,834.8 4,203.9

18.4

T,828.9 -43 -

NA

439.0

139.4

15.4

T068.8 -13'2

164.1

14.4

_T4I-

T43.7

14Z9

.1

.8

15.2 -

19.5

126.3

225.6

.7 --

4,299.6

5J 542

1,395.2 1,553.1-

21.3

-

512.6

~1.3

2,933.0 2,660-7

32.5 13.3

.4 .4

577-5 625.6

~05-9 - 302.5

1974, -1975 197,6

1.1

~9_6 .9

257.8

27
28

29

Coordinated Examination Program

All large case taxpayers, (except financial

institutions and utilities) whose gross

assets exceed $250 million are included in

the Coordinated Examination Program.

Financial institutions and utilities are

included in the program it their gross

assets exceed $1 billion.

Because large case taxpayers have

complex accounting operations and tax

issues, the Service turned to the team

audit or coordinated examination concept

when examining the tax returns of these

taxpayers, This approach combines the

skills of the accountant-revenue agent with

those of economists. computer audit

specialists, international tax examiners

engineering agents, excise tax examiners,

employee plans examiners and

employment tax examiners.

At the end of FY 1976, there were 1240

large cases in this program which

averaged 2.7 open years per case. This is

the fourth consecutive year the average

open years in the large case program has

been less than 3.0 per case. .

During FY 1976. the IRS expanded its

practice of conducting industry-wide audi.ts

the contemporaneous examination of major

companies in

a given industry. Nine

industries are Currently being audited by

this approach, tour more than in 1975.

Tax Shelter Program

In 1974, the IRS established

a nationwide

tax shelter examination program

coordinated by the National office Due to

the multi-district involvement of promoters

and investors '

these examinations were

conducted under industrywide audit

concepts. This approach insures

a greater

degree of consistency and uniformity in the

Service's overall treatment of the tax

aspects of shelter programs.

Examination of tax shelters are conducted

by field personnel analyzing the entire

enterprise first to determine whether

participants, barring unexpected problems,

can reasonably be expected to earn

a

profit appropriate to the investment and

degree of risk involved. The business is

then studied for the possibility of improper

or excess allocation of deduction and also

to make certain that individual items

causing operating losses are properly

claimed deductions.

compute r-assisted audit techniques are

being used, when appropriate, to

assist in the examination of large

partnership tax shelters. These shelters

generate many related tax returns and

presenta major clerical problem to the

Service. To correct this, the Service has

developed computer programs to expedite

the manual processing work flow

in these examinations.

During 1976 the Service conducted

examination; of possible tax shelter

abuses by investors in the oil and gas, real

estate, farm operations, and motion picture

industries. The program will be expanded

in 1977 to include other widespread

abusive shelters.

Joint Committee Review

The Internal Revenue Code calls for the

reporting of all large income, estate and

gift tax refunds and credits to the Joint

Committee on Internal Revenue Taxation.

During 1976, 1,506 cases involving

overassessments of $1 billion were

reported to the Joint Committee, as

compared with 1,356 cases and $969

million in 1975.

During 1976, some changes were adopted

to permit more efficient handling of these

cases. Until this year, final decisions and

reports to the Joint Committee on these

cases had to be made in the National

Office, in the name of the Commissioner.

Now, the Regional Commissioners are

authorized to take these actions on cases

within their regional jurisdiction. In

addition, the Assistant Commissioner

(Compliance) now has authority to take

final action for the Commissioner on

matters formally presented by the Joint

Committee relating to reports submitted

under this provision of the Internal

Revenue Code.

Audit Information

Management System

The Audit Information Management System (AIMS) is a video terminal oriented

management information and case control

system replacing the current System for

Controlling Returns in inventory and Production (SCRIP). The new System is an expansion of the existing Integrated Data Retrieval System (IDRS) currently located in the IRS service centers.

This new System was successfully pilot

tested in 1976, and will be implemented

nationwide during 1977. AIMS will provide for more rapid responses to taxpayer

inquiries and faster assessment and refund action resulting in improved taxpayer relations. Also, the System will provide for

automated control and verification of

assessments from the point of origin in the district office and service center.

The perpetual inventory feature of the new

system provides prompt location of any

return in the Audit Division. This feature

combined with more timely produced

management reports will permit increased

efficiencies in staffing and better workload

management and control.

Technical Reference

Information System

In 1976, the Service began nationwide use of the Technical Reference Information

system (TRI). This system involves

computerized legal research. All or any

portion of court decisions, revenue rulings,

statutes or portions of the Internal Revenue Manual can be retrieved through TRI. IRS personnel are able to research issues more

quickly and thoroughly than by doing

traditional manual research, with resulting

monetary savings. The IRS is currently

leasing 15 computer terminals and plans to

installa number of additional terminals.

Computer Production of

Reports on Audit Changes

In 1976, the Service increased its use of automated report-writing equipment for the production of Form 1902-E, Report of

Individual Income Tax Audit-Changes, and

accompanying Form 3547, Explanation of Adjustments, through the acquisition of 40 report-writing machines. Located in local

district offices, the new equipment

replaced older, antiquaied equipment in

several districts, and provided

a facility for automated on-site preparation of audit change reports in many district offices

which previously did not have such

a

capability. The new equipment will improve

the ability of district offices to service the

increasing office audit workload and will Provide increased service to the public.

Also, the increased capacity of this

equipment enables the Service to greatly

enhance the present 1902-E programs by

incorporating additional schedules (income averaging, sick pay exclusion, retirement

income credit, etc.) into the system.
30

The

Appeals

Process

Administrative Appeals

The internal Revenue Service encourages

the resolution of tax disputes through an

administrative appeals system rather than

through litigation. Taxpayers who disagree

witha proposed change to their tax liability

are entitled to

a prompt, independent

review of their cases, The appeals system

is designed to minimize inconvenience,

expense, and delay to the taxpayer in

disposing of contested tax cases.

Within the system. there are two levels of

appeal: the district conference staff in the

audit division of the district director's

office, and the appellate division in the

regional commissioner's office. Each level

of appeal is independent of the other, and

each has different authority and

jurisdiction. Their common and principal

objective is the early disposition of

disputed cases, with

a fait and impartial

application of the law.

For the initial appeal conference,

a

taxpayer may choose either the district

conference staff or the regional appellate

staff. opportunities for such

a hearing are

offered at 58 district offices and 40

regional offices throughout the country.

Conferences are also arranged, as needed,

at other IRS locations by circuit-riding

conferees, ata place and time convenient

to the taxpayer.

Proceedings are informal in both of these

offices. Taxpayers may represent

themselves or be represented by an

attorney, accountant, or any other advisor

enrolled to practice before the IRS. If the

disputed tax liability, for each taxable year

involved in the dispute, is $2,500 or less,

the taxpayer may obtain

a district

conference and

a subsequent regional

conference without filing

a written protest.

At the conference taxpayers are given the

opportunity to present their views and

discuss the merits of the issues. If

agreement cannot be reached during the

district conference, the taxpayer is advised

of his further appeal rights and may then

requesta regional appellate office

conference.

Ina majority of cases, the taxpayers and

district or regional conferees reach

a

mutually acceptable basis for resolving

their lax disputes. Consequently. very few

cases go to trial. In the past 10 years, 97

percent of all disputed cases were closed

without trial. In 1976, the appeals function

disposed of 56,004 cases by agreement;

the Tax Court tried 1,407 cases; and the

United States District Courts and Court of

Claims tried 344 cases. Thus, in disputed

tax matters, the administrative appeals

system continues to serve the taxpayer

well

-

The system provides for an

expeditious, independent, and impartial

review of tax cases, and one measure of

its success is its ability to efficiently

resolve the great majority of tax disputes

without litigation.

Commissioner Alexander (L) presenting the

Commissioner's Award to Singleton Wolfe, Asst. Commissioner for Compliance. The Award cited

District Conference

District conference staffs consider

disputes involving factual questions,

regardless of size. They also consider

whether proposed actions by

a district

director's office, with respect to issues

disputed bya taxpayer, reflect the correct

interpretation of the Internal Revenue

Code, as clarified by the courts and by IRS Regulations and Revenue Rulings. in

addition, since April 1 1974, district

conference staffs hav6 had the authority to settle cases where the amount of tax in dispute was $2,500 or less, by taking into account the hazards of litigation-the

Possibility that the Service might lose the case if it were litigated due to factors such

as weight accorded to evidence, lack of clear precedents, or questions pertaining to how the law applies to a given, unusual set of facts. Previously, only appellate conferees had this settlement authority,

Mr. Wolfe for "his Outstanding abilities as an effective tax administrator and his high degree of integrity and Professionalism-,

which meant that many taxpayers had to take their case to the regional appellate

office in order to settle unclear issues.

Since receiving this settlement authority,

the percentage of agreed cases closed by

district conferOnce staffs has significantly increased. Where settlement authority

could be exercised, about 30 percent of

these caS6S have been settled on that

basis. The results have been favorable to

taxpayers in terms of time, convenience and expense, as well as to the IRS in terms of reducing the number of cases going to the regional appellate offices or to

the courts.

District conference staffs reached

agreement with the taxpayer in about 73 percent of the cases they considered

in 1976.

31
33

Appellate Division

Cases considered by the appellate division

cover a wide range of issues from the most

elementary to the most complex. They

involve additional taxes or claims for

refund ranging fro

m

small amounts to

millions of dollars, including individual and

corporation income tax, estate tax, gift tax,

excise tax, employment tax, and otters

in compromise.

Cases considered fall into two broad

categories: Nondocketed cases involve

cases in which the taxpayer is protesting a

proposed action by the district director

involving additional taxes, a refund

disallowance, or a rejection of an offer in

compromise. These cases made up about

57 percent of appellate's workload in 1976.

The second category of cases are known

as docketed, and these involve cases

where taxpayers have filed for a hearing

before the United States Tax Court.

In 1976, 69 percent of nonclocketed cases

and 73 percent of docketed cases closed

by the appellate division were closed by

agreement with the taxpayer.

Other Appeal options

it a tax dispute cannot be resolved at the

district or the regiona I level, the taxpayer is

advised of the remaining appeal rights. In

most cases, the taxpayer may file an

appeal with the United States Tax Court.

Except in unusual circumstances, the

timely filing of an appeal with the Tax Court

prevents the assessment and collection of

the tax until the Court has made its

decision. Even if an appeal is filed with the

Tax Court and the case is docketed for

trial, the case may be settled with the

regional appellate office anytime before the

trial begins.

When the disputed tax does not exceed

$1,500 in any taxable year in dispute, a

simplified procedure is available under the

Tax Court's small case rules. These rules

provide for informal hearings where

taxpayers may present their cases before a

special commissioner. A knowledge of

courtroom proceedings is not required,

since the objective is to provide an

inexpensive forum for the taxpayer.

Because of the nature of the proceedings

no provision for appeal of the court's

decision is provided.

it a taxpayer does not want to litigate the

case in the Tax Court, he or she may pay

the tax deficiency and file a claim for

refund within two years from Ina date of

payment. If the claim is denied by the IRS,

or it the IRS takes no action on the claim

within six months, the taxpayer may file

suit against the Government for refund in a

United State

s

District Court or the Court

of Claims

A taxpayer may appeal an adverse

decision of the Tax Court or District Court

to the United States Circuit Court of

Appeals having jurisdiction over his area.

Adverse decisions of the Court of Claims Or

the Circuit Courts of Appeals may be

appealed to the United States Supreme

Court, although the Supreme Court does

not accept all such appeals.

Tax Fraud

Investigations

The Intelligence Division is responsible for

the enforcement of the criminal provisions

of the tax laws. Special agents investigate

evasion of income, estate, gift and excise

taxes, failure to file returns, failure to remit

trust fund taxes (withheld income and

social security taxes), the filing of false

withholding exemption statements, false

claims for refunds, and the preparation of

false returns for others. When evidence of

tax evasion or tax fraud is identified, the

Intelligence Division investigates and

recommends prosecution when warranted.

Special projects are sometimes carried out

to determine the extent of noncompliance

in a given geographical area or

occupational field, if a pattern of

noncompliance is detected, or to increase

the coordination of investigations covering

an already identified area of

noncompliance. One successful project

that was completed this year involved an

extortion and kickback scheme that was

employed in the construction of a $700

million nuclear power plant. This project

resulted in 16 prosecution

recommendations and has generated tax

assessments in excess of $1 million. Other

recent and significant Intelligence

investigations have focused on tax evasion

by large corporations abuse of tax havens

in foreign countries, ~orruplion of public

officials through payoffs and kickbacksand preparation of fraudulent tax returns.

During 1976, the Intelligence Division

completed 8,797 investigations and

recommended prosecution of 3,147

taxpayers. Grand juries indicted or courts

filed information on 1,331 taxpayers.

Prosecution was successfully completed in

M93 cases. In 839 cases taxpayers

entered guilty pleas, 138 plead nolo

contendere, and in 216 cases, the

taxpayers were convicted after trial.

Acquittals and dismissals totaled 77 and

71, respectively. Of the 1,172 taxpayers

sentenced during 1976, 486 or 41.5

percent received jail sentences compared

with 40.3 percent last year.

Mrs. Elsie O'Connor, Tax Examiner, Fresno

(Calif.) Service Center, brought a number of

suspicious looking tax returns to the attention of

IRS Intelligence which uncovered a tax refund

scheme intended to defraud the U.S.

Government of over $743,748. The subsequent

investigation disclosed that 357 fraudulent tax

returns were filed with the Service Center, Based

on evidence provided by the IRS Intelligence

operation, the U.S. Attorney's office obtained a

34-count indictment against 14 persons on

charges of filing false claims, mail fraud, and

perjury,

Mrs, O'Connor, a deaf mute, received an IRS Special Acts Award and a congratulatory letter

from the President of the United States. Mrs,

O'Connor has worked for ove~ four years at the

Service wit Center, and was previously employed

h the Federal Bureau of Investigation (FBI) in

Washington, D.C.

Cases Pribsecuted

Tax frvd is not restricted to any

partic6 at occupational or social group but

reaches across a wide spectrum of

industries and occupations. The following

examples illustrate only a few successful

prosecutions resulting from the Service's

vigorous and balanced program of

investigating tax fraud.

An elaborate scheme was uncovered in

California whereby 15 individuals attempted

to obtain $743,000 in refunds by filing 360

fictitious returns. Twelve people were

convicted and received sentences ranging

from 30 days to six and one-half years

in jail.
34

Eleven individuals involved in the

grading, weighing and shipping of

commodities through the Part at New

Orleans entered guilty pleas to tax evasion

and received prison terms totaling 71

months. Additional civil tax and penalties

amounted to $338,000.

The first criminal tax prosecution against

a

major corporation, Where both the

corporation and its chief officers were

found guilty, Involved

a conspiracy to

evade the manufacturer's excise tax

liability ata Detroit based firm. The

additional excise taxes for the nine year

period coveted by the investigation totaled

$12.3 million. A Chicago man, who was

a former Chicago

Alderman and State of Illinois Senator, was

sentenced to 18 months in jail for filing

false income tax returns for the years

1971-1973. He failed to report monies

received by him for assuring the rezoning

of property in his Aldermanic Ward . A New Jersey businessman was sentence

to 18 months in jail and fined $35,000 for

willfully subscribing to fals

-

e corporate and

individual income tax returns. The

additional tax and penalties exceeded $1.5

million, making this the largest income tax

violation ever tried in

a New Jersey court.

As the result ofa net worth investigation,

a

Memphis osteopathic physician was found

guilty of evading over $83,000 in income

taxes and was sentenced to 12 months

in prison.

After entering

a plea of guilty, during the

second day of his trial for failure to file

Interest Equalization Tax returns,

a Maine

securities trader dealing in Canadian

securities received two concurrent six

month sentences. Additional tax and

penalties exceed $1

1 million.

Organized Crime and

Strike Force Activities

The IRS cooperates in the Federal

government's fight against organized crime

by participating in the Federal Organized

Crime and Strike Forces Program. Located

in 17 major cities, Strike Force units are

headed by attorneys from the Justice

Department. The objective of this program

is to coordinate the combined forces of

Federal law enforcement agencies against

the criminal element in our society. The

IRS is responsible for ensuring the income

from illegal activities is correctly reported

and taxed and for detecting criminal

violations of the tax laws. During 1976 the

IRS contributed 660 staff years of direct

investigative and examination time to the

Strike Force effort. A total of 130 organized crime members

and their associates were convicted or

pleaded guilty to tax charges during the

year and 721 prosecution cases were

pending at year end.

Since the inception of the organized crime

program in 1966, 669 organized crime

membars and associates have been

convicted or have pleaded guilty to various

tax charges.

The following are examples of Organized

Crime and Strike Force activitfes~

During 1976, probes were conducted in

many areas of illegal activities by the

various Strike Forces to identity

individuals who may have violated the

tax laws. These probes included anion

racketeering and corruption and the

investment of income from illegal

activities in legitimate businesses and

real estate developments. A convicted whiskey violator, abortionist,

counterfeiter and firearms violator in

Mississippi received

a two year prison

sentence and was fined $10,000 after

entering

a guilty plea to filing false

returns. Additional tax and penalties

exceeded $600,000.

35

A well-known international consultant in matters at taxation. law and finance, the author of several books on tax

avoidance schemes and an associate of

underworld figures was found guilty and

sentenced to three years in Federal Prison for aiding in the preparation of

false returns. This individual is presently a fugitive. A former Teamster's Union business agent, who was formerly a Slate

Commissioner at Labor, entered

a plea

of guilty for failure to file an income tax return and was tined $10,000. The investigation covered the years 1969 through 1972 with the recommended

civil tax and penalties exceeding

$80,000.

After seven months of trial,

a reputed

Michigan Mafia leader was found guilty of evading income taxes by tailing to

report almost

a quarter ofa million

dollars in taxable income during 1968

1969 and 1970. The net worth metho~ of proof was employed and traced this

individual's financial history for the fast

25 years.

1972 1973

Results of Criminal Action in Tax Fraud Cases 1972-1976

Action

Pleaofguilty

nolocontandere

Convicted after trial

Acquitted

NOI-P(Ossed ordismissed

Totaldisposals

Indictments& Informations

733

113

40

151

High Level

Narcotics Financiers

As part Of its Special Enforcement

Program, the Service continued to identify and investigate significant tax violations by

middle and upper echelon narcotics

financiers and traffickers.

During 1976, the IRS completed 326

criminal tax investigations, obtained 56

indictments and achieved 51 convictions of

financiers and traffickers.

The following are examples of the results

of IRS investigations of high level narcotics financiers and traffickers: A major narcotics dealer and gambler in

the Washington,D.C. area was sentenced to a total of five years in prison. A major narcotics trafficker and owner of

an import company was sentenced to nine

months in prison for income tax evasion. A New York City narcotics trafficker received a 24 month prison term.

Number of Defendants

1974 1975 1976

914 4,062 1,046 977

190 191

55, 97

112 115

1,037 1,271

1,085 1,186

173 216

83 77

168 71

1,46S 1,470 1,341

1,441 1,495 1,331

11
Restricting Access to Tax Returns

Fiscal year 1976 saw the disclosure

activities again subject to continual

concern, study and oversight.

Congressional hearings were conducted on

proposed legislation dealing with tax return

and tax information disclosures. In

addition, the Privacy Commission, the

Administrative Conference of the United

States, and the Senate Select Committee

to Study Governmental Operations

with Respect to intelligence

Gathering made recommendations to

Congress for legislative actions concerning

disclosure matters.

The Disclosure Operations Division was

established in the National Office to

provide program guidance to the newly

created Disclosure Officer positions in all

IRS field offices. Both actions reflect the

Service's concern over the indiv(dual's

right of privacy and its responsibility to

respond expeditiously to request for

information and documents under the

disclosure laws and regulations. Field

officials now act on certain requests for

testimony of Service employee~ and make

initial determinations concerning Freedom

of Information requests as well as process

requests for information under the Privacy

Act of 1974.

The Service's disclosure activities are

oriented to limit access to tax information,

assuring that only those persons entitled by

law are properly permitted to inspect such

data, and to require that those who have

access to such information maintain

safeguards for the protection of that

information. On the other hand, the Service

strives to make available as much nonprotected information and documents

under the Freedom of Information Act and

the Privacy Act of 1974 as possible.

Disclosure Officer Positions

In response to new legislation concerning

Privacy and Freedom of Information, the

IRS has decentralized some responsibilities

for administration of disclosure, privacy,

and FOI to its field offices. To accomplish

this, Disclosure Officer positions have been

established in IRS regions, districts,

service centers, the Office of International

Operations, the Assistant Commissioner

(Inspection), and the IRS Data Center.

Trained personnel occupying these

positions are now able to handle most

requests of these types locally.

Chapter4

Technical Activities

"I al)Oligize fOr the ineQuities in the Practical

abdications Of the tax. but it

-should wait before collecting a tax to ad#jst the taxes upon each man in exact PrOPOrtion with "ety Other

any tak at bt-. we Mail hemf cottect

President Abraham Lin-in

Address 10 the 1641h Ohio Regiment 1864
38

39

Tax Rulings

and

Technical

Advice

The Service's tax ruling program consists

of letter rulings and published Revenue

Rulings. In addition, technical advice is

provided on difficult issues raised in audits.

A letter ruling is a written statement issued

to a taxpayer by the National Office that

interprets and applies the tax laws to a

specific set of facts. A ruling on the tax

effects of a proposed transaction permits

the taxpayer to structure the transaction to

comply with the tax laws, thus resolving

issues in advance and avoiding future

controversy. Letter rulings are not

precedents and may not be relied upon by

other taxpayers.

Technical advice is counsel or guidance as

to the interpretation and proper application

of the tax laws to a specific set of facts. 11

is furnished by the National Office at the

request of a district office in connection

with the audit of a taxpayer's return or

claim for refund or credit. Frequently, the

district director's request is made in

response to the suggestion of the taxpayer

that technical advice be sought because

the taxpayer believes the issue is

particularly complex.

A Revenue Ruling is an interpretation of

the tax laws issued by the National Office

and published in the Internal Revenue

Bulletin for the information and guidelines

of taxpayers, practitioners and IRS

personnel. Most Revenue Rulings are

based an letter rulings or technical advice

which have the potential of setting

precedents or have such broad

applicability that general guidance should

be offered to people in similar situations.

Test Program for

Processing Ruling Requests

On July 1, 1974, the Service initiated a test

program in the Reorganization and Excise

Tax Branches, Office of the Assistant

Commissioner (Technical) to change the

processing of ruling requests. Under the

lest program, a representative of the

Branch would contact, within seven

workdays after receipt of the request, the

taxpayer or the taxpayer's representative

to discuss informally the procedural

and substantive issues involved in the

ruling request.

The test program proved to be feasible in

the two branches and was very favorably

received by taxpayers, taxpayer

representatives, and the American Bar

Requests ForTax Rulings And Technical Advice (Closings) 1976

Subject

Total

Administrative Provisions

Changes In Accounting Methods

Changes in Accounting Periods

Earnings and Profits Determinations

Employment and Self-Employment

Taxes

Engineering Questions

Estate and Gift Taxes

Excise Taxes

Individual Income Tax Matters

Corporation Tax Matters

Taxpayers' Field

Total Requests Requests

26,812 26,080 732

103 87

6,182 6,182

10,960

1,158

626

237

635

223

10,960

1,158

527

180

525

138

2,610 2,495

4,078 3,828

16

99

57

110

85

115

250

Association. Due to the success of the program, it was expanded on July I

I to include (with only a few exceptionsI

)

975,

ruling requests received by all the ruling branches in Technical. Under this expanded test program the la

-

Payer or the

workdays

representative was coniacled within fifteen after receipt Of the ruling request to discuss the Procedural and substantive issues involved In the ruling request. On July

Rev.

19, 1976, the Service announced in Proc. 76-29 that the lest been Program had adopted as a

fifteen-day permanent change. The rule is now an ongoing of part Technical's procedures for handling ruling requests,

Ruling Highlights

Employment Tax

During the year the Service received a great number of requests religious for rulings in the area, particularly from newly organized religious denomination

Coming that are into existence acioss In S Also, nume e country. rous requests were received from taxpayers in a variety of industries seeking a definition of their employment tax Status, i e., employee vs independent contractor, Others Seeking rulings concerning self"Ployment status included insurance agents. vacuum fishermen, cleaner salesmen, and market research survey interviewers.

Wagering Taxes

Responsibility for administering the civil aspects

was

of the Federal Wagering Tax laws returned

Order to the Service by Treasury 221-3, Revision 1. effective 21, February 1976. The Wage, Excise and Administrative Provisions Branch of Individual Tax Division is responsible for interpretation of the Wagering Tax laws. The

aspects

responsibility for enforcing the criminal of the Wagering Tax laws, including the forfeiture provisions, remains with the Bureau of Alcohol, Tobacco, and Firearms,

Creditability of Foreign Taxes by Oil Producing Corporations

One issue actively considered Year was during the the

received question of whether amounts by foreign governments from the production Of mineral resources may be treated as creditable foreign taxes for U.S. purposes by domestic corporations. Three significant Fiscal Year

news releases were issued in 1976 which Pertain to this issue.

In IR 1591, the -Service announced that it had taken the Position that the share of oil production retained by a foreign government under a Production agreement sharing is in substance a royalty in its entirely, and is not eligible for the foreign tax credit.

Subsequently, the Service IR announced in 1608, Rev, RUI. 76-215, that amounts received by art Indonesian entity government under a production sharing agreement are not income taxes for Purposes of sections 901(b), 164(a) 903 and (3) of the Code. This Position was applied Prospectively,

The last release, IR 1638, specifies the circumstances under which a foreign tax credit will be allowed when a levy is imposed by a foreign

owns minerals government which extracted taxpayers. by United States

to be One

The Service expects this issue of continuing concern in the upcoming year.
41

multi-Corporation

Reorganizations

The publication of Rev. Rul. 75-561, 1975-2

-185.1969-1 C.B. 129, revoking Rev. Rul. 69

C.B. loa, marked a major change in

Service position with respect to whether

the merger of two or more commonly

owned operating corporations could quality

as reorganizations within the meaning of

section 368(a) (1) (F) of the Code. The

earlier position contained in Rev. Rul.

69.185 was that the Service would not

follow several court decisions which held

that a transaction resulting in the

combination

of

two or more operating

corporations constituted an "I"'

reorganization. In Rev. Rul, 75-561, this

position was revoked and the Service

announced it

would now follow those

cases, as well as other court cases, which

had held that a merger of a wholly owned

subsidiary corporation into its parent which

qualified as a liquidation under section 332

of the Code (to which section 334(b) (2)

does not apply) could also quality as a

reorganization under section 368(a) (1) (F).

Revenue Rulings and Revenue

Procedures Published in 1976

Type

Administrative

-

Employment Taxes

Estate and Gift Taxes

ExciseTaxes

Number

16

36

48

6B

70

Exempt Organizations

IncomeTaxes

Employee Plan s

Tax Conventions

Total

349

17

6

610

Accounting Methods Rulings

During

FY

1976, receipts increased 14

percent over FY 1975 in requests for

r

ul

ings regarding accounting methods. The

increase occurred principally in two areas.

First, a significant portion of this increase

was attributable to the large number of

requests by manufacturers to change to

the full absorption method for.inventory

valuation. This activity was primarily a

result of the promulgation in 1973 of

section 1.471-11 of the Income Tax

Regulations which provided a transition

period for ~anutacturers to change

to the full absorption method for

inventory valuation,

Second, many taxpayers requested

permission to readopt the last-in first-out

(LIFO) method of inventorying their goods,

as well as many requests for changes from

taxpayers already on the LIFO method. The

LIFO method softens the impact of

inflationary trends on prices paid for goods

and, in effect, reduces or defers taxpayers

current profits and taxes. Requests for

method changes in the LIFO area are

expected to increase until the present

inflationary spiral levels off of reverses.

Internal

Revenue

Bulletin

The weekly Internal Revenue Bulletin is the

authoritative publication of the

Commissioner for announcing official

rulings and procedures of the Service and

for publishing Treasury Decisions

Executive Orders, tax convention;,

legislation, court decisions, and other items

of general interest. Bulletin contents of a

permanent nature are consolidated semiannually into Cumulative Bulletins. Copies

of the weekly and semiannual issues are

distributed within the Service and may be

purchased by the public from the

Superintendent of Documents, U.S.

Government Printing Office, Washington,

D.C. 20402, on a single copy or

subscription basis.

During 1976, the Bulletin included 559

Revenue Rulings, 51 Revenue Procedures,

16 Public Laws relating to Internal Revenue

matters and 13 committee reports, 2

Executive Orders, 65 Treasury Decisions

containing new or amended regulations, 14

Delegation Orders, 3 Treasury Department

Orders, 14 Notices of Suspension and

Disbarment from Practice before the

Service, 242 announcements of general

interest and 7 court decisions,

The Bulletin Index-Digest System, revised

as of December 31, 1974, provides a rapid

and comprehensible means of researching

material published in the Internal Revenue

'Bulletin after 1952. The major part of the

System consists of digests of Bulletin items

arranged under headings that facilitate a

topical approach to a search for items on a

specific issue. With the aid of finding lists,

the researcher can locate items by Code

section or number.

Dividend Reinvestment Ruling

Rev. Rul. 76-53, 1976-8 I.R.B. 5, marked

the publication of one of the most widely

publicized rulings issued in fiscal year 1976

affecting several Dividend Reinvestment

Plans devised by some of the country's

largest corporations. The ruling held that

the operation of such plans, whereby the

corporations' shareholders could elect to

receive common stock at a bargain price in

lieu of the cash dividend to which they

would otherwise be entitled, results in a

taxable dividend equal to the fair market

value of the stock actually received rather

than merely a dividend in an amount equal

to the cash they could have received.
I

Chapter 5

Employee Plans and

Exempt Organizations

..Under the Interri Revenue Act of March 3. 1791,

secretary of

the

reas,ry Alexander Hamilton

established an internal revenue organization which has

been ~daf)ted With little change down to the present "me - ~ "

Taxation in the United States,

Randolph E. Paul

Little, Brown & Co., 1954

ft
I

44

Emp= Plan

Exempt

Organizations

Employee

Plans'

The office of Employee Plans and Exempt

0

rganizations (EPIEO) administers the

regulatory responsibilities assigned to the

Service concerning employee benefit plans

as well as tax exempt organizations. In the

National Office, the structure consists of

Employee Plans, Exempt Organizations,

and Actuarial Divisions. EPIEO field staff

are located primarily in 7 regional offices

and 19 key districts. and local service is

provided in numerous other offices.

The Employee Plans activity ensures that

the Employee Retirement Income Security

Act of 1974 (ERISA) is administered in

accordance with the law. Major emphasis

has been placed on developing those

regulations most urgently needed by

taxpayers.

The Special Reliance Procedure and ERISA

Guidelines issued in November of 1975

provided that, for employee plans which

comply with the procedure, the ERISA

Guidelines will be treated as fixed for a

certain period so that they can be relied

upon for drafting employee plans and

amendments without regard to changes in

the ERISA Guidelines during such period. A

new procedure was established whereby

law firms may obtain approval from a

District Director that the form of their

pattern plan satisfies the qualification

requirements of the Code.

The IRS has continued to coordinate

implementation of ERISA with the

Department of Labor (DOL) and the

Pension Benefit Guaranty Corporation

(PBGC) in order to issue regulations,

procedures and rulings that are compatible

with those issued by Such other agencies

and to reduce duplication of reporting by

taxpayers.

The Employee Plans Master File (EPMF) is

being redesigned to provide for the

processing of applications used for plan

qu

alification determinations and the new

Form 5500 Series returns. The revised

EPMF is expected to be operational in

July 1977.

In January 1976 a case inventory control

and management information reports

system was implemented with computer

terminals in all key districts. It has proved

to be an effective system for controlling

applications for approval of plans and

plan amendments.

Exempt

Organizations

During 1976, the Service received 44,377

applications and reappfications from

organizations seeking a determination of

their tax exempt status or seeking a

determination of the effect of

organizational or operational change on

their status. The Service issued 43,668

determinations and ruling letters. In

addition, 309 technical advice memoranda

were issued. The Service devoted an

average of 530 field Professional positions

to the examination of 16,635 exempt

organization returns and to other exempt

organization activities. Also, 5 regulations,

70 revenue rulings and revenue

procedures, 4 delegation orders, 12 forms,

9 news releases and 3 publications were

issued in 1976. Question and answer

sheets were also prepared for taxpayer

service use on exempt organizations.

A Taxpayer Compliance Measurement

Program (TCMP) covering the examination

of private foundations, public charities and

social welfare organizations was initiated in

1975. The first phase of the program was

completed April 30, 1976; the second

Phase continues until December 31, 1976.

The program is designed to identify

Patterns and characteristics of compliance

and non-compliance of the exempt

organizations being studied.

The number of active entities recorded on

the Exempt Organizations Master File

(EOMF) increased from 692,000 in 1975 to

756,000 in 1976.

45

Exempt Organizations has revised its

management reporting systems to

maximize cost effectiveness, The revisions

include the utilization of computer

technology to identify, select, and control

examination inventories; to control

applications for exemption; and to provide

to management and other interested

parties information essential to carry out

the mission of Exempt Organizations.

Exempt Organizations is participating in

testing the feasibility of decentralizing the

processing of Exempt Organization returns.

All processing is currently done by the

Philadelphia Service Center. The test

involves processing the returns at the

Cincinnati Service Center that would be

filed there if a decentralized system were

in use.

A revenue procedure concerning guidelines

and record-keeping requirements for

private schools was published. Extensive

changes had been made to the revenue

procedure in order to reflect public

comments received.

Five revenue rulings were published

concerning the treatment of exempt

organization income from the rental of

display space to exhibitors at convention

trade shows.

Final regulations were published on

December 12, 1975, regarding the

computation of unrelated business tax on

exempt organizations from the sale of

advertising in periodicals,

On February 17, 1

'

976, final regulations

were published providing the definition of

medical research organizations for

purposes of foundation status

determinations and limits on deductibility of

charitable contributions.
46

Public hearings were held June 7, 1976, to

consider the proposed regulation defining

an "integrated auxiliary ofa church." This

definition is critical in determining whether a church-related organization is required to

file an annual information return. The

Service is reconsidering the proposed

definition. Under the Commissioner's

discretionary authority, church-related

organizations covered by

a group ruling

issued toa parent church were excused

from filing

a 1975 information return.

During 1976, 38 regulations, 17 revenue

rulings and procedures,

6 delegation

orders, 25 forms, 19 news releases, 1

publication, and 27 technical information

releases including questions and answers

on plans, mergers and consolidations,

Employee Stock Ownership Plans (ESOPs),

the Special Reliance Procedure, and the

ERISA Guidelines were issued in the

employee plans area. In addition, the

National Office issued 5,446 opinion letters

on r~aster 'and prototype plans.

in 1976, the Service devoted an average of

790 field professional positions to carrying

out its regulatory responsibility in the

employee benetit plans area.

This responsibility is met by issuing

advance determination letters regarding

the qualification of pension, profit- sharing

and other employee benefit plans and by

conducting an examination program to

determine whether plans continue to

quality in operation and to verify the

appropriateness of deductions for plan

contributions. The number of determination

letters issued with respect to corporate

and self-employed plans during 1976 was

47,313,a decrease of 33.2 percent from

1975. Most of the decrease is attributed to

the passage of ERISA and the fact that the

IRS was in the process of developing

regulations under the new law.

Actuarial Matters

in 1976, the Service devoted 19 average

positions to preparing actuarial

determinations, interpreting and clarifying

provisions of ERISA and regulations issued

thereunder, and serving on joint

committees and task forces with the Labor

Department and with the Pension Benefit

Guaranty Corporation.

In addition, the Service contributed

technical and administrative assistance to

the Joint Board for the Enrollment of

Actuaries, established by ERISA and under

the joint direction of the Department of the

Treasury and the Department of Labor, in

the screening and processing of over 4,000

applications for enrollment. By June 30,

1976, almost 2,400 applicants had

been enrolled.

Requests forTax Rulings and

Technical Advice (Closings), 1976

Tax. Field

Re. ReSubject Total quest quest

Total 12,955 12,266 689

Actuarial Matters 1,749 1,700 49

Exempt

Organizations 3,791 3,482 309

EmployeePlans 7,415 7,084 331

Chapter

6

International Programs

.. Your Scheme yields no revenue; it Yields nothing but discontent. disorder, disobedience. and such is the state OfAmerica, that after wading up 10 Your eyes in blood, You 00uld only end just where you begun; that is, to tax where no rewnue is to be found'%

Edmond Burke

Speech on American Taxation 1774

I

I
I

48

Tax

Administration

Abroad

The Service maintainsa system of

permanent foreign posts to help coordinate

its domestic and foreign tax program.

Revenue Service Representatives (RSRs) at

these stations are involved in compliance

and taxpayer assistance activities and

maintain cooperative contacts with foreign

tax agencies. Foreign operations of the IRS

are the responsibility of the Office of

international Operations (010)

Since 1946, when 010 established an

office in Paris, the number of fore ign

posts

staffed by Revenue Service

Representatives (RSRs) has increased to

14. At present, posts in Bonn, London,

Paris, and Rome cover Western Europe,

and North Africa. Those in Mexico City,

Caracas, and Sao Paulo are responsible for

Mexico, Central America, and South

America, while Canada is serviced from

Ottawa. Offices in Tokyo, Manila, Kuala

Lumpur, and.Canberra administer 010

activities in Japan, Southeast Asia,

Australia, and New Zealand.A post in

Tehran covers the Middle East and one in

Johannesburg services Africa south of

the Sahara.

These foreign posts providea vita( tax

administration link with more than two

million Americans living abroad.-(n 1976,

the RSRs continued their support of the

international aspects of the compliance

and enforcement functions of the Service.

This included the audit of tax returns,

collection of delinquent accounts,

intelligence investigations, year-round

taxpayer assistance, and overseas

collateral investigations for district offices

in the United States.

The RSRs; also maintaina broad network of

personal contacts with foreign tax

authorities and other foreign government

officials, the U.S. Department of State and

other agencies, as well as the American

communities abroad. These cooperative

contacts area key element in overseas

compliance activities. In addition, the RSRs

act asa liaison with foreign competent

authorities in tax treaty matters and, on

occasion, are called upon to represent the

U.S. competent authority in conferences

with foreign tax officials involving

international tax issues.

During 1976, the RSRs met in Washington,

D.C., to review overseas activities and

receive instruction ona wide range of

technical and administrative developments.

These meetings, held at periodic intervals,

generate continuing improvement in

overseas operations.

The 010's twenty-third consecutive

Overseas Taxpayer Assistance Program

was conducted in 1976, during the

extended January-June overseas filing

season. Twenty-one trained tax assistors

were detailed abroad in 59 countries and

provided information and assistance in 129

cities on an individual walk-in basis, in

group seminars, over the telephone, and

by correspondence. With help provided

by RSRs, and other IRS personnel,

approximately 124,000 taxpayers received

direct assistance abroad during 1976.

Several hundred U.S. Armed Forces

personnel also received IRS tax instruction

at overseas bases. They, in turn, helped

thousands of Armed Services members

prepare their own tax returns.

Revenue Service Representatives (RSRs) 14 foreign from

Officials Posts Met With IRS National Office for a review of the increased responsibilities assigned t 0 -1e Office of International

administrationOperations (0(0) covering

U S. tax abroad Pictured (L to R) are: (first row) Albert Gi~oux Caracas,

William

McCarter,

Director, Rome JOsep'h

G Mcdowan, 010; D~nafd C. Alexander

Comm's

Joner of Internal Revenue -j hn Hanna. Kuala Lumpur; Ronald Shai,er,0 Me its;

Foreign LangUage Training f6rthe 010

The 010 continues to Strengthen the

language Capability Of its overseas Staff th rough intensive

training Courses in foreign languages.

Prior to RSRS entering assignments

overseas, they are required to receive broad instruction in the language of the host Country, During their four of duty, this skill can be improved through language training offered by the State Department. Revenue agents, tax auditors, revenue officers, and taxpayer service representatives, temporarily detailed overseas, also receive language training. To meet their needs, the 010 has established, at National Office headquarters, a language laboratory which presently offers basic conversation Courses in French,

German, and Spanish.

In addition to improving the language ability of its staff, the 010 is making every effort to employ, whenever Possible, revenue agent, revenue officer, and tax auditor trainees with a dual language capability.

(second row) George Barnard, Mexico City; Richard Reynolds. Ottawa; Ervin Skipp Sao Paulo:

Hoffman, Marilyn Dearsman TehranM lj?'n

Chief, Johannesburg, Wayne 6hrisitle will. Forei gn Programs, 010. (third row~

Canberra: I ism VOYzey. London; James Barnett Daniel Henry, Paris; Roman Klimkiewicz, Tokyo; Ludwig G. Kuttner. Assistant Director, 010; William Gottlieb, Bonn.

Compliance Overseas The 010's audit activity takes place primarily within the United States. This activity focuses on securing compliance with Federal tax laws from resident and visiting aliens, and foreign corporations conducting

Personnel business in the United States. of the 010, at National office, also examine thousands of tax returns filed by Americans living abroad.

The more cOmPV

lex tax return examinations continue to be conducted at the foreign country site of origin. and during 1976 the number of these audits increased over previous years, Until 1972, these audits were generally conducted by foreign post personnel. Since then, revenue agents and tax auditors are assigned to the 010 on detail from stateside duty for short overseas tours. During these tours, the .temporarily assigned alldif per onnel travel through foreign posts Performing audits under the supervision of the RSRs, This arrangement has greatly increased the number of overseas audits, and is an important factor in en ging an increase in voluntary IcOurpaijance abroad.

49
I

50

During the past year, the Service gave

increased attention to the proper tax

reporting of bribes, illegal political

contributions, and other illicit fiscal

activities. In many cases, such payments

have involved arrangements between

foreign nationals and American companies.

These situations have enlarged the scope

of assistance that the 010 normally

provides to the IRS stateside district

'S.

At

the request of a stateside district, the 010

will examine the accounts of a foreicgn

subsidiary of a United States corporation to

determine whether they properly account

for all income and deductions which may

have U.S. tax consequences. These 010

support audits also make a positive effort

to determine whether American foreign

subsidiary corporations are serving as

conduits for bribes, prohibited

contributions, or other illicit activities.

Although most IRS delinquent tax

collections occur within the United States

or its possessions, an increasing number

are made in foreign countries either by the

IRS personnel on temporary detail or by

the permanent RSRs. This collection

activity is generated by an increase in

delinquent accounts abroad, with dollar

amount per account averages more than

twice the amount of similar domestic

accounts. During 1976, the 010 continued -

an effective overseas collection program,

with special attention to collections in the

Dominion of Canada. Currently, the 010

plans to expand the collection program

during 1977. Revenue officers, on

temporary detail, are scheduled to pro vide

support to RSRs at posts in Western

Europe, the Far East, Central and South

America, and Canada.

Reorganization of the 010

The 010 was reorganized, during the past

year, to properly reflect its increased

responsibilities in the international area.

The reorganization augmented the

traditional 010 Audit and Collection

activities with those of intelligence, Tax

Treaty and Technical Services, Foreign

Programs, and Taxpayer Service. The new

functional alignments emphasize the 010's

expanded overseas compliance and

taxpayer service programs.

Tax Treaties and the

Competent Authority

The numerous tax treaties with other

countries are designed to eliminate double

taxation, remove tax barriers to trade and

investment, and help curb tax avoidance.

The United States now has income tax

treaties with 37 countries and estate tax

treaties with 13 countries. These include

income tax treaties with the Soviet Union,

Poland, Romania and Iceland, which

became effective during the past year upon

exchange of instruments of ratification. A

new income tax treaty to replace the

current treaty with the United Kingdom was

signed in December, 1975 and awaits

ratification by both the U.S. Senate and the

British House of Commons.

The Assistant Commissioner (Compliance)

is the designated U.S. Competent Authority

in administering tax treaties. As such, he is

responsible for negotiating agreements

with foreign competent authorities to

provide relief from the double taxation

which results when both the United States

and another country tax the same

income of a taxpayer without an

offsetting credit.

I

Technical

Assistance

to Foreign

Countries

The number of taxpayer requests for Competent authority assistance and the number of cases under negotiation reached a new high in 1976, representing a 40 percent increase over the prior four years. The competent authority continues to resolve these cases with a high degree

.

f success. Adjustments to taxpayer income under U.S.-foreign competent authority agreements to provide

more relief have totalled

Revenue

than $131 Million since issuance of a

Procedure in 1970 to cover taxpayer requests for competent authority assistance. Competent authority cases currently in inventory

with involve tax treaties Australia, Belgium, Canada, Denmark, Finland, France, Italy, Japan, Luxembourg, the Netherlands, Norway, South Africa, Sweden, Switzerland, the United Kingdom and the, Federal Republic of Germany.

In 1976 meetings were held with tax

officials from several treaty countries for the purpose of improving the administration of the treaties involved. As a result of these and earlier conferences' working arrangements have been reac~ed for more effective exchanges of information and for resolution Of recurring problems which arise from interaction of U.S. tax and foreign laws. Such dialogues will continue in the future with the aim Of Concluding further reciprocal arrangements with treaty partners.

The Tax Administration Advisory Services Division

provides reimbursable technical advisory assistance in tax administration to requesting foreign governments in cooperation with the Department of State and the Agency for International

Development, Continuing the program established in 1963 the Service Provided onsite technical as~~Islance during 1976 to 7 countries - Bolivia, El Salvador, Guatemala, Liberia, Paraguay Trinidad and Tobago, and Uruguay. In addiiion, short- term mobil instructor teams conducted audit

Republic

techniques training in Liberia and the of China and ADP systems design training in'UruguaY. The training was tailored to the needs of each country at low unit cost. A broad tax administration survey was conducted for the Government Of Sierre Leone at the latter's request.

The Internal Revenue Service was host to 313 tax officials from 66 countries. In the years since 1963, over 4,200 tax officials from 123 countries have Participated in study-observation Programs. These visits give the participants the Opportunity to see actual work processes and operations in var Ous IRS offices and divisions nationwide. and frequently Provide the motivating factor in instituting change in the visitor's own tax administration.

In March 1976, a seven week Middle Management Seminar in Tax Administration brought together 21 participants from nine countries, demonstrating once again that Peoples of diverse cultures can work together with mutual goodwill. The countries involved were: Barbados, Egypt, Indonesia, Iraq, Japan, Nepal, Nigeria, Republic of China, and Trinidad and Tobago.

The Commissioner of )nlernal Revenue completed his term as third councilor for the Inter-American Center of Tax Administrators. CIAT, as the Center is know, is this hemisphere's multinational

organization for promoling better tax administration among its 26 member countries.

CIAT The Commissioner attended the Executive Council meeting in El Salvador in February, and, accompanied by the Director, Tax Administration Advisory Services

CIAT's

Division, represented the U.S. at 10th General Assembly held in El Salvador in May. A member bf the Audit Division staff represented the IRS at CIAT's 15th Technical Seminar held in Haiti in January 1976.

,

In March, the Service h6sted a CIAT sponsored, fwo-day meeting of

representatives from Brazil, Canada, Mexico, and Venezuela to discuss ways tax administrators might deal more effectively with multinational corporations.

51

I
53

Mr. Edison Gnazzo, Technical Director, InterAmerican Center for Tax Administrators (CIAT),

discusses the responsibilities involved in the

collection of tax information relative to

I -

multinational corporations with the CIAT Work

Group, while Commissioner Donald C. Alexander

listens attentively. Mr. Gnazzo represents the

Republic of Panama.

A pause was requested during the CIAT Work

Group tax discussions on multinational

corporations for Mr. Alejandro Rodriguez,

National Treasury Administrator, Republic of

Venezuela. to take notes. Other CIAT Work

Participating in the CIAT Work Group sessions Campbell, Asst. Director on Tax Policy, and Mrs.

concerning the gathering of tax information on

James

L. Gourlay, Director of Audit, Dominion of

multinational corporations are; (L to R) Mr. Canada; Mr. Antonio Augusto de Mesquite Nero

~ergio Garcia, National Coordinator of Certified Coordinator of National Tax Systems, Republic ~f

-I...... . " .1-- KI, Pl-ril Brazil.

Group participants are~ (L to R) Mr. Juan

Roomer, Chief, Tax Administration, Republic of

Venezuela; Mrs. Angela L. Seltell, Staff Asst.,

and Mr. Joseph G. McGowan. Director. Office of

International Operations, IRS.

Chapter 7

Legal Activities

"The Power to tpx in volves rho Power to destroy".

John Marshall

Chief Justice, U.S. Supreme Court 1819

"The power to tax is riot the Peltier to destroy while this Court sits -

Oliver Wendell Holmes, it.

Associate Justice. U.S. Sept.— Court 1928
54

Responsibilities The Chief Counsel is the chief legal officer

for the Internal Revenue Service and is a

of the member of the Commissioner's executive

Chief Counsel staff. He advises the Commissioner on all m

atters pertaining to the administration

and enforcement of the internal revenue r

laws and related tatutes, as well as on all

non-tax legal questions.

His advisory responsibilities fall into two

major areas: litigation and technical.

Organization

The Office of Chief Counsel is organized

as follows:

I

H

Associate

Chief Counsel

(Tax Litigation)

Tax Court

L

it

igallon

Division

H

interpretative

~~

Division

Refund

Litigation

Division

Legislation &

Regulations

Division

Tax Court General Litigation, Criminal Tax. and

General Cegal Services have field counterparts,

Refund Litigation, Disclosure, interpretative.

Chief Counsel

Deputy Chief Counsel

Regional Counsel

North-Atlantic

Mid-Atlantic

Southeast

Central

Midwest

Southwest

Western

7-71-

Associate Chief Counsel (General)

Deputy Associate Chief Counsel

(General)

General Lit

igation

Division -

!l-Tinal ,S,o Tax

[Division= I 7

General Legal

Services

Division

K

Disclosure

~DlIsc~ls'ob v sru

[Administrative

Services

Division

Legislation and Regulations, and Administrative

Services do not.

Litigation

Ref und

Litigation

55

Both the National Office and the field

offices are actively involved in litigation.

Tax Court, General Litigation, Criminal Tax,

and General Legal Services work is

handled in the field offices subject to the

overall direction of the National Office.

Refund Litigation and Disclosure activities

are centralized in the National Office.

Tax Court Litigation

One of the major responsibilities of the

Office of Chief Counsel is the

representation of the Commissioner of

Internal Revenue in all actions brought in

the United States Tax Court.

The Commissioner had significant success

during the past year in challenging tax

shelters before the Tax Court. For example.

the Tax Court has disallowed deductions

for prepaid interest, James V. Cole, 64 T.C.

1091 (1975); prepaid fee, Phillip D. Foley,

35 CCH Tax Cl. Mem. 263 (1976); oil and

gas intangible drilling deductions, Lloyd L.

Cottingham, 63 T.C. 695 (1975); and

deductions based upon inflaled partnership

real estate, Estate of Charles T. Franklin,

64 T.C. 752 (1975), taxpayer's appeal

pending, Ninth Circuit. On appeal, the

Commissioner was also successful in

disallowing rental deductions in a family

trust-leaseback transaction designed to

shift income from high-bracket parents to

lower- bracket children. Mathews v.

Commissioner, 520 F. 2d 323 (5th Cir.

1975), revg, 61 T.C. 12 (1973), Cert.

denied, 424 U.S. 967 (1976). However, in

Phillip G Larson, 66 T.C. 159 (1976), the

court rejected the Commissioner's position

that a California limited partnership

actually constituted an association taxable

as a corporation. The Commissioner's

appeal is pending before the Ninth Circuit.

The Refund Litigation Division performs all

Tax Court Cases Received

1972-1976

Numbers above bars

represent total

Tax Court cases 11206 11 '

360

8,003

8,949

6,672

2,277

9,624

6,974

8,799

6,419

"It".11 N

Tax Court cases other

than Small Tax cases.

2,650 2,380

3,203

3,423

Small Tax cases.

1972 1973 1974 1975 1976

Refund Litigation Cases Received

necessary legal services on behalf of the 1972- 1976

Internal Revenue Service in connection

with suits instituted in the United States

District Courts and the Court of Claims by

taxpayers for refunds of taxes. The Division

determines and coordinates the legal

position of the Service in these suits and

incorporates such determinations in

recommendations to the Department of

Justice, which handles the trials of

such cases.

1,042 931 1,133 1,018 1,033N

\ \ E\ \ '\ ~~J 1972 1973 1974 1975 1976
56

A matter of continued significance handled

by the Refund Litigation Division during

1976 is the motion picture investment

credit. The principal issue in this area

concerns the validity of Trees. Reg. 1.481(l),

which provides that motion picture

production costs are not eligible for the

investment credit. There have been three

recent adverse district court decisions in

this area, one of which has been affirmed

by the Ninth Circuit. The other two are

pending on appeal before the Ninth Circuit.

Wait Oisney Productions v, United States,

75-2 U.S.T.C. 88,632 (C.D. Calif. 1975),

-2 U.S.T.C. 84,929 (9th Cir. 1976)~ aff'd, 715

Bing Crosby Productions v. United States,

No. 74-1429 (C.D. Calif. Dec. 18, 1975);

Sussex Pictures, Inc. v. United States, 76

U.S.T.C. 84,001 (C.D. Calif. 1976).

However, the Government has won an

analogous issue in the Northern District of

Texas involving the eligibility of the

investment credit on seismological

information recorded on computer tapes,

and the issue is on appeal to the Fifth

Circuit, Texas Instruments, Inc. v. United

States, 407 F. Supp. 1326 (N.D. Tex, 1976).

Proposed regulations have been published

in this area for post-1970 years.

Tax in Litigation - Tax Court

(in Thousands of Dollars)

The tables below depict a breakdown of the

opinions rendered at the Trial Court level

for both Refund Litigation and Tax Court

cases as well as decisions delivered by the

Appellate Courts for Refund Litigation and

Tax Court cases.

General Lifigition

National Office and field office attorneys in

the General Litigation area furnish legal

advice to the Internal Revenue Service in

connection with the assessment and

collection of Federal taxes and assist the

Department of Justice in the prosecution

and defense of suits to collect taxes, suits

to recover erroneous refunds, proceedings

under the Bankruptcy Act and other

insolvencies, civil enforcement of

summonses, and injunction and declaratory

judgment actions. During 1976 case

receipts increased substantially.

Bankruptcy Act proceedings remained at a

high level, and summons enforcement case

receipts reached the highest level ever.

All 71, Cwrt Clial lTio, C....

T...-dP...

11W. O,.rpay..- .1 --.dP:,,lftW, ,

T'

P_ .

iDlia tlm~ lhlil,p- Wt,min,d CWI..d O.Iaheina,l

4....

e 4.1

1117o 1.211

--MM

11.o.

11,3. See.%

0-

Crale'd 00-ilad

214W 11317' 1 -

-3

-h 1.7

14. 1-

53 %

.3

21

57

Tax Litigation - Refund Suits,

(in Thousands of Dollars)

star"

owtftl c-mt cMM of clami Total

ft.oa, Am- Am-, ftenear Anh.u., aah.- af It, or

"a Walpole- ftfundad, c.... ..

nor

N..1,a A.-ot Amount

Ol Olopuln net Ca... o, R1t11da,,.

% Not

P.1d.9-30,1976

77991

M 60021 $12.11.

713%

2-

410

11,

e2

a.

1370356

Tria I Court Case Record

(Opinions Rendered-Refund Litigation and Tax Court Cases)'

Court of District

Claims Courts Small Tax Cases

MY S 937.329'

1.3 -,1142

So3e.

Tax Court'

Other Total

ActiDecided in fai975 19M 1975 1976' 1975 1976- 1975 197W 1-75 1976 Of G.1ahnnhall - N-be, 10 21 217, 185 192 265 255 294 4497

559

-Pe,c.nl 526% 45 7 it, 662 62,1% 617% 626% 54.7% 52.9% 575% 57 1% Dec idcd in la,o, of Topily., N u,hoo, 4 14 82 68 35

Decided partially to,

the

Tlxp,y,, and penalty 101 the

Pe,cehl 21

% 44 49 68 84 112 2% 304% 250 22.11~ 11.1% 11.,% 105% 12.2% 108% 114%

Govennnhent- -Nu,hb,h 5 11 19

11%

145

- Pe,ccht 263% 239% 8194 246 30B

5

, 11 40 ~ jj~~

Total Opinion, 9 46 328 298 311

R.'anitice--n-

"n"n`-%r:r'~'iC 2WIP-n-D Cril'=nng,W-85,e,$~~

423T. -hCV

556 n

n

n .... ..... f-Sin c trin In h11 di-ion. -1. du,,ng in. 1-1 yee,

423 4M 556 777 979
58

Receipt and Disposal of General Litigation Cases

National and Regional

Status

Pending July 1, 1975

Received

Disposed of

Pending June 30,1976

Fiscal Year 1976

Court Non-Court Total

8,894 1,911 10,805

11,416 9,752 21,168

10,130 9,697 19,827

10,180 1,966 12,146

Receipt and Disposal of Disclosure Division Cases

TypesofCallfes

Disclosure opinions

Disclosure Litigation

Discovery opinions

FOIAOpinions

FOIA Appeals

FOIA and Misc. Litigation

FOIA Requests

Privacy Act Opinions

Pendl Pendin

n

6. 0.71

I 74-72 Received Disposed 3

104r 246 185 165

5

5

11 7 10 8

97r

-

314 309 102

59 211 144 126

29 31 13 47

14 83 69 28

6 125 83 48

- 6 2

Privacy Act Litigation

DivisionTotals

'Revised

_77

325 1023 815 533

General Litigation and Disclosure Cases Received 1972-1976

Types of Cases-Regions: 1972 1973 1974 1975 1976

Bankruptcies and Receiverships 1,217 1,153 1,112 1,254 1,431 Wage Earners'Plans (CH. XIII) 61 81 102 62 99

Arrangements (CH. XI)

Reorganizations & Real

1,492 1,526 2,273 3,440 3,442

Property Arrangements

(CH. X and XII)

Miscellaneous Insolvencies

Decedents' Estates

Suits to Collect Taxes

Section 2410

(28 U.S.C. 2410):

Interpleaders

Others

Injunctions

Disclosure and Testimony

Summons Cases

Erroneous Refund Suits

Miscellaneous Court Cases

Advisory Opinions

Discharges of Property

from Lien

Total, all Regions

NationalOffice:

Appeals

Advisory

International Operations

203 184

199

348 626 639

140 100 102 118

424 423

624 608

206 226

159 235

152 230

411

413 374 386

623 565 720

242 222 255

162 160 230

272 227 188

449 481 424 463

1,307 1,371 1,663 1,877 2,876

28 32

513 593

31 42 41

530 564 615

4,025 4,556 4,310 4,860 5,30-5

2,311 2,429 2,269 2,701

13,332 14,236 14,931 17,500

1972 1973

176 216

142 132

1974 1975

3,500

20,288

1976

1114 197 113

140 298 484

113 88 165 126j6_2

Disclosure and Testimony 54 212 158

Other Centralized Cases'

Total, National Office

Total, All Re lonsand National offt.

40 22

525 670

26 29 21

673 650 ago

13,857 14,906 15,604 18,150 21,i68

'Ni- handled in lhaDhid-aDl,ai.n InCludin, Railroad Reorganiz l.h. and 4cti.n, i., Intunctions andior Deeiinit., R.iie'll
60 61 A major issue in the General Litigation area

in recent years has involved the longstanding question of whether deficiency

procedures are applicable to terminations

of taxable years under Code

§ 6851. In

1976 the Supreme Court in the case of

Laing v. United States, 423 U.S. 161

(1976), revg, Laing v. United States, 496

F.2d 853 (2d Cir. 1974), and affg, Hall v.

United States, 493 F.2d 1211 (6th Cir.

1974), resolved the issue against the

Government, holding that deficiency

procedures are applicable. The Court

concluded that there is nothing in the

statutory definition of an income tax

deficiency to suggest that

a deficiency

arises only at the end ofa 12-month

period. it is sufficient that the taxable

period has come to an end by termination

and the tax is due and unreported.

Another issue of importance to the General

Litigation area which has recently been

resolved involves the use of summonses to

secure records in the possession of

taxpayer's attorney. In Fisher v. United

States, _U.S. -(1976), affg, United

States v. Fisher, 500 F.2d 683 (3d. Cir.

1974), and revg, United States v. Kasmir,

499 F.2d 449 (51h Cir. 1974), the Supreme

Court upheld the Service's position that

taxpayers could not successfully invoke

their privilege against self-incrimination in

response to summonses served on

taxpayers' attorneys for production of

accountants' workpapers which had been

secured from the accountants by the

taxpayers and turned over to their

attorneys.

Disclosure

Attorneys in the Disclosure Division handle

matters arising under the Freedom of

Information Act, as well as requests for

disclosure of documents and testimony in

both tax and non-tax litigation. The Division

is also responsible for providing legal

advice to the Service concerning the

Privacy Act of 1974

Specifically, the Division is responsible for

planning, directing and coordinating for the

Internal Revenue Service all matters

relating to requests for testimony and

production of Internal Revenue documents,

records or information under the Federal

Rules of Civil or Criminal Procedure, the

Tax Court Rules, the Court of Claims Rules

and various State court rules. This Division

works closely with the Disclosure

Receipt and Disposal of Criminal Tax Matters-1976

Prosecution cases Received From Intelligence

Pending beginning of Fiscal Year

Total Opened

Total Closed

Counsel Declined

Department of Justice Declined

U.S. Attorney Declined

Prosecutions Completed

Pending End of Fiscal Year

Opinions

Pending Beginning of Fiscal Year

Total Requested

Total Rendered

Pending End of Fiscal Year

4,088

3,147

2,125

349

240

215

1,321

5,110

15

52

51

Operations Division of the Service. It also coordinates with the Department of Justice all litigation arising under the Freedom

of Information and Privacy Acts, including

recommendations about defense or

settlement of suits and appeals of

adverse decisions.

Due to an increasing workload, the

Disclosure Division was reorganized in

1976 by the creation of

a Freedom of

Information and Privacy Branch, and

a

Disclosure and Testimony Branch, A significant issue being handled by the

Disclosure Division continues to be the question of publication of private letter

rulings and technical advice memoranda.

The Service's Position remains that

technical advice memoranda and private

letter rulings are tax return information not

subject to disclosure under the Freedom of

Information Act. This issue is presently

pending before the Supreme Court. See

Fruehauf Corporation v. Internal

Revenue Service, 522 F.2d 284 (6th Cir.

1975), cert, granted, 423 U.& 1047 (1976).

In addition, the Tax Reform Act of 1976 will have an impact on both the letter rulings

area, and on Code

§ 6103, the Service's basic disclosure statute. The Tax Reform

Act of 1976 Provides for the disclosure of private letter rulings and technical advice

memoranda, after deletion of certain

information, and amends Code

§ 6103 to

establisha statutory framework governing

the disclosure of tax returns and tax

return information,

Criminal Tax Activity- 1976

Referrals by Counsel for Prosecution

Indictments& Informations

NoTrueBill

Plea of Guilty or Nolo Contenders

Convicted After Trial

Acquitted

Nol-Prossed or Dismissed

Criminal Tax

National Office and field office attorneys in

the Criminal Tax area handle all criminal

tax legal matters for the Internal Revenue Service, coordinate criminal tax

prosecutions with the Department of

Justice, provide assistance to United

States attorneys in criminal tax trials upon

request, assist the Tax Court and Refund

Litigation Divisions in coordinating the application of the civil fraud penalties, and coordinate disclosure matters, as well as Freedom of Information Act and Privacy Act matters, in cases where criminal action is anticipated or has been undertaken.

Criminal Tax attorneys undertook the responsibility during 1976 to be the principal legal advisors to the Office of International Operations in criminal tax

cases being investigated by that office.

Criminal Tax attorneys also continued furnishing legal advice to criminal investigators of the Service's Intelligence Division during the investigative stage of criminal tax cases. The pre-referral assistance to the Intelligence Division and the implementation of legal advice to the

Office of International Operations has resulted in a more efficient use of

manpower in criminal tax investigations.

Legal Assistance to Intelligence Investigations -(in Staff Hours)

Fiscal Year 1976 figures are not re--illibilt with pror Yom due to a change in th-p.rlina system.

2,0371

977

216

77 .

71

14,040
I I

62

One troublesome issue to the Division has

recently been resolved. In United States v.

Beckwith,

_ U.S.-(1976), affg, 510

F.2d 741 (D.C. Cir. 1975), the Supreme

Court held that Special Agents were not

required to give Miranda warnings

[Miranda v. Arizona, 384 U.S. 434 (1966)]

to the subject of an Intelligence Division

investigation who was not in custody or

otherwise deprived of his freedom.

General Legal Services

The General Legal Services function

handles legal matters arising in the non-tax

legal area. Attorneys in the General Legal

Services function in the National Office and

field offices represent the Service in labor

cases, including representation hearings,

impasse proceedings, unfair labor

practices, and arbitration hearings, and

serve asa member of and counsel to

management teams negotiating individual

and multi-unit labor agreements. In

addition, the attorneys represent the

Service in adverse action and

discrimination proceedings, represent the

Director of Practice, Office of the

Secretary of the Treasury, in disciplinary

actions brought against tax practitioners

and provide on-going advice to the Service

concerning government contracts, tort

claims, forfeitures, Inspection Service

matters, and other areas not directly

related to Federal tax matters.

General Legal Cases Received

1972-1976

843

597

445

168

1,425

\1N\\\. _'-'s

1972 1973 1974 1975 1976

Technical

During this past year staffing for the

General Legal Services function was

increased sufficiently to permit the

assignment of attorneys to each Regional

Counsel's office. The ready availability

throughout the country of legal assistance

in non-tax areas has been well received by

Service officials.

The two technical divisions of the Office of

Chief Counsel-interpretative and

Legislation and Regulations-are located in

the National Office.

Interpretative

The Interpretative Division provides legal assistance to the Office of Assistant

Commissioner (Technical) and the Office of Assistant Commissioner (Employee Plans

and Exempt Organizations) in the issuance

of letter rulings to taxpayers, technical

advice to Service personnel, and revenue rulings and revenue procedures to be Published in the Internal Revenue Bulletin. The Division also provides legal assistance

to other Divisions in the Chief Counsel's

Office in determining litigating positions and in coordinating the litigating positions with the ruling positions of the Service.

Interpretative Division Cases Received

1972-1976

Type of Case 1972

Revenue Rulings 512

Letter Rulings

63

During 1976, the Division attorneys

assisted Service personnel in implementing

the established requirement that

a private

school must admit students without racial

discrimination in order to be exempt from

Federal income tax, and in order that

contributions to the school will be

deductible from the donors' gross income.

Major actions completed in this area by

Division attorneys included the formal

review of Rev. Proc. 75-50, 1975-2 C.B.

587; which further clarifies standards and

guidelines for the private school

enforcement program, and the drafting of

Manual Supplement 7(10) G-1 0, dated April

6, 1976, which provides detailed

instructions and procedures for use in

auditing private schools, including those

that are church-related.

Legislation and Regulations

The Legislation and Regulations Division

represents the Commissioner and the Service in tax legislative matters. Division

attorneys also provide the Treasury

Department's Assistant Secretary for Tax

Policy with technical assistance and expertise in the development and drafting of internal revenue legislation and furnish assistance to Congressional staffs in the

drafting of committee reports on

tax legislation.

1973 1974 1975 1976

511 ~: 471 443 423

89 107 124 117 114

Technical Advice 114

OtherAdvice .

Total

173

888

117 90 so 73

la5 158 212 257

920 843 852 867
64

Administrative

Services

Legislation and Regulations

Division Cases Received

1972-1976

Type of Case 1972

Legislation 76

Regulations 110

Miscellaneous 19

Total

1973 1974 1975 1976

46 77 85 59

90 56 85

38 43 33 46

206 174 176 289 190

Attorneys in the Legislation and

Regulations Division are responsible for

drafting proposed regulations, drafting

Executive Orders, and for representing the

Service in negotiating and drafting tax

treaties with foreign governments. Working

closely with Service officials, attorneys in

this Division participate in the preparation

and review of tax forms and instructions,

hold hearings on proposed regulations,

evaluate suggestions by Service personnel

for regulatory changes, and review

publications issued for the information

and guidance of taxpayers and

Service officials.

During this past year, the Division

continued to develop regulations to

implement the Employee Retirement

Income Security Act of 1974 (P.L. 93-406).

In addition, the Legislation and Regulations

Division played an active part in assisting

the Office of the Assistant Secretary for

Tai Policy and the Staffs of Congressional

committees in drafting and solving

technical problems which arose during

consideration of the Tax Reform Act

of 1976.

The Administrative Services Division is

responsible for the general supervision of

all matters relating to budget,

administration, and management in the

Office of Chief Counsel.

The Division coordinates the recruitment

program for the Chief Counsel's Office,

runs the Summer Employment Program for

legal interns and provides opportunities for

attorneys in the Office to participate in law

school, bar associations, or in-house

training courses.

Under the aegis of the Division, an Equal

Employment Opportunity Advisory

Committee, composed of representatives

from each Division in the National Office,

assists in the administration of the Chief

Counsel's Equal Employment Opportunity

Program. The Office continued to make

substantial progress in achieving its stated

objectives and goals under the Affirmative

Action Plan during this past year. In

addition, the Federal Women's Program

Advisory Committee sponsoreda four part

series on "Women and the Law,"

During 1976 the Division establisheda

Planning, Analysis and Operations Branch

(PAO). The PAO Branch is engaged in

planning and analysis, cost/benefit studies,

systems development and operational

activities such as legal information retrieval

and computer equipment analysis.

In addition, the Administrative Services

Division installeda computerized legal

research system in some of its major

offices. Additional installations will be

added in future years. Also, during the

latter part of the year, the Division initiated a study to determine the feasibility of

employing Paralegal Specialists to assist

attorneys in the Office in some routine

legal and non-legal work.

Chapter8

Planning and Research

-It Congress should conjur in

a reorganization or the

revenue sYstem, either a9cording 10 the plan proposed. or some other, the CDmmlssion recommends the change be Made bqfore, in the Internal Revenue depariment, custom has developed Into routine and use has acqwred, through time, the binding 'e*ffect ot .-Fo

David A. Wells

Special Commissione, of the Revenue 1870
67

Planning is an integral and continuing

management activity within all

organizatio

net components of the Service.

Du ring

1

976

, I

he IRS planning activities

encompassed the testing of improvements

in work technology and systems, analysis

of pending legislation

,

coordination of the

testimony before

committees, as well as

statistical compilation and projection ()I tax

return data.

Review Of Service Center

Space Requirements

A study was conducted to assess the

impact of projected growth in workload

volume and changes in work methods on

long-range requirements. service A center space

mathematical model was

used to project estimated future space

requirements under several contingencies

Plans call for a periodic updating of

estimated future space requirements using

the model.

Management information System

The IRS has begun initial steps toward

integrating its various management

information systems so that appropriate

data will be available to both operating

officials and top management. The first

phase of this long-term project will be

identifying user requirements at various

levels in the organization. Subsequently, a

detailed plan to develop, test, and

implement a system based on these user

requirements will be formulated.

Taxpayer Service Telephone Study

During FY 1976 a study was initiated to

assist Taxpayer Service Program managers

in making maximum use of their resources.

The study has two major objectives. First,

through the use of mathematical modeling

techniques, information will be developed

which will indicate the optimal number and

location of toll-free telephone answering

sites offering taxpayer assistance. Second,

an on-going system will be developed for

collecting. analyzing, and interpretating

data needed to improve planning,

scheduling, and budgeting for the operation

of Taxpayer Service programs.,

Planning Model for the

Intelligence Program

A long-term project for improving program

planning and resource allocation in the

intelligence function has been initiated. The

first objective of this study will be to

examine how more precise measures can

be devised for estimating the magnitude of

the tax fraud problem and identifying

significant potential tax fraud situations.

Next, the Service intends to use the results

of this study to improve its intelligence

resource allocation system and devise

better case selection procedures. The

adjustments made to current procedures

as a result of the study should lead to a

more effective coordinated national

compliance strategy for the Service's

Intelligence Program.

Research

and

Testing

Study of Alternative

Filing Procedures

Approximately 12,000 individual taxpayers

were sent questionnaires seeking

information aboutcurrent filing practices

and opinions on two alternative filing

procedures-a staggered filing system and the extension of the current three and a

half month filing period to six months.

Results of the survey, together with input

from State tax administrators and other

interested groups, will be incorporated in

the Service's study of alternatives to the

current filing period,

Problem Resolution Tests

In an effort to simplify the taxpayer's

problems in meeting tax obligations, during

1976, the IRS conducted tests in four

districts covering special problem

S

!at

Agent E. Michael Fornili, (L) of the IRS

BrItcimore

D

istrict, is presented the Treasury

Department's Meritorious Service Award by

Commissioner Donald C. Alexander for the

agenl's prompt rescue efforts that kept a

Washington, D.C., woman alive until the D.C.

resolution procedures. The tests were

intended to provide solutions to problems

taxpayers have in dealing with various IRS

components, as well as to help Service

management identify factors causing

problem patterns. Test results will be

analyzed to determine the need for any

procedural or organizational changes

which may facilitate the resolution of

taxpayer problems.

Optical Character Recognition

The IRS is exploring the feasibility of

substituting optical character recognition

(OCR) equipment for data transcription.

Cost-benefit analyses are being conducted

10

determine if OCR equipment could.prove

to be a more economical means of

converting data recorded on Federal Tax

Deposit Forms and other forms with print

characteristics controlled by the Service.

Rescue Squad arrived. On site witnesses

reported Mr. Fornili's valiant efforts to the IRS,

including instructions to call the Rescue Squad

and the assistance he rendered the squad after their arrival on the scene.
68

High Speed Printers

Tests have been completed to determine

potential IRS applications for high speed,

non-impact printers. These printers

representa technological breakthrough

over existing designs and can print tip to

twenty-five times as fast as conventional

printers. Because non-impact printers can

produce high quality output at greater rates

of speed, they have the potential for

cutting the costs associated with producing

taxpayer notices, periodic service center

reports, and one-time printing efforts,

Indications are that substantial savings

would accrue over the next several years,

it these printers were installed in each

service center.

Remittance Processing System

Based on successful tests witha

computerized system to expedite clearance

and deposit of tax remittances, the IRS has

asked manufacturers to submit proposals

for Remittance Processing Systems to be

installed in each of the 10 Service Centers.

When installed, these systems should

reduce processing costs by combining

remittance data input, numbering, and

preparation of accounting documents in

a

single operation. The system should also

accelerate remittance posting to account

status and tax data bases, and provide

a

"fact of filing" indicator for account

status operations.

Compliance ADP Applications Test

On site tests are being conducted in field

offices to determine the costs and benefits

of ADP (automatic dhta processing)

applications in support of district office

audit functions. Applications are related to

providing direct computational assistance

to revenue agents in their examinations,

mechanizing clerical tasks. and providing

reports for local management purposes.

Legislative Activities

The planning and research function has the

responsibility for the continuing analysis of

legislative proposals affecting the IRS,

a

determination of their probable

administrative implications, and, once

legislation is enacted, the development and

coordination of implementation plans. The

pace at which tax legislation is being

introduced has steadily increased. During

1976, approximately 185 bills were

analyzed for their impact on the IRS. Of

major importance during this period was

the analysis of the Tax Reform Act of 1976,

Implementation plans were developed for

16 enacted public laws, including the Tax

Reduction and Revenue Adjustment Acts

of 1975.

Consolidated Annual

Wage Reporting

For many years the Service has favored

consolidated annual wage reporting to

reduce the administrative and paperwork

burden for the taxpayer and the

Government. In 1976, Congress enacted

Public Law 94-202 which will allow

employers to file annual rather than

quarterly wage reports beginning in 1978.

This law will use Form W-2, Wage and Tax

Statement, in determining social security

program coverage and benefits, as well as

for tax enforcement. Under this

arrangement, the Social Security.

Administration will process the W-2 forms

and send necessary information to the

IRS. This will cut costs by eliminating

duplicate processing.

Tax Reform Act of 1976 A number of substantive tax law changes

and major revisions to the Tax Code were

considered by the 94th Congress. During these sessions the Revenue Adjustment

Act of 1975 was enacted to continue

certain anti-recession tax reductions

through the first half of 1976, pending

enactment of comprehensive tax

legislation. The IRS prepared necessary forms and instructions to implement the Act and its subsequent extensions. A

number of proposals to change the Code

were analyzed. These ranged from energy

conservation credits to the tax treatment for rental of vacation homes. Such

proposals were reviewed for administrative feasibility, and for their effect upon the tax

revenues. The result of these analyses

were provided to the Secretary of the Treasu ry and Congressional committees.

Ogden Service Center employees thrilled to the

sight of giant locomotive X4449. hauling the 25-

car American Bicentennial Freedom Train, as it

thundered out of the Utah Army Depot, adjacent to the IRS facility. During a two day stop in

69

Confidentiality of Tax Returns

Several bills for safeguarding the

confidentiality of Federal tax return information were introduced in the 94th

Congress. Generally, these bills would

amend the Internal Revenue Code to

restrict the disclosure of information from

a

tax return. The provisions prescribe the

persons to whom, and the purpose for

which, disclosure of such information may

be made. These bills impose stronger

penalties for unauthorized disclosure of tax

return information. These provisions and

penalties would apply to employees, former

employees, or other individuals who are

allowed statutory access to return

information including State tax officials and

officials of other Federal agencies.

Ogden last Fall, hundreds of IRS personnel were

able to view this mastodon of

a bygone era and its historical cargo of artifacts from the

American Revolution through to the Space Age.
70

commonwealth Status Slated for

Northern Mariana Islands

Congress has approved

a covenant which

paves the way for the Northern Mariana

Islands to become

a Commonwealth of the

United States. When the Marianas become a Commonwealth, the covenant provides

that the Commonwealth will apply the

income tax laws of the United States for its

territorial income tax , s

milar to the

Government of Guam .

The IRS is

implementing an agreement to collect

social security taxes on behalf of the

Northern Mariana Islands Government. The

funds collected will be transferred to the

United States and will be operated as

a

separate trust fund until the Northern

Mariana Islands achieve full

Commonwealth status, or earlier, if

mutually agreeable. At that time this trust

fund will be fully integrated into the U.S.

Social Security Administration.

Delinquent Child Support Program

The Department of Health, Education, and

Welfare has begun the operation of

a

Parent Locator Service, authorized by law,

to locate absent parents who have not

been making court-ordered payments for

child support and to collect those

delinquent payments. The law also directs

the IRS to provide certain tax return

information, if necessary, such as !he last

known home address or most recent place

of employment for absent parents. In

addition, upon certification by

a State that

court-ordered support payments are

delinquent and uncollectable through State

collection efforts, the IRS is required to

assess and collect these delinquent

payments as though they were tax

deficiencies. Amounts collected are to be

remitted to the States. Plans for

implementing this law have been

completed, although no cases have been

referred to the IRS for collection.

statistical

Activities

statistics of Income Highlights

Annual Statistics of Income (SOI) reports

provide the public and the Government

witha wide variety of data reported on

income tax returns, without violating

taxpayers' rights to privacy. The data are

estimates based on representative samples

of returns.

Preliminary SOI reports published in 1976

covered individual income tax returns for

1974 and corporation and business income

tax returns for 1973.

Also in 1976, the IRS published an SOI

report on personal wealth. The report

provides estimates of the holdings of living

individuals with more than $60,000 gross

assets in 1972 based on

a sample of

Federal estate tax returns.

In another area, statistics were provided to

the Treasury to help evaluate the

effectiveness of the Domestic International

Sales Corporation (DISC) provisions of the

tax code as

a means of promoting U.S.

exports. These statistics were included in

a

Treasury report to the Congress.

Work was continued during 1976 on

a

projected series of statistical reports

covering tax-exempt organizations, the first

of which will cover private foundations for

1974. Subsequent reports will cover

charities schools, and associations ;

farmers, cooperatives; and funded deferred

compensation plans. Another group of

special studies underway concerned

income earned abroad by individuals

and corporations. I A new series of lax research projects was

initiated during 1976 based on linkages of

related tax returns. One project was to

associate data from partnership returns

with income tax returns of the partners in

order to study tax shelters. Another was to

shed light on relationships between income

and wealth of Federal estate tax return

decedents and the income of their heirs,

whilea third was designed to examine

patterns in sales of capital assets over

a

five-year period for an identical group of

individual income taxpayers.

Statistics of Income publications can be

obtained from the Superintendent of

Documents, United States Government

Printing Office, Washington, D. C. 20402.

Tax Models

Originally developed almost 15 years ago

to meet Treasury's need for timely

estimates of the revenue effects of

proposed tax legislation, the tax models

continue to be valuable tools for economic

planning. Five basic models, representing the returns of individuals, corporations,

sole proprietorships, partnerships, and

estates, are now used. Each model consists of a set of generalized computer

programs used with specially structured data files comprising records in the

Statistics of income files.

In addition to the basic tax model for

individual returns, the Service has

developeda special individual model set

"State Tax Models," pursuant to the

Federal State Tax Collection Act of 1972. These models are designed to permit

reliable data estimates for each of the So

States and the District of Columbia.

Toward this end, the models are based

on the full Statistics of Income sample (over 200,000 returns for 1974) instead of the subsample of about 100,000 returns

used for the basic model.

71

Returns-Filed Projections

Planning throughout the Service is based

on projections of the number of returns to

be filed. The planning requirements of the

various units of the Service require that

workload projections be prepared for the

entire United States as well as for service

center areas, regions and districts.

Specialized projections are also made for

research purposes. The projections are

updated each year to incorporate changes

in the economic and demographic outlook

as well as the effects of tax law changes

and filing patterns. Statistical techniques

are used to identify the relationships

between tax returns filed and the economic

and demographic changes.

The total number of primary returns and

supplemental documents is expected to

grow from 127.3 million in calendar year

1975 to 164.7 million in 1985. This is an

increase of 29.4 percent and reflects the

expected growth in economic activity over

the next decade.

Projections of some major categories of

returns are shown in the following table.
72

Selected Types of Returns Filed In 1975, and Projected for

1976,1977, 1980 and 1985, by Calendar Year

(Thousands)

Type of return

EauActual mated

1975 1976

431 446

m 488 558 38.3

Total Primary Returns

andSupplementals 127,348 127,857 132,845 144,044 164,740 29.4

Total Primary Returns 124,564 123,179 127,404 135,242 149,857 20.3 I

individual, Total

Form 1040A

Form 1040

84,043 82,479 86,248 92,876 104,540 24.4

22,463 27,869 30,313 28.189 25,761 14.7

61,450 54,478 55,800 64,545 78,622 27.9

Form 1040NR, PR, and SS 100 104 106 113 126 26.0

Form 1040C

Form 1042

14 14

16 14

in,iivid.,i Declaration 7,500 7,609

Fiduciary

Partnership

Corporation'

Estate

Gift

Employment'

239 253 298 385 70.4

291 313 377 540 97.6

1,559 1,644 1,757- 2,094 2,872 84.3

1,133 1,161 1,184 1,262 1,391 22.8

2,138 2,194 2,260 2,438 2,763 29.2

226

273

24,738 24,673 24,777 24,977 25,578 3.4

Exempt Organization, 404

Employee PlanS4 1,124 1,004

Alcohol, Tobacco, and

Firearms Returns' 562

Excise'

Total Supplemental

Documents'

864

Projected' Percent

change

1975-

1977 1980 1985 1985

14 14 14 1.2

15 15 17 4.0

7,683 7,876 8,547 14.0

1,024 1,083 1,191 5.9

572 573 575 479

B82 886 898 913 5.6

2,784 4,678

lno.d.. F.-I 1120,1120 special, 1120F, 1120-DISC, 1120-

Pok- and 1120-S

.Includes Fons 940,940PR, 941 941E, 941PRI 941"S'941"' 6 CT 2

942 942PR, W, MPR, CIA an

b~6T 4720 and 5227 In&d@5 FOM3 990,99OPF,

991K

5&61, j~op, 4U8. and

In.l.d..F- 55M. 550DC, 56M

4a48A

'Includes Fonn3 7.8,11, 4705, 4705, 4707. 4708, Alcohol and

Tobacco 1,11ud F-liB 11C 720,720M, 730.2290 nd4838

I-Ild*: Fenn. IDbX, 1'120X, 268B. 4W8, 76~4, 7005.2438,

990AR 4578.5300,5329 ndIG41A

.P,,lecji,ns do not take'Into account the Tax R,f,m Act ot

1976

5,441 8,802 14,883 434.7 I

Tax Administration System

Plans fora redesigned IRS data processing

framework-the Tax Administration

System-were completed and presented to

the Congress for approval. Studies were

subsequently undertaken to develop

implementation approaches which minimize

the risks of the broad system changes

planned. The redesigned system will enable

IRS to improve service to the public,

including the processing of tax returns and

the retrieval of information related to those

returns, to provide increased capability for

compliance and enforcement programs, to

respond effectively to changes and

overcome the limitations of the old system,

To accomplish the Tax Administration

System objectives, the taxpayer account

files at the National Computer Center in

Martinsburg, West Virginia, will be

decentralized to the ten IRS service

centers; the National Computer Center, in

turn, will assume the new role of

controlling activities between the'service

centers and maintaininga directory of

service center records so that an account

is not kept on file at more than one

service center.

The magnitude of the redesigned system

requires that its implementation take place

in phases The first phase is tentatively

scheduled to begin in one service center,

which will serve as

a prototype, by early

1981. Implementation in the other centers

will be gradual. All phases would be

operational in all service centers by 1985.

73

Revenue Officer Donald R. Williams (R), IRS

Dallas District, is presented

a personal letter of

congratulations from the President of the United States by Dallas Director A.W. McCanless for

he officer's suggestion that is estimated to save he Federal government over $75,000 annually in administration of the Federal Ffighway Use Tax.
i~,

74

Assistance to State and

Local Governments

During 1976, the IRS responded to several

requests from State governments for

technical I assistance under the

ritergovernmental Personnel Act.

The IRS provided over 120 weeks of

training assistance for 74 employees of

state and local governments, including; a

specialty designed computer auditing

course for 21 employees of the

Department of Taxation, Hawaii: training in

excise tax law for Treasury employees,

Puerto Rico; basic revenue agent

instructions for employees of the State of

Vermont~ and investigative techniques

training for Department of Revenue

employees, Pennsylvania.

In addition, employees of the State of New

York and from two of its local counties

were provided special IRS assistance to

enable them to design tax courses and to

instruct their own employees.

Federal-State

Exchange

Program

The IRS has formal agreements to provide

reciprocal exchange of tax information with

48 States, the District of Columbia, Puerto

Rico, Guam, and American Samoa. New

model agreements are planned to

implement the More stringent disclosure

provisions contained in the pending Tax

Reform Act of 1976. These provisions,

when enacted, will require all Federal-State

tax agreements to be renegotiated.

Magnetic tape data containing tax

information on approximately 66,000,1300

taxpayer records were extracted from the

Individual Master File for tax year 1974,

sorted by State, and furnished to tax

authorities in 39 States, the District of

Columbia, and Puerto Rico. The IRS is

currently developing a new annual

standardized Business Master File extract

tape program to be furnished to

participating States. This program will

include Federal unemployment tax

information and current business master

file extract data. Presently, States are

provided limited tape extracts of

information from the Business Master File

and other Service master files relating to

gift taxes and exempt organizations.

Chapter 9

Internal Management of IRS

7

"For compensation to the7COhuhissionirr of the Revenue, Clarks and Persons emPloyed in his office' live thousand live hundred and lvventY-five dollars For expenses of stationery, Printing and all Whe, contingent ftPenseS in the office of the Comn,

of the Revenue. four hundred doilars'~ issioner

Tteasury Appropriation

Act of March 19, 1798
76

Maintaining

IRS Integrity

and

Efficiency

Internal audit and security programs of the

Inspection Service aid IRS managers in I

heir efforts to maintain the highest levels

of integrity and efficiency.

Internal Audit Activities

The Internal Audit Division independently

reviews all IRS activities to ensure that

policies, procedures, and controls protect

taxpayer rights and the revenue, and that

Service operations are carried out

efficiently, effectively, and in accordance

with laws and regulations. Varied auditing

techniques, including computer analyses

and statistica, sampling, are used to detect

operating problems and integrity

breakdowns.

improvements and Savings

Du Ing the year, Internal Audit emphasized

reviews of controls for safeguarding tax

information, assuring equitable treatment

of taxpayers, and safeguarding revenue

receipts and other Service assets. The

resulting Internal Audit reports enabled

management to strengthen the controls in

these key areas, improve service to

taxpayers, and stimulate an attitude of

integrity awareness within the Service In

addition, measurable savings and

additional revenue resulting from Internal

Audit activities in FY 1976 were estimated

to exceed $12 million.

Corrective actions on some internal audit

findings do not result in measurable

savings or additional revenue, but instead

accelerate the collection of taxes or

otherwise increase the effectiveness of

efficiency of the Service. Management

actions of this type were taken on

accounts and returns estimated to total

$4 million.

Fraud, Embezzl0ment or Misconduct

One of the basic purposes of the Internal

Audit program is to detect fraud,

embezzlement, or other wrongdoing on the

part of Service employees or others who

attempt to corrupt employees.

Integrity reviews during FY 1976 resulted

in the detection of 10 fraudulent refund

schemes involving 258 returns with refunds

totaling $477,000. Nearly $402,000 of these

refunds were stopped before issuance to

the claimants. Only one scheme involved

a

Service employee. In addition, the Internal

Audit Division participated with other

Service components in the investigation of 9 other refund schemes totaling in excess

of $1.4 million. The Service has established a committee, which includes an Internal

Audit representative, to appraise fraudulent

tax and refund schemes and recommend

impro ad controls for detecting and

deterring such schemes.

The integrity reviews were also

a

contributing factor in the referral to Internal

Security of information indicating possible

breaches of integrity to 401 employees and

other individuals.

In addition to the prevention of revenue

losses due to early detection of improper

actions, the integrity reviews have

a

deterrent effect on those contemplating

improper actions, and also identify

operational problems for correction

by management.

internal improvements

To improve service to management,

Internal Audit made

a number of significant

changes in its operations. Internal Audit

strengthened its planning budgeting and

execution processes by developing

a long

range audit plan; revised its reporting

procedures to provide more informative

and better balanced reports; reorganized

its management structure to improve span

of control, planning, quality reviews, and

communications; and provided extensive

re-training to staff members. I

Internal Security Activities

The Internal Security Division conducts

background investigations of IRS job

applicants and investigates complaints of

criminal and non-criminal misconduct and

irregularities concerning employees. It also

investigates persons outside the IRS who

attempt to bribe or otherwise corrupt

Service employees or who threaten or

assault employees.

The Division also investigates the

unauthorized disclosure of Federal tax

return information, disclosure or use of

information by preparers of returns and

charges against tax practitioners. In

addition, the Division conducts special

investigations and inquiries as required by

the Commissioner and the Office of the

Secretary of the Treasury.

During 1976, the Internal Security Division

was responsible for the arrest or

indictment of 125 individuals, including 27

employees or former employees and 98

-

taxpayers, tax practitioners or others.

A

total of 90 defendants were convicted

during the year, including 71 defendants

who pleaded guilty rather than go to trial.

Forty-three of these convictions were for

bribery, 27 were for assault, and the

remainder involved such other criminal

charges as embezzlement, conspiracy to

defraud the government, obstruction of

justice and subscribing to false returns.

Bribery Attempts

Last year, IRS employees continued to

thwart those persons who challenged the integrity of the Service through attempted

bribery. In 1976, 179 employees reported

204 possible bribery attempts, resulting in 51 arrests or indictments.

77

During the 15-year period that the IRS

Inspection Service has had the

responsibility for the bribery program, IRS

employees have reported 1,851 bribery

attempts. Approximately one of every four

such attempts resulted in prosecution of

the taxpayer; in the remainder, there was

insufficient evidence to warrant

prosecution, Since 1961, bribery

investigations have resulted in 493 arrests

or indictments and 372 convictions or

guilty pleas. At the end of 1976, 42 persons

were awaiting trial on bribery charges.

The following cases, in which employees

cooperated with Inspection, illustrate

bribery attempts during 1976: A California massage parlor and health spa

owner was arrested on charges of

attempting to paya revenue agent $500 for

a no change audit on the spa's 1973, 1974

and 1975 tax returns. A New York taxpayer was indicted for

attempting to Pay

a $5,000 bribe toa

revenue agent in return for favorable audits

of his individual tax return and

a corporate

return in which the taxpayer is

a

major stockholder. A New York accountant pleaded guilty to

conspiracy to bribea revenue agent after

he paid the agent $2,000 to reduce the

proposed corporate tax liability from

$30,000 to $253. A CPA from New York pleaded guilty to

bribery charges after he paid $3,500 to

a

revenue agent for

a favorable audit of

a

client; $450 toa Disirict Office auditor for

a favorable audit of another client; and an

additional $125 to the agent in the first

case to help fix the second case. A taxpayer convicted of one count of

bribery in California received the maximum

sentence of 15 years In prison and fine of

$20,000. This maximum sentence was

imposed by the court with the provision

that the taxpayer undergo

a 9D-day

psychiatric study at

a Federal institution

After completion of the psychiatric study,

the court indicated It will consider

a

reduction in sentence. I
An owner of a New England wholesale

radio company was indicted for bribery

after paying a revenue agent $2,000 to

reduce his tax liability from $14,00010

approximately $4,300.

A New Jersey taxpayer was indicted by a

Federal Grand Jury for paying a $1,000

bribe to a revenue agent. The bribe was

paid to reduce a proposed lax liability from

approximately $6.000 to $700. The tax

liability resulted from the taxpayer's failure

to file tax returns for the years 1968

through 1974.

Two Illinois taxpayers were indicted by a

Federal grand jury for bribery and aiding in

the preparation of false tax returns. Thec

harges resulted from an investigation in

which one of the taxpayers allegedly

offered a revenue agent $50,000 to

overlook an "exchange account"

transaction.

Assaults and Threats on

IRS

SinceEmployees March 1972, when it was first

assigned the responsibility tor-the Assault

and Threat Program, the Internal Security

Division has investigated 2,224 cases in

this area. Prosecution was authorized in

169 cases, 86 of whicIn resulted in

convictions or guilty pleas, and 25 of which

are pending trial. Du

n

ng 1976, 705

investigations were initiated and 27

persons were convicted or pleaded guilty.

An additional 13 persons were placed in

I

he pre-trial diversion program, subject of

revocation of probation, or referred to local

authorities for prosecution. In instances

where prosecution is not authorized, which

is the situation in most cases involving

threats, Inspectors,

with

the approval of

the U.S. Attorney, contact the alleged

assailant to inform him or her of the

applicable Federal statutes concerning

assaults or threats on government

employees. The individual is also advised

that repetitive acts could result in serious

consequences, including Prosecution.

The following cases illustrate examples of

Assault and Threat cases this year:

A Florida taxpayer was arrested for

pointing a revolver at two revenue officers

and threatening to kill them if they

continued with seizure of his automobile.

The taxpayer's wife was also arrested on

the charge of aiding and abetting.

An Indiana taxpayer was arrested after

phsyically assaulting a revenue officer who

had placed a Federal tax lien on his salary

check. The taxpayer came into the IRS

office, grabbed the revenue officer by the

hair and shook him

,

While threatening him

with further bodily harm it the lien was

not released.

A Michigan taxpayer was arrested on

charges of assaulting three revenue

officers who were in the process Of seizing

the assets of his

bus

iness. The taxpayer

threw a cash register in the direction of

one revenue officer and grabbed another

revenue officer by the coal lapels,

A California taxpayer was arrested for

pointing a shotgun at a revenue officer and

a special agent who were attempting to

seize his property for unpaid taxes.

An Illinois taxpayer was arrested after

physically assaulting a revenue officer who

had contacted him about payment of

$2,500 in back taxes. The taxpayer struck

the revenue officer with his fists several

times, knocked him down, and then kicked'

him repeatedly

Prevention of Organized

Crime Influence

The Possible corruptive influence of

organized crime upon the Service has always been a matter of concern to the Internal Security Division. An extensive investigation in the New York City area, in which Internal Security participated with the Strike Force and other agencies, resulted in the arrest of eight individuals. One of the individuals was a Prominent member of an organized crime 4amily who has been indicted on charges of

bribing a special agent to quash an Intelligence/Strike Force investigation of him.

In addition, a total of four organized crime members were convicted or pleaded guilty

to charges of obstruction of criminal investigation, bribery and conspiracy. Another organized crime figure has been indicted for making false declarations

before a grand jury.

Other Criminal Prosecutions

Other criminal activities involving the

Service, which led to prosecutions as a

result of Internal Security investigations

this year, are as follows:

An IRS San Francisco employee was

sentenced to 18 months imprisonment for

failing to disclose on his job application

forms nine arrests and five convictions

mainly for check fraud and forgery. State

and U.S. Postal authorilies also

investigated this employee on other

unrelated fraud charges,

79

An Illinois cement contractor was

sentenced to 60 days imprisonment and

three years of probation for posing as a

revenue agent and attempting to extort

$25,000 from a taxpayer for ending a

nonexistent tax investigation.

A former IRS Chamblee Service Center

employee pleaded guilty to 37 counts of

embezzlement of over $2,300 from an imprest fund, and was sentenced to a

$1,000 fine a suspended one year

imprisonment and two years probation, on

the condition that he make full restitution.

A Texas man was arrested and indicted for

impersonating a Federal officer after he

obtained over $500 from a taxpayer by

pretending to be a Government messenger

sent to pick up a refund check.

Two New York men, employees of a

communications firm, were arrested for

conspiracy to obtain confidential tax

information regarding a prospective

financial backer of their firm.

Investigation of Employees

Employees who engaged in improper

behavior or unlawful actions constitute a

very small percentage of the IRS work force. The vast majority of investigations relating to alleged acts of impropriety by Service personnel result in exoneration of

the employees.

The Internal Security Division completed

17,004 investigations during the year. In

addition, singular and multiple police record searches were conducted on 19,861

persons considered for temporary, short- term appointments or for positions created for special economic and educational programs.

These searches or investigations resulted in the rejection of 199 job applicants and in disciplinary actions such as separations, suspensions, reprimands, warnings or demotion against 957 employees.

The chart on the next page shows the type of investigations completed during the past two years and disposition of those cases.
80

InternalSecurity Division Investigations

-- --------

T-ype of investigations and Actions

Total investigations

Characterand Security

Conduct

special inquiries

Total Personnel investigations

Other investigations

Assault

Disclosure

foreIRS

Against Attorneys, 131-A

Federal Tort Claims 1 n,,stigat ions for Other Treasury Bureaus -

Total other investigations

fficials .on Personnel Investigations

-Total Actions

Separations'

Suspensions from Duty and Pay

Reprimands, warnings and ijemotions

Rejected forEmpl,)Y!1~.~~

Pending Adjudication

Non-Disiplinary Actions'

Separations byType of Offense

Total Separations

Bribery, Extortion or collusion

Embezzlement orThett of Funds or Property

Failure of Employee to Pay Proper I ax

Falsification or Distortion of Reports, Records, etc.

unauthorized outside Activity

Acceptance of Fees and Gratuities

Refusal to cooperate in official investigation

Personal and Other misconduct

,n,,,d ......

n,l,,n-,lhe1sep,,at,onswhiie employees

nd.,gestigallo, or cefore admin,stialive decision ad. on

del'iplinson,ction hall in-tigation disC10=

den,gatoryint-lid

-

1975

18,255

11,104

1,063

2,561

14,728

619

179

1,491

75

134

214 -

825

3,537 -

14,728

256

74

796

195

13,4071

25658

23

1232

1240

75

1976

17,004

10,291

1,011

2,503

13,805

705

182

1,562

52

153

228

317

13,805

237

87

633

199

502

12,147

2376

21

10546622

74

'Inci,des cie-noe and closed Itho, W'.. on

'nd'Ct cludesPendingA i"'astigati-T-iiJU dic-li-n'

Investigative Teamwork

Breaches of integrity by individuals can be investigated jointly by Internal Audit and Internal Security with the assistance of the

IRS Intelligence Division in some cases.

In one case,a former lax technician was arrested for filing 37 false income tax

returns, claiming refunds of over $118,000.

After her arrest, she offered the

explanation that she was "conducting

a

lest" of refund procedure but was unable

to explain 15 savings accounts she had recently opened under fictitious names. A refund scheme in Ohio, which did not

involve an employee, led to the arrest of an

individual who filed false income tax

returns claiming refunds of over $588,000

at five different IRS Service Centers.

Violations of tax laws discovered during

internal audits and integrity investigations

are referred to the IRS Intelligence Division for Investigation if no employees are

involved. During the year, there were 54

such referrals.

In each region, joint Internal AuditInternal Security integrity development

projects were initiated to probe identified

high risk Service operations. For example,

tests were made at Service Centers to determine that revenue receipts were

accurately and timely accounted for. This

included testing whether taxpayer

payments were input to the computerized

Integrated Data Retrieval System in

accordance with prescribed procedures.

Also, controls over taxpayer delinquent

accounts in Office Branches at District

Offices were reviewed, accountability records were verified, and the propriety of

collection actions were determined,

including abatement of penalties and writeoff of accounts as uncollectible. A third project involved tests to determine whether undelivered refund checks were effectively safeguarded at Service Centers against

unauthorized reissuance.

Management

Improvement

Cost Reduction

With the support and involvement of

managers and executives at all levels, IRS vigorously applied its best efforts to

achieve efficiency and savings during

1976. Through

a planned Management by Objectives approach and emphasis on

productivity measurement IRS

accomplisheda number of objectives and

made progress toward others that have

resulted in savings (some ofa cost

avoidance nature) of many millions

of dollars.

81

During 1976 several major projects to reduce mailing and distribution costs were accomplished resulting in savings in

excess of $4 million. The mail

classifications for quarterly mailouts,

Package X, some tax forms orders, as well

as Publications 17 and 334 were changed. Also, the IRS developed a wide commercial bill of lading program for commercial

shipments of tax forms and other printed

material. Each commercial bill of lading produced saves the Government $12.50

over the processing and post audit price of a Government Bill of Lading. Savings in

this area alone exceeded $100,000.

Another similar effort involved diverting to commercial transportation all material that

could not be economically moved by mail

and this created savings of $500,000 per

year over the past two years.

In the telecommuniciitions area the cost

reduction Program initiated last year was

expanded, resulting in improved service at a substantially lower cost. By reducing

Federal Telecommunications System (FTS) charges and local telephone equipment, a

$3.3 million savings was achieved.

The Service's on-going reports curtailment project cancelled enough reports to result in a 1976 savings of approximately

$300,000.
I

82

Records disposal during calendar year

1975 resulted in the release of space and

equipment valued at approximately $2.1

million.A total of 155,098 cubic feet of

records were destroyed in accordance with

regular programs and 365,436 cubic feet of

records were retired to the Federal

Records Center.

Special emphasis was placed on efficient

and economical space and property

management to encourage cost

consciousness. The implementation of

internal management systems provided

a

means for closer monitoring and control of

space and property inventories. These

management systems and the continued

emphasis on cost reduction, particularly

through implementation of open office

planning and multiple occupancy work

stations will result in the release of

additional space in the future. Also

furniture and machine rehabilitation and

repair have prolonged equipment lifetime

and improved utilization.

Employee participation in cost reduction

efforts was successfully promoted through

the Incentive Awards Program. During

1976, 937 employee suggestions were

adopted, resulting in tangible benefits of

$2,008,666 (an increase of $1,298,466 over

last year). A half century of Federal government service

was completed by Mrs. Myre Dodge, Audit

Clerk, in the IRS Detroit District, this year. Mrs.

Federal service with the Veteran, Dodge

Ad August 10, 1925, in Washington,

D.C. In 1933, she transferred to the IRS and

a

year later to the Detroit office where she has

since been employed. During ~o years of

service, Mrs. Dodge has received three Superior

Performance Awards,

a Special Achievement

Award, and two Suggestion Awards.

In addition, 345 awards were granted for

special achievements which saved IRS 'S

$1,328,723 ($792,823 more than last year

savings). In both categories, many

employees received letters signed by

President Ford thanking them for their

participation in improving economy. All

award recipients had created tangible

benefits of $5,000 or more.

The Service continues to rank as one of

the top Federal agencies in the area of

safety and health, although the rate of 2.8

disabling employee injuries per million staff

hours worked in calendar year 1975 is an

increase over the 1974 rate of 1.9.

Service personnel drove 135.3 million miles

on official business in 1975 with 874

accidents for

a low accident frequency rate

of 6.4 accidents per million miles driven.

Executive Development

The Service continued to maintain

a

competent and effective career executive

corps by enrolling 20 employees in

executive development training. Included in

this training were 16 employees selected

by nationwide competition and four

incumbent executives.

Middle Management Development

The Service's course for new middle

managers, reduced last year from four

weeks to two and one-half weeks, was

offered fifteen times. This enabled the

Service to substantially reduce the backlog

of Middle managers requiring this training.

Training costs were further reduced by

conducting the program at field locations

as well as in the National Office.

Basic Management Training

Increased responsibilities have made the

position of the IRS first level manager more

complex and critical. Thus, the Basic

Managem ent Training course, attended by

all new managers, provides the IRS with

a

means to prepare first level supervisors for

their responsibilities. I

Labor

Management

Activities

This year the Basic Management Training

course was redesigned to include more

essential material in the same classroom

lime. Job aids were developed to instruct the manager in the basic mechanics of the position as well as to provide a ready

reference when on the job. Subjects such

as communications, motivation, labor relations, and performance appraisal are taught in a manner that integrates them into the manager's job.

In July 1975 the IRS concluded

negotiations for

a three year Collective

bargaining agreement with the National Treasury Employees Union (NTEU)

covering 30,000 employees in the Data

Center, National Computer Center, and in

9

of 10 service centers. Overall, the National Office agreement, the multicenter

agreement, and the multiregional and

MUltidistrict agreements cover over 65,000 IRS employees.

Commissioner Alexander congratulated National Office Volunteer Income Tax Assistance (VITA)

coordinators for their efforts in organizing the

program to help taxpayers in the Washington, D C.. area. (L to R) Blanca Zayas, Taxpayer Service; John Totten. Fiscal: Athena Evans,

83

This agreement renewed the need for

training managers and Supporting staff people on their supervisory responsibilities under its provisions. Briefings were held for management officials and first level

managers received formal training.

Presently the IRS and NTEU are involved in the process of negotiating a new

multidistrict agreement covering 30.000

employees in 57 of 58 districts. Upon completion of thesepegotiat ions,

negotiations for

a new multiregional

agreement will commence.

Approximately 220 unfair labor practice

cases and 330 collective bargaining

agreement arbitration cases were tiled

during the past year which represents

a

significant increase over the previous

12 Month period.

During the year the agency has conducted training on local negotiations. arbitration, and unfair labor practice procedures to increase the expertise of personnel

specialists engaged in the administration of Executive Order 11491, as amended,

and the provisions of the collective

bargaining agreements.

Taxpayer Service~ Jane Collmson, Tax Programs: Commissioner Alexander: Carolyn Leonard, Asst. Director, Taxpayer Service Betty Frey, Taxpayer

Communications: Jim Owens, Deputy Asst.

Commissioner for Accounts, Colleclion, and Taxpayer Service.

t Ii
I

84

Equal

Employment

Opportunity

Employment of the Handicapped

The IRS continued to increase its

employment of the handicapped in all

occupations. By the end of calendar year

1975, 1,642 handicapped persons were

employed by the IRS. Over 100 blind

individuals were working as taxpayer

service representatives in IRS districts and

as tax examiners in the service centers.

Each year, the IRS focuses attention on the

valuable contributions of IRS handicapped

employees and their ability to perform toplevel work by presenting an IRS

Outstanding Handicapped Employee of the

Year Award. This year, for the first time,

two employees received this honor: Robert

Clayton, from our Phoenix District,.and

Breland Collier, from our Jackson District,

Mr. Clayton received an additional honor in

being selected as the Department of the

Treasury's Outstanding Handicapped

Employee of the Year.

The IRS continued to increase equal

employment opportunity and to insure

Upward Mobility opportunities for all

employees. There was minimum hiring

during the period from year-end 1975 to

year-end 1976, witha total on-board

increase of only4 percent. Increases in

minority representation exceeded that

figure, however, with

a total minority

increase of 4.8 percent, from 14,321 to

15,008. Blacks increased by 4.5 percent

from 11,101 to 11,596, and Hispanics by

13.6 percent, from 2,188 to 2,486. It is also

notable that 21 percent of the total

increase were minorities.

Revenue Officer Training

The Revenue Officer training program

(Phase 111) was changed from two weeks of

classroom training toa self-taught program

requiring about 40 hours of study. This

produced an annual savings of over

$250,000 in travel, per diem, and

staff costs for training about 400 new

Revenue Officers.

Also, the redesigned program eliminated

the need for senior Revenue Officers to

serve as classroom instructors. Instead,

trainees are given individual instruction and

guidance, as needed, by

a Revenue Officer

at their work location.

Taxpayer Service Training

Major efforts have been made to improve

Taxpayer Service employees' training,

Basic courses have been redesigned to

emphasize technical accuracy in answering

taxpayer questions. The training program

for Taxpayer Service Specialists has been

significantly improved to provide greater

tax information in more complex areas.

Also, improvements have been instituted in

the Refresher Tax Law program which is

given all employees furnishing taxpayer

assistance during the filing period. The

Refresher program provides assistors with

sufficient knowledge of tax law to answera

wide range of taxpayers' questions.

Writing Improvement Program

Increased attention was given this year to

our continuing effort to improve the quality

of written communication to the public and

also of our internal-use memorandums,

reports and directives.

The Effective Writing Program was revised

and now includesa three-part training

program for originators, reviewers and

managers. All segments are designed to

ensure that our written communications

are clear, correct, concise, and that

they serve the purpose of the sender

and receiver.

Nearly 600 employees completed this

training during the past year. Our objective

is that all employees responsible for

correspondence will be trained to improve

the Service's written image.

Internal Revenue Manual Revision

The Internal Revenue Manual production

methods are being converted toa more

modern rapid publishing system. The new

system will utilize computerized

composition, data base maintenance for

information retrieval purposes, light-weight

paper anda convenient 6"x 9" size. The

result will bea more up-to-date manual

with space and cost savings over the

current system.

Document Security Program

Although the Internal Revenue Service has

always been concerned with protecting the

confidential nature of information

concerning individuals, new guidelines

were issued this past year to comply with

the Security requirements of the Privacy

Act of 1974. These guidelines require that

all information concerning individuals be

properly protected whether it is recorded

on paper documents, magnetic tape, or

microfilm. This isa further step in the

over-all effort of the Service to protect

against unauthorized disclosure of

taxpayer information.

85

Art Advisory Panel

Since 1968,a 12-member panel of art

experts including museum directors,

scholars, and art dealers, has helped the

Service determine the value of works of art

donated to charity or included in taxable

gifts or estates.

The Commissioner's Art Advisory Panel

held three meetings at the National Office

during fiscal year 1976, The panel reviewed

541 items representing works of art witha

claimed value of more than $40,180,500.

Adjustments were recommended on

approximately 63 percent of the items and

amounted to more than $13,500,000.

Assistance was provided to the panel by

the in-house art program which, in.addition,

provides support to field requests for

valuing such works of art as antique

furniture, ceramics, Oriental and African

Art, gemstones, and historical and political

memorabilia. Almost half of the appraisal

items received are now being referred to

our in-house art activities program for .

valuation recommendations.

In its eight years of operation, the Panel

has reviewed estimates valued at more

than $185 million and has recommended

valuation adjustments of over $48 million.
86

Commissloner's Advisory

Group

The Commissioner named 15 prominent

attorneys, accountants, business

executives, educators, and public interest

representatives to serve as his Advisory

Group during the past year.

The group met with the Commissioner

twice during 1976 to provide him and his

staff with useful observations and

suggestions concerning IRS operations that

have been helpful in expanding taxpayer

assistance to the public.

Members of the group are selected on the

basis of recommendations from

professional and public interest

organizations in the tax field, IRS officials

across the nation, and other groups and

individuals interested in sound tax

administration. The Commissioner's

Advisory Group members serve for one

calendar year without compensation.

Small Business Advisory

Committee

In order to better understand and provide

assistance to small businessmen's

particular tax problems, the IRS instituted a

Small Business Advisory Committee.

During the past year, the Committee has

held two meetings, It reviewed many

issues affecting small business and made

helpful suggestions and recommendations.

Chapter 10

Appendix

"To levy a tax in those cases only hch -,a clearly provided for by Statue, and consequahtly, whenever a

reasonable doubt exists, to r~le against In& government and in favor of the individual .

George S. Boutwel,

Commissoner Of Internal Revenue 1862

I
89

IRS Organizational Chart

. [r--

Map of Regions, Districts

and Service Centers

Key: Commissioner of

~hte net Revenue

Washington, D.C,)

0 District Director Ar National Computer -Regional Boundary

Center

(Martinsburg, W. Va.)

~RS Data Center .... District Boundary

Detroit, Mich.)

Is Regional

Commissioner

Included in Alaska Ha.ai

Western

Region

Region and District Legend:

Central Region Southeast Region

12 C n-hati, Ohio 14 Aulanda, Ga.

C;eveland, Ohio 15 Birmingham, Ala.

3 Covington, Ky. 16 Chamblee, Ga.

(Cincinnati SC)

45 Detroit, Mich, 178 Coli'm Greqns.~Irs,ro, 'N.C.

Ind,imispolis, Ind. 19 Jackson, Miss,

6 L. vilhe, Ky. 20 Jacksonville, Fla.

7 Parkersburg, W. Va. 21 Memphis, Tenn.

Mid-Aliantle Region

22 Nashville, Tenn,

8 Baltimore, Md. Southwest Region

9 Newark, N.J. 23 Albuquerque,

10

Ph

~Iadicliphiz, P N. Max.

1 Pittsburgh, Pa. 24 Austin, Tex.

12

R

chmond, Va. 25 Cheyenne, Wyo.

13 Wilmington, Del. 26 Dallas. Tex.

27 Denver, Coto.

28 Little Rock, Ark.

0 Service Center

Office of international

Operations, National Office

29 New Orleans, La. North Atlantic Region Western Region

30 Oklahoma City, 42 Albany, N.Y, 55 Anchorage, Alaska

WOkla 43 Andover, Mass. 56 Boise, Idaho

31 chn., K.na 44 Augusta, Maine 57 Fresno, Calif.

Bro x;rM Midwest Region 1B B11.11n , 1~1 , S. 11 Helena Mona.

Y. 59 Honolulu, Hawaii

32 Aberdeen,

S

. Dak. 47 Buffalo, N.Y. 60 Los Angeles, Ca~tl.

33 Chicago, Ili 48 Burlington, Vt. 61 Ogden

'

Uta

34 Des Momes. Iowa 49 Hanford Conn. 62 PhDemi,, Ariz.

35 Fargo. N. Dak. 50 Holt-fle, N.Y. 63 Portland. One

36 Kansas City, Mo. (Brookhaven SC) 64 Reno, Nev.

37 Milwaukee. Wis. 51 Manhattan, N.Y. 65 Sall Lake City, Utah

3B Omaha, Neb. 52 New York, N.Y. 66 San Francisco, Calif,

39 Springfield, 111. 53 Portsmouth, N.H. 67 Seattle Wash.

40 St. Louis, Mo. 54 Providence, RA.

41 St. Paul, Min,
90

Commissioners

ofinternal

Revenue

1862-1976

and Acting

Commissioners

during

transitory

periods.

George S. Boutwell

Massachusetts

July 17, 1862/Mar. 4, 1863

Joseph J. Lewi's

Pennsylvania

Mar. 18, 1863/June 30, 1865

William Orton

New York

July 1, 1865YOct. 31, 1865

Edward A. Rollins

New Hampshire

Nov. 1, 1865/Mar. 10, 1869

Columbus Delano

Ohio

Mar. 11, 1869/OCt. 31, 1870

Alfred Pleasonton

New York

Jan. 3, 1871/Aug. 8, 1871

John W. Douglass

Pennsylvania

Aug. 9, 18711/May 14, 1875

Daniel D. Pratt

Indiana

May 15, 1875/July 31, 1876

Green B. Raum

Illinois

Aug. 2, 1876/Apr. 30, 1883

Walter Evans

Kentucky

May 21, 1883/Mar. 19, 1885

Joseph S. Miller

West Virginia

March 20, 1885/Mar. 20, 1889

John W. Mason

West Virginia

Mar. 21, 111389/Apr. 18, 1893

Joseph S. Miller

West Virginia

Apr. 19. 1893/Nov. 26, 1896

W. St. John Forman

Illinois

Nov. 27, 1896/Dec. 31, 1897

Nathan B. Scott

West Virginia

Jan. 1, 1898/Feb. 28, 1899

George W. Wilson

Ohio

Mar. 1, 1899/Nov. 27, 1900

John W. Yerkes

Kentucky

Dec. 20, 1900/Apr. 30, 1907

John G. Capers

South Carolina

June 5, 1907/Aug. 31, 1909

Royal E. Cabell

Virginia

Sept. 1, 1909/Apr. 27, 1913

WilliamH .

Osborn

North Carolina

Apr. 28, 1913/Sept. 25, 1917

Daniel C. Roper

South Carolina

Sept. 26, 1917/Mar. 31, 1920

William M. Williams

Alabama

Apr. 1, 1920/Apr. 11, 1921

David H. Blair

North Carolina

May 27, 11921/May 31, 1929

Robert H. Lucas

Kentucky

June 1, 19291Aug- 15, 1930

David Burnet

Ohio

Aug. 20, 1930IMay 15, 1933

Guy T. Helevering

Kansas

June 6, 1933/Oct 8. 1943

Robert E. Hannegan

Missouri

Oct. 9, 1943/Jan. 22, 1944

Joseph D. Nunan, Jr.

New York

Mar. 1, 1944/June 30, 1947

George J. Schoeneman

Rhode Island

July 1, 1947/July 31, 1951

John B. Dunlop

Texas

Aug. 1, 1951/Nov. 18. 1952

T. Coleman Andrews

Virginia

Feb. 4, 1953/Oct. 31, 1955

Russell C. Harrington

Rhode Island

Dec. 5, 1955/Sept. 30, 1958

Dana Latham

California

Nov. 5, 1958/Jan. 20, 1961

Mortimer M. Caplin

Virginia

Feb. 7, 11961/July 10, 1964

Sheldon S. Cohen

Maryland

Jan. 25, 1965/Jan. 20, 1969

Randolph W. Thrower

Georgia

Apr. 1, 1969/June 22, 1971

Johnnie M. Walters

South Carolina

Aug. 6, 1971/Apr, 30, 1973

Donald C. Alexander

Ohio

May 25, 1973

91

Office of Commissioner of Internal

Revenue Created by Act of Congress, July

1, 1862

In addition, the following were Acting

Commissioners during periods of lime

when there was no Commissioner holding

the office:

John W. Douglas, of Pennsylvania from

Nov. 1, 1870. to Jan. 2. 1871: Henry C.

Rogers, of Pennsylvania, from May 1 to

May 10, 1863, and from May1 to June 4,

1907: John J. Knox, of Minnesota from

May 11 to May 20, 1883; Robert Williams,

Jr., of Ohio, from Nov. 28 to Dec. 19, 1900:

Millard F. Wesl, of Kentucky, from Apr. 12

to May 26, 1921~ H. F. Mires, of

Washington, from Aug. 16 to Aug. 19,

1930; Pressly R. Baldridge, of Iowa, from

May 16 to June 5, 1933: Harold N. Graves.

of Illinois, from Jan. 23 to Feb. 29, 1944.

John S. Graham, of North Carolina. from

Nov. 19. 1952, to Jan. 19, 1953~ Justin F.

Winkle, of New York, from Jan. 20 to Feb.

3, 1953: 0. Gordon Delk, of Virginia, front

Nov. 1 to Dec. 4, 1955. and from Oct.I to

Nov. 4, 11958~ Charles 1. Fox, of Utah, from

Jan. 21 to Feb. 6, 1961: Bertrand M.

Harding, of Texas, from July 11, 1964 to

Jan. 24, 1965; William H. Smith of Virginia,

from Jan. 21 to Mar. 31, 1969: Harold T.

Swartz of Indiana, from June 23 to

Aug. 5. 1971~ and Raymond F. Harless of

California from May1 to May 25, 1973.

Internal Revenue Commissioners who sewed in Cabinet positions.

G:

- Bou"all

S Daniel

CR

~`egt.0ISY.ftIn. T,eas

u ry Secretary' 010ronoterce 1869.1

873 1933-1939

Columbus Delano Robert E. Hannegan Secretary of the Interior Postmaster General 1870-1875 1945-1947
92

Principal

Officers

of the

Internal

Revenue

Service

as of

September 30,

1976

National Office

office of the Commissioner

commissioner

Donald C. Alexander

Deputy commissioner

William E. Williams

Assistant to the Commissioner

Meade Emory

Thomas V. Glynn

Assistant to the Commissioner

(Public Affairs)

A.JamesGolalo

Assistant to the Deputy Commissioner

Michael J. Murphy

Accounts, Collection and

TaxpayerService

Assistant Commissioner

(Vacant)

DeputyAssistant Commissioner

James 1. Owens

Division Directors:

Collection

f-66mas-L. Davis

Ret urns Processing

[ ACc ounting

Rusi~il t. Dyke

Tax Administration Systems

6j~ria'j-. FtuftI6'-

"

Taxpayer §ervice

Stjnley Goldberg

IRS Data center..Detroit,.Mich.

jarn&s E. Dally, Jr.

National Computer Center,

Miilins6i~ii',W.W: , -

William E. Palmer

aqmjn~on

Assistant Commissioner

Joseph T. Davis

DeputyAssistant Commissioner

Alan A..Beck

Division Directors:

Facilities Management

LeoC Inglesby

Fiscal Management

Joseph F. KumP

Personnel

Billy J. Brown

TaxAdministration Advisory Services

Gordon C. Hill, Jr.

Training

Orion L. Birdsall

Deputy Equal Employment

opportunity officer

Barbara R. Thompson

Commpllance

Assistant Commissioner

S. B. Wolfe

Deputy Assistant Commissioner

Philip E. Coates

Division Directors:

Appellate

James C. Stigamire

Audit

John L, Wedick, Jr.

Intelligence

Thomas J. Clancy

Office of International Operations

Joseph G. McGowan

ETj?!_YA9?.1a"fFxemPt

9:rgWn1- Za9(?P5

Assistant commissioner

Alvin D. Lurie

Deputy Assistant Commissioner

Theodore C. Rademaker

Division Directors:

Actuarial

(Vacant)

Employee Plans

Fred J. Ochs

Exempt Organizations

Joseph A. Tedesco

Inspection

Assistant Commissioner

Warren A. Sates

Deputy As istant Commissioner

Robert L. R:bein

Division Directors:

InternalAudit

Rudolph W. Arena

Internal Security

William E. Mulroy

Planning and Research

Assistant commissioner

Anita F. Allpern

Deputy Assistant Commissioner Walter E. Bergman

Division Directors:

Internal Management Documents

Jack G. Petrie

Legislative Analysis

Claude D. Baldwin

Research and Operations Analysis Walter E. Bergman

Statistics

Vito Natrella

itEt!swAssistant Commissioner

John L. Withers

DeputyAssistant Commissioner

S. A. Winborne

Division Directors:

Corporation Tax

John W. Holt

Individual Tax

Aaron Felbel

Tax Forms and Publications

Roy J. Linger

Office of Chief Counsel

ICR@-C-~~ un ~17--'

Meade Whitaker

Deputy Chief Counsel

Charles L. Saunders, Jr.

Technical Advisors

to Chief Counsel

David E. Dickinson

Daniel F. Folzenlogen

StaffAssistant

to Chief Counsel

Richard A. Fisher

Staff Assistant

to Deputy Chief Counsel

James T. Fuller, III

Associate Chief

Counsel (Tax Litigation)

Dennis J. Fox

SpecialAssistant

toAssociate

Chief Counsel

(Tax Litigation)

Margaret M. Richardson

StaffAssistant

to Associate

Chief Counsel

(Tax Litigation)

Lewis J. Hubbard, Jr.

Division Directors:

Administrative Services

Joseph H. Hairston, Acting

CriminalTax

David E. Gaston

Disclosure

James L. Keightley

General Legal Services

George J. Shaw, Jr.

General Litigation

Harold T. Flanagan

Interpretative

Jerome D. Sebastian

Legislation and Regulations

James F. Dring

Refund Litigation

John H. Menzel

Tax Court Litigation

David R. Brennan

Aggigria.Uand District Officers

Central Region

All Regional Officers at 550 Main Street,

Cincinnati, Ohio 45202, unless

a different address is indicated.

Regional Commissioner

Leon C.G reen-

Assistant Regional Commissioners: Accounts, Collection [ Taxpayer Service L. Stanley Baker

Administration

Anthony W. D'Amato

Appellate

Claude C. Rogers, Jr.

Audit

Jack P. Chivatero

Employee Plans/Exempt Organizations Edwin A. Kelleher

Intelligence

Harold B. Holt

93
~ii

94

District Directors:

Cincinnati, Ohio 45201

Dwight L. James, Jr.

Cleveland, Ohio 44199

Robert J, Dath

Detroit, Mich. 48226

Roger L, Plate

Indianapolis, Ind. 46204

JamesW.Caldwell

Louisville, Ky. 40202

Paul F. Niederecker

Parkersburg, W.Va. 26101

T. Blair Evans

Director, Cinicnnati Service Center,

Covington, Ky. 41011

John 0. Hummel

RegionalCounsel

David E.M 11 Is

Regional Inspector

John E. McManus

Mid-Atlantic Region

All Regional Officers at 2 Penn Center Plaza,

Philadelphia. Pa. 19102,uniessa

different address is indicated

Regional Commissioner

William D. Waters

Assistant Regional Commissioners:

Accounts, Collection

[ Taxpayer Service

Leroy C. Gay

Administration

Americo P. Attorri

Appellate

Reuben H. Saideman

Audit

Paul H. Thornton

Employee Plans/Exempt Organizations

James J. Ryan

Intelligence

Robert L. Browne

District Directors

Baltimore, Md. 21201

Gerald G. Portney

Newark, N.J. 07102

Elmer H. Klinsman

Philadelphia, Pa. 19108

James T. Rideoulte

Pittsburgh, Pa. 15222

Cornelius J. Coleman

Richmond, Va. 23240

James P. Boyle

Wilmington, Del. 19801

James E. Quinn

Director, Philadelphia Service Center,

Philadelphia, Pa. 19155

Norman E. Morrill

Regional Counsel

Robert L. Liken

Regional Inspector

Benjamin J. Redmond

Midwest Region

All Regional Officers at I East Wacker D rive

Chicago, Ill. 60606, unless

a

different address is indicated

Regional Commissioner

Edwin P. Trainor

Assistant Regional Commissioners:

Accounts, Collection

[ Taxpayer Service

Thomas J. Laycock

Administration

David S. Burckman

Appellate

Bernard L. Hardiek

Audit

Leon Moore

Employee Plans/Exempt Organizations

John Edwards

Intelligence

Robert J. Bush

District Directors

Aberdeen,S.Dak. 57401

John B. Langer

Chicago, 111. 60604

Charles F. Milian!

Des Moines, Iowa 50309

Donald J. Porter

Fargo, N.Dak. 58102

Mitchell E. Premis, Jr.

Milwaukee, Wis. 53202

Lawrence M. Phillips

Omaha, Neb. 68102

Everett Loury

Springfield, 111. 62704

Ira S. Loeb

St.Louis,Mo. 63101

Richard C. Voskuil

St.Paul,Minn. 55101

C. Dudley Switzer

Director, Kansas City Service Center

KansasCIty,M0 64170

Roy D. Clark

Regional Counsel

Frank C. Conley

Regional Inspector

John T. Kelly

North-Atlantic Region

All Regional Officers at

90 Church Street

New York, N.Y. 10007 unless

a different

address is indicated

Regional Commissioner

Elliott H. Gray

Assistant Regional Commissioners:

Accounts, Collection[ Taxpayer Service Marshall P. Cappelli

Administration

Harry J. Bodkin

Appellate

Richard E. Fogwell

Audit

Joseph Slipowitz

Employee Plans/Exempt Organizations

Toomer F. Carr

Intelligence

Harry P. McCall

District Directors:

Albany, N.Y. 12206

Raymond A. Spillman

Augusta, Maine 04330*

John J. Jennings

Boston, Mass. 02203

Herbert M. Mosher

Brooklyn,N.Y. 11201

George S. Alberts

Buffalo, N.Y. 14202

William H. Tompkins

Burlington,Vt. 05401

Peter L. Dillon

Hartford,Conn, 06103

Pete J. Medina

Manhattan, N.Y. 10007

Charles H. Brennan

Portsmouth, N.H. 03801

Frank T. Murphy

Providence, R.I. 02903

John J. O'Brien

Director, Andover Service Center,

Andover, MA 01812

M. Eddie Heirommus

Director, Brookhaven Service Center, Holtsville,N.Y. 11742

Theodore E. Davis

Regional Counsel

Sidney M. Wolk

Regional Inspector

John T. Gallagher

95

Southeast Region

All Regional Officers at 275 Peachtree Street N.E..Atlanta,GA 30303,unlessa

different address is indicated

Regional Commissioner

Harold A. McGuffin

Assistant Regional Commissioners:

Accounts, Collection

[ Taxpayer Service

William E. Douglas

Administration

Philip N. Sansotta

Appellate

Tully Miller

Audit

Philip J. Sullivan

Employee Plans/Exempt Organizations

Billy M. Hargett

Intelligence

Anthony V. Langone

District Directors:

Atlanta, Ga. 30303

John W. Henderson

Birmingham,Ala. 35203

Dwight T. Baptist

Columbia, S.C. 29201

Harold Bindseil

Greensboro, N.C. 27401

Robert A. LeBaulbe

Jackson, Miss. 39202

William Daniel

Jacksonville, Fla. 32202

Charles 0. DeWitt

Nashville,Tenn. 37203

James A. O'Hara

Director, Atlanta Service Center

Chamblee, Ga. 30006

William B. Hartlage

Director, Memphis Sepvice Center

Memphis,Tenn. 38110

Claude A. Kyle

Regional Counsel

Jack D. Yarbrough

Regional Inspector

Dale W. Gardner
96 i

Southwest Region

A]) Regional Officers at

7839 Churchill Way,

Dallas,Texas 75251, unlessa different

address is indicated

Regional Commissioner

Walter T. Coppinger

Assistant Regional Commissioners:

Accounts, Collection[ Taxpayer Service

Joseph E. Bishop

Administration

RaymondAstumian

Appellate

Douglas M. Moore

Audit

Howard C. Longley

Employee Plans/Exempt Organizations

Percy P. Woodard, Jr.

Intelligence

John M. Rankin, Jr.

District Directors:

Alburquerque,N.Mex. 87101

Arturo A. Jacobs

Austin, Texas 78701

Robert M. McKeever

Cheyenne, Wyo. 82001

Bobby G. Hughes

Dallas,Texas 75202

Alden W. McCanless

Denver,Colo. 80202

Gerald L. Mithlbachier

Little Rock, Ark. 72203

Paul D. Williams

NewOrleans, La. 70130

Robert M. Cults

Oklahoma City, Okla. 73102

(Vacant)

Wichita, Kans. 67202

Maurice E. Johnson

Director,Austin Service Center

Austin, Texas 78740

Leonard E. Semrick

Regional Counsel

William B. Riley

Regional Inspector

Paul F. Kearns

Western Region

All Regional Officers at 525 Market Street,

San Francisco, Calif. 94105 unless

a different

address is indicated

Regional Commissioner

Thomas A. Cardoza

Assistant Regional Commissioners:

Accounts, Collection[ Taxpayer Service

John 0. Johnson

Administration

Kenneth G. Rivett

Appellate

(Vacant)

Audit

Johnnie Robertson

Employee Plans/Exempt Organizations

Ralph F. Albrecht

Intelligence

Richard C. Wassenaar

District Directors:

Anchorage, Alaska 99510

Charles E. Roddy

Boise, Idaho 83724

Howard T. Martin

Helena, Mont. 59601

Frederick C. Nielsen

Honolulu, Hawaii 96813

William M. Wolf

Los Angeles, Calif. 90012

William H. Connell

Phoenix, Ariz. B5025

Prescott A. Berry

Portland, Ore. 97204

Ralph B. Short

Reno, Nev. 89502

Gerald F. Swanson

Salt Lake City, Utah 84111

Roland V. Wise

San Francisco, Calif, 94102

Francis L. Browitt

Seattle,Wash. 98121

Michael D. Sassi

Director, FresnoService Center

Fresno, Calif. 93730

Fredric F. Perdue

Director, Ogden Service Center

Ogden, Utah 84402

Robert H. Terry

Regional Counsel

Emory L. Langdon

Regional Inspector

Frederick R. Rowe, Jr.

Audit Charts and Tables

11 I
98

Table 1-Audit StaffYears Realized, FY 1976

Years

Revenue Agents

Planned' Actual' Percent

14,097 14,166 100.6

United States .9

North Atlantic 2,888 2,885 99

1,844 1,841 99.8

Mid-Allantic

1,574 1,606 102.0

Southeast

Central

1.564 1,598 T02.2 9 2 ,

067 2,062 .

Midwest

7 100

Southwest

Western

010

-jaxAuditors

1,751 753-

2,310 2,325 100.6

99 96 97.0

4,763 4,763 100.0

United States

North Atlantic

Mid-AtIantiC

763 772 101.2

566 579 102.3

650 687 105.7

Southeast 102.2

Central

451 461

567 557 98.2

Midwest

518 486 93.8

Southwest

1,180 1,148 97.3

Western

68 73 107.4

010

-

Other (Permanent)' -96

9

North Atlantic . 6,947 6,

1,252 1,193

789 786 96

Mid-Atlantic

Southeast

&entnal

ti,dwe.t

ToUth.e.t

Western

010

(I operatiny Financial Plan

Repon

o A-Xe Positions Realited and Cost, incurred.

ncludes ~omor Regional nalysts)

includes ARC A.;II, Executive Astuatiunt. Chief of

Audit and Clans.

-

861 824 -

748 767

1,008 952 --818

1,320 1,257

152 135

95.7 -

102.5

94.4 -1 0'-'

95.2 -

88.6

99

Table2. Returns Filed, Examinations, and Audit Coverage

individual, total

NB Under $10.ODO N B $10,000 U nder $50,000 N B $50,000 and Over B Under $10,000 , B $ 10,000 Under $30,000

B$30,000aindOver

Fiduciary

Corporation, total

Assets not reported Under $50,000

$50,000 Unde,$100,000

$100,000 Under $250,000

$250,000 Under $500,000

$500,000 Under$l full,

$1 Mil. Under$5Mil.

$5 Mil. Undbr$10MII.

$10filil. Under$501AH.

$50 Mil. Under$100 Mil.

$100 1011. andOver

Estate, total

Gross Estate Under $300,000

Gross Estate $300,000 and Over

Gift

Income, Eslateand Glftjotal

SeNice Center Examination

Inc., Est.and Gift

Income, Estateand Gift,

Grand Total

E.ciset

District

S-ice Center Examinations

Employment

Service Center Disposals:

Total

Examinations

Corrections

Returns Examined FY 1976 Returns

Filed

Percent

Revenue Tax

0

CY 1975 Agents Auditors Total Coverage

83,913,057 326,951 1,560,449 1,887,400 2.25

42,924,677 37,216 731,641 768,857 1.79'

30,348,306 74,872 670,476 745,348 2.46

566,948 51,986 18,511 70,497 12.43

4,685,157 43,093 93,681 136,774 2.92

4,466,931 57,531 36,077 93.608 2.10

921.038 62,253 10,063 72,316 7.85

1,558,570 18,625 109 18,734 1.20

1,765,539 166,709 1,044 167,753 9.50

125,587 8,405 62 8,467 6.74

649,353 21,340 649 21,989 3.39

251,053 15.926 206 16,132 6.43

319,567 24,929 66 24,995 7.82

176,646 25,672 31 25,703 14.55

109,011 20,610- -2010 ,620 18.92

94.718 32,246

1

4 32,260 34.06

14,848 5,855

18,052 7,144

2,974 1,644

3,730 2,938

2

5,

857 39.45

7,145 39.58

2 1,646 55.35 % 2,939 78.79

225,827 39,649 8,473 48,022 21.27

195,448 21,264 7,641 28,905 14.79

30,379 18,285 832 19,117 62.93

273,184 10,214 -2,727 12,941 4.74

87,738,177 562,040 1,572,802 2,134,850 1-431 - - 134,628 .15~ -

562.048 1,572,802 2,269,478 2.591

846,508 79,394 12,827 98.797 11.43 - 79,394 12,827 92,221

6,576-

24,737,828 92,054 39,816 131,870 .53 - 1,882,178

141,204

- 1,740,974

.8 .1" Ctgag, In N1,3,Under $10,000 Standard kl~ Perc,%ndt,r,lc

femi~ad 4.33 tax.. 'Excludes swat occupational and alcohol and tobacco

'Does not add due to rounding.
100

Table 3.-Accomplishments vs Plan, FY 1976 Revenue Agents

Tax Class

Percent

Desys' Returns of Plan

Plan Actual Plan Actual Desys Returns

Individual Total 2,649

Form 1040-Standard

3

2,845 317,552 326,951 107 103

42 740 8,144 1,367 1,101

NB under$10,000-

Itemized

-

130 157 22,365 29,072 121 130

NB $10,000 under50,OOO 329 430 58,569 74,872 131 128

NB $50,000and over 389 408 50,016 51,986 105 104

ITund.r$10,000 471 495 49,564 43,093 105 87 B $10,000 under$30,000 575 584 63,065 57,531 102 91 B $30,000 and over 752 729 73,233 62,253 97 85

Fiduciary 127 141 14,526 18,625 Ill 128

Corporation Total 3,474

-

No Balance Sheet 65

Under$50,000 191.

3,615 165,757 166,709 104 101

47 5,133 8,405 71 164

180 20,256 21,340 95 105

V50,000 under$100,000 145 152 15,436 15,926 105 103

$100,000 under $250,000 228 251 24,513

$250,000 under$500,000 279 280 26,451 5 0,000 under $1 Mil. 255 266 21,419

$1 Mil. under $5 Mil. 570 639 33,125

$5 Mil. under $10 M11. 195 211 6,876

24,929 110 102

25,672 101 97

20,610 104 96

32,246 112 97

5,855 108 85

j10 Mil. under$50 Mil. 331 398 7,688 7,144 120

$50 Mil. under $100 Mil. 163

$100 Mil. and over 1,052

Estate

Gift

income, Estate& GiftTotal

j.cI,,

Employment

Join tCompliance

93

165 1,945 1,644 101 85

1,026 2,915 2,938 98

567 580 39,228 39,549

57 8,396 10,214

6,859 7,238 545,459 562,048

176 188 75,283 79,394

235 252 94,780 92,054

93 41

Special Enforcement Program 289 271

102

134

106

107

107

-- 44

101

101

122

103

105

109

101

Table 4.

-Accomplishment vs Plan, FY 1976 TaxAuditors

Tax Class

Individual total

Form 1040-standard

NB under$10,000-

itemized

Desys, Percent

Returns of Plan

Plan Actual Plan

-

Actual

-

Desys Returns

2,342 2,580 1,516,187 1,560,449 10 103

176 182 195,768 198,989 104 102

594 676 501,281 5~2652 114 106 NB $10,00o under$50,000 873 1,088 659,273 670,476 125 102 NB $50,000and over B under$10,o0o B $10,000 under$30,000 140 B $30,000 and o-ver44

Fiduciary

Corporation

Estate

Gift

42 39 19,499 18,511 94 95

473 430 100,881 93,681 91

-

93

127 30,176 36,077 91 120

37 9,309 10,063 84 108

109

-

-

-

3

_Z 1,044

41 39

-

8,676 8,473 96 98

10

8 2,998

2 727 83 91 ,

InCOMO, estate, giftTotal 2,393 2,630 1,527,861

-

-

1,572,802 110 103 Excise

Employment

Timct e-inalion staff-yeam

18 19 11,680 12,827 101 110

44 40 38,643 39,816 90-103
103

Table 5.-Audit Recruitment - Commitments and Appointments, FY's 1974-1976

Region

Revenue Agents

United Slates

North Atlantic

Mid-Atlantic

FY 1976 FY 1975 FY 1974

956 981 956

145 160 156

120 112 101

North Atlantic

Midwest

125 118 133 232 77 512

117 115 115 Southeast

Mid-Atlantic 121 -34 492

Central

Midwest

Southwest

Western

010

Tax Auditors

154 178 159

155 137 120

132 152 162

8 9 10

497 484 512

67

United States North Atlantic

North Atlantic 54 64 81

9 76 Mid-Atlantic

Mid-Atlantic

Southeast

Southeast

Table 6.-Audit Attrition- RevenueAgents and TaxAuditors, FY', 1974.1 976

Region

RevenueAgents,

United States

Southeast

Central

Midwest

Southwest

Western

TaxAuditors

United States

75 77 70 147 228 305

50 40 40 Central

Central

Midwest

Southwest

Western

010

64 63 82

52 53 66

131 125 96

4 3 1

Southwest

Western

'include, Estate Ta~ Attorney, and Vatuatibn Engineers

FY 1976 FY 1975 FY 1974

1,192 597 3,376

177 143 491

161 30 206

222 27 596

67 25 529

212 261 550

1,119 1,150 2,031

-

158 205 350

115 53 403

126 130 84

174 112 283

25 -

197

374 422 409
104

Table 7.-Revenue Agents and TaxAuditors (District Audit Divisions)

Percent of Returns Examined

By Type of Tax

FY 1976

Percent of Time Spent on Examinations

By Type of Tax

FY 1976

Estate2.0%

Corporation7.1%

All Other

Glft0.5%

Exclse3.9%

Employment 5.6%

Individual and

Fiduciary 80.8%

Total returns examined 2,358,941

I\j 11riven-All"11-d-r-Aud'10,

IDistrict Audit Di,is~ons)'

Estate 5.7%

Corporation 33.4%

All Other

GIft0.6%

Excise 1.9%

Employment 2.7%

Other,11.3%

Individual and

Fiduciary5l.4%

Direct Examination Time

(Days) 2,728,999

E'cludas Service Center. Pension Tmst and

E.empt Organ"tion Return.

105

Table 7.-RevenueAgents and Tax Auditors-Continued

Percent of Dollar Recommendations (Millions) By Type of Tax

FY 1976

Percent of Collections By

Type of Tax

FY 1976

Estate 10.4%

Corporation 54.1%

All Other

Gift 1.71)~

Excise 1.9%

EmPloyment3.4%

Individual and

Fiduciary28.5%

F

ations (Millions) $4,913

Tot.I Doll.,

Estate and Gift 1.8%

Corporation IS.9%

Individual and

Fiduciary s4.o%

Excise3.2%

EmPloyment25.2%

Total Collections (Billions) $294.6
107

TableB.-Large Deficiencies Recommended ($100,000 & Over)

Returns and Dollars, FY's 1974-1976

Region

Returns

UnitedStates

FY 1976 FY 1975 FY 1974

'5,143 15,137 '5,731

North Atlantic 1,130 1,122 1,436

1

Southeast

Central

Midwest

675 797 703

~35 633 683

529 559 686

791 683 868

Southwest 677 602 625

1

010

Dollar Recommendations (Millions)

39 831 __1,001

81 112 61

$2,959.2 $3.421.3 $4,220.9 United States

North Atlantic

Mid-Atlantic

Southeast

Central

Midwest

Southwest

Western

010

'Regional totals do not add to US. Total be-tr Of SPKial

rsporting procaduras to' WoQ8 cases.

767.0 814.4 1,241.1

. 371.9 608.2 370.3

281.7 396.0 385.0

296.6 415.6 509.4

440.0 403.5 630.9

390.3 294.5 394.5

368.4 427.3 668.6

43.5 61.7 21.2

Table 9 - Large Deficiencies ($100,000 and over)

Percent of Relationship to Total Tax (District Audit Divisions)

U.S. by Year

FY 1976

FY 1975

FY 1974

North

Atlantic

Mid-Atlantic

Southeast

Central

Midwest

Southwest

Western

Office of

International

Operations

7

By Region, FY 1976

60%

67%

72%

Total dollars

recommended

(millions)

$4,913 ~ I

$5,134

$5,847

Exclu

"ic

Pension trust and E=SPf`0n9'wCiz-alls'n' Return.,
I

108

Table 10-Individual Returns-Accomplishments In Relation

toPlan FY 1976 RevenueAgents

Region Planned Actual Percent

UnitedStates

North Atlantic

Mid-Atlantic

Southeast

Central

Midwest

Southwest

Western

010

Returns Examined

667,611 716,821 107

109,754 109,325 100

71,169 80,336 113

86,400 93,839 109

73,183 113,638 114

118,206 91,570 104

97,715 97,779 100

137,682 155,773 113

3,502 4,564 130

317,552 326,951 103 United States

North Atlantic

Mid-Atlantic

Southeast

Central

Midwest

Southwest

Western

010

49,371 54,611 ill

34,376 40,253 117

38,121 41,948 110

34,034 36,228 106

42,199 37,763 89

45,963 39,1 B4 85

72,445 75,242 104

1,043 1,722 165

Table 11.- Revenue Agents Accomplishments-individual Returns (District Audit Divisions)

U.S. Activity

Fiscal FY's 1974-1976

Year Direct Time (Days)

1974

1975

1976

1974

1975

1976

Returns(Number)

Planned100%

Note: IndWidual end Ficludwy Corrtbined for 1974

106%

103%

107%

109
I

110

ill

Table 13-Examination Time, Returns and Dollars-Individual and Fiduciary- FYsl974-1976

Table 12 -Acco-Dilshments In Relation to Plan-Fiduciary Returns FY 1976 RevenueAgents

Revenue Agents

Planned Actual Percent I

Region FY 19761 FY 19751 FY 19741

Region Direct Examination Time (Days)

Direct Examination Time (Days)

31,997 35,453 1-11 United States 752,274 754,230 586,660

United States

-

North Atlantic 116,250 128,028 97,487

North Atlantic 9,256 6,925 _L5

Mid-Atlantic 4,959 3,934 79 84,270 86,445 71,378

Mid-Atlantic

2,556 3,700 145 Southeast 97,539

--h-i

-

Central

Midwest

Southwest

Western

010

Returns Examined

United State$

North Atlantic

Wid-Atlantlc

Southeast

Central

_~_idwest

Western

-6- 10

2,911 4,268 147

4,475 5,500 123

3,730 5,457 146

4,085 5,657 139

25 13 52

14,526 18,625 128

3,547 4,359 123

1,988 2,313 116

1,386 1,588 115

1,321 1,914 145

2,509 3,260 130

1,634 2,310 141

2,136 2,871 134 5 10 200

Central

Midwest

Southwest

Western

International operations

Returns Examined

United States

North Atlantic

Mid-Atlantic

Southeast

Central

Midwest

Southwest

Western

101,002 75,686 11

87906 78167 66025 1 -

97,070 95,673 75,402

103,236 111,309 81,251

161,430 149,894 115,815

4,577 3,714 3,619

345,576 366,728 311,267

58,970 57,597 44,120

42,566 43,264 34,963

43,536 47,410 38,406

38,142 41,145 31,394

41,023 45,238 44,216

41,494 51,752 52,862

78,113 79,095 64,120 .

International Operations 1,732 1,227 1,186

Dollar Recommendations (Millions)

United States

North Atlantic

Mid-Atlantic

Southeast

Central

Midwest

Southwest

Western

International Operations

$1,019.0 $947.7 $896.8

192.9 ! ' . 194.6 185.0

119.2 116.0 96.7

177.8 155.5 129.8

93.3 93.4 81.5

113.0 87.4 67.8

118.6 96.8 102.1

176.8 194.9 225.9

27.5 9.2 8.0

Note: Dollars may not add due to rounding.

'In dividual and FIduciary combined for comWison w1th FY

1974.

I
112

(

Table 14-Revenue Agents

Average Hours Per Return)

Individual and Fiduciary returns by class and region FYs 1974-1976

Class

Fiscal Years

1976 1975 1974

*17.5 Total (individual & Fiduciary)

Form 1040 Standard

Nonbusiness, under $10,000- Itemized

Nonbusiness, $10,000 under $50,000

Nonbusiness, $50,000 and over

Business, under$10,000

Business, $10,000 under $30,000

Business, $30,000 and over

Total Fiduciary

Region

United States

North Atlantic

Individual bg class only to, FY 1975 and Fy 1976

individual and Iduciarl, We combined for FY 1974 riltint data.

"Includes Individual and Fiduciary by ragi-h for

comparison with Fy 1974.

11.5

16.8

*16.3 16.0

10.0

13.6 11.9

9.4

12.6 11.0 9.3

15.7 15.9 17.5

21.2 19.4 22.0

19.6 18.6 19.5

22.5 20.9 21.9

13.6 10.3

**17.5 -16.3 16.0

18 18.9 21.1

Table

Individual IS.- Revenue Agents (Average Dollar Recommendations Per Return) and Fiduciary Returns by Class and Region FYs 1974-1976

Class

Total (Individual

& Fiduciary)

Form 1040 Standard

2,596

1976 1975 1-974

32,949 '$2,584

1,087

Nonbusiness, under$140- ,000-IterWized

Ko n:b:u.~in::e

~. , $l 0,0

00~du n e, $ 5 0,~000

Nonbusiness, $50,000 -

and over

Business,

Business,

$10,000

under $10,000

under$30,000 -

Business, $30,000 an~ over

Total Fiduciary

Region

United States

North Atlantic

Mid-Atlantic

Southeast

Central

Midwest

Southwest

Western

International Operations

Cl Fiduciary

by

arecombined!

cl .. only for Fy 1975and FY 1976 individual to, FY 1974cia.. data. '

"Includes individual and Fiduciary by region for com. Parrifion with FY 1974.

Fiscal Years

846

2,917

$2,881

1,307

113

2,023

1,759 1,530 1,377

4,761 5,- 837 7,731

1,912 1,565 2,236

1,650

-

1,463 1,941

4,931 3,672 4,752

~1,817__

-$2,949 "$2,584 $2,881

3,271 3,379 4,194

2,800 2,680 2,765

4,084 3,279 3,379

2,447 2,270 2,595

2,754 1,931 1,534

2,857 -

1,871 1,931

Z,zb3 2,464 3,523

15,858 7,487 6,777
114 115

Table 16.- No Change percent-Individual and Fiduciary -Return andTimeby Class and Region-FYs 1974-1976

Revenue Agents

Returns

_TY FY FY FY FY FY

1976 1975 1974 1976 1975 1974

Class

Total(individual

& Fiduciary) *16 *19 23 *13 *15 14

Form 1040 Standard

NB under$10,000

NB$10,000 under50,OOO

NB$50,000and over

-Business under$10,000

16 23 34 11 15 17

15 20 24 11 14 15

12 16 27 10 12 15

12 18 21 11 15 13

T3

6 19 20 12 14

Bu iness $10,000 under $30,000 15 18 20 11 14 15

Business $30,000 and over 16 18 20 12 14 14

Total Fiduciary

Region

United States

North Atlantic

Mid-Atlantic

Southeast

Central

Midwest

55

- 47 51

-

-16 ..19 23 **13 **16 14

15 19 18 13 16 13

20 23 24 17 19 17

16 18 21 11 14 Ij -

18 19 21 14 15 15

15 16 25 12 13 15

16 21 30 12 16 16

Southwest

Western

010-

Cl"s

only for FY 1975 and FY 1976. .,,~ndlvldual b~ am

dual and ld,ciary cOmbinaci for FY 1974 Class

d:

jt~

Includes IldlAdual and Fiduciary t,y region for

alparnson with FY 1974.

15 19

Table 17.-Accompli sh Monts In Relation to Plan-Individual Returns-FY1976 TaxAudltors

Time

Region Planned Actual Percent

19 13 15 14

19 22 24 17 19 19

Direct Examination Time (Days)

United States

North Atlantic

Mid-Atlantic

Southeast

Central

Midwest

Southwest

Western

010

Returns Examined

UnItedStates

North Atlantic

Mid-Atlantic

Southeast

Central

Midwest

Southwest

Western

010

590,149 649,848

95,649 105,156

68,738 80,029

-

110

110

116

88,802. 104,792

8

53,487 61,941

67,089 74,124

68,363 68,587

139,950 146,347

116

ill -

100

105

8,071 8,876 110

1,516,187 1,560,449

265,496 284,337

186,148 204,007

103 -

107

110

230,768 241,165

1

05

128,987 149,877 116

160,943 146,847 91

157,586 146,490 93

368,181 367,408 100

18,078 20,318 112

1:
119

Table20.-Tax Auditors (Average Hours per Return)

Individual and Fiduciary Returns by Class and Region FYs 1974-76

Fiscal Years

Table 21.-TaxAuditors (Average Dollar %commendations per Return) Individual and Fiduciary Returns by Class nd Region FYs 1974-1976

Fiscal Years

1976 1975 1974 1976 1975 1974

Class

Total (individual

& Fiduciary)

Form 1040 Standard

Nonbusiness, under $10,000-Itemized

Nonbusiness, $10,000 under$50,000

Nonbusiness, $50,000 and over

Business, under $10,000

Business, $10,000 under $30,000

Business, $30,000 and over

Total Fiduciary

Region

United States

North Atlantic

Mid-Atlantic

Southeast

Central

Midwest

Southwest

Western

international Operations

*3.0 *2.8 2.5

1.7 1.0 1.4

2.4 2.4 2.1

2.9 2.8 2.4

3.6 3.7 3.3

8.0 7.8 8.3

6.3 6.3

6.4 6.5

4.9 4.5

5.9

6.1

**3.0 *'2.8 2.5

2.7 2.6 2.6

2.7 2.7 2.5

3.1 2.9 2.2

3.0 2.8 2.6

3.5 3.3 2.7

3.5 3.1 2.3

2.8, 2.8 2.8

2.4 2.6

'Individual bycls-rity, Io,FY 1975and FY 1976. Individual

and Fiduciary am combined to, -inon.- with FY 1974

,,;,-Includes Individual and Fiduciary by regions for counson with FY 1974.

Class

Total (individual

& Fiduciary)

Form 1040 Standard

Nonbusiness, under

$ 10,000-Itemized

Nonbusiness, sio,ooo under$50,000

Nonbusiness, $50,000 and over

Business, under $10,000

Business, $10,000 under$30,000

Business, $30,000 and over

Total Fiduciary

Region

United States

_~o~hAtlani~lc

Mid-Atlantic

Southeast

Central

Midwest

Southwest

Western

International Operations

,*IndivWual by cLum.nty for FY 1975 and FY 1976. d Ind, coap Fiduciary am combined t.rc thparl-.1th FYI,,,. "Incluotis.individ.al and Fiduciary by miliont, for om. Parmonwith Y1974.

.$243 *$220

139 143

182 172

-

$199

120

1-56

250 230 203

_~31 562 801

543 472

T64-414

533

476

784 691 916

766 1,396

**$243 **$220 $199

253 221 226

235 211 181

262 231 208

220 188

244 212

246 206

181 -

173

159

228 232 225

389 332 355
120

Table 22.-No Change .

Percent-Individual and Fiduciary

-Returns and Time by Class

and Region, FY 1974-1976

TaxAuditors

Class

Total

Returns Time

FY FY FY FY FY FY

1976 1975 1974 1976 1975 1974

.23 '24 29 *16 *18 20

Form 1 O-Standard 34 33 43 29 32 37 N B underi-loooo- -It..,,.d 20 -it 25 15 16 19

NB $10,000 under $50,000 23 24 29 16 17 20

NB $50,000 and over 38 40 39 26 28 28

Business under $10,000 J8 21 21 15 its

II

Business $10,000 under $30,000 14 17 16 11 13 13

17 2U 19

Buslnessi30,000 and Over 23 27 25

Region

..

-4 29 "16 ..18 20 United States 1.

NorthAtlantic 26 26 25 20 20 20

Mid-Atlantic 27 26 33 20 21 24

Southeast 21 22 29 14 17 20

Central 25 22 23 18 16 16

Midwest 19 21 29 13 15 18

Southwest

western

010-

Indlyidual=: for FY 1975.nd FY 1976, Indilid,al and

Fiduciaryd for FY 1974. - -

includ- individual and Fiduciary by m9hon for con,

pardson with FY 1974,

25 28 41 16 21 27

21 22 T6 15 17 19

26 28 30 18 19 21

121

Table 23.-Corporation Ratums-Accomplishments In Relation to Plan FY 1976 Revenue Agents R--To eg _n

Direct Examination Time (Days)

United States

North Atlantic

Mid-Atlantic

Southeast

Central

_~.dwest

Southwest

Western

010

Returns Examined

United States

North Atlantic

Mid-Atlantic

Southeast

Central

MidwestSouthwest

Western

010

Planned Actual Percent

875,360 910,948

208,985 222,677

129,561 129,013

104

107

100

86,297 91,779 106

100,5M 101,155 101

130,301 134,246 103

97,859 100,913

114,505 124,335

7,327 6,833

165,757 166,709

33,788 36,827

23,841 25,813

19,735 19,947

21,760 22,951

24,166 20,074

20,064 17,213

103

109

93

101

109

108

101

105

.83

86

21,774 23,010 106

629 874 139
122

123

Revenue Agent Audits of corporations (Average Hours Per Return)

Table 25.-RevenueAgentAudits of Corporations (Average Dollar Recommendations Per Return) Table 24. Corporation Returns by Class and Region FYs 1974-1 976 Corporation Returns by Class and Region FYs 1974-1976

Class

Total

No Balance Sheet

Under$50,000

$50,000 under$100,000

$100,000 under$250,WO

$250,OW under$500,000

$5W,000 under$1,000,000

$1,000,000 under$5,000,000

$5,000,000 under $10,000,000

$10,000,000 under $50,000,000..

$50,000,000 under $100,000,000

$100,000,000 and over

Region

United States

_W.rth-AtI.ntl.

Mid-Atlantic

Southeast

Central

Midwest

Southwest

Western

international Operations

FiscalYears

1976 1976 1974

37.6 38.2 49.1

25.7 25.6 32.3

20.0 19.3 13.2

20.6 19.0 15.9

20.5 19.3 19.0

22.2 21.6 22.2

25.1 24.5 26.1

36.1 35.4 39.4

57.9 60.7 58.0

90.4 91.5 84.9

162.1 147.0 175.7

450.4 478.1 620.7

37.6 38.2

4 9... 1.

42.6 49.7 54.6

34.0 35.4 39.1

31.5 30.0

32.7 36.7

40.0

52.2

46.2 37.1 50.4

38.5 33.7 53.0

35.3 38.6 50.9

52.8 65.9 53.0

Class

Total

No balance Sheet

Under$50,000

$50,000 under$100,000

$100,000 under$250,000

$250,000 under$500,000

$500,000 under$1,ooo,o0o

$1,000,000 under$5,000,000

$5,000,000 under $10,000,000

$10,000,000 under $50,000,000

$50,000,000 under $100,000,ooo

$1000,000,000 and over

Region

United States

North-Atlantic

Mid-Atlantic

Southeast

Central

Midwest

Southwest

Western

International Operations

FiscalYears

1976 1975 1974

$15,924 $19,078

-

$28,951

5,947 13,061 11,545

1,832 1,828 1,892

1,274

-

1,323 1,596

1,994 1,821 2,141

2,489 2,240 2,490

4,351 3,874 3,916

8,498 7,395 9,639

21,164 20,068 23,859

33,006 43,553 39,913

77,045 93,628 93,580

538,361 622,137 673,198

$15,924 $19,078 $28,951

19,244 25,572 32,614

12,891 22,863 16,833

11,161 14,763 24,949

12,521 20,104 33,046

20,178 15,836 33,891

18,808 14,188 28,404

15,502 15,983 31,048

20,374 40,593 31,654
124

Table 26.-ExaMination Time, RetumsandDollars-Corporation-FYs 1974-1976

Revenue Agents

Region

Direct Examination Time (Days)

United States

North Atlantic

Mid-Atlantic

Southeast

Central

Midwest

Southwest

Western

International Operations

Returns Examined

United States

North Atlantic

Mid-Atlantic

Southeast

Central

Midwest

Southwest

Western

International Operations

6ollar -Recommendations (Millions)

United States

North Atlantic

Mid.Atlantic

Southeast

Central

Midwest

Southwest

Western

International Operations

Note: Dollars may not add due to rounding.

FY 1976 FY 1975 FY 1974

27 28 26 16

Returns

910,948 858,435 662,778 1 Class 1975 1974 -1976 F6 1975 1974

222,677 197,193 160,502

129,013 127,554 94,151

91,779 82,759 60,448

101,155 97,756 79,239

134,246 129,662 102,168

100,913 87,875 62,065 1

124,335 127,745 98,831 1

6,833 7,892 5,377

166,709 153,240 134,083 1 - 1

36,827 27,470 34,33

25,813 24,555 21,012

19,947 18,162 13,77-

22,951 19,764 14,774

20,074 24,038 18,008

17,213 16,911 12,565

23,010 21,672 19,115

874 668 495

$2,654.7 $2,923.4 $3,881.9

70-8.7 702.5 1,119.9

332.8 561.4 353.7

222.6 268.1 343.7

287.4 397.3 488.2

405.0 380.7 610.3

323.7 239.9 355

356.7 346.4 593.5

17.8 27.1 15.7

Table

Region27.-No Change Percent- Corporation

-Returns FYs 1974-197 and Time-by Class and

RevenueAgents

Total

No Balance Sheet

Under$50,000

$50,000 under$100,o0o

$100,00 under $250,000 -

$250,000 under $500,000

$500,000 under$1,000, 000

$1,000,000 under $5,000,000

$5,000,000 under $10,000,000-

$10,000,000 under $50,000,ODO

$50,000,000 under $1 00,000,000

$100,000,000 and over

Time

16 13

33 31 28 22 00 22

33 l8 29 27

32 34 29

27 28 26 16

6 13

26 26 20 15 14 12

31 31 25

27 27

18 17 15

29 18 18 14

32 34

27 31

29 28 28 26 j7__27

28 29 27 26 27

28 32 30 16

24 25 26 22 25 23

24 24 24 18 18 19

125

30

25

19 19 21 12 12 -16 15 16 8 8

129 10

4

L6

11

3

6

6

-

5

8

12

3 Region

United States

North-Atlantic

Mid-Atlantic

Southeast

Central

Midwest

Southwest

Western

International Operations

16 13

-

22 21 24 12 14 11

29 32 32 16 19 12

23 26 27 1~ 14-15

39 41 35 30 25 22
126 127

Table 28.-Estate Tax Returns

Total Examination

Total Direct Examination

(Days)

Table 30.-Excise Tax Returns

Revenue Agents Tax Auditors RevenueAgents TaxAuditors

FY1976 FY1975 FY1974 FY1976 FY1975 FY1974 FY1976 FY1975 FY1974 FY1976 ~FY1975 FY1974

~9,549 40,591 40,143 8,473 8,357 7,586 Total Examination 79,394 74,493 72,405 12,827 12,774 15,943 Total Direct Examination

-

146,057 145,306 141,542 9,903 9,331 8,476 (Days) 47 336 45,336 43,771 4,703 4,421 4,158 Total

Total Dollar Recommendations

(Mils) $498.3 $546.9 $498.4 $12.7 $11.8 $10.3

Average Hours per Return 29.7 29.9 30.2 8.9 8.0 8.7

Average Dollar

Recommendation per return $12,599 $13,472 $12,415 $1,496 $1,408 $13,353

No Change Percentage 14% 14% 14% 19% 15% 18%

Table 29.-Gift Tax Returns

1-15 FY1974 Total Examination 10,214 9,955 8,876 2,727 3,118 2,594 1 Total Exam i-nat io n92,0-5-4---81 -

ry ItIf 25, Rn ~

I A, qa Q,.

Total Direct Examination

(Days)

Revenue Agents TaxAudltors

FY1976 FY1975 FY1974 FY1976 FY1975 FY1974

14,280 14,195 12,367 2,090 2,344 2,265

Total Dollar Recommendations

(Mils) $83.4 $64.4 $65.9 $2.5 $2.7 $2.9

Average Hours per Return 10.6 10.4 10.9 5.9 5.7 6.6

0 arneCommendations (Mils) $89.6 $102.1 $95.5 $

.

2.7 $2.2 $2.4 Average Hours per Return 4.5 4.6 4.8 1.7 1.6 1.4 Average Dollar Recommendation

per Return $1,129 $1,370 $1,319 $213 $171 $151 No Change Percentage 30% 35% 34% 17% 19% 20%

Table 31.-Employment Tax Returns

Total Direct Examination

Revenue Agents Tax Auditors

FY 1976 FY 1975 FY 1974 FY 1976 -

uU,842 39,816 29,683 15,690

I ays) 63473 58 n.,

Total Dollar Recomm- endations

-,.Qu 10,041 8,698 5,716

kIVIIISI $147.9 $185.6 $99.9 $16.8 $12.0 $8.1 Average Hours Per Return

-

4.7 4.7 5.0 1.5 16 1 A

Avera Dollar KecoMmenuaiion Averag Uo lar Recommendation

per'Weturn $8,166 $6,465 $7,424 $922 $860 $1,118 per eturini $1,607 $2,284

No Change Percentage 25% 30% 28% 33% 34% 31% NoChange 7rcentage 14% 14%

130

Table lt-internal revenue collections by sources and

by internal revenue regions, districts, States, and other areas

(in thousands of dollars)

To .1 imer. Corporation

Inc...

C.

Imfi,id1II income and iiniploiYomot I...I

Internal 11-mm

St. ,isg... to as

mad by single diet, cis

indwis 'le, O,h,,:,it in p,,*nlh ....: letStates no,' 81 boo-in

of table)

U.;.d State.

N-h-Allinfic Region

IS (c)

"U", Auh.s.

B

-kly. (see (c) 'mow)

B

iij

into (Soc (0 hol-)

(VCrlm."

isce (c) hcl.w)

Man ;11) P.,-.1h Now

' IT h,,it Pir-illim. (Rhmm, I

id-Alemi. -solo- iM 1

13.111-1c (my,an,, ,it &DC), I..... _

No irk ow

Philadelphia

P,tt,b,,gh bei.w)

sonAlne.tt.glo.

G,aarit,b. (North Cartilm.)

6-ki me City (Oklahoma)

jSewj!~rlOwll

...... ..... itsem (a) below)

Seattle (W.a,i,,g'.r)

offi-ofi,dian'tionslopo'slions,

Unsfistdinned:

ws7_

Gasoline 1.1inceling .0, and inxa mg c..n

C'Wj,tnm t,ej and il-Ai, Force and

(2)

302.Sig,192 169:782,956

52843652 859,493

2~7N:660 240493

1 89, 71, 872

;2.9

733.004

5211391

7.39

M 4 4

4'~Bg 144 23

3 28!02'907

22418 &7

24.205.9n4O 678 14 4.

55,431

1,169~2 146,813

42.311,117. It .77 1 S, 5,031,050

11,311

10.820:765 .799.675

10.0942,052 M 136,235

6 ~8 714,996

5,083650 505

..

296~

27:W3 04`g" 3 464 22170

4.55!49 322 588,385

2 36J26 35 :11

,7

1,940,381 WO 219666

788.935

6

0

1 74~0566 45 1%369

7.673:67 1 862.751

."3 5,,,Bl 4 S,4120~112

go's 111 31 11141 Sigg

,347

1:449,813

15171 ~-~727 240 2191.435

6832.976 594 061

3:988 013 511.299

260 466 214460

46 014 :463 7. 051934

461 :499

mi 2,12.57`9 2,917,981 39

Q2,165

57302 49,938

5,ND:W4683 617050

2,097411 318639

1&13 7 218,510

6.052. 798 M

3,561 6918 489 M

M,365:8M13 419461WO

'M750 9 1 61,465

593.1511 1 ODS

366

97 29 796

7.023

1

.14,2:~62

4~366~318 N

1299026 176.455

358623 113:41

31

1 Sigg jos

2:525:43'13 3~:327. 411,096 376 , 41

74 948

649:787 (12~MSI

,7.858 5

5

8

99 13.:7'1 g

815.679 i.M.430

736 125,418

2.463 32 268.445

693:07 78,881

932

1

1

.1 15.5.7

12.2756.318 4 8 102.488

1

178 406.286

8

1 1

'12

,

I 441

431 M5 P14

980:MV 421~275

13.601,914 6.993.289

556.306 39,697

-16,071 1

48

Inc.m. Is.

-1 withheld

and SECA

In.... 1.

1

A

Ummmil.y. me

llhh,ld and

FICW -

me., I..U,.-,.

(3) ;4)

S:04

"

233.171.11, 31 1 2

1,174.897

2.~:11.

2 421.~ 209438

630,170 137:392

1114

6

gg'.

6

.052871

1~4517:1 1 17

7 408 519~772

273.423 779 "S11 ~121 gs

4:3~47:.g,

17 1 1,448360

578.795 116026

97B.Ml

1 "13S '3

IM5.758 .377:. S 4. gl2 .92162

.141 7

'

Is

So.

3 ~772 72:21

2j.,4 S'

3~:5' 1

.411.. ":' .9761V

"

51 :22'

1:75, 3 :g21.. glig 35

949,4G3 JS

6 284,W 2"31:00

2880,170

, g`7s:3,S,7

'.:2.2*.:%62 '704.147

182:421592:770037 1 9B45~4355 23

08

5,762.127 :.31JS

2.1.11110 107

7

430,

260.11

36,632:122 6,218.650

89

14.011~:458 '96 .. 1, '402S 1M

2,2Q.292 713

21,:718

4 IM71:99 '5' 625.252

1:620.445 422,817

1:171:11 s. SS :13

21 12:4.4 7 60-Z"s 74 5

651.523

1,4Z1:01

' 651 2."0' g2s 112.22S

5 257:446 1,379,827

3:715,426 511,766

1,M8.222

2 627~3NS

"

1

2:.7:0'1'7

Z%:'6' 12

33:.0 2 153:.. 6,526,105

146B 7 ~4 6

744:37 57 4337

S4,874 1,6IS

a716.842 4:22.

12,751,448 2.332,629

1,W,1813 343,410

2.084.886 "9.682

579,312 131.4

792,630 15,1,794

03

3

,

938,959

9

1

'72426'444~72 454,791 _.2,, 103, 96 BlS

289,960

813,236 ":311 .2

6~26t.m

(5) (6) (7)

10 906 443 1 GH 384 1,562,752

35:642:362 wigs 7,11.1"

2 192 M 5472 13,624

6~31 0 5

8894 42:'11 '7

21:44(119. 19.386 W

3,229.682 257 27 M97

209,n5 470

3.552.674 , 63 2S

689 11SM

16 142508,129012 156 4.411

756

27.9911% sa..154 "1 MMS

5.763,955

1""

27,302

491. 58,712

735:37. 1' 249:028 58 083 61 '1

S":. 35,014

24,065

4:112 1

2 '7 1g:M B 72'S

1114

7

6,

MU 74.242 -51 ~2,6;31

2:1.61 30,605

I:'7'1'7:M74 2 ;9 In

2 5:N9

1

:0:3'

3 141 408Is 33,935

635 7,939

32' 242 4.%:.2 66,139

147 21205

29:;1'6:" 0 Z211,337 1711 106,73

32504 3141111

4

:171

33,311 56,750 1

7

0~882,28217 21 76569

4 OOM 8394 26AB6 :1.9:.

49.553 21S45

M, 727.109 93 6,982

6851443 493.227 234.800

249,7251 2734

977, 50 1798152 95":755

.11

47 768

270314 ~2197 46 2.650

3,459.387 1.103 28,8,29960

1.2

14 ':M2 1 WE .

38,149

4 1403:111 .26 29W

14.785 6, 1

~02:1

11,g12..24 534

492,919 45 322

5.105.615 7,105 46,85

174.5~38 5021

183765 W05 I' 3.820,588

15:668 15,981 3,172,0112

2,S.113 2 S.111 95:17

163

;'Mn 1:' 31gOll I 'M l.:7

97 911,675 213~06

Mw. 62 ':721 5

M:321 '3~"V 2

692 S1,V 10,M6.1 95

192,742 269 1

15:' 566 618,308 1,310 i: 4,748 &3:1 .1

1,312 6,381 1

7,966,069 2 3.210

.S.lg7 781 '2'1:3B2

%:11, .ills 4,094

-

412 US 329 4.0~4

SOO - 6 OBB,650 135.2M

516 6019 516.609

- 8

-153:14,

-113

33 SiI9 33,5;9

5:587 5.587

-

-16078

-153:148

33.549

- 587

Toord, to, States not shown abigCali,n .a .......... 28,Ml,997 3~021.919 22 4

's -6

M=164 93.902

21.613671 3:8407:752 77N:M23 2:1711

1,

13.910,219 1113

."W12 16

88.159

b) Illinois .......... 13 '28~863 1:9 16 185

ZB,353.558 3,139.627 24,990970

Now York.. . 36

690102 11

,

316

'

51 33:3~52 it Ohio l6:'~',7,:,657' 62.110,230

3S98 '60 14:937

B .

1~

11:2 7:5 272. g5.155

P.nmr,Ym. . ...... 16,936,41]() 12:1

16.364,46 736373 11,908.546 2,87t.628 8:926,281 25,482

I) To...

Table 1-internal revenue collections by sources and

by internal revenue regions, districts,States, and other

areas-Continued

(in thousands of dollars)

Intemll r...... legions. district,,

Slat" Ind other -.' (States

IndIc I ad I.0 by single districts

t.r other Sntida h b,la.'m

of table

..,Un.H,:d h- State.. total

mic Region

A be .. . . . . (see fc! - ~.,) ,

~1.rt:_

P--Uth

P-idlim.

Mail'

(Rhode lIla,d)__.

Id-A lentic Region ........ .. b

more

(Marviand & D C,

M,,Fak ~S-(1,,g,y)'Y

p.::

c) .

Wild, chm. "hac.,

,

ph'

an

c

R

h

tkl.w~

g

no (Dol..m.)

Birmingham iAlab~',I)

Col,mbia ~Iollh Conti n.)

(~r_.!~njboloi ~qdlh Ca,clinlil

C,ncinn,-Ii halo

See it) Wow~

Pl,ke,,b,,g iWest

Ithered Region ................

Aberdeen

San (b) el..

Mil-ker, jW in

Oman, INb,.,I. 'aasc.he

0~1!- It

. .. ...

Unifliddinflind:

FedG. to

" FICA cridd.tl, ,~.... ........ ..........................

....... " ...

h.,nI of G

Withheld I...1 .1

Federal

Clearmgtvticco-I for E-in jokoi

Pres=jal Election F,nd9

Earned inechre Cmdfits'O

Estate

(Sil

4.087705,47r35 A

29:472

18.110

21'2 o" 18.879

Tt'.6G6

5.790

116.607

238256

18, 24465 3

1 95

574,565

~22.188

38,469

140,896

6811131 2:0 7

22.063

12Sid

41:06~1 'S

76303

2' NNNit2

58,287

502.0 92 27S

'04: 7

41

.037

1 079

42:~2~742

72... 4:9'4

14.211

217,8Z3

18:100

.1~99~17

110,912 7

5.449

93,931

621,719

16,2N

206,074

9.464

1".252

38,13

25,015

21S

63,422

00,7S8

2

14:2

~5 450

.":014'

45.546

-,~:46,740

10,039

313.800

72,702

MT1

5,143

,

(alCalift,nia,

431.730

"1:()8"6

1,687

':74713'

3 :1'.41

3

10' 17:g439

1.214

13.1. '5'

10,S49

S 121-

5:3141 s g,

2,443

12142

2

1:.16,6

5044

24:sgs..

5,557

47,392

7,180

:018802

15

1~1:544

-7':224.

873

27.535

6

:4_43

4.,2,47 S ,

8:8154

5,702

79M1.

1,805

24.gl 73

24.631 25

3~gg 5958

. 1

':34 63' V

1:1.14

1 11.76S

1:270

IS':g' So

2.9M

::692~~s

2~257

,

5,586

5406

1 -091

02, 74

396 7,814 32.536

11

1

769 176 564:213 58,742 196 17

"'

.

~e)

0 Te,as

Pennsyl,ani

..........

. ......

..

2.:.7 14:840 350.326 48 Soil

171,2557,720 5.427,722

549.770

11:'12 2STN

317:, .31 IsS glit

503

45.4D3

12:.1 46

929 . ~ 1.6,172

r24:4 18:77430 24.392 5

2,1 .1',102.4

.97.

430,236 292:124"6

319.781

4"s ISM 124:~51's

405.333 104

W652:01 6 45.366

Z265,680 313.52317

331.361 '44 17,119

":4Utigg 3,.1.3

1.387,959 51 .917

784 169

N'

45'47 '9'7'

4W

145:0

3,414.277 1

320,472 683

71 11,1 6

'57

601 '02

1.474

367,972 3" 258 1

676:63133

.516 6.9

2130ll 2510736

9: 86,.,4'

502

12,064

131,- 217J99

1.642

492:=8 141,677

170.300 50,386

213.-

12. 2'1

"S

1:6

17:.l

2 1 1 31

946

865,909 73267

4127:18 621332

243,822 112:5236

56.273 Sits

.442 4Q g7g 82

,

3 74.552

83 321

.1:.3 ,S66

13,333

7

7:733 2191

3.5M

743,836 is "o 217, 1

1"

43.2

54602 21 :481

11461

11 675 -

W5:9192 416B~ 171

175 2.

1411,14S 1MG98

140.243

1

8, 26:698

502

-113

(12)

3.919,935

422.062

2 .824'

117:.7

8.0,15

209

125 o n

31

1261.=

55

1119,167

212..M

172:~711I.

.7

21.206

35

114,359

11.3gl

3.013

110

V.7

50

41,779 W

1.4

jg'M6.4!.

47:751

-2

247.233

661877

6:380

09,215

170.Z2

507

52

8.208

57. 1931489

1 212

.~2.13

1.892

28,W5

25

195

146

63

55

216

517,875

36

2.16'75

1 2. 79

311:.1924

2

14,351

59

2

SO

19

45,807 2,912

- 48,696

196,398 1100,181

-

185,153

3B,:. 477 7

1:4

12

270 1211 9

- 243.1a

660.205

6,U4

M.S" 380,US

-

3" 25 21.395

14 5 71'

126 1 650

26:649

Tobills tom Shilin, hot Shehsnl~_.

':64:.20 1 Is. 1 %6:881 . ,l

1 145253 ~2

1jr0:596 328:2M41

1~962,342 328,859

320.496 135,400

412.- 61 .058

353735 38646 260:

213U4: 34:170

2431 25 WS

711

28,40999 24.619-

419,2Q2

312.2"

197':'15' 2

251.299

3.451

131

-

(16) (17)

1,

29.123 72a 246

1.118 1330 1

- 89 -

M 37

ng 25

V) 226 1

2D9

22

N8 167

250 V)

20

1,146 117

176to

'93

171

57 -

30 6

ago 93

120

39

7

92 6

23 -

24

11

83 -

1,251

1,681

2,128

1 SIQ)

8:819

lea 1

297 25

836

702

nil

495

489

429

-15

1 M

102

1
132

and by Table i.-InternaLrevenue collections by Sources

internal revenue regions, districts, States, and other areas -

Continued (in thousands of dollars)

Internal -,n., elgilnei. , S,districts, it

Sla::: and other 1119, 1 Is he 'so m~ by Mn 1. districts

g

..

iedl..I:d or In , In pahnnthes, me'.

,I table)

Seen, he.. .1 bc,hiia U [led States

eh.A,I..Ii. Region

Albany . (Sea (c) their.)

A.g-l.

B.son

Brooklyn

B,halo

B n

Hahl.".. C-h.cI.c.0

Manhattan hire) (Sea 1,, 111w;

pl.v dahc. INR- hod'e"I' Sland)

id-At;-k: Region . . .

jl~a,and & D C 1

kl.w.,i, (N,.Je,sey)w)

ph,ladelphia (.See (e) be o

P,.sb.,,h !_ea (a) below)

Bi-ng".. (Al.lome.) S

Columbia - o,th Carol,nall

he G,,e,sb 10 ~Nc, h Calel

Jackson o Miss'ss-pp')

-c,,c,nnaT, (See (d) balol~

Chh,sland (Sao W) WIOW

c4

Alb,,1-11--

San Francisco (See (a) below)

Undlablant,d~

Federal to. deposit, . ............. ..

Gasolin, lub-thi; I$, and ..case

FICAc,ed1ts5 .. . .................. .. .

Thi.af-ad 1. G.-hhrenI.tG..m

Wntih,ld Clear, a,es of Federal employees

sen- ,,,'g 'cctiml......

and oil-Ai,

..c""Force to-s- and

.... .......

Posidemial Election Funds

Earned Incere. Credits

1. I

Total

(C.

=

Domestic

by C."...)

(is) (19) (20)

175 4a2 5s 150,276 2

'11765 2,668

174

- J7

2,055

'a116306,

2961

64

7.121

- "116

Mi2 -6,3' 3122 49'

3373

1-106

12

1,562

M

2.216

3.08

18.315

22

7,a. '3

Win... Cordials, e1c, I....

10"12

1 41

.324's

i,647

3.5431 1,610 1.0415 -

602 - 171

M 33 -

-

I~5

-

-

1.776 159

1,833 4.732-

- 3 .3

245

1

S

s

6

-

5

157"

2

2206

7.121

3.788

29

9396

923

6,7 3

4.8091

324

2774

1,3113

NO

2

Zffil 2

1.M45

312

4

4s9

2M

5

113.0020

32

6

61 75

65 1 ~N71 4,92,1

218M 102 32

-

-

I1

106,589

697

119

1

2:~7

1 4 P2

29,5961

IZ3 1

35,

2,244 4,444-

1,534 3212-

- 27

242 -

6 13

2;7- 1,150-

234

-- .2

971

it

C)

6T7 1

.7

IN 2

2,491 110,616

-

71 1

1.05 105.296

216 .363

-

19

Total. I., solihi. not iiiterehm

2:100 110

5~ T211531

7.121 22,414

918 3,888

1,310

(377-

Alcohol naini-Ccinfin.thil

Occ,paislion-I

... 12

ILI)

3.660

152

9

27

25

8

20

22

271

3

556

145

137

183

836

2

751

23

4

1

17

4

7

6

10

742

8

11

710

31

161

37

7

85

.11

131

in

1 02

57 51.677

2 80

6048 342

.276

128 22

70M2

12.300

114,373

7 7

104

.

7252 66

363,364

S,16

2 2

650

2097148

,5,549

10

US31.743

633

1 52

367 43,916

2 6

1 61 624

12.371

7425n

26

84

1"A47

2

7

1,1498

72

2:~ 69~7

2

1 3

9

55.0260

30

30

434

62

282

25

682

imported Occ.p..

Total Domestic" licimil (Collected

by C,stoms)

(22) (23) (24~ (25)

1.332.3 1 210 1113 7011

"

'

95

713 :264 6:165

21 -24

9.7831

26 4 0

26879

`1511

Is .12 5.114-1~17

-

7

-

1.03

23,MI 1.093

63 -

5'0

6:38

225193

195,6201

35,120

0

35

81~351

M9151

M,942

65:8:171

0554

Be., t....

2.31

283

21

- 24

57'

5

26 751

26:821 I'll

I

20

5B

16

Us

22

b19I

49

64

194,3 -

451

35.07356 47

- 62

35

51 69

80

59.4 63

`8`2 48 94 - .1

1.072 127,685 164

- 76629 1~3

12.270

13, 10

10.765 23

14,713 40

- 66

362.363 320

16

-

-

413 2.380 is

- 616 461

2

- 236 206 73 4156

- 5,537 13

2 82831

7

8 30:85 75

- 31,733 to

691 U4,M3 678,

- 43~ 51

605 060 232

61,520 103

112,336 35

27

66 7,275I 64

143, -986

013

-

27

-

786

18

1,05"

-

662

2,684--

-

2

1. 75

717

84

21

--

560

125

2.271 4,3

5,114

Is

665-

447-

-1682

9,737

174,853

21.71414

500~350

22:44..9

-

972

70 56

~ '221

6,885

8427

54:,24

30

30

78S83

34j 13

53,582

Mass

66,689

04,600

1

25

M

1

17

16

1

49

12

5

119

42

11

.1

91

28

21215

lie

336

Table I.-Internal revenue collections by sources and by internal revenue regions, districts, States, and other areas -Continued

(In thousands of dollars)

internal

h,phatanial

lelemn, region., districts States and other agal (State. b, single district. h4l-lilacl I. ptintinth .... ; cht, m ,her Stane. hman .1 bot.. .1 able)

United State., 1.1.1

Na,th-Alhimi. Region

Al y ..... ... .... . (S:e I~j boo

o

M Id-A le,lic Region

Baltimore ...........

N..a,k

Philadelphia

P'ttsb,,gh

Richmond

Mimington

*.Uth ..t Region

Jackson Joe

Ike— Its

ZhWl . ..........

Centel Region

Sal, L.k. F City

San ranceic,

Se.10, , ~ _ .......... .

Offi.:,,O.l al,madiamill lc, Operation,

PU R

Olh r

Undisithlbted:

Federal to. 1 deposit,'

Gasoline utillcating 61. and annes FICA creditsThin,hsferad to G-e,nm-t ofGWit held taxces 01 Federal empl,"es ..........

C,earh ac

ou,

tnilroon hiel

an for E.cim tad IPeesicentimi Election Fundaryland D C

Z:w Jersey)

a (a) below)

(So. (a) bel-)

Vrgllia)

D.'la-,a)

(G,,, _.b she , ,C.))

Nlllh Cmol~ra)'

(Missinippi)

Fl.,id.)

(Tennessee)

(I ndiarna) . .....

.

(

11 entlcky)

West Vi,g-ai

ui~ 6ak

(Wisconsin)

~N l..k.1

-b

o ,i) 1nesohl)

in

(Sea M below)

.... ..............

r_1 S1w (11)=.-111) ..........

Col,ado~

(a) California

T-bilit 1-1 Sister. -1 Otman isbaTotal

2.467,894

S'2

-

266

30

5

t 262

699,340

120

490

16 183

680243

1,255, 6

1313

2351

1,242,433

-8.390

559

517,608

6;3-

.21

516,281

23

so

;2-

-V)

a

-

2

;78

2T5

-

3

130

V)

V)

2

104

-

T9

4

13418 1

3,418

-

123

72

1,467

18,653

486

275

C19'reth"

2.434 a3l

5

5

17B

680.498

680.144

1.240,487-

1.240,483

-

3

513,ST7

-513.537

-

V)

-

198

-

V)

1

Tobacco I

...a

Cig`(28)

0,812

361

14

262--

19

C)

C)

813

18.4 2

3

38

I

13,211-5)

1312

2.351

1,484

a 1335

4,034

-

649

'1

12

2.7

231

10

-

2

-7

-

-

2"

-

2.

-

29

-1

1

13.310

13.31 D

2

w

No

18.406

133

011a.rn

3,252

1.426

18

265

-

304

119

123

-

6'

-

1,274

-0

4Fs254

554

4

93

as

1,171

4

-

29

32
134

Table I.-Internal revenueecollections by sources and by

internal revenue regions, districts, States, and other areas

-Continued

(in thousands of dollars)

Internal .... nue n,gle,. SdlatticM

Slate, and other on-, let-,

'I lisp .... nled by single districts

indicated in psnenllhaea,~ ~Ioffn I

In, he, Slate. honan . on,

of able)

United State,, let ,d~Allandiclitergill

Alban (See (0 bel-i

on (Main.) n... ~,_) A g. (Mass" use S

Bost

Bno,kly S as

1

c

c~

be

;

.

B.h.l. Sea he

Manhattan (See (c) celm)

P.nionoull, (Naer i-uunionn".)

Philadelphia

-to

he

pit ,l,gb,ug ho

. ... . .... i lancund

.Xit fill

Atlanta ............ (Georgia) :~:

Bi,,i,gha. .......... (Al,bannC!')

Cohurlbu, (SouthCarll o in ..........

Gre...b,no IIN Ih lro),,

,':~c=%Iia .......... JR-da)

C Na h1illi, (Tennessee)

,mbal so Region

Mideast Raskin

W4-ken (Wisconsin)

Springfield ..........

. (So, (b) balow~

Nee, One,,, aian!~

Western Region

Office W Lnumanaftenal Operational

Undl. lbul

Fixhual- deposits' ............

Gasoline lubricating or, an e,mss

5,40 :106 2

3n6 N

I4 "So 1.

50 H

364975

46.N3

1,512

164 37

47:13N

1 3~4ol

30 25

671, 12

;'6:' 32'3

218,37

2137~5165

22.503

1.06"

164,2511 26

979

".125' gol,

126

414,N8

1475

25:31'3

1,019.4112

20,265

63 .973

215785

J~:006

0279

36595

W1,693

5

833

397514

29 507

7

:

2. 2

7 :46

7

99; 71 462

55.509

1 M, 73

~1106,11124

1. 9:5w

~,~"5191

N4

2316W

36 ,1,.1

26

3.:6' 630

55,306

663.681

612

2.

74

1,370

2071:840 34 t

305

32

2.09

~.479 A

371 65

30911

29

jc)N-Y.,k .

(d) Ohio ...........

(a) Perumlyl,ants

Total

(30)

29

Withheld Is- of Fedital elpIcYabs

Clearing o'nuionaccount hall for Exam Isand ai"i, Force and

P=nl: ....................

I" Election C,.di.'- 'u'"' _ . - ............ - -

M..uhnc, ...... ... ....

L.W.

Gasoline cating

all, at..

(31) (32)

4.,1154,:11

3 003

4 M2

43800 9

22~977

1 001

284

14 90

32.3 1 92.97

63 7.206

2,355

W.685

1538 769

274

268,482

20,M

112

13.,607

21,397

o83

137~40

39 994

5,892

9.6446

154 7

164:913

BUM

34,569

970.

S422825N

.917

3,4,416

18:61

7582

303

0:511

77

624.6 6

45:939

30,616

1,131,133

7796

1

007

29

.13

23987

32: . 171

25, S33

010

M3 71

52: 888 -

564,016a

2.257

192

20 C)

174 em 3.948

lJ5412

099

.2:0

5

8513

1,11.1 fal

3

2(1*2)

53 -

35

U)

35

360

1 W114

248

3.356

4,948

9,563

- 1

08

97

12

2

4

3

189

301

~oi

2.269

219

3B74 '64

9,906-

7.258

167

1 0

936

3

44,171

10

2%358

7.4193

6

mi

426

6643

490

12,971

C)

65

ill

39

p.rt of

u=,).

tubes.

minter

(33)

ses

24.727

19.973

112,069N

6,462

17

213

74,249

39 77o'

6:13

242:893

123

- 10

14843

1 39

2146

291

2

7:766 7"

505

N`o

438.670

42 :7~'N

4.454

2"

339

217

12

.

642

11

4,253

169 5.619

29 22

37217

2,188

110

33

1,112

42

3,581

12

1.07

3733

73

99

520

79

10,50

1 13.

55

,235

14 109

218

63

311

170

2,635

259

13

13

s,.S 2,1 'Il:,

16 96

2379 7

977

~54 9

12 169

32

2:407 3

024

79

362

47921 1 1

4r3II4'2

36 298

5~03B

975

114

14,975

4:3 4

2 7S4

373

3,342

3,

:021'7

805

109,464

26

147481

0:685

2 309

575

102,004

1.396

nAos

4:47

3647

7.422

5.769

273

2 ,232

2.782

~,134

658

14 327

5102

2:426

2,1362

1,127

3,604

:813

.814 1

rS14

N

58

10~951

2.

13.708

28

305

2.4=699

14

lit

-hiclie,

he . .

bodies.

PVanso a.

so 2.

(M)

Other" Tittill

(35) (36)

175

52

194

580

2

14 2

fil4:~1,624 1112.

20:011

174 379 4

i:

4 M73 3,33703

191 1,429

1.865 5,021

138 633

35.2W 2.8115

4,621 2.931772

1.331

61,P1 573

5,233 41,370

el~76 3.111

3 6

962 11 11:2'1 18,

2 279

652

5.

'880

18 .404

3,226 48,439

7

Z M

W9 3,363

1 8967

214 3:2~

2.398 01753

152 10:31

2.!i(T?` 11,20

3:1

IS 5 898

1.283 9636

3" 1001

19 74178

10 2: 94

14.1" 67501

1 1~849

5,515 24.6735

M4 7.1

1') 1 16.

988 6,794

.917 5 3,781

0362

S~

238 65,175M

3,2111 111,122

1 4.W8

90 41,703

4 2,732

569 24,622

1.135 3~:715 oit~

1,082

203

M! is

91 1442 7.41'

B,M 72.6%

1 113

7

2:

' 458

26 960

29 328

3,990 17 589

11

6

050

1,169 4,714

1,702

4 051

28,727

3,814

109

09

Retailer'.-itet ....

fine.

Co..

No.. ne"I'l

C- ..1sation

.,.let fuel

an,la to, the,

fuel the.

g...line 9 ...Ila.

(37) (38)

1. M 27.14

'503 2:752

42 132

33

96 22

106

142 810

40 51282

16 706

22 51

'8 239

no 4.6 2

78 1,140

13 8

74

'25

75

2109 1,171

12 RB

3 731

117 8 3,M

23. 540

145 295

167 226

396 496

14 123

53 921

179

1,121 2,11. 0

144 426 2

207 59

284 5%

228 491

98 23D

65 1

1 _%B 3,893

55

SM

346

72

316

1.111

435

1

'A

3,116 734.

f

1,069

591

231

1,7M

371

Xls'

102,

20 1

1511

220

707

110

211

160

61

147

129

204

177

123

1,iiifst

Im

650

90

516

222

176

12

g

2.. '49

'161

80

87

29

634

208

163

95

695

187

internal

Table 1--internal

revenue

revenue collections by sources and by

-Continued regions districts, States, and other areas

(in thousands of dollarill

Internal region. districts States and other ,a.,' jSo.t COnt-ed

11,.P,'.*.*,*nl*d d ad h by al"91. districts

Sn Di...I

ill the, p .ill ...

total.

-fee hnnan .1 and bartann P,c

.1 table) -let nuto,

.1.

(39) (40)

Porislouth iW- H- ~h

---. ..... sout!~lsidf Anegao,

C

"P. ~r!T!Fhu,

u'l

West... 1..

19

........... San Francisco

(Waah'1ngt.n7',. a

Undlepits, ad

Federal ttal, d,posna,

Galsolinol.inicating.il ~~a.~aas

FICA W.w

T,

1,

W ahZ,11.d to Gon,ernmt ofa],;

a 1F 7l*,,jZapt,t,ae, lut o ~ . ~ ul a

-

aviat on full and Oil-At, Force%nd Ila,

on

379,125

16,676

1,205

1,322

1 5

'269

4,069

598

1:~213

63

315 898

43028

3446

15,807

INS

K898

5,168

660

43,5ag

6.253

4895

2. 70

8,075

2.995

S:

718

643

46.

12786

5,432

75'63

7,1491

1.947

62,351)

747

1:83 6.

0277

6.247

3336

9,046

5'.

1 `1~527

100263

4.248

37320

2,593

M,037

2, 94

:.27,1

4

13,960

6,544

67,124

837

2,24'

Ij

291

15.7 79

45,59977

378

3,6012 81

27.325

3,457

'as

106,

Other"

(41)

15 3,095.229

-

619 765

4.390

1,720

66.834

126,863 3

.1 5

694

54,485

349,785

1,067

316.732

065

64,124

91.171

96,653

415.683

6273

2.160

05.917

a2,210

115,973

5,231

40$46

2,973

57,902

2.':I'l

29421

71.945

80,459

44

:'7131

10,173

726,842

862

2451:024

10,532

2,3D2

S,

.513

2119.578

59.659

M278

226,230

1350

W:175

1.032

62,076

W,731

5.724

9.687

7.278

11,177

is 447,129

'2':0'30

875 1

-

141.IUW

2.436

7,34 6

:19i

954,895

203

62,38o

S376

Iw

.....I

..........

T.Ill

..

Trans. U. f

Total erh iu, l."T'p. of ,

Per.on.

M. .

by air

(42) (43)

j a37 362

'318:449

2869

459

59,634

2,432

1.11, R

49.958

1932756 go

~O,M33

42.016

8'4j".

X"', J

300,,1,1

'32,530 J,0~9

2:349

12796.1

.4

26M

M1.1.11

22,162

-115 'M

8:51

-.21

'753

75.558 5

~%S

26.122

61,716

177.562 351

12.106

itill

Z931

'-,~S` 7 52

4282 2

2

1

.016,1

7

287 i9f,

3~766

229

512

6,743

47.671

1

166

.853

171

155

73491

842

47

-

47

793697

204.89

~4

7' 7'

10S562

272

3

t45'

94,449

15

'50.1~5

t4:346

5

211'2

1402

151779IS

108:436

15413

8,769

18 3L2

16:025

l.,a2 So,

43

2140

125

13

20

273.7 23

2

139,721

79

of 46

70220

41.743

57.

42S

82

14866

211:.22

12.042

301

W7

77

ife, 68

3.661724

51

3.171213

70383 5.580

61 -

23

286

3,474

2.7752

5.002

5.0Ii

o

national

airis 1, w

Mli .

T;:,",*.pa

P.P. by nyas

air

(45)

52, 79

23,081

C)

6170

5

17,006

-

NO

280

45

5

4

6

-

66

11: 241

-

T,

02

1.4989

36

is

j

9

-

11,999

6.923

-

-

3

252

2.506

4

1.782

U-1

-

116

In

135

45,400 28820

8422 8:572

4 V)

212 an'

6,195 26

2

4

2,141 8059

1

L3

33982 7523

1,115

5

38 25

so 2

135

4

41638 2,852

932 1.641

go

7 3

338 2

62 -

213

2 3."

life

1 1202

34 479

465

67

520 ill 53

6

1

387

73 41

151

3

2

10,2~

1,841 1.13 5

4 it

Z290 6.670

69 27

523

1.,

74

1

236

364 3,5821

sugar

4")
136

Table I.-Internal revenue collectigns by sources and by

Internal revenue regions, districts, States, and other areas

---;Continued

(in thousands of dollars)

lnt,,n,l re...us egionsedWrioni, I

States and other ...... late,

"p.... nl.d by Ii district.,

I. at d In

-

I

'oth:

I

P..". 1. .:; ..I. to, .1. h h.n I bell,,

11 table)

United State,. Idial

h2-lam."on, ((SNWH=pShI),e)

southeast R.01 It .

.....

list (G-9i.) ..........

...........

eit,,.. J..ba-) __

rtu.= Its -1hhrC.',Oj1ina)

G,,

4.n ,

in.) ...........

ot, MF1 -";Pp!!_. toN.

Can sh,ifle (Tennessee) ~.

C tral Region

incinnat, .............. (see (d~ oeltnx~

Cl- not

Det,

]LIOd'ia ilp,l,s ~ In.d nc,),,. ive

~K ni

1.

Paxe, b;.9 (WeSt Vug'n'.j

Mids,init"R

No IL..i lens) ..........

O.*h',n'.".nY - Oklahoma)

Wn.- Region ............

Ant,h

!"2Ax"

H.-L. M 'a.

1, Phontu!i All

R.n SW,t. ....: : : "10

IaluiCily (Utah)

Be. Farcle.. .......

Cithi .Count to, Excite taxes in~hu_ Just and O,I-A:,, Foc, and

FireN:%I ntmil -

Election i - Fund - .- -......... -

~i -yWan

Q T.xas ............

N.-fic.

i

"'.Tu' udi"' Coin- IncWcu ng 'ps

up

-

.led

ti ..I gounfin,

d-k..

(47) 448)

103

0

-

C)

26

-

1

32

23

3

3

1

3

6.187

16

-

is1

V)

M3

555

16

2

48

4(

.

2

5 1

1 07

44

1

4247

Occups- fl-I

'411 (50)

31

bi

2

in

10

2

11

8

15

6

3,

3,5

12

51

5

-

55

95 2

27 (1

6 ll

227 2

2,360 64

99 66

2

264

1

101

11

li7

6

to

3 7

9

157 34

10 C)

864 1 80

359 1 768

so

21

4

2 75

13 20

34

2ING 46

171, 3

2

5

4) 5

3

3

0

11

16

10

2

24

20

10

C)

439

22

a

27

61

W5

................C-1....d

W,gdr, Us. is. be

higlexey

_Ibld.. -1

151)

7W,ls to, States net shm, id88

33

V)

1

76

50

10

26

a

M

15

26

.

715 w M (* )

57 8,295 747 1:'744 1,222

1 2,926 2.

15 E,

817 68 59 36 2 ' 1 ,

11 2,816 w 362 933

49 3,971 266 994

I

.

I

3,Ml 147 138

2,11110 M'150 3.374 3,931 3,636

0 671 358 4

8

96 :566 49 38 C)

070 76 25 2

3

79 244 59 7 5"

25

8,

34

1.

510 1,498 1,48 6D,120

1

1

950 102

1

16 31 931

72 126 lei 28 -11 9

01

1:397

2.286 47 421 12

340

12 436 41 14 .2.

778

1 Q4

1

338 5

'768

71 970 .149.987

251 3 21 M3 566 IM~5V

2 282 2 137 352

3 4

-249

2

40

90

228

53

97

92

11,3116

0.497 '92

;2 09

3:154 .1

5 73

3.782

2

4Z77 '224

322

311

las

V)

1

1

34 348

2,468

2,479

1

7 TPO

2:757

1

:689

5291

2,820

2,20,

9826

919

es

3. 942

:3

1~ 1

~200

.263

.3,033

9,352

'3110

ISO

a

334

_899

14

282,50

.15,

-32%

-334555

Table 2-Internal revenue collections by sources and by quarters (in thousands of dollars)

Source of r ... ina,

SePt. 30, 1975

67,159.753

Other" .. ... .......

9.159,082

Us. tax o ce. chill I

n

I .' IWWldull i

:, ,

or, ahd InePl.ine-I --total .." Z

In tied to .......... 62,

~EFA. . .

2M.SB9

~nc' ' h "n

as

rxenI .1 nconn n~Ilh%Id' .iind Il&

incont. is. Rulosd Itituann-I ............... .. .

.......

.. ..

.. 6,456,288

45.069,998

452) (53) (M) its) Unem loynent Ill,anct, ...... ..... .. 397.379

314,92

e:ill 31334 113,518 21 1 8 59' 4,

496 ,441 11,6452

"e" MS

Boll. . .. .. .....

................. 11.2911.01%

48 158 3 2,167 Excise taxes,01.1 76

~3 N 4 M 62 35

'

4 li

3 M

1

231 619 17.839

.

.... ........... ...... 1,257,373 7 161 419 -2,906

652 67

9 28

1

0

1,

Win's-idial,eh,." 863e70

73 1 I;43~~2212 Bee

063 3

1

..........

:71e e 2111' 2 21 362:821

3068

4, 2

21 126 16 16 . ..... ............

9 105 17 ~6,002 595,186

8111 c"o 3,09 26,918

.... .............. 583.1 243

3'1

132 -2,007

04

-

5V............ ..............

2 573 .61, ....... ............ ......... 11.404

... ..........

162 1 ,127 se 7 2 -12.332 178

149 2 219 -20.476 nice. taxes, lots,

.. .. ..........

1,38S,

0 655

7"

100 1,943

17 454 712 6OA01

3,r53 4,07 1,761 -21.501

157 7653 511 -3263 "s. hh.g"'ll

.. ..

...... 1,M6.237

and jo~ . . .

In P-11 -1 I.Ibbdi in..,,.b_ ...... 23300

'

,

46 130 22 .1418 Moto, ~ehiclea ,Chassis, bodi an Poll, and

IlB648

4,962 st, 2112,793

0,741

1,177

M

326 3, 5

5'

2066

69 3,138

- 428

2~104 '18

4116

081 586

501

3271 27,654

1147 3.527

6:1.15

17

e 0

.0

4,874

103 3,960

6 899

'2 31AD9

50 44111

62 4:282

Ill 1,977

66 6815

42 2:018

78 7.936

224 3,901

27010 32,301

4228

43 7,881

46 9322

.

93 6,994 167 7

31660

1

12 0

61 2B 2. 56 2

320 30 46 4 Telephone and teletypoxit., exchwge se,"ims M

Tan

............ 50 ................... ............... 501.567

225 .421 6,418 10,308 3,009 22-M so on W

3 5

Not

1,

':~Itic

.

...... 13

1 978 27 125 '"'t' I

160 21,335 T nsportsholOlPlopenybytil

:

.................

......... 192242

se 3 69 2 296 2, .013 8,267 . ,

Ill 152

...................

29 4,239 66 1.115 S. ......

..............

..........

11

'66 5 9 Na,,otj-,,,u,huana.includingm,upwi-a *

*

54

006 1 . ................. .... . . 28B6103

9

220

1

~698 Col-ponat.cl gil-it de,joas

..........

4

2 71

1056

4 ,

3

W 7 . 1 4

1 98 178 120 6,463 ager'nq huxes

I

63 2

Occ pe 4943 519 275 450 83 w ti-I s : _ .................... ......

g15 082 1,231

27

5'.

3 41 1.712 205 AM

22

U.'X.h ,

. .

. .

439

42

2

.......................... ............. 147

I

a" 951

321 323,.08" 35 Z125'6 7,316 5,865 Use lax on '9 1 -Y--I-' fthicies

247

1 E...ptb ch'i

in-a 114 05D

298 9

133

834 Odle, , 19aniWituni,w"i

9. 211:350 1

1,054

54 34

z

39

.65

...

552 2,951 4:N'I V) 2 -327 162 1 052 6

1 , ........... ...... ..........

36 876 4w 3,547 ,

660

612 789 46370

5

033 : N

6

1- Uncil-alified

006 ' os 9,085

53 96 51 208

2 2305 .............. ............642 2

................ 23.104 264 1 1 1

74 39 331

1

3

83.. ...........

50) 1102.256 1137 860 -18

N 545 254 W9

11291 Noncd,unerciaJ mution Well othe, than gx,cj~

.........................

...............

.......... 2. 691 1410 In, 583

1

874 5

3 2 1 396 547 m and special note, ju,js 6,414

Z

e ~ : 2

523 523 -702 Ot .......................................... .......... ......

-67

3,268

241 ....................... -

304 2

134 8 69

111111,966

154,174

137

Ou.- ended

Dec. 31. 1975 Me' 31 1976 J-. 30, 11976

62.632,767 75,135.2110 97.588,282

9.650'm 9.459.155 18,513,471

47.297,264 60.212,930 422.1167 1,460.675 10.045,371 21:oa3 73s 45239486

423:772

49 4elleat, 51.148~351

Q7.83 1 427,3M

173,X10 31 11175 763,381

1.120,657 ~210,720 1.245-162

109,146 140,

4,455,332 1

'1 96.582

4 14,- 4,31017"

1,483,241 1007.696578 1.3"A41

1.119.267 949 Us 986,954

315

03:62 46*

31

1:115

1

".630

M 347.857

570,778 674,022 647.90

556..5 661Z157 633,125 13.59ul 0.906

739 960

13.908

I'M $76

.8" I'M5,111

1433,701 1,071.609 984,127

2

1 1112 114

23,160

;91 108

97743 109:167 28,iF2 22:971 17792 27,637

97.915 108,0411

3,107 2,472 2.134

J6931 6.591 7116 7. is 911,9711 99:770

3 2

G",501 823,211i 689,153

431.854 537.600 366,342

200236 197,388 203,731

tM

12

1'

1

:542

'12495

1,574

74 2

4

'

243,019 -183,175 130,11in
138 139

Table 3-Internal revenue collections by soukes, fiscal years 1975 and 1976

(in tho6sands of dollars)

Ss.ea, sI , .... us

Grand lolat. WI sources

Corporation be.- ],.a,. total"

E.;,Pt organization busine-irc.nne w

lndi,idu,i hic .se . .no inn,mym.el ..a.. 1.1.1

- nor uhlrld and SECA'," ..

enthhold and FICA'

Railroad "'

'ement"

Unempoynn

ril

sna.ran~e amployiss or 1 o, mom poison, at any 31- in each of 20 Ullndmr oaks,

11 paid age., of S1,500 or -, , ony Illendair quarter. I... d

2

percent eflart- J,n.,,y 1, 1974

on a-ble Fell- of .,g,s up to S4.200

V

first sl .1 net estate in ISricess of $60,000

to

d,c1.n'1".n dpr!d"C.= In10000000, credit Al.wad 01 am daith

Gi t lax. graduated ales fmm 2~ in.... nI on $first $5,000 of at gifts in ....a, or $30.000

limse phon 1, 57+i percent 1, portion -

10.000,000; $3,00t) ann xc,uslo, to I each don..

. ........... . .......

rate, same , do, , c) ~711e ad'b; Customs N ;7 ;5 5'. P c 1 1 I

10.

Etureribic -of" f gallon o, wine gallon em p~o An be S10 50 par

l

.,, s

R.clif on. 30 cent proo ga on

Occupation. .a

N

"

bann-'eme-mc-ors of spirits. S25. $50.$100. per year

F

0ecul.- go

Iss ban =ipglilli so 11 Ig 1, a. . .......... . on

220 par ya

Rural dealerse liquor 0, madirinall spirits, s par ye

=dic(cd~~ecmdl by Customs, miss me 25 domestic) ........... ............. S

r-ines, 17 cents. 67 cents. $2, W-1-gall-sim, mg-es w",4y

0carbOo,I,m=.s2A0~IIquu rx,pordida.S1.92)1- .................. cc,pat

O.w

Occupier one taxes

Bee-mes:

-der.... .. .......

.. ..

Remilduakurs in beer, $24 per "A, (include, Inelled dlulr- wines or bear, S2.20

inch,, long Our thousand to, -oor 6% I' rgu'~C

;'~;nW~ilcnrer-6 cleutts each), sel par thousand ...................... .. .. ..

...... ..

d

Class D (0yer 6 c:n a:_n.; a15_-n,1s;::chh ticj.)s

P, n ..

Se rj, ;10 ~,`mtnu-d

G A; 15 emot, net cone, each). $15 pef thousand C=11 'I 100ye

Clan G (0yer 20 cont, ,&). S20 cre, thousand

Small cigars. 75 cent, per thousand

prepayments

Imported cigars , cigarettes. cig its papers and cigarette tubes (coll-ind turn,

nallor same as domestic) ........................

..........

.ZeCJ1-abxxou,T1baCCO - ........

....

Cig,reftepapentand tulcurs.pape,soni ceW,xrs6:.iu be 1 cont perSC

Fiscal Year

1975

n3,822,726

45,746,660

15723608

23,052

nit,1540,246

137712721

85 823~300

1:616.143

1.388.082

4,312,657

375,421

16A47.741

5,350,858

3.865.162

3,1'24~64~

22,156

W

4

23

12,500

714

5149

1",11

18,081

154,358

42%

377

1,308,583,

11

293'.03986

13'

2.930

697

2,316,0110

22".116

2261 ~099

16

SU26

48,733

1315T`

460

46:35' 89

173

4~666889

2,472

2D

~.254

Z1976

302,519.792

46,782456

46.739 120

43.836 1

233J71,651

39 046 072

190~06 4143

1,656.3U

1,562,752

4,875,73S

Q1,730

17257,720

5,427,722

3.919,935 .27

3.198:9'90'

29.123

823

8,17

04

517

3

246

175'":

21,546

150,276

3.366

294

1 A32"

1.3113,17MO6

1,825

480

2,411171M

2,43kIA31

2,434)312

Is1

49,812

47,9W

4,756

17:3 1 21

10, 13

4,898781

1 125

7

330

Table 3-Internal revenue collections by sources, fiscal years 1975 and (in thousands of dollars) 1976-Continued

Sources of ""bee,

Exce. ta ...-C-limeml

T-a (wholly or 1, Parlo~f,uI;be,T,-j'nne, 1., "-ad uroba, T,,,. highway type, 10 -t,

,,,

ban type used on highway

n ii the,, 5 ces per pound ex,ept laminated fies (Other yal-O

inner tubes 10 cents par pound

cles) cent par pound

......... ..

Tread 1,,,bbar, 5 cents Our pound

'.. -.1 -

s4morys JcJea,chaxsIAbxpdI.s.P.r,1~.and

Passenger automobile, chassis actlerriones

, dies etc . 7 percent" Trucks, and bu,e, Clh;~,' bod.

I'- -to t0l,eenl-l c

I

I A k

oo-.,re.n.d.-cox Or nuc 5 and lb-A 8 pol-I

Fimar 'a (Other than pialo1. and myon,elsj A~ I, and c~ rid

................. ................. ...a.

ri g- 11 crmt

. . .................... ............

unclu, tax.., let.[

N in 0; ;!..n ga~.,0.1

IF

Noncomm

a ru

~Z,,3 conor bar gallon

D1,1- C ret'lan Pulgalb (me0reemstances2centaperg-Imirij

lecallinneous excis. taxes. lortal

Telephone ll,I d I&let,,.enar exchange xdi~,,a

c

t nth h

Tran mrjl,2?jO

ichwasmonersed ......................

Waig,ring tale,7

Use I" On highway ohmij, wa;V~~ -

U tu~ystle,- sortir eye, j6.666pc6bd;. ... . .............. ..........

", '2~S ost tnm~

w

. on cj7,rxi, i

b-- I-- 6&P..; 5 c;ef year (maratment

le, ..................

AS Itw.."d eye, 2,500 pounds or 3V,

Ittan additional 2 -1.pe, poun~o on

..........

i Par Pound on turbine engine

new n- sesiongure,

-tle, and Xed filled choose tie I - b l d

p

:, , e and domestic).

imports 0 so reatirmeFirearms transferPocax-rnermlabxlb.iiora~d

Interest iiulalilatxon~mcurnui,mal ai~

Foreign Insurance

-,,-P. orgimucasurris. . hu

nerairoment b-our. 4 -centI

dealing, 5 Per-I on callce,l.

......

...............

.1

'

r.

8carol $10,000 11 2% percent 1*11e so 0n

n Oundation 0 on 0

` "

"" 'd

t

= ` W CTa h

kab" dt- a.!T~arcn1 F:ilu,,e --P- pi

to timely file certain inforedi

oundallum, kessarof

$5 ODD 6i.i

I

-

V1pxm.m ~niOundmidn* ..........

on returns $10 d ~

t

. pe ay p to .

F jIu;e to distribute income, 15 pares

Iness ment

nt Of undistributed income supubburn - $5.000 ..................

a which I

. .

5 . .

imPardiza&MI.cle Purpose.

5

MrCen M

percent on foundation, kas.i6ijS, foundation se.n.n.,

Flucal Yea,

1975

5.516,611

3.980,412

91.053

647.187

27,989

22,48ul

3,343

534.15B

121":05

331

21.899

546

51.170

4"-14

107

27

22,

5 ,

7

370.489

3.3",U77

2.0m;,44

750.ui

4752, 332

594

1

03.769

IS1

16

35

6,826

5.227

540

207,663

20.959

2

2110

1:131 q

458

65,069

63,828

324

6

S~

360

;9

39

2"-

:45M

1976

4.125,674

92,851

675.589

28.803

25.725

17

321,848

12 045

".910

20,152

4716

54:211

565

41?.M

27"jM

379

1 4

152

3A93AMS

1,837,362

793.597

45.40C

52.979

20.820

103

1 3

00

6.187

4.962 965

W.793

21,108

311

25

128

1.371

61,823

59'sw

2919

75

693

915

102

920

208

712

.17

344.a"
140

Table 4-Internal revenue collections by principal sources, fiscal years 1940 through 1976

(In thousands of dollars)

,.aId:d

31

~Oio1

IN3

1 !`4 4

5

'9146

19 47

1 all

W9

~9

95,

;M3 ----- --

9~ ---------

X!, . .........

1

1 95 -----------

958 ... .......

11

911 ........

1162 ---- .. .....

M3

964 ....

1965 ------

1 % ------------

1 967 -----

'96 ....

969 ------------

111

197

1 972 ----------

htd, 171 ...

191:

I. at

Co.=..

:3 0 452

371.106

22 "'1.369

40,3121,72 7

13 800 3M

11.67209 3"

01158'6

41,80 W

M0,125

38.957.132

SO 445 686

586

fto=i535 ti,

69.919,991

66~211 7 '12~112

5 6PI91

60.171,97

79,978476 7

9.797.973

11.47.741 1103

11 MI

lit139410,.11

5 ~925.30

112260,257

- 114 43,1,634

126.879.91il

~1:374:~Vl 6

53 36 W

187.919.5150

;11ih:72 :1I 1

M27 98

2 9,855737

237 757:,204

fill:95

293.322.726

3D2,519,792

R)

Total

121 9

' 4

, 1

3 ci'141'

162%.8

33,027.68082

35061.526

31 2M.138

21I :71,

3 ~'112 tin

M605 491

2137~11 7 171~1

4

50,741,017

54:130,731n.

!5e 350

49.91*.826

%:636 W 1 6,f

50

121

59,10,:117.

58,826.254

11 :12,5 126

67!n N,

71,.1.2105

75.323.714

78,891,218

I--..Profits hanse,

C.,

ad

11n.

(3)

1

`..1~12~

2013 7'. 003

"1:61~1:16 7S

7%

16,027,213

12,553

Q

1 161

0 '744' "1'0

11.5~1.669

;1~~11 All

4 87,569 4

21,466.910

21:11:31,15

W 2

11.2fis

21.2%,!122 7"

21:~1331,11

20

3

316

18.091.5D9

22,179,414

2;:,71'NO

2 95,711

22.3 6

24,3300~~ 63

26,131.334

30,534,2432

34

29:.9"96 22'0

W,337,646

7979 016

92:1 312 794

;..M8 :4,20

08 148 5

135,778,052

31 0762374

143,604,732

1

61:15 315

84 (548,094

~1.0315.903

30.319.953

34,925,W

39.045,309

41,744,444

s

M

1,2:~11 1

3 '2621 NO3,

Ut1. 21.1

.261,005

1.1~11313

7N 6

3.297

1j' N 97,781

18 M1,1122

17.1 W.

22.997.309

29,274.107

322:. 211

813691 '

1

3 IN

35 MV.6,12

31:029,772

111 4., ~51

73487449

41.1~1'11

16.1s

50 5a9.5N

52187 581

54 590:354

202.146097 4S.746660

205,751,753 46,782,956

53.660:683

11:3217 II~ 7 ~111

1..251,5.1 0 "

97.440.406

;03 651.58 5

M. 752.421

IN.879.186

125.112,006

142.903,650

IW3W156.968.797

E.M. Estate

e

Islas

(s)

83 :521

9258M 3

1:4M111:31'052

1.738.372

1,779.177

1,700,828

2,024,

365

2381,342.

2,476.113

~.4.1 '1

3:4627.4 N 2 7

4

1 718,403

5.107.623

6,219.W5

7.2W78,Y

7.560,522

1~14:141 ir

85374

121:,101589"

2~708.171

151118 If

02.5D.

17.101.306

11,21:121 26.. .1

28:085,8%

33,068.657

188

":" 3ff 91U9O

43.714

52,0111.00' 101

12 63

71 lairging

74,202,853

.. Il

I....

(6)

11. 71

407.00

14327~1()

496

511 210

643.055

6 7663

779:291

899N5

796,M8

7

7 V7

.~32' 134?

891..4

Ms. 121

7

07 '

,

1,171. 23

1,377.999

925

352.982

1:626348

6.392

2.035.187

2:1,17:4 2 IS

3.3

3,00.076

3.784~21KI

5

4 :"~1'1:."692

5100,675

2,745,5322 3.772.634

1 ,4

3:13j".2 4:2.15:377283

3 979 4~2871237

3:'53'.:065 4 555,560

Ai-hol

(7)

12If :.2,11

20 6

~048,117

423 ~65

61877

2.309.066 2.

W6.165

2.474,762

2,255,327 0

221 607

219.202

2:

2,'~9.112'0 6

2,7110. 925

2.710,01 2

22:142...

1120,574

2,973,195

2,N6.46I

3,002.096

3.1.,714

3.212,601

3.341,282

33:44

77j'9'9 1

4.746.3822

4,600.48

S 51:M

5,358,477

4.660,079 S.M.."

5,307.466 5,427,722

Taa1.11. 0',

6M

MW2

92 857

988.483 3

932.145

1~165.519

~,237,768

MO.2110

1.321,875

1 .328 41

:3

1:5-5,19N 1.

654,911 6

1,580,2n

1.171,213

6

1

3:497

374 050

1,734.021

1,806.816

. 1.50.

111511117 93

6

2 g 131

2,012.545

2~:014' .5,164

2

73

2,079,669

2.122.277

2,137.585

OW2 12

'2

2.207 ':"273

~.2767 9515

2,43 00

Ms.

't- Ali

h.r

....

....

far

441,7:00

313

771 902

504 74

503:462

W1,3l)2

430,5M

I 2,

.2 4~' it 'No

1.733,655

782511 2.N2,106

I 92 .671 2,421.944

425.200 2.147jN

1.64%M,1 2-M62?

I.M.533 250 969

:836 063 2.214,%l

12 363:V7 2.392.719

2 U8 W3 2.507.11133

2,862.7B8 2.647,492

2,M9.133 2.464,859

2.111115,0~36 2.ola,w

3, M.0 2,0,9,m

3,761,925 2,2<l.S$6

3.974,135 2,IW675

3.9511,789 1.997,292

4.735.129 2.004.3N

4.8%,802 1.963.582

5120.340 2.2N.1117

5~610,309 2.z7a.536

6.020.543 2.299.645

1:1 , ~~l~:.1,4.1 241. :.95.4015

5.475347 2.479,9`9

5,713973 2.196.ma"

6.501.146 ZM8.495

6.653.061 2.31110.601)

6,W799 3,179.905

720 57

-

:

" 3

7

5 395:7 SO V "004

W72,'

17

5742,154 3,5 2

2.315.020 5.516,61, 3.665.1114?

2.4f17.894 5,486.ID6 3,855,998

Footnotes for Tables 1-4

than $500.

r Revised

1, The ,ce,pta ln the ve,i,us Sahn do no, Indicate the Federal t den of Pinuc

nn.den a Or another

lur", in many hsPu,O.a axes are clilled in one St." bu'- Sma, Far exerr6l. vithh.ldir,, ox.e spurred

tbylr,m

Players located no,, State I— may incl,de ubn,nPj amount, from snhhZ'starts,

Of MPIIya.I

who ,

i

side in ne,gim.6,,g Shia,

2. InCluchis 11-Is on urn.fated b Illness income Of exempt Organ ,ah-s.

3. Coilecion, a

vYvOs. disability, and It rdlliduu hittirintiI Yncome tax not withhold nclud

Old as.

nd, it (SECA) S-0111y, the sallf-empo',hum,"n collection

P~ah

Ported ' OP taxes 0' in combined amounts with Oli amd, t~i,withheldl are ahsununc, taxes (FICA)

v!

it WWI - salinles and wages. Estimated i'pyit,-.nP a."iOn 1 I,., in, v1dual tax and to' P'd--gu

ab"I

nospit,, a, insurance ~lnda P.e, shown in the text tabl- s-11- dinfeb,14, x a

ohn g ne, d

indivi "at Income

I on 1 14 and -'I used`"m tax., and empicy,ent lavint in table 4,

4 nl

'a

pmica.,_ a. andarran Une, InmIlmd I

-`~

Yh`

AOYP

-

jIn. Fac-1 Insurer_ Co.-

n

a .a

..... Of 11 "Ini Ind Amer,,:nar~ac_

.par Ns ~lamm oln

- -

w,

I

.On Ia 0.11- d Pined Ih Ilirri,.,

"I 1" uam and American !

I.d

f

or MCI or 11-1-Ined Ouelati-s-0thin.

S. Includes Fiduciary h-mo ta. collections of 18`19,3121000

..c,.I'."ain"t . th `f,w','dhivf:dc c1_1917. the United Sunis total is

Guam in lic-dr-cl, with In. phu,i`sj ...1,1P.,nef.-P! 10 ma Gove,nment of

1950 (64 Stat. 392). This adjusua_1 OnounledlItc.1-a- 630, approved Aug 1

'a 1. 16.

1

million to, 1976~

7. "'Pe'ran-l- --1

'a 'd

- to banks under the FY,dPrPI ad in the internal '.a deposit revenue ::Ilections for the _ind F.dYY"` I

in w ey"'Y"

by mI.,nat 'IlInIccned. 0, ~~ax a, h Payments ale not misef!h subcl.. - a-c' m?,nts balata~, until the Federal tax deposit Ptlymact 1. which e,caa Ia, payIle silly tOm Ia' returns filed ant Is aPP led to the t,,FP,-

8- Rep,,eae,f, c,O,,,I -11-ble On in~Tme ne and ubncahn~ oil Pa. tax returns In, tai, ga_

oderal Irlsuranc, ontributlon

Payments

Act (FICA),

an 10, excess Payments under the

9. -

EhecPZs8nm8,hOgs %~ad~ararsmg-qiurl n Y , .1 their taxes 1. ho pm id-fial

art Of taxpayer liabihty~ Transfers .1 is

-'-he, as such, because Ih.;d. not

11-1 basis only and, ,noun's to Ih ,a fund are made I,

COIIeCtlon data. no alhic On district and regional

the Repress Ina d,,_, In base for`F.Sr

allunt, I

-urtal-dir, I.., 1040 an A on liabilities other

which the C,ed,(. wrho claimed.

A.If ~d nl. I

internal ....nue 1,,m

he"!s-p.rk., 10 the United Slates 1, 0. collIct'd On Puerto Rg.n,

dre-b-O nsumed on the island

. Plaiducl,

... and eviumses) d

under or visions I 0,

are bovere into the TaneuY, of pu.na"F,%~6

Code 954. The g

sect, 7652hl)(3) d Islets) .1 ,.as amounts Inhann.

(Tables I through .1.n -513disd)m 4). overall 'he collectionI Rmsuns "s12. R-far to Table 3 to, -Pon.,.

'1

Corporation income tax rates Eft.chive January 1, 19E~ first $25,000 of net

...InniZicinn, n,r,.t tax .1 22 pwcimt. hot ncOle in excil~a of $25,000 to not income dPranWd auy`j~,o~~ Percent. Normal norm I" an, au a

Or business. Eflectiv. j-P, I elvemp, organization, fro, Plax ad

O;~%P ad (a the Ia' (Public

L"19611, A to ce,con, Par ......are we Pit

I

June

';I ..I.nd.d 10 Dehournibear 90

The 10 Percent M, an

lach Ige

31-~',MI n.;, u,

davO.an. ' 1110, by Public t_PW In-, , 1 9. by Public w fit -,

. I

1975 retur'!

Under the Tax Reduction

11ca I Parc-1 annual late' and

nd,

to 2O.Porm

s, surtax -2tiOn increased t.t 0,~Zg(%(P.L. W-12).

eliechlPhan

b If an first S an

tend, y Th -000 If hanablu moo Truid normal tax .. t

1976.

far 1

1

Revenue Adlialtanurn Act "a IF IL as

976 returns It , of 1975 changes Were

Islas designed to achieve 1,; hall .1641 1- Jun. 10,

year extension

141

1 14.

Rate' If "' are as 1011-1 Individual C965. graduated income Is, Effective janu, I rates fro,

ludes1, old-age, IA Percent 1. 70 Percent It tansIP survivors, disability, and hospitai insurance Is,

income, la:

In. U ,!rP OYment ~Olml. Th. 10 Force, Is on sal,

-9um -chingli added by Public

!N196b

-111 April I. Ig.,.~P,(Pudb"d, ~ was Yx be, 139jo (Pu6in 'he as I an-I rI I. Ll,. ~, 3) no I _

30. hma ,

Dec.

it 'I- L-W 91-172) ., P 5 -O.Y., mhu., to Jun. POP. Yale. and them-dinacinnn,

15. Rates of la,o are as follow.

wa?33 in 0111's If to isa-PliIncome Tax, grini-had ithhold,n, on WPercent: Public Law If-, 68

14, I-clivej,hu., 1 19,0 1~ a

h

I

rhlbinItd,FICA tax

89-3 ~ effective ~UIY21, 1Z ji~

0; 1. 306 ~,O`ceml affect- Jlauxa~tr 16, 1972. has, Public Law 92'178; and I~ C. ant ithisclin, April 30 1975 under Public

'a's at 11 Pelclint was Laws W-12 and 94-164 A in O"O'Cl On eateries and we

up

10 $14, 00 for Calinud.r yes, 1975 and $15.300 for 1976 ithe

C"..'Id" regular 1-fl-Ol nitinemTnt combined tax Yale of 21 2 M, cent for Ott S IS-1 year, 1975 and 1976 as

aPPIms ond employee, 85%) and 11 employers (Ij35%) is imPitsed a, Is of

- If

h175 Of Monthly taxable Oomme -,-, I Pallum It wages (linlated

19 1` F"I de, a, railroad mII.M Ylea - far. 1975 and $1,275 to, cent 10, Caen is or year, 1975 and 1976 1

t Or.sentahv,s, Ia, of 76) u2i e`d`cI 21.2

Yoceived. In isdifin-, n

- ii-PPIPmernid I. v%aq 0

g:nion Of COmpensil

ad ti-mal Board n

Is i1PPaad an -pl.y a d'a.,r,"` by the Railroad R,

base on man-houm wo,ked. OYW reprosentalli...

1117.19 T., on RPa. I~n.g,,A Pro Of 0 mob, 1 71. ~ the_ I

I-- and light 'luck, marlikild

1971. D-chathi

it ,&1W0.I.hIu ,Sd,l,nqPe,l taxes an fiem, 8 4, "Posted by Public La,, 87456, 19 Rate

was lad.cinl from

Percent on January 9 Pe'cGnl to 8 Percent an J.n..V, 1, 1974 to 7

614). 1975, and 1. 6 Percent January 1. 1976 ( ublic Low 91,

M. Terminated In"I've June 30. 1975

2,1,Ih Narcotics, 1 cent Par unce- niuc~.Ica order banks.

shown 61 Pal hundred. inO,%,. ounce .,husne or ""In, I

I.

OccuP.h.Y I hum. I

dthl nk.. 2 cent, I ch. Ann-'s

practitmnaYs, Repeated. effective May 971 ,ubn, I "a On hillInufaclunne5druil-. and

L-. 91.5

22, Tax increased fro, $50 In S

Law 9~aqqy SOO. effective Decombef 1, 1974 (Public

M. Rat, educed from

(Public Law 93-eqf~ 10 Percent to 2 Percent. affechv. Docaurb., 1. 1971

24. :?ufdratddCbPtIer. 10 Coal. nounld. Process or -Wato, r poun ,es,c filled buther, V. choose cent 15 ~~snj 8 I cents MY Pound

, I Per Pound. IMPOntId Idlilti,rallaf be Occupational num' are 1-1.

buhiio".nd' at."Or"d untr fll'W

l.ra

th

mj_~Ise ProddIts d on mitnumcit-11.1,01,1init. chads.. m

Peale

I and are included in the wri-,mr. shown. Fillde-d

- 1-cPy- 0colver 1, 1974 (Public Law 93499).

25. Trahster, of machine un,

P a fihmrrm,, wlehoa,., Yin arvi aacn octlylin gu-a with -;;t on

"

0, ,,a me,

in 1,

h

a In

Otguns and Hill, barrel,, and

chinns

'mPrt,ls

0, do"

"aacKfodcupa .Ondal taxes are levied on amounts Shown. are in .,.arm. are included in the

26- Legislative auth.,ity expired Jun. 30. 1974,
142

TableS.-Amount of internal revenue refunds including interest (in t0ousands of dollars) (excluding tax rebates')

I.I.nal ....u.region., districts

Star*$ and other (Star"

=ad by single district

in p.l.RIh.... : Intel1.

Star,$ hear, M be"11

It table)

V had Sales, 10111

N.Mh.Atiantic Region

jSs. _~t n (c) ckrl..~

B01.1 (S'. W bac.) - -

B,,I,n gtDn (V

1-I.W.,ol . .

I. . f -

.

M.nh.1l.n . . ..... (Sea HC

P-,10,th (N-d a,,s1;e) s,

P,ok,di nc. (Rho I ~ and

id.AII..Ii.R.gh,,

'k d It D,C

N (Nc.Js..y),.

Phindelphi. ....

..... .. Son (1~ 1.1..)

FlIsib.,gh is (a be

Aichni.nd Vr.in.I)

.(N.,Ih Cwol-~

-------- Aperdeen-,

C i, ""

""ta)

San (b) belo.) ------

..

-Min.; -: ---------

Fargo

Wis..

'k .~~wo

------------ M,I.. ;;-;: 1- ("n, in)

O,aha

.) ------------

L

S. ..in ... M,a ....... ..it --------------

(M-eaota~ _.)---------- Si. P.oi -----------

(See p) a ow .

------- S Spring micl ..........

a.th.."it Regian ---------

(New M

a

to. ------ -----------

,'n ............... (Son I be

ChO'eyenne 'St ---------- - My.,-g) --------

Call. ------------- (Sea (7) b.l.

-------------- (C.I..d.) w ------- :::

Little Rock

.......

a) -----

New Odea. L,,is,ana) --------- --

Ok1,h.,na City iO h,11 - ------------

Wchi K...) _-----------

G ..It-, 1. "blig so adl ......

"bis, FICA c, ld

E,inkard! Incern, Credits M-. ........

Pat,nds 1-001. rinclas.1flad'

(a) California

_-2)

U.493.792

5,19 533

269,081

12'

9,31444"

'MM71 W1 07

54

~S

5096.581

1.2120053

14884011,

4,7161:17

66

1,3W,62

1,M6,499

:1.77

7.3

109 N

4,1 7:005

7129.342

41 237

34 324

W433

218,903

1,21319

573

4,560

'7'1 1ZI -3

1

32

I'Aa

78946616

418050

U6.471

71:"126

1,730.939

355.791

7 746

651 01

203559

.17 I

311325 'l

409,191

3.116,03

1 M 062

1,070

57:673345

742.964

417:421

222369

50 749

370,166

~413

S, '311 7

130.783

111:412 95"5

575:12

2A 531'

357

.5:S3'Sl

1124633

so

,

.7471

1.614 Ei2l

57 OD5

1537493

1 17:711 "2

30

556N06

.6S3

"Flo

Celt,...

Inill.

In12.

(2)

569 355

':146,178

38 M

11~:1411"

Wg2

,

1.

7a'

1014 '50721

530,756

31392 2

723 '95 954

2 711

21 2~

164709

3.465 3

91 512

32,743

617,IX14

128,645

3 ~1 1.17

5

103,951

21 98

197314

fifi 467

W8,866

117 . 14'

:404

B2 633 775

~O6~

M25

21 Saki

1.017,1194

7849

456,958

'7:V16'

114,808

36,747

1,31

3'002

51155,214

0,970

B,198

68,463

4.254

24.154

52

25:17"

76 U

57:796

W.6531

600,436

4.012

13,681

8328

19 015

362.848

41.nB

67,991

12,929

18.238

"155 85

441

27,073

193

26 no

13. 2

I.di1idU,I and

pwyment Is—

E.-..W.

P'*;

(3)

27215,507

3,896,2123

22 32

'7'214:' 7gl

:,2

"1114 'l16

447`1 *01713

618554

98252

a1 ~12S~4

3 241'

1 1.43:133

5

W,826

61D,271

3

,

73 1 20

890915 U0,2156

570,6701

3

274"Sn Sir

521.892

188~617

954601

47o.o,,6

571t:.1'2

a32.769

1.270:339

662762

311,171

ato,W

'"1,324

57.002

1

1222,5 1697

1'5~7At

519.6651

i5l.73

542794'209192

3.339~228

U91M

124,532

862.733

50.296

576,990

W.473

1M,267

414.551

296,112

5237,086

3m,lm

123,2. go 11

2. 8 1 087

13 1

14 ':421'

'

.

.2 97

31103~217 1

74 5

157.290

1,369497

Q2,T77

120,412

24249 1

96: 63

IS~. U7

Other

(4)

1,3071,~311

1, ,

U

3,810

1~2:121 gii,

15516

9887

1:306

14,710

38375

234

2 2921

98~305

18.178

29,420

23.598

9:826

5272

12.2:10a1112

2OA76

10.M

'6623

145

8033

52,879

16,137

a, "M

16,565

21:124 192 ~

4

14,179

14, "

3BM.E)

514.

1 ~4~~121 Sa

17.868

16926

112514

4S:2.

4~1

.02:16

7~

14.rB

14:4 a V

:5.71

i'4

ln)863

3a

:.6N

5,859

3,618

50,740

11,546

1

'

:805

3886

4.766

5

:

48

21 M

6,9117

268

612216

Estate

(5)

92,120 1 1

9,7123 1,M710

83

10

, 24111

4

2,820

2.58

1

220

1,9867

805

174

305

12,9457

1,709

4,8,19

4~158

385

673

11

3

I.,7V

928

4239

873 3

6,773

91D

950

1,276

10

1.4~1 I

791,

U,_913

7 "l 21a

7M

lika

57g

3.2B59

2a 1,

949

4

.76

1.9. 125

6462

812 S

11,17a

17,6537

679

V

323

359

9m2

1:W5

455

67

4.4

7620

931

8247

GH1 11.6.0

(6)

Total.

In,

area..

-1 h-n be,.

411,11:21 so'.

2

S

',.T5: 5'4!

1:7",676

1.813.598

548

512:72

767a:711

3

S

2 174

258: 92617

6, 445

164

392

115

213

372

S2

1 i lg 2.245

161 OAM

49 1,36

3 14

208

1 028

6 172 4.13952

Q

3 1 4

9 42$18

58 5,7~5311

142 172~,I~,

38

75

6 1600 3,272

15 1,332

469 20.312

55 8,M7

29 Q7

14

'67 2.188 3N

1 29 w

3

45 6~499657

376 19.750

44 2,812

71 1,932

144 7:,11

B6 4

26 2,7451'4

5

470 M,11- 62

8 68

52 5.865

41 97

21 105

47 1'.9

56 45B

56 141

11 .2

112 1,176

1,124 8,021

1 19 1 138

50 266

16 83

222 3,568

61 M

19 135

610 (KMI

~6 1,779

502

11,931 1

11 39

98

36

6

199

67

89

7

12

2:1

1~?~

-

30

3,515,966 102.226

561.745 50.783

121: 332554 67

1142 327 V

41 4~24

1.439723 71:420

~3.832

8,227

429

2M6

5:543

4 634

I Tm yen, 1974 rebates I.t.1.d $178,189.506 no "Iria 11.771,314 inh,"I'l

2

Fig....

ind,de CIddliS tor the -,al Old

ag"and ._.n,

Fecier. Disability. and Federal Hospital -,ance F,nds arrounting 11 $Q7.628.0M

, In.jild's

I credits for gasoline and tub,-"' ot is.

Y"'T" b.t,. (F1

or

IU cis ica $407,628 000

4 Credits

c

Pay, rd, ndli In. Federal InIuMc. Conlri a Ac

5 District -1. not -il.bls 10, r nd e-saj, pending ssl~ t FY 1976 boo. I,. desert.

298,485

18,597

1

1 2

2

5.9132

~ 41

32

98

3,890

1,103

on

ll

148670

1,9."112 7_,

::,

4,581 a34

Table 6.-Number of internal revenue refunds issued (In thousands of dollars) (excluding tax rebates')

Internal it --- 'd region.. districts,

Sls, .., an other (SI.I..

1OPr .. nild

i

by I not. th dl.ttol.

indic,tedS. pa,,n ... 1; ..let.

fill other Islas he.. ad board.

of 'able)

wit-g,. ....... jDal

Greinsp,c jr! &1

V~~ue,- (Ns- lwl`nic~i

Total

Inall-ld..' I...In. and

Corp.,.. --P'.Y-.nl I....

incom.

ti,n -

E..... ..

PaIreent Fla.

Enter,

(5)

Other

(1) 42) (3) (4)

66 96 .506

9:62 343

588.729

1 W 760

886,388

2,050.318

1.475033

J~~543,161

5,889

1,3N I

2 5.054

315 95D

37:171 1

T1:672

2,441.600

Z328.466 14 0

1:.S.41

805

193.110

415,312

1:502.148

OG3,574

1.8631,839

22019

2,551884,073930

1.352,909

9,365,658

1.453,317

2,012.224

2.W9.794

1.62 018

943.328

517.977

9.167119

82.705

2,74 695

788:228

173

1 .377 3006

I,"3.0D5

398453

1.195:402

8~ BIG 365

190,M2

346.982

2.259,982

1, 124,906

.50.

:.1.2

156

1.069,

773

'436

550

11,656,966

303,675

24~:2 1' '12

224720

289,809

4.276.479

17.1~

22

231,176

373,391

2879,649

1:

149.8W

206,577

45J52

60.8215

.23

477.4297 63a30,7S6

4,

S

9,17a,3

301,693

n, 56

2,5

2:.14 52.936 19 5.266

2 321:N

S17 257

17,79, 16

7.1

1,800,212 :4

'12.1

43

10'4 7

j:,171:g,;

a

74 1.2"

2 71~

o 4

1 11.4.5.12

1:. 3 467034

61

17.5131 11

71 -5

a14

2 7

602,m .~7

5 11 2 99 3 Io Wl: '163

00,662

11:.17 83

9.231,0115

V

3,133 IRIN 3 7~3

17,735 23.

57,806

1:1M

13.185 2.230,852 7

1,554

41

13:1.12 42.636 3'

So

9M ~:4 54,806

do3:.111; 361

7.397 57 11.1.4 NJ 1.

1 l.311 353,884 3,053

1~438.927 50260 34

5~013 32,872 187 V: "Ll 24.844

13' 4'08

1.552.072 19

56.659 U 1

23:097 2.3'1'4:L22

21.545 130

118.194 1.587

49,510 269 4 , . 11912~111.4

': .. 1:'

1:.107

3D9.601

~:397:.I, Z793

S3,

1 45.989 46

61.552

I'M

2,705,381

661

7 1.557.913

83.599

4690 62.172 534

759

2:469 S37:0

38.519 263

17.770

109

711.73, ~22 8,676,337 "06.704 3,791

'47

16,659 19:7M 2.W5:.O, 104

90~45

:o37 50.4 45

~12

'M '15'~

5

12'

.74 1

15416 133

4 44~

.311.2D2

1 '

52:676 454

1

~1~481

327:r. 12:870 376

1 V 56,455 431

49,0946 1 .132,728 51.946 462

3B.162 3DO

4

362,296 2."3

1:S 13.619 102 1. '7 2, I'al: 2.73 115.341

1:472 670 to. 7.530 72 7 1 4RQ52'1 :3

~7

:V6'

795.39o

S12 575

;7' 4 7

1 526 760

286

11,61, 139

~o 39.031 1:07023jZ 255

36.

1:1.14 385

10,1a,

4.

40.326 912 399

'10:i~ 430,777 1 IM37 1

1

Sao 125,951 6:2 5

2 4:710 IS

20 '11 52 2,506 2.5 16, 2.696 277.166

9

666

563 123

111

28,807 4.104,042 139:

80

3

5

655,756 327

.080

31

6:34Z

26

2

264

1.619

773,367 34.529 251

2.258

220,715 B.S47 so

1 :

114026 1, 63 16,684

2

356.656

7 Ml

750.857 08 502

592

088,428 52:'9'

1,,,2,4 2,.011 421 1

20 1a46 31.043 14648384 S,572 45251 14:754 182 302 43,48, 4"

1-1 ---1 -hoes. bve

O'sn

7,156.128 45.491 6.a54,899 247.588 3,612,060 24.639 3.45a.951

io .......

.. .. ...... 5:1.41, 41:5.1 5,259,086 5:r 1~ NO- h V

373

3,N42:12, 1. ........ 7

id

','4

3.

1. 7.1

16773

,4

0

3:82. go 124:Q4 21:462

1 The nmbe, 97 Tak Yea, "be'-- -I 1,NS,982,

3,632,607 161.733

2

ff,,,

details4

a

not -111ble to, edond `---Is pending classil,on,kor alka, FY 1976 book. ..'. closed,

3,582

t~ a

11,128

208

1:245

143

al"

1

--

4.410 481465

73

6.596

235 477

14 364

15 1.128

;50

1

00, to16 .082

a111

82

12

2

~5

.175

a

239

.1

184

7.1112

170 i:949

134 871

255 53B

2~0~1 673

74

23 2r

569 375

142

11;

11 :1;

43 j

13.

.

995

214

56a

.637

56 825

325 S.476

142

00

706

.010

76 676

66 127

25 628

16 329

5192 719" 1 21 1.252

41So

1B

40 1,0

~1 V 173 I

92 579

89 350 1

96 1,076

65 It 112

am .764

42

1

'16 198

.770

25 1 220

1" 307

87 576

24 433

32 Sal

51 733

67 566

8,14

6564 201

23 328

26 391

28 173

202

52

64

23

21

42

l

4

1

1~954

466

6m

214

387

2.270 ",7,

43

2

61

4,224

209 2325

491 3:736

142 1,716

456 2211

286 3.157

' Lee, than $500
144

Table 7.-Number of returns filed, by Internal Revenue regions, districts, StalLes, and other areas.

Ij dh,hhch,~

St.,.. .1. is,..

,.pr...nl.d by single district

hui-,d Ind in per mthhuni; We

ot other States shdenn .1 bothho

law..)

United States. 101.1

Nadir, tI,nflcA.'km I

a

(0 con-)

Au,.~ (Wi-I ....... . ...

ba'..) "'co' S khn .. ..... Son

DOW. . .....

(S- (1) Ounw)

B,ul,.gH,r-to,d .) -

:

,

.

M,.hltt, . ... .. ....- (S-IC he 1: :.:.~

P.,t,,,o,lh IN Harm,Ova) ..........

Pro dence Rhode Nand)

MId;A':m i 6

B

He.J-Y)

"'w'

vI 1

Plumlel,hi. .. ....- -

IS-- (-) WI.-~)

"I"=d R'c Z' s

outh-st R eg h

A I-I. ......... .......... C AlathamC!, ........... 4-ghan, -, I

(SOuffia"1118)

Ghmnsb ro

0

IN.nh

Jaci,son Miulansippi) ...

Jactulonville (Florida)

(1-nesese

........... .-I Region le

IFI, 'da Id

C and cl~

Detroit

Indum.) ........... Indfianah,lis

Lo-ille IK,,IVky)

par (W.m ugun.) :;.hlr 9

silders R.gcn

scumnshurl Region ...................

Waste,, Region ....................

Puerto R- ..... .......

(a) Pe,n,yl,ania

IndwhJuill Dad ...tion

Imc... .1 at -

IS. me ad Is.

127,348,211 82,755,521 7,8.,411

1808,741 I

.1 13,M4 53

632.5

3

3869 512:85909

2.6(19,1547

2,' 1.S 471S

3355.161

511,850

589.569

18,373.M

':?'.'~:113 4

4.262,950

2:460:01 .SjS

2

17,11til Z~..1

2

S."JES

1,,194 826

2,996,670

1.112,11 _4

2,396,762

6.711,1161594

'M557

4, .324

69666,562 2.

1,759.9357

IS. 911.77

247,952

409233

5. 1 7.-1

.80 :495

415

V954,5 798

79.334

2,769.24

2,1111A43

1.772,870

15,129,675

632:3

4 M77225

26079

3 133:N7

:566 707

110:777

:921. 15

5183

41963397

21,089,796

233,485

487:~I"14

7.112 1 M.'258

1 2513,560

532

196

4021138,

713

5.4'785:

2.207.3715

654,847

25687

397:9698

11,960,925

711:~111

2:327: 71

2 7 '3

1,793,618

111.117

438,811

1. 774~08

332 576

" 387 ,621

1 865,194

g

~2: 1'31:2

2,906.787

;~.1,1181255 :6

4

11,M-50 '21342

14

33

"

:121

1,"M

..

1 31~6711,169 2_ 12,4

1MMMM

3.352.439

2 111.211 I. JS~

1

6M~009

11,829,601

245902

3 424:429

1,110.074

241.376

1,71~1:'11SlI

1:4 1.,M' 90 4W

57g32

10,05014119

4191S:7g

21 6 I36S

1,007.691

"12131 .~:.

3

M3377

13,767,141

;t4 3737

.

287,213

5,M.73741

829.355

967,184

3 266.417

M443

593,672

1:406,836

407.01

334~91)6 72,725

":3'

'21

257 -

155.8579

19.9 1

150,917 2

04

31:7M14

33,627

1,111,933

189354

302,764

284 541

1157 6`1

56119

1. 21.409

124~112.

85,281

'~. 13:11 1.

53.264

1 :711

14

'g,

4'

222,315

2177:24

IS .11

101,644

1. 50.886

214,463

3'171124

IMS

36,

IB2.540

67,692

113-5~386

127,279

896.00

2N32:'9

7:3"

IS12 7.

95.;2

102:0115 6'

'15:12

291

1,3461769 1,

=7'

31.462

,724

497 958

81.550

94.965

19.338

29. 70

385,2 69

140, 57

40,865

3711:21

(549

Totals for States INA ithoram -b-e13:r.:71. 715

16 '4 2:.61

47 ,:I

1

0 0 '3 11

:'2 4:21~ 4:2

6.723,034 6 4.622 ,5,742

7,210,772 4 .9D4

Fidlichr,

(4)

partner ship Coupor tion Etitall

lo.o.: tia. his

(5) (6) M

1,610,3011 1,143.213

U5,139

11S~2

211IN

92,948

21

.5

42~4."S

113,770

5

9:2.

25

'144:1~11

51,M

91.227 37

25:096026

101"

21,263

13,650265

8,

22010

5:464

71.519510

1 7,

311 8 466

43:392

49,832

33529

15,744

8322

93,559

31,371

4.002

46,189

12.

:V6"

.'.1

1.21:~3. 42

4,729

38,192

2 W87

3B: 1

19615

.734

8,575

'3,742

2315,924

S,625

A44.3

4,555

5,203

11:374

16

37

4156 S:12

2

'24:.

943

74

869

883227 152.9113

W1:403 14,901

687:132 81'949

383545 7~4:11'

442,167 2 .3

387.282 T.053

137,590

:098

1 308

18Z

27401 , S .S,

jg2:6~22 S.

31,111

3:gZ7

133,642

22,206

311:194

3

'j,

19308

20,"6

1.2~14047

3

221

2~4771

'1:= 23

10,270

4 5

141:'25

131,106

19.215

24,1 B9

40.920

20.4 75

18292 015

1

B.

715~1

51,747

1 3737 42

2

'

1

1:7122

24,594

1 21,180

7127~37803

6,145

44,456

3186

44,735

21.067

085

12:882

5:1

13 3

3:1.11

5,812

5.618

13.

17.78802

4:41g

631 1

24059

329

39

290

2,144,06 2M,482

466,122 40.6"

2 :030 2,855

1 1 113

75,0243 6.22368

112 99

~3:' 6,531

6.1

12,4111 43 4.65 23

131990 7005

'51:5 1 94

.32 891

295 32,032 624

41Vg 4, 1

3'~r

10,479

M 7,9M

22,938 3573

4 4:

1

:045 .2

It 319 8 796

2117.320 2 .467

42:12 3068

24 .2 1~2722

22:M IS

3.OD3 1,1160

15.OD9 102

118~544 13:GBB

28797 3024

241,976 27

M.698 4'616 6:705

55,286 5. 341

70.487 930

43.490 6,531

214.665 2:663

3,350 "6

290,366 46,401

6.080 1,263

81,957 10:490

28 004 7049 1

5,927

6.5"

'17:N1'

3,867

47.405 4,303

M 962 5.68679

18:497 5,478

241. 9,234 24.500

183 702

525:632 5.291

313 4Dg

as

75 4

:72 2:NI

,6:= 11:'N71S

24264 3.274

21~.116 4.232

308 2 36,060

1 8,924 1,165

11,771 812

14,778 13.219

2D.000 :918

24.423 2628 1

7,788 401

12.418. 776

62 .385 10,646

34,011 3,4,17

3.167 707

375

37

2.79 2 670

-

161 IM63 23,

69:81'227 100,454 1

87,501 326 1"26: 19

43 0

924

1

1 046 :401

819 73

89.191 97";5.8 1792 9:"

column co tents:

(2) Includes Form, 1040, ID40A. 1040MR, 104OSS-PA, 1040C, and 1042.

11) F, , 10111S

4~ Form. m

(65) Includes Forms 1120,1120 specials (SchW. PH, 1120L, MGM), 1120S. 1120-DISC, 112D POL, and 112OF

17) includgil'orms 706 and 706NA

8) 1

"'

-1. -2.

-I.d., Forms 940,940PR, 941. 941PR & SS. 941E.294iM. 942. 942PR, 943. 943PR. CT and CT

10

In. lgk!&M~1.1. 27 ;~I. 4.1.1

tl~ In

Ud Fd;1

d:', F

m:Mr

P c2ders Forms 7, a, 11. OR, 4706" 4107. and 4708, Alcohol r~ciae T.. Flaphuns, Tobacco IE.chh, Tic, Ple-mi.

F.-: 720. 720M 11C 3780 37 A, and,4638.

1113 cIud- F.~m 1,

1 7004~ Ttmt~ 11200L M 7005. 990AR, 4578, WW Series 5329 and INIA and 2438.

(14) Inc do, Ox. 1

Table 7.-Numbe, of returns filed, by Internal Revenue regions, districts, States, and other areas.

-Continued.

Internal 19,--legion, districts,

States and other are.. (just.,

htd,',...'.nt,.,d by -1.91. district. in ad

hiPtillinth , 4 .... ; IoN,l

I., the, S

less henlitboplam of of..)

Ifild-A Rejic~ --uinc, .. ....... . mimic

P

:=Qh Igo R no

g Wilmington 1, aiw'12s,

outh

----

at R. ...

--c-aI ................ .

C.-n-'

...... hildenhan

A.,c..:g on

S."Imse., an ca'..' .. . .. .....

. ... .. ...................

N-~uihdrri 0,1,

"'

Lo,isia net .......... hl ho-)

12a"ru,as) w

Lo el.~

Phuen'.? -A

SahF anci,~o

Sao... Obel-)

(a) California

)pennsylvarfla ............

GIN

to.

is)

302,464

",0522

2,15

1.439

7955

6,825

5~517

681

11 220 186

IZ

--171

6,626

10.294

361

360

5

1060

42,SOO

6.W2

3776

3,109

6.088

2,233

16.568

4,124

n, 82

5.073

7,070

8.9 3

7111 2

373

1,425

60,502

12027

3,739

9.584

2702

7,314

173

7

1

5183

5.869

45,487

410

11:

1 '177

6,'87~

4.910

'2:r7g

4.648

416~8. 21

212

1.3, 3

2.606

2.076

11:~43

3 24

3,963

1 1.72

10372

4:321

07

49

578

21.515

19,608

2 74

2143

10.

20,49ON1

E.pj.,-

...I

I

(9)

24.6,rT,380

3.7003'51

208~ 02

13a,182

631.555

705,828

1,078

71,587

390.985

102A

3.U(I~27' 116'It

SM,271

915.319

741.964

418908

&56.674

75,143

3,842.068 60

7,955

395.823

321,072

645.444

1 261,244

124059

48671

2,949,

"4.'14'1

621514

829

51 7:W145

356,871

180,172

3.402,792 9

3.295

823.4,12

37

:

269

914925

514.352

E;Z"

423:337

338,36s

3.3.U,s24

134,550

826,094

61,134

7D2.2 09

3 754S0

4226":22.0

324:597

4,9:M-

'03,82" 4

4 26

108:266

93,875

226.087

284,612

73

126'000016

1,013.475

435,493

1,83769

71:551

12,218

110)

1454. 73-8

-

9;3

-

-

19,461

8671

4,068

6.722

'Y'

-

111)

7,1,505

97

415'j

2,30

17,242

17,063

13,467

1,290

11

26'40438

1:876

2,589

284MI

762

21~929

900

8,299

39.27362

4942

2:400

29227

1..0

12. 5175

66':96 4

4UM,

2 1

4.

2

.123

. 12

1432,673.

.491

43,713

17,024

3,989

23.028

5,405

~7.779

136.93

.307

43,894

1.230

8.695

860

9.090

8.116

Z109

3,706

4 054

6:034

as 33

2.482612

2.

342.547040

559 2

9.38' 753

1 1.792

1:703

3 266

683

8

-6

Totals for Slates hot shown tabonn,

2:11 1 HI:S'li 13

2,253.591

065 12,739

1:160:805

1.528,334

Include, 47

-Includes

.

677SI'E0 I-. not id-lihad by districts

r'

195.160 Forms gwp. a;d 2,753 "Ims 480A hot idemilied by dishicte.

Includes 4 6i6 1-`ms'4="

Includes -:480 Forms 7OD5 nd,!d.nljj:. 'd ',y

includes

2,

-j", 281Orms "68 and 8,599 Form Infified by districts. Inc - tjtj'=d a

.:

I F* m,: no, id- hl~Id

inde 506 F.~ 2688 It idemified by districts

65,858

57,020

61.~

27~5gil

17.'78005

..bAT1hot

(12)

511,955

575,19,

21

.7.

1071.9045

1 5

':S73' 7

1I'm

69a~.~ 3151

152:1

9.0w

1102,06

75059

17,113

:4

1 7 7S4

2-623 8,95

18:826

_10-M

:34

Q

.

9 7

7:~592

12

10:492

6,118

90mi

2.587

15,344

82-995

22:93

4:S71

16

1:9?

84.727

2,799

12."1

56,780

62

II:g'36

160,005

..

:S6

12

3

21.301

5.3D6

6.587

1.953

2,034

236.337

.743

320 311

",638

23,891

33.112

22.155

24 84 39:125

Ed

U0214

K332

:31S.

55

1 '1:417'

15.916

2.289

8130 5

97

4:522

2,332

3~7

'104 4641

2:0

'24

18:524

17.406

2:4.7

123 7

20,278

;41

:7.'l

21 .602

11~. 611

731

MIN4

3330.867

11: '13~2

7.3w

141,304

18:~Z31

18.220

227 7

.9' 30,

1

3:0

~4

2:813

1'4

142:334

5276

'47'092

32:322

12,914

13

4:%

16.551

134'X

4

7:M

2:157'

34,847

7.238

17,192

5.604

7,523

36.769

22.667

1.004

158

846

71.616

32:M

39.078

4359 492

:nI

145

-57 474 7

27: 16

967

119.122 91: 11

393

6.110

65:135

139094

5~1.j

15

490.939

'81.400

56.

91-11, .5.

80"aZ5

55'80'9'977'

82J.

44

7!15

~:536

SI S,

3.13

12

'3

It

0

3

144:255

570.313

113.863

53.262

49.5"

13354

50.435

34.783

80,732

86,742

44.787

2

"414

135.268

Ia.

03.227

60'"0

27,357

47165

47,321

43,701

I"'= 6:1 1

12 174

21.634

238.733

48807

97.309

16343

24.892

181'slig

93,472

7,479

7.133463

420293 198,049

354,341

2D4.016

153290

239,'45
146

Table 8-Iniernal revenue collections, cost$, employees, and U.S. population, 19491 through 1976

F1 ... I

YOperating Us, of Pe,,uAti..

coal ..H.cis 9 (Th.-M.)

S1;gO

(1) 12) (3) (4)

M916.822 39,IN.385,742 052 1".696

64

1:

295

183 731 41, . S 044 47,208

209:205~701605 .,'463~54'125.11 052 149.767

230,4W,200 38,951 31 768 0.59 152,

271

245 :51,S~ .51:~~5:16:ZL5 14 ;~.878

Z71:S7723 012 57,5M

26B~590 8m 6969919 686,535 389 0 M 160.18',

268 969:107 038 63:02

278,834,278 66.21,969902.7D9001 042 1 65 931

T..

..olt 5) I

27028

28,f.39

2701755

M

Nuoulos, of reploy-s

194

T

X9

950

1'95'2I

19953

1955

119

19 7

19 a

'959

960

1,96

1962

1963

1964

65

I 967

11a6l

1970as

1971

197

1 9 3

17

197's

1976

299894,710 75,112.649,01DO 040 I'll "4:71 IS

305:537,814 W.171.971,(XV 638

1. 13

46

S

33

74117 17 :~47,6:= 042 882 457

If as ":7 7

1,74:24 Its

355~4 :22a 97 7 0" 7 .830 448,73

ml,n5.359 91,V4,W2,823 0,40 180.671 ~.96

413,295:238 N`:4011086.398 0,44 163691

20 99 ~.839,245 045 186~538 500:804 450080 4 1

314 05.925.395,281 047

Is

9

2

9242

~II7 541:1. 41711 1111:117 1121 , I 04 191.889

3 7 4:43ul &13: 052 194.303

325,71

413262

500

428.89

399,50

S13 91

53109

559,74

M03

58895

Total National

(6)

52,11N) 52

43

52:'266

551

57. 5

55.73970 53.

463

51 411

50.890

501682

51 w

50:816

50.200

50.199

&1680

56:510

59. 6

59:357

60360

14

1

0 .66 61.689

66

s 4.:~74:.,4

~2

7:=:I.l 121 111111:512

SO 25 INV'12 746.68 65.122

1:7. 699:190. fa3f

:4 1 7

1

a =5 0' VO 202 77

97 65:ITF

758,765 304 SC 237: I's 64507

886159162 195.722,096.497 046 204.878 955,31 68,098

981.065,297 191.647.198,138 051 207,053 92543 68987

1:121 411, 1 1.175:273.6~171 054 M8 846 1.OD4.83 74:086 S2:=:. 2

068

049 210:410 1,130.11 71 846

:312,894.661 268,952,253,663 049 2 1901 1,26924 78:233

1

1

213:540 375,96 82,266 584,711.486- 293.822.725.772 054

1,667,311,689- 302.519,791.922 0,56 215,118 1,406,30 85,712

11611, cost. ..

for FY of an m

n 1

is

5

, 97

-

..;,

7 staceived rom other

age~ciol for SONICIPS Pallf-lid. While' operating cost

figure. for fiscal year prior to I

S'5 -.' I. so-. a a. I cl,cle reimbursements .... an, .rh-l. or. -111cl:nfly

all so as not to alter the cost figures In column 3.

oft.

M

4 T'l

662

4

,

4,535043

4,030

3.842

3,834

2.707

Z675

FI.W

-

Q,049

4 481

47:712

51.248

53.765

51,528

49.629

48 704

0: 215

21583 48

26()2 4876

2:aw 48178

2,633 4756 7

2.702 4

.

4977

3Wi 50.649

3 3567 53:153

3:5 2 55924

37 3 55.6D4

3:7'90 56.570

:816 57.873

1 Ow 61,062

3939 :238

4:037 6' 6..4M

4.356 63742

4521

4:8M

4,646

4,685

4,960

64466

69:263

67 2DO

73:548

77,306

4.944 80,768

147

Table 9--Number of returns internal revenue rprii- examined -

byclass of tax and by

er areas

Ilegion. -ic, cents,,

Total ImPlAd-I Fld-J.,y C-,._j.r E.Ight. GO, E

!!!.~i

IE ,p

-.hTh!At:.hjjc 11 -U. 411 IS 731 Mid-All

2

"60

.

.........67,753 48 022 1

M'

an, all.. Man,

-c ,

4:UA 37.05S ,41 08,797 131VO -67.418

a-uth-11 ....

....

' 16.635 ".639 2.3m

9,343 2,335 13,S72 16'se,f 324.420 252,912

M3 25,951 S,685 2JU 7,496

1

311,408

Mid,

:89 1,594 20,219 335 194.180

1.630 9,525 17,M 2,69S 6.434 1,920 23, 6,289 2..57 14.1"

South..., 275,6114 199,169 M,037 2,374 S,,W

3.301

01025 S.294 1 13.Mg 16.36S

W'Sh"'

2 2.251 2,973

8,408 2,221 34 262, 0I6 1 98217 2 321 F ' ' 3"

1 7M 75 ,

Intern.;

552 4

Jon,,;! ?Rperation, I 331 a:208 1 ~ :. , --M7Me 2.759 3,405

Nlrth~lkt- c gi.n: M:974 M:,':,3 2,8" 23:159

7 1:. 1

410 126 1,766

Alban, 11 .235 17,290 2e:712 53 2.156

. . .....

Sal 3115

41 3 1

21012 17.190

431 064 -r,_

. . .

'Os3

023 146

kyn 3 a

57

831 310 65 78,1 h 57.670 41

1

886 222 56 B,.. 726 577 .121 4 699 B, so 119.231 .988 103:244 1,212 2~993

B.,I,ng- 46 W3 37:014

288 5,477 2 N4

259 2,971 441 '92 399 453 1.094 2=7 3.655 1

2.Ogo 208 448 1.979 35 .621 1

.

36 352

.113 351 1 1 9 30

7 78 16

2 3' '

2

S3 5

1

3

1

5:

4.63 6 S2 480 235 1.290 56 -

4

716 280

712 2,829 787 .1

1.55

25'

3

098

9

04 66 6S

.34

And,- Sm-e 1138 , 4 1,192 Conter 5,351 80 1.0851136 2 257 709 B ookha, n Cc,, ;4:

Id Atlantic

If

5

1

' 228 'a c' 1.2

590 09

1

6 269

191- 14:880 -

- -

051

- - 802

48.472 -62,750

87.D37 66.155

479 3.898 1. 966 357 1.571 3,291 76,357 62.310

613 6299 994 396 2,244 4467 1 ~33,41 2,375

35,71 25.042

514

322

5.877

3.199

965 312 1.758 2:074 2 ~5%3 47.715 n 873 28, 965

''

74 2-790171 74 4.034 -1 h S C~, 6710 3

6 2. 223 1

:

S Pinflad, :Il 1., 585 2,812

,

All-to

8. 339 6.652 - -2 58 315 M5

fh-hghmn 58.232

- 87

C

42.954 211

Zba

26& 3.373 24.721 824 249 1,505 27:229 2 363

378

2,1

2.717 3240 1,425- 3 819

Central C'n,,nr:, R h

Cimml.nd

D-Ir.it

Indi li,

Ph

Mla-f Region:

J8 ,

97 1.474 I.Oge 2 22B

19450

43.130 All 386 63 U7 24. 3 19,902

3438 752 1:594

116315 94

ID6 301 429 2,807 3,3.11 S S

,

1-

35

568 7

.1

350

1

133

583

':228 014 029

1~:`Iw 13 162 2. 401 949 1389 3:.,~ 15,093

5:209 -

609 600 214

'865

1.590

006 -

- .7

34,878 24843

56 88 3S,536 278 3,500 88:4

36 491 6.334 1 70' 111 1.453 2,418 748 68.~B M4 408 3.318 4.256

7S. I

37 28,580

576 7,

23.733U is 280 725

1

9 2429

.152

.271

281 3.68 5000 743 212 2. 218 l'im

1:738 6

1 W5 '988 7140,

1 2:4118

thf,

056 8:075 1.20

'27 46 .114

99 54

1.401

5 332 -

4

82:421

.053

2 60,130 1.614

32

6897

328 255 75 148 4 1

15 12.404 2,N3 453 3,063 927 5,ON

3,910

220 1,887 1,40, 4

30. 809

".

21

39 2

1

4 - 2,14. 2.-, -2

14

.510 .2

315 95 IN -

mg 419

'

s

8

187 2,394 906 1 -1 8

174 61 45,892 33,

696

711 388 2

.

S U ~4,276 -2,M1

17. 34 135

1

.053

KP11-9 Wd ."3 24

1

N17 nMm Cq So,_C__ 20.622 14' 902 222 3:~7 s 475

Ie. -IRag on; 16.507

1 :1124 W7 1.496 794 12B 2 1'7 So ill 5 5 - 1:676 2.047 ~uquerquo .............. .318 -

ock

N'" eOrleans

,lano-Oly

W, h.l. ..........

WA.cStinS-i-Cmis

Rest..:

~-cn-g. .......

Hor,olw

Lo Angeles

Ph.en,.

P Iti.nd

Arm. ...

S n,It Lak. Citc.

~%dan se-ca Can 'no

~-Iuco Can,.,

7,897 6.059

65

2:

286 49,693

754

52

. 1,901

~6 38.476

21.. 14

a

16.240

16

33

7 12.416

26.011

242M716 7,

12

1

17 9:

13,101 12:543

7.083 5,590

8199 6.758

9 T73 8,075

.5':81 8,161

.,51 60 217.709

22.1 71 25.811

s"

17,485

13.103 10.6"

1

1

'Z998 10,572

27,260 07:91,

32.602

. sa

15583 14~470

9:280 '0643

40

635 4.814

26 286

636 3,153

2,6 1.~2

1.047

42

1

2.

230 2.1. "96

316go

-

1,620

-

J31 67 365

253 M7

, 3.75

1 99 2.450 767 1.163

15 216

1

'190 21 -

570

495

157

3,427

.413

3.7. 703 722 1.976 -

237 so 1.329 82 -52 1

19 3.

9 1

"09,

6237

:495

578

-

138

-

2,648728 2.1535 27 558 -

T4 37 4~1

51 a 9

.7 7

41 42 578 2

60 741

155 32 437 101 943 9.616 3119

'40 1.273

3,260 469 34882

82

429 146 1,393

406

680

86 673 132 924

114

92 37

27 5. 603

~I, 266

2,241

2.

51098 625 97

1

-

6417

1

'

13

1 '07

qs~ employs,

xcll Empic,

C

5

.32So

4 5

492

7.458 1.4a2

1,645

482

632

4.835 n9 678 4;; 2.962 484 270

- - -
148

Table 10-Additional tax and penalties recommended after audit examination

by class of tax, and by Internal revenue regions, districts, and other areas.

(in thousands of dollars)

But- se"A.. ..m." .A di.ftid'

N.rih-AII-11. Region:

Ando,mSen,deCmAm

13-k-nS-im, C.nmr

IIIRegion:

Philnd.lph,~

PitIstou gh

Rich-nd

C.-I Region;

cindi-atige-ceC-1.1

iftest Region:

West.,.RaI

Ancho age

Son.

H len.

H-WlLosmenA

ag"I"

ft land

R A. ............

S It Lake City

S:

n

Francisco

Seattle

Ogden

Fresno

S~*

= Center

Total IndWid-I Rduciary corporation EsUn.

.1 'is

N

51:111

1

622,151

622,560

Ns':1"132

642:11.2 11

75

64,469

36.006

12.420

41 67'

23:

153

n.504

3,790

122

sal: I'll 433

9180

203264

348

2A 674

198 NJ

95,128 6

2114

60.634

15.349

18.353

,17

103'7 N'1

40~226

75.019

33,030

207.879

76,

23.450 26,

905

66698

111,3107

.

91,229

51,49

19,321 20.83

6.505

332,691

31So,138

5,610

81

Us

60,371

.:4'0'1

41 W

22:262

S2n

236,969 1

6,368

11':41 12

53

22,825

63,871

63731

64:,sa 's.1

51

M759

9.621

269914 16

:537

26 562

36,060

5020,348

.266

204,9137

55.: ~ '1.2

V.5Z39

1,551:.17' s

7.

184,092

V9.M

11 ".:6"7'0

6

.2:653

33,395

8,777

'181 3

52.885485

23

,

I~254

837

116 I

70

.:1

97

432

'!

1

4 10

20,274

24,"l

35..2

47.264

1.11

21,658

2224'

3,585

18,342

22'0~1'5`7

16:959

27

14~809690

92,86st

27,941

23359

M:qW

12,769

43.718

22

1

53

13.88"

11 1153

178

2.974

61.313

7 021

2

,:.'7'4

1 6.172

7

I

3:B. '

10:303

22173

.879

351:463 3

35.3661'

8,31'a

7,748

17"~%

129.11

.088

3 .9D4

21706

4

5 .681015

1081~:161

10,47267

13:616

81

53:Z1

18:332 ..1

27,388

713AI3 2,660,747 a

as 70

05 333:753394

':

"

4 is 224,415

12 207,512

16.385 405.915

1.4~7 3~2'4 211sa

3 :4

3,173 17,010

93

1' 35

326

421

84'

7

16'

686

26

39

-

-

376

21 2

545

74

981

382 2"

39

118

10,777

434

-

103 1`3,610

211 167 12~49175 48

M7 48 59843

188 27~824

11 &252

-

" Bs'7 a1:117a,

131 11275

43

33 40 Is

- 54 26'850

B'62

-562 '6:2' 36 1~

222 22,448

-

-

1

11,5611 W

124

740

1"

316

-

- 2~567

29 3,734

Is 3,121

141

1

9,133

587 26,94 9

35 5741

28 19S67

40 31,345

28 8312

16,96, 118,938

681 24.125

-

21~31 s 1

74778'

35 6

74:994 11

1

'019

.

51

.1116

VBD5

7838

-

-

47486 8019

107:111 28,926

06

is, 13,092

3B:037 6.720

249 935 9,807

123

1

461

- -

52701 I

1 ~2K

1

8.8"

36,46

6110,421 1

33,5760

-

B:4 7

is, 201

540

33230

17,725

35,090 0'

238

42.864

24,901

-

510.941 I 65A19

11,414 7.97 a

69,024 608

67 35s

:'65

59

22 179

.:aD4 4:646

71:091 156 743

337

5-

:1

2'011 06

3'~072 14

008 212

18 46~ 1,07

20,201 1.382

27,512 438

712 19

10,564 746

36,71

1

3255

65a 64

513 62

- -

-

8409 31

2,65 6: 685

708

5

264

3010 .350

101

9:21 6

131

J..092

13,941

7:1

291

199

1

.

16700

10299

41'82450

Dal' 4:

11.787

7,539

7,125

-

1

772

15 564

11"9 s'33' "566

272

7,192

1271

002

201

i,063

2OA25

2:1

342

2.571 1

972

11,282

7.491

-

GM

2,"5 1

DM

&188

57

838

339

-

4,550

535

44

11DD9 656

11'915 327

.879 1.75

.882 367

91

5

1 682

.229

270

743

1,459

780

2,548

596

53

1,151

109

486

. 261

.7

10,948

1,151

20.535

2T'

-

E.d..

93.08 M

414

1412 1 :"~

0,168

5.022

11'0:444

682

us

207

309

7W

9,35524

6

58

14.41, V`4 1

222

14

33

904

7.0 4

3.81 138

092

1.070

334

11

1.035

3,N9

3.41 1 9

1877

558

B7 143

3.276Q

S24

29

472

4139

71

31

2

360

89

5 190 I.xij 332

MS

229 1.159

3.331

7W' 1 3,749

242014 2,771 099

884

IN 2,155

- 63

38 1,712

30 181

'60 48

08 46

13473 4,179

1 21 263

696 1. 723 3

200 09

41 196

1 529 1,090

737 075

47

- 151

Employ.

164,679

21.695

114:.111 , .

18,231

30,405

M,124 1

3

1:76"6

405

6 2

5,717

2.703

2.766 1

2.1 6. 35BB

117

430

-

3,728

2A92

2,755

2,796

1,508

299

-

5.5126

95973

2,242

91

7

9DW

2,203

-

-

111.

'

12

.2 B

2,648

1.630

837

284

6,3137

1.115

D2

U9

3062

2:5n

12,&R3

3111

1.'667

-

1 2

2,917

S'I53

66

1.4W

1,389 ISO

17512

-

136

272

7s'281

408

53

867

1,610

2,8N

2.707

-

E...Pt on,s.i~ satim,

13,372

61019

111..

743

4`15

1:163

154

-

-

-

132

955

-

4.9Y1'

"1

67

79

--

38

-

-

NO

10B

28

in

-

729

599

Table II.-Abe orliate Division receipts and dispositions of cases not pffee the Tax Court (nondocketed cases)

A. Progress of work

Disposed of, total

Pending J- 30

Unagre- (O-a-,narnt. cim_

mnpf?ym~nt, and off,,_m_-mpnr_ad"'

By nennm, 1. the Ts. C-n 1.

B. Results obtained in dispositions

Method

Disposed G1. total

Unagrrd In (Olent,sess-ma claim,, a,~jj~~

B _P Yment, old Offel-m-compronni. rejections)

aY Wgim, It default dnatai

j, once

V~iakol wn. to line To. C010-ten,flned to

-

Table 112-Appellate Division receipt and disposition of Income estate and gift tax ca ses petitioned to the Tax Court (docketed cases)

A. Progress of work

St..

649

-3,515 Petition, Wad I, response

District Dhod!ors'stanamy nofices,

Appellate DIvIsion', stant,dr,, notims'

By dismissal bY the Ta, Co- or -,a.ye'

cletault

- T 1. hat.~.* the fe. &~r~ on ti~ rneris ..........

69 Pending J.n. W ..... ........ ............................................... .................. .......... .

- 1 Diffeetng from tabi.13. Insmit-edi to docketed aninm is ca,sed udmq matrid I'~tO~'ststutOlYmti~co~s,de,,dbyAp~llat6i,=.,~t.,t.

60

-

24

B. Results obtained in dispos tions

Method

B, d'Amass' bime T.Co.. or iaxp.W

,det,uj;

................

TIrwel be we t ax Court on the merits . .......

1 Revesents mao,nt. pefilimn.d

A.-I .!ad In 1-1-nagent . A,""

14-ban, 0

.,h,:-.M ftll.ra~

a ...

r.......

.

A.Ift"Y mant

(1)

19.688

19.754

914,139

I1:502.66,

19.496 11484,019

13,802 1.05BSW

1.992 37692

725 53:509

2.977 291.206

149

FY 1976

(2) (3)

(2) (3)

115,283 2.066,831

I 783,11117

723 515,289

2:.3 7 268,398

91600 490.487

17,023 2,380,031

I,W4

42.815

-,732

40,319

7.0(Y7 114.549 Not

186 14,697

N07 95.501

4.413

FY 1976

A-As statea 1.

holk=1sa.

"hoolkir of Overassese.

--"Y am

7.OD7 37s422

Not is 15564 Appl~

11:107' 95:501 cable

Appeflate, dertarmhostio,

sheaths, of

ran-ndaellis"L

.......

ment

(2) (3)

224,747

19,946 3,051.9al 189.687

APP*Hst. determination

(thousand dollar

N-las, of D.R".ny .........

Ad penalty remat

(1) (2) (3)

19,496 IIS0,354

13,802 467.W5 59.759

6.918
150

Table U.-Appellate Division processing of all cases for 1975-1976

(income, estate, gitt, excise, employment, and offers-in-compromise)

St.,..

Disposed of. ours

By

unagreod

and miectionsl .. . .. .......... . .

u I By tri,pbr, d,!aqt or~5~a~yh"' notice or di,smi,rial

,

I

.

y T

.

a

.

x

Ptimaingiurve3f)

1-sed

Table U.-District conference activity

C.... pending July 1 -

Cor,mancecompl.led

I-Omit,nmd

Agreed

as. percent If total

C.... ..ruling ~- 30 ..........

of claims forrefund

Table 15.--Overassessments of tax exclusive

1=,399

96.766

1 820

1,41501

5,902

23

4

1565

145

Revenue

Agenda

8,186

20,423

1427 2

657 62

0

9,182

isM

137.455

108,749

1,141

807

6,127

022679

3,522

Numbs, of _a..

1975

35

29AN

1976

34,951,

31.114

11,947 36.969

Atullto':

FY 1976

Total

8,912 -15,098

30r381

28.994

M566

77.8

8,2119

50.BN

48 421

e5,193

72.7

171481

Amount

Risceinverided

(thousand dollar.) ...

1975

$302,797 $290'sil

69252

2:

111& 266

34.1Z823

6

6W

2,720488

96,04,

7,298

133409

33-1

11621

17

"

1

:1507

Table 16.-Work flow in the Internal Revenue Service and the Courts, fiscal years 1975 and 1976

Return.

151

1176

Tax ,t,,n, flied, total ................... - ......... ........ .... . ........ .. ............ ................ .. .

md,yidual ln,om, is, .- ........ ........... .. .. .............

Declaration Of estimated tax ......... ........

Fiduon ................... .. 7,543.339

82.755,521

7.8s,t

C.'Polin- mcorn. is. I.............

Estate ;:74"' is. .......... - .. 1 111. 1 3213

Gift i1x

-1-1--............... 2.111,731 2. 44036

Emu oYmen taxes 215.918 236:"2

E,Mpt 0,ganization ... .... ....

260.094 302.464

E.K."I tumt .

.....

...................

24756,630 24 677380

AT Asti- .. ........ ............... 1. 374.200 474 199

103

M

M S05

:_ Supplemental Do,um,- ..........

............ ..

. .......... a24

:49 51 955

.... ....... ......... .. ..

557 880,214

...... .... 599652 986.525 1 The c assif atiOl Of return h b

ic

een ChIn Form gadl t,,10~ SP;101 I.Portit. The Supplemental Documents category in 1976 ncl,des returns not previously co-ted. in Addition it includes

OX which increases the 1975 Guium'Tolalk 1,6U,

Number of return, examined by Alml Di

Return ,in ""en.1 P,.potmot by Aud., Division

Disposed of by Audit

G itnon

'at

N-ber of urn. examined by Exempt Organize tn v

Income, Estate and GIN Tar.

Returns with

'it 0,

justments, prob E G, oar Number ofretu Posed by Exempt rthanuation Division

,m, .=pl.yE ~ Plan. vision Return, withedju~=Inedl Py

P'O by mPlOYel Pines Division

Chil Us Ctiess,

G..na of 01191nal J.1taximlon, Tax Court

Total P-1111.1.d 1. Tax Cot,. ...............................

Sin". ...................... 11inn;sedby

... ...

Closed by Tax Court decismi, ...

. ... .....

Decided hy To, Cou,~ but appealed : - I . . b - '. * * I - - - - - - - - .. - - - - - - Diar-1 Courts and Court .1 CA.r-

.. b I

.......................

...... ...........

.... ......... .........

...

Total Well in Dn,tnct Courts and Clu,; it .if I

Sett.,ed nD1,1)t1jcr Courts and Cc

C,

CO

in

Dec' ad strict Couns and Court of claims .............., th ~ I

"t

............

;~hled - by Goul~fts of Appatils decision . ..........................

............... .111;: _,so 10I "e,,en

S F ........

Dec,d,d by Court of Appeals but ro~,~,~tod 6ou"'::

upmme

CWif

Settled by Supreme Court d-sion ...... b ............

C.... initiated by intelligence Division

Disporad of by Intelligence Division:

Map— of by Office of Chief Counsei:

Fraud C ....

P, wa,ranted. including .,I. declined by the DIPamment 0 1 a ic

2.171.923 2.269.478 1,667.492 1,772.W7

1,625,147 1,726 049

2B.624 30141

13.721 1

22.168 4:'

247

3,635

044

65562 6. 29.639

225 7.169

11,206 11,360

1.143 1.209

6.436 7.070

989 1.210

265 299

1,018 1 G33 50or 5 2

414 402

3 2 9

2560 231

52 56

3 2

q_,W 91035

2.760 3,147

5.971 5.650

381 5" 1,397 2.037
152

Table 17.-Amounts of revenue involved at each level of the tax system, fiscal years 1975 and 1976

(ndflions of dollars)

1975 1976

I-ma, Estate. and Gift Ties..

C1.11 C....

T, and Penalties determined by settlement in Tax Court

-

an

Cc

Tax of penalties determined by Tax oun't decisions.......

arms,ad .......... .....

.

. ..... .. ....

Dec,sionsonmente' --ad.... .... ... ....

.. ... . . . I, and C

.

urt .1 A

.

p P

.

.1 . .......... ...... .. .

T-ndl;~d,1IxxsdeIemrm n,, couse decided by.m. Suplamr.h.., act,

Amoun

ut of

on

on ;'no ISPus but not refundecl to taxpayers s a

...........................

suit, ........ I ............. I ...... ... ....... I ............... .....

ose utesequ.ntly app,alld, Reflec~a,ounid.l.r~in~,n~iTa.Cu~d,cisions,indudi.glh

Fraud C....

Roland- bid phold.. in disposed of In Intelligence Divisions:

Do

ters issued on pre-ERISA* employee benefit plans, fiscal year 1976.

Table 18.-Determination let

Prefil-.h.ring sold Pension

or

Dete,"naloni~t,,rsis,,edllth,esp,c:fO- 'ue I 1 In s

um Or ......

'Employment Relimernent income Security Arl 1 1974

156,823 293

122:3 '.103

45,747 2"

4

...

7014

16~8418

114

11

21

75

235

7

Sell.

-Ok behu. P... nmu ty of... oy.d

5,W7 5,865 I

06

70 ~1~17 254:078

5 3 75 065

2,354 60223

423

16

1,943

67

99

-

Table 18A.-Determination letters issued on ERISA-employee benefit plans, fiscal year 1976.

Dfined Defined

Iflindken Benefit

It..

-6-ftnespec"o- i5eterntimun,h letter, is.

1. initial qualification:

c. N.. c,patmg employ

Employment Retirement Inc...S-llyAct of 1974.

88

7,613

0

140.0010

4.5113

4260

9.930

0

392

3MS20 158969

123 "1

35:528

465. 7B3

307

74,203

17,258

115

15428

lul

609

11

Total

12,195

210

1

2

3268 398

415

.055

52

Total

8,M9

149.9310

4,910"

153

Table 19.-Earned Income Credits January - June 1976 (Tax Reduction Act of 1975) (Amount in thousands of dollars)

Internal a,,=r.,rgio,.na, deftict.,

States and .

.

(State.

represented by single districts

indicated In pan..Ih .... ; total.

to Other Shu.. how. .1 bctId.

of table)

NM FILERS APPLICATION OF EARNED INCOME CREDITS'

TOTAL EARNED VVITH EIC AND APPLIED TO

INCOME CREDITS' ZERO TAX LIABU.rTY2 1975 LIABILITY REFUNDED OFFSET-FROZEW

Number A...., Number Amount Number Amount Number Amount Numb.,- Amount

(1) (2) (3) (4) (5) (6) (7) (a) (9) (10)

fit United States, total

.. ...... .....

.... . 5,976.7113 1,212,702

arth-Atenfl, Region 697,614 137.988

Albany (Sen (c) boo') ............. 45,147 8905

Au quiet. (Main.) _.... ........ . 38205 7,603

Boston ..... (Massachusetts) 115,402 22,6,14

Brooklyn -, . . 151,5M 30,Ma

a 0110 .. Z. WS41 22,530

Burngto. ....... (Vermont) 14 840 2S13

Hartford 10181 13,724

Manhathm c 111 1

95 22,456

f-,uh.uth . ..... (NO. H.mp.hua) 2,143 4 02'

Mid-Atlanfic Region

Vy.h gum OC

Wunni glon

Southeast Region

Central Region

(South Dakota)

I_

(Yelt seyo) 1

76229 15,232

(New 157.878 31.263

~.Io 11.171 32.335

93851 184169

is) -..... .......... 141:

('SV4g(i544 28.747

P) wo.) ............. 39.173 7.674

(Delaware) -,.......... 15,251 3~(Kul

I. -

1,271,037 26716"

2M.877 "WNJ 43377 31,

~S,uth CeOlm,j . ......... 118782 24,6WUl

North Carolina) ............ 229.io6 47.665

miwi.sippi~ ................. 109,822 24:...

Florida) .. .. .............

Tenn.,-) ..................

266.412

196,097 40.741

Sim jdj b~j 769,275 153,643

01 121,526 24:15

(Sno(q)

ol 1

28 25 22'

590 1

Milithaost Region

Aberdeen

'ZOM"gres:

F. g. .......

Milwa kas ......

Onuaim

SI.L.u,e

St. Paul

Springfield

Southwest Region

Oklahoma City

5,1 93 1:024

(loan.) ................ 24.971 4,954

l'o"he"I 22002 4423

Hearst) 16:146 2'

(See (a) below) 376,279 7711 6

, W!.ta,n Region 916, S9 Is, M

9

Honolulu

Sell Lake F, City (Utah) ...............

-San Inc!,, (SW_ (a,),.I.w).."i. ash

on)

Of fia.m.U.n., op.madons -Offl- 91 ................

Totah, 901 Dietrics and States hout shown ab0) P-Z.-~-nu-

('I

T.

Baltimore District *

(g) (Maryland A D.C.)

24~26

1

45.

SN,897 136,4S4

%5, 36.463

141,38414 im, 211.190

5" 27746

57,453 11~765

682,530 IM,533'

Zas

62:732 31:7' 22

59091 1 434

16:373 1:135

V816

3

17,017

36~771 7.096

31051

79,693 ~5JS9

65--a4 3.070

9,17,043 1961950

W.W5 10J37

270,432 27 57,101

74 31' 82'

209

.131

64, 61 12.669

1-1

1315.~ 20"t 95,9851 29,167

51 687 M118

71.670 14,

63.421 12,553 578

19,505

3.

29.791 5 881

212,670 42.898

75.311 14116

3.438 495

2.623 540

815 156

377I.W9 a5,443 3,065328 1191568 4.150,123 8601031 07.386 13.103 42,41a 9,697 355

1.904 423

23.953 W 569 474:176 97.639 11,347 1.680

1429

.118 2:548 31057 6.269 593 88 286

646t

2.309 26,1 W 5.223 Sal 71 1,382 54.648 5.917 80907 16:483 2. 12.109 2.925 75,671 a, 164 102,968 21 13608 4.229 902 53,725 5.90,f 71.03 10 14A.' Z :,251 ~7 62 563 116 8.014 936 245 1,945 25

45 It 996 35,709 3.812 47.492 9,751 1

'32

9

2

.1 60 .174 2.234 61290 6506 72,694 15.4711 2.475 472 762 159 11,650 :2 13.

730

1 261 2,730 268 35

273 11.562 ~ 263 7

M,sae 7,SIa 363,1611

SS.2131 Sa 1 .114 3,5W 249 38

46226 9

3,751 809 41,231 4,491 50:5699 3`6

IS, 8,709 I,3DI

10.929 2.436 76,806 8.354 '09

0.599 978 142

1 12 Z 39'

7,504 1.631 67,559 9.727

09A14 22

~3

E 2

4.096

:665 22 .3

806 49.095 5.370 63 0:0 12~675 93 1 12

6.1513 1.365 78.029 8,575 95.498 19,945

1,712

2.698

227

606 22.316 2.459 24,592 5,126 572 89 752 165 8,124 873 10.128 2,133 2D3 29 81.103 18,812 646.818 72~326 902,483 192,02 17,019 2,WS 14 219 3,2W 101,331 1,1:1.412, i~467:g7l 11 ~5957 2,717 388

0166 2

Ill .

653a

'351 71.233 1.732 248

:505 5%725 6.522 Be'lal 18,140 1,563

9,510 2,143 :11, 14*186 117.561 33.173 3,11.

25 3 288 5,381 84.024 18.622 1,658 253

4 7. 4:211 3-9..257S 15, .957

9,946 2.183 101,745

".587 ~83 311.667 4.713 738

U.893 ?AS, 388.742 42,318

38

'360

129.088 2.426 334

5 so ' '

09758 S.Gyg I.M

5:4

:458

a ~:21,52 62,756 6.727 83133 17:216 1,569 216

ti. 111 1.S 4 M.078 7,179

86,

5 17,1121 1.459 220 3864

131

:

S" 87.921 9.451

74.274 "17,1 3076.495 1,392 8.167 210 6,930 1,529

9

2.824

69.450 074 :n2 189:465 1,5w 2os

614 M263 2967 8: al' 178 737

25,159 7,642 3m 44

.2 at

15 flif 15,658

SOB

946 :171 as, M, 709 7.118 11S3

197 226 2 .345 2:545 19'5 11.821 2.658 81.460 8,690 109.759 22,&M 2365

23

2,357 495 3695

399

9

4 37877 772 594 76 653 138 11:076 386 10:345 ,:%S I

1:73 131 '18 3.302 659 49,488 5,934 58945 10.955 928 28 1,324 294 23,409 2.869 23~296 4,183 336 43 8.475 1.84685 80 105.153 21,390 j.SS6 25A

IQ 46:9' 1 74

3

M 52.9 9547 &W 113

3171

672 49 799

71.910

1 4 35

,

539 4

.019

43.964 8:952 639 go

61699 481,S70 S3.6417 670.029 141,320 12ASI 1,964

4,332 910 22.414 2 37230 7.6,17 695 100

1

1 1

22.822 5.466 129~484 3 J397903 96,636 42,626 3,751 6D2

528 91.931

10.601

6,

U

-

5,317

12. 2.960 '03

115.2164 1:21 to

396 18 3a2 2.611 403

3758 837 ~1.396 3 795 43,587 8,738 947 136

50,731 6~954 '71,026 14.843 365 ':- 1.543

1

12,528 2.872 6`:370 7.104 00,745 21.816 1.571 24974

266

S

1.39 51

2

1,703 5927 66,626 13.697 1,260 183 .577 5918 3 224 3. 32.797 6.408 553 83 jW J.627

6,028 447,109 028 646,103 134,181 17,737

396

.

2,764

"a

L315 304 14229

1.288 1 13.484

3

722

390

14

1,241 269 12,1

63

'M

"

'

':3' 923

S5

1, 457 15055 2- 3175' 42 205 8,8020.

I J76 11 7W 66 0117

35 96B 238 73:063

77 F. 135

5.070 32 3.599 52'050

10,12 9.088

1 21

3.225 191 438 405 .422

M4

1,306 213

:614 800 33,o38 3,597 43,356 81 947 13

282 301 1, '2:6788 M 47

5

~1.098 1.156 12.928

17.63291 3.358

1 5.466 1,656 20~472 4,ISS 371 54

'.920 0394 10941 148.804 31.008

5,183 155 31:0216 4:212 51,282

3,946 08

348 at 1,030 N 2A47

10,574 876 13D

see so 12 295 70 599 49 2.319 87 Zs 5

4

53 11 431 7 528 101 40 7

11,19,.nla

LIT

. S:,

44 ,2 5,24:4,6912 123:1a582 2T7 ODS 29.540 2,273

415193172M

87.971 131D34

497 '

'19:74

1~1) ~ 709 3 31.58S 3,004 ~11. 16.999 12 , 1 3

413,27 82

49 1 ~:4 23: 22 278,552 57,857 7.441 ~2911 251,116 :3277S 2,1:.' 3,6 2

128, 34 13,9013 169.778 35037 3.

1

436 258JB22 50.50, ,,6oo 2,437

1

36,= 15,097 1172,668 34:990

440,730 92,232 35.350 1,4 26 221.415 24.21, 1, 1.- M.S5, E._ 2. 1 417

115.402 22,go6

1

415 63.547 `ImA 75.161 15,725 1,550 231

1. Include, Earned Income C,.di, Claimed by bobatm% And me" 11han a million hispones, to notloas sent to and me.mad by Wp-y.,s whose tax returns showed the OfIturactereauce of Wt did hot clam, IEarned 1-.Credit on final, tax h.m

E I I ~!h, '2.

includes

taxpayer, In, filed solely to claim arned Inc", Credit as "It as these who 1116iyed an Earned In... C-if notice because til talent. fit. As rmn-tax. b e Or refundable, showed am.d Income Crec 1 c ar,ct,rlsl,.,

3. The number of Earned Incon, d.: Credit applications exceeds the total, nurri Of such credits in

Wiled to outstanding balance The

' of

Earned ni~'E-.r` C,d

because Of deal Application, i a. Partially refunded And p,MiWly

4, The urn of. hUnited States total for cellmn'91ZI de ld -l"Th (1)

5. Earned Income Credit, gery.r.lee

but ~Phe~~ 2,

iZins sOu-11 the amount . own 11 couturn (2),

204 AD I ~IOIIS which 110 no, -,.liable ~to other than 1975 liabilities and the ci herated bull temporarily nap

', district and region,

paid Pending resolution of tespaye, accourift.
154

Table 20-Tax withheld from payments to foreign persons of treaty and nontreaty countries-Calendar year 1974

(in thousands of dollars)

C.unbtr

Tnlad, Couml,lF-e, Belgium eiglan is Talrd.r .. ............

Federal Republic If Gemrany

L-loci

Net 0ands

Nidlymitind,Anna-ir

R-bIi,ojSo,thAffim

Unt

Tv

i At printing, only 11111 mount of tax xinthheld is available n.1 I,

ding agents is estimated a, past ax,aarienm,

Tarr Ind. Number of

Tin, I.,:i,n Indarmant n

In.... Total arithhoW

g......

III documents

- b, domestic or fikel by

,IthhOld Ithh.ldig Mthholding IdIldrolding

agent, agrets agents

6.828 1 501 I'Mi

3

:211 7~38' 388

47906 949 64M

25 4

401.934 47,322 43J77

4.4302 25i 250

". 27

152.3" 15,32433

2

6 6,

74,731 93 932

1.647 335 335

5~379 7M 702

16:171 2:.7.13 2.713

79

", 10 ,

10

1 230 4 5,572 5:219

30:2'54 M090 1

197,901 31931 1:9,28 1

711

1

25

125

3,176 365 311

54 IJ22

11

922

5D4

3

3UM 3

0

58,

472,145 2. 58 2"

24 424

2,3413 330 4814912 92

424950 193 4T779

2 192 :15

M 067 30,221 30,221

2,260.021 276= 269,637

6. 55

-

a

.3.

1,40 13.699

4,14511 274,781

2.32064

214

- 14.278 3'

54.010

3.255

32 14220

-

3

- 4.532 ' 29

353 4.

1213 121.29

1,425

- .291

3.947

100

4,992

29.963

292

Z

XI"I 53.008

1.0. U,

109,516

6,666 6",524

-kilown betiveen Is, withried by domestic ithholding agents and M, from foreign gonemment. a, xxlt~

Table 21-Internal revenue refunds, including interest, fiscal years 1975 and 1976 (excluding rebates)

(For refunds by region, and district, see tables 5 and 6)

C,rn,ndumm-e-rs

Individual income and -P10-rd taxes WIW

Other income is. and Fed!ral tri-ence

1975 1976 1975 1976 1975 1976

67.634.472 32,2M.671 34.493,792 236,M "4.227

359 2M 477.N7 5.290433 5569355 164 W6 194.627

386~316 66 412,449 2{5,532~559 281523~245 59 '921 85,754

K953.020 03.630,756 25,4" 02 27,215.W7 28,953 ~Ml

2,212.418 2~377,426 1,~.256 1,274r84, 30.220 41.363

726 736 332 .1 18 16 .'152

XO'~l ~939 32530 730 In't "

366

26.8115 79 W 92.120 7JU 9.606

7

-

4~4

"

5~4116 1058 751 2,144

55,519 "11 465 '20 8:485 3.322 2.095

14 110,301 10 163 .060

3 3

12.25, 11

M 4,328 C),

377

3 4e5 4

3

981 4,066 157.489 158,692 1.716 436

144 129 128417 122.136

-

II'll

833

1

2.691

2.961 3,104 27:1M 33,865 1,716 436

37.135 31,771 27,313 25.165 1.596 1100

1

"1"'

1',', 1:'Inclaral Old-Age and SUNZo&F.deral Disability. and FWer7aJHospiIaI lns,,anc,T...t Funds amounting to s360,000.000 in 1975 $407,628,ODD in

"16

to .

no amounting to $145.

7

. 1 1975 1152,078 475 in 1

2

Not

i 89 481 undeliverable chercid, totaling S25 5W,OOO in 1975 -it 176,742 ndiflivenitne checks totaling s".728,000 in 1976

3 Was n0unds not othe-se clanifieci

4 includes excess FICA cled its

5 elevidarcic, and suard o ad,,

P`o"'

'

In refunds and credits to, aviation lubricating I) used for non high.ay -and miscellaneous artinuniel ... rs* and retailers e-ise

Is"

7

Incl

dei,efundso, inerindinruldi-fiente,.--tt use-, M,rC,t,M,sil,,,,wag,,,ng(,,c,w,ndsta,ps~. capital stocluirind omerexceeptax lot-dritind credits.

Less -$500.

Amount rMundleal Amount I

Number, (principal Ind mterind.

mt&re

acrid

thousand dollar,)

155

Table 22-(Olnblihgatuisoannsdisncoufrdroeldiaby Internal Revenue Service by Appropriation and Activity rs)

AWropfl,djon 4Ae,,Ity

Toal~icbl,gati-. app,op,jatueni Is

01~1,ganiona against apar.pri.l.

Seinin. and Exp.n.,

Accounts. C,11,,Ii.n and

S.,vion.

Total T.xp.yI' ~ 1-1 ..

........

Palaproces'wigone"tt"s

CompliumEmployee plans

Tax na?d and special investigations

Tax pays, 6carde,ences sea ap~eai !tnmucai r1filga and se-cas

Reimbu,sable obligations, Total

T able 23-StaffYears authorized and realized,

APP-PlitillA"",; o"s, Cal"Il,"n ndi"Pay""ica

C-Pluince, . .. .... ... .

Total

L~L2 e..... . . .....

1 Does 'Itinclude '.if "ars devoted to le'llb-,ble p,,jTotal

975 1976

..Persomnal

Idi....Van.

I

8-flur

1171

1,589,125 I.M2.557 1,215,510 1132,437

1,584,711

-

1,667.311 1.211.923 1,318,223

41.607

18,161

23,446

-A85 35533

19410 16:478

25:275 20,055

732,442 n7,223 519.328 3EI5.10', ~10.517 284462 12,102 12,763 9:W1 226,178 242.625 1 185 128 1090M 11 '316 39.637

810.662

578 191

23:004

01061

19:303

36, ,at 112

a5MO

U5,403 657,062

6DO.726 467.956

130.6U 18.974

00.293 78066

20.MI 16.059

31.850

'.M 14292

38.405 29:865

373,5115

372,788

38 6.074

1 NO. 2.

21.01 3,369a?

573.169

306j35

12

':'

1

191116

96.981

706.820

500.738

26.096

8I.M7

17,494

32.159

1601

32:9333

213.114

100.642

41:'M~ 2

69,121

~53.600

10,235

4.030

22,995

3.244

5,N2

21'gl

5:

1970

350.120

M9,018

6,451

2,807

3,~

204,054

104,382

Z871

".464

52.337

138,583

W988

4,568

Is3.9D6

3172;

2:15

472

4414 15.246 3.617 14,214

"thorbord

1975 1976

42'

'821

W

6

13

14:171

050

38,042

82.486 84.1",

- 678

R..11-.d

1975

42':5"17

37,955

82.339

-

797 1.032

P*r.c.,nl:r

1976 1975

1,880

21

38 i6l,

64.264

1 1,925

102.4

998

99's

1976

M3

99.9

00,3
156

Table 24-Costs incurred by the Internal Revenue Service

(in thousands of dollars)

Internal

, ... nu, .1ficis. district -1 region

A. national Mice and regional totals

(Including district di,..-."- ofticlus and service climem)

South1 Weall"n

Regional Counsel

Cli Repc.,nal nmP ction

of international operation

kilittimirl cumputer Can,.,

0.

1 conme ellomill's call...

R*O'*" f.including district quaciat'. ad... and sohnicis cents,.) 0 District direct.,', offi,se and ser,tc. cenuirs:

Merin Atlantic:

~orm.Alltlrfic Regional Tmi rung Cit.

Non,Atl;:Iu, As ~mitt usidT,

Ando,or ric. nn,

Mid-A ends:

solution,

N-.,k...

Philadelphia

hlid~Aliihlic Regional Training C,

.. ...........

hfid~Atlahfic ~~jok~Cmttalitedi T,

Philadelphia

C.

.. ...............

la.utiound:

personnel

Total Ciurpih- 1-til Equipment Other

(1)

1,682.557

307,016

246,27,

1,5.12

175.5192

146163

63:632

149051

233.330

20E22

191,807

9:927568

22.891

12.9W

9,827 8 3

13,313 165

i~872

2,815

2,404 2

2332

2:108712 7

4.146 ."a

26,4N

29

17V

2:2

13 03

57,067

E:531 3

090

149 M

32.195

34.135

sation

(2)M (4) (5)

1,332.436

96.172

228.153

159

55,517

131 999

149:480

132.374

207 2M

il)'688

7,706 9

5,651

19,285

11.985

8~389

7:57

7211

8,176

7. 21

040

7.2

i'M2 I 980

255

8u`6

6,693

3,741

24,748

27:747

15895

2:.11.1

12

54.966

3:24

4745

133-

28.413

29.875

22923 21,560

35:026 32867

29.266 27:524

1494 ;4,450

,034 3,650

53,398 3,179

32 288

15

41 701' 36,8-11

19915

9.425

7,2D1

15:2.11

.:455

12273

21.923 30, fill

150

18,184

8.595

1 6565 3~:121

31,535

11.202

24970

26~228

46843

2,220

5,039

4,250

6,732

5,207

5.372

6235

327

231

101

11 472 1 54 N

1,99

95

290

2a

2

287

399

1,155

g75 7 8

i:477 J.. 1 2 1

~242

1899

223

165

556

456

482 11 2

331

663

127

1071

248

12'

g2

40i

820

551

375

565

723

159

98

9110

400

V5

709

1,306

202

529

I6D

62

at

25 296754

'2~4' 10 211 %11

292 14:

743 10530

32 12.737

323 8.634

1711 8.60§

373 D.069

1.2N 16,521 - !5(kI

47 454

99

3N521

ni 3:2203 7 1748

70 .174

48 645

42 660

46 8~

42 sw

500 1,374

141 94

- 45 4 48 - 51

.9 75 - 172 6

29

133

03

1425

594762

126 1

19

79r

65

13-

195-

536

121

'06

98

$80

135

505

1.398

155

23

155

3

4,166 '655

1,220

081

592

754 1

35

31

4,598

58

30

17

39

13

go

17-

;2-

157

693

3"

641

1,27

639

525

32

3.0191

3,68

Table 24.-Costs incurred by the Internal Revenue Service -Continued

(in thousands of dollars)

Internal to ..... antics, district, 01 region

Central:

C-tal Regional T,,i.ing Mr.

Central ReCn-Contralized Tie -g

C.n,inn,t, mic, CanI.. ............ ...

Alidatilit:

Abom- .... ..........................

Chicago

~s Moin,s

Farg .. ... .......................

MO. ukee

Ont.h. S . LOUIS

St. P. 11 .. ,1 ... Spring ~eldR. ....... .. .. .. ......

M:d

d* n.,Cl

R:9 on nl;. ~`ad I'minuig

K.n.."C"I'S.1-

seuthsmlll~

Abu,-qu. .....

A stin

Cheyenne

Do Its

CarLittle Rock

Western

Western R1gioh,lTm,,hgCir

)~~!terl~ RegioutCentlalurin; Training

157

Personnel

Total Camper. Travel Equipment adult luition

(1) (2) (3) 44) (5)

23~404

16,208 14.976 .8 27 755

32808

21,827 580 2D 977 30,267 997 94 1.449

is

.976 148,525 653 22 775 621 740 403 17 461 '5:3 4,87 250 4 258 851

'2

5

49

9

a 56 152 -

ISO-

I

31,577 28,211 86 86 3,1 aut

2661 2,361 185 14 101 Q 139 38,032 807 20 1.280

8:688

7

'

967 N5

4 372 ZVI 1

2,182 129

5 154 13018 2.174 390 4 .9 5,833 5.287 230 7 309 20687 ~9.195 7G4 14:6m

10,139

3.530

9,164

524

5 sw 465 7 504

125 33,571 30,157 85 za ..A

25.5119

4.074 3.649 18 13 227 23.N3 081 33 I.IN Soo 1.767 118 3

25533 22,810 1,08

1

U 1,608

26~02

111 411 15 640 ~~ag'

2.081

271 14 316 11,051 394 51 584 1 17

N"

43

7:.19 '324 '7 378 209 -

209--

33,160 29.242 122 116 3,681 373 38 3 1

333

3570

3.561

21898 2w 12 39 3,190 208 4 159 3.M 2,892 225 4 178

55.887

4,194 3802 144

6 242

.9

511826 1,702 45 2.315

19:

7.554 308 14 574 1 025 392 17 5 N

3511 6~ ' 5 1

2542

1

4.20621 3.8,17

37054 33,975

1 '1540

1

a 266

13:890

A 1,831 12.646 617 20 607 565 sw V) 54 340 - A

33020 29042 134 2;; 3.5.~ -

34805 W511 133 212 3,949
I

158

Table 26--PersonnelSummary

Locriflar, and free

Truqui,mus'"Ic"Motal

Taypaye, Se, S- .

T.payer Stu! Reps. .........

E...'stOrp, miss

R-anus Agents

To.l.a,Spircuilists

N-=Z..Myr. A,

1976 1976 Isis 1976

8514SS 022U 95,712

71.936 71,734 70,868

11:292

1

3,519 10,532 14,11,13

4579 4.763 4.686 4,550

78:037 80,672 77,6BI 01,153

25

.

732 26 23694

11,492 11:37' 11:810 2'

1

2:'

6,765 6.91' '4 6,919 6.78M

4,n7 1,866 4,01

S.

300

Z017 3.5001 3,0011 3,4147

N.A. M - -

2.07

1 ,

491 2,032, 327

845 1.633 969 2320

M 21111191 V 411 26,31110

14:265 14,

1

66 14:223

13

865

4666 4763 4 ~ 4,596

7:455 7:762 :4126 7,92111

"1 1,103 M 1,212

525 714 592 756

- 30

6

82

30 4 31 42

206 317 336 332

757 3730 3'"S

2636 2 ',ill 2,:1 '2:'

1,119 1,128 553

1.

1,110

658 684 M 65

412 447 417 421

7 3

63 n 86 A1

'63

1

53 160 153

1,288 "is 12M 1,2M

61

5

am 576

125 M 122

548 SID w ILI

3,256 3,21311 3.21

1

3,102

920 as

.

947

870 m 901 as

Not : Reimbursements am included inBIfig"es

Ihgd.,

to

me I ad to, -11. serv.-

1

0

1=1

on., h

2 1 a;, National Compute, Center and IRS Data Center

N.A. Not Appli~ble

Table 26.--Quantity and CostStatistics for Printing'

Class of Work

PZ-Z.- a. 1.17., 1-11-timts, S~.dulis AIpages)

1

...2 ,

pai.fu~ ,1,: 32 (F.,;,.1.11.1: S,-=U~:: SC A&B. D, E, R. & In,trudi-s-52 oaqe.) ...................

A. B, C, D. F&A SE If hatructions-60 most) . -

Priclurg, 4 (Form 1040, ScImsdules A&B. C, D. E&A, F, SE, Forms 3468 4136.4797. If

P=

P.ekaqelOBS(FomIO65.8c~d,le~1,Fom479781,st,uO,o,&-~ap,cI P.Ck.b. ..........

1120(F.r.

I

Immu.ion._40 itaraps) 120,Sc~~I.D,F.,.,Il~W.UU,4797,4874,7 . &

.............. . ...... ................................. ....................................

Z Employment Ta, Package

TolsIC t ofT., Retums & Ins"Olons for IftMaiNng to Taxp,y, . .........

3. Other Tax Remains, Instruclions, Pubfic~usm noti,endleamphats,

ou..tfty

11 coal

000dallis.)

To. Other Printl "-75 FY-n

packets. FY25:453

10553

6603

2722

40,788

1,600

2,050

1,453

in

876

165 153

143 154

5,640 387

3,851, - 26:'524M7

634.147 871 17793

273,853 2,063

- 4,759,1171 - 1715"

I D- to the ohmis, of pfintingaq,krunients. solicitations to, the main, to, packages- as,shl I, each year in the Sp,,ng.ExMnditu,es,ay,themto,e,~riap~ofiwaI ,.am.

Is

Index
160

Acts of

'

Congress

State and Local ASSistance-1 972 71

Employee Retirement Income

Security (ERISA)-1974

Privacy-1974

Revenue Adjustment-1975

Tax Reduction-1975

Tax Reform-1976

Administration

Cost Reduction

Equal Employment

Handicapped

Labor-Managemeni

Security

Tax System

Training

Advisory Groups

Art Panel

787

17

69

81,82

84

84

83

76,77,78,85

73

82,83,84

Commissioner's Group

Small Business

Alcohol Tobacco, and Firearms

30

32

32

31

30, Appendix

WageIring Taxes 38, Appendix

Statistics 13,14

Appeals Process

Administrative

Appellate

Options

Processing

Statistics

Assessments

Corporate

Estate

Excise

Gift

Individual

Statistics

21,22,27,28,29

27

27

18,27

24,25,26,27

25,27, Appendix

85

86

86

Assistance

ElectronicV DRS)

Foreign

State and Local Governments

Taxpayer

Audit of Returns

Charts and Tables

Computer Assisted

Information (AIMS)

Tax Shelters

Technical Reference (TRI)

10

48

70,74

6,8,9

97,Appendix

26

29

28

29

Chief Counsel Programs

Administrative

Criminal

Disclosure

Legal

Refund

TaxCourt

Technical

Statistics

54,64

61,62

60,61

62,63

55,56

55

63

56161,Appendix

commissioners of Internal Revenue

(1862-1976) Appendix

Conferences

Advisory

Appellate

Inter-American Administrators

(CIAT)

Procedures

Corporate Income

Collections

Employee Plans

Refunds

Returns

Team Audits

Criminal Prosecution

30,31

32

51,52

30

14,15

44

26

12,13

28

Case analysis and disposal 55

Investigations 19,21,33,35

Justice Department 56

Statistics 60,61,62

DelinquentAccounts

Child Support

Compliance

Prevention

Statistics

Disclosure operations

70

19,20,21

21

22

DocumentSecurity 36

Disclosure officers 36

Privacy Act Impact 8,61

Restricting Return Access 36

Earned Income Credit

Public Notices

Tabular Data

Statistics

Employee Plans

Federal Agency Coordination

Master File (EPMF)

Rulings

Statistics

Examination Programs

7,10

17

Appendix

44,46

45

46

46, Appendix

Discriminant Function (DIF) 24

Mathematical Verification 18

Taxpayer Compliance

Measurement(TCMP) 24

Exempt Organizations

Determinations and Rulings 45

Master File (EOM F) 45

Technical Advice 46

Statistics 46,Appendix

Federal CourtActivities

Appeals 55

Claims 56,57

Supreme Court 60

Tax Court 55,56

Federal-State Programs

Agreements 74

Tax Information Exchange 74

Training 74

Foreign Programs

Assistance 51

Competent Authority 52

Conferences 51,52

International Operations (010) 48,49,50

Official Visitors (TAAS) 51

Statistics Appendix

Fraud Investigations

Cases Prosecuted 33,34

Intelligence Division 33,34,35

Internal Security 76,79,81

Organized Crime U135

Strike Force Cooperation 34

Statistics 35,Appendix

Individual Income

Appeals 30

Audits 2426

Collections 14,15:17

Refunds 12

Returns Filed 12,13

Statistics 12/15,Appenclix

Information Activities

Internal Revenue Bulletin 41

PublicAffairs 9,10

Publications 8,9

Taxpayer Assistance 6,7

Inspection Operations

Internal Audit 76

Internal Security 77

Investigations 77181

Statistics 80

International Operations

(See Foreign Programs) 48

Legal Activities

(See Chief Counsel; Criminal

Prosecution) 60,61

161

Map of Internal Revenue regions,

districts, andService Centers Appendix

Narcotics Financiers

Investigations 35

Statistics 35

Personnel Programs

Equal Employment 84

Executive Development 82,83,84

Handicapped 84

Labor-Management 83

Recruitment 84

Statistics Appendix

Principal Officers of Internal

Revenue Service as of

September 30,1976 Appendix

Publications

Internal Revenue Bulletin 41

Taxpayer Assistance 8,9

Statistics of income 70

Refunds

(See Corporate Income; Individual

Income; Appendix) 12,26

Regulations

Revenue Rulings 38140

Technical Advice 38,46

ReturnsProcessing

Audit 24

Collection 12,13,16,17

Service Center 26

Statistics 71,72,Appendix

Verification 18,19

Statistics

Audit Charts and

Tables1 to 31 97

Statistical Tables

1 to 25 129

Tax Administration

Compliance 23

Collection 12,13

Costs Incurred Appendix

Enforcement 33,34,35

Forms and Form Letters 7,8

Legal and Legislative 8,17,53

Security 79,80

Statistics Appendix

Workflow In the Internal Revenue

Audit Appendix

Chief Counsel 64

Collection 16

Inspection 80

Management 81,82 Statistics Appendix