the

Commissioner

of

Internal

Revenue

Reference

Do Not Remove

Annual Report
the

Commissioner

of

Internal

Revenue

0

AnnualRepo

9Mn

fl'o
I

Presid nt Nixon greets Commissioner

Randolph W. Thn-ar, after naming him

:nd IRS Chief Counsel K. Martin Worthy,

nown at the Commissionees teft, to the

National Council on Organized Crime. .1..mtary . of Treasury, Dawid M. Kennedy

(faIt th PresldenVs rIghL Also Pictured

.lng-~e camera) left to right are

Postmaster General Winton M . Blount and

Assistant Secretary of Treasury

EdwinS. Cohen.
D@pfftn@a V~

Internal Revenue Service

9@ 9@9M

Honorable David Kennedy,

Secretary of the Treasury,

Washington, D .C. 20220 .

Dear Mr . Secretary:

I have the honor to transmit to

you the attached annual report of

the Internal Revenue Service relating accomplishments throughout

fiscal year 1970, my first full year

in office . I believe the record will

confirm that despite budgetary restrictions the Service made progress in 1970 towards laying the

foundation for an adequate level of

tax administration .

The workload of the Service con .

tinued to grow . Records were

broken when gross collections

soared to $195 .7 billion, an increase of $7 .8 billion over last

year ; 113 .1 million returns of all

types were filed compared to 110 .7

million in 1969 ; and refunds issued

exceeded by 3 .4 million the record

set 2 years ago .

Practically all returns received

during the filing period were proc .

essed by June 30, a feat never

attained in the past . This accomplishment enabled us to update accounts faster and issue bills and

statements sooner than ever before . Almost all the 55 .3 million

refunds due were mailed within a

few weeks after the returns were

filed, which achieved a two-fold improvement-reduced Government

interest payments and accelerated

refunds to taxpayers. In the area

of delinquent taxes, a greater number of past due accounts were

closed, but unfortunately the inven .

tory of past due accounts rose

when an even larger number of taxpayers failed during the year to pay

their tax bills when due .

We fully recognize the additional

difficulties introduced for taxpayers in using the new consolidated

return Form 1040 in the past filing

period yet the evidence shows that

many taxpayers who formerly filed

on Form 1040A took advantage of

the opportunity of declaring additional deductions and credits not

permissible an the short form. In

this year of transition, more taxpayer errors were forecast so we

were surprised when error rates on

returns filed failed to show a signif .

icant rise . Looking ahead, suggestions received from members of

Congress, the news media, tax

practitioners, and the general public are being thoroughly reviewed .

Those that merit adoption, together

with Service plans to streamline the

consolidated return Form 1040,

will be reflected in the return form

to be used in the next filing period .

Over the past few years the Service has experienced difficulty administering tax laws applicable to

exempt organizations . In November 1969 1 appointed a committee

of 15 distinguished Americans to

serve as consultants in resolving

technical problems relating to the

status of organizations applying for

tax exemption . This committee assisted in defining terms such as

"religious", "educational", "prop.

aganda", and "political activity"

and serves as a sounding board for

new approaches to the audit of

exempt organizations .

The Service also participated in

the fight against organized crime

by increasing its contribution to

Federal strike forces now operating

in major crime areas throughout

the country. In addition, the Service

I

enlarged the scope of its firearms

program under the licensing and

registering provisions of the Gun

Control Act of 1968 . Arrests, seizures of firearms, and criminal cases

completed all rose sharply compared to results in 1969, the first

year of operation under the new

law .

The pattern of growth in our tax .

payer population requires the

Service constantly to plan to meet

increases in work volume . Recent

approval by the Administration and

the Congress of three new service

centers, to be located in Long Is .

land, New York, Memphis, Tennessee, and Fresno, California will

give the Service an opportunity to

process a larger volume of returns

efficiently and expeditiously . An .

other development that will help

improve taxpayer service is a system successfully tested in the

Southwest Region that gives almost immediate response to in .

quiries regarding status of a taxpayer account by visual display of

results through a computer where

tax data is stored . Known as an In .

tegrated Data Retrieval System, it

permits a local office to respond to

a taxpayer request by flashing on a

screen the current status of the

taxpayer's account . Moreover, ad .

justments to taxpayer accounts can

be effected immediately rather than

having to pass through a series of

transitory stages .

I believe the Service has achieved With kind regards,

gratifying results this year in car- Sincerely ,

rying out a multiplicity of programs

with limited resources--only a fe w

of which I have discussed here. 1 4(OW441of tv. TA40e4mr-V

am confident that with adequate

funding and your continued support, together with action taken and

p!ans formulated by the Service for

improving tax administration, the

American taxpayer can anticipate

better service at minimum cost in

the years ahead .

Randolph W. Thrower,

Commissioner of Internal Revenue .
content

s

Letter of Transmittal/ iv

Report on Operation

Informing and Assisting Taxpayers s / 3

Receipts, Refunds and Returns Filed / 13

Enforcement Activities/21

Organized Crime Drive and Firearms Activities

1 43

International Activities / 5

1

Legislative and Legal Activities / 61

Planning Activities / 67

Management Activities / 77

Organizatlon-Princip~l Officer

s

Organization of the Internal Revenue Service/ 92

Internal Revenue Regions and Districts / 93

Service Reading Rooms/94

Principal Officers/94

Historical List of Commissioners / 98

Appendix

Taxpayer Publications / 100

Tax Form Activity / 101

Court Decisions / 103

Statistical Tables / 109

Index / 139

Report on

Operations

notes

All yearly data are on a fiscal year

basis, unless otherwise specified .

For example, data headed "1970"

pertain to the fiscal year ended

June 30, 1970 and "July I" inventory items under this heading reflect inventories as of July 1, 1969 .

In many tables and charts, figures

have been rounded and may not

add to the totals which are based

on unrouncled figures .

For sale by the Superintendent of

Documents,U .S. Government

Printing Office, Washington,D .C .

20402 . Price $1 .50 (paper cover) .

Highlights

Gross Collections . . . . . . . . . . . . . . .

Refunds : Number . . . . . . . . . . . . . . . . . .

Amount . . . . . . . . . . . . . . . . . .

Returns filed . . . . . . . . . . . . . . . . . .

Returns examined . . . . . . . . . . . . . .

Additional tax from enfortement . .

Delinquent taxes collected, total, .

*P.1fl.jjY H..w

Millions

1969

$187,919 .6

49 .6

12,94Z6

110.7

Z5

3,368.3

1,939 .3

1970 Percent

Change

$195=1 W

16,18R.1

lal

211*

32OLI

2,517.6

+4 .2

+11 .4

+25 .1

+2 .2

- 20 .1)

+12 .8

+29.8

Report an Operations / I
Informing

and Assisting

Taxpayers

Public Informed of Tax Law

Changes Through Established

News Media

Taxpayer Service Continues to

Expan d

Publications Assist

Taxpayers

Revenue Bulletin Provides Official

Tax Guidelines

ME[PUT

One

.1/
Introduction

The American tax system ,

founded on the democratic principle of self-assessment, would

likely create insoluble problems in

voluntary compliance outside the

realm of a free society . In contrast

United States citizens' responses

to their tax obligations are truly remarkable . In 1970 over 113 million tax returns were filed . To foster

a sustained high level of compliance with tax laws, substantial resources were devoted to describing

tax filing responsibilities simply

and clearly, with emphasis on the

importance of accuracy and timeliness. Other efforts designed to

strengthen voluntary compliance

involved clarification and simplification of form letters and notices

and broadening taxpayer assistance throughout local offices.

These and other programs to inform* and assist taxpayers are described within this chapter.

Public Information

In anticipation of the 1970 filing period, three major public information campaigns were conducted covering introduction of the

new tax return Form 1040 ; identification of most common taxpayer

errors ; and urging taxpayers not to

delay filing returns in anticipation

of tax law changes .

For many years, individual income tax was reported on Forms

1040 or 1040A . The latter could

be used if wages did not exceed

$10,000 and if income was limited

to a few sources other than wages .

Form 1040A was not designed to

provide for various deductions authorized by law. Its few entries thus

led many taxpayers to overlook

benefits to which they were

entitled .

This year the Service consolidated Form 1040A and the regular

Form 1040 into a new Form 1040

which provided for claiming benefits overlooked by former 1040A

filers . Many taxpayers in the past

denied themselves advantages of

claiming head of household, sick

pay exclusion, and other benefits .

With the new Form 1040 these

benefits can be claimed with a minimum of additional preparation .

More than 23 million taxpayers

filed a single sheet tax form in

1970 . Another 14 million taxpayers required only one additional

sheet for particular classes of income or deductions .

The Service developed a publicity campaign to minimize the impact of the changeover for the

former 1040A filers . Special "1040

packages" were prepared for media

use, with emphasis on television,

newspapers, and magazines. The

Service also distributed 50,000

posters to postmasters for display

on the sides of mailtrucks during

January 1970 .

During the filing period, there

were complaints about the disappearance of Form 1040A, owing in

large measure to the discomfort associated with filling out an unfamiliar form . Although many taxpayers

found the new form an improvement, others complained that certain new features were confusing .

Consideration has been given to

these and related adverse comments, but the Service is convinced

of the soundness of the basic principle of a single return form for reporting income by all taxpayers .

To call attention to the new Form 1040

during the filing period, posters ware

displayed on mail trucks throughout-the

country. Pictured here Is Postmaster

Harry Kizirlan of the Main Post Office in

Providence.,11J., affixing the first poster to

one of his mail trucks. John J . O'Brian,

Internal Revenue Service District Director,

looks on.

The Service has engaged a private concern to review and report

on taxpayer experience with the

new Form 1040 and its related

schedules. The results of these

studies will aid in developing the

1970 form and schedules.

Error Reduction Goa l

To reduce mistakes on individual

income tax returns, the Service

conducted a publicity campaign

alerting taxpayers to the most common errors . Subjects covered

through all media were : Use of the

wrong tax table or column, mathematical errors, incorrect or omitted

social security numbers, missing

statements or schedules, missing

signatures, and failure to attach

W-2 forms and other supporting

documents . The error reduction

campaign was geared to the

idea that "errors can delay tax

refunds ."

Impact of NewTax Laws

The Tax Reform Act of 1969

posed many return filing problems

because of its far ranging effect

and varying effective dates. The

Service noted early in the filing pe .

riod that many taxpayers were

waiting for additional instructions

on the new tax laws before filing

returns . Sensing that this could

precipitate a deluge of last-minute

filing and seriously complicate

processing, a program was quickly

initiated emphasizing that the

new tax laws affected only a very

small percentage of returns filed

for 1969 . The information further

pointed out that most changes

brought about by the Tax Reform

Act of 1969 related to later years.

Of immediate concern were the

retroactive provisions because they

affected periods for which some

returns could already have been

filed at the time of enactment .

Within a short time after passage

of the Act, several public an .

nouncements were issued describing major provisions of the Act

and keying them into specific tax

return forms and filing periods .

The circumstances under which

amended returns could be required

were also noted in these announce .

ments. Several new forms (including forms for fiscal year computations) were developed on a "crash"

basis.

Increased Use of

Media and Public

Forum s

Service personnel gave more

than 5,500 speeches to civic and

practitioner groups, handled more

than 40,000 media inquiries, and

arranged for approximately 3,500

interviews throughout the country .

Numerous news releases, technical issuances, and other printed

materials were directed to the Nation's daily and weekly press .

Well-trained Taxpayer Service

Representatives each day help many

taxpayers fill out their Federal tax returns.

Media use of public informa .

tion materials was extensive . Especially popular with newspaper editors was the weekly "question and

answer" column ba~ed on the most

frequently asked taxpayer questions . The column was used during the filing period by 1,132 daily

and 4,035 weekly newspapersboth new highs . A number of newspapers continued to carry the column after April 15 .

District and regional offices participated in 5,500 locally-developed

radio and television presentations.

Service -produced materials were

used by 4,235 radio stations and

720 television outlets . The Service

made available 16 television spot

announcements, a 271/2 minute

color film for television, a 12-minute slide presentation designed for

use at group meetings, and a number of radio spot announcements .

A 10-minute film emphasizing er.

ror prevention was prepared and

used throughout the country.

Throughout the filing period,

Weekly taxpayer error statistics

were made available by service

centers to field offices so local news

releases could pinpoint problem

areas . To encourage prompt filing, weekly news releases were distributed citing the number of returns filed and refunds issued .

Firearms Control

As the administering agency for

gun control legislation, the Service

provided information on the various provisions of the Gun Control

Act of 1968. Materials were developed to inform 200,000 target

shooters and 100,000 gun collectors of their responsibilities . The

Service also provided approxi .

mately 396,000 local and 47,000

state police personnel with greater

insight to their roles under the Gun

Control Act .

Public information support was

given to "Operation Disarm the

Criminal," a pilot cooperative program of the District of Columbia

Police Department and the Alcohol,

Tobacco, and Firearms Division

aimed at getting guns out of the

hands of criminals in the District

of Columbia . To inform the public

of the program objectives and

methods of operation, the Service,

in conjunction with the District of

Columbia Police Department, arranged for television spots, post .

ers, bumper stickers, special

notices, press releases, bus showcards, and flyers . Arrangements

were made for in-depth interviews

of enforcement personnel working

in the program, for broadcast purposes . This Federal-local effort was

highly successful in uncovering

gun violations in and around the

Nation's Capital .

Over 28 Million

Taxpayers Serve d

Almost 28 million taxpayers

either called (18 million) or visited

(10 million) Internal Revenue Serv .

ice offices in 1970 . An additional

2 million to 3 million taxpayers

requested tax forms and publications.

Dealing with the ever-increasing

millions of people seeking help and

assistance is an important part of

4 / Annual Report / Chapter One I Informing and Assisting Taxpayers / 5
the total Service effort . Much time

is devoted to developing a corps of

trained taxpayer service representatives whose primary objective is

to take care of taxpayer needs

courteously, efficiently, and expeditiously .

Year-round service was provided

by 1,176 taxpayer service representatives at 373 locations and on

designated days at remaining Service locations . During peak filing

periods, these personnel are augmented by temporary employees

trained to answer questions of limited scope. Additionally, employees

from other organizational activities

are assigned as needed to maintain

the desired level of service during

peak periods .

Plans for Improving Service

Become Realities

This was a year of innovation . A

number of ideas that had been in

blueprint stage for several years

came off the drawing board for

testing, limited operational try-out,

or full-blown adoption . For example, 1970 was the first full year in

which standard procedures were

instituted for referring taxpayer

inquiries to another location, instead of back to the taxpayer, when

inquiries could not be answered at

the initial point of contact . This

helps immeasurably to prevent

frustration on the taxpayer's part .

The concept of a network of tollfree lines was further pursued during the year. This system automatically directs telephone inquiries

within a specific geographical area

to a-centralized taxpayer service

station . Although not available on

an extensive basis, this toll free

service has been popular with taxpayers and will undergo further

experimentation .

Many offices tried different approaches to add an extra dimen .

sion to taxpayer service. Through

the use of taxpayer service mobile

units-taxmobiles-several districts in the Mid-Atlantic Region

provided service in inner-city areas,

at shopping centers, and near

apartment complexes housing

older citizens . Some offices provided service through joint efforts

with State and city governments .

Special Assistance

for Older Citizens and

Lower-income Group

Training was expanded and s

other special efforts were undertaken to make tax information

more readily available to older citizens and lower-income groups .

Both programs were staffed by

volunteers to provide tax informa.

tion and help under programs

sponsored by associations of retired employees, community action

groups, civic organizations and

The Boston District n- 1. able to . .,It

taxpayers In preparing their returns by

Mass production methods through the use

of ansparenclas and projectors.

churches. After completing institute training, these individuals pro.

vided tax information, in many

instances on Saturdays and during

evening hours. Preliminary figures

show that over 104,000 taxpayers

were assisted under the program

designed for lower-in.come groups.

New Look for

Reception Area s

New facilities were provided in

41 Internal Revenue Service offices

in 1970 . This continues the Service's 5-year program to remodel

taxpayer reception and service

areas into a nationwide network of

attractive and functional offices .

Plain Language Publications

Help Taxpayers

File Proper Returns

Many booklets and pamphlets

were published and distributed dur.

ing the year as part of a continuing

program to help taxpayers understand and,apply the technical provisions of the statute, regulations,

and official rulings . More than 80

of these publications provide selfhelp guidance for taxpayers in pre .

paring their tax returns .

Most publications were revised

during the year to reflect new developments in the tax law. In addition, the material presented in

the Tax Guide for Small Business

was substantially reorganized to

improve its appearance and reada .

bility. The 1970 edition of the

Farmer's Tax Guide incorporated

suggestions received from representatives of the United States De.

partment of Agriculture .

Continuing as one of the Gov.

ernment's best sellers is Your Federal Income Tax, a 160-page book .

let designed to aid individuals in

filing their income tax returns . It

provides answers to a broad range

of questions of interest to many

taxpayers.

. Of particular interest this year

was the Highlights of 1969

This taxpayer Is receiving assistance at a

neev Intemim booth composed of portable

panels and a folding table .

Changes in the Tax Law, which pro.

vided information about the Tax

Reform Act of 1969 . More than

21/2 million copies of this 16-page

publication were made available to

taxpayers by mid-January, highlighting the tax law changes important to taxpayers in filing returns for 1969 and in planning for

1970 .

Other publications that were revised to incorporate additional ma .

terial included several of limited

subject matter coverage, such as

Tax information for Students and

Parents, Tax Benefits for Older

Americans, Tax Information on

Selling Your Hofhe, and Appeal

Rights and Claims for Refund .

The Service reviewed for technical accuracy several tax information publications issued by other

Government agencies. Effective tax

administration is indirectly enhanced by this effort . Specific bene .

fits hopefully will come from the

Service cooperation with the Small

Business Administration in providing technical assistance in the review of tax material appearing in

its publications. Other publications

that illustrate assistance to other

agencies are as follows : Federal In-

*Corne Tax Information for Armed

Forces Personnel; Social Security

and Your Household Employee ;

Special Information About

S

ocial

Security for People Who Receive

Cash Tips Corps Volunteers ; and Tax Guide for Peace

.

For further information about

current publications see page 100.

Publications Broaden Technical

Knowledge of Service Employees

Other publications were provided by the Service for the benefit of employees who are responsible for the technical aspects of

tax administration . The Quarterly

Review of Technical Developments-Income Tax explains new

developments in tax legislation,

regulations, court decisions, and

published rulings affecting individual and corporate income taxes.

The Annual Review of Technical

Developments-Employment, Es .

tate, Gift, Excise Taxes is a companion fiscal year publication that

comprehensively discusses developments in the named special fields

of taxation .

At the end of the fiscal year a

special Review of Technical De .

velopments was being prepared to

volunteer tax ...let. . far senior It[ ...

receive tralnIng provided by Service

personnel.

present to Service employees de .

tailed explanations of the provisions of the Tax Reform Act of

1969 .

Examination of professional journals, periodicals, and other tax

literature provided constant information about tax thinking outside

the Service . This identified articles

on tax avoidance schemes, criticism of Service administrative interpretations, and suggestions for

legislative changes. Such articles

were digested in the bi-weekly RePorts on Current Tax Literature .

This kept Service officials informed

and alerted to the need for ap .

propriate action .

Brief digests of legislative

changes, new regulations, court

decisions, Revenue Rulings, Reve .

nue Procedures, and other material

were distributed to field offices

every four weeks . This pocket-size

booklet, entitled Tax Briefs, uses an

informal writing style and groups

the digests in type-of-tax or sub.

ject areas to give revenue agents

and other interested employees a

quick view of current technical de.

velopments in their various areas

of special concern .

Public-use Forms and

Form Letters Improved

A large number of forms and

form letters are used to facilitate

necessary communication between taxpayers and the Service .

Improving the tone, quality, and

clarity of these forms and form

letters is the goal of a continuing

program of centralized review in

the National office . Review has

been completed of all National Office forms and over two .-thirds of

the approximately 3,000 field office

forms . As new or revised forms are

developed to accommodate the

needs of tax administration, they

are subjected to the centralized

review.

6 / Annual Report / Chapter One I

Informing and Assisting Taxpayers / 7
Regulations Aid in the

Uniform Administration

of Revenue Laws

In order to provide uniformity

and to bring clarity to the Internal

Revenue Code, Congress has authorized the Secretary of the Treasury or his delegate to prescribe regulations . By means of regulations,

Internal Revenue Service personnel who must administer revenue

laws and the public who must conform to revenue laws, are given

appropriate guidelines which mini-

,mize administrative discretion and

encourage uniformity in application of the taxing statutes.

Through publication of a notice

of proposed rule making in the Federal Register, the public is generally made aware that the Commissioner of Internal Revenue, as the

delegate of the Secretary, intends

to prescribe new or amendatory

regulations . All notices invite written comments on the proposed

regulations and inform the public

of its right to request a hearing at

which oral comments may be made

on the proposed regulations . The

usual period provided for submission of written comments and requests for a public hearing is 30

days . After consideration of the

comments and suggestions from

the public, the proposed regula .

tions are revised to the extent

found necessary, and a Treasury

Decision containing the final regu.

lations is prepared, signed by the

Commissioner, approved by the

Assistant Secretary of the Treasury

for Tax Policy, and published inthe

Federal Register .

If time does not permit a notice

of proposed rule making, regulations are issued and published in

the Federal Register immediately .

In such cases, the regulations contain a statement of the reasons why

it is impracticable, unnecessary, or

contrary to public interest to delay

the issuance of the regulations for

submission of comments by interested persons. This procedure has

been employed to provide guidelines for those taxpayers with difficult transitional problems under

the Tax Reform Act and to enable

taxpayers to make elections provided under numerous provisions

of the Act . Guidelines of this nature

have been provided principally in

the form of temporary regulations

and it is contemplated that similar

rules will be incorporated in permanent regulations to be issued subject to the notice of proposed rule

making procedure affording interested parties an opportunity to

comment .

Presently, a massive regulations

program is underway in the Service

in an attempt to develop appropriate regulations under the Tax Reform Act . Regulations projects have

been scheduled for completion in

accordance with a list of priorities .

In this way, regulations will be issued in order of the greatest needs

first . By the close of the year, four

final regulations, 17 temporary

regulations, and five notices of proposed rule making had been pub .

lished covering projects underthe

Tax Reform Act . With respect to

other projects not under the Tax .

Reform Act, 10 final regulations

and four notices of proposed rule

making had been published in the

Federal Register.

Published Rulings Inform

All Taxpayers

of Administrative

Interpretations

Technical interpretations of the

Internal Revenue Code and regulations are announced by the Service

as Revenue Rulings . During the

year 635 Revenue Rulings were

published, for the guidance of taxpayers, tax practitioners, and Service employees . Publication of

rulings is a significant factor in pro.

moting uniform treatment of issues, both in filing and in examining returns. Uniform application of

technical interpretations is an important aspect of tax administration .

As new rulings are published

each year, the cumulative effect of

all outstanding rulings is to provide more authoritative guidance

to businessmen and other taxpay .

ers in planning transactions and in

filing returns. These published rulings officially establish the Service

position, and they may be cited and

relied upon by Service employees

in examining all returns involving

issues covered by the published

rulings .

Internal practices and proce.

dures that affect taxpayers' rights

and duties are published as Reve .

nue Procedures . Procedures of

continuing significance are periodically incorporated into the State~

ment of Procedural Rules. During

the year, 32 Revenue Procedures

were published .

The Revenue Rulings and Revenue Procedures published during

1970 in the various tax categories

are shown in the table below.

Revenue Rulings and

Revenue Procedures Published

Typ e

Total- . ---------------- _

A nnini,trtifi-----------------

Alcohol. tobacco, and firearms,

Employment taxes -----------

Estat

and gift te . as .. . . . . . _

E

..x

tax. ~ - ~ ~ . . . . . ------

Exempt orgahl'atmes. --------

Income is--------------- I .

Sell Pan, on trust ---------

employment tax---------

Numbe r

667

28

25

45

15

61

4 9

377

65

2

Revenue Ruling 69-545 and

Revenue Ruling 70-101 are examples of the more significant administrative interpretations published

during the year, and Revenue Procedure 70-5 illustrates the announcement of internal procedures

that affect the rights and duties of

taxpayers.

Revenue Ruling 69-545 relates

to the qualification of nonprofit

hospitals for exemption from Federal income tax . This ruling describes two hospitals and concludes that one is exempt because

it serves a public rather than a

private interest, whereas the other

is not exempt because it is operated for private benefit rather than

for the exclusive benefit of the

public. Underlying the exemption

for the first hospital is the theory

that, under the general law of

charity, the promotion of health (as

well as the relief of poverty and the

advancement of education and religion) is a charitable purpose .

Revenue Ruling 70-101 relates

to the Federal tax classification of

professional service organizations

formed under various designated

State statutes. In light of several

decisions of the Federal courts,

organizations of doctors, lawyers,

and other professional people organized under State professional

association acts generally will be

treated as corporations for tax

purposes ,

Revenue Procedure 70-5 announced the conditions under

which rulings will be issued under

the Tax Reform Act of 1969 pending the adoption of regulations that

reflect the various provisions of

that Act .

Published Tax Rulings Purge d

As part of a continuing review

program, more than 600 pre-1953

published rulings were declared

obsolete during the year and 159

were updated and superseded by

republication under the current

statute and regulations. This review program has resulted in publicly listing more than 7,100 old

rulings as not being currently determinative and in republishing

372 for guidance under current

law.

This review program was under.

taken because of an awareness

that the contribution of outstanding published rulings to effective

tax administration was being some .

what hampered by uncertaffity

about the current effect of many

old rulings . Several thousand rul .

ings have been published since the

initiation of the practice in 1919 .

As a result of statutory or regulations changes, or for other reasons,

it may be obvious to an astute researcher that some of those rulings do not represent current statements of Service position even

though they ostensibly are still outstanding . In other cases the old rulings may state Service positions

that are still applicable to current

transactions although the underlying statute may have been subsequently enacted in different form.

In many other cases, it has been

difficult even for a careful researcher to determine the current

effect of the old rulings . Therefore,

this review program was undertaken for the purpose of officially

listing as obsolete those rulings

that are identified as not being

currently determinative and republishing those that are identified as

having significant application to future transactions .

Internal Revenue Bulletin is

Authoritative Instrument

For Informing Publi c

and Service Employees

The Internal Revenue Bulleti. n

is the authoritative instrument of

the Commissioner not only for an.

nouncing official rulings and pro.

cedures of the Service but also for

publishing other tax items as a

convenience to Service employees,

tax practitioners, and others interested in Federal taxes . The need

for frequent and regular communication is met by weekly publication .

Items published in the Bulletin

during the year (in addition to the

Revenue Rulings and Revenue Procedures referred to above) include

13 Public Laws with related Committee Reports, three Executive

Orders, 32 Treasury Decisions settiing forth new or amended regu .

lations, 16 court decisions, two

amendments of the Statement of

Procedural Rules, one Treasury Department Order, 19 Delegation

Orders, one revision of the Statement of Organizations and Functions of the Service, and 126 Announcements of General Interest .

Announcements of acquiescence

or nonacquiescence in 57 adverse

decisions of the Tax Court also

were published .

The contents of the weekly Bulletin normally are cumulated semiannually and published in bound

volumes, known as Cumulative Bulletins . These indexed volumes

make up a reference library for

use by those concerned with Federal tax matters . Because of the

extent and significance of tax iogislation during the first 6 months of

the fiscal year, two Cumulative

Bulletins were published for that

period . A special edition, Cumulative Bulletin 1969-3, contains the

voluminous Tax Reform Act of

1969 and other Public Laws enacted during that 6-month period

as well as the related Committee

Reports . As an aid to researchers,

a finding list of all the Code sections added or amended by the

Tax Reform Act is featured. Brief

digests of the important provisions

of'that Act also are included .

Cumulative List of

Organizations Is a Guide

for Donors and

Service Employee s

During the year more than

10,000 names of organizations

(contributions to which are deductible for Federal income tax purposes) were added to a growing

list . This list, Publication 78, is

useful to individuals and to foundations and other organizations in

determining the tax treatment of

contributions for charitable, educational, and other specified purposes . It also serves as a helpful

working tool for Service employees

in informing taxpayers or in examining returns . It is reissued biennially to reflect additions and

deletions .

8 / Annual Report / Chapter One Informing and Assisting Taxpayers / 9
Current information between re.

issuances of Publication 78 is provided through the distribution of

bimonthly supplements . These cumulative supplements contain ad .

ditions, deletions, and name

changes of organizations . A new

series of supplements begins with

the first issuance for each calendar year .

To assure wide dissemination

the Service announces in the

weekly Bulletin the names of orga .

nizations that have been deleted

from Publication 78 because they

have terminated their existence or,

for other reasons, no longer qualify

for deductible contributions .

Alcohol and Tobacco

Industries, and Firearms

Licensees Notified of

Technical Change s

The Service continued to issue

industry circulars to aid the alcohol

and tobacco industries in keeping

current with the requirements of

internal revenue law, regulations,

rulings, and procedures . Firearms

licensees were also kept current on

the requirements of the Gun Control Act of 1968 and on the importation of arms, ammunition,

and implements of war under section 414 of the Mutual Security

Act of 1954 . Of the 33 industry circulars issued during the year, seven related

to actual or proposed amendments

to regulations ; 13 announced the

substance of Revenue Rulings and

Revenue Procedures ; . two discussed the use of plastic and nonrigid liquor bottles ; four related to

firearms matters ; and the remaining seven related to other matters

of current interest .

Technical Correspondence

With Taxpayers

and Field Offices

Many taxpayers write to the

Service each year for interpretative

assistance where the proper tax

treatment of their transactions cannot be clearly determined from the

statute, regulations, or published

rulings . Other taxpayers request

permission to change their ac .

counting methods or periods in accordance with requirements of the

statute and regulations, and various corporations ask for earnings

and profits determinations . Dur.

ing the year 30,114 taxpayer requests of these kinds were an .

swered.

In connection with the examination of returns or claims for credit

or refund, district directors may

request technical advice from the

National Office regarding issues

that are not covered by the statute,

regulations, or published rulings .

During the year 2,856 field office

requests were answered .

The taxpayer and field office requests in the various tax categories

are shown in the table below .

Requests for tax rulings and technical advice

subject Total Tarrlsai,en '

requests

Field requests

. . . . . . . . . . . . . . . . .. . 30,114 2,85 6

A-uhlinz . .thad . .. . . . . . . _ . . . . . . . . . . . . . . . .. .. . .. .

.

2~ 722 2.722 . . . . . . . . . . . . . .

A"

. .h

in, penods .. . . .. . . . . . . . . . . .

A'unodal anatters --- _ . . . . . . . _ . . ------ - . . . . . * ----------- ... .. . .. . . .-.

I I , 65 8

$2 11,658

21 ---------- -

Ad .j.1,tr.fi,. p,c,i.icn--------- . . . . . . . . . ... .. . .. . .. . 92 77 1 5 Alcohol . tobacco. and . . . . . . . . . . . . . . . .. . 6,006 4.502 1 504 Earnings and profits . . . . . . . . . . . . . . . _ . . . . . . . -

Ernficy-t and 11h- ..pI .yh,.rt W.. . . . . . . . .. . .. _ _

77 1

2

10

771 . . . ------ -- -

: 4 1

Engine -------------------- -

"'

,Iln,- -

:'i 1

1 t :: : :: : : 30 0

Estate ~d 1 1 . . . . . . . . . .. .

E-Ptoflanization . . . . . . . . . . . . . . .

. .

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

49 7

2, 631

Z 41 7

367

R D

264

1

oth-ni . .W. . . ._ . . . . . . . . _ . . . . . . . . . . . . . _ ------- 301 192 109 Oth . . . . . . . . . . . . .. ... . . . .. . . . .

P..:Wtnu.t,_ ._ . . . . . . . . . . . . . . . . __ .. . .. . .. . .. . . . .

5,656

2,254

5,25 5

1 1,892 1

401

362

Procedural Changes

Adopted To Handle

Increasing Volume of

Pension Trust Activity

Several procedural changes

were effected during,the year to

handle more effectively the increasing volume of work . related to pension

'

profit sharing, stock bonus,

and bond purchase plans . Various

tax benefits are provided under

plans that are "qualified" in accordance with requirements of the

Code, together with pertinent regulations and rulings.

In accordance with procedures

previously announced, the National Office initiated the issuance

of opinion letters regarding master

and prototype plans for use by cor .

porate employers . Under the new

procedures, a sponsor who develops a master or prototype plan

can request an opinion letter stating whether its plan is acceptable

as- to form under the provisions of

the statute . A corporate employer

which adopts a previously approved master or prototype plan'

may apply to its district director

for a determination letter as to the

qualification of its plan . Although

the employer's participation is important to the qualification of a

plan, it will not be necessary under

these circumstances for the district director to examine all the detailed provisions of a plan, since

they will have been considered at

the time the master or prototype

plan was analyzed .

New application forms were developed to be submitted by employers requesting that the Service

determine in advance whether individually designed plans qualify .

Standardization of the applications

should help employers furnish necessary information to facilitate

processing .

Other procedural changes were

adopted regarding plans that provide benefits for self-employed

persons (commonly referred to as

H .R . 10 plans). Responsibility for

the issuance of opinion letters on

the acceptability as to form of

master and prototype plans for

self-employed persons was centralized in the National Office to promote uniform application of the

qualification requirements . Because of the volume of requests

and the fact that most were accepted without substantive change,

issuance of advance det6rmination

letters to self-employed persons

who adopt previously approved

master or prototype plans was discontinued . This resulted in a significant reduction in the number

of determination letters issued .

Details on the determination letter activity regarding corporate

plans and self-employed plans are

shown in the tables below .

Determination letters Issued an employee benefit plans

prolit Pension Much

It.. sharing

,line

., .-ity

PI ...

bonus

plan e

Determination letters issued with respect to -

1. Initial qualification of plans :

ld~j . . . . . . . . . .. . .. ..

Plans Wu=`a, .. . . . . . . . . .

.

b'

Plans dIlIPP11%

15,29 0

285 027

17 7

'

96: END

23 3

'

42

24,999

. .. . . .

.4

cases closed without Issuan . . of deluranin .fild. 136 1, 531

Determination letters Issued on benefit plans for self-employed person s

profit. Pension Bond

Hour sharing

p

plans lans Purchase

plan ,

Detsfifirinationsissued MIA res With10.1 qu.fif.ti.n of plans: 1 .

in

. ___ 11 110 11 104 411

Numb., at .. .. . .. . .

b. Plans di",prll d

:

.9 520

4

1

.: ,

1 2 5

66

51 ,

.1 P, .. ! : : -------- -

C . 2- T.minat ion ----- 69 56 5

..

closed without issuifil, of determination letter am 1,215 23

10 / Annual Report / Chapter One 404-M 0-71-2 - Informing and Assisting Taxpayers / 11
Receipts, - Refunds and

Returns Filed

Collections Continue to Increase

Most Collections Processed

Through the Federal Tax

Deposit System

About 65% of Filers Receive

Refunds

Increase of3 Million in Returns

Filed

Returns Mathematically

Verified up 30%
Receipts

Thomas Paine said, "Those wh o

expect to reap the blessings of

freedom must, like men, undergo

the fatigue of supporting it :" That

quote is particularly appropriate

here because the next several

pages detail the story of our National tax collection effort for fiscal year 1970, which totaled

$195 .7 billion in gross revenue

receipts .

What is $195,700,000,000? The

magnitude of such an amount is

difficult to comprehend . Put in

more manageable terms :

-Look at your watch for 5 seconds . Your Government collected about $32,000 in that

short time span .

-With a population of roughly

200 million, collections of all

classes of tax for 1970 averaged approximately $983 for

you and every other man,

woman, - and child in the

United States .

In 1960, Federal tax collections

amounted to $91 .8 billion, more

than double the receipts for 1950,

but less than half of the 1970 figure . Since 1960, the steady rise

has continued, reachin g $195 .7

'billion in gross collections for

1970, an increase of $7 .8 billion

or 4.2 percent over fiscal year

1969 .

While increases in Federal tax

revenues are pronounced, they

closely parallel the upward trend of

personal and corporate income and

the general growth in economic ac.

tivity . As shown by the chart

which presents data for the past

10 years, individual and corporate

income have risen a total of $400 .6

billion, or an increase of 84 percent since 1961 .

In 10 years corporate tax rev.

enue has grown from $21 .8 billion

to $35 .0 billion, up $13 .2 billion or

60.6 percent in a decade.

For tax collections on combined

Individual Income and Corporat e

14 / Annual Report / Chapter Two

Profits the chart shows a slight rise

through 1968, a jump in 1969

(primarily due to surcharge increases not covered by previous

estimated tax payments or withholding) and a return to a more

normal course in 1970 . In 10 years

this tax has doubled.

With regard to tax rate change

for fiscal 1970, the tax surcharge,

which became effective January 1,

1968 for corporations and April 1,

1968 for individuals, was in effect

through December 31, 1969 at the

10 percent rate. The Tax Reform

Act of 1969 reduced the surcharge

to a 5 percent rate for both individ .

uals and corporations for the period, January 1 to June 30, 1970

Increased rates for Federal In

surance Contributions Act taxes

(FICA) and Self Employment Contributions Act taxes (SECA) were in

effect for the full fiscal year. Th e

700

Sao

EPE

400

30 0

20 0

100

total employee-employer rate for

FICA increased from 8 .8 percent to

9.6 percent, and SECA increased

from a 6 .4 percent rate to 6.9 percent. Both increases were effective

as of January 1, 1969.

The Federal Tax Deposit (FTD)

System, inaugurated .in 1968toaccelerate the deposit of withheld

taxes to the credit of the Treasury,

continued to expand . In 1970,

FTD's accounted for $145 .0 billion

or 74.3 percent of all Federal tax

collection . This was an increase of

$11 .2 billion or 8 .3 percent over

the prior year .

Payment by FTD was extended

to Federal Unemployment Act tax

( UTA), January 1, 1970. This tax,

now payable quarterly rather than

annually, generated revenues of

$768 .1 million for the last half of

fiscal 1970, an increase of $136.4

million or 21 .6 percent over the

comparable period of fiscal 1969 .

Combined Individual Income

and Corporate Profits

(before taxes)

Gross Tax Collections on Combined

Individual Income

and Corporate Profits

V .4 71.9 75.3 78 .8

I 1 108.1

79.7

979 .1

135 .7 138. 7

years 1961 1962 1963 1964 1965 1966 1967 1968 1969 1970

Tax Collections Continue to Ris e

Billion of Dalian

97 .

38 .3

35.0

103.7

33 .1

37.4

3 .5 3.7

15 .5 15 .9

=tIon Individual Employment Exists ad E.I. beass t- I A com - t- beeno gift lasses,

Gross Internal revenue collections

10ell.,, in in ..... it, . For d.t .11, so. table 1, p. 110 1

San" .

Percent .1

1970 196S

Increase or decreas e

'llactiAmount Percen t

Grand total '_ . ------- ------ . . . . . . . . . . . . . . . . . . .. . . . 100 .0 $137,919,560 qWMW.V22MI' $7, 80Z 536 4 .2

Income taxes, total_------------------------------------------ 70 .9 135, 8,052 7 7 '40INSUM 2,910,516 7. 1

Corporation-_ .. ... .. . .. . . --------- _ . . . . . . _. .. .. . &8, 337,646 -AWMAD -3 31.663 - & 6

individual, . . . . . . . . . . . .

E53:0 97,440,406 VRAUJM

:2

11,179 6. 4

Withheld by -Play., .' --------- ----------------_ . .. . . . . . . . . . . . 39 .6 70.4112,175 -v AnNelad,;M 233,89 5

2

10. 3

Oth .rx ---------- _ ----- . . . . . . . . . . . . .. . . .. . . ~ -1 -------------- 13 .4 27,258,231 09,=XU 1 : 02Z 716 -3 . 8

Employment in... toW. . . . . . . . .. . . . . . . . . . . . . . . . . . . . . .. ... .. . . . . . . . . . .

. . . 19

.1 33,068,657 SI "WJM 1380,531 13. 2

Otd-ain and disability insurance, hotal- . .. ... . . . . . . . . . . . . . . . . . ---- __

. . .

1&

2

31,489.943 allegations

:

20Z 255 3 3

Federal own .....Ujibuti. . .

. .. . . . . * ------------------------

-

i'

17.2 29,775,392 43,1010M 3 974 613

:

13 3 Self-employmnttnwrancecon r.,6utions . . ---- . . . . . . . . .. . . . . . . . . . _ 1.0 1.714 551 e4agapar

127: S42 13. 3

Unemployment insurance -------- -- ------- -------------_---------- -

l

.4

:

640 030 136,109

21

. 3

Rai road retirement . --------------------- ---------- .5 938,694 "MBOU 42,167 4. 5

Estate and gift taxex, . .. . . . . . . . . . . .. ... . .. . . . . . . . . . . . . ------- _ . . . . . . .

.

1 9 3,530 065 dapaninge,

-

150 Oil 4. 2

Excise taxes, total-. . . . . .. . .. .. . . . . . . . . . . . . . . . . .. ... . --------- 8: 1 15,542:787 SWAKWM 361:477 2. 3

Alcohol --------------------------------------- -

Tobacco

Z4 4.555,56D ftimlin 190.822 . 4. 2

. . . . . -----------_--------_---- -

Other 1.1

137.585 24@K= - 34~ 373 -2. 0

_. . . . . . . . _ .. . ... .. . . . . . . . . . . . . . .

4. 6 8,949,642 4LONOM

2 1 ,

028

4

z

Collections are adjusted to exclude innounts transferred to th% Government of Guam. Far detail, .

.a table 1. P . 110 and footnote 5, P. 120. Ellinated .-C.Ileclion, of individual income tax withheld are not reported npurmly from old-age and disability insurance taxes on Wages and salaries . Similarly.

collections

at individual in,

... tax not ithh .ld -net reported separately from old-.9. and disability insurance taxes a, sell-employmeni Income . The mount of old-age and disability insurance tax collections shoem, is based on estimates made by the Secrenry of the Treasury pursuant to the provisions of sec . 201(s) 00~ the Social security Act In , ended, red includes .11 ld . .I . and dmabdit, insurance taxes . The rat-tax troven for the ? classes of individual Income tax . we, . d !led by subtracting in

. old . age and disability Insurance tax vatirr-lon from the combined totals reported .

R .,.,ad .

Receipts, Refunds and Returns Filed / 15
Refunds Pai d

In 1970, 55 .3 million taxpaying

entities received a refund check

from the Service, and usually, did

not wait very long . The number of

refunds increased 11 .4 percent

over 1969 .

In total, the Service returned

$16 .2 billion in tax overpayments

including interest of $112 .9 million (down 6 .4 percent) . Interest

per each dollar refunded was reduced from 0 .9 cents (nine mills)

to 0 .7 cents (seven mills), a de .

crease of 22 .9 percent.

About two out of every three

Form 1040 filers received a refund this year. Since the average

refund was about $241, and 54.4

million refunds were issued, the

Nation's individual taxpayers received $13 .7 billion in refund principal . Interest paid by the Service

in 1970 for individual refunds de.

clined $4 .5 million (13 .8 percent)

to $28 million.

Corporation income tax refunds

amounted to $2 .3 billion, an in .

crease of 33 .0 percent over 1969 .

Interest of $70.9 million paid on

corporation refunds was down 5 .5

percent from the preceding year .

Internal Revenue refunds, Including interest

Fruitland, by,ishmi and district, laltelit, 5, P . 1231

Typeoftax

Total refund, of irstrun.1 learmori . . .. . . . . . . . . . . . . . . . . . . . . . .

Corpirstims memars, I .... . . . . . . . . . . . . ------------------ . . . . . . . . . .

Individual income and employment taxes, total a. . . .. . . . . . . . . . . . . . . . . . .

Excessive prepayment face .

I

tin,~ . .. . . .. . . . . . . . . . . . . . . . . . . . . . . .

Other . .

.Orhe is.

and

Fecerat ,~,ancecontfibutlon$Acttaxwll--,-

Railroad retirement. .- . . . . . . -------------- __ . . . . . . . . . .

unemployment insurance . .. . . .. . . . . .. . . . . . . . . . .

.

. . .

. . .

-

Este : ax . . . . . . . . . . . . . . . . . . . . . . . . . .. . .. .. ....

Gift ; a. . . . . . . . . . . . . . . . . . . . . . . . . . . . .

.. .. . .

. . .

. . .. . .. . .

Evoin, learn, total .. . ... . . . . . . . . . . . . . . .. . . .. .. .. .. .. .. .. . .. . .. ---

Alcohol laxei. . . .. . . . . . . . . .

Tobacco taxes 4- ~ .. . . . . . . . . . . . . . . . . . . . . . . -------

Meriden . .. . a' and retailers' each . halo, total . . .. . . . . . . . . . . .. . . .

G

Gas.O.:inn :,used on for a . . . . . .. . . . . . . . . . . . . . . . . . . --------

i minhighwey . . . . . . . . . . . . . . . . . . . . . . . . . . . . . _ -------

Oth rir~. . . .... . .. . . . . . . . . . . . . . . . . . . . . . .I _1. . . . . . . . . . . . . . .

All other excise taxes I... . ... . .. . . . . . . . . . . . . . . . .

1969

Numbe r

49,607,120

49,3227 068

26:509

48,594 IN

703:64

5361

37 .602

a.

944

1,234

43,285

9 .063

294

7,96 8

53 4

25:031

8 0

25,970 1

I=

WMAY4

=3Aa smi .assites

U.M .5"

CKAU

'111111

U.S o

nAcr

1;M

423n

1AS

M

3 .2v,

M1

%A n

3 .1tv

-assext

Returns Filed

More than 113 million returns

were filed in 1970, an increase of

about 3 million returns over the

previous year, reflecting the con .

tinued substantial growth of recent years .

Tax year 1969 was, of course,

the first year of use for the new

combined Form 1040/1040A . More than 76 million new Forms

1040 were filed ; approximately 20

million of these were received in

the 5 days ending April 15 .

Amount refunded (principal

hit aterest-thu.sad dollar,)

1969

12,942.604

1 735 605519 10:939:

9,944,210

987,60 5

165

7,680

be,,

sigiftvas

2.ZYS~M

Ulm~m

J1;gaSJ=

W

giiss a

44,413

1,69 1

321,790

108,81 1

1 .594

193,036

134,124

37 .71 5

21,197

18,359

so~m

2'aaas

22L=

M.W

1.1=

14 ~m

U.Sm

2sAst

XAU

Amount of interest (th ... and dell

Tig

120,095

74,963

36,238

16,373

19,5886

27 1

6,680

21 3

2,001

33711

212,923!

hatury =A74

1$Al

4,mas

3 .zo

14

(*~

6 1

-----------

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

615

1 .373

7

V)

234

------

7341

in

I Hlull, hall "of Wah Induced 1. efiect reimbursements from the Federal Old-Ag . and Stinnimrs, Federal Disability, and F,d. .l Hospital insurance Trust Ford, .ursiurd, ., in

,04 953 000 in 1969 and $36 8094 000 in 1970 from the Noway Trust Fund amounting to $223,755,DDO in

unimn 1969 and $32,074,000 in 1970; and train the 'Wayortut T,uxt V~hd mounting to $5J52 .66il in 1969 and $3.500, 1 . 1970.

a, at of 127M7 undeliverable checks totaling 118 ' 539 ' 000 in 1969 and 113,595 undeliverable checks totaling $14,182,ODO in 1970.

,, ud :,, refunds "not otherwise classified .'

includ drawbacks and stamps holimillkiIncludes lubricating allused far himisfin.ify .no.. . I .

,,ties, silver, wagering (excise and at

Includes ruirso ships), capital stock, and other axis, tax refunds .

1,,I~uddin !1xm1,sn ;1,A,.fund1.In,

x, IC .. . cliff.

-Loss the. $500.

as

Number of returns flied, by principal type of return

fFigures in thousands . For details, see table 6, p. 124 1

Type of .tur n

Grand total-------------_ . . . . . . . . . . . ... . . .. .. . . . . . . . . ------

Income tax, total-, ___ ------------------------_-- . . . .

Individual and fiduciary, total I . . . ------------- _

ndividual-citizens and resident aliens, total__. . . . . . . . . .

All other individual and fiduciary. . . . . . . . . . .... .... .. . . . . . . . .

Demlarotions of estimated tax, total . .---------------- --------------

Individual. . . .. .. . . . . .

Corporation . . .. . . .. . . . . __ --------------------------------- . . . __ -------------------- -------

`Ch p .~trarships . . .. . . .. . .. . . . . . . . . . . . . . . . . . . ... .. . . . ------------ _

Other . .I!" ----------------------- ----------------- ------ -----------

Employment tax, total... . . .. . . --------------- . . . . . . . . . . . . .

Empplomr: : Fix in 941 . -------- _ . . . . . . . _ ------------- _ --------

E. y Far. 942 (household emplovemi . ... . . . . . . . . . . . . . . .

. . . .

Employers' Form 943 (agricultural "Pl

R freed retirement forms CT-I . CT-2_..Y!").----------------------- . --- I . . . . . . . _ -------

Unemployment insurance. Form 940 .___ . . . .. ... . .. . . . . . . . . ---

Estate tax .. . . . . . . .... . .. . . . . . . . . . . . . . . . . _ ---------------- ---------

Gift tax,--- -------------------------- ------- ------------- . . . . . .

Excise tax ,

Occu pa'aan ----- -- ---------- -------------------------- ... .. . . . . . . . . . . . . . -------

Form 720 (retailers, manufacturers, M) . ----- ---------_---------

Alcohol_ -------------- ---------------------------------------

Tobacco~ -------------------------------------------------------

0Highway use tax----------_-- --------------_-------_--- . . .

Is .. . . . . . . . . . . . . --------

1 Includes 66 1120 ES and 2429 other excise for Ist

. 6 mos.

1969

110,559

86.702

76,215

74,962

1,253

7,102

7,096

6

956

1.7639D8

22,032

15,426

4,349

563

21

1,674

123

15 1

1,650

1,016

300

23

5

249

56

1970

11114711

M=s

-n;m

1;gxgg

1.26

~7=

.7.3ors

H A

237

I.M

m

Z~guk#

its,.7the

2~sxn

us

11111

1.7"

122

34111

~Jcal`

m

2n

1

The alsone, picture

'

as reflect oparnationse In

the retums processing cycle.

N ineteen -seventy was also the

first full fiscal year for the Form 1

040X, a now concept in amended

tax returns . This form was well received by indivdual taxpayers, and

about 533,000 were filed . The

form's success lies in its ease of

preparation, since only those items

of information necessary to change

the original return are required .

Streamlined processing procedures

for the Form 1040X have made

possible more rapid adjustments

and refunds .

Because of the favorable experlence with Form 1040X, the Service extended the same concept this

year to the filing of amended cor

poration returns by introducing

Form 1120X . As many as 40,00 0

16 / Annual Report Chapter Two

Receipts, Refunds and Returns Filed / ~17
corporate taxpayers will probably

use the new Form 1120X annually,

rather than amend their returns

with a regular Form 1120 or Form

843 claim .

In 1970 the Service completed

implementation of direct tax return filing required by legislation

enacted in 1966 . Direct filing wit h

Returns Filed Continue to Rise

in the Individual Area

Ind'Admal

and

fiduciary

[Indentures,

of ariffixemod

tax

Partnership

the service centers has provided

benefits for both taxpayers and

the Service . Taxpayers have benefited from the accelerated processing and refunding and the Service has reduced processing costs

associated with the transs hipment

of returns between outlying offices

and service centers.

Corporation

. Individual income tax returns mathematically verifie d

Itarn

Employment Excleas and

.11 the,

Numb . . . . . . . .. ... . . .. . . . . . . . . . . ..thousand, .

Number of returns on which changes were made. . . . . . . . . . __ . . . ... _do.. .

Returns with Increase :

Number. . . . . . . . . . . . . . . . . . . . . . . . . . do-. . .

itmount. . . . . . . . . . . . . . . . . . . . . . . .. . .. ... . .. . .. .... ..thousand delta. . .

Returns wi h denraus Nu . :

itroxual ,ml* -------------------------------------------------- th..... dt .-

. . . . . .. . .. .... ... .. . . . . . . . . . . . . . . . . . . . . . . . thommad dollar,--

Net Yield :

Total . . . . . . . . . . . . . . . . . . . . . . . . . .

4vetaul. per return verified. . . . . . . . . . If..

196 9

65,923

5,360

3~ 31 4

315,103

2,046

140,236

174j867

.66

Mathematical Verification

The tax return (on the followin g

page .) is representative of the

first page of some 2.8 million

Form 1040 returns filed in 1970 .

The taxpayers who filed such returns made errors which would

have cost them a totbi of $212 .3

million had the Service's computerized math-verification program not

detected their errors . Over 4 million other taxpayers weren't quite

so fortunate . Correction of their

mistakes resulted in upward adjustment of tax liabilities totaling

$507.0 million .

Including both upward and

downward adjustments of tax Ii- .

bility, about one in every 12 returns contained a "math error"

(improper arithmetic or use of inapplicable tax rates, etc.). On balance, the Government realized

$294. 7 million from mathematical

verification of 88 .4 million Form

1040 returns .

The total number of returns verified was up 22 .5 million or 34 percent over last year. The increase

was due to (1) 5 .4 million returns

carried over from June 1969, to

be processed in fiscal 1970 and

(2) processing of practically all

returns filed during the January to

June 1970 period .

In addition to verification of

Form 1040 returns, the Service also checked nearly 10 million claims

for estimated tax credits, totaling

$24 .6 billion . Of the total, $24 .2

billion were allowed, leaving a net

yield to the Government of $320

million and Statutory penalties totaling $65 million .

44 E7 f

7- 1 1 Lk 1+' 01

g .1 _ko14P

Combined Department of the Treasury / IntatmellilemmusService

twith Form

e

1 040 1040A

F, ,7 1-0-miser 31. 1969. or othm, taxable Year beeinnift

Individual Incom

. ...... .... .... . 1969

. Tax Return

. soding

am 269

rose - W annual (if Joint hands.

- am amew .0 evislau. lawas, al low I Use - I I- sensual no." ..bw

IL

11_rL_MW_M afid lalm~L c ._2W*dw .WUo~.

7~70 / zea or, . sameZpealofflo,

, , , ,, "I- as

U

Enter` below yfrns and addres, "ad o~ YWI vatInn far less (I SOMS I a M. " -. filed. slive,

Impersts la lot or Islas to asomnate relturns. enter 19N . . -on dranows.

Nam and asuldrame of i~~r at tims off 1 1.

To oZe 0

Unmarried Head of Household

.11% 1 . IvIsigilifil I ~ filing joint return (favein If only one bad Inomme) 5 0 Surviving widow(ar) with dependent child

Status— 3 0 Mariled:=parste return end spirits is also filing a fietion. 6 0 Married filing generate noturn and spouse

(Check give seem a and I security number in spm provided Is not filing a return

' a 1only ono)1 above and enter flat name bar e lo.

Check boxes for exemptions which apply Reve 65 or over 81;nd

7a Yourself . . . . . . . . . . .

. . . . . . .

. 0 01-1.

*

an

c0 Ins Spoons (applies only If line 2 or line 6 Is checked) . . . . .

. V 0 0

8 First names fy!urd indent phildren who lived with yo _ _? ;7 u

E

::7 _ 0 "1

e Enternumber 1, 2-

.1

s

oo~. = r,~mx name I I, the used

. at ;~ -h .-fisted

(it -a-I. assava . - now West 0

3 00%

I In :3

. roishe d

'd sol

.

$

a .

. 20 Total exemptions from lines 7,8, and 9 above . . . . .. . .

.

. . . .

.

11 Wages. suslaries, Ups . aft. (Attach Form W-2 to back. It unavailable. explain on back)

E 12a Dividenth li... . ... .... .... . ... .. 11: ft- 12) 22b Leds ExclusIon S.. .... ..... .... .... ..... . Badence is . 12C

23 Internet (Enter total hem and It other $100, also list In Schedule B. Part 11)

0

>' 24 other incomes: Total from attached schedules; (chKk whookfired, use" 0. 0 El E 0. F 0) -L4

Ad'u,ted

-

Gross

15. Total [ 1'2, ..7.5_Tb I . Adjustment, [ I O'.,l 1 $ Income a- 15C

0 It line J So is $5.000 or

. ,

to fig- nor and -halses. (O.It lin.26 and 17.)

fill Go to SCh . T to figure tax and surcharge It YGU Itarnift deductiOrrs; or Claim ratirsommot InConse Crardit, foreign tax Creft arInVestC nment -1-dit; or If I..-

twif-ployrnent tax ar tax from recomputing prior year inesufruent credlL (Omit firms 16 and 17J

as it neither of abemne two items applies. go to Tax Tables instaund of SO. T. C.-Plt

. Imas 16,17.6 18.

0-

maid, tea

'

16 Tax from Tax Table (suns in will figervas tables on T-2 Arid T-3) . . . .

. yeansax

and sandemes.

I

17 Tax surcharge online 16 (sumse T-1 for tax surcharge tables) . 27 1

f

~!

18 Enter totai if from a ra xef l1bn,:sA26,arxd 27 OR amount from Schedule T, 11i"m 1188, ~ ffa rable (check

B 0, C []; Tax Rate Sch. Ia . Sch . D or Sch . G rI2c .

29 Total Federal Income tax fthheld (attach Forms W-2 to back) I

F h ld l

M.ke check or

ifirsons-even 0-2) . .

.

2D , F.I.CA tax with e (two or mom supp money order payabl t I ternal

22 E3 Krinhighway, Federal gasoline tm Form 4136 ; 0 Reg. fin, Farm 2439 e o n

P, R-enti, Starv e

10

22

22 1969 Estimated tax payments (Include 1968 onsurpsyment allowed for Credit)

soo,ic,~ppas e

0

.

23 Total (add lines 19, 20, 21. and 22) . . . . . . . . 23 dr,

up C 24 If line 18 Is larger then line 23, enter BALANCE DUE. Pay In full h niturIf

as X,

25 If line 23 /0-0 In .

is larger than line 18, enter OVERPAYMENT L25

a t

0 26 Line 25 to be : (a) Credited an 2970 estimated tax lv~ $ (b) Refunded le-$ /00 do

Issal =h

. declans I~Cavmolsvd 016. nature, achudke -I-. of --. a-,",- -1 ver -I-- a- -11. of

70 .0.00 .

U saw . .1 -4 than Waxen. a: so

whomi. 0

a n

18 / Annual Report / Chapter Two
I

Enforcement

Activities

f

Additional Tax and Penalties'

Recommended by Audit Higher

Than Last Year

Most Appealed Cases Closed by

Agreement

Delinquent Collections Increase

Tax Fraud Not Confined to Any

Particular Social Group

Laboratory Analyses Supporting

Law Enforcement
Introduction

A vigorous enforcement program is essential in preserving the

American system of self assessment . The enforcement effort

serves as a deterrent to fraud, delinquency, and violation of the laws

relating to alcohol, tobacco, and

firearms products . The additional

tax resulting from direct enforcement is only a partial measurement of total accomplishments . The

more important accomplishments

of the Service's enforcement activities are set forth below .

Comprehensive Audit

Program Enhances SelfAssessment Tax Syste m

Most taxpayers voluntarily file

tax returns reflecting their correct

tax liabilities. To a large measure

their voluntary compliance is attributable to their belief that most

taxpayers are also properly meeting their tax obligations.

The audit program is designed

to maintain the integrity of the selfassessment system by examining a

sufficient number of tax returns of

all categories to keep the possibility of an audit of a particular return ever-present . Auditing returns

not only deters potential wrongdoers and ferrets out taxpayers

who knowingly understate their

tax liabilities, but assures uniform

application of the tax laws.

The scope and nature of an income tax audit depends on the income producing activities of the

particular taxpayer. Field audits of

large and medium sized businesses are normally conducted by

revenue agents since knowledge of

Number of Tax Returns Examine d

and Additional Tax and Penalties Recommende d

Thousands 141111ow of Dollars

3,100

3ALIM

I

2.544

2 9

1,672

tax laws and professional account.

ing skills are necessary. Audits of

returns of employees, profession.

als and some small businesses are

normally conducted by interviews

in Service offices or by correspondence . These are referred to as "of.

fice audits" and are conducted by

tax auditors who know the tax laws

and some accounting but are not

qualified to work on complicated

accounting problems .

At mid-year the service installed

a new mechanized system for reporting production and controlling

returns in inventory. Some adjustments were necessary to present

current and prior year results on a

comparable basis. Therefore, credit

production data for 1970 are partially estimated .

11696

IXU7

895

ALr__1

169

Total fird'irldnal corporation Estate Exclea

and ad . .it gift and

fiduciary exernist runplcrinninit

suirinissitio g

i97o data inniaGy astiorited

22 if Annual Report / Chapter Three

Total lndi,id,.l

and

fiduciary

4LX

r,erponsition Estate

and and gift

exernint

crg. .i.tion

" 72

Easier

and

reepliesessett

Results of Examination s

In 1970, the number of returns

examined totaled 2 .0 million, of

which 1 .2 million resulted in recommended assessment of addi .

tional tax and penalties. A total of

$3 .1 billion was recommended for

assessment as a result of audit ac .

tivity.

The following table compares

numbers of returns audited in

1969 and 1970 by type of return .

Number of tax returns examined

ffigu- to thoularid1l

Type of retur n

Grand Total.

. . . . . . . . . . . . . . . .. .. ---

Income tax, total - ---------------

Coup after- ---------- -1. . . . . . . . .

ledl,ad .al and fiduciary . .. .

.

Exempt organization .... ------------- -

EExist: and gift tax- .

xcis and rrrnploYmWl~~;;--------------- . -

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

To

196 9

2,54 4

I'll ,

166

2,19162

42

130

I

tal

~gsrye,.

Vmo

~m

2,M

m

r

o0o .

Fie

1969

69 8

54 9

163

374

12

37

1!1 .

ld

un

42%

"

-in

us

-40

Irt

1 10

0

1969

1,946

1,823

I

1,822

(1)

4

19

I

a

"M

I.M

Zge,

~L=

C.)

A

ge t

I

- Partially estimated

Audits Also Result In

Overassessments

Examining officers are required

to determine a taxpayer's correct

liability-no more, no less . When

:n examining officer discovers that

taxpayer overstated his tax liability, an overassessment is made .

In 1970, Service examinations disclosed overassessments of $183 .2

million, exclusive of claims initiated by taxpayers . Overassessment

recommendations by type of tax

are shown below.

Overassessyments of tax exclusive of claims for refund

Type of tax

Total ---_------------- __ ---------- _ .. . . . -------------

I ndividu .1 and fiduciary locence-------------------- - ---- ---

Corporstio --------_---

Extat ----- ---_-----------_ ---_----- --------- - . . . . . ..

Gift- ._ -------------- . . . . . . . . . . . . . . _-_--- ___ --------

Exc

Erefil ':j;i~-i----------------------------------------- * ---------------

- partially astinested

AnsoUnt meensendial

(thousand dollars)

1969

203,747

48.082

135,335

16,23

948'

2,133

1,011

low

Sam$

sit=scor

,Z=2

Most Claims for Refund

Processed Rapidly

Taxpayers who file claims for refund are naturally anxious to learn

the results of the Service's consideration and to obtain prompt

payment of the amounts due them .

The Service has designed a system for rapidly closing claim cases .

Many can be allowed in full without contacting taxpayers . Form

1040X (Amended U .S .-Individual

Income Tax Return) introduced in

1969, not only speeds processing

claims but reduces time spent by

taxpayer in preparing them.

During 1970 the Service closed

396,346 claims for refund . Of

$592 .5 million claimed, $260.0

million was allowed. The greatest number related to individual

income tax, 352,038, followed by

28,296 corporation refund claims .

Section 6405 of the Internal

Revenue Code requires reports to

the Joint Committee on Internal

Revenue Taxation of any refunds

and credits of income, war profits,

estate and gift taxes exceeding

$100,000 . During the year 638

cases involving overassessments ; of

$331 .2 million, were reported to

the Joint Committee.

Enforcement Activities / 23
The following table shows data

on claims closed by the Service

for 1969 and 1970.

Claims for refund disposed of by district audit divisions, fiscal years 1969 and 1970

Closed by audit divisions I

Class of tax number Amount (thousand dollars)

I

Claimed by taxpayer Allowed Disallowed

1969 Em . 1969 1969 snt. 1969

Total- . . . . . .. .. . .. . . .. .. . . . .. ----- 353,361 M.4s, 394,653 .4SIAn 217,549 zs~eat 177,103

Individual Income .. . . ... .. . .. . . . . . .

Corporation in . ... . .. . . . . . . . . . .. . .. . . . .. .. .. . . .

E

state .

. .. . .. . . . . . - 1

Gilt . ... . . . . . . . . . . . . . --------------_--------- -

Exmi.. . . . . . . . . . .. . . .. .. . .. . . . . . . _

. ... . .. . . ..

Employment .. . . . . . . . . . . . . . . . . . .. . . . . .. . .. . .. . . .

306,916 3"Am 162,334 ~Mgacr 117,689 4"ju " . 64 5

30 708 'JXX2 171 .195 IMAN 78,512 W,= 92 .693 sectisers

2 : 364 .2 .= 29,232 M ;m Z 024 aus'auts 17.20 8

396 in 9 19 MA4

7 .318 1 0=3 7,509 7' 9 2

17,410 a n

5,6 'MA 9' 376 sMo 1 .617 U W .318 751M

ASO 4,03 198 %Ads 2.839

Pf0tated-transterreal to appellate divisions

Number Amount (thousand dollars)

Class of tax Claimed by import, Recommended b, audit divisions

1969 'M 1969 Allowed Disallowed

1969 im- 1 1969

Total . . .. . . . . .. ... ... .... .. . ... .. . . . . . . 3,619 1AU 112.302 In,= 8,723 4.s" 103,57 9

Individual in,...-. . .. . .. . .. . .. .

Uncork

- "s ---------------------------------

-

Estate, ~ . . . . . . -11 . . . .. . . . . .. ... .

Gill . .. . . . . . . . . . . .. . .. ... ...... . . .. . ..-------- - . .. . . . . . .

E

"i- ------ ----------------------------------

-

Employment . . . . . . . . . . .. . . . . .

1 . 7D4

113

34

46

2392

m

32

4m

9.589

91 .146

5,69 7

262

21 : 51

,,

ast'ass

ass

=2

.

1,106

7,4171126

1

1112

1162

3 An

------ - ---

a 49 2

86: 57

5 58 6

'26 1

,17104

6

0

iscit,

Ali n

ncludes claims all . . . d I. Nil without formal examination of the return : 1969 2617th d

.ill;on .

- . .,an r .I.,r,xrd$I24 .I .JIIm ;1970-310 .2th~ .I .~d,,t.,~, .~d$158 .3

tax law as "religious," "educational," "propaganda," "political activity" to permit a better understanding by exempt organizations

and the Service of permissible or

prescribed activities of exempt organizations. The Committee will also assist the Service to apply the

tax laws to novel experiments in

education, new expressions on religion, and changing avenues for

the application of charity to soci .

ety's present needs. A list of members of the Committee appears on

page 89.

KEY DISTRICTS FOR ADMINISTERING

THE EXEMPT ORGANIZATIONS PROGRAM

Centralized Approach

Now Used

All exempt organization field

work is now centralized in 16 key

district offices throughout the

United States . Each key district

has at least one group of specially

trained agents who conduct examinations of exempt organizations

and process applications for exemption .

A map showing the key districts

and the areas of their jurisdiction

follows.

* partially estimated

Exempt Organization Program

Expanded and Improved

In 1969 the Internal Revenue

Service recognized the urgent need

to take a complete new look at the

Exempt Organization Audit Pro .

gram aimed at improving the qual .

ity and control of these audits and

greatly expanding audit coverage .

A new approach was necessary because of the dynamic growth in recent years of exempt organizations

in terms of numbers, size and im.

pact on most phases of our society.

Wide-ranging changes in the Tax

Reform Act of 1969 made the need

for upgrading this activity even

more critical.

In 1970 the planned expansion

and improvement were accomplished. Highly skilled and moti .

vated people were selected and

trained in exempt organization

work . Quantity and quality of audits

reached the planned level . These

improvements resulted from a con .

certed effort by many segments of

the Service and several important

organization changes.

Service policy and overall direc .

tion is provided by a coordination

committee composed of the Commissioner and the Assistant Com .

missioners (Compliance, Data

Processing, and Technical). Fif.

teen distinguished Americans have

been appointed to serve on a now

group, the "Commissioner's Ad .

visory Committee on Exempt Organizations", which will aid greatly

in this important program . It is

composed of a cross section of the

public, with members representing

a broad range of disciplines such

as philosophy, theology, education,

physical sciences, economics, law,

accounting and business . These

widely experienced people will help

the Service define such terms in the

southwest

regio n

24 / Annual Report / Chapter Three I Enforcement Activities / 25
Exempt Organization Examination Activity (1966-1970)

Direct exam"rus"tal

1969 -19io- 1966 -

dations are examined at least once

every 2 years. A 5-year examination cycle has been established

for other private foundations and

other tax exempt organizations.

During 1970, the Service ex13 .33 1

17,893

8 .552

153. 6

110.8

112 .5

108.4

- 1966 1987 - 1968

Another step taken to strengtnan this program was the establishment of the Exempt Organizations

Examination Branch in the National Office Audit Division. It

develops the nation-wide exempt

organization audit program and

oversees and coordinates the

efforts of all key districts. The new

Branch assists in the planning and

directing of audits of certain large,

complex organizations whose activities have a national impact . In

these cases, it reviews each audit

plan and monitors audit progress .

The Branch also supplies many

other forms of assistance such as

perfection of examination and procedures and identification of train .

ing needs.

Audits of exempt organizations

differ both in purpose and in scope

from audits of taxable entities . The

letter are basically financial audits,

while audits of exempt organizations involve examination of activities of the organizations to insure

that they are in compliance with

the law granting exempt status .

Emphasis is placed on the private foundation area . Large founNumber of returns examined

Exempt Organization Determination Letter Activity

volume (1966-1970)

23,349

22,21 7

17 .36 1

14,394

H.755

12,128

11 .94 5

1967 - 1968 - 1969 --7-niopended 153.6 man-years examIn .

ing exempt organization returns .

The graph below depicts the

volume of exemption applications

received and processed over the

last 5 years.

19,404

APPlications

.!,ad

17,367

14.486

1966 1967

26 / Annual Report / Chapter Three

15,675

17,316

1968 19G9

o.t nnlrati .~ I ." :.

Wood

1970

Specialist conferees from each

key district office visit areas away

from district headquarters to hear

disputed cases . If agreements are

n ot rea ched in cases involving the

le. iai, modification, or revocation

of an exemption, the organization

may request that its case be referred to the National Office.

Audit Program Responsive

To Change

There is an obvious need to revise the audit program when new

tax legislation is enacted . Less obvious is the need to make changes

because of the growth in size and

complexity of many businesses

and taxpayers' use of advanced

technology in recordkeeping . Man .

power shortages also require con .

tinuing search for better ways to

utilize skilled examining officers .

Several studies made during the

year resulted in actions which help

to maintain a viable audit program .

Scope of Office Audit

Operations Enlarged

Small business returns were

shifted from field audits to office

audits to release revenue agents to

examine more difficult returns. Tax

auditors who audit small business

returns are now permitted to make

out-of-office contacts varying from

gathering information from third

parties to examination of ,

records

at taxpayer's place of business.

Another important change is the in .

crease of the percentage of office

audit cases handled by the inter.

view method and a comparable de .

creasp in correspondence audits .

This modification will aid taxpayers

who have difficulty with written

communications and improve au .

dit quality.

4104-061 0-71-3

Development in ComputerAssisted Audit Techniques

As more and more taxpayers

use computers for a major portion

of their accounting systems the

Service recognized the need t~ use

computer auditing techniques . With

the cooperation of large corporate

taxpayers-the Service has employed

computer programs which retrieve

required accounting data directly

from the taxpayer's magnetic tape

files, thus eliminating the time.

consuming task of examining volumes of books and records .

While there is much to be done

to keep abreast of now developments in computer technology, the

results to date have been gratifying

in the speed and accuracy of data

retrieved. The Service is constantly

exploring new and better ways to

use computers in auditing returns

especially when they will increase

the quality of audits and reduce

time spent on them .

Computer Selection of Returns

For Examination

Selection of returns for examination is a vital part of the Audit

Program . One of the main goals is

to select returns having the greatest probability of error .

This photo shows the volume of

accounting records printed out by a

t-xP2Y0eS Computer for one year from

which a program selected Items essential

to completing an audit.

Stacks of printout, ..r. reduced to the

few pertinent pages shown under the

hand of Internal Revenue Agent Allen L

Wolfe of the St. Louis District.

The Service designed the Discriminant Function System (DIF)

and thisyear it has been used to select individual tax returns for audit .

The DIF system employs computers programed with mathematical

formulas which rate the returns according to the degree of potential

error . The returns rated highest in

error potential are selected for

examination .

This scientific system reduces

the number of audits which result

in little or no tax change and saves

time previously spent in manual

screening. So far there has been

an excellent correlation between

audit results and the potential error ratings produced by the computer, validating the basic principles of the DIF system .

Enforcement Activities / 27
Large Corporation Coordinated

Examination Progra m

The goal of this program is to

identify taxpayers whose size, complex nature, and decentralized activities require special attention

and a great deal of coordination

between various offices of the

Service.

Audits of giant corporate taxpayers usually involve the use of

more than one internal revenue

agent and frequently require specialists skilled in such tax areas as

international operations and engineering . Usually these audits must

be simultaneously conducted in

several locations because of the de .

centralized nature of the business

operations of these taxpayers . The

newly established Coordinated Examinaiion Branch in the Audit Division, National Office, provides

planning and leadership to insure

high standards are maintained in

the execution of these large audits .

During the year, 1,454 corporations having control of 36,000'subsidiaries were identified as having

the characteristics for coverage under the program . At year-end, examinations of approximately half .

of the taxpayers identified were in

process . This program is being expanded to cover a number of individuals with widely disbursed

holdings and complex transactions .

Art Panel Assists

in Art Evaluatio n

A 10-man panel of art experts

was established in 1968 to help the

Service determine whether realistic

fair market value appraisals have

been placed on donated works of

art and art objects valued for estate

tax purposes .

During this second year of activity the panel reviewed 596 works

of art valued for tax purposes at

$14 million . Recommendations by

the panel included a reduction in

value claimed on works of art from

$9 .5 million to $5 .7 million and an

increase in value on estate art objects from $4 .5 million to $8 .3 million . In the last two years, changes

in fair market value recommended

by the panel total $10 .3 million . A

list of members appears on

page 87 .

Interest Equalization Tax

Audit Activity Extende d

The interest equalization tax has

helped to strengthen the balanceof-payments position since its inception in 1965 by reducing the

dollar amount of foreign securities

purchased by U .S. persons. To

guard against the risk of capital

outflows, the law was extended

from September 30, 1969, to

March 31, 1971, by the Interest

Equalization Tax Extension Act of

1969 .

Enforcement in this activity involves audit of returns, and inspection of record systems of approximately 1,200 broker-dealers and

banks (designated by the Service

as participating firms and participating custodians) to assure compliance with the law. Designation of

an organization as a participant

permits it to certify its compliance

with the law .

. Due to change in the law in

1969, audit activity will be expanded to include monitoring the

reporting and recordkeeping requirements of broker-dealer organizations who are not participating

firms .

During fiscal 1970, 1,462 Forms

3780, Interest Equalization Quarterly Tax Returns, were examined

by district audit divisions . These

examinations resulted in recommendations for assessment of $4 .0

million in additional tax and penalties.

Appeals System Provided

for Taxpayers

Taxpayer Has Opportunity

For Independent

Administrative Revie w

In the examination of about 21/2

million tax returns each year it is

inevitable that some taxpayers will

disagree with proposed adjust .

ments to their tax liability . It has

been a long-standing policy of the

Service to provide an administrative appeals procedure to enable

taxpayers to settle these unagreed

cases promptly, without litigation,

on a basis which, is fair and impartial to both taxpayer and Government.

The appeals procedure gives the

taxpayer an opportunity for an

early, convenient, and independent

review of his case. In an overwhelming majority of cases a mutually agreeable resolution is

attained . The success of the procedure is evidenced by the fact

,that during the last five years over

98 percent of all disputed cases

were closed without trial .

The appeals function operates

at both district and regional levels

through 58 district conference

staffs, 40 regional appellate division offices, and, as the - need

arises, at other locations where

full-time conference staffs are not

maintained . These offices consider

issues relating to all internal revenue taxes except those on alcohol,

tobacco, firearms, narcotics, and

wagering . They consider issues

which range from the most elementary to the most complex and

involve proposed liabilities which

range from a few to many millions

of dollars. Although there are differences in the authority and jurisdiction of the district and regional

offices, both have the same obJective--to effect an early disposition of each case .

Early Informal

Hearings Provided

The appeals procedure may be

characterized as one of informality

:nd accessibility. It is designed to

chieve disposition of contested

cases with minimum inconven .

ience, expense, and delay to the

taxpayer . District and regional of-

'fices offer conferences within a

short time after the case is received . Convenience of the tax.

-payer as to date and time is carefully considered. In office audit

cases the taxpayer has an opportunity for an immediate conference at the time of examination if

he desires, and circumstances per.

mit . In cases in which the disputed

tax is less than $2,500, a written

protest is not required for conference in the district office. The same

rule applies in the regional appellate office provided the taxpayer

has first availed himself of a district conference.

The taxpayer may represent

himself or be represented by counsel . Both offices are independent of

the examination branch and give

impartial consideration to the

issues in controversy.

Taxpayer Has Other

Options Available

If agreement is not reached at

either the district or regional office,

the taxpayer can, in most cases,

file an appeal with the Tax Court.

Even though this is done, and the

case is docketed for trial, the taxpayer may still reach a basis of

settlement with the regional ap .

pellate office . As an alternative to

trial in the Tax Court the taxpayer

can take his case to the Court of

Claims or a United States district

court, but this requires payment of

the proposed tax deficiency, followed by the filing of a claim for

refund, denial of the claim and suit

against the Government .

For 1970, the appeals function

disposed of 52,324 cases by

agreement compared to 946 cases

District conference mse work-load

Appeals-Method of Disposa l

Numnalser of CanNorst docketed cases,

21 .537

Ilagettflesneed to Tax Caiurt

B.27 8

1,373

1,154

Li I LEE L_

F-LS-6 1

U L __

Agreed U.eg,..d Defaulted an

statutory

moti .

decided in the Tax Court and 367

cases decided in district courts

and the Court of Claims.

About half of the cases closed

by agreement were at the district

level and half at the regional level .

District conference staffs obtained

agreements in about 65 percent

of the cases they closed . District

conference activity is set forth in

the following table :

Item Fiel d

and it

oft.

audit

T .t.1

Cases pending July.. ------------------_------ ____ 8,848 3 .066 11,91 4

Case ace, e-d,,,,,,d:: : --- : : : : : --------------_----- -

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

23 93 7

24 :611

16 451

15 :650

40 38 8

40 :21 1 N..b., g,e.d . . . . . ------------ ------------- 14.906 11,20 5 26,11 1 Ce Ag d as a pencimt sf total . . . . . . . . . . ..

ns pending June 30 .. . . . . . . . . . . . . . . . . . . . . . --------

6 1

8,174

7 2

3,917

6 5

12,091

L_

2GG

Tobal

1969 29,756

1970 29,6Zg

94 6

72. F~

Agreed Dismissed Tried on

Matultad

Appellate Receipts

and Disposals

Case receipts in appellate divi .

sion offices have been quite even

over the past 3 years-33,213,

33,103, and 33,099. Total disposals for 1970 were down slightly

over the prior year, due principally

to a smaller work force, but aver.

age disposals per appellate con .

feree remained at the high level of

prior years . Inventory was up 5

percent over the prior year, but remained in current condition .

The major portion (over 80 per .

cent) of the appellate workload

consists of nondocketed cases .

28 / Annual Report / Chapter Three Enforcement Activities / 29
These are cases in which taxpayers

have elected to try to settle their

tax disputes with the Service

rather than go direct to court. In

1970, 82 percent of these cases

were closed by agreement with the

taxpayer. Agreement on cases of

this kind have ave ra ged 82 percent

over the past 5 years .

Taxpayers filed peiitions for

hearings before the Tax Court in

6,968 cases in 1970 . However,

settlement negotiations on these

docketed cases continue and most

are ultimately settled . For 1970,

79 percent of all docketed case

disposals were closed by agreement without a legal trial .

The following table shows the

processing of both nonclocketed

and docketed cases in 1969 and

1970 . (For additional information

see tables 16 and 17, page 131 .)

must make every reasonable effort

to collect these taxes . The first

steps involve sending notices to

taxpayers requesting payment . If

the taxpayer does n t comply, delinquent accounts are established 0

and assigned to enforcement

personnel .

Delinquent Accounts Grow

Over 2 .6 million delinquent accounts were established in 1970,

some 140,000 and 6 percent

higher than last year . Reflecting

this increase, the amount of delinquent tax involved rose $506 million, or 18 percent, to $3 .3 billion

in 1970. It is reasonable to expect

some increase in delinquent accounts, if only because of population and filing growthsu . it is equally

Ily compliant reasonable for the f

n processing of all cases for 1969-1970 (Income, estate, gift,

Appellate Divislo,

excise, employment, and offers-lif-compriamise )

Statu s

R ------ ------- - -------------_-_

. ...

. . . . . . ----------- ___ . . . . . . . . . . . .. .. . .. .. .. ... .. ..

P=JUly_1

Disposed of, total. . . ~ --------------------------- -----

By .fffsene.nt. . . . .. ..

.. .. .

. ----

Uri.g-d favor...... . it, I arms, -W r.m.

compromise f#!Wioa')- -------W.- a, -dismissal -by -f" -C~

;

R petition to the To, Court --- -----------------------

lyTried 1 taxpayer default . the Tax Courton-------------------------------------------- statutory "at

Pending June 30.. ---------------------------------------------------

Sorne Taxfilers Fail to Pa y

Not every taxpayer pays the full

amount of tax reported due when

filing his return . Others make

errors on their returns, often re .

suiting in additional tax due . Still

others are found to owe money

after an audit is made of their tax

returns . In each case, the Service

Number . 1

1969

31 264

3T, 10 3

32,340

26,21 3

li 5D:,V3

2'578240

32.027

33:m

-,U :M

mrm

1

i;w

72 "soo

UA4 5

Taxpayer delinquent accounts

status

Issued. . . ---------- ---------------------

Disposed, total .- . . . . . . . . . . . . . . . . . . . . . .

By type Of action :

UllectedAdrfitialalo;wwt~~ ; -------------------

Other disposal, I ---------- - ------

Pending Jc,. 30, testal_ -----_-----_-- -

segment of the tax filing public to

expect the Service to take fair enforcement actions to bring these

delinquent taxpayers into the

timely taxpaying fold .

Increase in Delinquent

Accounts Closed

The Service'disposed of 2 .6 million delinquent accounts in 1970 .

This was an increase of 275,000

accounts or 12 percent, over 1969

disposals . In addition, the dollar

value of taxes collected rose to

$3 .3 billion, a jump of $846 million over 1969 . These accomplishments took place despite continued budgetary limitations, which

caused a variety of serious operational problems during the year .

Inventory Kept Relatively Stable

Enforcement efforts kept the in .

ventory of delinquent accounts at

788,000 valued at $1,812 million,

10,000 accounts and $26 million

iginer than the 1969 level . An unexpectedly large number of delin- IT

quent accounts were issued in the

last month of the year.

Nation's Economy Impacts

on Tax Collection

Changes in the economy, par .

ticuiarly when adverse, have a direct impact on the collection of

taxes due . This year, inflation pressures and higher interest rates

Number (thousands)

K9

2,494

2,31 5

1,962

------ 3W

778

=

little

2;w

Amount (thousand dollars)

1969

2,809.494

2,464,717

1,3765 947

3: 304

525,466

1,786,053

2AWW

sa~gdtt

2=1711,

AIU21 M

I Include, disparsal.chn, to up,all.tibility, .1mr-oul and duplicate asesseargirts,inel for fiscal Y93T 1970at

. huct des Pay ...t Tracer and Adiustment casR.,i=s

30 / Annual Report / Chapter Three

have increased the tendency of

some employers to "borrow" with.

held or employment taxes as working capital . The use of these

monies as working capital is a misappropriation of funds that belong

to the Government . For some time,

the Service has given attention to

these delinquent taxpayers by ac .

celerating enforcement actions in

getting these accounts satisfied

with dispatch . The 6-percent interest rate provided by the Internal

Revenue Code is low compared

with the going rate of commercial

loans and may have hindered en.

forcement success. Congress recognized this problem and provided

a penalty in the Tax Reform Act of

1969, for failure to pay taxes when

due .

Number of Offers

in Compromise

Disposals Decrease

The numbers of offers in compromise cases processed during

the year decreased by 2,446

cases, or 18 .4 percent from last

year . Total liabilities involved an

increase of $31 .3 million or 38 .2

percent.

The following table provides a

summary of compromise cases

closed in the last 2 years:

Offers in compromise disposal s

Type of tax or penalty

Delinquent Filers Detected

Although the vast majority of

taxpayers fulfill their filing obliga .

tions timely and voluntarily, there

are those who do not . Since the

strength of a self-assessment sys .

tem rests largely on the faith the

taxpayer has in the Government's

policy of fair and equal treatment

for all, every reasonable effort is

made to detect delinquent filers

and enforce collection of tax

monies due. Particularly before the

advent of the computer, searching

out those who are delinquent filers

has been a painstaking and time

consuming task. In recent years,

and especially so in 1970, enforcement efforts directed towards coping with the delinquent filer have

been aided by increasing use of the

automatic data processing system .

Delinquent Return

Assessments

Highest in History.

The rise in delih4uent account

workload prevented the same level

of personnel deployment as last

year to delinquent returns activities. Nevertheless, there was still

a significant dollar return com .

pared to .the manpower invested .

The Service secured 738,000 de .

linquent returns valued at $370

million . A total of 671,000 return s

Offers accepted, total----------------_---- --- . . . . . . . . . . . . .. . ... .. . ...

Income estate, and gift taxes. . . . . . .

.

. . . . .

E Iment nd withholding t . .

. -__ --------- ... .. ... . .

A=to --------------------------------------

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

Other excise leads- .----- _ ------_-------------------- ------------- . . . . . . . _ ---------- _

Delinquency f" flea on .11 .a es -----------------------------------------

Spec! pmiffens .1 .. . . . . . -------- --------------------------------------

offers rejected or withdrawn, total . . . . . .. . .. . . ------- ------ _ . . . . . . . ... . . . . .

no f

n.

ff1h

I 'E pfovir*e'~'aletica -------------------_-----

Alcohol t . . ... . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . .

Other ..fee tas es.. . . . . . . . . . . . . . . . . . . . . . . .. . . .. . . . .

. . . . . -----

. . . . . _ ---- . . . . .

Unit.. . cy penalties on .11 to-es ---------------- . . . . . . . . . . . . Speaffic penalr e

, Rervised .

Note : Appraised values of specific penalties are not included in the liabilities .

1969

Numbe r

9.64 9

455

377

65

59

205 4

7 go

3,04 4

IS"5

~1.2U

.1164

se

AS

105

SAU

aus

Taxpayer

Delinquent Accounts

Millions of Dollars

3,31 4

21808

1 .81 2

-

1,786 F 7

U Ll LLJ L

F.1affifidned Classed Invest."

falls 30

assessed at $311 .2 million were

secured through various estab .

lished delinquent returns pro .

grams . The balance was secured

through the Service's returns examination program .

1969

Amount (thou- it diAl ..)

Liabilities

20 .691

1343:972

's,1 3

919

1,412

22AM

3.m

64,294

45,20

8 3 51

298

9,938

604

.. . . ... . .

3 .310

L.461J

UA@2

2s=~m;

1.

Jet,

a.ass

~at

1969

off ..

6.91 5

4 925

1 :48

1,.

228'

91

9,313

1 :7

25

410

125

I

3160

~2=

Ziaci

tax

'U ;W

3 0

~a s

Enforcement Activities 31
Three Automatic Data

Processing File s

Trigger Delinquency Leads

Three automatic data processing

files, the Business Master File

(BMF), the Individual Master File

(IMF) and the Exempt Organization

Master File (EOMF), are today at

the heart of a large portion of the

Service's delinquent returns activities . Because tax regulations and

filing periods vary, each file works

differently to check for delinquent

taxpayers. The aim and result,

however, are the same-to trigger

a delinquency notice or investigation in any apparent nonfiler

situation .

The BMF, which contains filing

requirements for several classes of

business taxes, is programmed to

deliver notice of a need for a single

investigation at any time during

the tax year for any delinquent filer

with one or more periods of delin .

quency . This eliminates massive

paper work and clerical processing,

as well as enforcement contacts .

since the computer will not issue

any other investigation until the

returns for all periods of delinquency have been filed . The procedure applies even to delinquencies

which may arise while the case is

outstanding . The program is so

successful that additional business

type returns will be added to the

BMF control, maintenance and

delinquency check routines next

yea r.

The IMF operation, on the other

hand, produces but one delinquency check annually for nonfiling since only Form 1040, Individual Income Tax Return, is

involved . The program can identify

cases needed by an individual district office, thereby adding value

to this computer operation since

management can use it as a tool

in deploying manpower.

While the Exempt Organization

Master File is still in early development, it has adopted more sophisticated techniques for delinquency

check purposes . The principal

benefit here is in the computer's

capacity to issue delinquency letters to taxpayers at any time during

the year, thereby enabling a prompt

follow-up personal contact when

necessary .

Computer Programs

Yield Good Results

Approximately 50 percent of al l

apparent nonfiler cases, regardless

of program, are res.olved through

computer generated issuances .

Clerical savings in these ADP operations justify the Service's objective of complete automatic data

processing control and maintenance for all delinquent returns

programs .

Leads Developed With

Other Government Agencies

Another side of delinquent returns activities concerns probing

for those soft spots, or compliance

gaps, which may arise in particular

tax return program areas . Apart

from its own sources of leads, the

Service has liaison with various

Federal and State agencies . Marihuana and Wagering Taxes, Federal

Unemployment Taxes (FUTA),

Federal Highway Use Taxes, federally funded programs requiring

withholding and Federal Income

Contributions Act Taxes (FICA), are

some of the areas covered by these

liaison efforts . Other agreements,

geared both to manual and computer processing operations, are in

various stages of negotiation.

Tax Fraud Investigations

Promote Complianc e

The intelligence mission of the

service is to identify serious areas

of noncompliance ; select for investigation those cases that will

create the broadest degree of deterrent ; investigate assigned cases

expeditiously and thoroughly; and

obtain maximum publicity of prosecutive actions

To effectively carry out this role, -

the Intelligence Division has rede32 / Annual Report / Chapter Three

fined its program into two broad

categories-the general program

and the special enforcement program . The general program consists of the investigation of tax law

violations committed by so-called

"white-collar violbtors." The special enforcement . program covered

in Chapter 4 includes participation

in the Department of Justice's

drive on organized crime, strike

forces, and the investigation of tax

law violations by racketeers .

Effective Use of Manpower

In view of limited special agent

manpower great emphasis is

placed on careful selection of cases

to ensure that critical manpower

resources are aimed at detection of

potential fraud situations and to

achieve maximum level of deterrence to tax evasion by investigation and prosecution of those cases

which would have the greatest impact upon compliance attitudes of

the taxpaying public .

To deal with the relatively few

taxpayers who willfully try to take

advantage of their fellow citizens,

Congress has provided criminal

and civil sanctions. These sanctions represent the cornerstone of

our self-assessment system . They

constitute assurance to the honest

taxpayer and deterrent warning to

the potential tax fraud perpetrator.

If it is well known that violators will

not escape punishment for flouting

the laws enacted for everyone, selfcompliance is more acceptable . The

results of the work of mspeclal

agents are not measured by the

number of criminal cases investigated or prosecutions recommended . Of paramount importance

is the increase in voluntary compliance bythetaxpaying public resulting from the impact of these

investigations and subsequent successful prosecution of violators.

Careful Evaluation of Cases

Enforcement of the criminal ta x

statutes is accomplished through

the evaluation of more than

100,000 allegations of tax fraud

and the initiation of approximately

10,000 investigations each year .

These investigations include suspected income and excise tax

evasion, failure to file returns, false

withholding exemption statements

(W-4), false claims for refunds,

false estimated tax credits, perjury,

failure to remit trust funds collected, and evasion of wagering

taxes .

Historically, the Service has

played an important role in combating organized crime with the

convictions for tax evasion of many

powerful and notorious racketeers .

In the past year it has stepped up

its enforcement of the tax laws

with respect to racketeers, result .

ing in an increased number of the

nation's currently prominent racketeers being investigated for possible tax violations.

While the Internal Revenue Serv.

ice seeks to avoid surrounding the

filing of tax returns with an aura of

fearfulness, the would-be tax

evader, pondering his decision between filing a true and correct return, no return, or a false or fraudu .

lent return, should be well aware

that his ultimate detection and

apprehension will be publicizedin addition to the prospect of a

criminal indictment, an arrest, a

trial, a fine, imprisonment, or a

period of probation .

Tax Fraud Not Limited to

Particular Social Groups

The incidence of tax fraud is not

confined to any occupational, geo.

graphical, or social

g

rou

p. Cases

investigated by the Service during

the year have covered a wide range

of subjects by occupation, geograPhy, and economic or social

status as well as by types of tax

or by method of evasion .

The fact that convictions of

people involved in 170 separate

occu pations were secured indicates

the extent of the Service's efforts

to maintain a balanced coverage of

the entire spectrum of the taxpay .

ing public .

Examples of the many taxpayers

indicted or convicted in 1970 as a

result of criminal tax investigations

follow:

A Federal grand jury returned an

indictment of the operator of a tax

service for more than 50 counts of

willfully aiding and assisting in the

preparation of false and fraudulent

income tax returns for a 3-year

period. Under the law the ultimate

responsibility for the tax deficiencies in these cases rests with the

persons for whom the returns were

prepared .

A former magistrate and probate

judge was sentenced to serve 2

years in prison and pay a $4,000

fine for income tax evasion .

The court sentenced a tax return

preparer to serve 1 year and a day

upon conviction of charges that he

prepared false returns for others,

claiming false deductions and

exemptions . The wife of the return

preparer, who also participated in

the tax return preparing practice,

was sentenced to serve a prison

term of 4 months and a probation

period of 5 years on the same

charges.

In a 5-week trial, three promi .

nent state officials were convicted

of Hobbs Act (Extortion) .violations

and were sentenced to prison for

terms ranging up to 8 years and

fines up to $20,000 . The extortion

schemes were revealed during the

course of an income tax investiga .

tion of one of the convicted men

who was also indicted by the same

grand jury for evasion of his and

his corporations' income taxes.

A retail furniture dealer was

found guilty of willfully making and

subscribing income tax returns,

under the penalties of perjury,

which he did not believe to be true

and correct as to every material

matter. The taxpayer omitted from

his returns substantially all special

order customer sales . He was sentenced to 3 years probation .

A former bank official failed to

report "payoffs" that he received

in currency for extending bank

credit to merchants and their cus.

tomers . After his conviction on

three counts of attempting to evade

tax on the income from this

source, the court sentenced him to

serve a prison term of 3 years and

fined him $10,000 .

A former president of a commercial college was sentenced to

pay a fine of $40,000 and received

a suspended 4-year prison term as

the result of a nolo contendere plea

to charges that he attempted to

evade his income tax. The charges

centered around income to the college which was diverted to his use .

Unreported corporate and per .

sonal income amounted to over

$180,000 .

As an outgrowth of an income

tax investigation, an engineering

consulting firm was fined $2,500

for making an illegal political cam .

paign contribution . Sentence was

imposed after the court noted that

the company directors admitted

that the contribution was charged

off as a business expense in tax

returns . Similar illegal political

contributions cases resulted in

fines up to $50,000 against two

shipping companies, an advertis.

ing company, a savings and loan

association, and a wholesale liquor

dealer .

A numbers lottery operator was

sentenced to a prison term of 21/2

to 3 years and a fine of $1,000 in

a state court for conspiracy to vio .

late the state's anti-gambling laws .

This conviction, and that of 18

other conspirators, was based on

testimony of special agents of the

Intelligence Division and evidence

seized by them during wagering

raids . When Federal indictments

charging conspiracy to evade and

defeat wagering occupation and

excise taxes were dismissed on the

basis of the Supreme Court decisions in the Marchetti and Grosso

cases, the county prosecutor

adopted the evidence and success .

fully prosecuted the state charges .

Enforcement Activities / 33
Intensified Investigations

Continue

The number of investigations in

process continued at a relatively

high level with an increased humber involving racketeers and organized crime drive subjects . Tax

investigations of racketeers require

substantially more manpower than

other tax investigations so the increased emphasis in this area

caused a decline in the number of

investigations completed . Nevertheless, the number of prosecution

recommendations for tax fraud

remained approximately the same

as in the prior year and the amount

of taxes and penalties recommended for assessment in in .

vestigations completed in 1970

increased by more than 50 percent.

The number of special agents on

the rolis was increased by about

200 by the end of the fiscal year .

Much of the new employees' time

was devoted to intensive classroom

and on-the-job training which is

tailored to meet the unique needs

of the special agent in his detection

and investigation of criminal tax

offenses .

Law Enforcement Training

and Research

Part of the Service's training

program for special agents is being

made available to State and local

law enforcement officers under an

agreement between the Secretary

of Treasury and the Attorney General . It provides training to officers

selected by the Law Enforcement

Assistance Administration of the

Department of Justice, which was

created by the "Omnibus Crime

Control and Safe Streets Act of

1968 ." Forty law enforcement officers from outside the Internal

Revenue Service have successfully

completed the training and are now

better equipped to make use of

financial records in pursuit of their

investigations.

Special agents with expertise in

investigative techniques in criminal

tax investigation served as panel

Tax Fraud Investigations

Type

I r...ligature completed, total -------- --------------------------------

Prosecution recommendations, total . . --------------------------------

Fraud. . ----------------------------- ___ ---------_------

Wagering Crim. . . . . . . . . . . . . . . . . . . . . . I . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Moh operated gaming device. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .t .. . . . . . . . . . . . . . . __ . . . . . . . . . . . .

Investigation, in macess, June 30 ----------------------------------------

moderators and workshop discussion leaders at regional conferences sponsored by the Law

Enforcement Assistance Administration for police officials and

prosecutors .

The Intelligence Division also

maintains liaison with other administrative agencies and with

Congressional committees concerned with legislation relating to

taxes and enforcement of tax laws .

Studies were made and information

was presented in testimony before

Congressional committees considering legislative proposals relating

to secret foreign bank accounts,

domestic banking and financial

institution record keeping and reporting, regulation of credit reporting agencies, and wagering tax enforcement . I nvestigations were conducted in cooperation with military

investigators and the Senate Permanent Subcommittee on Investigation, concerning alleged tax

fraud in military club systems and

illegal currency manipulations in

South Viet Nam .

Several projects were initiated

during the year to measure the

deterrent effect of fraud investigations; to find new ways to use data

processing equipment as an- investigative aid ; and to formulate

better methods and means of

gathering, storing, and retrieving

information .

To measure the deterrent effect

of investigations, taxable income

reported in returns filed after investigation in 188 selected cases

was compared with that reported by

the same taxpayer in returns filed

for years prior to the investigation .

Elm

8, Z73

1.139

33

5a3

7,513

.1~m

I .M

,% .an

;a

AS

The study showed a marked increase in the amount of income reported in subsequent years'

returns.

New techniques have been found

for identification of frauds perpetrated by multiple filers of claims

for refund and by unscrupulous tax

practitioners. Electronic data processing equipment is being applied

to available intelligence data to

facilitate the collating and analysis

of vast amounts of information in

place of time consuming investigative procedures formerly used .

A new and improved system for

gathering, evaluating, and using

intelligence data relating to taxpayers engaged in illegal activities,

is being formulated . The proposed

new Intelligence Gathering and

Retrieval System is designed for

Service-wide use and conversion to

the automatic data processing system . Implementation will permit

expeditious retrieval and dissemination of information throughout

the nation to meet the problem presented by the mobility of today's

racketeers .

A new compliance concept was

tested bythe Intelligence and Audit

personnel in one district in each of

the seven regions this year. The

project was directed toward determining compliance conditions in

the districts and identifying compliance gaps, enforcement weaknesses, and developing remedial

measures.

Studies are continuing on the

capability of automatic data processing to assist in criminal tax

enforcement work. As additional

information becomes available

through increased use of electronic equipment in the next

decade, the Service expects to

capitalize on its greater speed in

identifying criminal tax violations,

evaluating potential fraud situations and supplying special agents

with the leads needed to more

effectively conduct tax investiga .

tions .

Referrals to the

Department of Justice

A total of 880 income and mis,

cellaneous criminal cases, with

prosecution recommendations in .

volving 877 prospective defend .

ants, were forwarded to the

Department of Justice . In .1970,

indictments in such cases were up

41 .2 Percent . There was no signifi .

cant change in the volume of referrals to the Department of Justice

or in the total disposal of cases in

the district courts over the prior

year .

In income, excise, and wagering

tax criminal cases 448 defendants

pleaded guilty or nolo Contendere,

73 were convicted after trial, 30

were acquitted, and 77 were

dismissed .

A comparison of indictments and

court actions for the last 2 years

follows :

Results of criminal action In tax fraud case s

Action

Cases Involving

Criminal Prosecution '

Total additional taxes and penal .

ties of $87 million were involved in

cases received in the Chief Coun .

sel's Office with recommendations

of criminal prosecution . This was a

decrease of $9 million under the

amount involved in the prior year.

~n analysis of criminal tax cases

of all types (other than wagering

and occupational tax cases) referred to the Department of Justice

follows :

Receipt and disposal of criminal cases In Chief Counsel's Officer

status

Pending July I . . . . . . . .. . . . . . . . .

ROctived, total. . . . . ---

With recommendations lot phosecution . . . . . . . . . . . .

With request, Im ibirion at

Disposed of, tatal . . . . . . . . . . . . . . . . .

Prosecution not warrant",-,,,

Department Of Justice coot --------------------------------- _. . . . . . .

Prosecution

OF,inions delivered

.

. . . . . . . . . . . . . -1 . . . . . . . . . . . .

. . .

A

other losings_, . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . .

Pending June 30 . . ... ..

1969

2,148

1 . Us

1 .01 9

65

127

M

171

2,073

F=

USAi r

Usn"

so

EIE:J

oLincludes, cases Swatting action in Department

liters. Di0simi.

of JuStIcit elctusive of wagering tax uses referred by

Total

Indictments and Int .-firml 1 Disposals, total --------------------------

Pin, guilty or not. contend.. .

Convicted attar trial-------------- ----------------------- ------

Acquitted .. --------------------- : : : : ------- * ----------------------

Nol-Prossed or dismissed I . .. .. . ... . --------------------------- -

Income and miscell.mm, cases x ---------------

I ndictments and inte-tiams

Disposals, total . . . . . . . . . . . . . .. . .. --------------

- ------ --- I . . . . . . . . . . . . .. . .. . . . .. . . . . . . . . . . . . .

Pie., guilty or noto contendene

Convicted after trial------------ : :- --------------------------------

Acquitted -~ ---------------

. . . . . . . . . . .. . . . . . . . .. . . . . . . . of No ~Prosseworillsm, Or -------------- ----------

Wagering tax uses

Indictments and firlonim,thm ,

Disposals, total . . .

---- ---------------- __ -------------

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

Plea . guilty or nolD contendere

Convicted after trial -------------- : : ----------------------------------

Acquitted -------------------

. . .. . .. __ ---

Nril-Prossed or dismissed . . ----------------------------------------- I -------- .. . ...... .. . . . . . . .

Number of

defendants

1969

649 825

470

91

20

24 4

631

626

441'9

11a,

18

L9239

121

163

40as,

2 5

a

1`3

29

5

I

b-hse Includes cases dismissed for the fallowing reasons : 19 because of death of

of serious illness, and 23 because Whillml defendant had pleaded guiltyprincipal cheamilift . 8

in a related case . orhad base convicted

to'seaIncludes .

income, estate, lift, and 0-11- taxes Other than wagering, alcohol, tube-, and fhmhm ,

34 / Annual Report / Chapter Three Enforcement Activities / 35
Additional detail on legal workload involved in the prosecution of

criminal cases by Service attorneys

during the past 2 years is provided

in the following table :

Tax and penalty and number of tax years Involved in criminal fraud casedisposals

(Exclusive of wafering and ceir-up too timing cars . cmur'l

Disposition

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

P-as fish, . . . . . . . . . . . . . . . . . . . . . . . . . . .

Ail othe closings U I ----------------------

To . years

196 9

~, 902

2.713675

I Includes man declined by Department of Justice.

Additional Taxes from

Direct Enforcemen t

Most taxpayers voluntarily file

tax returns and pay their liabilities

~ith no enforcement work required .

However, a balanced enforcement

program covering all classes of

taxpayers is necessary to promote

compliance by all .

~Lgrg

2 .~M

,an

Tax and penalty

1969

;126,230,68 8

64 683 413

fil : 547 :275

32 .~=Xn

Z '. 9i ; ;134

Examination of tax returns in

1970 resulted in additional assessments of tax, penalties and interest

amounting to $2,299.2 million .

$370.1 million in delinquent re,

turns were secured during the year .

The following table shows compara,

tive data for the past 2 years:

Gross tax, penalties, and interest resulting from direct enforcement

lin thousands .1 dollars]

1959

Additional tax, penalties, and ithroured, to"L ------- ------------ 3.368,338

From examimitirm of is, returns. total _------------------------ ------- 2,383,068

income tax, total . .. -------------------- -------- - -------------- 1,976,078

C.'por .thm . ._

---------------- -------- 1,212,319

Individual and fiduciary . . .. . . . . . ----- ----------------- 763, 75

9

Estate and gift tax -------------- ij --------------------- ___ ---- 319,594

Employment tax (including w1fifis income tax), . . . . . .. . .. . . . -- 46 826

Excil. tair. . . --------- --------------

. . . . . . . . . . . . . . . 45"57 0

From ms~hematic3l verification of income us return - '36111:1021

From verification of actirested to. payment- 11-imerd_` ------------------ 09 ~ . . . . . . .

From afixfirstutint return, secured, brief --------- --- ----------- -------- 309

.075

By dt"firist coll Iran division,----- -- -------

. . .. . . 252 599

B

d

y istrict audit diii,firic T .. ._ --------------------- ---

56:435

Claims disallowed, total,___ -------------------- I. .. . .. . .. . .. . 296,962

117

By district aeudit ivilitial ------------------- ..

I

By reports reliefs divisions. .- - ---------- OUR

Delinquent taxes, collected, total. . . .

. ------------ . . . .

. 1,939,251

l,M 222

Z20~=

~LIV~we

UIU,-

sen;garr

07XX

-U,"

Sm.so

&MAN

Mi6Ml

sal

Ak~m s

21L no

2.

Results from

Direct Enforcement

Million of Dollars

2,299

2,517

507 .0

370 . 1

Fr,mideded Transfer Delinquent M-th

exame driliesdamt do- sedificar"lead

ticcounts Secured

colhictiod

Workflow in the Service

ING! the Courts

The following tables provide information on work processed by

the Service for years 1969 and

1970 . The major portion of the

workload results directly from the

returns filed involving income,

estate and gift taxes . The time required to process a return depends

on the complexity of the items and

the issues involved . Many returns

are processed in a short period

while others require work by dif.

ferent activities and are not closed

during the year of filing.

The unit of measurement at the

audit level is on a return basis while

beyond that level it is on a case

basis . A case may involve one or

more returns and more than one

taxpayer and may include returns

which span a number of years.

Workflow in the Internal Revenue Service and the courts, fiscal years 1969 and 197 0

Tax returns filed, total . . . . . . . . . . . . . . . . . . . . _ . . . . . . . . . . . . . . . . .

I ndividu .1 income ..._ . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . .

"O"I'mratiril modure., - ----------- . . . . .. . . . . . . . . . . . . . . . . . . . . . : : : :

Estate and gift . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Employment

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

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -

E.,.. .

other .uncermi . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. .. .. . . .. . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . .. . . .. .. . . .. . . . . . . . . . . . .

INCOME, ESTATE. AND GIFT TAXES

Number of .turn . examined (includes for., 990) . .

. . . . . . . .

. . . . . Returns with adjustments proposed by audit divisions . . .

. . . . . . . . . . .

isPoSgerse a As it of by audif divisions .0 :

it it defaultod___ . . . . . . .. . .. . .. . . . . . . . . . . . . . . . . .

Turve , claims it

--------------------------------------- :

fimxrar~xd to alipe

;ti . . . . . . . . . . . . . . . . . . .. . . . . .. . . . . . . . . . . . .

Other . . ------------------- . . . . . . . . . . . . . . . . . . . . . . . . . . I -------

Civil .'as

Total received in appellate divisio n Disposed ot by appellate --------------

Courts of origins jurisdiction :

.. .

Tax court :

Total petitioned to Tax Cour t

Dismissed----------------- -------------------------

Settled by stipulation ------- : : * ----

Settled br~ To, Court decision . .. . . . . . . . . . . . . . . . . .. I ------ ----

Decided y Tax Court. but appealed

District courts and Court of Claims :

. . . . . -. . . . . . . . .. . .. . .

.

Total filed in district courts and Court of Claims . . . . . . . . . . . . . .

.

Settled in district court, and Court of Claims . . . . . . . . . . . . . .

ecided by district courts and Court of Claims . . .... . . . .

. . . . . . .

Courr's of Appeals :

Settled by courts of appeals decision

. . . . . .

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

Favorable to Government .

Favorable to taxpayers. - . --_-------------------------- . . . .

Modified.. . . . . . . . . . . . . . . . . . ..

Decided

by courts of appeals but reviewed by '~Winit'Cmdrt . . .

Supreme Court : Settled by Supr Court decision . .. . .. . . . . . .

Fraud a., r

. . .

Received lot full-scale investigation in intelligence divisions

Disposed of by intelligence divisions :

P.-tuin ox,ohnnuandin !

Disp Prosecution not

, --------

dead *1 prosecution net vm~r by 0111, 0 llist Counsel :

of Justice----------

n

- led. I.[-u

. it ,irg . ce,. as declined by the Department

pros . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. .

actilicunt. . . . . . . . . . . . . . . . .

i Includes cx,!,d I p as ce.. . .

.rually estimated

110,658 .63 3

76 215 414

1 :729 : 80 8

274 280

22,032:475

1 650 216

8:756~440

2,414,266

1.685,41 0

1,374.231

258 51 B

':'1'3!

25,110

21 .924

272

4 . 7776

93

22 5

1 .246

1,073

47 1

349

233

66

50

5

049

1:031

227

712

Returns

ms. am ass

~Mnhf

=3 SST

=M : a .

2. Sn . 2g,

2,ing, as

SjuldLIM,

1 .14cus

SRL lu

us

cases

S"

auts

m

m

Jus

IV

An

2111

12

Sal

m

L.Sas

36 / Annual Report /

Chapter Three Enforcement Activities 37
Amounts of revenue involved at each level of the tax system, fiscal years 1969

and 1970

latilliom, of dollarsi

Item

Internal I-A. . collections, tolel_ _ _------------------------

lirdi,idul I .... taxes. bit-L -------- ------------ _ . . . . . . . . . . _ _

Withholding .. . . . . . . . . . _ --------_------ ---------------------

other. . . .. . .. . .. . . _ . . .. .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Curtis, tion I . . . . taxes----------- ---------- ----------------

Estate and gilt - - .. . ------- - ---- - -- -------------

Employment t... il~ . .. . . .. .. . ----------------------- - -----------

[.,I,. test, . . . _.. . _ --_------ --------- ---------------------

196 9

,187,920

~97, 440

,70,182

27,258

38.338

h ON

15.543

1,328

361

119

4

23

ID

47

~=,,M

ZZ

INCOME, ESTATE, AND GIFT TAXE S

Civil uhus

Additional Us and penalties I, caus, disposed of I. audit di,Liiiarri by "' re.

adment, poymanr~dor detaulL . . . . . . . . . . . . . . .. . .

. .. . . .

diummil . . . .. . .... . . .

Us ir Penalties in uses disposed of in appellate divisions by

Addition.] is no penalties determined by settlement i n Y e"'m anti at' or dolau P It—

Additional tax and inumalthics determined by Tax Court decisions:

Dismissed. .

Decisions an il . -------------------------------------------- ;i' ----------

Additional tax and .I'nettles Court I;iW1;i .1 and courts of

Amount -pp as...run . ..

. ----------- * ------

Fraud us.,

D"encia and penalties in cases disposed of in intelligence divisions :

gosecution recommorded

P ~"i_

. . .

osecution not warranted and uses K 1~ed ~; iii iiii e . .

au

3$JW

3 ;M

.1171449

uAles

103

105

23

as

83

20

~ Includes . .is. Us,, .

Liquor Law Enforcement at 1200

Reduced Level s

The Alcohol, Tobacco and Firearms Division of the Service enforces the Federal laws pertaining

to illegal activities involving liquor,

tobacco and firearms . Due to the

passage of the Gun Control Act of

1968 and the resultant manpower

requirement to implement that

law it was necessary in 1970, as

well as in 1969, to divert manpower from other programs, mainly

from the illicit liquor program . This

was necessary even with the staffing increases provided for the firearms program .

The following chart reflects the

shifts in staffing between the principal alcohol, tobacco and firearms

programs .

Manpower Utilization

A 5-week survey utilizing "Saturation Raiding" was conducted in

certain counties of seven States in

the Southeast Region during the

early spring of 1970, resulting in

the seizure of 1,611 illicit distilleries and 6,427 gi~llons of nontaxpaid distilled spirits . "Saturation

Raiding" is a technique involving

the concentration of manpower in

"search and destroy operations"

designed to measure the extent of

the illicit liquor problems rather

than apprehend distillery operators. As a result, this operation

brought the number of distilleries

seized to a higher level than would

normally have been the case considering the manpower expended .

Analysis of this survey indicates

that, while substantial inroads

have been made towards eliminating major violations of the Internal

Revenue liquor laws, a tremendous

amount of work remains to be

done .

-bano Me, Jun gap D. Ma r

1967 1968 1968 1968 1968 1969

38 / Annual Report / Chapter Three

Jun Sao D. Mar Jun

1969 1969 1969 1970 1970

Illicit distillery seizures for fiscal

year 1970 totaled 3,763, a gain of

700 over last year's figure of

3,063 . A slight but . continuing

downward trend in seizures of

mash and untaxpaid distilled

spirits in 1970 could conceivably

reflect marketing difficulties for

illegal liquor, particularly in areas

where local economic conditions

have improved, and where intensive public relations campaigns on

the dangers of poison moonshine

have been conducted . More de .

tailed accomplishments in liquor

law enforcement for 1970 in comparison with 1969 are shown in the

two tables below .

Seizures and arrests for alcohol and tobacco violation s

item

San .,.:

D ulffleries . -------------------------------- -------- nurnbilStill, at distilleries

Non"U .peid distilled pkili__ ------ ------------------------- An__ . ... .. . . . .. . __ --------

Me$

.. . .

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

Vehicles .. . . . - . . . . . . . . - . . . . . . . . . . . . . . . . . . . .. . . . . .. . number--

Property (apingived _ ------ ___ dollars

Arrests---------- ---------------------- . . . . . . . . . . . . . . . . ;

u

be,-

1969

3,063

4, 362

92,281

1,964

.972

1,092

11346 276

4:137

Results of criminal action In alcohol and tobacco cases (Federal courts)

Actio n

Indictment, and information ------_----------- _

Disposals, hitel_ ----------- ...... .......... .. . ... .. ..

Plea. guilty or nolo contenders

Convicted error trial . . . . . . . . . _: : : :. ...... . .. ... ......... ... . . ..

amounted --------------------_--- ----------------- . . .. . . . . . . . . . . . . _ . .. . . . . . . Nol-Prossed or dismisse d

The traffic in illicit liquor remains centered in the southeastern

portion of the United States, ac .

counting for over 90 percent of the

illicit distillery seizures in the Na.

tion . "Operation Dry-Up," a tech.

nique employing a heavy concen.

tration of, investigative officers in

the principal problem areas, has

proved to be extremely effective.

While available manpower resources have been spread thin in

current "Operation Dry-Up" target

areas, progress made justified conNumber of delandarts,

E9

2,27 0

2,57 1

""' 374 1

112 36

am n

ZAU

tinued priority emphasis on this

program .

A substantial increase in revenue has accrued to the States as

well as to the Federal Government

in the three States directly affected

by "Operation Dry-Up ." Since its

inception "Operation Dry-Up" has

produced more than $46 million in

additional revenue to the Federal

Government as a result of shifting

patterns in the consumption of

alcoholic beverages from illicit to

legal markets .

The production of Illicit whiskey was

reduced by 49 gallons per day In the

Birmingham, Ala. me when this still was

seized In an a bandroarsaid cost hilis .

In

northern Jitiffiension County. Th. two

F-ins' Agents and :no State Agent

pictured aided I is th seizure.

Chemical Analysis Supporting

Law Enforcemen t

-Fiscal Year 1970

The National Office Laboratory

is engaged in the analysis of physical evidence connected with illicit

distilled spirits seizures, firearms

violations, destructive device con .

trol, tax depletion allowances, organized crime investigations, document examinations from intelligence cases, and specialized ex .

amination for State and local gov.

ernments and Federal agencies .

This fiscal year, 560 cases in.

volving 5,300 specimens were

examined . This compares with 390

cases involving 2,700 specimens

examined in the prior fiscal year.

In research and development,

manpower was devoted to the de.

velopment of techniques for dating

ballpoint, writing and felt tip inks.

Work in bomb residue detection

was given high priority because of

its importance and the large num .

ber of samples submitted for

examination .

Enforcement Activities / 39
Expansion and modernization of

the photographic laboratory was

completed to accommodate the in.

creased workload . Approximately

1,500 -prints per month were prepared, involving photomicrographs,

pictures for the Commissioner's

Art Advisory Panel . and photographs for training purposes. Almost all divisions of the Service

draw upon this activity for special

assistance .

Five scientific papers, based on

original research, were published

during the year. One paper on

document dating, based on ink

analysis, attracted interest on the

part of agents working on income

tax fraud cases .

Continued increase in Volume of

Regulated operations

The Service is responsible for

the regulation of the alcohol and

tobacco industries . This regulation

helps assure compliance with various Federal requirements (including proper taxpayment), prevents

diversion of nontax paid products

into illegal channels, and also pro.

tects the consumer. These controls

are applied principally through a

system of permits and bonds, reporting, requirements, and inspection programs .

Although the number of distilled

spirits plants remained fairly

stable during 1970, the volume of

activities requiring Government

supervision has continued to increase . The following table reflects

Statistics for fiscal year 1970 .

Alcohol and tobacco tax collec .

tions continued to climb, totaling

$6,8 billion in 1970 as compared

to $6 .7 billion in 1969 .

Production by alcohol and tobacco Industries fiscal year 1970

Distilled spirits ' . .. . .. . .. . .. ... .. . . .. ... . ..

. 917.5 million tax gallons .

Rectified distilled :Sol rits. .. ... . .. . .. . .. . 114.3 million proof gallons.

Still wine.

. .. . .. ... . .. . .. . .. . . .. .. . .. . .. . .. . . .. 305.8 million gallons .

Effervescent wines . .. . .

. . .. . .. . .. . .. . .. . .. 20 million gallons .

Vermouth and other 33 .5 million gallons. natural wines. . .. . .. . ..

. . .. . .. . .

Beer .. . . . .. . .. . .. . .. . .

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

134 .7 million barrels

Large cigars. . .. . . . .

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

. 6.8 billion.

Small cigars. . .. . .. ... . .. . .. . .. . . .. ... .. . .. . .

. 863 million .

Cigarettes ------ ------------------ 511 .7 billion .

storage after de ormination of taxes due . 601256.3 million gallons removed from bonded., Iiinn gallons In'stonage in bonded a.- 6 .8 million gallons removed tax free. 2,197

houses at the end of the year .

ATF permissive Man-POWOr Use

Plants and perinitteas subject I .

IRS regulatory ventrol (exchides retail liquor

dealax) :

On.sito impastions madii~

M-Y.- , -------------------------------------------- A . --........ . ... .. . . . . _

Minn-yern, s~ent an direet Plant ijl30iv1iWn: --- --------- ------

Permits Issued, amended ad --------------

cl.ion, .11--in-compromise and alsesurents revieved and

1969

Z3, 400

216

339

22,

2112

40,610

,illZally ~ I

Regulatory Changes

Promote Efficiency

improved efficiency resulted

from several regulatory changes

made during the year . One eliminated printing the bottle size on

bottled-in-bond export strip stamps

(Green) . This change extended to

export stamps the earlier changes

made in strip stamps for spirits

bottled for domestic consumption

(Red) wherein one standard stamp

is used for all bottles of 1/2 pint or

more . The printing, accounting, and

stocking of one type stamp was

substituted for the printing, accounting, and stocking of six types

of stamps. Another regulatory

change permitted distillers . to

determine the quantity of spirits

produced by means of a volumetric

g uge in a tank, thereby eliminating the need for costly installation

of tanks on weighing scales .

Administrative

Dev elopments Relating

to Alcohol Industry

Operation s

Industry Cautioned

About Use of

Food Additives

The Alcohol, Tobacco and Fire .

a rms Division enforces compliance

on food additives under the Food

and Drug Administration's (FDA)

regulations . Responsibilities to the

consumer require inspection for

changes in food additive requirements, particularly those items

which hold only limited clearance

from FDA. For instance, the industry was notified that brominated

vegetable oil was removed from the

FDA's Generally Recognized As

Safe List and was requested to

identify any wine or liquor formula

using this clouding agent. Subsequently, approval was withheld

on formulas which included this

material .

Alcoholic Beverage Advertising

Labeling and Trade Practice s

The Service administers the

Federal Alcohol Administration Act

which is designed to protect the

revenue, protect business competi .

tors, and protect the consumer .

In executing responsibilities under this Act the Service examines

alcoholic beverage advertising of

producers, bottlers, importers and

wholesalers for compliance with

requirements of law and regulation . Examinations are normally

made of advertising in a selected

group of general circulation news .

papers and magazines, trade pub.

lications, and radio and television

commercials. (in recent years under the voluntary codes of the

National Association of Broad .

casters and the Distilled Spirits

Institute, radio and television have

not broadcast advertisements for

distilled spirits. )

In 1970, the Service reviewed

more than 18,000 issues of 70

publications which carry alcoholic

beverage advertising, and 175

red io

com

mercials were also reviewed . Within the various media

our sample selections are changed

from time to time .

In addition to the review function, as a service to industry, the

Service evaluated the acceptability

of 900 proposed advertising

themes or campaigns voluntarily

submitted prior to release . Some

263 conferences were held with

industry members, their attorneys,

or advertising agents on proposed

advertising.

Examination of labels, unlike

advertising, is done prior to their

use . During the year, 71,BD4

labels were examined, 71,225 approved and 497 rejected . Approval

of these labels hinges on their

acceptability under law and regulation aimed at protecting the con .

sumer . The information on the label

must enable the consumer to iden .

tify the beverage, determine its

quantity, and be truthful as to any

other information on the labels . All

labels and their approving certifiNumber of Cigarettes Taxed (1960-1970)

1960 61 62 63 64 65

cate are now being put on microfilm

for easy retrieval, since approvals

made in the past are checked for

precedent many times a day. After

July 1, 1968, all labels were to be

resubmitted by industry for reexamination and to be microfilmed,

The distilled spirits industry has

complied and the labels have all

b en completed. The wine and beer

industries have until July a( 1 1971,

to resubmit their labels ior the

same purpose.

Offers-in-Compromise

Twenty-three cases were closed

upon the acceptance of offers-incompromise under the Federal Alcohol Administration Act. Involved

were such matters as the furnishing or giving of equipment, services, things of value to retailers, or

the extension of credit to retailers ;

all practices contrary to law. The

purpose of the law is to keep

manufacturers or wholesalers from

influencing retailers to exclude

competing products .

560

$4 0

520

500

480

460

44 0

42 0

40 0

Cigarettes and Small Cigars

Until 1953 there was a steady

increase in cigarettes sold domestically. From 1953 through 1963,

consumption increased about' 3

percent per year except for 2 years

in the early 1950's . There was a

decline in 1964 at the time of release of the report of the Surgeon

General's Advisory Committee on

Smoking and Health, but this was

followed by an increase which

lasted until 1968 when the signif .

icant anti-smoking campaigns be .

gan to affect domestic consumption

of cigarettes. Internal revenue tax

receipts from cigarettes have approached or exceeded $2 billion in

each year since 1962.

Sales of small cigars (cigarette

size) seem to gain when cigarettes

experience down-trends . The in .

crease in small cigars in the domesti,c market has undoubtedly

been further stimulated by the use

of a reconstituted tobacco wrapper

(Paper made from tobacco), which

provides significant labor saving

economies in manufacture . Also,

the internal revenue tax rate on

40 / Annual Report / Chapter Three Enforcement Activities / 41
Number of Cigars Taxed (1960-1970)

WHO=

1960 61 62 6 3

small cigars is 11/20 for a package

of 20, compared to 80 for cigarettes. But small cigars still constitute only a minor part of the

smoking product market which is

dominated by cigarettes .

Chemical Analyses Made for

Regulatory Work

To provide scientific foundations

with Internal Revenue Service management decisions and policies, the

National Laboratory is engaged in a

number of activities . In the field of

consumer protection this include3

the evaluation of containers made

from plastics, aluminum, coated

metals, or ceramics used for packaging alcoholic beverages . The

evaluation includes an analysis of

42 / Annual Report / Chapter Three

90 0

H E

70 0

11E

Sa o

40 0

30 0

200

100

66 67 68 69 70

the changes in composition of the

alcoholic products, and an investigation of foreign substances in

products which might be toxic . The

development of analytical profiles

on whiskies, wines, beers, and

other alcoholic products is essentiai in carrying out routine analyses

and regulatory controls . Samples

from proposed industrial processes

are examined, and recommendations based on technology and regulations are made . Samples from

the Bureau of Customs are examined to determine classification,

taxable status and compliance with

labeling requirements .

Cooperating (through the Asso .

ciation of Official Analytical Chemists) with technical Societies, the

Laboratory helps to coordinate and

maintain standard analytical methods for all alcoholic beverages .

Projects . are assigned for joint

studies of methods and the development of new analytical approaches to old as well as new

problems.

More than 100 different materials are analyzed each year by

the national and regional laboratories. Among these are alcoholic

beverages, food products containing alcohol, flavors, toilet preparations, lubricants, and tobacco.

This year a total of 27,531 industry samples were analyzed as compared to last year's 19,736 .

The national and regional laboratories examined 4,043 formulas

for specially denatured alcohol arti .

cles, 9,660 label approval requests, and 1,783 formulas for

nonbeverage foods, flavors, and

internal medicinal products .

Organized Crime

Drive and Firearms

Activities

4~_961 0 - 71 - 4

Project Investigations Aid in

Exposing Organized Crime

Strike Force Operations Expand

Foreign Bank Accounts Problem

Studie d

Firearms Law Enforcement

Continues to Expand

Gun Control Laws Effective Against

Convicted Felons

MEDDUT

Four
The Service Fights

Organized Crime

The internal Revenue Service's

participation in the war against

organized crime retains a position

of highest priority . Application of

resources to the racketeer segment

of the Service's overall program

has steadily increased . Expertise

attained in tax investigations of

racketeers over a long period of

time has enabled the Service to

move immediately into any area

singled out by the Department of

Justice for Strike Force activity .

Strike Force energies are generally

concentrated on criminal combines

in specific geographical areas .

Because of the Service's particular interest in the tax affairs of all

racketeers, their enterprises, and

iheir so-called white-collar collaborators, it continually seeks to improve its inte

I

ligence gathering and

retention system, an essential tool

for efficient and expeditious investigation of tax fraud cases involving top echelon racketeers

whose personal activities are usually cloaked in secrecy and often

extend beyond state and national

borders . The pieces of intelligence

that surface periodically in scattered areas are maintained in a

common depository where they can

be put together, evaluated, and

made available to field forces for

comprehensive investigation.

The Project

Investigation Approac h

The Project investigation ap

proach is applied to significant

racketeer cases traversing service

organizational lines and relating to

particular areas of evasion such as

loansharking, untaxed gambling

profits, or deposits of untaxed

funds in Swiss or other secret for.

eign bank accounts.

The scope and depth of . the

fraud is too extensive in these situ .

ations for efficient and timely detection by one or two agents operating from a district office. Guidance and assistance is provided by.

National and regional offices which

remain current on the progress of

these investigations and alert to

problems being encountered by

agents . District office personnel in

one section of the country are assured of immediate assistance from

agents in other parts of the nation, whether it be a call for surveillance, interrogation of witnesses or general investigative

activity. The sense of urgency, an

essential feature in any investigation, does not fade by transfer of

investigative responsibility to distant corners of the nation .

Project investigations, due to

their scope and intensity, have

greatly broadened the Service's

knowledge concerning the realities

of organized crime and have resulted in assessment of a substan .

tial amount of additional tax . Unfortunately, a great segment of the

public equates organized crime

only with a rather limited but notorious group of racketeers who

rely upon the threat of violence to

enforce their demands. In reality,

although heavily populated by

hoodlums and confirmed racketeers, organized crime is participated in by numerous other criminal elements who reside in most

President Nixon sign, on -Utl..old-,

creating the National council on

O,g. .iz.d Crion, e -..be. ofthe

C01not end other government ffid.11

lock .. .

levels of society. These segments

join together when it is safe and

profitable, separating when convenient . The leaders in organized

crime are not provincial ; they entice, enlist and often compel the

assistance of those required to

serve their cause . In addition to the

pure racketeer type, organized

crime is populated by larcenous

businessmen, corrupt public officials, unethical bankers and

brokers, and unprincipled attor.

neys and accountants, who portray

the role of reputable members of

the community . The strong-arm elements can expand freely without

fear of disruption, cut themselves

in on sizable crooked transactions,

receive the benefit of excellent

business expertise including financing, obtain secure investments

and gain control of legitimate businesses here and abroad .

The Service has been acutely

aware of this criminal coalition and

has extended its scope of inquiry

beyond domestic borders to areas

throughout the world .

Infiltration of Legitimate

Busines s

Organized crime is constantly

striving to take over legitimate busi .

ness . Nominees are often used to

legally purchase a business and

coercive sales techniques are often

employed on a reluctant customer .

Another method of takeover is

through the use of shylock or loan.

shark acfivities. Money is loaned at

prohibitive interest rates to busi .

nesses in financial difficulty and

unable to borrow from legitimate

credit sources . Default on the payments is followed by takeover of

the company.

Sole proprietorships or closely

held corporations are especially

vulnerable to this tactic of orga .

nized crime. If the businessman is a

habitual gambler and a big loser,

the racketeer's capability for stealing the business is greatly an .

h-anced. Gambling debts accumu.

lated with a friendly bookie by the

principal stockholder, corporate

president or whomever controls the

company, often result in the busi .

ness finding a strange, new "no .

show executive" on its payrol

' 1

. The

situation can progress to the point

where the owner of the business

finds that his services are no longer

required or the owner may file false

and fraudulent corporate income

tax returns in an attempt to pay off

the criminals with untaxed cor.

porate profits .

Secret

Foreign Bank

Accounts

For many years, individuals in

and out of organized crime have

used secret foreign bank accounts

to evade taxes . Racketeers find this

arrangement extremely beneficial.

Cash receipts derived from illegal

activities or from legitimate gam .

bling casinos under their control

are deposited in foreign banks .

These deposits are later invested

in the United States by using a

nominee to disguise the beneficial

owner . In reality, the lender ig also

the lendee . Often, false loans are

made to foreign entities who de.

posit the borrowed funds in Swiss

banks for the credit of the party

making the loan . In these cases,

there is no intention of repayment.

In addition to the tax fraud in .

volved in evading tax on funds de .

posited in foreign banks, this prac .

tice breeds other fraudulent con .

spiracies.

Sometimes, through cooperative

foreign banks, the money finds its

way back to the real owner as an

ostensible loan on which the owner

then Proceeds to claim interest deductions for tax. purposes while

each installment payment is cred .

ited to his account with the foreign

bank.

Every effort is being made to

eliminate those features of foreign

banking which can aid fraudulent

activity on the part of Americans .

The Government is approaching the

Problem from a legislative standpoint as well as through interna .

tional treaties.

Strike Forces

The Strike Force concept, which

melds the energies and expertise

of several Federal law enforcement

authorities under direction of the

Department of Justice, has ob .

tained results in several major

crime centers across the nation .

Additional units are scheduled for

deployment to other areas of significant organized crime influence .

The investigative arms of the

Service are heavily committed to

this drive . It is believed that a well

organized and determined effort of

the Service, advancing in concert

with other cooperating enforcement agencies, can drrest and

eventually eradicate this national

disgrace, organized crime .

In connection with the Strike

Force effort, there were 1,472 ex .

aminations in progress by the Audit

Division, 896 investigations being

pursued by the Intelligence Divi .

sion and 161 cases being worked

by the Alcohol, Tobacco and Fire .

arms Division as of the end of the

fiscal year .

Tax investigations are time con.

suming, especially those involving

racket figures and their associates.

Customary business records are

nonexistent, prospective witnesses

are uncooperative, obstructionist

tactics are the rule, and audit trails

are carefully concealed . Unlike the

situation where the investigation is

contemporaneous with the crime,

Federal tax cases require the agent

to dig out facts and evidence from

cold leads. The actual crime may

have'taken place several years be.

fore assignment of the investiga .

tion and, depending on the theory

of proof, the agent may need to

trace back several years beyond

the actual year of the tax fraud to

establish evidence . Despite the inherent problems, a number of key

Strike Force targets have been successfully prosecuted or are under

indictment for income tax evasion .

They include three top echelon

racketeer leaders and four top

lieutenants . The Service also has

under scrutiny or investigation all

known members of numerous rack .

eteering groups and their asso.

ciates. Many prominent racketeers

have been investigated, indicted,

and convicted for tax violations in

the major areas of criminal activity.

Millions of dollars in tax defi .

ciencies have been recommended

for assessment in organized crime

cases . The Service has contributed

leads and expertise, such as recon .

struction of complicated financial

transactions, which helped make it

possible for other Federal agencies

engaged in the drive on crime to

obtain indictments for violations

outside of the Service's juris.

diction .

" / Annual Report / Chapter Four Organized Crime Drive and Firearms Activities / 45
il

46

/ Annual Report

/ Chapter Four

State and local law enforcement

authorities have also been assisted

by the Service. For example,. in response to a municipal police department's request, special agents

of the Intelligence Division guided

police efforts through a wagering

investigation and furnished the

raid plan which was carried out

with great success .

Among indictments returned as

a result of Strike Force efforts was

one against a leading racketeer

who was charged with conspiracy

and income tax evasion . He reported a net income of less than

$90,000 whereas he allegedly had

an income in excess of $1 million

for the period in question .

The tax law enforcement efforts

in wagering taxes were for practical

purposes neutralized by Supreme

Court decisions in the Marchetti

and Grosso cases in January 1968 .

The Service will, upon request, participate in investigations involving

wagering cases, although this type

of violation is not within the juris .

diction of the Service . Last year the

Service completed a significant interstate wagering case which shook

the sports world, caused the indictment of numerous successful book .

makers, and publicized the tenacious determination of organized

crime to dupe uns uspecting

athletes .

Firearms Enforcement

Guns and the Service

The Service attaches great sig.

nificance to its responsibility for

enforcing Federal gun laws . Re.

sponsibility for gun laws was initially given to the Service with the

enactment of the National Firearms

Act in 1934. That Act was designed

to control gangster-type weapons ;

and, because its passage was

based on the taxing powers of the

Congress, its administration was

vested in the Service . Responsibilities for gun control were increased

with the passage of the Federal

Set zures and arinests for firearms violations

S.iZ....:

ri... . . .... .. . ... .. . . .. .. . . . . . . . . . . . . . . . . . . . . . . . . -Irw

Destructive ciftice, . . . ... .. . . . . . . . . . . . . . . . . . . . . . . . . .. .. . do: . Whid .... . . .. .. .. .. . ... ... . . . . . . . . . . . . . . . . . . . . . . . . . . ..

. do _

:

Property (appraised .. . . . . . . . . . . _ . . . . . . _dontrs

A,

_t3_ . _. . . . . _ . .... . . ___. . . _ ._ . . . . . . .. . .

umber . I Not available. E

94 152

(.) .9

499 763

715

E=

Results of criminal action in firearms cases (Federal courts)

Action

Indictments and information . . . . . . __. .. . . . . _ . . . . . . . . . . . .. . . . . . _ . . . . . .

Dismeals. tool . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . _ . . . . . . . . . .

PIOA.guilty or note contendere- . . .. .. . . . . . . . . . . . . . . . . ... . .. . . . . .. . .. .

Convicted sitar trial .. . . . . . . . . . . ... .. . . . . . . . . . . . . . . . . . . . . . . . . . . .

A' d ----------------------------------------------

Firearms Act in 193, . Due to ex .

perience gained under earlier legis.

lation, and because of an effective

law enforcement capability, responsibility for administering and

enforcing the Gun Control Act of

1968 was also given to the Service.

Significant Results Achieved

Under the Firearms Program

In 1970 a total of 627 investigator man-years were used on firearm activities compared with 442

required in 1969 . Investigations

conducted under the firearms program in 1970 led to the completion

of 2,975 criminal cases, the arrests

of 1,957 violators and the seizure

of 30,307 1 firearms. These figures

compare with 1,595 criminal cases,

715 arrests and 4,152 firearms

seized in 1969 . In the regulatory

area of firearms control, 54,369

investigations of the activities and

operations of licensees were completed in 1970 leading to the discovery of 1,812 purchasers of firearms with criminal records and 300

purchasers who had used fictitious

names or addresses. The following

tables reflect in greater detail accomplishment under the firearms

program for the past two years . N

. .bl, of defendant,

1969

331

278

126

45

16

91

I;m

Eil

433 Winin

The preceding statistics are indicators of the success of the intensified effort to use strengthened

firearms control laws as a major

tool in the broad and continuing

fight against crime. These statistics, however, which primarily

relate to violations of Federal statutes, do not tell the complete story .

Objectives pertinent to the intent

of the law to assist local, State and

Federal enforcement bodies are

also being achieved .

Disarming the Crimina l A pilot project, aimed at disarming the criminal in the District of

Columbia is an outstanding example of local law enforcement assistance . Conducted by a select group

of special investigators, the goal

was to determine the effect of an

intensified Federal program in helping local law enforcement officers

reduce the crime rate in a metropolitan area. Special emphasis was

placed on the arrest and prosecution of convicted felons possessing

weapons and armed violators of

other statutes . I Not including 4,372 divint-ti,ve do

. Vices 0,..d.

Organized Crime Drive and Firearms Activities/ 47
Investigators working on the

pilot project have developed and

maintained excellent liaison with

local police departments, other

Federal enforcement agencies, and

the U .S . Attorney's office. During

the first 6-month period of its operation a total of 424 firearms were

seized by Service investigators and

67 were abandoned voluntarily . A

total of 695 special investigations

were completed which resulted in

159 cases involving 163 defendants, 55 of whom had previous

felony records . More than 600 requests for assistance were received

from police, and 177 referrals were

made by Service-assigned officers

on violations of concern to other

enforcement bodies .

The Gun Control Act at Work

The effectiveness and varied

applications of the Gun Control Act

can best be seen in case illustra .

tions . A few examples follow :

In Boston, a notorious bank

robber, suspected of having committed several murders, was indicted by a Federal Grand Jury for

making a false statement to a licensed firearms dealer in the purchase of a firearm . At the time of

arrest, he was armed with a loaded'

.38 caliber revolver, stolen from a

firearms manufacturing company.

A second indictment has been returned covering the stolen firearm .

In Utah, a defendant with a long

criminal record was charged with

furnishing false information to a

dealer in the purchase of a shotg u n, and with a violation of the National Firearms Act after he sawed

off the barrels of the shotgun . Convicted in Federal court, he was

given terms of 5 years imprisonment on each of the two counts .

Another felon, free on appeal for

a manslaughter conviction, had a

registered National Firearms Act

type weapon in his possession but

failed to obtain the required authorization to transport the weapon

across a State line . He was arrested

in Wyoming, convicted, and given

a 5-year prison sentence.

Police investigation of a bizarre,

brutal sex murder revealed that a

suspect might have recently purchased a firearm . A Service investigator was notified and through an

extensive search of licensed dealers' records, found a firearm sale

to the suspect, who was in a Category of persons prohibited by the

law from purchasing a firearm and

who had provided false information to the dealer. The suspect was

arrested and jailed on the gun violation, and conclusive evidence was

later developed as to the subject's

guilt for the murder after he had

initially been written off as a

"harmless nut."

An investigation by Service investigators assisting the Bureau of

Narcotics and Dangerous Drugs resulted in the purchase of five fire48 / Annual Report / Chapter Four

Special Investightons of the Alcohol.

Tabs. .. and fint- DWIM .

evidence seized In the Washington, D.C.,

area during the early months of the

c1rhr. to "Di . .-the Criminal."

arms from a felon suspected of

trafficking in narcotics . Thirty-six

firearms were seized from the suspect's car . Subsequent investigation proved that 17 of the firearms

had been stolen. The felon entered

a guilty plea to the violations of the

Gun Control Act and was sentenced

to 10 years in prison .

An investigator trainee received

information concerning alleged

firearms caches, stolen Treasury

Bills in $100,000 denominations,

and stolen merchand ise . He pursued the information in an undercover capacity . The information

was developed into an Organized

Crime Strike Force investigation in

cooperation with the Federal Bureau of Investigation and resulted

in the arrest of three organized

crime figures . Four $100,000

Treasury Bills, part of a theft of

$13 million from a large trust company in New York City, were

recovered .

In Missouri two felons were

hired to put a man out of business

because he had chosen to buck

"big business" by opening a small

household gas company . The two

felons were spotted by local police

driving near an 18,000-gallon

household gas storage tank owned

by the small businessman . The

police stopped the two men for

que~tioning and found three firearms and a fully armed bomb in

the car . The bomb, composed of

10 sticks of dynamite, had a set

timing device attached . Service

investigators completed a case

against the two men for possession

of a destructive device not regis.

tered with the Service under the

National Firearms Act . Both men

were convicted and sentenced to

10 years in prison .

in Montana, police responded to

a call of a shooting in a bar. Upon

arrival, they found a body, a foreign-made handgun on the floor,

and customers who avowed no

kno~vledge of the shooting. They

requested Service assistance in the

investigation . The firearm in this

case was traced from Germany

through Mississippi and finally to

Montana where the last known

owner was identified by the Service

investigator as a customer of the

bar on the night of the murder . He

was subsequently convicted of

homicide.

Militant Activitie s

The category of destructive devices has come into prominence

with the wave of bombings and

bomb threats across the nation .

These devices (which include

grenades ; incendiary, gas, or ex .

plosive bombs ; rockets ; mines ;

and similar devices), are the types

of weapons most suitable to the

activities and avowed purposes of

militant groups of radical philosophical persuasion . Such organizations have publicly espoused use

of guns and explosives as an integral means of achieving their ob .

jectives . Many such organizations

have assumed a paramilitary pos .

ture modeled on irregular or clandestine groups which have suc .

cessfully operated throughout the

world .

The destructive device sections

of the Gun Control Act provide a

statutory vehicle for prosecuting

individuals who willfully use guns

or explosives as substitutes for

dialogue and reason .

The efforts of the Service have

been to focus investigative attention on the un lawful acts of individuals who by pronouncements or

associations have beco me identified with militant grou ps . Infiltration and the judicious cultivation of

sources of information have enabled the Service to perfect cases

against several well-known crimirial activists. Collateral benefits

from these investigations in the

form of referrals by Service investigators to other law enforcement

agencies have enab!ed these agencies to successfully conclude investigations of organized extremist

factions .

Demonstrations, civil disorders,

and riots have necessitated Service

involvement, primarily to protect

Service facilities, and provide advisory assistance to other enforcement agencies, including intelligence gathering support. While the

effects of these demonstrations

have been particularly manifested

in vandalism, there have been

many instances of both bombings

and bombing scares with all the

attendant ramifications of disrup.

tion and tragedy.

The commitment of enforcement

personnel in these areas will be

maintained whenever the possibility of Gun Control Act violations

exist .

Impartation of Firearms

and Ammunition

The Service is in its second year

of administering the provisions of

the

'

Gun Control Act of 1968 re .

lating to importation of firearms

and ammunition . The number of

applications for permits to import

firearms and ammunition for fiscal

year 1970 totaled 24,360 . During

the same period 1,054,282 fire .

arms were imported (includes rifles

and handguns .50 caliber and

under, and shotguns), and 1,128

applications were disapproved covering imports totaling 12,412 firearms not meeting the importation

criteria .

The Service also continues to

administer, under Executive Order

11432, the importation provisions

of the Mutual Security Act of 1954

covering articles on the U .S . munitions list (includes arms, ammuni.

tion, and implements of war) .

Organized Crime Drive and Firearms Activities / 49
II

International

Activities

Tax Administration in the

Foreign Area

Tax Assistance for Citizens Living

and Working Outside th

e

UniteU States

CIAT Continues to Mature

Assistance Furnished to Emerging

Nations

M&DDUT

Five
Introduction

The Service has a broad overseas program consisting of three

functions. One involves the administration of tax laws as they

apply to U .S . citizens living abroad .

nonresident aliens, and foreign corporations . Another involves providing assistance when requested

to developing countries in improving their systems of tax administration. The third function involves

participation in the negotiation of

tax conventions or treaties with

foreign countries to prevent economic double taxation . The more

important highlights and accomplishments in carrying out these

functions are related below.

Development of Tax

Administration in the

Foreign Area

The quarter century since World

War 11 has seen a peaceful explosion in foreign trade, in U .S. business and investment abroad, and

in the U .S . population which lives

and works in foreign countries. (To

cite one statistic, over 2,300,000

U .S . citizens, including more than

850,000 civilians, are presently

located outside the United States.)

At the same time, there has been a

great increase in foreign business

and investment in the United

States .

The tremendous foreign business growth ha s been matched by

a proliferation of complex tax

problems, together with a new body

of statutory and administrative law.

To operate mo re effectively in the

international theatre, many law and

accounting firms and large corporations have developed departments of intern ational tax specialists . These practitioners deal with

foreign as well as U .S . tax rules,

and with complex issues arising

from the interaction of both-for

example, questions of source of

income or allocation of income and

expenses between related U .S. and

foreign companies .

To develop comparable expertise

in the international area, the Service has created several groups of

specialists . These include :

1 . Eleven groups of specially

trained international examiners,

located in key districts throughout

the country . Together with district

revenue agents, they conduct joint

audits of corporate returns which

indicate transactions between related U .S. and foreign companies.

This joint audit procedure referred

to as the "Coordinated Enforcement Program," is closely supervised by the National Office Audit

Division which, in appropriate

cases, [ends the assistance of

economic specialists .

2 . Corporation Tax and Reorganization Branches in the National

office Income Tax Division, issue

income tax rulings on international

questions .

3 . A branch in the Legislation

and Regulations Division of the

Office of Chief Counsel specializes

in preparing regulations, treaties

and legislation in the intenational

area .

4 . A branch in the General Liti .

gation Division of the office of Chief

Counsel performs various legal

functions in connection with litigation and settlement of cases involving international issues .

5 . A branch in the National

Office Audit Division has specialists

to administer the interest equalization tax .

6. A task force deals with the

unique problems involving U .S.

citizens with secret foreign bank

accounts.

7 . The Office of International

Operations administers the Internal

Revenue laws and provisions of tax

treaties as they apply to U .S. citizens doing business abroad .

The groups have evolved inde .

pendently in response to needs and

pressures experienced by the Service . They perform a wide range of

functions, from basic audit work to

formulation of new laws . While

directly concerned with various

phases of taxation, their activities

have broader implications.

The Services international spe .

cialists endeavor to assure that the

Internal Revenue Code and tax

treaty rules are applied in a cor .

rect, fair, and nondiscriminatory

manner, and that where double taxation or other inequities occur relief

and assistance will be made to the

taxpayers affected . They seek to

acquaint taxpayers with the special

rules and procedures which apply

in the international area, as well as

the special benefits and measures

of assistance and relief .

A presentation of the major

activities of the Office of International Operations follows :

Sharp Upward Trend in

ReturnsFifled by U .S.

Civilians Living Abroad

Number o f Wum.

210,000

200,000

190,00 0

160.0ti o

170,000

160.000

1965 1966 1967 1968 196 9

The Office of International Operations engages in the usual audit

and collection activities of district

offices and provides information

and assistance to our taxpayers

who reside or do business abroad .

In its latter role, it employs a permanent network of Service repre .

sentatives at various foreign posts,

operates a special taxpayer assistance program which sends a number of technicians on annual trips

throughout the world, applies the

tax relief provisions of Revenue

Procedure 64-54 and aids the

Assistant Commissioner (Compli .

ance) in administering tax treaties

which provide a number of special

benefits and relief measures to

taxpayers.

Steady Growth in Number

of Foreign Corporation s

in Which U .S. Persons Own

at Least 5% of Stoc k

Number uf

conmrstioni

45,000,

40,OOCH

35,0001 Af

30,0001

1967 1968 1969 197 0

Operations Abroad

The Service has 10 foreign posts

operating as miniature district

offices, manned by 20 technical

and nine clerical personnel . This

includes a temporary post in Viet

Nam added this year. These posts

provide the principal link between

individual taxpayers and U .S . business entities abroad and our tax

programs at home .

The foreign cities where the

posts are located are as follows :

Manila Rome

Paris Bonn

London Tokyo

Ottawa Mexico City

Sao-Paulo Saigon

Subject to agreements with for .

eign countries, the staffs of foreign

posts advise and assist American

taxpayers abroad with their U .S. tax

problems . They audit returns of individuals, corporations, partnerships and others, hold conferences

with taxpayers and their repre-

~entatives, and develop essential

information to be used *;n, cases

under investigation or in it gation

in the States.

They have unique responsibiliI ies under the tax treaties between

the U .S . and foreign countries .

They are usually the first and often

the only representatives of the

United States Government to hold

discussions with foreign officials on

particular cases under treaties relating to the avoidance of double

taxation and the exchange of

information .

In terms of responsibilities,

areas covered and movement of

U.S . citizens abroad, present day

staffing of these foreign posts is

critically short of true staffing

needs. The two-man post in Sao

Paulo, Brazil, for example, has

jurisdictional responsibility over

the entire continent of South

America. The meager staffing of

the foreign posts, coupled with the

vast areas they cover, continues to

impose serious limitations on our

overseas enforcement efforts in

the face of a steady increase in

U.S . investments and the numbers

of taxpayers abroad . As an interim

measure to narrow the gap between

foreign post workload and avail.

able staffing, the Service is considering detailing personnel from

Washington . Further expansion

both in the number of foreign posts

and manpower will continue to be a

prime Service objective in realizing

its long-rang overseas mission .

Foreign Taxpayer Assistanc e

In terms of tax assistance, the

average American taxpayer living

overseas is less fortunate than his

Stateside counterpart . There are

nine Service offices abroad where

a taxpayer can go for tax assistance, compared to hundreds of lo.

cations in the States . Telephone

service overseas has obvious limitations and offers only marginal

access to the Service's facilities

abroad . The Stateside taxpayer by

comparison has only to reach for

a telephone to dial any number of

local Service offices for assistance.

Professional tax service is also very

limited overseas and can hardly

compare with the countless numbers of tax practitioners who are

available in the United States . The

American taxpayer abroad is at a

decided disadvantage when he

needs tax assistance and advice,

when compared to his Stateside

counterpart.

For the past 17 years, the Service has provided a worldwide tax

assistance program . This year 14

revenue agents and six tax auditors

went to 97 cities in 50 countries to

help some 29,000 taxpayers file

their U .S . tax returns .

To effect economies in program

costs and manpower staffing, the

taxpayer appointment system used

in rendering tax assistance in prior

years was discontinued . A full .

scale seminar program was conducted this year in combination

with walk-in self-help service . The

seminar concept, tested experimentally during the 1969 filing

period, proved to be so effective it

was expanded during the current

year's program to include 173

seminars in 73 foreign cities . A

further refinement was added to

the program by tailoring the seminars to common-interest groups.

Five thousand taxpayers attended

the seminars. This record attendance brightens the outlook for

future development of an economyfocused technique.

52 / Annual Report / Chapter Five I

International Activities / 53
Nearly goo servicemen stationed abroad were given basic instruction at 14 income tax schools

conducted by Service personnel on

military installations in Europe, the

For East and the Canal Zone . This

tax training program is co-sponsored annually by the Service and

the Department of the Army . The

purpose of the tax schools is to

provide the military community

with its own tax advisors . This

method of providing tax assistance

has been successful in extending

the benefits of our efforts to approximately two-thirds of our

Armed Forces abroad .

The Service in Saigon

The black-market currency situation in Viet Nam has been a long

standing concern of the Internal

Revenue Service. Vast amounts of

money and resources of the United

States have been committed in

Viet Nam which has produced a

climate conducive to black-market

money manipulations, theft of Government property, and other illicit

activities .

Illegal black-market money traffic has grown to serious proportions. In 1969 a Service representative was sent to Viet Nam to make

an on-site inspection of black mar.

ket operations . The inspection disclosed evidence of substantial and

widespread black-market money

manipulation activities by civilians,

military personnel, and U .S . business entities . The Service now has

three technical representatives conducting examinations and investigations in Viet Nam and other

countries in Southeast Asia . The

activities of this team are coordi .

nated with related investigations

conducted in district offices

throughout the United States .

In November 1969, the Senate

Subcommittee on Investigations

opened hearings in Washington on

illegal currency activities in the Far

East. In the course of these hear .

ings, it was disclosed that seven

U .S. banks were handling transactions involving approximately $150

million per year in Viet Nam blackThis Overseas Taxpayer Assistance T. ...

office of

international Operations (010),

travels throughout the free -dd ftlft

tax assistance to citi..n . ..Uld.the

United states. 010 01-tO' C- 1. Fes Is

... hod at the . .tn- laft and A.M .Unt

Director Joseph G. McQ-- Is --t-d -t

the extreme right.

market currency. One account

alone had transactions of approximately $2 million per week . By

analyzing these accounts the Service has been able to identify many

of the individuals and firms- en .

gaged in black-market activities .

The basic practice of the currency manipulators is to profit on

the difference between the official

rate and the current black-market

rate in the conversion of Vietna .

mese piaster to the U .S . dollar .

Many ingenious methods are em .

ployed to accomplish this purpose .

Through close cooperation between

all agencies of the Government, an

effective program for combatting

these illegal money manipulation

schemes in Viet Nam has been

instituted .

Administrative Relief

For Economi c

Double Taxation Cases

American industry's expansion

abroad was accomplished through

the organization of complex foreign

corporate structures. For the most

part, foreign tax rates were lower

than those of the United States,

and profits were diverted beyond

U .S. jurisdictional boundaries to

foreign affiliates through the medium of inter-company pricing and

service fee arrangements .

Internal Revenue agents, whose

specialty is to examine international transactions involving domestic

entities and their subsidiaries, completed the examination of 953

cases between 1960 and 1965 .

The income adjustments recommended totaled $768 .5 million, resulting in tax deficiencies of $386.7

million, an average of almost

$406,000 per case . The Service applied section 482 of the Internal

Revenue Code in recommending

these deficiencies . This section provides for the reallocation of gross

income, credits and deductions between related taxpayers to prevent

evasion of taxes and to reflect the

correct taxable income of each taxpayer.

The increased use of section

482 in the international area in the

1960's soon brought the realization that the tax effect of this provision could not be measured solely

from the standpoint of the U .S .

taxpayer . Almost every adjustment

to a domestic taxpayer's income

had an effect upon the related foreign entity which was a party to the

same transaction . In too many

cases it was found that either the

foreign country in question did not

permit retroactive adjustments

once a tax return had been filed,

or that its statute of limitations for

filing refund claims had expired

prior to the recommendation of allocation by the Service. As a result

many U .S . taxpayers were confronted with the prospect of economic double taxation with respect

to large amounts of income under

circumstances where no means of

securing relief was available .

To provide administrative relief

and to give the taxpayer time to

adapt business practices in conformity with the law, the Service

issued Revenue Procedure 64-54

I

n December of 1964. Under this

procedure, U .S . parent companies

were given unilateral relief from the

economic double taxation which

would otherwise have occurred

from reallocations between such

companies and their foreign

subsidiaries .

As of June 30, 1970, requests

for aclministrati~e relief have been

granted in the amount of nearly

$8 million to 119 taxpayers .

Twenty-seven of the 119 cases

were closed during the past fiscal .

year with the requesting taxpayer

receiving $1 .4 million .

In October 1968 the Service announced in Revenue Procedure

69-13 that on an "ad hoc" basis

the administrative relief provisions

would 6e extended to an entirely

now group of taxpayers . It determined that economic double taxa .

tion can apply to a U .S. controlling

taxpayer and one or more of its

controlled domestic entities which

operates in a foreign country and

is subject to its taxation . As of

June 30, 1970, two~such cases

have been closed with a total

amount of relief approved of more

than $6 million.

The Competent Authorit y

In absence of a world-wide tax

code, tax treaties furnish a limited

measure of uniformity, designed to

avoid double taxation and other

inequities which can result from

separate applications of two na .

tional tax codes . At present, the

United States has concluded 21

treaties with 31 nations.

Treaty rules are often stated in

fairly broad terms and, as a result,

questions of interpretation arise .

To resolve these, treaties include

consultation machinery, referred

to as mutual agreement proce .

dures. Such procedures create a

tax personality, known as the competent authority, to represent each

country in the settlement of problems and disputes involving the

application of treaty provisions .

The competent authority is not

necessarily one person . Each country may have a competent authority

for the various functions connected

with treaties. For example, the

Assistant Commissioner (Compliance) acts as the United States

competent authority in administering the operating provisions of tax

treaties . He considers claims in

specific cases involving alleged

double taxation, consults with the

appropriate competent authority

of the treaty country involved, and

handles exchange of information

and collection assistance matters

pursuant to the tax treaty .

The Assistant Commissioner

(Technical) acts in matters involving interpretation or application of

tax treaties and issues rulings and

technical advice. Offices in the

Treasury Department also exercise

competent authority functions . The

Assistant Secretary of Treasury for

Tax Policy is responsible for the

development of tax treaty policy

and tax treaty negotiations .

Any U .S. citizen or resident may

ask for the intervention of our

competent authority if he feels that

he has been subjected to double

taxation or to other unfair tax treatment not in accord with the spirit

or meaning of a treaty provision.

54 / Annual Report / Chapter Five I

International Activities / 55
For many years requests for assistance have been handled on an

individual basis, without the aid of

established procedures . Various

groups in the Treasury Department

have been working to resolve the

difficulties in formalizing procedures. Their efforts culminated in a

landmark directive, Revenue Procedure 70-18, recently published

by the Service (IRB No. 1970-29,

p. 23).

Revenue Procedure 70-18, sets

forth applicable procedures for

handling issues by the U .S. competent authority in cases involving

the allocation of income and deductions between related corporations

or other parties, one of which is a

U .S .

taxpayer and the other subject

to the jurisdiction of a foreign

country with which the United

States has an income tax treaty.

The new revenue procedure explains how, when, and where requests for competent authority

consideration should be filed, information required, and conditions

to be met . Additional procedures

are planned to cover other issues

which cause taxpayers to seek

assistance of the competent

authority .

It the competent authority feels

that a case has merit, he will contact his counterpart, the competent authority of the country in

which the alleged double taxation

or tax inequity occurred, and arrange for consultations . Settlements made at these meetings are

not reached-in adversary proceedings ; they are agreements which

reflect recognition of each country's tax sovereignty, the existence

of reasonable differences of opinion, and the overriding need to

achieve an equitable solution to a

problem which neither country

could resolve independently.

56 / Annual Report / Chapter Five

During the year, 71 cases involving 15 foreign countries were

considered under the mutual

agreement provisions of income

and estate tax treaties and 44 were

closed . These cases covered a wide

variety of treaty issues, ranging

from allocations of profits between

related business enterprises to taxation of alimony payments . Some

were taken up for consideration at

the request of foreign competent

authorities, but most resulted from

requests made by United States

taxpayers . There is every indication that this activity will become

increasingly more important in the

years ahead .

Exchange of

Information Program

Many taxpayers doing business

on the internationa

I

scene are curious about the exchange of tax information that goes on between

countries . They frequently want to

know what one country is telling

another country, especially their

country of residence, about the

nature and size of their income .

The competent authority is responsible for executing the tax

treaty provisions which describe

exchanges of such information for

income tax as well as estate and

gift tax purposes .

There are two general types of

information exchanges, automatic,

and by request in specific cases .

Under the automatic exchange

program for income tax, the Serv .

ice gives each foreign tax treaty

country copies of Forms 1042S

and Forms 1001 which pertain to

residents of the respective treaty

country, other than U .S . citizens,

who derived income from U .S .

sources . These tax forms were filed

by withholding agents to report

the amount of U .S. source income

(dividends, interest, rents, royalties, and pensions) which were paid

to nonresident aliens, and the

amount of U .S. tax which was withheld from such income . Neither

copies of income tax returns nor

information therefrom is ever lurnished under the automatic exchange program .

During the year foreign tax

treaty countries supplied the .Service with 192,000 documents bearing information about foreign

source income derived by United

States citizens, and residents, and

the Service sent 412,000 informa .

tion documents to the foreign tax

treaty countries .

There are I I estate tax treaties,

one gift tax treaty, and one combination estate and gift tax treaty .

All except one contain provisions

for the automatic exchange of information to facilitate administration of estate and gift tax laws .

The Service obtains prime benefits from these exchange of information provisions . On the basis of

the information sheets received

from foreign treaty countries reporting United States assets, the

Service is often able to secure delinquent returns . Frequently, these

information sheets disclose assets

which were not reported on U .S .

estate or gift tax returns.

During fiscal year 1970, we

received approximately 2,880 information sheets from the participating foreign, countries . In turn,

approximately 625 information

sheets were sent to governments

of foreign treaty countries informing them of assets which may be

taxable under the treaties or their

laws .

As a continuing part of the Service's obligation to assist taxpayers

and foreign taxing authorities in

alleviating taxation of the same assets by both countries, the Service

provides certifications of the

amount of Federal estate tax paid

to the United States, thus permitting a tax credit against death

duties imposed under foreign tax

laws . During fiscal 1970, the Service provided 175 certifications to

governments of both treaty and

nontreaty countries.

Information furnished under the

specific request program generally

involves three classes of taxpayers :

(1) nonresident foreigr6persons, including corporate entities ; (2) U .S .

citizens ; and (3) related domestic

and foreign commercial enterprises . Requests under this pro.

gram are very limited in number

and the majority relate to nonresi .

dent alien individuals and foreign

corporate matters . The types of in .

formation requested fall into three

broad categories . These are : (1)the

taxpayer's financial activities ; (2)

the taxpayer's travel and residence

activities ; and (3) U .S. tax treatment of individual or related

persons .

Under Service rules, any specific

request for information must be

concerned with a particular item of

income or expense, and with the

determination of the income tax li .

ability of only one taxpayer . It must

also indicate the reason such information is required . In addition,

the treaty country must furnish evi.

dence that the person is involved in

business or other financial transac.

tions that would subject him to the

tax laws of the country, and that

receipt of the information is pertinent and material in the determi .

nation of the tax liability.

Foreign Investment

in the United State s

Foreign investment in U .S . busi.

ness has contributed measurably

to the growth of the U .S . economy.

To stimulate such investment, and

thereby improve the U .S . balance

of payments position, Congress

passed the Foreign Investors Tax

Act of 1966 . This legislation

amended the Code to provide more

favorable tax treatment to foreign

persons, including corporations,

who derive income from U .S .

sources .

A reliable barometer of trends in

foreign investment is the statistical

data compiled by the Service reflecting the flow to foreign rect. pi .

ents of U .S . income in the nature

of dividends, interest, rents, and

royalties. From 1964 through

1968, the amount of this income

received by foreign persons in .

creased from $714 .5

m

illion to

$1,100 .7 million--a gain of more

than 54 percent.

A key tax aspect of foreign in.

vestment is the Service's system

of withholding tax due on income

paid to foreign taxpayers outside

its jurisdiction . The present withholding procedures reflect lessons

gained from years of experience .

Before the present procedures were

adopted, nonresident foreign persons filed returns and paid taxes

after the close of the taxable year,

in the same manner as U .S . citizens, As a result, the Service

experienced many collection prob .

lems in the case of taxpayers

outside of the United States who

had no assets physically located in

the United States against which the

tax could be levied,

Under the internal Revenue

Code, investment income paid to

foreign taxpayers is subject to

withholding of U .S . tax by the payer

at source, at the rate of 30 percent

of the gross amount. However,

most of our income tax treaties

reduce the tax rates applicable to

various types of investment income. In these cases, the payers

are allowed to withhold at the ap .

plicable reduced rate. To minimize

the administrative burden an with.

holding agents, tax is withheld on

the basis of the address of the

recipient of the income without

verification of the citizenship or

residence of the beneficial owner.

In a number of treaty countries,

banks and other nominees collect

and remit to the United States an

additional 15 percent when divi .

dends are received from U .S.

sources on behalf of clients who

are not residents of the treaty

country, and thus nut entitled to

the reduced withholding tax rates .

This cooperative practice assists in

eliminating abuse of treaty bene .

fits . Currently the Service is

negotiating with the German tax

authorities to develop a system of

withholding additional U .S . tax

from income flowing to German

nominee banks .

International Activities / 57
Tax Withhold from Payments to Nonresident Alien Persons of Treaty and Nontreaty Countries- Calendar Year 1968

Thanifund delta .

cmmtsy Tax withhold Tax from N .M ., . 1

information by domestic f.r.iff. Total tax d.,..,nt,

Imers . withholdin g

agents

Imn,mments, o r

withholding

withh~ld

.Santa

Total . . . . . .. . .. . .. . ... .. . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . .

TrasZowrit'll :

1,100,720 117,796 26,876 144,662 499,914

maillc----------------------------------------------------------- 2,705 366 W 366 3 7384

latri----------------- I --------- I . . . . . . . . . . . . . _- .. . .. . .. . .. . .. . .

. . 7 ---------

157 .

2,232

P Gfj i ;

17 53 2,215 197 2,412 7,609 mrx ., ~

Canada..... ...... .......... ... ..... ...... ... ..... . .. ... ... ------- 202,1194 ('~5, 615 --------- * I " -1 '01 - -------- 11_,_7__6-

1

37

21 6DG

,

Denmark . . . .. .... ------------------------------------- 9,195 167 67 1 : 446 Fi n land. __ -------- ... ... . .. ... . .. .... ..... . .. . .. ... .....

1 Fars.

1 .236 36 ---------------- 36 268 46,436 4,578 14 4,592 15.399

Gr.-- ..... . . . . . . . .. . . . . .. ... . .. . .. . .. . . __ . . . ... . .. . .. . .. . .. .

92,899

1,290

2.51 4

211

.. . . . . . . . . .

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

2,514

211

31 .664

2 328 1 land . . . .. . . . . .. . .. . .. . . .... .. . .. . .. . . _ ------------__--- --- 3,328 43

If

----------- ----- 430 ,

2 9 0

7

I

fair

; . -------------------------------------------------- * --------- -

S. 9D9 797

-----------

----

7

79 fl~:

7 90 . . . .. . .. . ... ..... . .. ... . .. ... . .. . ------------- ---

-

sea

L b

10.775

1 '1 ------------

11106 2,200 uXe taoudr, n . .. ... . .. . . . . .. . .. . .. ... . .. . .. . .. . .. . ----- -

N .th m., .. . . . . .. . .. __ . . . . . . . . . . . . . . . .. . .. . . . . . . . . . . . . . . . . . . . .

9,452

56 662

3 3 9

10 480 429 1156 6

01908

2,13 7

5 1 3 11 .1had. in Antilles. . . . . . . . . . . . . . . . . ---------------------------- -

,

35:317 2 :989 3 21892

1 : 58 , h

-Zialimd~ ----- . . . . . . . __ -------- . . . . . . . . . . . . . . . . .

. . . --------

397 57 .. ..

. ----------

57 69 7 h .rein.

P ki t ------------------------------- - -------------- ---- -

1

.7

1a ' 0 '

209

3,88 0

a s an

sw"im .---------------------------------- ---------------- . . -

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

2 3

11 1'!

22

917 --------- __ ---

2 2

917 16 13 702

S.Itziullibj

i

1 5: 54 20,025 24,637 44,662 34: 03 3 Trinidad itn

. I.th rf ~li

As -I bin S T i

23

I

1

5 so Unft. . . . . . . . . . . . . . . . . . . . . . . . . . . - --------------- -

d

K! d:d. ---------------- -

225: B393

278

26 , 1 78 ----------

26 2 7

. 441 39 961512 Unliml N. me 3

' - -------

662

.

Nonlresty countries by Forms 1042S___ ------ -

umsti~ iV W~ WiW 3 : : :

3

1

5:

1

4 15,780 15, 780

83

:366 Treaty and rontruty, countnes by coupom bond int : C r t : : : : : 12,517 753 . . . . . . . .7

53 22,249

For the most part advisory tax

administration assistance is offered

in partnership with the Agency for

International Development (AID) .

The principal focus of the technical

assistance has been on Latin America, and certain high priority coun.

tries on the rims of the Iron and

Bamboo Curtains .

Service advisors do not partici .

pate in the actual decision making

or in the operation of a host country tax administration . The pro .

gram does offer counsel, in several

forms, on how to orgam.

ze, manage

and operate tax administration

agencies.

Review Certifies

Program Quality

A full scale review and evaluation of all Treasury Department

technical assistance programs was

completed in 1969 by a three-man

panel of private experts . The panel

-

found that the Service program was

a successful technical assistance

activity, with an above-average record of producing desirable changes

in the administration of taxes in

less developed countries . In its general conclusions, the panel con.

firmed a prior approval of Service

operations in four Latin American

countries given by a 1966 review

panel . The current review also

made several valuable suggestions

for improvement of the program .

Commissioner Thrrower, Deputy

Commissioner Smith land S.,i. . Offi.lals

at a State Department meeting with

01 A.tbni. Armil-r do 01N.I. Lt..,

Sacnatalry of Fachmal Receipts for Brazil

end members of his .1taiff.

Pictured left to right are : Albert Brisbin,

D,,AntxknIo Augusta do Mesquite Note,

will lam H. Smith, DL Antonio Amll- do

Clilvehis Lima, Randolph W Dr . Thrower.

. P.d . Nonnais, d. Lim ., Harold Me .. .

Edexand F. Preston, end Edwerd Lewis .

I Amounts to unall to repor t

During calendar year 1968, a

total of $144 .7 million in tax was

withheld from income of nonresi .

dent individuals and corporations,

as shown in the following table . It

will be noted in column 3 that

$26 .9 million of this amount was

withheld by treaty countries, including $24.6 million withheld by

Switzerland .

Negotiations of

Tax Convention s

Attorneys from the Office of the

Chief Counsel, as representatives

of the Commissioner of Internal

Revenue, assisted the Treasury Department in negotiations with

Trinidad and Tobago, Norway, and

Turkey concerning bilateral income

tax conventions . Negotiations also

took place with France concerning

a bilateral estate tax convention

and a protocol to the income tax

convention which would have the

effect of extending the "avoir fiscal" to certain-U .S . residents .

An estate tax convention was

signed with the Netherlands on

July 15, 1969 . On January 9,

1970, a new income tax convention with Trinidad and Tobago was

signed, and on March 6, 1970, an

income tax convention with Fin .

land was signed .

Foreign Tax

Assistance Progra m

Gibir . . . Impuesto . . . Oara'Ib

. . . Ker . . . Imposto . . . Sekim

. . . Kedi . . . Buwis . . . Impot

. . . Vergiler . . . Thue . . . Tax.

As the Foreign Tax Assistance

Program begins its eighth year of

operations, one basic truth learned

long ago is still very much in

evidence. Regardless of the language in which it is spoken, the

word "tax" conjure's u p the same

images in the mind of the taxpayer

and raises similar administrative

problems in all countries . In developing countries, where revenue

needs are acute, these problems

assume more serious proportions

than they do elsewhere. The purpose of the Foreign Tax Assistance

Program is to assist tax administration officials of developing countries in alleviating these problems

by renovating their tax administration institutions .

Managed and coordinated by the

Foreign Tax Assistance Staff, the

program is a Service-wide effort .

Over the past 7 years, every Service function has contributed ex.

perienced manpower and training

services. Contributions come from

the regions, districts and service

centers, as well as the National

Office .

In devising the program, the staff

maintains contacts not only with

the developing countries but with

other suppliers of technical assistance, principally, the Organization

of American States, the InterAmerican Development Bank, Ihe

nternational Monetary Fund, the

United Nations, and others .

58 / Annual Report/ Chapter Five

On-Site Assistance

Contracts Slightly

Advisory teams are active in 18

foreign countries; Argentina, Bo.

livia, Brazil, Colombia, Costa Rica,

the Dominican Republic, El Salvador, Guatemala, Honduras, Korea,

Nicaragua, Panama, Paraguay,

Peru, Trinidad and Tobago, Turkey,

Uruguay, and Viet Nam. Over the

year, an average of 53 long-term

advisors staffed the teams .

40i-9(n 0-71-----b

No new long-term efforts were

undertaken this year. Teams in

Chile and the Philippines successfully completed their missions.

Short-term advice will be continued

for these two countries, as requested . Problems raised in the

Central American Common Market

by the El Salvador-Honduras con .

flict resulted in suspension of our

regional effort in AID's Regional

Office for Central America and

Panama .

Frequently, this long-term assistance is supplemental by shortterm (up to 90 days) advisory

assignments, although in some instances short-term assistance has

been offered to countries without

regular teams, Fifty-one short-term

assignments were completed in

1970, with services going to 19

countries and two international

organizations. A survey of tax administration needs was completed

for Liberia . Since 1963 there have

been 301 short-term assignments

to 32 countries and three interna .

tional organizations .

Sharp Upturn in Foreign

Visitor and

Training Activities

Several milestones with respect

to our foreign visitors and training

activity were witnessed in 1970.

First, 513 tax administration and

finance ministry officials from 67

countries and one U .S . dependency

visited the Service this year for

orientation and training in modern

tax administration management .

This is an increase of 133 percent

over 1969 . Eighty of this year's

visitors held offices equivalent to

Assistant Commissioner or above . Secondly, since the outset of the

program 2,206 officials from 97

countries and four U .S. dependen .

cies have passed through Service

offices .

The seminar scheduled by the

International Tax Administration

Training Series (INTAX) are an im .

portant aspect of this activity. Sev.

eral years ago it became evident

that we were being inundated with

visitors having the same language

and cultural background and need .

International Activities / 59
I

ing the same managerial and supervisory training . To provide an eco,

nomical and efficient means of

training groups of similarly situated people, the Service, in 1965,

initiated a set of management and

supervisory courses, offered in

English, Spanish or Portuguese.

This provided an unusual opportunity for cross-fertilization of

ideas from various countries . This

year eight management courses

were presented for 110 Participants . One, a first, was in Korean ;

the others were in Spanish or

Portuguese . Since 1965, 32 seminars have been given for 445

participants .

Mobile instruction teams providing basic audit training were

sent out this year to Colombia and

Uruguay .

60 / Annual Report / Chapter Five

CIAT Continues

To Mature

The Inter-American Center of

Tax Aaministrators (CIAT), initiated in 1967 with a strong assist

from the Foreign Tax Assistance

Program, continued to provide

evidence of its rapid maturity .

Jamaica became the 22d country

member just prior to the Fourth

General Assembly in Montevideo,

Uruguay, in May 1970 . The U .S .

Delegation to the Assembly was led

by Commissioner Thrower, who

presented a paper, entitled Regulations and Rulings : Their Contribution to Improved Tax Administration in the United States .

Throughout the past year, the Commissioner, as a member of CIAT's

Executive Council, took an active

role in the management of the

organization .

In January 1970, CIAT spon .

sored a technical seminar for man .

agers of automatic data processing

operations . Forty-four officials from

CIAT countries attended this con .

ference, held in Bogota, Colombia .

Deputy Commissioner Smith, who

is also a CIAT member, presented

the opening paper on the Internal

Organization of Automatic Data

Processing . Vito Natrella, Director

of Statistics Division, made a pres .

entation on the Tax Return as a

Statistical Document : The U .S.

Experience.

Assistance in

Non-Federal

U .S. Taxes

Most developing countries impose a greatervariety of taxes at

the national level than the United

States . Conseqbently, the program

has been providing, at an increasing rate, assistance in the admin .

istration of such taxes, principally

general sales taxes and real property taxes . Long-term advisors in

each of these areas are now overseas and, in the past 3 years, five

short-term assignments in sales

tax administration and seven as .

signments in real property tax administration have been provided .

The program recruits advisors from

State and local tax administrations .

The increasing interest in these

areas is also reflected in the foreign

visitors program . To meet the rising requests for training, contacts

were developed with a number of

State and city tax administrations

noted for excellence . As a result

of their generous assistance, high

quality orientation and training was

provided to an increased number

of visiting foreign tax officials.

Legislative and

Legal Activities

Tax Court Decides 570 Cases

Service Provides Assistance in

Drafting Revenue Legislation

Much Tax Legislation Pending

$131 Million Obtained for the

Government in Settlement or Trial

of Cases in the Tax Court

MEED~(!N?

Six
I

Introduction

The legal work of the Service is

performed in the Office of the Chief

Counsel . The Chief Counsel renders opinions to officials of the

Service on substantive legal questions . The legal staff prepares

drafts of proposed regulations

implementing tax laws and participates in the rulemaking proc .

ess . For a discussion of the regulations program see chapter 1,

page B. The office also furnishes

technical assistance to the

Treasury Department's legislative

program .

The Chief Counsel represents

the Commissioner in trying and

participating in the settlement of

cases docketed in the Tax Court

of the United States . The legal staff

also furnishes advice relating to

refund litigation, general litigation,

criminal enforcement, and alcohol,

tobacco, and firearms matters . Important court actions are included

in the appendix beginning on page

103 . Statistics on legal activities

are shown in tables 18-25 on

pages 132 and 133 . Criminal prosecution cases are shown under

chapter 3, Enforcement Activities,

page 35 .

The office also furnishes legal

advice in management support

matters and represents the Service in administrative hearings on

labor disputes, contract appeals,

and personnel appeal actions, and

the Director of Practice in disci .

plinary cases .

Civil Litigatio n

Refund Litigation Activit y

During the year 1,182 refund

litigation cases were disposed of

and 1,189 new cases were received, leaving a total of 3,421

cases pending at the end of the

year . In the previous year 1,573

cases were disposed of and 1,246

cases were received .

The Supreme Court rendered

four decisions in tax refund suits

during the year. The Government's

position was sustained in three

cases and rejected in one case. In

the previous year the Supreme

Court had also rendered decisions

in four refund suits, with the Gov.

ernment'

*

s position being sustained

in each case .

Of the 131 opinions rendered

by the Courts of Appeal the Gov.

ernment won 87 cases and lost 35

cases . Nine cases were decided

partially for the taxpayer and partially for the Government .

At the end of the year the

amount involved in pending refund

litigation cases increased to $496. 6

Results In refund suits (settlements and trials combined)

IA.. . .t, are In thousands at dollars]

million from $427 .5 million at the

start of the year. This increase resulted from the receipt of new cases

involving $155 .4 million and the

disposal of cases involving $86 .3

million . The amount of $155 .4 mil .

lion involved in new cases received

during the year-represents an in .

crease from the amount of $111 .2

involved in cases received in the

preceding year . The 1,160 refund

suits disposed during the year

gave rise to refunds of $34,094,

000, consisting of $7,850,000

refunded pursuant to Court of

Claims judgments, $4,949,000 refunded pursuant to district court

judgments, and $21,295,000 refunded as a result of settlements .

The total refund of $34,094,000

represents a recovery by the taxpayer of about 40 .4 percent of the

amount of $84,356,000 involved

in refund suits disposed of during

the year . In these refund suits, the

Government's position was successfully defended wth respect to

$50,262,000 of the amounts

claimed for refund, resulting in a

saving to the Government of this

amount . (Comparable statistics for

the past 5 fiscal years are shown in

the table below .) There were

22 erroneous refund cases disposed of during the year involving

$1,979,000, of which $185,000

was recovered .

All .fund suit, I Distric t courts Court .1 Claim s

Fiscal yes,

Number of Amount Amounts Perceal . humberat Amount Amounts Percent. 4umberof Amount Amounts Percentc . . .. dl, -

pond of

I .

dispute

saved (not

refunded)

ago not

refunded

uses di,

-

o d of

in

di t

send (net a. not uses dj'. in saved(not U . not

P se spu e refunded) refunded posed at dispute rapruded) , under!

!96 . . . . . . . . . . . . 354 $94 .067 $47,774 50 .79 205

'

'2 ,

$34,397 5z 09 149 $23,039 $13,377 47

967 . . . . . . . . . . . . . 1 292 110,958 47.613 42.91 1 176 : : 331 22.760 46 .14

0.

116 61,627 24 .853 .33

l9lik . . . . . . . . . . . . . . . 1, 296 94,607 39.856 42.1

3

11

1

71 1

19

23,562 46.47 178 43.904 16,294 37.1 1

1969 ------- ---------

1: 13 12% 059 72,670 60.53 : 39

4

:

5

97 "

" 112 "1 45 16 9 22 5 15 59 678 &9 50

1970. . . . . . . . . . . . . . . . .

.

15 94,356 50,262 59.59

1 ,

053 19,246 26:10, 53:11 07 35: 1 1 0 23 961: 67.96

I Don not include a small number of actions by the United States for recovery of erroneous refunds

Tax Court Litigation Activity

The number of Tax Court docketed cases on hand June 30, 1970,

increased from 11,048 pending on

the same date a year earlier to

11,453 . During the year 6,969

new cases were race ived and 6,564

cases were disposed of-5,343 by

stipulated agreement 763 by a de.

cision on the merits, and 458 by

dismissal .

The Supreme Court rendered one

decision in favor of the Government

involving two cases originating in

the Tax Court during the year .

Results In Tax Court cases

During 1970 the Tax Court entered 570 opinions involving 859

cases . Of the 570 opinions 327

were decided for the Government;

82 for the taxpayer and 161 partially for the Government and partially for the taxpayer . The Courts

of Appeal rendered 124 opinions

involving 200 Tax Court cases. Of

these 96 were decided for the

Government, 16 for the taxpayer

and 12 partially for the Government

and partially for the taxpayer.

During the year, in the trial or

settlement of cases in the Tax

Court the Government was sustained as to $131 million in taxes

and penalties out of $400 million

asserted against taxpayers and

saved $30 million out of the $36

million in overpayments claimed by

taxpayers . At the end of the year,

$1 .4 billion was involved in taxes

and penalties being contested in

the Tax Court . (Comparable statistics for the past 5 fiscal years

are shown in the following table .

In the trial courts (Court of

Claims, U .S . district courts, and

United States Tax Court) the record

of Government wins, losses, and

partial wins apears below .

Cases disposed of by settlement Cases disposed of by trio) 1

Total

Tota l

deficiencies

0-11 Defect "

Deficit. tax

Fi ce t

X

number and Total

=

and a d Y of cases

di d

Penaltie s

t

amount, 1 Number imnalt.., Amounts Recovery Numb .,

Pon

spose

fit,, Amounts Recovery

of

asser e d

(thousands)

recovered

(thousands)

asserted

thousands)

recovered

(thousands)

percentage asserte d

(thousands

.a, .r,d

(flumunds)

perportg.

i96 6

967 : :--- :---

6 22 7

7:24B

447 844

367:

995

$137.723

109 505

30 7 5

29:76 1: 274

$398 17 1

312 :156

$111 962

85:179

28 94

27:

711 $5 1:603 $17,901 34 .6 9 1

968 5,944 313.875 98:825 31,48 5,059 281,785 82,215

29

29 .18

659

611

47

249

29 131

15 807

13 : 859

33 4 5

47 : 5 7 1

1611- , : . . . . . .

5 83 1

:

393 699

:

1 41,

"

3 11 4 7

7'

" 93

29 '

1 1 1 114 1 , 1 783

,

19.798 22,988 38 28

9

70. 1 6 564 400 092

~

0,724

,,

32:

'

:

313 2152 :121

05: 4,7

29 .93 763 926 22,654

.

50.4 3

I Figures for settled and tried uses do not add to overall total,, vvhhh include . small number at ...dismissed .

Trial court cases, won, lost, or partially won (and partially lost) for the Government

Actio n

Won . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

.

. .

Last . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Docid"ll Partially far the taxpayer i a

partio It

tar the G_mdmmt__ . . . . . .

Court Claims

3=mn

24

q23 :~ ".

12

Diltri purt s

1 ., 1 2m

-an

To. Court

1969

. -1

Tax Court opinions Involving 730 docketa .

Tax Court opinions involving 859 dpckats .

Tax In litigation

lin thousands of dollars]

statu s

Pending

July 1 --------------- -

fignind

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

-

Disposed ii_ . . . . . . . . I . . . . . .-

P . .di June 30 ... . . . . . .. . ._

AnImm!m y .,ad ------_------- -

Annhuo r-,.,.d --- . . . . . . . . .

I

Tota l

1,805,144

689,495

1.972, 521,98 211, 6 D

59

41 5

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

Tax Court

Tax. ad over.

Penalties payment

,

1 '

324 211 53,408

464 :08 5

40D .

0923 69.988

1, 3M 256 35 55 7 3

87:943

130, 24 30,429

.

Refund fifiginflan

Refund Erroneous

suit, fund ,.. ..

425,021 2,45 15 2 0

51210 14

94 356 1 979

495: 877 ; 683

50,262 _. . . . . . .

Tort Claims

The Service acted on 166 Tort

Claims during the last year . The

Service also acted on 125 claims

under the Military Personnel and

Civil an Employees' Claims Act of

1964 . This represents an increase

of six claims under the Federal Tort

Tis Act and 46 claims under

the Military and Civilian Employees' Claims Act over the pre .

ceding year .

Revised .

62 / Annual Report / Chapter Six Legislative and Legal Activities / 63
General Litigation Legal Services

In the area of general litigation ,

case receipts increased over the

preceding year by 602 cases, i .e .,

10,803 cases were received in

1970 in comparison to 10,201 in

1969. Disposals decreased from

10,475 cases in 1969 to 10,138

in 1970 . The inventory of pending

cases at the end of the year stands

at 5,578, an increase of 665 cases

over the 4,913 cases pending at

the end of 1969. increased receipts occurred at both the National and field levels and related

to cases in litigation and non-court

cases, such as advisory opinions .

Receipts at the field level for 1970

included 5,535 cases in litigation

and 4,883 non-court cases as compared to 1969 field receipts of

5,057 cases in litigation and 4,860

non-court cases . National office receipts for the year included 159

cases in litigation and 226 noncourt cases, as compared to 1969

figures of 146 and 138, respectively . Field disposals for 1970

were 5,113 cases in litigation and

4,693 non-court cases in compari .

son to 1969 disposals of 5,236

cases in litigation and 4,928 noncourt cases . National office disposals increased over the 1969

disposals, 165 cases in litigation

and 167 non-court cases in 1970

compared to 163 cases in litigation and 148 non-court cases in

1969~. For detailed statistics on

case receipts and disposals, see

tables 22 through 25 on page 133 .

The Supreme Court decided two

cases in favor of the Government

in the general litigation area during

the year and, also, granted certiorari in one case. There were a

number of cases decided by the

courts of appeals and in four cases

petitions for writs of certiorari to

the Supreme Court have been filed

and are pending. In five cases the

Court denied certiorari . The decisions in the general litigation area

64 / Annual Report / Chapter Six

involve issues relating to the col.

lection of Federal tax claims and

liens and matters concerning in.

junctions and civil enforcement of

internal revenue summons . The

summons cases continue to represent a major area of litigation atthe

appellate level. Summaries of some

of these cases may be found starting at page 103 .

Extensive legal services were

furnished in connection with disclosure of information, including

matters arising under the Freedom

of Information Act (5 U.S .C . 552) .

General litigation supervisors and

lawyers actively participated in all

training sessions held throughout

the country in the Advanced Technical Training Program for Revenue

Officers. The general litigation law.

yers furnished substantial legal

assistance and performed many

services which did not relate to

docketed cases, such as rendering

day-to-day formal and informal ad .

vice to administrative personnel,

,visitations to service centers, district and suboffices and participation in general training programs

for collection personnel.

Revenue Legislation

Assistance Fliovide d

General

This was an exceptionally bus y

year for the Service in the area of

tax legislation. Primary concern

was directed toward theTax Reform

Act . In connection with the promul .

gation ofthisAct and other revenue

legislation, Service personnel attended public hearings and con .

gressional meetings, prepared in .

formation reports, and drafted

bills and accompanying technical

explanations.

The Service also evaluated 677

legislative suggestions made by its

employees, Congressmen and tax .

payers . With a view toward next

year's legislative proposals, the

Case Disposals by 01fice of Chief Counsel

Fft-C- .b., 0 .

10.475,

7,709

6 .121

r-i 1 _11_21P

11159 967

11573

T*W~

1969 25,946

1970 27,51 6

F-U, 181

~ 1 1 G... . I T.. Al.b.1 EM-W R.Wnd litigatin Co.rt .,d 11figu.

t.b.-h.

Service engaged in research and

study projects in such areas as

estate and gift tax, subchapter S,

foreign income through export in .

centives, and tax incentives for

small business .

Tax Legislation Enacted

The Tax Reform Bill was passed

by the House on August 7, 1969 .

After nearly 2 months of hearings

and a month in executive session

of the Finance Committee, plus 3

weeks of debate by the Senate, the

bill was passed December 11 by

the Senate. On December 30, 1969,

the Tax Reform Bill became Public

Law 91-172 .

Hailed as the most far-reaching

piece of tax legislation since the

1954 Code, the Act covers such

varied areas as repeal oftheinvestment tax credit, reduction in individual tax rates, taxation of private

foundations, decrease in the deple .

tion allowance for oil and certain

minerals, extension of the surcharge for the first 6 months of

1970, and many other broad provisions. The massive 255 page

document will play a significant

role in tax developments and the

countless hours expended by Service personnel in its preparation are

but a prelude to the work yet to be

done for its implementation.

In addition to the Tax Reform

Act, Congress enacted a number of

public laws relating to tax matters,

the most important of which are

listed and summarized below:

Public Law 91-53, enacted August 7, 1969, extended the 10 percent surcharge through December

31, 1969, and placed the payment

of FUTA (Federal Unemployment

Tax Act) taxes an a quarterly instalment basis .

Public Law 91-128, enacted November 26, 1969, extended the

interest equalization tax through

March 31, 1971 .

Public Law 91-215, enacted

March 17, 1970, amended section

3211(b) of the Internal Revenue

Code of 1959 and section 3221 of

the Railroad Retirement Tax Act to

give the Railroad Retirement Board

authority to determine the amount

of supplemental tax necessary to

finance supplemental annuities . ,

Public Law 91-235, enacted

April 24, 1970, extended tax relief

to the crew of the U.S .S . Pueblo

during imprisonment by North

Korea .

Public Law 91-258, enacted

May 21, 1970, increased the exist .

ing tax on the transportation of

persons by air and imposed new

taxes on the use of international

travel facilities, the transportation

of property by air, and the use of

certain civil aircraft .

Tax Legislation Pendin g

Among the tax bills awaiting

action by the Congress at the end

of the year were the following'.

H.R . 12923, to restrict the type

of tax exempt activities available

through use of industrial development bonds .

H .R. 15073, to prevent tax evasion and other criminal violations

shielded by deposits of money in

foreign countries .

H .R . 16506, to clarify income

tax exemption of cernetery corporations .

H .R. 17861, to extend the tax

surcharge applicable to corporations until 30 days after cessation

of military operations by the United

States in Southeast Asia .

H .R . 17984, to simplify the

Internal Revenue Code of 1954 by

repealing obsolete and rarely used

provisions .

S. 3963, to eliminate the 50 percent fraud penalty against an innocent spouse and to relieve an

innocent spouse of th: tax liability

for stolen or embezzl d funds.

S. 4039, to simplify and reform

taxation of small business. Among

other things the bill would give a

beginning business enterprise freedom from Federal taxation for its

first 5 years, provide statutory

status for depreciation guidelines,

and reinstate a limited small

business investment tax credit

of $50,000 for manufacturing

corporations .

Legislative Cooperation

The Service cooperated with the

staff of the Joint Committee on

Internal Revenue Taxation in drafting amendments to the Internal

Revenue Code designed to remove

obso'ete and little used provisions

and furnished technical assistance

to the Committee staff and to

Senate and House Legislative

Counsel in perfecting bill language

and drafting committee reports on

three bills in the alcohol, tobacco

and firearms area .

Interpretative Activities

The Interpretative Division furnished legal advice and assistance

to the Assistant Commissioner

(Technical) and to the litigation

divisions in the Office of the Chief

Counsel on many significant problems . There were a number of

interesting and important reorganization, earnings and profits, and

corporate distribution issues. Accounting problems were more

numerous during the year than in

the past. Various problems concerning natural resources as well

as problems concerning taxability

of nonprofit organizations were

considered . The estate tax area was

very active and there were a number of significant legal issues involving the manufacturers excise

tax, the tax on special fuels and

highway use taxes. As in past

years, many important and sensitive questions involving tax exempt

organizations were considered .

These included the tax status

of segregated private schools,

whether tax exempt charitable organizations interested in social reforms may properly . engage in

picketing and rent strikes to

accomplish their goals, and the

extent to which various section 501

organizations may engage in unrelated trades or businesses without

jeopardizing their exemption .

Legislative and Legal Activities / 65
I

Planning Activities New Legislation Facilitates

Taxpayer Compliance

Withholding Procedures Improved

Increased Use of Tax Models

Computerized Taxpayer

Assistance Tested

@Nalpfty

Seven

.1/
Introduction

The Internal Revenue Service

collects and accounts for more

money than any business in the

world . To accomplish this task,

efficient management must be

aided by systematic planning .

Planning occurs at every level of

an organization . Full-time profes .

sionals are needed to conduct

studies, prepare analyses, and develop forecasts . These are the

objectives of the Planning and

Analysis Division, Research Division, Statistics Division and Systems Development Division, all

under the direction of the Assistant Commissioner (Planning and

Research) .

Their work is carried out in close

collaboration with the various offi .

cials of the Service . In addition, as

requested by the Assistant Secretary of the Treasury for Tax Policy,

staff support is provided in developing and evaluating proposed

legislation . The Service played an

important role in initiating several

provisions of the Tax Reform Act

of 1969 which were designed to

minimize overwithholding of tax

from wages, and to eliminate

millions of nontaxable returns from

low-income taxpayers .

Improvements in

Withholdin g

A study completed in the early

Part of fiscal year 1970 showed

that the chief cause of overpayment of individual income taxes

was voluntary overwithholding of

tax on wages . Voluntary overwithholding was the cause of overpayment on 42 percent of the returns

covered by the study, and ac.

counted for 39 percent of the total

amount of overpayment . Itemized

deductions contributed to over

payments on 33 percent of the

68 / Annual Report / Chapter Seven

returns and accounted for 22 percent of the total overpayment . In .

termittent employment also was an

overpayment cause on 33 percent

of the returns but accounted for

only 11 percent of the total . Vol .

untary overwithholding is accomplished by filing form W-4,

Employee Withholding Exemption

Certificates, underclaiming the

number of allowable exemptions,

having additional amounts withheld, and (in the case of married

employees) using single, rather

than married status .

As a result of the overpayment

study, certain recommendations

for minimizing overwithholding of

income tax from the earnings of

employees were incorporated in

the Tax Reform Act of 1969. The

law permitting taxpayers to claim

additional withholding exemptions

because of large itemized deductions was liberalized

'

making it

easier for them to adjust their

income tax withholding to achieve

a closer balance with their expected tax liability . Employees,

such as students, who anticipate

no tax liability on their part time

employment earnings may now file

an affidavit with their employer

which will excuse them from withholding and from the necessity of

filing a tax return to obtain their

refund of withheld taxes .

Success was attained in authorizing extension of income tax

witholding, on a voluntary basis, to

annuity and pension payments . The

Tax Reform Act of 1969 requires

annuity and pension payers, at the

request of the payee, to withhold

income tax beginning January 1,

1971 . These individuals will have

the option of paying their income

tax obligations on a current basis

in lieu of filing, and making payments on estimated tax . Efforts are

also being made to effect other

improvements in withholding. A

st

udy of employer payroll systems

and practices, nearing completion,

is designed to develop basic information helpful in improving the

withholding system, and evaluating

systems or procedural changes to

assist employers, employees, and

the Service. Prelimin~y results of

this study show that the majority

of employers pay qn a weekly basis,

that this is their only payroll period,

and that they pre0are their payroll

themselves . '

Alcohol Industry Records and

Reports Studied

During 1970 a study group was

formed to cooperate with various

industry trade associations in making an in-depth study of records

and reports requirements for

bonded premises of distilled spirits

plants . The study examined the

needs of both the Service and in .

dustry with the view of devising a

modern and streamlined system

compatible with good business

practices and sound governmental

administration.

Departing from a tradition of

more than 100 years, a recommend6tion was made that the Serv .

ice discontinue basing warehouse

controls and records on the identi .

fication of each barrel of spirits

by serial number . Instead, a lot

number system would be employed

and control would be on the basis

of the number of barrels in each

lot and the average content of each

barrel in the lot . This system has

been found to be feasible, and will

simplify recordkeeping and the

physical storage and movement of

barrels in bonded storage at considerable savings to both industry

and Government . Other proposals

by the study group materially reduce the number of records and

reports required of the industry .

Legislation Facilitating

Taxpayer Complianc e

The Tax Reform Act of 1969 contained other changes easing taxpayet compliance with the income

tax return filing requirements. As a

logical development of the change

in law excusing nontaxable employees from income tax withholding, and in recognition of the new

low income allowance, increases

were made in the levels at which

individuals are requred to file a tax

return . These new levels are designed to correspond generally with

the new, higher nontaxable levels

of income, which for 1970 are

$1,700 for single persons and

$2,300 for married persons filing

jointly, plus another $600 for each

additional old-age exemption to

which these taxpayers are entitled .

An estimated 6 million persons will

take advantage of these new filing

requirements in calendar year

1970 .

The optional tax tables have

been expanded to include incomes

up to $10,000, thereby enabling

more taxpayers now taking the

standard deduction to use these

tax tables instead of undertaking

the computation of tax. When the

standard deduction is increased to

13% in 1971 (and subsequentlyto

15% in 1973), even more taxpayers, now itemizing their personal deductions, will be able to

take advantage of these optional

tax tables .

The Tax Reform Act of 1969 permits the Service to compute income tax for more individuals than

the previous law allowed. A revision

of the regulations to implement it

has been proposed .

Proposed Legislation

Proposals have been developed

recently for other changes in law

affecting taxpayer compliance. A

suggestion has been developed for

liberalizing the requirements for

filing estimated tax designed to

follow up the various legislative

changes that have occurred in income tax liability and withholding.

Another proposal, if enacted into

law, would serve as a deterrent to

nonpayment of tax . This proposal

affecting nine different sections of

the Internal Revenue Code calls for

increases in, and simplification of,

the penalties for failure to file returns or pay tax .

Developments in

Tax Administration

Other research activities in the

past fiscal year have focused on

three areas-providing assistance

to payers of annuities and pensions,

questionnaire surveys of taxpayer

reactions to certain tax returns, and

compliance studies .

Assistance was given to the Civil

Service Commission in its implementation of the new withholding

provisions for nearly I million annuitants. Special forms have been

drafted for use of annuitants and a

handbook is being prepared to

cover the rules on taxation of annuities . A series of Treasury Department meetings was held with

annuity payers on problems in com'

plying with the new withholding

requests.

Two surveys of taxpayers reactions to income tax return use are

under way. In one, individual in .

come tax return filers are being

requested to give their reactions to

the consolidation of the Form 1040

and Form 1040A

,

into one new

Form 1040 . Results of the survey

will be used in revising the tax form

for 1970. The other survey, still in

.the preliminary stage, is a factfinding study on how well the system of paying estimated individual

income tax is working .

The Information Document

Matching Program has centered on

new special surveys of taxpayer

compliance . These relate to casino

gambling payments, lottery winnings and health care payments.

Design of Advanced

Automatic Data Processing

The long-term program to develop an advanced automatic data

processing system to carry out tax

administration functions over the

next decade was continued . Detailed requirements for AOP support were developed . These are now

being analyzed, to form the basis

for development of alternative system designs . These designs will be

evaluated by an independent consultant from the standpoint of cost

and performance, using advanced

simulation techniques. The benefits

associated with the alternatives will

also be determined, so that decisions regarding the implementation of the new system including

equipment acquisition will be based

on the best available information .

The Taxpayer Compliance

Measurement Program

The Service has the responsibility to assure that programs to

which it is committed are properly

implemented to promote voluntary

compliance. It is a continuing task

to refine current efforts and shape

new programs to cope with shifting tax administration workloads .

It is vitally important to know how

tax administration has performed

in the past in order to establish

its future direction . The Taxpayer

Compliance Measurement Program

(TCMP) was established in 1962

for this purpose . It is the major

long-range scientific research program of the Service, designed to

answer the basic questions about

Service programs, namely : How

well are taxpayers voluntarily complying With the tax law and, conPlanning Activities / 69

I
versely, which segments of the taxpaying population are least compliant? By determining types and

sizes of errors, frequency of occurrence, and taxpaying groups in .

curring error, TCMP helps the

Service channel its scarce resources into programs aimed spe .

cifically at the noncompliant

taxpayer. Because TCMP is a

continuing program, the Service

has an opportunity to evaluate its

efforts at stemming noncompliance

and encouraging voluntary compliance by noting taxpayer reporting characteristics before and

after implementing now policies .

TCMP information had a myriad

of specific uses in 1970. These

ranged from answering administrative inquiries on specific compliance characteristics to forming

the total data bank for major ana .

lytical studies . One of the most

important uses was in updating

and improving the computerized

discriminant function formulae

employed to select tax returns for

audit with a high potential for tax

change. This technique is based in

part on the idea that tax error patterns in the volume of individual

returns are identifiable . TCMP

brings this idea to fruition by

identifying the return items with

which tax errors are frequently

associated.

Another important use of TCMP

data in 1970 was in a study to redefine the criteria used to classify

individual income tax returns for

audit . Classification is necessary to

reduce the audit workload into

more manageable groupings . The

data is readily processed by computer; therefore, each classification system can be tested and

ranked in terms of acceptability

until the best solution is uncovered .

The Taxpayer Compliance Measurement Program will continue in

future years to provide the Service

needed information in the four

major areas of tax enforcement.

70 / Annual Report / Chapter Seven

Planning-ProgrammingBudgeting System

Continues Analyses of

Major Service Program s

The Service continued to conduct a number of major analytical

studies as part of its Planning .

Programming-Budgeting System

(PPBS) in order to develop the

most effective programs to meet

Service objectives. Alternatives are

~eing evaluated by comparing their

relative benefits and costs. Among

the most significant current PPBS

special studies are:

1 . An evaluation of alternative

methods for achieving the objectives of the delinquent accounts

and returns programs.

2 . In-depth cost-benefit analyses to determine alternative ways

of correcting more tax returns with

small manpower increases. Alternatives are being evaluated to correct statutorily unallowable items

identified on individual returns

during regular code and edit

processing.

3 . A special study of the taxpayer assistance and services

program to re-examine overall ob.

jectives in the areas of ru lings and

interpretations, forms and publi .

cations, printing and distribution

of tax forms, and taxpayer

education .

4 . A study of compliance characteristics in employment tax

accounting and withholding .

5 . A study of Service organiza .

tion to analyze and evaluate the

long-range effectiveness of Service

structure .

6 . A field evaluation of Centralized Telephone Taxpayer Service

(Centiphone) . This study was designed to test the cost and efficiency of Centiphone on taxpayer

service. In test districts, Centiphone enables taxpayers from

every area within the district to call

district headquarters without a

toll charge.

7. A major study is being undertaken, with Treasury participation,

to look at alternate audit strategies.

Methods and procedures to in .

crease the effectiveness of audit

resources will be sought by this

investigation .

Computerized Taxpayer

Assistance

Integrated Data Retrieval

System (IDRS )

The Service continued a suc .

cessful test in the Southwest Re .

gion of a system designed to

provide immediate availability of

information needed to respond to

taxpayer requests concerning their

returns or account status . An important aspect of the system is

elimination of traditional paper .

work by using electronic computers

to store and retrieve data. The end

product is the same but taxpayer

service is dramatically improved .

The system uses random access

computer files in a central loration connected to video-display

inquiry stations in field offices to

provide immediate availability nr

data . Ultimately, a taxpayer will hp

able to visit a field office, question

the status of his account and receive an answer within minutes by

video-display. The source of the

data will be located many miles

from the district office . The system

includes provisions for prompt retrieval of information from returns

which have been placed in storage .

It will be possible to get a written

response to an inquiry on the date

of receipt. This new technology will

ultimately enable the Service to

make immediate adjustments to all

types of taxpayer master file

accounts .

Proposals for supplying neces .

sary equipment for permanent installation of the system in the

Southwest Region and all other

regions are under consideration .

Current plans call for complete installation of the new system in the

Southwest Region in 1971 and in

remaining regions as soon as possible thereafter.

Service Planning Starts with

Projection of Workload Items

One of the first steps in the development of the Service's plans

for budget, allocation of manpower,

and facilities is the projection of

the major returns to be filed in

future years . These estimates are

projected in substantial detail so

that the most efficient use of all resources may be made .

The number of returns to be filed

is expected to decline .in calendar

years 1971 and 1972 . This is due

principally to the Tax Reform Act

of 1969, which eliminated the requirement for about 6 million individual taxpayers to file . By 1973,

the natural increase will have compensated for this drop and the

number of tax returns is expected

to continue growing through the

decade of the 1970's .

Although the number of returns

will decrease temporarily, the trend

toward more complex returns will

continue . For example, individual

returns with incomes over $10,000

will probably double by 1980, while

those with income under $10,000

are expected to decline 11 .6 million returns, or 21 percent . A similet*, although less spectacular,

trend is expected in corporation returns where smaller corporations

with assets under $50,000 will increase by 185,000 returns, 28 percent, while those with assets between $50,000 and $100,000 will

rise by 269,000 returns, 37 percent .

The total returns workload is expected to grow from 94 .5 million in

1960 to 113 .2 million in 1970, and

is expected to reach 117.9 million

in 1975, and 130 .6 million in 1980 .

Projections of some

of

the major

categoriesof returns areas follows:

Selected Types of Returns Filed In 1969 and 1970 and Projected for 1975 and

1980, by Calendar Yea r

11 n thnaumd,l

Type at Retu as Actual , Edionte,

Cinul

a

1969 wo 1975 1980

ut,

1970 a

I

Total Mum, . . . .. . .. .. . . . . ----------- IID,9D5 IL%nl 117.931 130,565 15 .3

Individual, . . . ... .... 75, D82 -77,219 70 .673 87,681

AGI under $10,00) 1 ----------- _ 56 .029 55,101 44,997 43.456 -21. 1

AGI U0,I)DO and ever.

. . . -------- 19 .053 22. 1111 33,676 44 .225 100 .0

Corporation, total

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

1 .696 LTC) 2,055 2,427 39 . 5

forms 1120 and 1120 special,

total. . . . . _._ ------- ----- 1,460 Las 1,712 1 .995 34 . 3

Assets under $50.000 -. . . .... 636 734 837 28. 4

Assets 350 ' 000 unit, ,

"' DOMINO. ~........ -----

Assets $ 000,DDO or hnore ._

724

100

7M

101

85

1253

1,002

156

36. 7

54 . 5

Farm, 1120-S and I IZ2. . . . .... 236 254 343 432 71. 1

=.nt . . . ..... ... ... . ...... ... 22 . 109 ZLO74 24.364 M 1 48

1 0

9

it

2

75 239 372

4 62 5 9 :9

L ;T, .p,t .,unuaa

s accup.ti'" a ---------------- -

...

381

994

417

08

51 3

1,024

61 0

1 .053

46, 3

.u.. 5 . 5

E - ------ :

others -.... ......

622

9,746

753

S."411

532

10,398

464

11 .720

-38 . 4

19 . 5

Data by size class ate estimated.

Based an most recent reports of returns filedarnalmler aliear estimated.

Includes .9 ..td eft.ts of the Tea Rotor. t .11969 .. a- 1040 beginning with return, filed in

1971 and the Employment Security Amendments of 1970 which affect Form 940 retuns filed beginning In

1972 .

~. additionto Forms 1114D.nd ID40A . Includes Form, 1040C, hit. PR, ndSS .

, Iocludn form 1120 with assets not torNted .

nclind. Far.. ID40ES 1065, ID41 . 7 , 2438 ..it 1042.

Taxpayers Report New

Highs in Individual and

Business Income for 196 8

Preliminary estimates for 1968,

produced in the annual Statistics of

Income showed substantial gains in

personal income and business receipts reported on returns filed in

1969 .

Individual taxpayers reported

adjusted gross income in excess of

$554 billion (up 10 percent), which

resulted in taxable income of $352

billion after allowing for personal

exemptions and deductions.

In the business sector, almost

$1 .7 trillion in business receipts

(up 11 percent) were recorded by

corporate and noncorporate enti.

ties . Corporations accounted for

$1 .4 trillion and showed net in .

come of $85 billion . Partnerships

had net profit of more than $11 bil .

lion on business receipts of $81

billion . Receipts of sole proprietors

exceeded $222 billion and net profit reached almost $32 billion.

The table and chart which ac.

company this section focus on the

recent large increases in deductions

itemized on individual income tax

returns. In the 5-year period 1964-

1968, deductions for State and

local income taxes, real estate

taxes, and home mortgage interest

have risen by 127 percent, 55 per.

cent, and almost 54 percent, respectively. Over the longer period

1958-1968, the total amount of

taxes deducted has more than

tripled and interest paid deducted

has almost tripled .

A I ist of Statistics of Income publications released in the past year

appears on page 106 .

Planning Activities / 71
individual Income tax returns: Number of returns, personal deductions and exemption s

11'.

All individual retuins. . . . . . . . . . . . . . . . . . . . . . . . _ . . . . . ___

Standard deduction turn, I . . ... .... ...... ... . . . .. . .

hamized deduction rstums_. .__

Number of ...Ptl... . . . . . . . . . . . . . . . . . . . . . . . . . ... . .. . .. ... . .. ... . .. ...

Tout personal deductions and examptlom;. . . . ------- . . . . . . . .

Announj Aumme and, d o~ scarnp ;lon,;,~,,i ;~_

. -------------------------------------------

Amount of Itemized deductions -------------------------------------------- . .. . ... .. . . ------_----------------

lt.mi . .d did .lUcims by type :

Taoin . total. . . . . . . . . . . . . . . .

Rai instin' I

State and 1-1. . .. . . Out., locorn"117

uses . ~ . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . _ . . . . . . .

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

Intisnot Paid, total. .. ... . .. . .. . .. . . . . . . .

Home in, . . inl. ... I . . ... ....

Id .. . .. ... . .. ........

Contribullons .. ._. . . . . . . . . . . . . . . . . . .. . ...... ... ..

Medical and dental expenses

Other dd.,Unn, . . . . . . . . . . . . . . . . . . . . . . . .I . . ----------------------------- . . . . . . . . . . . . . . . . . - ----- .. . I

I Includes riturns Ith . adjusted gross Income.

The Tax Models in 1970

Originally developed 7 years ago

to meet the Treasury's need for

timely estimates of the revenue ef.

fect of proposed tax legislation, the

individual and corporation tax

models have proved to be valuable

tools for economic planning .

These models use generalized

computer programs in conjunction

with specially prepared magnetic

tape files containing randomly selected samples of taxpayer records .

The models are capable of measur .

ing the effects of tax law changes

and projecting the results to represent the entire taxpayer population .

During consideration of the Tax

Reform Act of 1969, the 1967 in.

dividual tax model was used to project and forecast the effect of many

provisions of that law . Tax model

tabulations provided data on the

classes of taxpayers affected, the

revenue effect, and the workload

requirements of the Service .

72 / Annual Report / Chapter Seven

1964

In .. . year,

1965 _L:~~W

65,376 67,596

(Thousands)

38,466 1 39,8724

26,910

2

7, 72

70, IA D 71,6~

41,600

28.560

187,253 1 190,741 114.11

(Million dollars)

179,342 1 195 .101 113.11

112.352

20.158

46 .832

114,445

20,618

50,739

116 977

2154:820 .

566

14,071 17,469

61 D50

2,962

5,158

12,457

7,316

4,065

61 MG

14,97 1

6 391

6 : 066

' 327

4,7 : 095

882

8,142

6 .830

41 .877

29,774

198, am

200,548

118,822

22,103

59,623

Not

tabulated

7:61'

5, 61.21

Percent Change in Deductions Itemized

on Federal Individual Income Tax

Returns (1958-1968)

pe

1962 1964

lamorn. your

196 8

NOTM (1)

Revenue Act

(Inurissfi thl* period, there

of Ware major changes In the tax leave especially the 1 64, Which siff-Ahod the an,mearmt of dandficti...

of deductions am tabulated reported. (2) Data an types only for annin-numberad years.

73,729

'28

201,288

212,02 4

120 773

22; 074

69,177

24,360

322

68,:499

481

18.54 5

9,822

8,72 3

131

4

.,

6,647

This year increased use was

made of the tax models by various

branches of the Service . With the

passage of the Tax Reform Act of

1969, the Service realized a need

for estimates of total returns to be

filed as well as num bar of returns

with balance due or refunds . Such

forecasts help in determining workload requirements, and in evaluat .

ing possible problems . Other uses

of tax models included : (1) operating ratios relative to specific industry groups to assist revenue agents

and tax auditors in screening and

examining business returns ; and

(2) a review of returns showing refunds to determine the adequacy of

the withholding tables.

The 1968 tax models, now in

preparation will more effectively

utilize computer capacity and require little or no special preparation

of the data files before use .

Maximizing Federal and

State Tax Administration

Through Cooperation

The Federal and State governments share the objective of obtaining maximum compliance with their

tax laws with the least cost and inconvenience to the taxpayers .

One of the important contributions toward this end is being

achieved with increasing benefits

through direct cooperation between

governmental agencies . Since there

is no formal statistical reporting

system, these benefits cannot be

measured with precision. However,

an indication can be obtained from

incomplete data from 24 States .

During the 18-month period

from January 1968 through June

1969, these States estimated that

$43 million in additional assessments were attributable to information received from the Service .

Eleven States reported the addition

of approximately 31,000 nonfilers

to the tax rolls-due primarily to

the use of data in tape form from

the Service's individual master file.

An even more fundamental benefit of the cooperative program is

the elimination of costly duplication in the detection of nonfilers,

the audit of erroneous returns, the

location of delinquent taxpayers,

and similar activities . This contributes to the efficiency of both Fed .

eral and State governments and

saves taxpayers from the inconvenience of separate axe

m

inations

by the two governmental levels.

The principal forms of cooperation are .

1 . Formal agreements

2 . Exchange of computer tapes ;

3 . Cooperative audits ; an d

4. Training and statistical assistance .

Increase in Formal Agreements

A general benchmark of the cooperative program is the number of

agreements on coordination of tax

administration concluded with the

States . The map on page 75 indicates the 45 States and the District

of Columbia with whom the-Service

had agreements in force at the end

6f the fiscal year-the State of

Rhode Island having been added

to the list this year.

Over the years the program has

been extended beyond the original

arrangements for the physical inspection of returns and the manual

exchange of audit information. To

reflect this broader scope and the

application of computer technology

to tax administration, a model

agreement has been prepared for

use as a guide in revising existing

agreements or the drafting of new

ones. This model agreement provides for optimum cooperation between the Service and the States in

such activities as audits, training

of personnel, taxpayer assistance

service, statistical services, and

ot her methods and processes to

improve tax administration . Pre .

cautions to avoid unauthorized disclosure of tax return information

are contained in the model draft.

The agreement signed with

Rhode Island this year conforms to

the model . Existing agreements

with Idaho, Illinois, Minnesota,

Missouri, and Wisconsin were revised to reflect the wider scope of

cooperative activities. As the States

are able to expand the scope of

their cooperative activities, addi.

tional revisions will be made to

existing agreements .

Computerized Cooperation

To cope with the ever-rising

volume of tax returns and other

documents, nearly all tax administrators have turned to the use of

computers . Their use in the exchange of tax return information

under the Federal-State Cooperative Program has proved to be one

of the most effective tools at the

tax administrator's disposal . To

assist in developing mutually

helpful tax exchange programs, a

survey of computers used by the

States was made . The tax departments of all States and the District

of Columbia reported that they now

use computers to process returns .

All but one store data on magnetic

tape . This survey indicates that in

the near future the bulk of tax

information exchanged between

the Service and the States will be

handled by computers .

One of the most impressive developments in the program has

been the furnishing of selected

standard data elements from the

Service's individual master file to

State tax administrators . Thlity

States and the District of Columbia received such data from 1968

tax year returns. Since its inception in 1967, the number of Federal

returns involved in, this IMF tape

program has included almost 60

percent of the total number filed

with the Service.

Planning Activities / 73
Cooperative Audits

One of the expanding cooperative activities which has proved

beneficial for both the Service and

the participating States is the cooperative audit program, in operation in six States. Under this

program, the cooperating State devotes a significant portion of its

audit activity to performing audits

of the State returns of taxpayers

whose Federal returns cannot be

audited by the Service because of

limited audit resources . The results

of a State audit are used by the

Service in making additional

assessments on Federal returns ;

audit results of the Service are

similarly transmitted to the States

for their use in adjusting assessments on State returns . Thus, both

Federal and State revenues benefit .

Since this program provides an

economical and effective means for

both the State and Federal Government to increase audit coverage

and minimize duplicate audits, the

Service is taking positive action to

extend it to all States where such

a program is feasible .

Automated Certification of Credit

for State Unemployment Tax

Contributions

Developmental work is under

way on a computerized system for

certification by State unemployment insurance agencies of the

credit which employers claim on

their Federal unemployment ta x

Number of Individual Income Tax Returns from which

Selected Information was Furnished to States in Tape Form

(for Tax,Years 1966, 1967, and 1968)

Numbef to States (in millions )

Total rtums filed (in millions)

T

70.2 71 .7

39 .9

57%

196G

39. 4

55%

1967

43. 6

59%

,968

73 .7

returns for contributions paid

under State unemployment tax

laws. The new system will effect

substantial cost savings over the

existing manual procedure under

which about 1 .6 million return

schedules are shipoed annually to

State agencies fol- verification and

then shipped -back to Internal Revenue Service Centers for manual

recomputation of any Federal tax

adjustment. Under the computerized system, the Service will exchange sets of data elements on

tape with the States. These tape

listings will permit the Service to

compute automatically any Federal

tax adjustment resulting from an in .

correct credit claimed by an em .

ployer .

Training and Statistical Assistance

During the year, 61 tax official s

from 26 States, the District of Columbia, and Puerto Rico attended

training classes conducted by the

Service. Training materials, including correspondence courses and

classroom kits and instructors'

manuals, were furnished seven

States . Special statistical studies

also are furnished to the States

within the limits of available facilities.

Federal-State Tax Coordination Agreements

and Income Tax Tape Exchange

I

74 / Annual Report / Chapter Seven 4M-961 o - 71 - 6
Management Activities Personnel Policies Prove

Successful

ADP Redeployment Program

Completed

Utilization of the Handicapped and

Blind Continued

Training Fitted to Needs of the

Service

Internal Operations Monitored
Financial Management

Meets Budgetary

Challenges

Financial resources were

strained in fiscal year 1970 . Funds

planned for specific programs had

to be used for unanticipated cost

increases of the mandatory variety,

i .e ., printing, telecommunications,

travel per them rate, employers retirement contribution . To meet

these requirements the Service was

forced to severely restrict purchas .

ing, training and travel . Recruitment was restricted by overall Gov .

ernment limitations during the last

half of the fiscal year . The ceiling

for permanent employment was

61,442 and June 30 employment

was 152 under the ceiling . The restrictions seriously jeopardized the

Service's abilityto fulfill its mission

and resulted in the loss of revenue

from principal compliance programs .

Careful management enabled the

Service to conduct operations without overexpending . $879 .1 million

of the total authorization of $881 .4

million was obligated as ofJune 30.

Of the $2 .3 million unobligated balance, $1 .5 million was reserved to

offset pay act increases . With this

amount excluded, the Service was

brought within one-tenth of 1 percent of employing all money available.

For more detail by appropriation,

by activity and also obligations

by districts, regions, and National

Office, see tables 26 and 27 on

pages 135 and 136 .

Service Exceeds Savings

Goal by $1 .7 Millio n

The Service established a savings goal of $15 million for fiscal

year 1970. The savings realized-

$16,736,000-is within $50,000

of the record high savings reported in 1968 . Over $11 million

in savings will accrue in 1971 and

1972 from cost reduction and

management improvements imple .

mented in 1970 .

Man-years authorized and realized

Appropriation

Authorized

1969 am

ealized

11=1

IL-L a m

Salaries and expresses- ' 1 , g =

f

". I -- a

Revenue .-Ming 9m :

0

- - -- I re a

coroplumc... . . . . . . . . . . .

.

. .

. ---- 42.407 u .M

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

. . . . . . . .

. . .. .

66,872 a M

Increase 1970. over 1969 ---------------- -

. .

------ +2 ;m

Of the total savings realized,

$6 .3 million is attributable to 14

Service-wide projects, many of

which are described elsewhere in

this report; $4 .4 million accrued

from continuing management programs such as reports and records; and $6 million from miscellaneous improvements implemented throughout the Service .

The Incentive Awards program

was responsible for approximately

$1 .2 million in tangible savings .

Adopted employee suggestions

numbered 1,200 and 320 specia l

achievement award s were granted .

The sixth annual Treasury Awards

Ceremony recognized 41 Service

employees.

Successful Recruitment Efforts

Despite hiring restrictions, fiscal year 1970 was a successful recruitment year in terms of the

Service's ability to attract quality

recruits . Recruiters exceeded expectations in filling positions authorized after the close of the

1968-69 school year . A significant element in the successful hiring effort was advertising placed

in newspapers and professional

journals.

Hiring in Alcohol, Tobacco and

Firearms and Intelligence Activities

reached an all time high . Recruits

were needed to replace investigators selected for the Organized

Crime Drive Program and to meet

the workload resulting from firearms legislation.

A critical shortage of account .

ants was encountered in filling

Revenue Agent, Internal Auditor,

and Special Agent positions in New

York City . Competitors were generally offering higher salaries for

their service . To alleviate the situation, the Service requested higher

entrance salaries for these positions. The U .S. Civil Service Commission approved special New

York City salary rates.

Assessment Center Experiment

The initial results of the Service's experiment with the Assessment Center technique proved encouraging . This advanced selection

technique was adopted from a Bell

Telephone System prototype application . It provides an objective look

at candidates for supervisory posltions during a 2-day series of simulated work situations, group exercises, and interviews. The Assessment Center proved to be a valuable adjunct to traditional methods

of evaluation and selection of personnel, and was used in selecting

the 1970 Executive Development

Program participants.

Completion of

Revenue Officer

Occupational Study

An intensive study of the revenue officer occupation was completed in January . The study, which

began in 1967, covered all major

aspects of field collection work :

the appropriate division of work

between office and field branches ;

g

rade level of work; and the ex-

'perience and education needed to

perform the work. A close examinati on was made of hazards in the

revenue officer occupation, the

reasons for separations, and the

career opportunities for revenue

officers .

Personnel Summary

Location and type

Service, total . ... . . . . . . . . . . . . . . . . . . . .. . .. . . . . .. . .. . .

P irmament. . . . . . . . . . . . . . . . . . . . . .. . . .

Temporary ---------------------------- :,-, :... .

National Office . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . .. . .

Field urvice, total ------------------- --------- ----

Data processing, total ------------------- __ . . . .

Collection, total --------------------------------

R venue officers an ----- . . . . . . . . . . . . . . . . . . . . . . .

Other. . . ---------------------------------

Audit . total------------------------------------

Revenue agent,. . . . . -------------------_

Offi-ii,ill.-nd to. technicians . . . . . . . . . . . .

Other I .. . . . . ... .. . .. . . . . . . . . . . . . . . . ------

Intelligence, total_ . .. . . . . .. . . . . . . . . . . . . . . . . . . .

Special agent, . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Other . . ... . . .. .. .. . . . . . . . . . . . . . . . . . . . . . . . .

Alcohol and tobacco tax, total --------------------

!~.,~Plafig.hrs . ... . . . .. . .. . . . . .. . . . . . . . . . . -

'rapect-g...'al---- -------------

OOnpect. .c.-m Plan' irs,- ----------------

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

Appellate, total_ . . . . . . _. . .. .. .. . ... .. . . . . .. .

A gall to of.. . as -------------------------

A.' ltris . .. . . . . . . . . . . . . . . . . . . . . . . .. . .. . . .__

Other . . -----------------------------------

Administration, district office ------

Administration, regional theadquarters .11.. .. . . . . . . . .

nelf onV counsel R I . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . .

egio inspection . ----------------------- __

fil-fmas-lind

1969

66 .064

562 578 : 50Z

3 .gs2

62,20 2

21,50 3

10,08 1

5 .945 4, 23G

20,248

12,767 2,869 4,612

2,293

-I, sso 609

2,639

1,045 399 409 786

1 .52 2

6 6

14 6

70 7

1 .689104

759 663

=

".M

7.72' s 14'gro

U.M

4rd"

I 6=

,-

12 ;113 0

I .M" a

2,1511

39;

eads

"a

I ;m

as i, 64 7 .

--- 85 7

't- M

732

.-M

Number a . mile at clos, .1 Year

1969

64,50 7

57,742 6 .76 5

3,793

60,714

19,60 3

10,105

5,853

4,252

20,496

12,531

51:701,1

2,310

1,673 637

2,712

1,090 389 395 838

l, s w

33 1'692 3

769

669

41~25.

. .m

. ..7

",an

U.60

G. M

1.15`1

a "

3 .M

1 ;242

-3s,

-

222

1 .470

an

Us

7111

1,M872

'?12 717

32.1,12

-2-

I Includes terminal leave man-years for entire Service .

includes Office of international Operations National computer Center and IRS Data Cent ., .

includes cry mplay. .. hired locally i2 in 1970 and 3 in 1969).

Several significant developments

resulted from this study . For ex.

ample, a new semi-technical occu .

pation of revenue representative is

being established and persons in

this occupation will perform a large

portion of the lower-graded work

now assigned to revenue officers.

Another product of the study was

a set of recommendations to the

Civil Service Commission for revision of the general and special

experience requirements in the

revenue officer qualification standards. The study revealed a changing emphasis towards highergraded work . A number of new GS11 and GS-12 revenue officer positions have been created in recognition of this change .

A major product of this study

was a profile of the types of indi.

viduals who tend to meike good

revenue officers and who remain

with the Service. Guidance will be

given to recruiters on potential recruitment sources for these individuals. Finally an awareness was

gained for expanding revenue officer career opportunities . An effort

in this direction will soon begin .

Increase in Cooperative

Work-Study

Participation Continues

Participation in the Cooperative

Work-Study Program for college

students majoring in accounting

reached a new peak during calendar year 1969 when 388 student

trainees served under the program .

The Service negotiated cooperative

work-study agreements with 80

schools, bringing total agreements

to 210 . This prograr; enables the

Service to interest high quality stu .

dents in tax work while they are

completing their accounting study.

Last year the Service retained 74

percent of the students in the pro .

gram as full time employees . Par.

ticular efforts are being made to

enlist minority schools in this

program .

Job Enrichment

Experiment Complete d

The Service completed an experimental application of Mr . Frederick

Herzberg's job enrichment motivational theory. In brief, the theory

states that once "hygiene" factors,

such as pay and working condi.

tions, are taken care of, real motivation comes from the content of

the work itself. A selected group

of tax-examiner positions in the De .

ttroit Data Center were subjected to

his experiment . Over a 6-month

period several changes were made

in the way the jobs of the selected

participants were done. The

changes were intended to make

jobs more meaningful and satisfying to the employees .

Results of the experiment will be

reviewed to determine the extent

changes affected productivity and

.

perceived job satisfaction . Follow.

ing analysis of data, decisions will

be made as to how job enrichment

principles can be further applied.

Restructuring the Inspector

Occupation in

Alcohol Activities

After a comprehensive study, the

Service decided to restructure the

work of Inspectors (General) and

Inspectors (On-Premises) to in.

crease operational efficiency . This

restructuring is based on three

principal ideas . First, low level custodial duties in the current In.

Spector (On-Premises) job will be

brought together in a new position

entitled Plant Officer . Second, audit

and inspection duties inherent in

Inspector (On-Premises) and In .

78 / Annual Report /

Chapter Eight Management Activities / 79
Spector (General) positions will be

combined into one job . Finally, a

new position, operations Analyst,

will be created to encompass only

the most difficult inspection work.

Restructuring is designed to recog,

nize the increased complexity Of

certain inspections, new program

emphasis, and additional duties

and responsibilities which have

arisen over the last decade .

Service Successfully Completes

ADP Redeployment Program

In March 1959, the Service be.

gan a conversion from manual to

automatic processing of tax returns . This decision committed the

Service to staffing and training

service center organizations totaling 14,000 permanent employees,

primarily in job categories practically unknown to the Service . It required the phaseout of work in the

district offices affecting approximately 12,000 permanent em.

ployees in the returns processing

and accounting function . The Service decided to avoid layoffs and de .

veloped a program with the primary goal of minimizing hardships

to employees working in the affected functions .

To accomplish the objective, the

Service planned and developed a

"Redeployment Program ." This included reassignments within a dis.

trict office or to a service center,

transfer to other Federal agencies,

retirements, resignations to accept

suitable employment outside the

Federal Service, and in short, any

voluntary solution to the placement

problem caused by the conversion

to ADP. To assist the program,

numerous special placement authorities were negotiated with the

Civil Service Commission .

Of 12,000 permanent em .

ployees 11,000 were redeployed

with no adverse actions or involun .

tary transfers. The work involving

public assistance and information

duties performed by the manual

processing work force remained in

the districts and provided positions

forthe remaining 1,000employees .

Much of the success of the program must be attributed to the em .

ployees aftected, because of their

excellent cooperation throughout

the conversion.

Labor-Management Relation s

The year's most significant event

in the area of labor-management

relations came when President

Nixon issued Executive Order

11491 in October 1969 . A key fea .

ture of the Executive Order is the

application of the third-party concept to unit and election questions,

and to disputes between management and labor organizations.

The Service was highly organized

before the new Executive Order was

issued . More than 47,000 of its total 66,630 employees are in exclu .

sively represented units .

The trend toward formalizing the

labor-management relationship

with written agreements has continued . Almost 19,000 employees

(some 40 percent of those organized) are now covered by negotiated agreements . Negotiations cov .

ering 5,300 employees were in

progress, or about to begin at the

end of the year.

The Service responsetothis high

level of activity has been to expand

the training given personnel specialist, management negotiators,

and others concerned with the program . Increased technical assistance on labor relations matters has

also been made available to field

offices.

Service Commended

for Utilizing Handicapped

There is no need to embellish

the words of Civil Service Commission Chairman Robert E. Hampton, written in April to the Service

about its program to employ the

handicapped . He referred to " . . .

the fine job the Internal Revenue

Service has been doing in supporting Executive Branch policy

for employment of the handicapped ." He also indicated that the

Commission had been especially

impressed with the Service's "efforts to employ those whose amployment opportunities are most

often drastically restricted by lack

of employer understanding of their

work potential-the blind, the

deaf, the mentally retarded and

the mentally restofed ."

Mr. Hampton praised the Detro it Data Center 'to r the deaf it

has employed as card punch Op .

er tors. Special mention was made

of the record established over the

years by the Southwest Service

Center in Austin in hiring the deaf,

persons with other severe physical

impairments, and the mentally retarded . The Southwest Service

Center had been previously recognized by the Commission and the

President's Committee on Employment of the Handicapped . Mr.

Hampton also paid tribute to the

effort made by the North-Atlantic

Service Center, in cooperation with

the Veterans Administration Hospital, Bedford, Mass ., in providing

counseling, training, work experience and employment for mentally

restored patients .

Chairman Hampton also made

special note of the cooperative arrangement with the Arkansas Enterprises for the Blind, therein

carefully selected blind candidates

for professional employment are

trained and successfully employed

as Taxpayer Service Representatives . This program received national attention during last year's

Conference on Employment of the

Blind, sponsored by the Civil Service Commission, the Department

of Health, Education, and Welfare,

and other agencies . Ten students

entered a new class in June at Lit .

tle Rock where Taxpayer Service

Representatives are trained . At

year's end, 40 successful blind

Taxpayer Service Representatives

were at work in 26 States, furthering the Service's 3-year goal

of hiring at least one blind Taxpayer Service Representative in

every major office.

Kathy Sanders Is a highly efficient

taxpayer -sister. Blind since birth, she

was train d by the Little Rmk. Ark.

Enterpris: . for the Blind. She uses a

braille slate and stylus for taking down

questions to be answered and an abacus

for her computation .

Equal Opportunity

Developments

Recruiting, training, upgrading,

and assistance activities are components of the Service's Equal

Employment Opportunity Program .

The development of the Coun .

selor Program has done much to

reduce disharmony. The job of an

Equal Employment Opportunity

counselor is to establish an open

and sympathetic channel through

which employees may raise questions, discuss grievances, find answers and (on an informal basis)

get resolutions of problems con .

nected with equal employment op .

portunity. A counselor serves as

a bridge between employees and

management . Before any complaints can be filed, a counselor

must be consulted . A counselor

cannot delay a complaint since he

must act within 15 days . After implementation of this procedure, the

number of formal COTp I aints of

discrimination dropped markedly .

Another new development Ahat

is expected to have Service-wide

impact took place in June when

Mrs . Barbara Vatran Thompson

was appointed as the first Service .

wide coordinator for the Federal

Women's Program . Mrs. Thompson will also serve on the Treasury's committee dealing with the

special concerns of women .

The Southwest Region conducted a series of seminars for examination of relationships between

ethnic groups . Participants have

been extremely enthusiastic about

the seminars, and attest that the

openness and candor developed

during the discussions gave them

a new perspective on relationships

between ethnic groups . Participa-

.tion in the seminar was voluntary

and involved Blacks, Indians, Mexican-Americans, and whites . Super.

visor participation added another

dimension dealing with the impact

of supervisory attitudes and behavior on relationships between

ethnic groups .

Assistance in Communities

A new free school for ethnic

group students desiring tutoring in

basic English and typing received

assistance from the Service in

Santa Ana, Calif. The school had 46

pupils-the oldest 50 and the

youngest 13 years of age . The plan

features voluntary tutors, mostly

from the Service, and is sanctioned

under an Executive Order. The tutoring makes participants more

employable; gives them confidence,

and makes them aware that the

Service is truly an "equal oppor .

tunity employer".

The Service worked with fair

housing organizations in Philadelphia, in neighboring communities,

and with the city transit company

to increase housing opportunities

for minority employees and to secure extension of the city's transit

routes at the time of relocation of

the Mid-Atlantic Service Center.

Upward Mobility-a Reality

. The Service's Statistics Division

has a career program designed to

give lower grade clerical employees

the opportunity to advance in the

statistical field . Trainee positions

were established at lower grade

levels, allowing the Service to hire

inexperienced employees whocould

be trained to qualify for higher

grade positions . This created a ca .

reer ladder of grades beginning at

GS-2, with grade levels up through

grade 9 . The establishment of lower

grade statistical clerks opened the

opportunity for file clerks to be reassigned to statistical work . Of the

19 employees enrolled at the

trainee level, one has progressed to

a supervisory position and all have

been promoted to higher grades.

An interesting and timely project

sponsored by the Service gave

young male students in the District

of Columbia a chance to observe

successful men (representing minority groups) at work. Each youth

spent a day with a Service em .

ployee who shared his regular daily

work activities with the student .

Such programs help interested

young men become familiar with

the world of work and recognize the

need to stay in school to achieve

success .

Commissioner States

Training Guidelines

Three broad guidelines were set

for the Service's training effort for

fiscal year 1970 :

1 . Implement new and broader

recruitment and training efforts in

a tight labor market, to attract and

prepare capable employees.

2 . Encourage incumbent em .

ployees to gain better skills for ad .

vancement to higher technical and

supervisory positions.

3 . Recognize and meet the chal .

lenges and crises of a changing

society .

80 Annual Report /Chapter Eight Management Activities / 81
Recruitment and Training

of New EmployeesContacts with Educators

A series of seminars for college

and university professors of accounting and taxation helped open

communication between the Serv .

ice and the academic community.

Valuable contacts were made by

employing professors during leave

from their academic duties . These

individuals worked in the field of

their academic specialty to apply expertise to various problems

in training and utilization of

employees .

Skills Development

opportunitie s

In a cooperative program with

the Labor Department, the Service

is providing opportunities for disadvantaged citizens to learn mar.

.ketable skills. Those who success .

fully complete training programs

are guaranteed employment and

the chance for self-betterment . Tar.

get positions for which' *specific

training was given include : Data

Transcriber, Tax Examiner, and

Clerk .

Training for Recruits

The Service is concerned with

providing the best possible training

for new employees and for those

changing to new occupations within

the Service . For example, newly

recruited Trial Attorneys were introduced to their duties in the enforce .

ment of tax laws . Trainees

discussed the preparation of cases

and analysis of evidence . Through

mock court trials and the use of

video-taped sessions, each student

was able to observe and eval .

uate his own performance and

was assisted in correcting his

errors .

Supervisory Trainin g

The Service provided special supervisory training in addition to the

basic supervisory courses required

by the Civil Service Commission .

Supervisors confronted with special situations were given training

in equal employment opportunity,

hiring and utilizing the handicapped, and negotiation with employee unions.

Managerial Training

Programs concerned with specific job problems and situations

as well as generalized managemeni

training, were provided for managers . Formal training was combined with assignments as acting

,managers to build managerial skill

and an awareness of the responsibilities involved . Service managers

acted as instructors to make the

formal training more realistic .

Executive Developmen t

The Executive Development Program provided participants with

the broadening experiences and

training needed to equip them for

future roles as assistant district

and service center directors . Par.

ticipants visited regional, district

and service center offices in small

groups to learn about management

activities and to gain familiarity

with operations . A new feature of

this year's program was the introduction of an electronic data processing seminar to show partici .

'pants the capability of a data

processing system and its influence upon the relationship between

district and service center operations.

Reading in Management

Selected articles and readings

were distributed periodically under

the "Readings in Management"

program as part of the continuing

development of supervisors and

managers . This program provided

an opportunity for incumbents to

read the latest theories and ideas

in a broad range of topics .

Taxpayer Education

Expands Coverage

Taxpayer Education continually

faces the problem of keeping pace

with changing laws and a changing society . The largest Service

program, Teaching Taxes, provides

an important base for the kinds of

activities necessary to meet this

challenge. This free program,

aimed at the high school level,

reached a large number of students . In 1970, requests for ma .

terials totalled over 3 .6 million

general student texts, 460,000

farm texts, and approximately 95,

000 teacher's guides . These ma .

terials provided students with an

explanation of what the tax structure is designed to accomplish and

how it works . Students were furnished sufficient information to

assist in preparation of tax returns

for parents or friends .

To provide similar coverage of

business filing requirements, a

pilot Teaching Business Taxes program was launched at the freshman and sophomore college levels

dealing with individual ownership,

partnership, and simple corporation tax problems .

Training of Alcohol,

Tobacco and Firearms

Special Investigators

Increased staffing and expanded

responsibilities have necessitated

revamping the alcohol, tobacco

and firearms law enforcement

training program . Mandatory training adjustments have been predicated by technological change

advancements in the field of ordnance and weaponry, and changes

in criminal behavioral patterns .

To satisfy these,needs, an intensive incumbent investigator training program was initiated. Programs were designed primarily to

provide a professional supplement

to the law enforcement training received by each newly-appointed

special investigator .

The Service incurred an additional training obligation under the

objectives of the Gun Control Act of

1968, particularly as to Title 1,

wherein the Congress declared its

intent to provide assistance to Federal, State, and local law enforce .

ment officials in their fight

gainst crime and violence . Inervice training programs were

established for State and local po .

lice agencies, in firearms as well

as other law enforcement subjects .

Regional and local semi.

nars were

conducted to inform police officers

of the provisions of the law . In

February 1970, the Service conducted a 2-week investigator train .

ing program in Tallahassee, for the

Florida Beverage Department .

Expansion and

Improvement of Facilities

and Equipmen t

Progress o n

Service Center Space

Extensive negotiations and much

effort were devoted to designing

and getting approval of three new

service centers . Lease awards for

the Fresno, Calif ., and Memphis,

Tenn . locations were made before

the end of the year . Responses to

the Suffolk County, Long Island, so .

licitation were satisfactory . Present

schedules call for completion of the

Fresno Center in October 1971, the

Memphis Center in December

1971, and the Suffolk County Center in July 1972 .

Office Surroundings Improve d

For some years, the Service has

been striving to improve the physi .

cal conditions of its offices. At

times employees worked in less

than adequate surroundings, but

now most are in new or substanti .

ally refurbished space

Progress has been made in two '

problem areas-the Chicago District Headquarters Office and the

Detroit Data Center . With the Gen .

eral Services Administration's close

cooperation, success was attained

in these two cities. The Chicago

District will be in renovated, air.

conditioned, modern office quarters

by the middle of fiscal year 1971

and the Data Center is in the proc.

ess of making a temporary move into a modern building outside the

city limits. The Data Center will return to the city when a suitable

building is constructed .

Security of Internal Revenue

Installations Strengthene d

During the past year the nation

experienced an increase in social

unrest, marked by protest demonstrations ranging from peaceful and

orderly rallies to those of a violent

nature involving personal injury

and destruction of property. Recognizing the need to devote more

attention to a basic protection

program, the Service took steps to

increase protection of facilities .

Protection was strengthened at

the key data processing facilities by

initiating more stringent methods

of preventing entry by unauthorized

persons ; improving the early warning fire detection systems ; providing additional guards ; establishing

close liaison with U .S. attorneys

and State and local law enforcement officials; and complet i ng other

related actions .

The Service issued guidelines for

handling demonstrations at service

locations by various protest groups .

Over 100 such demonstrations took

place in 38 States, most of them

on April 15 .

Guidelines were also issued for

handling bomb threats. During the

last half of-fiscal year 1970, there

were 102 bomb threats to Service

installations . Although n

0

destructive devices were found, evacuating

employees from buildings resulted

in a significant loss of work time.

Prompt steps were taken to

strengthen the security of firearms

seized by Alcohol, Tobacco and

Firearms personnel under the Gun

Control Act of 1968 . The Service is

obligated to protect these weapons

from both deterioration and theft

until final disposition is determined

by the courts .

Forms and form letters

New Telecommunications

Developments

In fiscal year 1970, the Service

sent and received more information

than ever before by telephone, telegraph and other electrical and elec.

tromagnetic communications me.

dia . Extensive efforts were devoted

to exploring greater use of new and

more sophisticated types of equip .

ment while attempting to keep tele .

communications cost as low as possible . This year's efforts resulted in

new telephone usage guidelines for

revenue agents, expanded telePhone equipment systems for taxPayer service, and a teletype system for access to National Crime

Information Center data .

Gains in Records Management

An active records disposal pro.

gram released space and equip .

ment valued at $1,406,000 for

productive reuse by the Service . Al .

though total records holdings in .

creased slightly in 1969, a regional

test on sending 1969 individual

tax returns to a Federal Records

Center 6 weeks after receipt by the

Service Center is promising . Test

goals are to alleviate critical serv .

ice center space problems and

make maximum use of the records

reference service of the Federal

Records Center .

FForms and

orm Letters Reduce d

The combined efforts of Navonal, district, and service center

employees yielded significant prog .

ress in reducing the inventory of

forms and form letters by 1,039

or 6 .8 percent . The following table

summarizes this year's forms man .

agement activities:

presented by open",

101,

N .

..Py

.,ad

rated

"b"

closing

Wry

goir.

Net

Tohl__ ------- . . . . . . . . . 15,367 1 111 1 117 11 11 ,

NatWral Office(used at headquarto

Fissional offices (used

is and 2-1co-wide). ,

bl feipona, headquarters com -

ponents or 2 or more i t i t ffi

6,084 620 466 6 .238 + 154

, r c o ces). . . ii. .. .... ..-

Distr~ct Q ffic&(used by lots districts an their lub.

61395 440 1,436 5,399 -990

ordiret0 offi U

S .1111. cant-_!

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

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

75 5

1 .945

199

558

244

731

710

1 772

-45

Data cents, .. . .. . .... . . . . . . . . . . . . . . . . . . . . . . -172

188 41 20

,

209 +21

82 / Annual Report / Chapter Eight Management Activities / 83
Accident Prevention

on Target

Due to one incident in calendar

year 1969 when 29 persons were

temporarily disabled bytoxicfumes

from a ventilation system malfunction, the Service slipped from its

record low personal injury rate for

the previous year . The Service was

nevertheless able to maintain the

31 percent improvement achieved

since the start of the goverrimentwide Mission SAFETY-70 . The

campaign is designed to reduce

the number of injuries and costs

by 34 percent by the end of calendar year 1970. The Service has

every hope of meeting this goal .

Service personnel operated motor vehicles for 106 million miles

on official business during calendar year 1969 with only 689 accidents . Less than seven accidents

per million miles driven established

the lowest rate on record . A significant portion of the improvement can be attributed to benefits

derived by employees completing training courses in defensive

driving.

The Service acted on 108 claims

under the Military Personnel and

Civilian Employees' Claims Act of

1964 settling 65 claims in favor

of employees who suffered personal property losses incident to

their employment . This is an increase of 30 percent over the number of claims handled last year .

Inspection Programs

Strive To Assure

Public Confidence

in Tax Syste m

The confidence of the taxpaying public in the objectivity and integrity of the Internal Revenue

Service is vital to the success of

our tax system . To gain this confidence and to insure that it is not

violated the Service conducts continuing inspections into questions

concerning the integrity and effectiveness of operations . Management officials are furnished facts

and data developed through internal audits and investigations for

evaluation and use in taking corrective actions. Evidence of a violation of Federal criminal law is

furnished to the Department of

Justice for determination of prosecutive potential.

Assistant IRS Commissioner (inspection)

Vernon D . Acres accepts the Nations[

Civil Somico League' . 1970 Career Service

Award. The award is granted for

efficiency, conscientiousness, originality

end sheer weight of performance.

internal Audit Maintains

Vigilance Over

Service Program s

The Internal Audit Division, as

an integral part of the management

control system, has the responsibility for determining that controls

established over the operations of

the Service are efficient and effective and that policies and procedures are being carried out and

continue to serve a meaningful purpose . Periodic examinations and

appraisals are made of all field

operations, reporting immediately

on problem areas or operating deficiencies which require management actions . Although all operations are examined, emphasis is

placed on those directly related to

the collection of tax and enforcement of tax laws, these being the

areas most susceptible to breaches

of integrity . Data processing activities at the seven regional service

centers are examined on a continuing basis.

Management's actions on reported deficiencies or problems result in significant improvements in

programs, procedures, and controls . The results of these actions

are often measurable in terms of

their impact on revenue or on savings of manpower or other resources. It is estimated that actual

or potential additional revenue and

savings during fiscal year 1970 exceeded $31 .5 million.

One example of program improvement was to increase the extent of verification of excess social

security tax withheld, claimed as

refunds on individual income tax

returns . This action will save an

estimated additional $4 million in

refunds of erroneously claimed

amounts.

In the review of closed audit ex.

aminations in one district office,

internal auditors found that substantial payments refunded to taxpayers underspecial insurance programs of one insurance company

were not being properly reported by

the taxpayers . Follow-up examinations to date, in this and other districts, have resulted in proposed

additional assessments of more

than $1 .7 million .

The recent criminal conviction of

a taxpayer for willful failure to file

income tax returns was the culmination of an investigation originated by an internal audit referral .

Internal auditors found that although the taxpayer had requested

an extension of time for filing his

1964 return, he had not filed. Further research showed that he had

not filed for 1962 or 1963 . Tax

and penalties proposed in this case

exceeded $164,000 .

Refund Schemers Thwarted

Internal auditors uncovered several false refund schemes during

the fiscal year . One case involved

the use of special com puter prbgrams to identify 143 persons who

claimed $180,000 in fraudulent

refunds . The practitioner who prepared the returns was also identified . In another case, internal audi .

tors, working with service center

personnel, identified 838 returns

showing apparent fraudulent refunds of over $235,000 . Substan .

tially all of the 838 returns were

detected early enough to prevent

issuance of the refunds .

Proper Staffing Vital

to the Service

The integrity and effectiveness

of the service is protected by :

-Hiring the right persons.

-Protecting employees from peo.

ple who would seek to have them

misuse their positions .

-Identification and removal of

those who choose not to resist

temptation .

The Internal Security Division

does this by investigating applicants to weed out poor risks and

by investigating irreg,,ularili:s or

complaints which involve

S rvic

employees. Included in their activ .

ities are the investigations of persons outside the Service who

attempt to corrupt Service employees through bribery or other means .

Since January 1, 1961, a total

of 744 Service employees have reported what they believe to have

been attempts made by various

persons to bribe them . These reports have been turned in not only

by tax collectors and employees

who audit tax returns but also by

clerks, stenographers, attorneys

and persons involved in training

programs . During this period a total

of 189 persons have been arrested

or indicted for attempting to bribe

Service employees; as of June 30

1970, 111 of these persons have

been convicted and another 55 are

awaiting trial .

. The Attempted Bribery Program

is illustrated on the following graph .

Each bar on this graph shows the

number of attempted briberies rse .

ported by employees; the shaded

subsection shows the number of

arrests or indictments each year

resulting from these reports.

Attempted Bribery Program

I

6 2

6 1

6`1

65

6 6

67

10

i s

1 7

16

61

0

80

6 8

69

50

46

3 2

70

4 3

11_~ lenerig .ti.r. initiated ~

83

120

10 5

100

The Best Laid Schemes

of Mice and Me n

Persons who attempt to corrupt

Service personnel come from a

variety of locations and occupa .

tions. For instance :

A New York State Sales Tax Di .

vision employee offered an em .

ployee of the Brooklyn District

$2,250 on behalf of a taxpayer.

A used car salesman in North

Carolina offered a Service em .

ployee $3,000 to "fix" an audit .

A CPA in New Jersey offered

$200 to take care of an audit of

his client's return .

A vice-president of a wig man .

ufacturing firm in Ohio offered a

Service employee $1,500 for a fa .

vorable audit ,

Investigation is continuing into

attempted penetration of the Serv .

ice by members of organized crime .

During January and February of

this year 17 persons were arrested

in New York . Eight were prominent

figures of organized crime. Two of

the eight were recently the subjects

of newspaper publicity in the Now

York area . Nicholas Ratenni took

the Fifth Amendment 19 times at

a hearing before the State Commis .

sion of Investigation into under.

wo rid ties with Yonker's City Offi.

cials . John Masiello, Sr., and his

son, John, Jr ., were convicted of

bribing postal employees and have

been indicted in connection with a

Plot to have John, Jr ., deferred

from the draft.

Internal Security and Internal

Audit teams pool their efforts in

the investigation of actual or po.

tential frauds by employees or

through collusion between em .

ployees and taxpayers, This effec .

tive cooperation can be seen in

the trial of Norman H . Egenberg,

CPA, recently concluded in New

York City . After an extensive Serv.

nvestigation, Egenberg was in .

i'Cted on 88 counts of bribery,

false statements and aiding and

abetting in the preparation of false

alien tax returns . His trial ended

on June 25, 1970, resulting in conviction on 25 counts. The trial was

highlighted by the testimony of

many prominent personalities . The

re-alidits of Egenberg and his

clients have resulted in proposed

defic iencies including penalty and

interest of approximately $4,388,

000 .

The Attempted Bribery Program

continued at an intensified level .

in commending Adolph Moline, Jr.,

an Internal Revenue Agent who had

reported a bribery attempt, the

Commissioner said :

"Your excellent performance

during the investigation and trial

of the defendants, despite personal

risk and hardship, significantl y

84 / Annual Report /

Chapter Eight Management Activities / 85
t

Commissioner Thrower presents commendation to Mr. Moline.

demonstrates to the public the The Balance Shee t

courage and commitment of our

employees . . . "

Crimes Bear Bitter Fruit

Many investigations I o r c a

schemers and corruptors into the

criminal courts, with 58 defendants starting down the path of our

trial system this year . Thirty-seven

were taxpayers or tax practitioners;

the remaining 21 were employees

or former employees . Trial or indictment is still pending on 88

taxpayers and 45 employees or

former employees. Ahead of them

were the 46 defendants who had

been convicted of various criminal

offenses during the year.

During the year, Inspectors

were kept busy tracking down a

variety of schemes . For instance:

A Revenue agent in Now York admitted accepting 14 bribes totaling

between $15,300 and $16,500 ; a

CPA in New Jersey tried to extort

money from a Service employee to

re-grade his CPA exam ; and an

employee in the New Orleans District embezzled $17,684 .93 by

means of a refund scheme .

Internal Security Inspectors

completed 10,107 investigations

Investigations and disciplinary actions

during the year, an increase of

about 13 percent over last year's

total of 8,950 . An additional 5,248

checks of police records were made

on persons being considered for

temporary short-term appointments or for positions developed

under special economic and education opportunity programs .

As part of the Service's internal

security effort, investigations are

also conducted of (a) certain applicants for enrollment to practice before the Internal Revenue Service,

(b) charges that are made against

tax practitioners, and (c) aiccidents

involving Service employees or

property. Special investigations or

studies are also made when requested by the Commissioner, the

Secretary of the Treasury or other

components of the Treasury Department .

The following tabulation shows

the types of investigations completedduring the past 2 years and

the related disciplinary actions ;

Type of immstigati.- and actio n

Total investigations closad__. .. ...

. .. .... . . . . . . . . . . . . . ----------

Personnel Investigation s

Number of cases closed, total . .. . . -------- -- ------------------

Character and security i....tig .thm-----------_------ ---------------

Conduct investigations

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

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

Sp.1.1 imi.irms. . . . . . . . . . . - - . . . . - . . . . . . . . ... ... .. . . . . . . . . .

Actions Taken by service Nitrate 1 nvM.01fili-Is -a 8 Result of Parsomml,

timn,

DiaslitliturtrY -client, trat . . . . ----- - ---------- ----------------------

S.p.ratimrs . total -_-----_ ----------------------------------------

Bribery ..to,ti.. or olle,mn . . . . . . . . . . . . . . . . . . . . .. . .. . . .

limbeililement at 'theft If G.W,;;~iWl fund, or property . . ---_------

Fgilun, of employ. to pay proper ----_--_------- ---

1,iii"thr, or distortion .1 Government 1P11 ,

nauthorumd outside

Failure to diuh.ril . duties P

Dinilgtmc. .1 onfidmiti.1 i~foltmttic .. . . . . . . . .

A..pt . .c . -1 hm- -1 Ratufturt

Personal and other misconduct.---- .. ---------- : : :-- . . . . . . . . . . . . . . . . . .. .. ..

Stno..mrs from duty and futyi---------------------

N

.rd~,

eprimand', "'"nings. or demo tons----- IZlinary st (including domm,m Non, and others). . c - tnt mt

Other Imnadiasta- 1

Number of cases closed . total -_--------------------

Applications for luirnisawt, in p,.til. before the Int.m.

Charge, against Altturs.y'a, CPA's, and Ennilears. . . .. . .

Federal Tort Cial ..._. . . . . . . . . . . . . . . . .. . .... . . . .

Attem ad Bribery . . . . . . . . . . . . . . . .. . -------------

: -----_---------

invesubptaf,ons for other Treasury bureau, _---- .. ... - ------------

196 9

8,950

6,806

M175

1,999

U ;m

2. sw

$ .=I

.1 am

. las t

458 1 -

132

6

61

3

3

1b

47

302

6,348

2

'

144

755

56

172

108

1.053

182

22

13

21I

I

J1

TA U

an

31141

-1A"

I

Includes maignetimIS F9firsommis, or other separations while arrilthrIness war. under invenstilation 0,

before administrative &idrm .., ad.

.

disciplinary when where investigation disclosed derogatory

information .

86 / Annual Report / Chapter Eight

Aid to Others

Internal Security conducted

1,146 investigations for other

Treasury components during the

year. Assistance was also furnished

to the Secret Service in the 'protection of the President and other

persons .

The Service, at the request of

the Territorial Governor, continued

to assist the Virgin Islands in de .

veloping a modern tax system .

Since this program of assistance

and internal audits was originated

in 1962, Virgin Island tax revenues

have increased from $8 .9 million in

1962 to $47 .9 million in 1969 .

Advisory Groups Aid

the Service

The Service uses the abilities of

private citizens, who are experts in

their field, through the medium of

Advisory Groups. At present there

are four such groups appointed .

They are : The Advisory Group to

the Commissioner of Internal Rev .

enue, The Art Advisory Group, The

Firearms Evaluation Group and The

Advisory Committee on Exempt

Organizations.

The Advisory Group to the Commissioner of Internal Revenue was

established on June 17, 1959 . This

committee, which represents pro.

fessional and other Private groups

concerned with Federal Taxation

Provides constructive ways in

which the Service can improve it's

operations . The group met on OctOber 16-17, 1969, and January

29-30 and June 4-5, 1970 . Fiscal

year 1970 membership follows :

Donald C . Alexander, Esq .

Dinsmore, Shohl, Barrett, Coates and

Deupre s

Central Trust Tower

Cincirmai, Ohio 45202

William T . Barnes

Lybrand, Ross Bros . and Montgomery

1100 Connecticut Avenue NW .

Washington, D.C. 20036

Professor Norton M . Bedford

University of Illinois at Urbana.

Champaig n

Department of Accountancy

College of Commerce and Business

Administratio n

Urbana, 111 . 61801

Professor J . Keith Butters

Harvard University Graduate School

of Business Administration

Soldiers Fiel d

Boston, Mass. 02163

Sheldon S . Cohen, Esq,

Cohen and Uretz

1730 M Street NW .

Washington, D .C. 20036

F. Cleveland Hedrick, Jr., Esq .

Hedrick and Lane

1001 Connecticut Avenue NW . Washington, D.C . 20036

William M . Home, Jr.

Reed . Smith, Shaw and McClay

Shoreham Building

Washington . D.C. 20005

Walter L. Kid d

Director of Taxes

American Telephone & Telegraph

195 Broadwa y

New York, N .Y . 10007

Jeff Blair McIlroy

Public Accountant

Post Office Box 4345

Little Rock, Ark. 72204

A. Waldo Sowell, Jr.

CPA, Alexander Grant & Co.

2550 National Bank of Georgia Bldg .

Atlanta, Ga . 3030 3

Maurice E. Stark, Esq.

Stark and Crumley

Warden Building

Fort Dodge, Iowa 50501

Arthur B . Willis, Esq,

Willis, Butler, and Scheifly

615 South Flower Street

Suite 1100

Los Angeles, Calif . 90017

The Art Advisory Group was established by the Commissioner of

Internal Revenue on February 1,

1968 .

This group consists of members

representing the three major seg .

ments of the Art World-museums,

universities, and dealers . The

Group provided advice on the valu .

ation of works of art for Federal tax

purposes at meetings held on Sep.

tember 10-11, 1969, and March

16-17, 1970 . Three new members

were appointed during 1970 as

Part of the rotational concept of

panel membership. The newest

members are marked by asterisk in

the following list:

Dr. Richard F. Brown

Directo r

Kimbell Foundation

Fort Worth, Tex .

Mr . Anthony M . Clark

Director

Minneapolis Institute of Arts

Minneapolis, Minn .

Mr. Charles C . Cunningham

Directo r

Art Institute of Chicago

Chicago, 111.

Mr . Louis Goldenberg

Art Dealer

Wildenstein & Co .

New York, N,Y.

-Dr. George H . Hamilton

Williams College

Williamstown, Mass .

Dr . Sherman E . Lee

Director

Cleveland Museum of Art

Cleveland, Ohio

*Mr . William S. Lieberman

Director (Prints )

Museum of Modern Art

New York, N.Y.

Prof . Charles F. Montgomery

University of Delaware

Newark, Del .

*Mr. Alexander P . Rosenberg

Art Dealer

Paul Rosenberg & Co .

New York, N .Y .

Mr. Eugene V. Thaw

Art Deale r

E . V . Thaw Co .

New York, N .Y.

Management Activities / 87
I

I

The Art Advisory Panel (above) meats to

can:Ida fine art. valuation matters for

Fed ral tax purposes .

Pictured left to right sested are:

A exander P. Rosenberg, -Mrs. Esther W.

Robles, I' Dr.She- E. Lee, -Dr. Perry B.

Cott. *Louis Goldenberg, Dr. George H .

Hamilton, -Blirtlett H. May., -Charles E.

Buckley, and Dr. Richard F. Brown.

Standing left to right . . .:

Thomas HartnaM IRS . Karl Ruh., IRS.

Charles C. Cunningham, -Dr . Merrill C .

Ru.pp .1, ..it Eugene V. Th...

Members not present when the picture

we take.-

Anthony M . Clark, William S. Lieberman,

Protes, or Charles F. Montgomery, Frank

Paris, :no -Theodore Rousseau.

-Appointed ub..q.. .t to June 30, 2970.

88 / Annual Report / Chapter Eight

The Firearms Evaluation Group

was established on November 15,

1968 . Informal meetings were held

throughout the year, at which advice was given concerning the de .

velopment of standards to control

the importation of firearms and

ammunition . The membership of

the Group was as follows :

Mr. Donald Flohr

Firearms Technician

H . P. White Laboratories

Bel Air, Md .

Mr. Harold Johnson

U .S . Army

Foreign Service and Technology

Cente r

Washington, D .C.

Mr. Daniel D . Musgrave

Representative

Mauser Works of West Germany

Cabin John, Md .

Mr. Ohn Richards

Owner

Potomac Arms Co .

Alexandria, Va .

Mr. Jepta Rogers

Administrative Assistant

International Association of

Chiefs of Police

Washington, D.C .

Lt . Col . Joseph S . Smith (Ret.)

Deputy Directo r

Civilian Marksmanship Program

Department of Defense

Washington, D.C .

In November 1969 the Commissioner announced the appointment

of 15 distinguished Americans to

the newly created Advisory Committee on Exempt Organizations .

These widely experienced people

have agreed to serve as Internal

Revenue Service Consultants in the

nature of a sounding board to review problems in charting the outer limitations of the tax law regarding religious, educational,

charitable, and other organizations

which constitute the majority of

tax exempt organizations .

The committee met on January

15-16 and May 18-19, 1970 .

Present membership is as

follows :

Dr. Carlton P. Alexis

Associate Professor of Medicine

Howard University

2401 Sixth Street NW.

Washington, D.C . 20001

Mr. Donald T . Burns

Arthur Young & Co.

615 South Flower Street

Los Angeles, Calif . 90017

Charles 0 . Galvin, Esq .

Dean, School of Law

Southern Methodist University

Dallas, Tex . 75222

Mr . H . J . Heinz 11

Chairman of the Board

H. J . Heinz Co.

1062 Progress Street

Pittsburgh, Pa. 1521 2

Dr. Adelaide Cromwell Hill

Boston University

.Afro-American Studies Center

10 Lenox Stree t

Brookline, Mass . 02146

Dr. John R. Hogness

Executive Vice President

University of Washington

Seattle, Wash . 98105

Mr . James Roger Hull

Chairman of the Board

Mutual Life Insurance Co . of

New York

Broadway at 55th Street

New York, N.Y. 10019

Hon . Louis J . Lefkowitz

Attorney Genera l

State of New York

80 Centre Stree t

New York, N .Y. 10013

Harry K. Mansfield, Esq .

Ropes and Gra y

225 Franklin Street

Boston, Mass . 0211 0

Bishop Francis John Mugavero

75 Greene Avenue

Brooklyn, N .Y. 11238

*Fred C. Scribner, Jr., Esq.

Atwood, Scribner, Allen &

McKusic k

Commerce Building

Portland, Maine 04110

Rabbi Ralph Simon

Congregation Rodfei Zedek

5200 Hyde Park Blvd .

Chicago, Ill . 6061 5

Mr. Richard J . Whalen

3846 Macomb Street NW. Washington, D.C . 20016

Rene A . Wormser, Esq . Wormser

'

Koch, Kiely &

Alessandron i

4444 Madison Avenue

Now York, N .Y . 10022

'Chairman

The above Picture at the Committee an Exempt

Organizations was taken at the January 1970

meeting . Left to right are: H . J . Heinz; Richard J.

Whalen; Dr. Martin D . Jenkins; Julius Greenfield

(attending for Mon . Louis J . L.fk..It.); Harry K.

Mansfield; Judge Elbert P . Tuttle; Charles 0 .

Galvin ; Fred C. Schribr .,. Jr. (Ch .inrum); Dr .

John R . Magness; Secretary of the Treasury David

M. Kennedy; Donald T. Burns; Commission.,

Randolph W. Thrower; James R. Hull; Deputy

Commissioner William M. Smith ; Bishop Francis

John Mugavem; R.

. . A . We-..,. Dr . Carlton P, Alexis ; Chief Counsel K. Martin Worthy .
organizationOrganization of the Internal

Revenue Servic e

Internal Revenue Regions

and District s

Service Reading Rooms

Principal Officers

Historical List of

Commissioners

40t-"l 0-TI-7 Annual Report / Organization-Principal Officers 91
National

Office

ASSISTANT

COMMISSIONER

(I .Mftn)

INTERNAL REVENUE SERVICE ORGANIZATION

ASS START

COMMiSSIONER

(Adamiindim)

COMMISSIONER

DePuty Commissioner

ASSISTANT

COMMISSIONER

(C-Pin-)

-I.W.Tx~

REGIONAL INSPECTORS

(7)

U.S . TREASURY DEPARTMENT

INTERNAL REVENUE SERVIC E

District Ihiefts

(58)

92 Annual Report Organization-Principal Officers

REGIONAL COMMISSIONE

(7)

ASSISTANT

COMMISSIONER

(DA, Proassirz)

n,

- - - - - - - -

~W~El . . Elm

ASSISTANT

COMMISSIONER

(PI-iq snd

R,-,, h

.noon

ASSISTANT

COMMISSIONER

(Techi.,)

=T..

REGIONAL COUNSELS

(7)

Field

Office

Annual Report Organization-Principal Officers 93
I

internal Revenue Service

Reading Room s

(Locations of reading room.same as

mailing address unless otherwise

Indicated)

Principal Officers of the

internal Revenue Servic e

As of June 30, 1970

National Office

Mail Address:

Director, Public Information

Divisio n

Internal Revenue Servic e

1111 Constitution Avenue NW .

Washington, D.C . 20224

Central Regio n

Mail Address:

Regional Public Information

Officer

Room 7106

Federal Office Building

550 Main Street

Cincinnati, Ohio 45202

Mid-Atlantic Region

Mail Address :

Regional Public Information

Office r

P .O. Box 12805

Philadelphia, Pa . 19108

Location :

401 N . Broad Street

Midwest Region

Mail Address :

Regional Public Information

Office r

17 N . Dearborn Street

Chicago, Ill . 60602

Office of the Commissioner

NATIONAL OFFICERS Commissione r

Randolph W. Thrower

Deputy Commissioner

Willi:m H .,Smit h

Assi tant a the Commissioner

Edwin M . Perkins

Assistant to the Commissioner

Roger V . Bart h

Chairman, Tax Forms Coordinating

Committee

James N . Kinsel

Assistant to the Deputy

Commissioner

Donald C. Dawkin s

Director, Foreign Tax Assistance

staff

L. Harold Moss

94 / Annual Report / Organization-Principal Officers

North-Atlantic Region

Mail Address:

Regional Public Information

Office r

Room 110 2

90 Church Street -

New York, N .Y. 10007

Southeast Region

Mail Address :

Regional Public Information

Office r

P.O .

Box 926

Atlanta, Ga. 30301

Location :

Federal Office Building

275 Peachtree Street

Southwest Regio n

Mail Address :

Regional Public Information

Officer

1600 Patterson Street

Dallas, Tex . 75201

Western Regio n

Mail Address:

Regional Public Information

Offi6er

Flood Building

870 Market Street

San Francisco, Calif. 94102

Administration

Assistant Commissioner

Edward F . Preston

Director, Program Staff

Julius H . Lauderdale

Division Directors :

Facilities Management

Leo C . Inglesby .

Fiscal Management

Alan C . Beek

Personnel

Albert J. Schaffer

Public Information

Joseph S . Rosapepe

Training

Stanley Goldberg

Compliance

Assistant Commissioner

Donald W . Baco n

Deputy Assistant Commissioner

Leon C . Gree n

Division Directors :

Alcohol, Tobacco, and Firearms

Harold A. Serr

Appellate

Arthur H . Klotz

Audi t

Singleton B . Wolfe

Collection

Harold E . Snyder

Intelligence

Vacan t

Office of International Operations

Clarence 1. Fox, Jr.

Data Processing

Assistant Commissioner

Vacant

Deputy Assistant Commissioner

Vacant

Division Directors :

Management Information

William E. Palmer

IRS Data Center, Detroit Mich .

Ernest Sha w

Operations

Clinton. L. Walsh

National Computer Center,

Martinsburg, W . Va .

John E. Stewart

Systems

Donald G . Elsberry

Inspection

Assistant Commissioner

Vernon D . Acree, Jr .

Executive Assistant

Fred . G . Robinette

Division Directors:

internal Audit

Francis 1 . Geibel

Internal Security

William F. McCarthy

Planning and Research

Assistant Commissioner

Albert W. Brisbin

Division Directors :

Planning and Analysis

William A . Vogely

Research

James R . Turner

Statistics

Vito Natrelle

Systems Development

Lancelot W . Armstrong

Technical

Assistant Commissioner

Harold T . Swartz

Deputy Assistant Commissioner

Richard J . Stakern

Division Directors :

Income Tax

John W. Littleto n

Miscellaneous and Special Provi .

sions Tax

Linder Hamblen

Technical Publications and

Services

August F . Pohli g

Office of Chief Counsel

Chief Counsel

K . Martin Worth y

Technical Advisorto Chief Counsel

Robert B . Jacoby

Special Assistant to Chief Counsel

W. Dean Mathis

Special Assistant to Chief Counsel

Lester Stei n

Associate Chief Counsel (Litigation)

Richard M . Hah n

Technical Advisor to the Chief

Counsel

Paul E . Treusch

Division Directors :

Alcohol, Tobacco, and Firearms

Lega l

John F. McCarren

General Litigatio n

J . Walter Feigenbaum

Enforcement

William F. McAleer

Refund Litigation

Robert A. Bridges

Tax Court Litigation

John T . Rogers

Associate Chief Counsel (Technical)

Thomas McP. Davis .

Special Assistant to Chief Counsel

Arthur B . White

Division Directors :

Interpretative

John L. Withers

Legislation and Regulations

James F. Dring

Operations and Planning

William P. Crewe

REGIONAL AND DISTRICT

OFFICER S

Central Regio n

All Regional Offices at 550 Main

Street, Cincinnati, Ohio 45202, unless a different address is indi .

cated

Regional Commissioner

Charles G . Keeble r

Assistant Regional Commissioners :

Administratio n

Arthur J . Collinso n

Alcohol, Tobacco, and Firearms

Rex D . Davi s

Appellate

W . Franklin Hammack

Audi t

Michael A. DeGuire

Collection

William~J . Grabo,

Data Processing

Wayne S . Kegerreis

Intelligence

Harold B . Holt

District Directors :

Cincinnati, Ohio 45202

Paul A . Schuster

Cleveland, Ohio 44199

Frank S . TUrbett, Jr.

Detroit, Mich . 48226

Thomas A. Cardoza

Indianapolis, Ind . 46204

James E . Daly

Louisville, Ky. 40202

Robert J . Dath

Parkersburg, W. Va . 26101

Hugh D. Jone s

Director, Central Service Center,

Covington, Ky. 4101 9

Everett L. Meek

Regional Counsel

Clarence E. Price

Regional inspector

William A. Costello

Annual Report / Organization-Principal . Officers 9s
11

ll

i

M~d-Atlantic Region

Al Regional Offices at 2 Penn Center

Plaza, Philadelphia, Pa . 19102,

unless a different address is indicated .

Regional Commissioner

Dean J . Barron

Assistant Regional Commissioners:

Administratio n

Americo P. Attorri

Alcohol, Tobacco, and Firearms

Charles R . Peterson

Appellate

Victor Cuniglio

Audit

Dwight L. James

Collection

William F. Cullincy

Data Processing

Anthony L . Carrea

Intelligence

Amerigo R. Manzi

District Directors :

Baltimore, Md. 21202

Irving Machiz

Newark, N.J . 07102

Roland H . Nash, Jr.

Philadelphia, Pa. 19108

Pitt Vac n:burgh, Pa t . 15222

H . Alan Long

Richmond, Va . 23240

James P.

Boyle

Wilmington, Del. 19802

Carl R . Gromatzky

Director, Mid-Atlantic Service Center,

Philadelphia, Pa. 1915 6

Earl L. Torgerson

Regional Counsel

Cecil H . Haas

Regional Inspector, Bankers Securities Building, Walnut and Juniper

Streets, Philadelph is, Pa . 19017

Emanuel M . Schuster

Midwest Regio n

All Regional Offices at 35 East

Wacker Drive, Chicago, Ill . 60601,

unless a different address is Indicate d

Regional Commissioner

Alvin M . Kelle y

Assistant Regional Commissioners:

Administratio n

William F . Sulliva n

Alcohol, Tobacco, and Firearms

William A . Coliawa n

Appellat

Wallace T. Morris

Audit

John W . Baudendistel

Collection

Roger C . Beck

Date Processing

Norman B . Bergeson

Intelligence

William B . Mayes

District Directors:

Aberdeen, S . Dak . 57401

John B. Langer

Chicago, Ill. 60602

Edwin P . Trainor

Des Moines, Iowa 50309

John F. Hanle n

Fargo, N . Dak. 58102

Frederick G. Kniskern

Milwaukee, Wis. 53202

Walter S. Stumpf

Omaha, Nebr . 68102

Richard P. Vina l

St. Louis, Mo . 63101

Eugene C . Coyl e

St. Paul, Minn. 55101

George 0 . Lethert

Springfield, Ill . 62704

Jay G. Philpott

Director, Midwest Service Center,

Kansas City, Mo . 64170

Arnold S . Dreyer

Regional Counsel

Frank C. Conley

Regional Inspector

Gordon M . Anderson

96 / Annual Report / Organizatiort--Principal Officers

North-Atlantic Region

All Regional Offices at 90 Church

Street, New York, N .Y . 10007, unless a different address is indicated i

Regional Commissioner

Harold R . Al l

Assistant Regional Commissioners :

Administration

John E. Foristall

Alcohol, Tobacco, and Firearms

Edward J . Fox

Appellate

James C. Stigamire

Audit

William M . Wolf

Collection

Robert M . McKeever

Data Processing

Marshall P. Cappelli

Intelligence

Alan McBride

District Directors :

Albany, N .Y . 12210

Donald T. Hartley

Augusta, Maine 04330

Whitney L. Wheeler

Boston, Mass . 02203

William E. Williams

Brooklyn, N .Y . 11201

John J . Flyn n

Buffalo, N .Y. 14202

John E. Foley

Burlington, Vt. 05402

Fulton D. Fields

Hartford, Conn. 06115

Joseph J . Conley, Jr.

Manhattan, N .Y. 10007

Edward J . Fitzgerald, Jr.

Portsmouth, N.H. 03801

Frank W . Murphy

Providence, R .I . 02903

John J . O'Brien

Director, North-Atlantic Service Center, Andover, Mass. 01812

Norman E. Morril l

Regional Counsel, 26 Federal Plaza,

New York, N .Y . 10007

Marvin E. Hagen

Regional Inspector, 26 Federal Plaza,

New York, N .Y . 10007

Sidney M . Wolk

Southeast Region

All Regional Offices at 275 Peachtree

Street NE ., Atlanta, Ga . 30303,

unless a different, address is indi .

cated

Regional Commissioner

William J . Bookhol t

Assistant Regional Commissioners :

Administratio n

Daniel H. Hollums

Alcohol, Tobacco, and Firearms

William N . Griffin

Appellate

Vance N . Bates

Audi t

Harold B . Bindseil

Collection

William H . Loeb

Data Processing

Edward G . Pranczke

Intelligence

Edmund J. Vitkus

District Directors:

Atlanta, Ga . 30303

Aubrey C. Ross

Birmingham, Ala . 35203

Walter T . Coppinger

Columbia, S .C. 29201

Harold M . McLeod

Greensboro, N .C. 27401

John E. Wall

Jackson, Miss . 39202

James G . Martin, Jr.

Jacksonville, Fla . 32202

Andrew J . O'Donnell, Jr .

Nashville, Tenn . 37203

James A. O'Hara

Director, Southeast Service Center,

Chamblee, Ga . 30006

Claude A . Kyle

Regional Counsel

Henry C. Stockell, Jr .

Regional inspector

Earl L. Fuoss

Southwest Regio n

All Regional Offices at 1114 Commerce Street, Dallas, Tex . 75202,

unless a different address is indicate d

Regional Commissioner

B . Frank White

Assistant Regional Commissioners :

Alcohol, Tobacco, and Firearms

Billy L. Gaun t

Appellate

G. Clinton Witt

Audi t

Lawrence M . Stewart

Collectio n

Alfred N . Kay

Data Processing

George M . Oliver

Intelligence

William E . Beloate, Jr .

District Directors:

Albuquerque, N. Max . 87101

Maurice E. Johnso n

Austin, Tex . 78701

R . L. Phinney

Cheyenne, Wyo . 82001

Richard L. Hutt

Dallas, Tex. 75201

Ellis Campbell, Jr .

Denver, Colo . 80202

Arthur A. Kennedy

Little Rock, Ark, 72203

Fred W. Johnso n

New Orleans; La . 70130

Chester A. Usry

Oklahoma City, Okla . 73102

Clyde L . Bickerstaff

Wichita, Kans . 67202

Harry F . Scribne r

Director, Southwest Service Center,

Austin, Tex. 78740

Ervin B. Osbor n

Regional Counsel, 1025 Elm Street,

Dallas, Tex . 7520 2

William B . Riley

Regional Inspector, 1511 Bryan

Street, Dallas, Tex. 7520 1

David 0. Lowry, Jr.

Western Region

All Regional Offices at 870 Market

Street, San Francisco Calif. 94102,

unless a different address is in .

dicated .

Regional Commissioner

Homer 0 . Croasmun

Assistant Regional Commissioners :

Administration

Joseph T. Davi s

Alcohol, Tobacco and Firearms

Brenton G. Thorn e

Appellate

Gardiner B. Willmarth

Audi t

Raymond F. Harless

Collectio n

Charles D. Moran

Data Processing

Willard L . Pierson

Intelligence

Herman F . Kueh l

District Directors:

Anchorage, Alaska 99501

Lewis J . Conra d

Boise, Idaho 83701

Calvin E. Wright

Helena, Mont. 59601

Nelson L. Seeley

Honolulu, Hawaii 96813

Robert M . Cutts

Los Angeles, Calif. 90012

Frank S . Schmidt

Phoenix, Ariz . 85025

George D. Patterson, Jr.

Po rtiand, Oreg. 97204

Arthur G . Erickso n

Reno, Nev. 89502

Warren A. Bates

Salt Lake City, Utah 84110

Roland V. Wise

San Francisco, Calif . 94102

Joseph M . Culle n

Seattle, Wash . 98121

Neal S . Warre n

Director, Western Service Center,

Ogden, Utah 8440 5

Robert H . Terry

Regional Counsel, 447 Sutter Street,

Son Francisco, Calif. 94018

Richard C . Schwartz

Regional Inspector, 1076 Mission

Street, San Francisco, Calif. 94103

Frederick R . Row e

Annual Report / Organizatior-Principal Officers / 97
I

Historical List of

Commissioners

of Internal Revenue

Office of Commissioner of Internal Revenue

created by Act of Congress, July

1

. 1862

GeorgeS. Boutwell

Massachusetts

July 17, 1862/Mar. 4, 1863

JosephJ. Lewis

Pennsylvania

Mar . 18, 1863/June 30, 1865

William Orton

New York

J uly 1, 1865/Oct . 31, 1865

EdwardA. Rollins

Now Hampshire

Nov . 1, 1865/Mar. 10, 1869

Columbus Delano

Ohio

Mar. 11, 1869/Oct . 31, 1870

Alfred Pleasonto

n

New York

Jan .3,1871/Aug.8,1871

John W. Douglass

Pennsylvania

Aug. 9,1871/May 14,1875

DanielD. Pratt

Indiana

May15 1875/July3l,1876

Green B . Raum

Illinois

Aug . 2, 1876/Apr . 30, 1883

Walter Evans

Kentucky

May 21, 1883/Mar. 19, 1885

JosephS. Miller

West Virginia

Mar. 20,1885/Mar . 20,1889

98 / Annual Report

/ Organization-Principal Officers I

Annual Report

/ Appendix / 9

9

John W . Mason

West Virginia

Mar. 21, 1889/Apr. 18, 1893

JosephS. Miller

West Virgini

a

Apr. 19,1893/Nov. 26,1896

W! St' John Forman

Illinoi

s

N ov. 27, 1896/Dec . 31, 1897

Nathan B. Scott

West Virginia

Jan . 1, 1898/Feb . 28,1899

George W. Wilso

n

Ohio

Mar. 1, 1899/Nov . 27, 1900

John W. Yerkes

Kentucky

Dec. 20, 1900/Apr . 30, 1907

JohnG. Capers

South Carolin

a

June 5, 1907/Aug . 31, 1909

RoyalE . Cabell

Virginia

Sept. 1, 1909/Apr . 27, 1913

William H . Osborn

North Carolina

Apr . 28, 1913/Sept. 25, 1917

DanielC. Rope

r

South Carolina

Sept. 26, 1917/Mar. 31, 1920

William M. Williams

Alabama

Apr . 1, 1920/Apr. 11, 1921

David H . Blair

North Carolina

May27,1921/May3l, 1929

Robert H . Lucas

Kentucky

June 1, 1929/Aug . 15, 1930

David Bunnell

Ohio

Aug. 20,1930/May 15, 1933

Guy T . Helevering

Kansas

June6, 1933/Oct .8, 1943

RobertE. Hannegan

Missouri

Oct . 9, 1943/Jan . 22,/1944

JosephD . Nunan, JF.

New York

Mar. 1, 1944/June3 0,1947

GeorgeJ. Schoeneman

Rhode Island

July 1, 1947/July31, 1951

John0 . Dunlap

Texas

Aug . 1, 1951/Nov . 18, 1952 T. Coleman Andrews

Virginia

Feb. 4, 1953/Oct . 31, 1955

RussellC. Harrington

Rhode Island

Dec. 5, 1955/Sept. 30, 1958

Dana Latham

California

Nov . 5, 1958/jan . 20,1961

Mortimer M. Caplin

Virginia ,

Feb . 7, 1961/July 10, 1964

SheldonS . Cohen

Maryland

Jan .25,1965/Jan .20,1969

Randolph W. Thrower

Georgia

Apr. 1, 1969/

In addition, the following were Acting

Commissioners during periods of time

when them was no Commissioner holding

the office : John W . Douglass, of Pennsyl .

vanm from No.. 1 . 1870, to Jan. 2, 1871;

Han;C. Rogers, of Pennsylvania, from

MayI to May 10, 1883, and from May I

to June 4, 1907: JohnJ. Knox, of Minne .

sat., imm May I I to May 20, 1883; Robert

Williams, Jr., of Ohio, from Nov . 28 to

Dec . 19, 1900; Millard F. West, of Ken .

tucky, from Apr. 12 to May 26, 1921;H . F .

Mi Is, of Washington, from Aug. 16, to A..

. 19, 1930: Pressly R. Baldridge, of

Iowa, from May 16 to June 5, 1933;

HaroldN. Groves, of Illinois, from Jan. 23

to Feb. 29, 1944; JohnS. 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, from Nov. I

to Dec, 4, 1955;.nd from Oct

- 1

to Nov. 4,

1958; torl..1:. . of Utah, from Jan. 21

to Feb. 6. 1961; Bertrand M. Harding. of

Texas, and fr m July 11, 1964 to Jan . 24, 1965;

or

Will iam H

. Smith of Virginia, from

Jan. 21 to Mar. 31, 1969.

appendix

Taxpayer Publications '

Tax Forms Activity

Supreme Court Decisions

Actions of Lower Court

s

Statistics of Income Reports

Published

: I
APPENDIX

Taxpayer Publications

In the 1970 edition of Your Fedoral Income Tax, Publication 17,

special emphasis was given to the

now income tax return form and

several of the schedules were illustrated in connection with the sam .

ple filled-in tax return . An entire

page was devoted to "Items of Interest," highlighting the significant

changes in the law that occurred

during 1969 . Also shown on that

page was a checklist of things to do

when preparing an income tax return so refunds would be processed

promptly .

This 160-page booklet, designed

to aid the individual taxpayer in

filling out his income tax return,

was written in nontechnical, easy .

to-understand language . It contains

answers to most questions tax .

payers might have when they prepare their returns. It presents

numerous examples illustrating

how the tax laws may be applied .

This is a continuing publication that

is revised each year to include the

latest changes in the tax statute,

regulations, and official rulings .

Approximately 1,330,000 copies

of the 1970 edition of Your Federal

Income Tax were sold at 60 cents

a copy by the Government Printing

Office and local Internal Revenue

Service offices. The Service used an

additional 360,000 copies in various educational programs.

The Farmer's Tax Guide, Publication 225, is a 48-page booklet

intended to help farmers in preparing their income tax returns . It

explains what income is to be reported, what farm expenses may be

deducted, how to claim depreciation and soil and water conservation expenses, and how to report

self-employment income. The 1970

edition featured a sample filled-in

income tax return based on illustrated farm income and expense

records, including a detailed depreciation record . It also contains

"Important Dates to Remember," a

tax calendar that lists the dates

when farmers must file certain returns and pay taxes . More than a

million free copies were distributed

'~y Service offices and by extension

agents of the Department of

Agriculture.

The Teaching Taxes Program

continues to be used in approximately 25,000 high schools and

colleges . Three publications were

used to present step-by-step explanations of the preparation of individual income tax returns . The

Teacher's Guide, Publication 19,

which contains answers to the tax

problems appearing in the student

text, was sent to approximately

95,000 teachers. The student texts,

Understanding Taxes, were published in a 28-page general edition,

Publication 21, and a 36-page farm

edition, Publication 22. About 3,-

654,000 general texts were distributed, and about 458,000 students

used the farm edition . This indicates use by 150,000 more students this year than the previous

year.

The Tax Guide for Small Business, Publication 334, is a 160 .

page booklet aimed at answering

tax questions of small businesses,

including sole proprietorships,

partnerships, and corporations . As

in prior years, it explains in nontechnical language how the tax laws

apply to business situations. The

Guide features a "Tax Calendar for

Businessmen" showing the dates

for filing returns . A "Check List"

of business activities lists the kinds

of Federal taxes to be paid with respect to each, what forms to use,

and the page in the Guide where

each kind of tax is explained . Ap .

proximately 200,000 copies of this

booklet were sold by the Service

and the Government Printing Office

at 60 cents a copy. Another 80,000

copies were distributed for internal

use by the Service .

The new edition of the Tax Guide

for U .S. Citizens Abroad, Publication 54, continued to fulfill the

need to explain the special tax pro.

visions that affect U .S . citizens living in foreign countries. Explana .

tions of the conditions under which

income earned abroad may be exempt, or partially exempt, from

Federal income tax are provided in

this 32-page booklet . Approximate.

ly 770,000 copies of this booklet

were printed for free distribution

through Service offices and U .S.

embassies and consulates in all

parts of the world .'

The foregoing publications have

been revised and republished annually to reflect new developments

in the tax law. Three items formerly

issued on a periodic basis were redesigned and incorporated into our

annual taxpayer publications pro.

gram . These publications, which

are available through the Service's

Office of International Operations

to United States taxpayers overseas, are as follows : Tax Return Filing Requirements for U .S. Citizens

Abroad, Publication 563 ; Interest

Equalization Tax Highlights, Publication 573 (formerly Notice 59);

and Filing of U.S . Annual Return of

Income Tax to be Paid at Source,

Publication 574 (formerly Notice

20).

During this year several new

publications were developed for

free distribution to meet particular

needs. These new publications are

discussed below.

Tax-Sheltered Annuity Plans for

Employees of Public Schools and

Certain Tax-Exempt Organizations,

Publication 571, was developed to

inform teachers and others of the

special Federal tax provisions that

apply to certain "tax-sheltered" annuity plans . This 20-page booklet

explains and illustrates the conditions and limitations of th e tax*

deferred treatment accorded these

plans . The special provision that allows an employee to exclude from

gross income, to a limited extent,

his employer's current contribu .

tions toward his annuity is explained in detail as well as the tax

treatment of benefits receivable

under the plans. The booklet also

contains a computation sheet designed to assist the employee in

determining the amount of the exclusion allowance and the amount,

if any, of the employer's current

contribution that is taxable to him .

Certification Required to Obtain

Reduced Rates under Income Tax

Treaties, Publication 686, instructs

a U .S . taxpayer on the procedure

for obtaining a certification that he

is entitled to the benefits of an

income tax treaty between the

United States and a foreign country. Over 20,000 copies were

printed and made available through

the Office of International

Operations.

Tax Information on Interest

Equalization Tax, Publication 565,

was developed to assist U .S. taxpayers in determining their interest

equalization tax liability, if any, on

the acquisition of foreign stocks or

foreign debt obligations . Explanations of the requirements for claiming an exemption from the tax, for

filing the return to report acquisitions, and for payment of tax due

a

re provided in this 24-page publication. The information contained

in this publication is limited to that

which applies primarly to indvidual

investors and sets forth in detail

the acquisitions that are excluded

or exempted from the tax.

Other publications that were distributed free of charge are listed

below .

Publication NumberlTitle

308

Farmers Gas Tax Credit

349

Federal Use Tax on Trucks, TruckTractor and Buses

378

Federal Gas Tax Credit or Refund

for Nonhighway and Transit Users

463

Travel, Entertainment and Gift

Expenses

501

Your Exemptions and Exemptions

for Dependents

502

Deduction for Medical and Dental

Expenses

503

Child Care and Disabled Dependent

Care

504

Income Tax Deduction for Alimony

Payments

505

Tax Withholding and Declaration of

Estimated Tax

506

Computing Your Tax Under the In.

come Averaging Method

507

Tax Information on Scholarships and

Fellowships

SOB

Tax Information on Educational

Expenses

509

Tax Calendar and Check List for

1970

sic

Information on Excise Taxes for

197 0

511

Sales and Other Dispositions of

Depreciable Property

512

Credit Sales by Dealers in Personal

Property

513

Tax Information for Visitors to the

United State s

514

Foreign Tax Credit for U .S . Citizens

and Resident Aliens

515

Withholding of Tax on Nonresident

Aliens and Foreign Corporations

516

Tax Information for U .S . Government Civilian Employees Stationed

Abroad

517

Social Security for Clergymen and

Religious Workers

518

Foreign Scholars and Educational

and Cultural Exchange Visitors

519

United States Tax Guide for Aliens

520

Tax Information for American Scholars Abroa d

521

Moving Expenses-Tax Information

for Employees and Employe r

522

Adjustments to Income for Sick Pay

523

Tax Information on Selling Your

Home

524

Retirement Income and Retirement

Income Credit

525

Taxable Income and Nontaxable

Incom e

526

Income Tax Deductions for

Contribution s

527

Rental Income and Royalty Income

528

Information on Filing Your Tax

Return

529

Other Miscellaneous Deductions

530

Tax Information on Deductions for

Homeowner s

531

Reporting Your Tips for Federal Tax

Purposes

532

Tax Information for Students and

Parents

533

Information on Self-Employment Tax

534

Depreciation, investment Credit,

Amortization, Depletio n

535

Tax Information an Business Ex.

penses

536

Losses From Operating a Business

537

Installment and Deferred-Payment

Sale s

538

Tax Information on Accounting Peri.

ods and Method s

539

Withholding Taxes From Your Em .

ployee's Wages

540

Tax Information on Repairs, Replacements, and Improvement s

541

Tax Information on Partnership In .

come and Losses

542

Corporations and the Federal Income

Tax

543

Tax Information on the Sale of a

Business

100 / Annual Report /

Appendix Annual Report/ Appendix / 101
1!

6"

Sales and Exchanges of Assets

54 5

Income Tax Deduction lor Interest

Expens e

5"

Income Tax Deduction for Taxes

547

Tax Information on Disasters, Casualty Losses, and Thefts

548

Tax Information on Deduction for

Bad Debts

549

Condemnations of Private Property

for Public Use

550

Tax Information on Investment Income and Expenses

551

Tax Information on Cost or Other

Basis of Assets

552

Recordkeeping Requirements and a

Guide to Tax Publication s

553

Highlights of 1969 Changes in the

Tax Law

554

Tax Benefits for Older Americans

555

Community Property and the Fed.

eral Income Tax

556

Appeal Rights and Claims for Refund

557

How to Apply for Exemption for an

Organizatio n

558

Tax Information for Sponsors of Contests and Sports Events

559

Federal Tax Guide for Survivors, Ex.

ecutors, and Administrators

560

Retirement Plans for Self-Employed I

ndividual s

561

valuation of Donated Property

564

Tax Information on Mutual Fund

Distributio n

566

Questions and Answers on Retirement Plans for Self-Employed

Individuals

567

Tax Advice on Civil Service Disability

Retirement Payments

568

FederaI Tax Information for CivilService Retirees

569

Answers to Questions Most Frequently Asked by U .S . Taxpayers

Abroa d

570

Tax Guide for U .S . Citizens Emp,oyed in U .S . Possessions

TAX FORMS ACTIVITY

The following new tax return forms

were issued:

Form NumberlTitte

W-4 E

Witholding Exemption Certificate

(For use by employees who anticipate no tax liability for 1970)

637-A

Registration for Tax Free Transactions

Schedule A (1040)

Itemized Deductions

Schedule E (1040)

Supplemental and Miscellaneous

Incom e

Schedule R (1040)

Retirement Income Credit

Schedule T (1040)

Tax Computation

1040-FY

U .S .

Individual Income Tax Computation

Supplemental Schedule D and Instructions (1040 )

Gain from Disposition of Depreciable

Property Under Sections 1245 and

2250 ; AND Computation of After.

native Ta x

1040-ES(F)

Estimated Tax Declaration-Voucher

for Farmers and Fishermen

Supplemental Schedule D (2065)

Gain from Disposition of Depreciable Property Under Sections 1245

and 125 0

1120X

Amended U.S . Corporation Income

Tax Returns

2363

Export Exemption Certificate

425 5

Tax from Recomputing a Prior Year

Investment Credit

4562

Depreciation

4563 (Formerly 1040E)

Exclusion of Income from S~urce!~

in United States Possessions

4573 i

Application for Deterrr~nation-lncfividually Designed. 'Plan (Under

sections 401(a), 405(a) and 501

(a) of the Internal Revenue Code)

4574

Application for Determination-Individually Designed Plan Covering

Self-Employed Individuals (Under

sections 401(a), (d) and 501(a)

of the internal Revenue Code )

4575

Application for Determination-Investment of Trust Funds in Stock

or Securities of Employer (Under

Sections 401(a) and 501(a) of the

Internal Revenue Code )

4576

Application for Determination-Termination or Curtailment of Plan

(Under sections 401, 405(a) and

501(a) of the Internal Revenue

Code)

4577

Application for Determination--4ndustry-Wide Plan and Trust (Under

sections 401 (a) and 501 (a) of the

Inteinal Revenue Code )

4578

Application for Approval of Bond Purchase Plan that includes Seff-Empioyed Individuals

4625

Computation of Minimum Tax

4626

Computation of Minimum Tax-Fiscal Year Corporations and Fiducian s

4629

Transfer of Property to an Exempt

organizatio n

4638

Federal Use Tax Return on Civil Air.

craft

4653

Notification Concerning Foundation

Status

4653-A

Notification Concerning Foundation

Status of Subordinate Organization s included in a Group Exemption

The following tax return forms

were eliminated :

Form Number/Title

940(010 )

Employer's Annual Federal Unemployment Tax Return

941(010)

Employer's Quarterly Federal Tax Retur n

1040 Packages 2 and 3

Federal Income Tax Forms for Individual s

1040E

Schedule for Citizens of the United

States

2950 and Instruction s

Statement in Support of Deduction

for Payments to an Employee's

Pension, Profit-Sharing, Stock

Bonus Trust or Annuity Plan and

Compensation Under a DeferredPayment Pla n

2969

Application and Permit to Use Documentary Stamp Tax Mete r

2970

Order for Setting Documentary

Stamp Tax Mete r

3673

Application for Approval of Self-Employed Pension of Profit-Sharing

Plan as Part of a Master or Prototype Form or Any Bond Purchase

Plan (Under sections 401(a) and

405(a) of the Internal Revenue

Code)

3953

U .S . Commercial Bank Weekly Information Return

3964

Weekly Information Return With Respect to Foreign Commercial Banking Subsidiarie s

3969

Notice of Acquisition of Original or

New Japanese Debt Obligation

3973

Receipt of Part I of Notice of Acquisition of Original or New Japanese

Debt Obligatio n

4415

Election To Exempt From Self-Em .

Ployment Coverage Fees Received

By Certain Public Officers And Employees Of A State Or A Political

Subdivision Thereof

Supreme Court Decisions

Civil Case s

The Supreme Court, agreeing

with the Commissioner, held that,

when the stockholders of a corporation were required by State law to

purchase the stock of a dissenting

stockholder, the attorney, accounting, and appraisal fees incurred in

connection with the necessary ap .

praisal litigation were a part of the

cost of the stock acquired rather

than deductible section 212 expenses . In doing so, it rejected the

so-called "primary purpose" test

and applied a standard based on

the "Origin of the claim litigated"

and, in this case, the expenses

were deemed to have originated in

connection with the acquisition of

the stock . Noodward v . Commissioner, 397 U .S . 572 (1970) ' affirming 410 F. 2d 313 (8th Cir.

1969). This was a companion case

to United States v. Hilton Hotels

Corporation, 397 U .S . 508 (1970)

wherein the Court reversed a con

flicting opinion of the Seventh

Circuit.

In the case of United States v.

Key, Trustee, 397 U .S . 322 (1970)

the Supreme Court reversed th~

Court of Appeals for the Seventh

Circuit which had affirmed the district court's confirmation of a plan

of reorganization in a Chapter X

Bankruptcy Act proceeding' The

plan provided for payment

of

the

Government's tax claim over a long

period of time with the unsecured

creditors being paid ahead of the

Government . The Supreme Court

reversed the court of appeals and

held that Rev. Stat . 3466 (31 U.S .C

191) required that the Govern .

ment be paid first, ahead of other

creditors, and that a plan which

provided for payment contrary to

the provision of R.S . 3466 was not

fair, equitable and feasible and

could not be confirmed by the

district court over the Govern.

ment's objection under the provision of section 199 of the Bank.

ruptcy Act.

The Supreme Court reversed the

judgment of the Court of Appeals

for the Sixth Circuit in United

States v. Estate of Donnelly, 397

U .S. 286 (1970). The Sixth Circuit

had affirmed, per curiam, the judgment of the district court which'

had held that the Internal Revenue

Service is required to attempt to

file a notice of lien with the register

of deeds before filing with the district court even though the State

of Michigan, at that time, required

a description of the land which was

later held invalid in United States

v . Union Central Life Ins . Co ., 368

U.S . 291 (1961). Additionally, the

district court had held that, in any

event, the Union Central decision

should not be applied retroactively

against good faith purchasers . The

Supreme Court reasoned that th e

. . .

presence or absence of the

legally futile act of tendering the

noncomplying notice to the register

of deeds could not be a factor de .

terminative of the priority to be

granted the federal tax lien ." More .

over, it is not a question of the

purchasers relying on a statute

which was later held unconstitu .

tional by the Supreme Court nor

was it a situation where res judi .

cata would be applicable . Instead,

it is the principle that Acts of Con.

gress are generally to be applied

uniformly throughout the country

from the effective date forward and

the Service is entitled to adhere to

what it'believes to be the correct

interpretation of a statute and to

reap the benefits if the interpreta .

tion proves correct .

On March 3, 1970, the Supreme

Court decided United States v. W.

M . Webb, Inc., at al., 387 U .S . 1 ~9

(1970), reversing and remanding

402 F. 2d 956 (5th Cir. 1968), in.

volving the important issue of

whether maritime law is to be ap.

plied in determining whether cap.

tains and crewmen of commercial

fishing vessels are "employees" of

the boat owners for employment tax

purposes . The case involved men .

haden fishing vessels used in the

Atlantic Ocean and the Gulf of Mex .

ico . The Supreme Court adopted

the Government's view, and that of

Annual Report / Appendix / 103
the Court of Claims in Cape Shore

Fish Co. v. United States, 330 F. 2d

961 (1964), that maritime law .

rather than "common law" stand .

ards applicable to land-based

activities, was to be applied . It described maritime law as "the common law of seafaring men ." Under

the standards of maritime law, an

employer-employee relationship

may exist even though the degree

of control by the employer is more

limited than in the case of landbased employees .

In United States

V .

Maclin P.

Davis, 396 U .S . 815 (Mar. 23,

1970), the Supreme Court resolved

a conflict between the circuits as to

the proper test to be ap plied in determining whether a d istribution in

redemption of stock is "essentially

equivalent to a dividend" under

section 302(b)(1) of the 1954

Code . It rejected the "business purpose" or "flexible net effect" tests

which had been applied in the past

by a number of courts of appeals,

and accepted the Government's

"strict net effect" test . It held that

purpose is irrelevant, the control .

ling test being whether or not the

redemption actually results in a

meaningful reduction of the stockholder's proportionate interest in

the corporation. The Court also

held that the attribution of ownership rules contained in section

318(a) of the 1954 Code must be

applied in determining dividend

equivalence under section 302(b)

(1). Its holdings on these two

points resulted in a dec ision against

the taxpayer, who (after application of the attribution rules) was

the sole shareholder of his corpo.

ration both before and after the

redemption .

On May 18, 1970, the case of

Nash, at at . v . United States, 398

U .S. 1 (1970), was decided ad .

versely to the Government . This decision resolved a conflict between

the circuits and held that taxpayers

using the reserve method of accounting for bad debts do not realize taxable income in a nontaxable

section 351 exchange when accounts receivable are transferred to

a new corporation for stock havin g

104 / Annual Report / Appendix

a value equal to the net value of

the receivables . The Supreme Court

reasoned that the "so-called tax

benefit rule" could not be applied,

because the transferors actually

did not secure any "recovery" or

"double benefit" from bad debt reserve items which had previously

given riseto tax benefits . There was

no "recovery" because it was concluded that the value of the securities received in the exchange Was

no greater than the face value of

the receivables less the amount of

the reserve.

Actions of Lower Courts

Civil Case s

The Court of Appeals for the

Fifth Circuit in a decision rendered

on June 24, 1970, in United States

v . Stewart, Trustee, 428 F. 2d 319

(5th Cir. 1970), upheld the Government's contention that income

tax deficiencies not assessed at

the time of the petition in bank.

ruptcy which the Government was

prohibited from assessing prior to

bankruptcy under section 6213 of

the Internal Revenue Code will not

be discharged regardless of how old

the subject tax liability may be. The

Court further stated that an assessment for the difference between the

amount shown by the taxpayer on

its return and the amount calculated as correct by the Service is

an assessment for an amount of

taxes not reported on a return made

by the bankrupt. The Fifth Circuit

was interpreting section 17a(l)(c)

of the Bankruptcy Act as amended

in 1966 . The decision reversed

both the Referee in Bankruptcy and

the distirct court which had held

that the taxes were dischargeable

because the Government was not

prohibited from assessing as there

was no prohibition against sending

a statutory notice at an), time or

against a jeopardy assessment .

In the case of In re Hato Metal

Products Co ., 419 F . 2d 1068 (7th

Cir . 1969), the taxpayer while operating as a debtor-in- possession

under Chapter XI of the Bankruptcy

Act incurred liabilities for unpaid

withholding and social security

taxes . Subsequently, the taxpayer

was adjudicated as bankrupt . The

Referee refused to declare a trust

in favor of the United States on cartain funds which were'withholding

taxes withheld from wages of the

employees of the debtor but not

paid over to the United States . On

review, the Government contended

that under section 7501(a) of the

Internal Revenue Code, when one

is required to collect taxes from

another and subsequently pay the

taxes collected, the monies col .

lected constitute a trust for the

benefit of the United States . The

district court, while recognizing

contrary authority, affirmed relying

on In re Green, 264 F . Supp . 849

(D. Colo . 1967) and the footnote

.in Nicholas v. United States, 384

U .S. 678 (1966).

In the opinion of

the district court, the priorities

should be determined under sec.

tion 64(a) of the Bankruptcy Act

and these priorities should not be c

hanged 6y reason of the trust fund

conc pt of Code section 7501(a) .

The Court of Appeals affirmed the

district court and consequently the

Government's claim for employment taxes was relegated to the

priority accorded all Other administrative expenses under section 64

(a)(1) of the Bankruptcy Act . Petition for certiorari has been filed by

the Government .

In a case which will, in all probability, be the subject of a requested Supreme Court review, the

Ninth Circuit held that "secondary

premium payments" made by a

Savings and Loan Association

which was insured by the Federal

Savings and Loan Insurance Corporation (FSLIC) were deductible

in the year paid as ordinary and

necessary business expenses (section 162) . These payments, made

pursuant to 12 U .S .C . 1727(d),

were ava i [able to FSLIC to pay

losses only after a "primary premium reserve" (payments thereto

being annually deductible under

section 162 by the member) was

exhausted . By law, the "secondary

premium payments" are suspended in any year once the total

of both the primary and secondary

reserves reach a certain level and

the secondary reserve is then utilized to pay the primary premium .

If an institution elects to terminate

its insured status, FSLIC 'must, refund its "secondary reserve ." In

so holding, the Court rejected the

Commissioner's position, provided

in Rev. Rul . 66-49, C .B . 1966-1,

36 (i.e., that the deduction is

proper when the possibility of the

return of the premiums has been

precluded or the taxpayer's income

and exepnses thereof are not

matched) and the Tax Court's position that the premium payments in .

to the secondary reserve are for

the acquisition of something in the

nature of a capital asset . Lincoln

Savings and Loan Association v .

Commissioner, 422 F. 2d 90 (9th

Cir. 1970).

In Steadman v. Commissioner,

424 F . 2d I (6th Cir. 1970), however, the Court rejected the Commissioner's contention that .a loss

on a corporate stock which became

worthless in the hands of an at.

torney, who allegedly purchased the

stock solely to retain the corporation as a law client, was a capital

loss pursuant to section 165(g) of

the Code . It held the loss to be an

ordinary loss under section 165(a)

of the Code since it was purchased

by the taxpayer as an integral and

necessary part of his business, relying upon Corn Products Co. V .

Commissioner, 350 U.S . 46

(1955), rather than purchased for

investment . The Solicitor General

has decided to request Supreme

Court review in this case.

in Maryland Savings-Share In .

surance Corp . v. United States, 308

F . Supp . 761 (D . Maryland 1970),

the district court has held uncon.

stitutional under the due process

clause of the Fifth Amendment the

provision of section 501(c)(14) of

the 1954 Code which limits the tax

exemption provided therein only to

certain corporations organized be.

fore September 1, 1957 . The court

held that the taxpayer, which was

organized after the cutoff date, was

substantially identical in all material respects, except its organization date, to certain bther similar

coroprations which had been organized before the cutoff date and

were entitled to the exemption

under section 501(c)(14) . It could

find no rational basis for Congress

making a distinction in this in.

stance based solely on the organization date . It held that the tax .

payer had been discriminated

against arbitrarily and deprived of

property without due process of

law . The Government has applied

directly to the Supreme Court for

reversal of the district court's

decision .

Criminal Cases

On February 25, 1970, the Su.

PreMO Court in The Colonnade

Catering Corp . v . United States,

397 U .S . 72 (1970), reversed the

decision of the Court of Appeals of

the Second Circuit (410 F . 2d 197)

and upheld the District Court's

suppression of evidence seized

from a retail liquor dealer by break .

ing open a locked liquor storeroom .

The Court based its decision on the

construction of-the statute provid .

ing for entry and inspection of

Premises of retail liquor dealers,

holding that the statute did not

authorize forced entry . However,

the Court held that refusal to permit entry of Internal Revenue of.

ficers would subject the proprietor

to the penalty imposed by 26

U .S .C ., section 7342. The Court

specifically declined to apply the

rule laid down in Camara v . Munici.

Pal Court, 387 U.S . 523, and See

v. City of Seattle, 387 U .S . 541,

which would have required the ob .

taining of a search warrant before

the penalty for refusal to permit in .

spection could be invoked .

In United States v. premises,

801 N . Seventh St ., 310 F. Supp .

1316 (S .D . 111 . 1970), a search war.

rant had been approved under Title

IX, Omnibus Crime Control and

Safe Streets Act of 1968 (see 18

U .S .C . 3103(a)) to seize books and

records of Dr. Vincent R . Hill . In

his motion for the return of proper.

ty and to suppress evidence, Dr.

Hill questioned in Part whether a

search warrant could validly issue

for the seizure of private books,

papers and documents in light of

the Fifth Amendment . The Court

in denying the motion, noted that

there is "no special sanctity in

papers, as distinguished from other

forms of property, which renders

them immune from search and

seizure," and that the "documents

sought to be seized were instru .

mentalities by which the crimes of

willfully attempted tax evasion had

been and were then being commit.

ted, as well as evidence of the

crime Of -willfully attempted tax

evasion ." As instrumentalities, the

Court held they were subject to

forfeiture, and as evidence were

subject to seizure,

The Tenth Circuit affirmed the

conviction of Arthur J. Fiorth on a

five count indictment charging will.

ful failure to account for and pay

over withholding and FICA taxes,

willful failure to file employer's

quarterly tax returns, and willful

failure to file an individual income

tax return for 1963 . United States

v. Porth, 70-1 USTC 9329 (10th

Cir. 1970) . In regard to the latter

charge, it was shown that Mr. Porth

submitted an income tax form

containing only his name and rate,

ence to various constitutional pro.

visions which he asserted excused

him from filing a return . The form

filed was completely devoid of in,

formation concerning his income,

Provided no basis on which his tax

could be computed, and was ac.

cordingly held by the Tenth Circuit

not to be a return within the mean .

ing of the Internal Revenue Code or

related regulations .

United States v . Prudden, 70-1

USTC 9336 (5th Cir. 1970), involved not only the matter of "Cus.

todial interrogation" as defined in

Miranda v . Arizona, 384 U .S. 436,

444 (1966), but likewise the mat.

ter of alleged fraud and deceit by

Internal Revenue Service agents

through soliciting taxpayer's cooperation and failing to advise him of

Possible criminal consequences of

Annual Report / Appendix / 105
their inquiry . In considering the alleged improper conduct of Service

agents, the U .S. district court had

suppressed 511 corporate and personal records furnished to the Internal Revenue Service on the

ground that they had been obtained

by the agents' fraud and deceit in

preventing the taxpayer from understanding that their investigation

might have criminal, as well as civil

consequences . The Fifth Circuit-reversed the suppression order, holding that the record did not disclose

any affirmative misrepresentation

that would establish the existence

of fraud . The Court found, after a

careful review of the whole record,

that the ultimate finding of fraud

and deceit on the part of the agents

was a mistaken one. True, the

agents never advised the taxpayer

that their examination of the tax

returns might result in a criminal

prosecution, but they were not required to do so. Such a warning

was held to be inherent in the

agent's statement t

'

hat they were

there to audit the returns. The

Court held that the burden is on the

movant in a suppression hearing to

establish his right to suppression

of the evidence by clear and convincing evidence . The Court then

went into each facet of the evidence, which the taxpayer had contended constituted affirmative

fraud, deceit or trickery, and con .

cluded that "[w]hen the record is

taken most favorably to Prudden's

position it falls markedly short of

demonstrating by clear and convincing evidence that he was the

victim of fraud, deceit or trickery ."

In rejecting taxpayer's contention

that he was entitled to Miranda

warnings the Fifth Circuit noted

that there was "no factual support

for a contention that Prudden was

put in such an emotional state as

to impair his capacity for rational

judgment," and "no evidence that

the incriminating evidence was coerced as a matter of law; i.e., was

the result of in-custody interrogation or anything approaching comparable pressures ." The Court rec .

ognized that of the nine Judicial

Circuits which have spoken on this

issue, decisions favorable to the

Government have resulted in all but

the seventh Circuit. United States

v. Dickerson, 413 F. 2d 1111 (7th

Cir . 1969) and United States v.

Habig, 413 F. 2d 1108 (7th Cir.

1969). [Note .-Prudden, supra;

Simon v . United States, 421 F. 2d

667 (9th Cir. 1970), cart . den . 38

LW 3453; and United States v.

Caiello, 420 F. 2d 472 (2d Cir.

1969), cart . den . 38 LW 3406

(1970); have specifically rejected

the rationale of the Dickerson opinion .) Compare United States v .

Heffner, 420 F. 2d 809 (4th Cir.

1969).

Statistics of Income

Reports Published

Individual Income Tax Returns ,

1968, Preliminary (31 pp ., 259)

Corporation Income Tax Returns,

1966 (316 pp ., $3) . '

Corporation Income Tax Returns

1967, Preliminary (32 pp ., 359)

Foreign Income and Taxes Re

.

ported on Corporation Income

Tax Returns, 1962, Supple.

mental Report (263 pp ., $2 )

Individual Income Tax Returns,

1967 (259 pp. $2 .75 )

U .S . Business Tax Returns, 1967,

Preliminary (34 pp ., 350)

U .S. Business Tax Returns, 1966

(321 pp ., $2 .50)

Statistical

Tables

Notes :

All yearly data are on a fiscal year

basis, unless otherwise specified .

For example, data headed "1970"

pertain to the fiscal year ended

June 30, 1970, and "July 1," in

ventory items under this heading

reflect inventories as of July 1,

1969 .

In many tables and charts, figures have been rounded and may

not add to the totals which are

based on unrounded figures.

Internal revenue districts are

listed in this section by the names

of headquarters cities . Each district

is identical with the boundaries of

the State in which the headquarters

city is located except for the States

recapitulated at the bottom of

tables 1, 5, 6, and 14. A map of the

districts papers on page 93 .

I,

106 / Annual Report / Appendix -_- 0 - 11 - - Annual Report / Statistical Tables / 107
Statistical Tables Collections, Refunds, and Returns

Filed

1 . internal revenue collections by

sources and by internal revenue regions, districts, States,

and otherareas/11 0

2 . Internal revenue collections by

sources and by quarters/ 117

3 . Internal revenue collections by

sources, fiscal years 1969-

70/11 8

4 . Internal revenue collections by

principal sources, fiscal years

1940-1970/120

5 . Internal revenue refunds including interest / 123

6 . Number of returns filed . by ininternal revenue regions, districts, States and other areas/

12 4

7 . Internal revenue collections,

cost, employees, and U .S . population, 1940 through 1970/

12 5

S . Internal revenue tax on manufactured products from Puerto

Rico/ 125

Alcohol and Tobacco Taxe s

9 . Establishments qualified to

engage in the production, distributioln, storage, or use of

alcohol and alcoholic liquors/

12 5

10 . Establishments qualified to

engage in the production or

exportation of cigars aind cigarettes/ 126

11 . Permits relating to distilled

spirits under Chapter 51, IR

Code / 12 6

12 . Permits for operations relating

to alcoholic beverages under

the Federal Alcohol Administration Act/ 12 6

13 . Permits relating to tobacco under chapter 52, IR Code/ 126

14 . Label activity under Federal Alcohol Administration Act / 126

Stamp Taxes

15 . Number of occupational tax

stamps issued, by class of tax

and by internal revenue regions, districts, and States/

127

CASES RECEIVING APPELLATE

CONSIDERATION OR IN

LITIGATION

Appellate Division

16 . Receipt and disposition of

cases not before the Tax Court

(nondocketed cases) / 13 1

17 . Receipt and disposition of income, estate, and gift tax

cases petitioned to the Tax

Court (docketed cases)/ 13 1

Office of the Chief Counsel

18 . Processing of income, estate,

and gift tax cases in the Tax

Court/13 2

19 . Receipt and disposal of Tax

Court cases in courts of appeals and in Supreme Court/

13 2

20 . Receipt and disposal of suits

filed by taxpayers in Federal

courts and actions by the

United States for recovery of

erroneous refunds/ 13 3

21 . Decisions of courts of appeals

and Supreme Court in civil tax

cases/133

22 . Receipt and disposal of collecti.

ons, injunction, summons,

and disclosure cases/ 133

23 . Receipt and disposal of insolvency and debtor proceed .

ings/ 133

24 . Receipt and disposal of miscellaneous court cases, lien

cases not in court, noncourt

general litigation cases and

apeal cases / 133

25

.

Caseload report / 13 4

Cost of Administration

26 . Obligations incurred by the Internal Revenue Service/ 135

27 . Obligations incurred by the In .

ternal Revenue Service, by ap .

propriation and activity/ 136

28 . Quantity and cost statistics for

printing/ 13 7

Annual Report / Statistical Tables / 109
Table I .-Internal revenue collo ctions by sources and by internal revenue regions, districts, States, and other areas

I In thousands of dollars. See table 3, p . I IS for lax Fates and Further breekdow, of national ortals by soucasl

Ind dual Income and employment taxes

Inte-Leveav . egunIi . districts Sta.,.

Ind the, areas I Total internal

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

eve- Corporation I-ar. tax Income tax

(States represented bs Single di,inst, indicated in C.11calwal income tax at withheld withheld and Railroad Ualmoployamor t

Parentheses ; totals for other States show, at botto m

at

fare 1

.)

Total and s .11-con cld-.Zu and etairroom

I

I-Inic.

PI.Yerent disability

asurInce 3 1 t

(5) (6) (7)

carried Serves . _135,722,09 35 .036 .993 141 .1111- --ar. . . ... .

Fiewsh-Irs. Ix If. . .... . .. . . . . . . f .il

'''

1 .1 1s,941 24,8411 .1 . 51 .1 .1 111 .01

Albany. . . . . . (See (c) below) . . . . . . . . 1 .902,766 ILS 3 :3 0 I :fl7:651

1

88.186 1.435,341 3,987 to 140

Augurs . . . . . (Main,) . . . . .. . .. . . -- -

losion

.

488,41 6

3

1' 0

72,26 8

963,256

394.679

4 .701 .680

99,43 7

852,941

298.569

3,318,994

4,35 4

5,8915

2,319

rim" Z3 .849

B ;n--

896,877

3 4 3

11"

3,252 169 963.418

H,

c 10,863 1 131

. . . . . . . . I 3.704.893

.

73 78 2.63G.592 4 31 960

11

1,: ,

. _ _

B.1hati ;n:

HIrtfi= - _ , n

b )

226.674

" "

26 .27 5

GOO .283

187~279

2 670.910

9 : 0

5 2

651,420

136,236

2, 002, 987

1 F. 9

44

952

: : : : : 16,559

Marrhatte Q ., . , :- : :: :

Par

D

mouth anno'bre)------ -

('''

MI. . . %

44,970

7,3!1%~4 0

S 28

1

5

JI,316.~13

376,814

1, 8411 . -1

82,790

.2. -r134

291,785

12 .11S

26

.!i, IProvidence ' 1 1

: : . . . ( Rh!. "laval)- ~ . . . .- 871.90

1

46,290 688. 837 IIL35I 573,122 20 I~ 314

finfol-ext .m .,. ex. ... . . . . . . . . . .. . . .. . .. . . . . . . .

Baltimore .. . . . . . . . . (Maryland and D .C.) ---- : 5 203:7 0 4893-691 14 .260,195

.10 0

683,463 3 4 3 211

1

ges .3.,

491

III .re

IS 1

3

Ninvick ------- . . . . . .. . . . . 7,105 ISO 1 173 10 1 3

0 64' 1 . ..

3 3J If, : , :

7

5 06

So . 31: 17

Philadelphia 1 : ** ~ 337,456 7

5

025

:.

5 11 115 5 ~ 1: 031 ~

39'

4,332.aI25 167,6

88

b ovv , : : :~ : ~ : : 30,703

Richmond --------- (Virginia) . .. .. . .. . .. . .. .

4 :

2 .ilql~ 111 3l79S1 1512.1141

31 412

1 .12~,194

1,111.11

507~ 2 18

441 .3S8

2,887.67 4

1,161 .126

13 434

49 .003

20,86 9

786 Wilmington . . . . . . . . . . (Delaware) . 1 2 4 7 .01S5 :

22 , 17 '9,1287

ITS ,

S., . q 161 41 1 1 T&I

. . . . . . . . . . . -------

1 . , 1

1

.

.11 . 2 .6 a. .1 Sea li is Set

,

S . rus

se .jara 7S .

~Iacrl 141 1 25 U

5

29 .3 2 209 75

l

1 7 " 1 . 1 34 19 2.209 1219 1 Bi.Iran Alli 1) t . . . . . . ( .

S 3h 1' 1

J

: 43S ~, 2 I

9 .86 0

1 "

1

74.958

164,741

1 . MUGS

867,070

1

253, 54

177 .635

87 J :

32

683 .3077

8,388

1 37

7 :~11 1

9 1

: Cremation a

.. . . . . . . . . . (11%. C. ~.

16 4

4 : .654 717 111 2 . 111 151 451.771 1,72S.152 1,224

IS sa

g

(Mississippi) ----------- 658.467

4 2Pi 344

9D 67

0

5S8,1411

'I~ 05 :

8

3,333.447

146

1,124 .474 89G 365

:39

2.155 9471

517

35, 82

3 ~

17,302614 Nashville, . . . . . . . . . . . (Tennessee

1 :, :

96 743

3 ,

C ., 29,37 1,585.723 401 .830 1 .171,971 1.831 IOrD9 I

t- i

13

1

6.102 .0116 21 .686 .502 1 .113 411

I . . 111

67 aa* U4 .M

ina i giii;

21yebund. . . . .. . . . . .

. (See it) below)----- ---

:[3 :9

7 .793,172 1 345 94 IS: "4 ' 251511" :77541

5.5 JI ~ ,

711.132

N2 3J : 1

4,741,8281 4 5. 104

17,47 7

28,79 0

.1

. . . . . . . . .

0 -it . . . . . . . . . --- (Mk`!ain` ) _-

13,303,001

:

906 .496 7 174 1 15 11114 452 6 701 322 11 713 4 21

1 ndianarls . . . . . . . . (ind n . . . .

Lor ESVII a . .. . . . . . . . . . (Ke,t,cky). .- .--

1 101,11 2 :, 1

72 .306

630 7

315.2120

~ 6 : 8

3

1,1201 .1 %

6 1

02 :.853

29 2

2~ 994 : 7 39 1

IS ' '

. '3 : T

25.911

:

13 1 8 0

17 1

rkersburR --------- (West Virginia) I . . ----- 682 .183 88,410 512 .008I 1441 0831 11 4 : 97S

47 go t

2 : Mr

.-" "w"" - Ablirdaim . . . _. _. _~ .- - - - TS a-u-t-h- -6a---------- -- File) - .. . . . . . . . . 244,057

Irse .57s

24~583

22

-,Mot '179':'

11,121~0114 128 1,1 111.a122 123 .9U0 13

:

C"',

. .. . .

. (So, T)

below )

. . . . . .

. . .

12,

594,830 1,113

'6

9 .078,219 1 .561 .129 ~? 7.334 .899 126,511 55 69 0 Gas :

__ r -- ~'ow' - - - -

1.612,687

~EZ

A 38 1 .281605 439369 837 .394 498 5,94 4

Fargo -------- p l h Dikille)- -- ----- -

Alit talk ea. . .. . . .. . .. Wiscror io . . . . . . . . . . . .

241,029

3,532 .328

19,958

7 11 4

"

210 08 3

2,531 .437

80.963

482.722

129.36 0

2 . 033 685 170 J1,1 5

0 an .he. . . . . . . . . .. . . . (Nebraxka) . 1,132.991 9

1

: 1

,

53 7 980

4"

137

'"

:

. . " 33

St : : : : : : :, : : : , 3 1 7

. Lo.... . . . . . . . . . . . (Mh,,pur1?, . .

5

.125. 196

M N

4

3

171 7,2 :141

W1

3,796 7:9 t

' . . " 1

5:

64

411,177 ITS

3 . 072 .

1 . 112 .6577'1

: 2~5

151 .1107

0 :

14 .33. .1.

~ : : : : ~ : : : : : : : : S angfi.

It

:2 15,04

2 2 311 . 2 9 2 1:464 : 7 10

37,

.524 1,082,494 2 6

74

.. is

.theiver, lit.gle,,. . . . . .. . . . . . . . . . . . . . . . . . . . .

. Movic.) - --------- 408,963

22.1221

3 2

S2 .1- .11 .

3' . .' as

26G .777

111~=

9

-32 8

Aus'i Chervicarmi_ -------. . . . . . M1 ., (1) 1.1mil ~ . . . . . . . 4.171,252 1 3 :92 7 3.2 1~661 1 AS: 68Z 2 .354rO44 3 .704 IT :23 1

. . . . . . . . . . 159,214 10.998 128 .590

IS 584

79 .439

Dallas 1 " 1 . . (sea (1) below)

Dean,.. . . . . . . . In'. a) -------

2

3 .708 137

2,47

0

630,415 2 .29

2:'0'5'2 .8991

750.291

277.936

1

2 .

1 . 7S'0 : 594790

12 .64 6

7 . 997

11 .413

33

8

Little Rack t rikersas) ------ 1 :00

89 8'

131 111 111 4 13 313 077 344 30 3

Nkv, Orleans (Louisiana) 1 704,7 0 4f,273

354 :1 3

1,

3,G I :7 ~ S :

84 747 1 .023

2

sha 7,11

0 chloma C`~ ((0 k 1111, . . . . . . . . . . . .

l IS Karl-a).

1 : 7

.,33.0%

1 .071

21,3 J7 :012377 1 :03~ 111.134

348

298,86 6

112 .131

855,127

110. .3

101

55 407

5. 1

Fai 4.767

few. Frea .im,. . . . . . . . . . . . . . . . . . : : . . . . . . . . . . . . Z. .ll 1 .12'

"

n." ."s

. . . . .

. .

fuli ..~.,Saaa ~

93 MZ 10S .511 4

(11,111) --------------- 171,111

1

4 :111 19,114 25 431

I 1 .. 1' '33

Helena . -------------

asont. 41 :01 1

2897 , 96

59 0117

35 :29

39

2401:632

'S:

I

int T

3"3

: "

'4 '

47 4

296

~ . I3 T7

D38

Honolulu ------------ (Hawaii) . . .. . . . . . . . . . . . . 602,998 84,519

IN '

99,

P213 24

3"

.12 11 2 34 1: 0

L03 Angeles . . ----- - (So .

(a) below). . . - 10,74 571

3

1,635,228 8 .351 31S : .,741,51 . 6.559, B62 1,273

a

prooni 45,61

- I

. . . . . . .

Portland --- (A

; ..

0

897,82 5

1 .463,337

2100 134

39:544

761 .698

1,164 .207

210 150

17 067

547~499

886.456

15 5

3,956

3 894

6,727

Sam, IN

* ,

437 119 11 112

7Iha

1

8

5 :

If 5

`1

231

' 5

2 768

1

U ,

SIR Ealikiti S. . .

I Francisco (See (a) below)------ -

:~

506 76

7~ 352 . 664

7l :ti'S

11 111

: .0,

41 4

1 111 211

1 6 55

1 211), 591

311: 02 1

4,13F37 5 .1

3

71': 'O

:

1

2 03

27 997

Seattle. . . .. . . ---- ~ ul . . 1 .610 .133

95.

321,

2 :13, :

D46

. 4

48,513

.

1,671,4 9 3

V

94

11 :

19

off ...;~ I : : : : :

aw .1 Irs- i . 1.

P

I

St. R,a. :

al

282 :"3, 56 "41-5 4:

.",?a ,

1 59

..",

1

7 0

,

T

M1 4

"ints

1 .7 372

'T

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

. . -

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

Other . . . . . . . . . . . . . . .. I .. . .. . . . . . . . . . . .. . . .

Undistributed :

581,486 62,291

94 7

501,161

55

6:20?

8 69

413 .301

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

1,505 15 4

Federal to' defirsils and alloullturY Keipts C . .. -681,896 -319,482 -362,975 ----- ---- -361,611 -1,479 11 5

Gaisolin bill IS .11, and fac.. FI A

a

:

"oil ; . .. . . . .. . . .. .. . . . . 4 1 311 11 121 121 79 2 126,972

. . .. . . . .

WIN",to 1 . . ., .1 F.I .,al

a in

1: ,an

1""'

1 _ ~ .:

16,965

-11 140

16.965 . . . . . . . . . . . . .. . . . .. . .. . I .. un, or vci,

. tax.,-

-end I-A!, Fares .. . . . .. . . . . . . . . . . I

. . . . . . . -91 1 . . . . . . ------- I . . . . . . . . . . . . . . .

Tinar to, State, at show. above

(a) Cahromi

1 3 '

7.441,238 14,472 587 2.955 173 117

1 44

(a) 76. 36! 11 1I 7

Illimil, 4 2. ~17, 1 1 23

1 6

In,142 .

1 933

:, :

3511

' ~

29.

" : 'Jit

)) New Vorik .~ -- - - - it

Ohio . . . . .. . . . .. . ..

32,

11182 9 :423 111511GS 17 1

1 1 9

'11" 2 521 J5 T7 :372: 21 isTW13 22' "42' 25" "a ;~ '4"S: '11'7

j

of

pnasyholune- . . . . . 11 .840,894 1 . 137 12'

S

1 11 4

1

11

1 ",

7,220 099 121 .121 51 .57 2

To

vas -

. . . .. . . . . . . 8,Z81 .399

: ~

.84 42

11 : :~~

WS I 1186,97 3 4,458.933 16,35( 3t. 64 5

Sale tioloulas an IF 120

110 / Annual Report / Statistical Tables

Table 1. -internal revenue collections by sources and by internal revenue regions, districts, States, and other areas- Continued

fill thousands at dallarx. See table 3, P. 118 for tax rates and further breakdown at national totals by source5l

Alcohol taxes

Excum FI.IS, Distilled spirits faces

Internal revenue realms, districts, States and other total (Surn

.,.as -

(States ,presented 6, single district, indicated

Estate tax Gill is, ofeclumna,

11 . 26 . 30,

Trial

Total Input

in parent h Ss .x ; total, I., the, Six- show . at 31 . 37 . 38. (cal lacteal Domestic I knIfil, Occupa- Other 1 1

hot,.. at table) .,it 50) by it., Initial I

...turns)

(8) (9) (for (11) (12, (13) (14) (15) (Ifi) (17 ,

Diluted Sanit- ii-noul --- - ----- ------

-

3,11I .J21 4II

-

.Is s

__

. .? . . .a $ -. .. gas . .. . 74111 .62 1

_ -

2 .695 ."] 25 .101 !!:!!L

Nwituh-AtIselti. R .0- --- -- - . . . . . . . . . . . . . 21

.. . 1

111 I Issr.3as ;4~ ..

.2 .2 1

a.-

_

A ~S 2 .11A ..a (1) below) ---------

9

21:

7 , :

S 5u 21 254 14 . 778 308 . . . . . . . . . . .. . .

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

Boston . . . . . .. . . . . I Sal

a

.ase suits) . .. . .. . .

12,84

118,8189 17 6 3 311'

7 :111

2

81

I,~ D~ 2 :1387 1, 2 .22 0

1 11 1

------ - -

16 41 3

1. i12

1,103 Igi A, I

6": ~l~ 11 1 2 049 1 14 ,772 75 731

. G : ~2 ' 1

,

EJrftx ._ ( c 9,823 44 66,

S

7 :

114 5,11. 5 6 39 .284 485 _ . : . : :

3 .

482

Burlington- (Vermont) Me, ---- -

Hard NU013

759

15,792

' .04 1

123,508

10 2

71 .801

4 3

70,396

_

. . . . . . . -

. .. .. .

69,826

. . . . . : : .

259 2

39

11

her _ : . . . . . A

Manhattan --- 1&

'll

17 93,893 1,246 722 234,171 209 .761 156 701 51, 685 939 43, 1 N-Harapshife)- ----- 9,418

'

711 3

263 ~ . 222 4 38 . . . . . ..

------- ( a

,

,.,

.d .n,I Rho. xlxmd)~ ---------

Mid-Athunti . Val... . . .. . . . . . .

B lt o M , , d d D C I : :

21 .57 0

I . . . . .

8

45 IT

59 .3,11

4

1 4

2 .309 .2 'L" ra, , 'a

7

- 'i~ ."3

. .

soa~axx

. . . . . . . .

I

III

2.111 0

a im re ( e y~ a an . .

Newark ---- a a

Now

2 .65 7

1, 1M,

9, 3 7

15,674

30,88 0

494,654

Z6 .396

260 111

232.969

112 ' 1 1

62,533 ifs 09

11 351

Do

11'

3,~

746

9

2

Philadelphia S .: (I) below 0 1 1 12 1 13S

1 "

:6, .

1 5 1

If, : :~.

R , 36~ 653 74

Pic Sh R harrom -: : : : : W('-ISIII)

as V1 : 219153

J,: g2~

7.317

: ff~

315

534,084

. . S5

3 7'

8Si6s

645 :

1,1:144,S7 . . . 7 4 459

40

1]

6

Wilmington-------- (Delaware) . . . . . . . ---- - 25,476 6.969 1 .729

51 49

. . . . . . . . 41 1' )

-livernst

Atlanta : : : (GiioFriu6 : : : :

M

45 :6,5D Z1,18 "15NINS

130,607

11 450

67 .751

5 711

. .3a, 3G .2"

1 121

51 IS

1

gas

---- -- .

Birmingham ------- (Alabama) -------------- 35

12 ,

2.644 10,1017

2 : 3

62

: 1 4 , 4. . . . . . 3 118

11

41

27

Columbi, ----- --- (South Car,

2 na ~ -- -

15 :

' '

1, 4 11 731

21

7 145 is . . . . .

SS I

6 Greenstme-_ - (North Car ris : 48, 1 18

3 .20 ", : ,1 .

1. 11,774 123 23 14 11

Jackson . . . . ------ (MissisDPPl)__ -

jacksmaylla (Florida) ---- . . . . . . . . . . .

.

13' .~94 . . 11 I1121 S 141114' I S 11,1123'8 3SA613 11.378 7 .9965 ZI 35401

1.

26

Nashville . . . . . . . . . . (Tennessee)- - ------ 31 :461 ~1:734 47,451 22' 950 22,827 22,735 - . . . . 61 31

- - - . . . ... 6 - .-- ------ -

Cincinnati- IS ---- :a - ~

Ise,73 4

67,583

44 .9,611

5 704

4 .993 .75.

203,119

1 .

W.4S1

158,911

1 .412,979

128,360

M6 .2,67

--------

11175,asl

26,630 1,530

I .-

199

Is

(S d) To 2

Cleveland 86 .168 19,601 751 56 for, 562 1 1 11 71 211 1 14 7 111

6

3 1 2 Detroit- . ---------- Oific~hllrxft) . -- ---- 101 . 155 12,576 2,117 1 11 111 114

2 :. ~ 5

11

IS2 : 9.0 S4 :

1

., 4

'

441 21

Indi,repis is ---- -- (Indiana) . . . . . . . . . . . .

!

111

11

3 3

IS

If, ! ~ 4 :

6

9

3

' M

CfiQ 6,01

19~ 5

Louis IS (Kentucky). .-- . . . . . . ~ : :

PxrkeisWj~ :_~~ : : (West Vizi .i.)------ . ..

31, , 2 5

11 .537

':

64

,

646

1

. 193 .91 3

19~581

694 .259

6~2s5

119 :4 3

6~084 . . . . . . . . .

571, :111

6 .056

1,96 5

2

70

25

141

eldwevi, Fal.. . . . . . - ------ --------------- funi .ses Se ". J ."J ." rhol ..27 56 1 423 .067 A I a ..111 it Are, din- - - - - ( o .kh Dakota)---------- -

Chicago---------- (Sir. JET below) ---------

4

2DD . 19 .0074 2 a. 4220 1

4

6946 :43 7740 173.16628 1%. "22 1

:

4i,i5i 1'*)59 12 . 5 _ ' ']I~ 5 ' 74335 . . . . . * ~

Des Ailmnes (1**I) -_-------------- 30,653

7

0

6

, :: 30.322 403 15 1

Fill ------ North Dakota) --------- 4,590 162 1~ . 93

86

44 . . . . . 42 1

Milwaukee -------- (Wisconsin) ------------ 53.343 11 311 221 44 111,654 5.521 3 .276 i'&32 8 705 1

Oamba; _ . ------- ------------ ! - 20,117

1 : ~37 ?:

,

5 0 7 834

~. Mix 1 103 . . . . 113

St. Lo

St

. Pat ------- (Minnesota) _ :

3

017: 3"2

'

9,495

7 '4

376 .59 6

12' "1

125 3: 4 5

52,2118

35. 227

J0.692

7 .930

3 055

2c, 54

301

7

. .

99

20

146

3

2

S~rixzfiald -------- (See (b) below) --------- 41,111 1 : 84 0 344:34 3 305349 278,575 - . . .

.

275 095 : 3.216

21

3

~ ------------------------ -

Albuquerque (Now Mexico)-.

212 .1aill 1

., 556

39 .223

1 0al

1ASS .-

7.937

201 .159

685

",US

679

29 .77 4

------ .-

13 .07 5

586

2

(-)

11

.

"

DF

Austin Ch ------------ ISee (f) halo%) - ("

."'"-

Myouring)------

fi~.990

2.

886 10,76 7

286

72

6

. 9 06

16,463

65,54

141

19

20361

&

11 :1 1.

'00

. . . . . .

J4 1

36

1 9

(')

[)at].,

" , ,

6 1 71 1 11 1 11 11 1 21 731 199 116 . . . . . . . 1 2 1

Demvei: : : CI ad .). -

3 4 : ~

98

5 "

~:

, "

3:

S 32

1

206

1 . . I S

Little Back. . . . --- (Airkx-sax)~ New L ---------- -

Orleans

( orislans

11 :31 7

32 084

50 4

11 34 3

30,746

68,904

.1

'j 's!

51

. .. ...

IJ . 624

6

10,251

: : : : : : : .

2

34

73a 362

Oklahoma Wichita. . . Cl~ . . . :. :. :. :. : (OkIllmans) --- -

. ----_--------

25,26 9

29 .963

4 20 1

2 :64

a 309 713

34:082

: I

I

. 1

1 .241

. . . . . .

. . . . . . . . 7 7

w-n ll. . .. . . .

Anchorage ------- .479 . .. ""'11s

ii, -. ..I.

1 741

a

a" 171 -" ~ f

1

72 '133 268-7 1

1

"I 2 .44391 f-)I f

Boise ---------- (Ida no)- ------- -

Hot. .. . . . . . . . . .

4 .309

1 2 11

I S

1

11

: 1

3 6323 I

J,

866

G

4

845

. .

-~ 773 3

4 0

66

. . . .

1 Honolulu ---------- (Haw-0-

:~ 7 ,

, 346 13.107 4 .980 2,3?7 2. 178 129 2 68

Los An a ------- (So,( val .) below) -------- - Z82 .521 17 .473 457.02 156

1"

94 .432

31, 1"

55,

1"

1

11 10, 1

Phmarj~

(A a .). . ~ . . . . . ---- -

-

11 1 3,277

6

.275 2 111

2

06

16 7 Portland .- Retail) . . . . . . . .

Rem, ---------- Nevada) -------

21 :

1~151

12,

1 7:4 1

4

3

13': J3".

11~47 1

IS 612"

091

1.

.. . . . . .

4.131a

. . . . .

S182 11,

1111 Larks ry (Utah) . . . . . . . . . ------ 3,809 827

" 540

39

I I, a (,I,, hI) Ul..) -------- - a .. - . . - . .. : ~

Seattle

------

Was 'Igt--) -----------

172.630

41 14 3 "1 17 : V

741 :

147,303

311~21 7, 311 243~~12'

1 ~,

37,~11 2 IC 1 21~ 14I 1,

2 11

738

2113 1 M. It Sent- 1 .

.1 0-11 -------

, "

lls~

a,

a" " I 'N "Te '11 1 ',

IT

.a-- 41 7 ST IS : B 71 199 70 151 69: 08 1 : 071

other . .

idistrib led :

15~ 039 490 2,505 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F-derIl tax deposit, and Isola situry receipt . . . . .. . .. . . . . . .. 561 . . . . . . . . . . . . . . . . . .

. . . . . . . . . - ----- - ---- ----

Gasoline, lubricart

"' 0", 1 1 it a aca

. FIC A

ared It, I ~ . . . . .

Tr,nsfeTFecJtaGov;rnWoW ;idu;;__ ---- -- ---

. . . .

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

Withheld taxes of Told ... I employees - - -

I

. . . . . . . . . . . . . . . . . . . . . . .. . . . tuej . . .

CI

:xragac"uF`foT Excise "xes-avi atj

;;

ad oil-Air ----------- 1 - ----- - 91 . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . .. . . . .

Tota l

- '

s 10, States no t shown above

(a Shia- G -------- -

455 151

28 90 1 198,719 505.246 7

7J

71 71

a

2 99 T

5

-Uq-77-664-44-i 4 - - - -1`1

I

Illinois

240 6 : 8 4

'13 M

30,26 5

' " 7 ' '

:

U38.71 7

'16"2'

4 7S) II ii" al.

3

~

7 I

22

1

1

IN

~ ~ E

4

,

. 7

.

3

llflnI

3.

gii

:~~t~ri

I

2

(d] IM 71 :

1

2 1 :3 0 4

1

~2 175 2 1%31~ 208 518 73.287 33.037 1 .631 559 14

194 , 327 19,944 997.494 240,333 179 .039 . . .

75

731 2JIl 1, 1 11 11

jj~~ _20,657 843. 72

4

93 279 19 408

. . . ~6

.

gilit --- --- . 25~

f

2~

Sao footnotes on 120 .

Annual Report / Statistical Tables / Ill
T ble I.-4nternal revenue collections by sources and by internal revenue regions, districts, States, and other areasC:ntinued

To thousi dollars. Sao table 3, P . I IS for tax rates and further breakdown of national totals by sounces]

Alcohol uxes-Gant,nued

Internal even.. regains, di,t,,,t,, States

and atte, areas

Wines. cord,al,, etc ., taxes Beer taxe s

(States famencented by single districts indicated in V,

' FOZ I I'' ove : n

ated

.-

Occupationparen1heses : total

I

for at he States shown at bottom Total

I

co I red Domestic I l r

pl

Total (c. led Domestic I at taxes 1 1

of

as

by Customs) by Customs )

(19) (20) (21) (22) (23) (24) (25)

United St,ox . ted,l . 1112 .921 ur .Ill 10,102 2 .57G 1.080 .156 1

- An-Ale Roakew . . . . . . . . . . . . . . . . . .I's 20 .992 21,044 1 91 125.505 1 .- _..39 75 1

10mv) ---- -- 480 . . . . . . . . . 478 3 13,990 ------------ 13, 900

1,

.

A sho . . . .. . . . . . . .

. _-, - -,

Bo (Mix.m

. ialts)---------

159

2 117

. . . . . . . . . .

2 111

159

411

C)

1

5 7

' N,

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

9

- . . . . 51

7

Brooklyn. . IS :~, lb~ :jmv~ .

:

4 :934 ~

. _ * -_

J2,

3 60U2G - . . . . . . . Buffalo, _ ~ ~ : : : c . 60.072 196

: S

is me . . . . . .

. . 17 .024 . . . 17 020 4 21 775 21 . 600 175

8

Islington . ----- . . . . (Vermont) 4 . -------- -

.0tri ~Gmr

52

&4

_

. . . . . . .

. . . . ~

. . . . .

645

52

4

6

765 . . . . . . . . . . .

------- .

769

6

57

Mothers

do

2u, 320 18,973 1,338 9 3,988 2,32 127

Portsmouth 'h

a

P

rovidemor ., : tRh`o`c . f1sandh 1

I7 : : --------

313 lEni

328

Fees ow . . . . . . . . . . . . . . . . . . . : : . . . . . . .3 .48, ilsoo J12 271 Us .=? 439 11112,11 .9 111

inva, "~ _ : do .D.C .) ---- -

N I

.

. . .. . . . .

1 .83 1

8,266

1, BOG

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

297 34

3

32,59 6

90,052

439

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

32 .D99

90~016

5 7

36

,

Philod.1ph .. . . .... . . .. . (Sao(,) 1, mv~ 1 .711 ---- 1 715

I

15

"

hnv : : . 131 41

Pittsburgh ------------ (See (a) be

Richmond i lumil)- .

.

.

.

. . . . . . .

"

S

1,661

: :

V )

1,436

1

232

23 :7B 2

1,005 ------

2~

68,

'893

1.~

107

( Delaware) . . .. . . . . . . . . . .

1 .

-----

1

2 ------------ ----- . . . . . . 2

--ad R"11.

Atlanta . ------ "511 . . . .. ..

-

'162

$5,

11

57,97 1

4 .112

3 1

---- --- -

a "I s

1 128

as,

64

Birmingham . .. . . .. . . . . Oklahoma) . . . . . . . . . . . . . . 52 --------

2 136 ~

IS

Calumet I, . . . . . . . . . . . .. . (South C-la .) _

reensbaro ------------ (North Camlina) .- :-* : :: :

411911 . . .

191as 12 .4 86 340 'N

I k (Miss I I) . .. . . . . . .. . 2 . . .. . . 2 7 ------------ ------- . . . . 137

Jackson 1

Nashville. . . . . . . . . . . . (Tennesseij ::

3,7212 4M 159

1

441 40,172315 . . . . .. . 350. 40,226

.. ---- ----- "121,

. . assay.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3's 111 122,326 sit I..-

Cinefirmat-------------- (Sea Toy below)-

1 . . . . . . . . .

1,141 1

1 0

29 To 3 --------- - 21 11 2

Cleveland . . . . . . . . . . . . . (See (d) below )

Dr,trolt ----- hinliffor) ------- -

- .

1 3:6 2

2.376 524 1,745

3

106

IS:

772

39.513

&j

511

15 :

3.,S93

1

--- 9

:: . . . . . . . . .

I I - an ,1,)

Parkersburg. : : : : : : : : : ((We,!

59

722

3

_ _

- ----- -

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

'19

3

INJOS

198 ------------

'11:'091

153

23

45

.10 awaken . . . . . . . . . . . . . . . . . . . . . . .

Ab.,dI.n,-- (South Dakota)

S ..0 2.2112

. . . . . . . . . .

7 .498

. . . .

'

10 .5 .517

25

42 4

- . .. . . -

1" set s

, . __ :. .

Us

25

Chicago . - - (So . (b) below) . . . . . . . . . 6,315 1,287 ~ 6~6 2 10,625 305 10. 2N 29 DM I,

ay a no . . . . . . I loveg- - -

Forgo. . . . . (Nort Dakota )

Milwaukee 1homs,") . . .

60

4

310 253

58 _

64

1

-a

197

1310.811

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

(*) III

128

--- lid 5W

6 9

1512 :

Onfache

. (N.It'sak .)

54 . . . . . . . . . 54 1 11 1 ----------- 7: B54 2 3 St. L..'s (Missouri? . . 2,436 294 2. 151

1 B7 : 773

4 87.669 1 off St . Pau l

so,[.

(TeiI V; w-) . . . . . . . . .

519

2

374 1451

1

41,087

27,373

2

. . . . . . . 1

949

2'1:314

3 5

wed 2

thwant stag-_ . . . . . . . . . . . . ------- ------ -

Albuquerque . - (New Maxim) . .

Austin .. . . . . . . (Sea fly lnlldw).~~ :

6.696

1 .8372 538'

1 .527

1,0162

40 1

2813

151

44,494

sair

vii

dar" 81

.

----- ii:g§

316

3

5~4

Cle.grono. . . . .. .. . .. (Wirtmirtil). . . . . .

D . . . . . . . . .

. . as . . (So. Q) be]..)- 312 _i~b_

(*) 9,

7 27 .228

7

99

. . . . _ -- - - -

2 . 4fl . . . . . 1, 411 4 1

11111, IT

(A'

;~i : : -

"M "'a*"'

J1 i;ig..)~ : : : :. . . . . . .

Oklatharmi Z

.a

.) __

. 1

I .10b 230

4 7 5

1,36227

1 5

'3

I , 399

1 :06

6 5

------- ----

u,ij o

935

9

3

ioll

34 Wichita . . . . . . . .. . . . . . . KII .,)-- . - I . . . . . . . . . . . . ------- 1 87 . . . . . . . . . . . . . . . 87

ad- '" see -- ----- * - -----------

-

Anchorage- (Alaska)

-

11,711

i

1,111 17,111 111

(* )

IIA, " ?

3

1,111

"'

111,111 14 1

3

Thih.

:~ : : : :: : :: l 45 ----

------ -

4 5

Helena . . : : ------------- I

------

(1 20 I ------------ 2 0

Honolulu. . . . 1),

11 Angles

5,9 36 29 7 7

3,1046 2 .749 82

1 3

% :327" 111.. 5'1. 43 .

167

5 :

4 1

1

4D 2 .236 1 2.224 1 2

P rdand .. . . 0 and).

R : I

2

it

2

53 26 113 5,986 16 5.934 36

,n,,,,,, (

s ------------ " --------------

-------

. . . . . . . . __ _

-

2

N

5

2 1

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

------- -

------ -

__- -

5

2

San F

'anc... . . . . . . . .

. (S" I) below) . . . . . . .

Seattle . . . . . . . . . . . . . . (Washington)-

84 .099

Z197 27

wai

1,970

19 1

101

20,923

46,718 5

iO

46 .64,

~

7

2 7

.-P .mrt .1 w- so " is- denewou-n . . ., _~ :

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

. . . .

a3

3

___ . .

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

'

I

45

_ ____ _ _

------------ '4 I5

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

odistributed oth". ---- ; ------------ - -- -------

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

Fsi tax dio.1ft, add dnsduny .,role i . . . . .

G li l b i il FICA d t '

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

aso , dne. u r catung o , an excess cre i s -

Trans 1 . Go encri of Us. . . . . . . . . . . . . .

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

. . .. . . . . . . . . _ ---------

Within _

aid . .a .

of Federal tionclovies . . . . . . . . .

I

--------- ------------ ---- __ : : : ::

1

(I) Cb) (,) " de Illinois litainia.

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

0) (1) 7 isse Partwurvene . ,

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

Totals to, States at shown abov e

0"AT 1 11 ": '2117

415 6: q1SI

4: N2

1,721 -------

2,149 5]8_

S 21

231 : 713111

'236

11 So' factories an P. 120,

2 / Annual Report / Statistical Tables

274 1 7 7 :92,1,1

3 37 do"1,

00,022 2,324

22397 44 875 51

' -

: 71

27 23 --------

375 1 N*

132

37 5

97.110

44 .800

59,326

71,088

262

5

59

2"14

458

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

11 o thotsards of dollus . Sea table 3 . b . I 18 for Ux tales and further breakdown of natural totals by sovimil

Internal -enue regions, districts, States, and other areas I

States opromifted by single districts indicated in parentheses ; totals ]of

other Star, ; shown It bottom f table)

Tube. . I . ...

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

1 .1tat Cigarettes I C~jua,, Cura, I i

(26)) (27) (21) 111)

1 .1 .1 tern p

Us ., on

d,.ndmIff`-t

ad'. ..1

(30 )

United . . . . . . 2,094=2 1 .031 .101 1,271 22 1

e-1-11wrid .. Prose- . . . . . . . . . . . .

' ce

331 an .1

Albary . . . ~ . . . . . .. . (See (c) below)

A.g.stur Maine) ------- - ----

17

--- - ---- --

__------- - - . . . . . . . : : . .. . . . . . 17

. .

V

)

B M

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

.,,ach .,ctt,) .. . . . . . . . . . . . . . . 47 0) 2 45

I

Brooklyn .. . .. .. . . . (Sre(c)b,lm,)_ . . . . . . . . . . . . . . . . 4 V) 4 4

If ffelo ----- .- (See (c) below) -------------- -

B ri ngton- . . . . . . . . . .. . (Vermont) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . .

V )

- -_ _' '

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

H -Ft a ;ord . . . . ------ (Umn-ticut) . . . . . . . . . . . . . . . . . .

Manhattan ---- . . .. . . . . . . . . (Sao (c) beer.). . . . . . . . . . . . . . . . .

22 6

571

.. . ..

127

226

at

' 0

"""'t, 'n-don - ((Rh wod Hee 1=;'-- I---. . -.

lid ALI-- R... win . . .. . . . . ---------------------- . . . . . . . . .. . .. 25 .11 . 11 to

Baltimore __ -------- ~ . (Me ryl, nd and D .C.) ------- ---- -

) . ------ . . . . . . . . . . .

Newer

k ... . . . . . . .. . . . . . . . . . . . . . (No. Jeise

68 . . . .. . . . . . . . . . . .

(*)

5 3

12

1 5

2

~ 6

Philadelphia . ----------- . . . . .

Pitt b h : : : ~:,) : : : : : : ::: : ~ : : : : :

24 .41 2

419

1 3

(

24,43 0

411

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

s urg . --------

Richmond (vuldri,I ) 484 046 13 100

BIG C)

------- --- --- -------- - I

Wilmington----------- --------- Delaware)-

. ,

(1) . . . . . . . . . . . . . . . . . . .. .. . . . . . .

Saudmaxed it"I .. . . .. . . . . . . ------------------ --------- -

Atlanta -------- ---------------- (Georgia). . . . . . . . . . . .

i h Al b 2 871.

1 .1aill .- 16 .3 . 4

95 8

2 0

. 1

. . . . . . .

. . .

I

B rming am ------------------ _ ( a ama) ---------- -

Columbia ------ - . . . . . . . . th a

"*,

.

2,014

1

2: at

41 . . . . . . _ ( .) 4

No,

G.... sbo- ----------- - (M i in

k i i i

4 0 1,123 677 4 48 2

son. . . . . ..

. . .. . . . . . . . . . . . (

ss

ss pp ) Ja c ----- -

jackson' .11------ -------

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

11,4iZ

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

-

155

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

.

11, 2119

. . . .. .. . . .

Naub,fll.~ -------------- 162 . . . . . . . . . . . . . . . . 4

tored Reveal- ------ - ----_--------- ---------- - "1 1

Circirmati .- .- (Sea(d) b

2'*)

113

zy

--------

4 .111131 . . . . . . . . . . a. d. . . . . . . . . . . . . . . I.

C eveland----------------------- (See (d) b .) :

Detroit ------ . . .. . . . , ----- --. . ("n Men) . .. . . . . . . . .

777

4

. . . .. . . . 77 52 2

2

la.ilrlis~ --- ----- lmd . . .. . .. . .

. --------- - Ind a nama)..

L i K k

'59

431 562

. . . . . . 6 6

429

2 45 9

sv 456 7

a

.

bu ------------------ ( imtmc y)~ ---------------- -

Parkersburg ------ (West Virginia) .. .. . .. ... . .. . .

,

23 3

,

.

233

8

of a s - ----------- -

Articles Ch . . . . (South Dakota) . . . . . --1 . . .. . .

174 (See(b) below) ------ .. . . . .

. . . .

4 3 1 at

Des . (Iowa). . . . . . ..

.

.. . .. .

M. T . . F.,,I-- ---- - Notirh Dakota) . -

.

Mil-k- . (Wootc-) .. . . . . .. .. .. . 7 6 1 1

Ormiha l Lo u --- . . . . . . . . . (Nebraska) -

Si : 1 .2__ a : : - : : t

Spingridd ------ - . . . . . . . . . (Be

.

_ by below) . . . . . . . . . . . . . .

showers savelin. _ -----

Abuqu,nque_ (New 'xi ) .. . . . . . . . . . .. .

u N

are

C)

5 too

a s

A stin-_ _ -(See I ---

168

3 IG3

2

Ch

.... do- . . . . . . . . ---

("Yor""g)-- . . .

. .. . . . .

Dallas . .. . -------- . . . . . . (See (f) ow)_ ----- . . . . .

. . . .

. . . . . . . - 3 7

. . ....

. Icomad I ----- .. . . . . .. . . .

Lits . Boa_ (A,k .mxa

') -* '

2

No. Odcars- (Louisiana) : : : 2 2 (H

Oklahoma Coli, (Oklah .

I Wlchit------- (Kansas) .

W-eend . .I

.. . . . . . .

A chisrartiBoise . . . . . . . . . . . . . . . . . . . . . . . . (Idaho). . . . . .. . . .. .. . . . . . . . . . Helena -------- (Montana)-----------

Hooolulu-_ (Hawaii)--

N C )

IS

Los Angola- - (a) below). . . . . . . . . . . 61 21 40 2 C

Phoenix

---

~4n`mr) - - __ . . . . . . .

Polli ~ Oregon) ----- . .. . . . . . . . . . .

C

0 )

grion- C )

~111 ,an Ille I3~1c.,. - - - . . . . . .

so.

C) 19

3

Seattle- (Washington) . . . . . ---- _ ---

_ * -

I . . .

...of fort"a ..1 6 o-1". -- ------- -

Puerto Rico . . . . . -

I9 .0s ,

IGO22 C)

. . .

Oth-__ ------ ------- . . . . . .. . . .

undistributed :

. . . . . .

Federal tax deposits and cle~oxltcrviegipl'~

Giisolin,julbricaUng oil, an excess I CA cod,is_ . . . . . .

Ira,slerred to Go . . . mment of Gua, . .. .

Withheld tau, of Federal employee- . . . .. . . . . . . . . . . . . . . . . . . . . . . .

f

Total, to, States nor an .. . b.,a

See footnotes on 1 . 120.

b~ Illinois

(it) (ac) No, "HomYorke Ohio . . . . . . . . . . .. . .. . . . . . . . .

11) P n

. . .. ..

(f) T :nxsyIvx`."__ -

SO

59 34

890

24,861

168

243

102

888

24.949

163

364

V )

Annual Report / Statistical Tables / 113
Table I .-Internal revenue collections by sources and by internal revenue regions, districts, States, and other areasContinued

]In thousands in dollars . See table 3, p . I IS lor tax rates and hurthin otesidown of national trials by -ceil

Manutrecturer's-ise taxes

I mumal o. ...pairs . districts, State,. and a4mr, .1., 1

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

(States represented by wrigh, districts indicated In parentheses ; totals

'I ... M c"s,

I., other State, crown It Intion, of table) Lubxcal- (wholly .1 in chassis

TOM G-11n . .2 W . part of rubber), binh-Irfalts, Other n ' ~,xliaer fails a

at . monn, tube', a n

red . oc. . so. his

is... n

tread rubber

(31) (32) (33, (34) (35) (36) (37 )

Inkink.l. -.1 . . . . . . 3,430 .0 6 .1 . at . I .IsT .382 51.21. .0

N-A J-11 insig- .

"5 1

al . Ill Is, 1sx .31.01 1

Albany .

lsq` (

3:119

1

19 46 03 178 . . . August. : . . . ..I~ ------ . . . . . .

Boston Miss relln"Aft) . . .

3.110

31 .979

3 . W I

26,970

2

...

326

522

11 5

1 .778

5

2,572

. . . . . .

Brooklyn S , C )(c) hot . .). . . . . .

B .fial- S :I(Ilb,ll*--

22

3 1: 075..

ij1 14. 1. 11 1

50

6.

13, 587 D4

11 .179

2,028

11 9

763

1

:

V,

Dinnit)

"U1411" Connecticut) Hal aid . . . . . . . . . . . . . . . . . . . . .

BIG

. 67, 517

8,573 2

06

C) 3

34,72756 2 .70341 21, 57487 -- - Manhattan IS a I (c) hot. .). . . . . . . .

Porwou fliw, H "'"hil ) ------- . . . .

.

,

1 35

928

. 1:

4

51

4231 .0809

12

12, 2571 83.3156

1

ID .871178 5,62

4 Prolidence . . . . . . . . (Rhode Island)- . . . . . . . . 2.919 2 : 306 20 25 2751

3

hald-Ausent . agerifier .- . . . . . . . . .

.. . . . . ..

I .- I.A,, es

rilturor ----- - 1l' 1- I - 1 3 B (Maryland and D.C .) _

.Wa

N r 4

. . . . . . .

6

111

24

5

" : 12 . . .

225

' INI

31: S

"

14,

7BI

10'. 706

1 2 f

2 .20 1

PhiladeiiiWiii6 91~ I l : 96

' 6

780 C)

Pittsburgh b ye)

R chnnood .

is

Virginia) . .. . . .. . . . .. . .. . . .

273~ 7 1 3 19

711

257, 7 G 8

1,117

8,135

47

3,41 4

11,614

4 350

9"

46

283

-------- -

Wilmington . . . . . . . . . 6 5 1 3

3

18 M

thynast ary,ai.. . . . . . .

Atla ta Gsm l ) :s".1' '"44 :1a 9P ' .5131 T",

2 .143

n - .. . .:: _ :, : , ~ rg a

Bi,=,, Alabama) ~ . . . . . . . . . 13.690

7 741 5 1

1 .207

2,731

4,641

tog

41

------- -

Cut (

.. . South Carohnii) ._ . . . . .. . .

Greensboro . . . . . . . . . . . . . (North Carolina) . 1

.67 0

31.980

11,48 1

28,323

151

58

19 1

2,407

265

2.147

582

14

Dyls,

_ _

.51 3

11

5 275

1

5,384

8 3

to

I : :~ :

N

ashirilre--- - ---

Tennessee) . . . . . . . . . . . . . ---

5.21 4

- 13 52

10. 762

10 701

340

78

33 1

2 12

2, 2 . 48 7

934

1,244

102

(San (it) below) - - - - - - . - . . . .. .. -.

CindIna

. 1.I" " 2 .4 1 '7 ..7.:9"05' "

7'

"' ....

2 44'

'* 1 us ",'B36 `67 1 . )

d

C

Is 9 1 7 ' 7

121,664 2,185 393 : 77

0

:s

Oct .,, ',DG9,363 42 564 2 84 -2& 195 2,054,095 6 '' 1 5

Indianapolis . . . .

. . Undi-0 -

Loui.il,, . .. tKon uiyiky~ ------ . . . -

!

41,35 2

51,455

30: 770

47,1105

a 9 5

1,533

12 1

3D`

9,328

"B3

21 1

: : r -

,Irkasbufg : Was g 113) . . . . . . 2,035 11645 211 IBI 3 1')

Mid- Igi.. . . ... . . . . . . . . . . . . . . . . . . . ---- . . . . . . . . . .

Aberdeen-. (South aket.)- .

t

ani

1 451

I.A.

22'

141

~,aly12f a...$

'a :, 244 C) -------- -

IS, (b) lo.).

. ......

111 5,

2 20:

10,

5.595

2,744 76

U '

A

N 1)

Fix 0. . . . . . . . . . ofth 'do kiiiiiij- - - - . .. . - -

19:521

3,658

14,9

1 .50' 1g 1'24I

1,08 2 1 I 3 1 1

2,113

3911

Milwaukee . . . . . . . . .. .. . (Wissinmin) . .. . . . . . .. . . . . .. . . ..

Omaha . . . . . . . . . . . . . . . . . . . . (Nebraska). . . . .. . . . .. _ . - . .

11B I :~3231 151 '71 2

is

131

3 66

2,421

101

16

557

71 3

71 ------ -

St. Louis ---------- -- (M

.

sarcurl)----------- - - --- - -

St. Paul. . . . . . . . . . . . iminnesota)-------- - _ . .

so 988

46 .006

72~Z94

41 214

1,2 7 9

844

1,816

329

5,50

11

9 3

3,111

12

spolifi .ld. . . . . . . . . . . . . . . .

. IS a . W Wmn) . . . . . . . . . . .

25

150 22.637 67 36 2,2,2

saxillywanot R .1. 1 . . . .. . .. . . . . . . .. . .. . . . . . . . . . . . . . . . . . . - _

At bin nin)- - . . . . . . . . . .

- f'"W m as

1 .1,Df .urs

4 .433

1 .0n .122

4

..

30

.

o n

1'

111-

.6

. .

35

. .171

5 . . . . . . . . . Austin . . . . S: . ( I) belo,) .-: . . . . . . . . . . . . .

C V on' e

"E")

691 .23 8

" 1 6'

:

B3.

12 111

20.83 7

1*)

4 . 04 3

6

L6558

6

4

4

3

D.1131. . . . .

innim, ------- GSan "" .1m.do) --------- ..)

: 3

a

hD 2

IS "'

5, : '

70

2'

~' .

- Is

2 .51 7

12,246

5,554

2.042

260

306

77

-- -

Lit Is Book---------- (Alkinsial)

1

DfLms)::

Now Oricany . . . . . . . . . . . . . . . (Lou

24 02

11 :498

23 :

B .111 580

.0,4 4

B14

7

I11S cy

Oklahoma City . . .. . . . . . . . . . . ( Okl.hmo - --------- _ -

Wichita . .. . . . . . . . . . .. . . . . . . (Kuflaf)~ ---

III 11 19,251 2711 .311111 1,41to, 402 3,430

21

51

4

. ... . . . . .

.. . . . . . . .

unw. la"I .. . .. . . . . . . . . . . . . . . 4"arl 3S7~423 11 .1. Sa

SS .

; . I .93a .

. . . (Al ,slk I ) ---------------

1

Bqi ._ : ('it ~ 4 3 ------- 9

hq~ . . . . . . . .. . . . . . .. . .

H:km . . . . . . .. . . .. . . . . .. . . . . . (Montana) . .. . .. . .. .. .. .. ..

2,53 2

470

'.028

368

71

4

5 14Is1 258

H

(H-11)

-

1 395 50 126

1' 203

DO

Los An _ : : ~ : : . : ~ : : : (So.(I) bilo~j : 207,641 162,189 4,681 2,111 35.3% 2,380 . . . . . . . . . .

Phoenix . . . . . . . . . .. . . .. . . . (Vzona) . . . . . . . . . . . . .

Poll

land. . . . . . . . . . . . . . . . . . . . (0 agan) .- ---------- ------ -

390

17, HUG

1,593 (*) 9

10.

311 15.15'5'

0 11 1 . no. . . . . . . . . . . .. . . (N-d .). . .. . . . . . . . . . . . . . . . . .

a6115 7 21 94 (_~ _ _s, 1.1 Links ((Utah). . . . . . . . . . . . . . . . . . . 4,937 LBOG 4 187 375 z 566 . . . . . . .

Se Fronch. So, 0) below). . . . . . . . . . . . . .

Squirt . . . . . . . . . .

.

. . . . . . . (Washington) . . . . . . . . . . . .

Z04 ONG

26 :884

.36 0

186,29 2 9

6,639

is

1,576

214

2013,15 8

.026

27 4

IN

1- )

;

- .1 hory-1 - 0-firw,

--- -- --

IS

Puerto Bic------ -

Other. . . . . . . . . . . . . . . . . . . .

Undi Wilerted

. . . . . . . .

Federal to, deposits and dyinsittiv recenift 5

Carolina . lubricating oit, an excess I'l C A I I (1 -it3;

Iran st erred to Government of Guam . .

V11thheld fic.., of Federal implinnins- . . . . . . . . .

1101,13 to Staes not sho- eo .

0) . .. . .. . . . 411,647 344 549 1,319 4.571 48~555 21654

fb) I fifinne . . . . : : :

~) N sy York. .. . .. . . . . . . . . . . . . .

380 408

596 889

Z90:543

449.572

:

5,66

2 1 .2

2

1

03: BE

751 2 :111

185

2

472

6,690

4

1 2

1

(it)

(a) Ohl . . . . . . . . . . . . . . . . . . . . . . .

Painsyl .in,I ----------------

111.411

6 Is

. gui 111. 111

5 77,460

25 1

15.990

396 219

1 312

51 .59

Is 'is1 71

827

2

(t)

7 of. . .. . . . . . . . . . . . . . . . . . . . . . 751,580 716,008 21,478 0:

1

B 56 7.209 324

79

11 See hummotes on o. 120~

4 / Annual Report / Statistical Tables

I

2

B

Table 1--internal revenue collections by sources and by internal revenue regions, districts, States, and other areasContinue d

it. thousands of dollars See table 3. jo . Its for tax rate, and further ti-lidow . of r .henal total, by snunceil

Miscellaneous =,,a taxe s

Ad ., ,any:

Dis less conInternal ,,,one regions, districts, Statel, I'd other Ilessi sort,. athletic Tirrilho Glass oil

Total q "" 'is , net W,r,i etc,

,

: no

'an

III

. "I' an

sugar , poiral ..for

(States represented by single districts indicated in Parentheses ; totals

or

deny, inouniment

.1 cielcon; fuels

for other Slates shown at bottom of table) 1.1rayet" ec~ a-mins

(3a) (39) (40) (41) (42) (43)

Dennis! sins-, 25 .3111 W... 2a7.711

N.-Axi-til Fur,l- 2.1 :0 a . .' 12 .::l 21

AlbanyAminstiI.,, 11~2 141 024

11 .-

6 111 1

"1

Is B 8

Boston (Massachu 64,711 46 44 1 .211 2.499 2. 39'9'

Brookl,yn-

(Sea ~" ':!a

.,) 9 31 DD 1.711

B Hat (I . r~ , ): : : : :~ N~ ,i', * 3, 5B 3, 1379

Bud,ngt,n . . (Vermont). . . . . 1,095 342 2 8 481

Hartford- (C

.

minct,cut) --- 21 411 397 22

830

lyaqratja~: :

So. (c) hot. .) ---- --- ---- 68* B7 1 ": 2'3

84

7

1-4 67 829 76, W 35, 84 .3 B, P.Asonmith- . . New H.-hu,e)-

I " P-nd"".. . . (Rhode Island) . - ~ 753 23

2 1') 221 4

"2

Mid-suilia.u . .-_. . . . . . .. . . . . . . . . . . . . . 2701 .5 29 -.302 6 .330 $.Us Sol

Baltney . I_~ (Mary and and D .C.) . . . . . . . . . 46 764 -4 35,4434 5,003

2

3&: a

Newark' . Near )a,,, ) ---- 4

1 2

56,743 1

4

4 97 4.8

Philadelphia P . . (Sea(e) berow~. . . . . . . . . . 166 28 8'3:70"6 211 5 .054 11,97651

N I rig ' Istsurgh (See (~l below . . .- . . "'21: 888 1-) 6 43 3 14 720

nchnnumd :056 24 - : : : .- Wilmington ((Dole . Vhia)~ 11:01fll 2 2~ 4: ON

. ., r. - . - . . . - - I 1 1

4

201

a-thassid, Phial.r . ---- an. 241.3711 ..2 . 2a. .

A Inter . . . - , : *177 1", 63 54 1 23,556 5,OR 4, -

Bi-InVirinn . ~Alatbanoa)_ . . . .. . . . . . . . 658too 8 .739 -21 58,76, 6 4,985 2. 9

C lumbis South Ga,oInqs)_ . . 2bS -14

L39

Greensboro --- (North Carolina).

. . . . . . It 5 "28 21~11~2 3 " N 1 9 3,614 :IV?

1 32 . 2

4

38

. .. ... . vii le :: -8 14 .091

3

1 .&- 1 ((VMi0i'rId`u-P" . , 11 .143 8~419 - 1' 11 . 161 60

. (Tennessee)-- 11 '166 - I 1 9 56 (1) 3 , 90

.yeiria laselen,- - _. __ . . - . m Is'. I . . . ~ 6,1s 7.9 2 .29. W..

Cincinnati (So, ld~ hl~1 Sea (it .11 ; : . . . . ZO .311 -14 14~941 161 21,393

53,ga3 109 14

1

Ch-land 69 51 1 Detroit (Michigan) . . .. . . . . . . . 68 10 : 2 -4 54 797 53 '32

led!...F .11- . .

I

War ans). 41,111 29 :603 .3E) 1 6 1 7Z2

. 8

Lo.ia,.l I ---- (Kentucky)-- .

III - 1 1

. 3 608 31 1 1

Parkersburg --- (Weltilnicifix)- 11~212

8

'43

1, 1:

.a.-

. "1 7- - ---- ------ --- .2 "a as U.035 also xyr..5s AberdeenChicago . . .

- _ -

-

(South Dahot

(See (b) behr

.),__

.). . . . . .

2 .161 C) 613 3 972

. 162,393 - 3 86 .142 as 1 19,087 Day Moin's- (Iowa). .- .- , - ---- " 38 -1 5.080 24 3,196

Fargo .- (North Dakota) .. .. . . . . . . . . . l: BE 699 1') 598

Milwaukee ---- (W-sirnV . . . 36 244 C)

29,081 120

3,488 Omaha ..- .- IN atraska 111 11 114 12

1

2

,Louis- (Missouri) 16,9 : '66 13a, 592 21 817 5 1 5 1' . 020 :11 2

S; . Paul . (Minnesota). . . . . . . . . 25 53 . . . 696 992 3: 16' Springfield. S . (b) but..) . . . . .. .. . 13 366 -26 a. a22 3 1 Z,493 Sin.1-11 lasol - -------- .. .

.

. . I -------- -

2"

"* - I TG,071 I ... .6 .175

Albuquerque ----- -------- -- (N- Mexico) 3 :372 -3 190 6 - 2.621 Austin . . . . . . (Sea0? bal ..) 34 002 -22 2.067 2, 1235 3 798 20 877 Chain- (Wyoming) . . . . . . . . . . .. .. . . U 3:69 11 1 8

Do "'r :

Il :5312 7 -2 14, 5 10.104 1

Be

.,, r2don""') 79,793 -1 13, ME 3 237 17,658 3 301

Little Rwk--------- - (Arkansas) (Colo b . . . . . . . . 5.1 . . . - 1.231 90 . . . 4

Now Odeqn~,,. . . . (Lossiagl)-,

.

431

U8

Ofdah 6 9Jj4 2 242

..

. C (Olds 1). 15

'54 -2 1: 7112

4 11 :988

Vichitif ----------- -- - - -- (Kansas)---------- -------- 7,255

2

GO 1 3

2 581

slac. Flan.1 .7 --- --------------- - 29S 172 is 267 .5" 2G.72

3

Ancho,ag, . ~Alxxk .)-_ 2,500 1 730 405 97 Boi-, . . Id.ho)-_ ~:,72 1 2 19 1,579

Helena . . . . . . . . . . . . Montana) . . . . . . . . . . . .

. 1,

425 1 1. 171

Honolulu . . . . . . . . . . . - - - (Hawaii) .. . . . . . . . . 4:1 1,09D 3

21,

Los Angel.. . . . . . . . .. .. . (See (a) below) .. . . . . . . . Its I I.) GI Q9 22.22 1 .448

I

of ---------- - . . .. . . . (Poi.rus). . . . . . . . . . 45 2 :370 lin"'and --- ((Oregon) . . . . . . . . . Ill . . . . . 6 714 54 7 -2 1 950 19 2 137 71 Bonn Na,ada)~ . . . . . . .- _ . i2

:0st .

i 2'

1 1:,

Soft Lake City San Franc ---- (Utah) ------- 024 C) ID 2 ~ .111 1, 211

(See W below)- 184:0 1 148 380 442

1 15 153

Seattle . (Wat"'glon)- 462 .057 11 .a i.7 495 (.1)0' 50 2: 05G

offt- .1 Los n

Puerto Ric.- 1.093 . . . . . . .

. . 1

:0,8D Other- . . . 1 120 j65' DID ..

.

. . . . . .

Undistributed:

Federal tax deposits and clelositury renceicls,

Gasoline, lubricating oil, an excess FICA credits ; . .

Transferred! to Ginnernment of Guam . . . . . . . . . . .

Withheld taxes of Federal employees . . . . - . . . . . . . . . . . . . . . . . . . . . . . . . . .

Tohils tar States not shown abo, e

(I) California . . . . . . . . . . 1 217.781 4

(b) Illinois ---- _ . . . . . .7 96

. I GO 4

94

2

.

6A

go . I ) 1 59 ~,! : .'.u

(0 Now York --------------- - 315I 1 68 7D 179 I :238 78, 35331 17, 111 14

824 270

2"

4:393

t

(a) I P.,misil, 1,3 90 : A :335 259 5 I 26,696

(1) Texas. . . .. . . 7 564 21

Is I I. I Is

See lootn'tes on P . 120

Annual Report / Statistical Tables / 115
Table I . -4nternal revenue collections by sources and by internal revenue regions, districts, States, and other ateasContinue d

Inflansaunds of dollars. See ladale3l, p . 118 lot tax rates and further breakdown of rial,onal lots[, by sowitee.1

Mise,irch.e ., islit, U .-Confi-d

internal revenue rations, districts, States, - - - - - - - - - - - - - - - - - - - - -

add the, .,.as t hisuciah" Cino-id-drul Wavering taxes Use tax on U.Cl-h,ad

States retires men by single districts indicated in

and drionju,n e

including lev.c".f - - - - - - - - - - - - ..to ,

Palantir ... x; total a far the, Suits h..b at hot, . . -., .if.. . I Occupational Waste's vehicle ,

.1 able)

a

x 1

(4 a4 ) (45) (46) (47) 4 (49) (50 )

U, stay Stiat... twbal. . 2 .07s 14

-

.2% - - - -any .. .Is

- - - - - - - - -

Islas ,

sawreek

Alu. . to 11.1.. . . . . . . . . . . . . . . . "1 12 arys 2a

- - --

..Is.

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

is At "

;anv . . . . . . . . . . . . (So.(c) held.).

53

2 1

957 89 1:0 18

Augusta . . . . . . . . . . . (Maine) . . . . . . . 3 . . . . . . .

. I l -

24 -94

Boston------------ (Mav=h ,s,tIs)_ . .

. .

b' 2 S "601 7 .3 %

Boalkly .. . . . . . . . . . (Sao (c~

B .".1- . . . (Saa(c hot-) . . . .

121

. 44

. . . . . . . . .

. . . . . . . . . . : : : 2B

6

4

1 .658

1 .141

504

67

436

a 'I

ugglad, . . . . . . . . . (Vermont) -----------

- ----- ---- -

2~7

4 -21

Hart

aid . .. : : : : : : : : flo nne,ficul)------- -

Manhattan . See (c) below)

-

I D

116 27

3

905

1 7

29 31

-42

107: 16,6 Portsmouth . .. . . . . . (Now Hampshire) -----

2

4 311

11

31 R A d

Poct'idence..------- I trade I an y.3 . . . . . . . . . . _

in

_ 1

..

1,, -256

sextet.. . . . . . . . . . .

B It..... . . . . . . . . . . (Mvylabd*;mi'wejv : : : ~

'

a n

36 425 7

yer5 221

2:

386

~ .Wbs

645

_33. 5

- 8 81313

N w.rk (Me . I . . . . . . . . . . . 257 59 4 16 4. 42G 501

.

25,644

~: : 116 8

1 ' 1"

892

-JI ' 1

PUtch . ryef

Richmond.. . . .. .. . . (Vniffirdt)

79

31

1~12d 1

1

3 1

13

1:

2,671"

113

59

2 2 : s

-10 7 9 Wil noingled . . . . .. . . (Calliam's) . . . . . . . .. . .. .

5 407 '7

,

,

sewertax. saxopwis

:- :-

sit 2 .1" 27

3&j U.

. .

a,

.I 31 .Q ' A inna Z2 193

1

65 2,547 211

1

A

Bit righ . .. .. . ..

. . tabs ..)

Cot'.mb .. . . .. . .. . . (South Carolina)- -------- 1I

1

734

1 12s7 1:'11 1

1 "

43

2 1

5 :?4 1

7 5

Greensboro . . --- 2

3,

4 242

'6' 1

: : : , U

Jackson . . . . . It 2H 2 37 7 2~1 1 1

Jack-ill . . .:: : : : : 21 1 112 4 41

3

36

-106

Nashville . --- Far,

seats Itheal . . . . . . . . . . . . . . . . . . . .. . .. .. . . . .

I~

121

89Z

a.

3 29

""'?*

:3 1

s" 1

~

9 9

s27

-35 7

' "

Cincinnatl-- . . . d)

( e ~ m

24 164 3 57 2, 529 13 I l :43 l

CI ... lrymd~ ~See d be1 v -

Detroit. . . . . . . Micti,gibri). .. . . . .. . . .. . .. . 1

50

2 '123

14

35

45 :

g ;2' 217'

. .3 3

57

Ild~ama . . . . it

_

54

1

55 1 5 565 3 1 1 1 11 8 :444fi

L (K. morel :~ :

:

G 1 '

8

iso 1 : ~ ~~5 , 1 131

P rksnburg (Werit Virginia) .. . . . . . . . .. . 2 23 3 9 20 799 4

- a

lielldvossat lihoglien, .. . . . . . . . . . . . . . . . . . . . . ---- --- -

Abinde. . . . . .. . . . . (South k .t.) .. .- . . . . .

14S

2

says

99

24

C) 2 23' 54791

3 .11, -4.;57

21 1

Chicago . . . . .. . . . . (See (b) below) --- - ----- 32 25 _

11

10

1

6'

2.622 H1 05

Des

M In' (8 2* 'h- . . . . . . . . . . . . . . . 7 's

1 7 2,4

2N

42

-

44

. .

Far, :~I: h A 6akou) . . .. . . . . . . . . 4 8 2 5 782 Milwaukee . . M-min)_ - - - - _ Omaha----- Nab.

. . k .) . . . . . . . . . . .

1 4

15 30 5 87 31 ~ 24

594

L -28 475

(Missouri) . . . . .

'K ' '';' - - - - -

I 1

83

1

3 4.232 21 191 P.U . ~ _ : : : M bnmxotxL___ , . : : : : : : :

5

1 4

1

3. 07 16,

4, a

1 9

Sir ligli.ld. .. . . . . . . (Sea (b) beer.) ----- - -- -

tow-, ft. .. . . .... . .. . . . . .. . . . . . . . . . . . . . . .

8

an

124

133"

1

a

7

323

1,907

,

27

Al

buquinque ------- (New Mexico) . . . .. 9 13

1

1

515 20 -60G Atom.- ~ ------ --- (Sao Q) be[..). . . . .. . . . . S7 4 1 109 4, ZIO143

04 Ch .y,nb. .. . . . . . . (Wyoming) -

I :Il,: (Sea (f) below;

4

29

57

1

2 78

4

1 .22'~ A' S31'

n, , :: :

V I Colorado) ---------------- 37 55 3 6 2 .173 126

Little Rook I A, an .. ) ------------- - _11 "

New all . ., . . . . . . . ILouisiana) ------ ----- --

9

21 635. . 1

a4l

'4 1 :111 232

244

Oki 1,69 5 .

homa City ----- (Oklahoma) ---------------

1,

55

1

30 2,111 2 356

W-thita . . . .. . . . . . . . (Ka .... ) . . . . . . . . . . . . . . . .

-R..l.. . . . . . . . . . . . . . . . . . . . . . . . .

13 197

1.3sal

1 .)

120

5 1 If,

34

~

0%6

A (Al ak .) 3 2 3 45 3

1

( .

Id he).. . . . . . . . . . . . . . . . . .

4

'

V) Iss 41 -3 4 Helena 2 21 816

517 71

. . . . . . . . .

Los An eles- - (Sea (a) below). . . . . . . . . . .

g

17

239 5D _16 54-

4

5, 7"

1

3 1

2, 51

'

1,

-25,783

Phomu ------- (Alumi. . . . . . . . . . . . . . . . . 58 36 4 122 1 _ 5i

P,11,nl . -- ..

. ""T"y' 1

216

1

2,318 31,

i

- 1 . 4

'

"and : :

. IN . . 1 5

8,555

7 1,584 2541

8

7 3 Salt Lake City . (Utah) . . . . . . . . . . . . . . . . . .

.

S:r, Fl ~n i (So, 0) tsfiov)~ . . . . .

.

5

158 IBO2

23

2

625

I'll, "1

26

590

31 6

, .

S ttl . . . . . . . . . . (Washington) . . . . . . . . :vq : : 36 158 60 299 2,208

5

a'- 62 2 13 6

P Its 51 I . s

...to Ri . . . . . .. . . .. .. . . . . . . . . 2

1

0

Undi

"I"I":

:W 7 . : 750 1 .1,1 2

Findmid Ia. d1fiesys no d .binifil- receipts 1 56 1 Gasoline analle"red . Job"to.Otto, ,

sy 1, :no excess FICA ctedd,7-

T

0 .

. A, rd a

Guam- . . . . . . . . . . . .

"I'll Id 111' total ,pl* ... _ _ . . . .

.

. . . ----- ---- -- -- - f'W~ ,,;

it

- -

. - i, F.... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. .

. . . . . .

-- - - - - -

. . . . . . . 9

Totals to, State, not ithow, above

W 1 , !11can,

, , *

...

57

I

"

b) j ".nm

. . .: : : : : : : : : 39

1

is

11

1 1.

3b'

(s) New York. . . . . . . . . . . . .

1 )0111

343

40 1 215

21~

23

1 1

99

7 6

7

. -

l",'firi I

764

Imm ~l n

~I)

146 119

)a

43 ', ~ !

I M

sti,

I . . .

1 ) 116

6

6 87

sar ~ o

I', '

ii,

See Woman on p. 120.

116 / Annual Report / Statistical Tables

I

Table 2-Internal revenue collections by sources and by quarters

fill thoosands of dallarsl

Sourc e

b,sod tosel . . .

Cup . .. hurt income ta x

Individual income bit mobyroalit taxes, lblbl _

j"cmd no..', L,. no wllhh.eid ancivelf-.e.mc, not tat J . I

Z held it old- go d disability in-soc, i

R ad in, mrsel . _ . .

nemployment insurance

E late tax ------- -

Gift tax ------------

E .'- taxes, total ------

Alcohol I . . . s, total ---

.Idled sort . , I -----

oft-, cordial,, Due, - - _ -It .

T .ba-taxes, most i .

Stamp 1-5 on document, nine' InStsibrubs, and Playing cards, todain

MantitaClu-S' se- islet, lot I. . . . . . .. . . . .

G-l'o_

Lubrical,egod,

7ios=o"ch"'P'a~'t .t rubber), inner t,b,,,and Ilead rubber--

Motor y, bodies pa,S. nod .,ccs,o,i,s ----

kadi. and television

"' ;' phonographs, cmrmF,o.cts, clo -----Refrigerators, fiebbins, . -Condit ... els, ote .: ejeci,,c. gas, and oil appliances

other---

Fird"'Ins, exciiie fears, (out -----

Luggage, els:

Jewelry, etc- .

Fit fToilet proportion .. . . . . .

Miscellaneous exione Levee', order . . . . . .

Admission

Ifrou" beats. res . .. ...cc,,I,,,, let, ormiells, etc . , .- .

,it

Club does

.no initiation fees,

T,I,,h ..

"heirdo,

, a .s,., add equipment ar-c.,r.- . . .

. lio n

Use .1 to ftsoosilt

Coconot and other vag, table oil Processed .

Sugar.. . . . . . . . . . . .

Diesel and special mxdc~ 6ef' .

Narcotics ,it m,,ih,,n, . mcludbog WoI pliancy fast,, ;m". bit

I ,

:.11 11:1 Inillentent devices be . Ing alloys, Ind .

Col.

:

;a 6 gaorr,rg devices . . . . . . . . . . . . . . .

Wage, ing taxes :

(sciorctitimoal .

W go,

U so tax on highway motor vehicles. . . . . . . . . . . . . . .

Ot h

Un,l .,s taxes---

5ro, footnote, on p . 129.

Q-111 ended

sent .

3 0 1969 Us- "li, a :3--) -

9

44 911 . 502 40 277,205

7. w . 513 i . ni . iiiI3

2 s . '2'1~4~2(1 551

2bl .525 233.908

4 .644 3,406

732,062 7G2.907

" d

S

4 InYf 03 11 4' '414

1 . 1. 312. 9,ki

00

4:127

292,603 25',292_

5 ; 5L6, 4i3

527 .SG3

14,31"61

30

1,720.623

84 4 .978

f72 : "9'

665 G2 0

17

12-17

'802

620 943

499, 971

311

1,621 300

898 562

2,4 . 372

I 1 3

. 7"

S3 I 7gl,

-7

19

12,81 7

53ti, 12 7

354 . )75

G7, CAD

26 .703

311

4

l"514

17, : 311 '4 '

-4 , J37

473

31~ 7~

4 . 1 4

30 778

11,473 'k1

2

5 5

"I 1 7

14,368

25i W9

)do, 30, IWO

(4)

4,,454,2)7 63, 079~173

G. m4 . 303 13. 273 - _~8. 3

36.

21

6~2. 065

870. 553

11 ~ 41

,

Artly D

L 029. 130

03

222~0 526S8

501 . 792

490,072

11' 3 3

6

3

2

1

-11

44, 470, 184

2 26 . 48J

834, 51 ?

I G3

iG, 021,

675, 798

4 1 11

1 . 23U. 17i

1133 424

41 711

3okf

: s87

533,539

513 191,

37 .

121,114 liy I ~I '

141,581

586,750

-119

5 . '58

7?

7 7

9 4

E

314 . 154

60,130

2VI ~16

12

fil

4rA 51

73 147

1

29,691

67. 52"

326

J4,. 1-

21:

11, , I

23 448 li .?Gl

'w iso Y92 . 77 7

Annual Report / Statistical Tables 1 117
Table 3-internal revenue collections by sources, fiscal years 1969 and 1970 Table 3-4nternal revenue collections by sources, fiscal years 1969 and 1970-Continued

[in thousands of dollaral 11, thousabas I dollea l

Sairces .1ne'romp,

Corporation pocometaxes. total 1% .

Rreguls. . . . . . . . . . . . . . . . . . . .

Exempt .,liamration business cmn, Is . . . . . . .

individual income and employment taxes, total . .

nlm, , ,I *lthheld and self-employment tax . . . . . . .income x. h l

-i

to

and .ld-a roudd-,tollitv insurance, lotals'- . . . . . . . .

Rallmad retirement, total "". d . . . . . . . . .

Unum"'pubrot insurance emrlcyes,t 4 o~ Doong'so's taxed 3.1 percent on taxable Poll", of wages, eflashve Jan . 1, 1964, credit liOnnecIPPED90pariartnflarle cent, lb,firms loState unemployment fund. . . . . . . . . . . . . . . . . . . .

Est 1, tax, graduated rates fre, 3 Percent on first ;5,ODO of net ,late D, excess of S60,M0 ex motion to 77 percent on pOwn over

v 0,000,000 : credit allowed to, State death taxes Gilt t- glbd..Ild rates I .. 2tj persaml on first 15 PUP .1 Put Rills in ease. of $30,000 acruptem to wa~ -purcirm bpo'ti.. over $10,0w,000;$3000annu,l,~lu,iont,r~chdln,is . . . . . . . . . . . . .

Excise faces total . . . . . . . . . . . . . . . . . .

Alcohol r, sea total .

`

Ul. . . . . .. .

,

art

I '.`ppp,'.'1t daa1'", ~t

Don,1011 1 5 3 1, 0 "dper"p "oo Cpst`p-alplo' i"to' or wine same; ~a fic'n "$it') - he . few pulml be Rxect,bration, 30-3 per Pumpt Rate, a -------

0- atknal fares

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

g

orbavenge manclactursts of spirits, S25, $50, $100, per Ve . . . .. . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . .. . .. . . .

Rectilurs:

Less than 20.000 proof pall-, $110 per via, . . . . . . . . . . : : : _ .

. , - - --:~ : . 20, :~

000

roof go lions or more, $22 0

Retail ~' al- in liquor or modecinal""'I"r,is'. prei ;ea-,-,-. . . . . . . . . . . Wholesale liquorydeavers, $255 Per year_ .

Momil.t.irer., D stills . S 55 per year . . . . . . . . . . . . . . . . . . . . . . . . -- -----

spil.-gp.~gglilvi, of,- - I . . . . . . . . . . . . . . .. .. . . .. . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . .

tilla Do sD,, nnam. actolood . $ each. . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . .

Wines . audilla, of, ., Ivan, total . . . . . . . . . ----- . . . . . . . . -- - ----

Imported (col

me, C1 d--tilyi[m. - I,y , . . . . . . . . . . . . . . . .

Do " If

ll, ,

per W.D. g , r; ca D ; ;i ad Wines, $2 .40 ;

bripeurlsolordials, il .92) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . --------- ,,,,Occupations] taxes :

11 dealers in wums or in Wines and be ., $54 pet year - S Wholesale dealers In win s of in wines and beer $2 5 per yearBeer losea, total. . . . . . . . . . . . . . . . . . . . . . . . --- --------------- - -- . . . . . . . . . . . . .

Imported (collected by customs rate, me a, dari 1 Domestic. $9 nrearrel 5 o 31 gallons I .. . . . . . . . .

auga.tianal -

visrs !

Less than 500 barrels $55 Per yeas . . . . . . . . . . . . . . . . . . . . .

Repr

as rob I , Do more, 1 10 per yes 17 . . . .. . . . . . . . . . .. .. . i

Who bales n .be,,. $24 for Yost (include, united n.all.0"alers .in wines r beer, $2.20 Der month)----- Instate.

Irr, m beer, 123 per .a,. . .. . . . . . .. .. . . . . .. .. . . . . .. -_ . . . . . . . . . . . . . . . . . . .

Tobacco fast,, total. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . .

Cipareft a. to at- . . . . . . . .

Small (Class A), (C 34 Per thousand . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . .

Large lass 0), $8 4 0 per thou sa no . except it ever 0!,1 inches long $4 per thous, of l it to, each V, .,he, or Pact- there- . ..

Pepro'nnersis : :

Colors, totalLarge chars, total . . . . . . . . . . . . . . . . . . . . . . .. .. . . . . . . . . . . .

11~1, C a E or . A (1.1ey ver.1.1, ceps bach). $2,5D per thousand . . . _ . _. : _:

2,11! on

., ,

4 eent, each) . $3 per thousand . . . . . . . .

. . . . . ----

ass C (0 no ' Ian ass 6 Pal can p

'

") ~

:

:, lh'.'u "I : : : ~ ~1) (0,P; " c'e'~!'~: ,e; 8 ~a rect) . $7 , . T : ~ : . . . . . .

Class E (Over 8 comar but eye' 15 sent' ash

)' $10 Per thousan dC 11, 111) ; 121 .1m;x net D .

. 10 Do or , each), $15 on, ftbc! _ C PoWe 0 each

)$20

per thousand . . . . . . . . . . . . . . . . -- -----

Small coats, 75 cents Per tn,um,d . ., . . . . . .

Import Prepayments ofxxvgar,=ts, cigarette paper, ,. I~J uarellfe tubes, (collected by Customs rates some as dome"ic)

ci

[Ig3refte vapors and tubes, Papers le cent per 50; tubes I cent per 50 ------- . . . . . . . . 1

Stamp faces on documents, other exPuments, and p :av,ng cards, total I-. . . .. . .

So, footnotes on P . 120,

Foscal yes,

196 9

(1) (2) 1 I'll. -

187 9194 560

38 .337,64 5

31 33 13"2 .6

15

13f, 9 . W2 28 972 .731

957 565&4G

39. 6

640,030

195,722,096

_35. 035,983

35 0 183

": 8Of

INI : 17,7 : ""'

111,366,075

990,85 1

776,13 9

73,136.691 1 3,241,321

15-542 7871-- -T5-,9M -,26 4

4. 555.550

3. 1'

of

2,51

- 31, 1: 7,44

7 0

rl

1 3

1,139

8

__

4 . 746,382

1,4

1481'U"E

1,111'5 :11~1 31

80

1

12,4277

64

5,12R

3

157, 39 4 F827-929

E9 7

134, 9H 7

2,4721

1666 9

6.203

997,15 1

2

I I ,

21E

1 36,7 1

43,60?

2,411

L

- 165

6,594

1,063,55 5

22

NAN

2,137 . 585 4,212

2 : 03' . 1 OG 2: 0131E:lf,01 OF2.101 2Be

1 6

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

54, 220 56,834

721 71 'R

4

" "" f, 'R' 12

12. .1"11

8.770 10 402

2,878 23 288

" "' l", 3 . 515 3 5 0

'141 ~112

_d 5192

669 756

1,455 220

So.,- of revenue

-C.D once,l

1 ex'I"faces total

G-lim a cents per A.11-

Lutricalmi, or], etc ., 6 cents Pei gall,n, cutting oil 3 cents Pei or It,,,

Tires 1wholy or in part of rubber), inner tubes, 'r; d Jor. rubber :

" 1,,,, 10 cents per pound, othm,5 cents per pound except lannunatO true on high-

.dox), I cents on, P.Pod_

I , Do pound. . . . .

Pound

Memo vehicles,

c a.'a,

bodies, Pont, and amessouris

Passenger automobiles chassis, bodies luck 1 . etc., 7 percent 21

a, and buses . chassis. th d

Paris and racce.scu,na for auto

.

1 1P, no components, etc .. ~ f

-

R, etc 5 o =P

hiaetar, I appliance, 5 0 of or, _ pairclol ; as I uI .D.Munpron, tits 1 6 percent :5

To-ct~i, go., no I :

~

P ,

at. a abut e,oh, Fs,1 1IJ percen t

Phonograph isceird

"

0 percent . . . . .. . . . . . . . . . . . . . . .

Musical iatwmams. 1 0 'p. rc .n t

~ml._~ufhb , !h .~,~hhC mula, I, atc .), 10 pxx_~ w

Business and store or 10 oei,e,t,--- , . . . .. .. . . . . . . . .

C boxes, films. etc . 10 Percent ; household 11P,, Pu .Im,t.'s 5 D o E),,tric Ight loullo, and tubes, 10 Re

u ------

. . . . . .

'"'

,

I'Dearms (of Pit than pistols and iev o Ive

Mechanical ormcils, peas, 10 percent '

" 1 " '" " ' d' ` "ce r it (less ther,U), : light a L . , 1 0 oent pe Rh r !j t ., (,, ., on ~D)I~pbr~xr Me fiche a, 2 cents per thousand (but not (,l exceed I U percent of selling price); lancy wooden .1 .[.led Items, 53, cents

par thousand 21. . . .. . . . . . . . . . . . . . . . . . . . . . . .. . . . .. . . . . . .. . .. . . . . . . . . . . .

Retailers' exciss taxes, total . . . . . . . . . . . . . . . . . . . . . .. . .. . .. . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Luggage, sts, Is . 10 Percent- ---- ------- a c.. 10 per en t - ---------------

TD it. t oto'n a ,- 10 police n- 1

i..Il,n.oul rusur. (a.." (total . . . . . . . . _ . . . . . . . .. . . .. . . . . . . . . . . . . . . . . . . . . . .

Adminuors taxes, total m ------- . . . . . . . . . . . . . . .. . . . . . . . . . . . . . .

Tnatir's,

to "c"ts

. thin"' cliMe't", etc ..

Adoss , c.ol each 10 cents or major ftection thereof of the amount paid I, excess of 31 .

TicYnt =,],' seleso,"I 0 Percent of amount, in b,cess of box office D"c'. . . . . . . . . .

. . . . . .

L ogsor seat-, 10 percent at he ...out to, Which similar comm.dalions - a 11 . . . . .

Aadaesslo-t

'

a by junprietor, in excess of established price, 50 ancruit of sucp excess-. .

Hoof aird-, cabarets, etc., 10 percent of Out mu~ to, admissions. -11c.1, etc . .

Club dues and imbat ion fees, 20 percent (it dues or lees are in excess of $10 Per YND) 27----- _- --- T m'M.n1'9j1r etc ces. 10 percent ; wire and qgivnent vite, 8 percent ol .

.Ixph.De,,w

n-rtatlon

I

pe , 0 perie"I';yin'baled offectne No, . 16 19 .1 except an all I-sporta, or, which We, induced 1. 1 Pro

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

.

.. . .

.

.

Lse D', . .... .deripj.-i boons, 10 tricent ------ _ ------- -------

'pa',ija apd .,~1.1~,, vegetable oils procerssed, 2 cents per pound losprocalrd . Corsom -lbixtiy

ppre t'ly Y, cent per pop, . . . . . . . . . . . . . . . . . . . .. . . . . .. e

Oiba,.l and ,ocDI Plot luell, 4 crops pet anon (in same instances 2 cont, per sailor). . . . . . . . . .._D~ and

manhuane i . Intel 1~. . . . . . . . . . . . liarcot,cs . . . . . . . . .. . . . . .. . . . .. .

gi ani : . . .

Cmn :ppos ro~ed amusement devices pr~a $10 per device, por year, bowling alleys, pool tables, etc, $2o pe t alte) or table, per year N .

Coi ed . . . . . . .. . .. . --- ----

Warr taxes: Occuo'Donal tax, $51) per . . . . . . .

wagIrpoll) percent of amount wagered- .

Us. of t1h*11 t,'111,clss we, hing by 126,000 pounds, $3 per I,GDO pounds Prob year (installment p-Ileves pcrputbd) ::~

Adfiuftprt~','ed lb~pi and bit chre,s (inolm'

d

utter and imported oloomarg-res' ._ .

Free- t,ansf 'eand oirocipirtio,all

tax', ~'~Dyd and domeafic). onoress or renovate

1 Merest . . . . . .

Uvoll'orsig, insurance ---

a s shoul excia, pses . -

See footnotes on p . 120

Fiscal year

1969

(1) '(127

1,501 .146

3 186 23 )

97,47 3

..N. I ...

Z7 .909

6. 683, N I

3 430 076

8?, 51 0

" 2"' :

29 .01 6

1 . 863, 956 1 .765, .321

589,304 1986

81,387 84,06

4

6 169~

8

11 -3 ('

.9T 13.924

33 . 0168~ 32,81D6

17 5

3G 108

-

--

C)

874

fl~ 31 2I6

- 1

2, 147 . 54 7

11

2, 342. 222

-7 1

22 -? 1

3

,

1,31iiIA'

223,6817

log 191

24,657

1 .936

7

719

12.34535

354

4 32 8

124:?,3

'11'

111 .6885"

1918, 4

9,458Z

- 36

1 . 469, 2" 5y ;z

250. 802

_)l 13, 3M

257.711

2.075

257

818

14.25,27

4.

135,

13Sit

B85 .609 6

14

38,' 0 59

Annual Report Statistical Tables 119

118 / Annual Report or Statistical Tables
Table 4-Anternal revenue collections by principal sources, fiscal years 1940 through 1970

11, liteitsaiels .1 dc,11-1

I Ac... .d , Otilt, WM-lac -

total ntdrn,l 1,111pi- 0 BIA, snd Alc,hol T.b-r, timo, All .1h . ,

FucalI go Y., ii,dsd -nu,

.ll~tws T.Nl

Cil'it-o.,

inc- c .d

10,0dual

.-ril

ts-- gift Is- Wes - I .- - . .e w

1 .

Ulinchl,

Iss .,

W . .. c

(it (?) (3) (4) (5, (6) (7) (8) (9) .(to)

S. 340 42 2' 129 609 1 147 '92 982. 017 833 .521 360, 071 624 . 253 608,518 447 . U&S 337, 392

7,370.10 3 421, 124 21053,469 1,417 . 655 925, 856 407 OSH 820 056 G99 0 77 617,373 430,564

1942 . 13 04T 869

:

o0c ; 884

1

4,744 083 3, 262 . goal 1 85, 362 432: Sit) 1 .048~ 517 780: 982 771,902 821 .682

.M . .

1240 1712 :11

760

13" o", 802 6 211: "1 ': "Ir 71 '

1, 766 96

6. 1321 g12

g I 'GI : 005

4

Is 7 0

1: 738 : 372

411 496

511 ~ 210

1 .423,64 6

1,618. 775

923. 857

9&9, 483

504, 74 6

503,462

1, 274 . 04 8

1 . 733,655

194~ . 43. 809. 388 35,061,526 M 027. 213 19,034,313 1 . 779 .177 643 055 21309,866 932 . 145 782,511 2,292,108

40 672,097 31 258,138 !2. 553, 60? 18, 704, 53G 1 700 SA 676 832 2 .526,165 1 . 165 Si g 922 671 2 421 94 4

I gNI - -

31 103 39G 29 019 ' 75G 9 676, 459

19

343, 297 2. 024 :365 7 79: 291

2

, 474. 762

2

37 : 768 1 . 425: 260 2 : 147 : 18 4

1

1949. .. .

.

" :

964, 541,

40,463. 125

31, 172 . q I 1 911 1

0

174. 41

553,669

20

997 . 78 1

18,051,822

2.381,342

.1,476. 113

991, 34 5

796, 533

2,255, 327

2,210.601

3

UO, 28 0

321,875

1 .649,231

771, 533

2 .206 .82 3

2 .280,969

! 'So

11 111. 132 1 1 17 159 lorSU 351 17 . 111 3(18 515

I "'

111 227 2 219 202 1 328 464 836,053 2 .214 .95 1

, l : .

So:445 ~

16

3 7 .

,384 : 79 4.387,569 122, 937 . 309 7:

"g

3,62 729 :730 2. 546:808 1 390~ 396 2 383 677 2,392.719

1112-- 65, Cog: 586 50, 741 . 017 21,466,910 29 r 2 74 . 107 4,464 264 833,147 2, 549,120 1 565 162 2 .348,943 2,507.933

~5 3- 69,686 535 54 .130,73? 21 .594.515 32 .536,217 4 .718 403 931,284 2 .78U,925 1 654,911 2 8862 7 8 1 .

1954 . . 69,919,991 54,360,014 21 . MG, 3?2 32 .813,691 5,107,623 935 . 121 2. 7934 012 '47 sa

229

1,580,

2 : ~

GR9 1 33

2

.111 g5 : s

19559 . . 66~298.692 49 914,826 18,264.720 31 650 ID6 6 219 1 936,267 2,742 .840 1 571,213 2,885,016 2,018,866

75.112,649 55,636 IG4 21,298,522 35:337,642 7211 714 171 .23 7 2 11o 11 4 1.613.497 3,456 .013 2,019.380

11 1 7 17 1 11 .11 .125 21,51o.gll Is, .1, 111

1 522

1 . go

77 g, 9 :"3 :

1 95 1 .674 .050 3,761 925 2 243 856

MS .

1959_

:g : . 79 I s 7 S

79 797,973

11Is 1: .11~1~ 112 4

54

11,133 1 1 1 : 3 6

8, D9 509

308:568 559

4 734:744

8 644 386

8, 853" 744

1 410 92 5

1 : 352, 982

2,946,46 1

3,002,096

1 . 734,021

1,806.816

33:974 :13 5

g 58,789

2:166:67E

1,997~292

11 1f 771 gU3 G7 125 IN 12 ]Is 414 44 945 71

1

58 9

1, 1 "

1 626 348 3 193 714

'

1,931,504 4 735~129 2. DM, 39 4 9 : :

401 0&6

g

7 917 941

21 :764 :940 46: 153:00 2 : 502.451 1 : 916 39Z 3 :212 801 1 . 991~ 117 4: 1116, 1102 1,963 .1.2

99,440,839 71 :945 305 23,295 711 So 649 594 12 708 1 7 !

' '

2.035 187 3 341 282 2 025 736

5

264,81 7

96 4

11

3

1

1

IDS 15,39 12: 5

260.257

75 323,71 4

78,991,218

22 .336 1 3

24,300 :8643

52:98~7 358 Is 1

. : 54

4 8

1,5 004 .

1002,504

2

187~457

2,416,303

3 '47471:654 6

3: , 99

2:0795? 237

2, ~ 545

5:

610 309

6,020,543

2

78,53 6

2,299 .64 5

1161 .- 1 14, il 6 34 79 92 01 7 6 26 131 334 53 660 683 11, 111, 3OG 2. 745,531 3 .772,634 2.148.594 6,418.145 2,453,40 6

96'

28 : 9 6 1

79

92: 13

1 :794 301834 :243 61 : Z97: 55,

2" 256 133

3 093,922 3,814.378 2,073,956 5 613 ' 869 1 895, gl e

1 90

,

1 48 374,81 5 104 288 420 34.917,825 61.370.595 26 958 241 3 014 406 4 075 723 2 079 869 5 478 347 2 4I'

19GB: "

969

5

1 3 636 83 .919,5680

V

108,149,56 5

1 1 1 7 11,012

29A196~520

38,337 .646

73,252,04 5

97,440,06

28~ 085 898

33 068 657

3~ 0110: 91 1

1 " 065

:

4 287:237

4. 555, 560

2 122 :277

2 :137, SES

5 J13~97 3

6, 501 .146

~ 1

1 6 909

2 341 111

1970. 195,722,096

3 g: 6 8

8,568 1 35, 0364 983 1 303, 651 . 585 37: "q: ]all 3~680l(376 4.746,382 2,094,212 1 6,683,06 1

1 IS I 80:

: 3 s

Footnotes for tables 1-4

N.,c .--C ;:,Ic Ito yeat figures. by egions, di,i,i,ts,

States, and other areas, fit selected types of taxes inay

be obtained froin the public Information Division, int-

.oil Revenue Washington . D,C . 20224 .

-1-s than $500,

` Rc,igcd .

I Thc I .ecipt, in the various States do not indi-te if,,-

Federal tax Imoden of rach, inrc in ... .y

wxes at(! reflected in one State from residents Of anOther

State . For example, withholding taxes reported by mployers located near State lines may include substantial

am. . .ts withheld firmu salades of employees who residiin neighboring States .

- Includes tax oil orlielated business income (if exempt

opicailiIations .

Collections of individual inconiv tax not withheld

include old-age. survivors, disability, and hospital insurance uu,cs oil self-cuipluynient iticone . Estimated separatt

national totals I'm individual income tax and for old-acc,

sur%ivors, disability . and hospital insurance w .es are

snot- in the text table on p . 15 and ;in- used in oluairing

national totals for individual income taxes and cuiployment taxes in table 4.

' Stif-cinplo

,

yractit tax and taxes imposed by the Federal

Insurance Contributions Act are applicable with respect

to Guam and Ainerican Sarnoa, Amounts of such taxes

collected in Guam and American Samoa are emobilied

with similar taxes reported for Office of Internati-al

Operations-Other.

~ Beginning with fiscal year 19 .37 . the United States total

is adjusicel to exclu le withheld individual income uxes

transferred to the Government of Guam in accordance

wit1b tile provisions of Public Law 630, approved Aug . I

1950 (64 Stat . 392) . '17his adjustment amounted to $11 .1

mi Ilion for 1970 .

" Tax payments made to banks. under the Federal tax

deposit system or the priot depository receipts system, are

included in the internal revenue collections for the

peiiod it, which the Federal tax deposit is purchased or,

the depository receipts were issued . However, such pay .

',,cuts are not classified by internal revenue districts fror

1". tax subcf-es to which excise tax payments relate)

until the Federal tax deposit pacynnot is applied to the

taxpayer's liability in the internal revenue offices or the

dcpc~ilary receipts am received in the internal revenue

.ffi"s with tax reour-

~ Represents credits allowable oil income tax neturns for

certain eawlinc and lubricatirig, oil tax payinums and lot

excess payments under rite Federal Insurance Contribu6-Act (FICA) .

' Ac is of internal reveinic ta-s collected on

Puerto Rican pioducts transported to the United States

or , onsurned it, the island (less refunds. drawbacks, and

expense-0 ;-, --rcd into the Treasury of Poerto Riwide, piro,nmu, of &-. 7652ia)13) and 5314(it) (4 c of

the Internal R,%eji,e Codc of 1954 . The gross amounts

are included in overa I I col lect ious results ( tables I

thlough 4 ) . bcginning villi 195.5 dw,, separately

it, 1 .1,1c B .

* I-lo ties oc c . pat to .ml I ., oil roc to, s of , til I s,

nectiffi,cli, whoh,salc liquo, dealers. retail dealers in liquor

or crediri.al spirits . and uzioui.,,ureis of

spirits.

" Includes sci-es . penalties . t,., and tax ,it stills or

condensers manufactured .

` Includes occupational taxes on u,holesale and retail

dealers in wincs or it) mines and be-

`includes -eupalional taxes m 1--t-s and h .ld,ale

and retail beer dealers.

" Includes taxes oil domestically produced cigarette

papers and cigarette tubes : ta-s by Custo s ou

imported cigars . rivaretles, ci

-

careto, papers and cigarette

tubes : and miscellaneous tobac- oll-timils.

" Includes taxes oil fishing ccluipment, and taxes on the

following items which were repealed by Public Law

89-44~ Phonograph records. musical instruments : sporting goods (except fishing, equiputent I ; business and store

machines ; ranceras, lenses, films, and p-jermis ; clectric

light bulbs, and tubes ; mechanical perells, pens. and

lighters : platches : radio and television sets, phonographs,

components, etc .

: refrigerators . freczers, air-conclitioners,

etc . ; electric, gas and oil appliances.

" Includes taxes on luggage . fills, toilet

prcparatiorls~ repealed effective Jurip 22 . 1965 (Public

Law 89-41 ) .

" Includes taxes on adulterated better and filled clI imported and d .ine,,tic) . pi-e-Is ,, 11--ted bull. and

imported olecroargarine : firearms transfer : and occupational taxes .

`Corporation memne tax I ates : Effecti%-(! Jan . 1, 1965,

first $25,000 of net income normal tax of 22 percent : net

income in c.ce . of $25 .000 -robined milrut .] and scarta.

of 48 percent. Normal tax and surtax also apply to net

income dc,i,-,d by exempt ot-g-iI,.lions feet,,

unrelated trade or business . Effective J an . I , 1968 . it I ()

percent per annum suicharge was added to fit,. tax .

(Public Law 90-364) . The If, percent per artruni sur.

charge was extended to Dec . 31, 1969, by Public Law

91-53 and then extended to June 30, 1970, by Public Law

91-172 at a 5 percent annual rate.

" Rates of tax are as follows : Individual inconte tax :

Effective Jan . 1 . 19G5 . graduated rates froil, I I percent

on taxabIc mccuic not over $500 to 70 percent, oic amounts

of taxable income over $100,000. Includes old-age . so, .

vivors, disability . and hospital insurance! taxes on self .

erriployment taxable income. The 10 percent per annum

surcharge added by Public Law 90-364, effective Apt . 1 .

1968. for individuals . was extended to Dec. 31, 1969, at

,I,, sanic annual race (Public La, 91-53) and the,,

extended it, June Al . 1970 (Public Law 91,-172) at a 5

pen-ent anneal rate .

c"Rate, of tax are as follows : Income tax withheld :

July 1 . 1907, graduated withholding, 14 1 . 33

percent Of wages in excess of exemptions (public Law

139-M,H) Uld-ag, . su-ivo,s . and disability insurance

taxes and hospit-al insurance. taxes oil salaries and wages

a?V 511hite(ed it, a combined tax rate of 4 .8 pereent ( 4 .2

per-it for so,i .l security and 0.6 percent fm hospital

insuran,c) . For 1969 and 1970 tliv tax applies to wages

up to $7,1100 paid bv the cinplovel, and received by the

eniplo-e . in the cas, of w..gr,; id after the Ifith day

following criact na of Public pa- 90-36,1 (e.art,d

June '18, 1969) income tax withheld was adjusted to in .

chad, tht, sm-charge .

~ Includes i ailroad emplo

'

vinent coinfacrisafion tax, 9 .55

peo,eni for calendar years 1969 and 1970 . Ta . applies

I,, employers and ..cpl,,yccs, i posed II-ble pm-timi

of wages. Almi, effective Oct. 31, 1966, includes (a) a

suppleniental tax on inctum, on each employee representa.

6- equal to 2 cents pet man-hour fin which compens.tio. is paid to Ili : ad 00 a s .pplentental tax imposed

on each cinplotea equal to 2 rents fm each nuut-hia., for

which ( ocupentaction is paid to cipployces. Amended by

Public Law 91 - `J 5 which the R,iihoad Retire.

uu,ru Board to deteirmirpt the at(- of If,, suppl,nicrital

I:. . b,gioniog Apr . 1 . 1971). Further includes railroad

employees io-p-cut.livi, tax, 19.1 pelo-cm fm calendar

years 1969 and 19711 ,,, la-ble p-tim, of wAg,s ,

" issues and transfers of stocks and honds, repealed,

effe,ti- Jan. 1 . 1966 . Deed, of Onvcvicrce,s~ $100 to

$500, 55 cents : each additional $500 or fraction thereof,

Y) cents : repealed effective Jan. 1, 1968 .

~'Cutimg ()it. repealed )an. 1, 1966 I .Public. Law

139-44) .

.

under the Revenue and Exlwttditum Central Act of

June -18, 1 968 (Public Law 90-364 1 rate csi,),,.d retro .

,actively, to 7 percent, efflective through Dec . 31, 1969.

This ,I, ,as extended to Dec . 31, 1970 by public

Law 91-17" . Cl'h, Tax Ref-to Act of 1969) .

` Repealed, effective June 22, 1965 (Public Law

89-44).

"Air cmiditi,in-, epealed, May 15, 1965 .

Refrigerators and freezers. repealed, effective June 22,

1965 (Publi~ Law 10-44) .

~ Repealed, effective noon, Dec. 31, 1965 (Public Law

139-44 ) .

Repealed, eficuive Jan. 1! 1966 (Public Law 89-44) .

This In. was ontinued at 10 Percent by joint csohitimi (Public Law 90-285), and thc Re-mi, mid Ex .

pecclitul-, Ccoul-ol Act of June 28, 1968 (Public La .

90-361 10tich extended this rate through Dec . 31, 1969 .

This rate was further extended to Dec . 3 1, 1970 by Public

Law 91-172. (Tio, 1' . . Reform Act of 1969) .

120 / Annual Report / Statistical Tables Annual Report / Statistical Tables / 121
I

-' Repealed, effective July 13 1965 (P.blic Latu, 89-44 ~ .

.

.'Narcotics, I cent per ountc : narcotics order blanks ,

$1 per hundred . Mariana- $1 per rnarihir.ra

-der W.nk,, 2 c .r. ealia. Arrourly sly-n .1- inchad,,

o-pation.1 ..,e levictl on ounalf.enar-, dealers, and

plactiti(iners . Fur classes and rates of ocrupatiunal t:,xe.%,

ace table 14 .

" Adulterated bull,, : 10 cents per pound . Procese,d ch,

renuvared Inatter ; V4 cent fact- pound . Doinestic filled

cheese : I c,, .t per pound . lunplorted filled cheese : 8 , cuts

per pound . linpurted adulterated butter and olenniatgarine : 15 cents per pound . (-occupational taxes am 1-ird

122 / Annual Report / Statistical Tables

on or. ..f.curress or dealers it, thes, 1-ch-B oil a,,-

incl lcd in the act ur, slo-a ,

"T,atrafers of Inachine goal, sh-t-l-reled fi,varnn,

silencers, etc ., $200 each : certain guns ,,ith cornirinalion shot~tui and illc I-els . ad - .th .I special tyl- if

fimarns. $5 cach . Occupational tantes am lc%,od,:oii

nianufacturers. iinporters . or dealers in fimarnis arld am

ir(lud,d in the anhount sluovo .

~~'Negari,c figla-., (-cluding unapplied c.1lections ad

undistailauted del ~4,ry receip,s) ster, pl-interily front

floor stock mthu tak,n (,I, certain taxes repealed by the.

Excise Ta~ Reduction Act of 1965 .

Table 5-linternal revenue refunds including interest

Ina thms .nd, of delay)

areas

(States -mrsintod to single dishi.is indi-ad i n

pajoureses ; total for othe, States shown at botto m

of table,

Total

C=Oh

2)

Indnidual m,hro an d

omloveeeml t,,, &

Enen w

pa"~"Ommy Onto ,

(3) (4)

ut.

(5)

ill

(6)

ou" I

(7 )

yona- el-, -1 . . . . . . . . . . . a .vyl .sya, .I .M."ger 32 .51g allyst lou ..'all

14-h-AtOw.- 11 .9- ~ -- --- - - ------ - 2-.274 Iss-I ~ .orl

"

1 42

Albany . . ~ . . . . . . . . . (See 0) bal-) ---- ---- 113,121 6,205 1

1

0417 1 : Z39

-

445 55f

A u

testa . . . . . . . (Memo) ------------ . . 55 344 3, 583 50. 687 332 IGO 7E Boston- (Mal-hosartts) . .. . .. 4 55 . 9OG 62. 5~1 382.380 6.168

-

1,176 89 3. 543 B (5,, (0 below). . . . . . . 518 387 32. 44?

2

471 360 5. SO 1 1,199 103 5.774

Donato (See (0 below) -- -

d V t

344 . 558 3. 168 313, 195 4,395 577 zi 3, 2 2

B o autme . . . . . . . . . . . ( ermon ) . _ . --------- -

Hartford ---------- _ (Gimeelfireet) --- -------

24 .69 3

266,897

1 .590

19.400

22. 691

237,098

311

3,325

65

1.023 40

~ 9

6 01 0

M.Ithaft. . . . . . . . . . . . . (See (C) below). . . . . . . . . 915,464 493.171 38s. 769

27

797 2.710 157

,

6,861 P.,11mamth ------- _ III- Hahrp~hlhu ------ -

Pre"thm- ----- --- (Rhode island) . . . . . .

50,369

70,535

G, 355

9,89.11

43,424

59,672

142

769

21

49

1 26

150

Mid-1--Fh,h___ ~ ~ - - ---- . . . ..

( d

a1 .131 . ..? 33 n.

BaltheaDayton ( 0 .. . . . . . . . . Marylan aney) D .C I . . , .

Now Jots . -- ----- 39) 86 572: B3 3

34,2

50.31, 1 Iqq~ l371

52

B 4670 "

7

1,42

5

13 151 Phil,hhhdh,a (See (o) below) . . . . . .. . 583 .630 106 418 456. 610 8 129

909

1 56 Pittsburgh--- (See (e) below) . - - . _ 32G . 37G 40,851 281 .632 2.30 525 7 1: 003 Riehmond . . . . . . . . . .

Winniogem : : :7 D .Iaw 1

778,70 3

45,037

22, 34 5

10.864

250 225

31,435

3. 061

2,201

5156

75

10

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

2,50 7

3G2

.-h.. .I Is --- - -- - __- 1 .431,572 112.-

' "' At !.nda . .. . .. . .. . .. . (Georgia) ~ ---- _ ---- I" I, MIS7257, 113 3a . 515 215.177 4:022 151 19 3.228

Bi ' inuglem- - - ~ - . ~ - (Ahatrano) . . . ---

.Ioretbw ---- (Smeth G... I a)

163,833

I "

15 446

31'

144,892

1 "1

1 413

44'

890

1 1

12

283

Glen 486

n,l,,,- Horth Ginolona) : : : :~ . .- 230: 2BO 21:111 . 1BB

:

73 365 29 6,13%

's.'en _

- I

Mississippi).

; f

89,594 4. 293 8? . 787 2. OGI 86 16 351

Jh,ksm .I 1_ ._ (Florida). . . . . . . . . . . . . .

% ;hville. . . .. . . . . (I ehne .,e)-. . ~ --------

400.431

183,664

31, 374

18, 3G7

359, 138

160 .4911

7, 192

3.177

1,848

3GS

28

2

85 1

_

1 .263

~mmnab "24-

(See djbeIowj::

3-

24 503

2 .1.061

38 363

t .int .yers

27 339

a, a

: '.1 '

.9 11M,

City _

gtamd . ------ --- (St . (it) below)--------- 550,959

.

103,528

8 .

437 .567

78

1

3

6,403

376

705

1 1

38

3,613

2 71 7

Do

to it -------- ----- (Nt0qah) ------

: : _ : : : ~

72 3

9

04 0

'

142

.

7 46

Indt,marihs.-------- (Indiana) ----- :

1:

.7 21 113 30 7 7 5: 326 .91

1

2

:

3 999

o . . . .

to.-d. . . . - ---- (KanIuhky)_

r=,sla, III . .. . .. (West V ginia) . . . . . . . . .

156.724

83.005

10. 99b

4 .370

141 06 2

77,223

2 . 527

796

467

165

1

5

1 .672

446

o

Amorde it

( Sna " Uake")

2 .1n .121

25 039

298.US

95

I .M .- 21 .13AI 2.95 . .,0.

Chicago- ( Sea (b) below) -------- -

.

766 402

1

11-1, 156

23 48 1

628,269

7 6

4 6

10 .114

8

779 1,) 105

1,2'4S

Day ft .- --- 0...) ~ ----- - -------- 145.922 13 .915 1 ?9 . 053 2, ?73 205 10 532

Fargo- in Da"u). .

i

23,639 BID 22,083 617 9 C 1 4 3 Mil au ,

"

Wi-inin) . . . . . . . . . . 293,301 41,895 247,057 2 . 879 611 59 719 Omaha ------ (Nob,aske)-

S on. . . . .

(M-asuh) _

I L'

In, 706

339,833

11,73 8

63,900

67,759

261, 155

1,48 1

4,686

29 8

454

6

829

425

8,91 0

S : U1 . . . . . . . . . . (Mi.. . .ot') . . . . 266.257 32,870 223, 213 3 . 155 323 5 6 69,

Siangfimid (So. (b) 173, 024 11, 218 157~ 759 z D54 249 a 1, 72;

la .h-- - tLAO .T iTIM, 1 .g.s .rsea 31 .07 11 .1. 131 9 .1r , At1, uqueram _w -

:

55 890 1 . 553 53 .117 1 .028 13, GO Aratin ---- - - - (See (1) b,lo.)_ . . . . . . 175. 877 50,296 312.097 10, 278 575 25 2,656

ch-on, (Wyoming) -- -

Dallas __ (See (I) below) . .. . . .

18,966

305 660 5 1 ~ IN1 61

217 35 1

" -~ 2"

57 4

33 5

ID

1,0696 3

517 4 . 6252'

Deny,,- (Colorado) 161. 209 17,776 1 3!1 3 1

3 I'g ~

III 31 211

Little keti- (Arkansas). . . . . . . . . . . 76.941 1 .111 11 7

"

1 .113

2 7 3

N-Od.- (Lthh,io.)_

, . .

Met- GO (Oklahoma) . ..

202.928

14

'

488

1 "7

14 1

1 .: ,

14

j ll. 1 ,

4 . 11 5

1 1 ' 3

2 .3 1

1,313

3

1 6 1 ."875 Wichit" Kansas)--- 3~ 489

1 : 7

05

i ~

958 1 : 7 5 3

'B

12 W 3

--------- -_ - -

'7

3,392,3% 2,11U .8411 57,115 6 .2U 413 11,74

o he)

161

998 1

'

37~ '15'7'

66 5

711

(. I

b

Hot...-, Moinna) _

rmnolul ------ - (Hawail)------

11: 216

1 13 1

111 " ~ 71 S1 31'~ 'gS :11 1

1 " 1

Big

36 3

4"

M

12

4

2

4 8

"s ----- - (Sl, ola Iho' I*) . . . . . . . . 1 .691.11 213 11 1 1 31, 11 1 1 711 2 . 2,11 17 ( .~ 0 3 .13 0 men! A,

(Dome .) 117' 145,39974

3 :

M

13 .091

:3

'GO 7 1

IZ8,505

3

3 4

43 8

90

7

9 22 6

Be he-- 14-do)_ 54. 543 3,996 49,028

1 1

12 330 14

1

,

S

Uts

:'' L '? P

MIS

" 7 71 '

41

11

3 6

S ~ le~ ;)

Soattl Washington) ---

82

292': 33MZ9

7

377 ' .32 1 "

7 B

B

"

7

24B,159

14,95 1

5,456

1 '0 5

763

II B

20

7,43 2

60

5

'.'.

.1 1 . '1 1. . .. . . . . . . . . . . . . IMIUS 4. .' Ing . . . . . . . . is

P-~the . Ri1IG3. .36 "1. Iri11 7

6 62 .2 B .S1I. . B12 . . . . . .

2

. 4

It amd . . . FICA -will. S ri~ ."4 . . . . . . . . . . . . . .

.1 C . . . . . .

(a) Wcalimnta_

(') Illinois-, .-

11 New Ohio yet k11 )

ptmms~il ;.

mTe'am .. . ------

2. 517,446

939.426

1,891 .530

875,46 910 .1

1 : DO 6

537

Total to, Sales hot thowm a.. . e

373 . 359

133 .386

554 991

1415 :21~1 '1

101 812

2.090 .875

786 028

1,276 000

"I "I 7.

550~ 2117 4 2

38,699

312' 1 "

1,.: 7"

10gG, 'S 3 4.7

3 . 752

1 .028

4,111

1,644

299

2B 2 113

49

7

82

10, 4G2

ll~ B3 7:3101

G.350

12

7 M- 5 "g

des draw att 1500 Fulue, .s .

bay. hot been otd-d to refto,t reimbursements Ilon, F.d,ol Old Age and S--oi, I - dool Disability and Federal Hospital Ins'T"C' Insl Ful"'t, I

. itht, It I

shasom

ing to T338.034,000 in 1970 anJ ;SO 2 14070,U 1, 1919, 1- in, 11144-y Troat Fa" heminting to $ 3 .071,000 1. 197U and $223,755,000 in 190 : and tome the

a Net of 113 5)~rm 11, mMing to $6,500 M 0 0 and $6.852,000 1. 1969.

1 .1 j Ili-abl.ei dap-ol UlAing $14 132,0 0

1 too: R.,,Mn I "' I on "not, la, 11hun, let unt.i. g .adm. and hlb-Amg oil U, p-tients and lot -ass Setut Socantly lwymens unde, the Federal styas I

a A"ti(r1'CbA"f .

Annual Report / Statistical Tables / 123

`,M_[`rl 0 - It - ~
Table 6-Number of returns filed, by internal revenue regions, districts, States, and other area s

Internal revenue taln .ol districts ga . States and othe r

s

Slates represented by sin

III

pldienth... S; e districts indicated i n

total

a to,

oth a, States shown .1 bottom

id , bl

..)

,.

I

1)

Dindividua ... is,l r

2)

Corporation

income tax

3)

Partner .

shi p

4)

beclarat on

or esti.

mated tax

add .11

.the ,

nation

taxes I

(5)

Employmen t

1. . ..

6)

Estate

at

7)

Gif t

ta x

8)

Eac.s e

taxes

9)

unified Staxa... t .tes . ----- - III .R711.1in

-

77 .213 .rlull 1 .725 .7"

- --

etwian

-

937 .31 , 1 .U8 .4,s ..$,1.118 Mr. 15M .,

(Saj (cl,6iil

-

18 .3S2,SS 5 5798

N

12 ."3 .220 4M .S76

M

IMAT O

I "1

-1 .7-an

11 .1

3-M2.91 9

IgS. .2 a l 910 d 375

A gusts ..

('

1 .7 III

74 11. .1484 2 : 11

7:

Boston. . ( M .a t ' A

Brooklyn-------- -- (So . I,) bd3 . 158.4951 . 11 1 111

2~ 151 11 ... ~ 1

2 . 112

11: 541

go 18

21~1~ N

217

11 . M

31 11

11~ 7: 4 1

111 1 11

1, 891

1 111

4,0 l

4 . 54d

G: 16

11 . 1g2 B :

Liff 1 16 . . .. . . . . . . . . . . .

(See (c) below )

..

au .. . . _ _

mill.

11' orent)

I 6.

.34 809

2 V R'

1.798,94 1

14'

37 .436

1 4'

115 .832 4

'

,: ,

3 81

"

4": ~ g .

1 7 "1

4:

299

211

1 . 12 1

71

3,7: o41l,

, ..

(Cormiali,

. .. .

(See Mindimm" (0 hot..) -- -

I . 1go: IG

3 413 11 1

1 . 338: 11

2,11

..

3 ~ 1W

IZ830

13 :1

35, 517'

31 ,

156.681

..

3 1 : Its

"I- 'IS

. ..

1

5,297

.

4 549

10,518

26,665

, f id, 49.903

or 'pro Mo

ro --

. H-nnpshni!) . -

P valence .

.

. . . . . . . . . . (Rhode Island) .

9,: ,

513 3&7 14

:

,a

2379,205 9

7 .111

13 . 833

2, 11 1

2 . 126

5,111

10.861

83,26 3

99 .972 573

31

,xi - 467 G 13.

.,no D.~.)

altimore . .

. . . .

112 :1*1 b9of 7 :871 1 11 :21

1 ~

I

1 958 7"52

2a3irl :ITO

898 ,21 ,

966

I.W III

36 311

3 .9da,xill

512 .423

15 .362

1. 11

17 .114A

1 41 1 six21: 'III

Me (No. J-br) . . . . .. . . .. .

fl hii : Phil d S t )

"

3 . 335. 1072

12

to

' "1: Ml7

go,

Id 7'118

21 .2

Ig 4'131

1: s2271

9

5

'

71~731 : 31 1

594

13 3: '142

3

: ~

4 1 " 4

OGO

as 7"

47 .i p i an a 9 6

Pdt,b.,gh .- . 'W)- :- . ~Sca I .) bar R ..)

k Vi

~

2

g

1 Hin

2 211

2

1 .751 .279

1 642 3

.

Z2 .21 3

28 38

.

12 .542

14 0

34, 331

22 402

424 ,

477 201612

2,01 9

2 043

2,

089

2 86

, 4

11 ~ 155

hmond 3 . . . . . . . . . . . rginia) . ..

Wilmington . . . . . (Delaware)-

. 2 : 1

99 673

. 64

209, 4' 56

6 : 841 1 . 6

.600

,

9.489

,

68,124

,

388

, 3

5011

2, Olk i

211

3

N ' 7 1 ' " ' 2 'I. 1'

7 '9 " .

. .a ,

1 - " 3

13 .

M

28~

.7,

~

2 .-

. . . . .. . .. .

I : I .

1,49Gr657

:53.: 389

1 .067, 703

30:67 9

17,360

1 h : 4 1

11,627

23 ~ 937

11 117

547 . 6 3 7

11 3,111

1,643

9D9

2 .880

1,628

29, 776

21,492

Columbia ------------- (South Carolina

Greenstiolo (North Citroli

21 : all~ 1 G, 1

074

1,7 66 3 112 :1173

1~' 3 1765 4 " 23~138

2 ~:

5. "860

2

11,' :12'17 2,'0"17 13 1 55 158 '12 j : -87 3

. .. ....

(Mississippi) 979,755 ISOM 1 1 772 1 . 13 3 1. 31 1 2 3 3 1 11 157 792 1 1

Jackson alinill)

Na,hvill--------- -- 1

31: 8181,1 :1413

94 12: '35'3. 292

7 11 ~ : 1

21,092

27 ,,.

21:250

3 ~

59

16,911 -

8 55 : 070

433 .435

5 1 5

3

1 .494

G,g

04

1 962

:

56 485

c-teM 28,52 1

la"

" as '' '

CDC 11 as, an 20s,"s 123 year IIU9 977 2 rall .al 1 15,730 16 M 203 220

octal I : 60i(it) balow~:.

I 11, el , "1 11 I (l) 111Dv). . . . .. . .

2 ;2 9 2 :7 4 0

3 .169 .S46

1,758 91 9

2, 405:

978

351' :4'08

5

24' : I .USS 49. 4'220 45'1 : '

84 5239

2

3 7tS "n

2:

3.97'

15

a

I ~

M

46,

4 39

' . 'M ., h go

263 003

a

3.294,886 55,876 37 11 41 .17 1 711 457 3 :664 4.727 57, 8

nifiamitalb . . . . . . . (Indian .) 538: 239 1,943.G71 35 .995 A

.9:

8ffi

2li 722 4 :

ord"thi. _ . ~ . . . . 69 077 3,423 2,816 36,669

. . (Kentucky) . ---------- -

Parkersburg - -------- (West Virginia)

1,455 81 3

797,411

1.06

5930:181 12*" . "' M g " ' 1 1,113

14 :782

11.047

.

317 750

16 3,872

1 .482

649

11639

678

20,04 3

keddlive 13,44 7

., IG .8. All It g`l

235"ll 165 .

an

I .ifa, .rn

1., 2. ."a

Aberdeen . . . . . .. . . . . (South Dakotaow)) . , I 1 ,

b.

4 .~I`9 3 7: 1 M2'

247: a

a 36

-3

g:o322 47': o."

4,34 3

g1,700

85,7.

1114 111

674

' 1 '

595

7 41

. .7 .. 1.1.

Gas all .. .. . . . . . . .

F . . ... .. - (North Dakota), . . . . . . . .

1,507~114 1

326.768

1 087,679

225.953

1

9,45 5

4 .305

11,474

4 .964

24,71 9

3. OGO

:,

325 56 6

80 87

4 : 1 2

707

:

2

5

17

592

2 91 5

_ :

1411-oke, (W-D-). .

.

655

.

695.701 38 237 19,808 41.117 444 1 7 3 .466

7

3. 68 46,4 11

maha . .. . . . . . . . . . . . (Nebraska).

St. Louis -otrfi). . . . . . . . . . . .

73 04

2,412,792

580,046

1 .740 754

1,12 1

117 11

22': 7' So

1N

If a

7 :714.

187 :

511.654788

12 .94 1

766

I.D92

3.141

05

17, 0

41 I 3 1

SL

S --

Paul. Minceal. . . . . . . .

prinRfceld ------ --- - (See (b) below)

1,916,734

1 410.1138

1 .439: 868

1 095,181

21 1 1

t 5, 695

lo, 7

17,284 111.2M0

31 71 7

1 ' :4

70

3 7

3

3 : 3"330

2 3

1:0-3

a

3d : 7l ,

21,17 7

it-h-ri Real- .

.

;

.

-

~

I

~

'

I

.". 9~3 . ..

T .1111 .0as 131 .2 .

IS .

b,9u 2. 1. 211

A 11 -) mue 6aw me;

. .

1 1- 11) bl-) . .

AM . 808

3.1 1 711

327: 963

2 .13b It 1

6,009

39 96

4 .577

3g .4I9

34.:Go11 5. 113 7 :21 5

04 067

31 3

Z M 4,599 585

:1

1 .1.4

56 9

1

( . in' : : : C, )

.... Wy.

.R: ag7 ~ 2

is 7

3 :

619

2 No 2 0" " 4 'g

'1 5 Dallas '2 5 . . . . . . . . . . .. . . (Sao (1) bd . .). ,

Dim-ol ----- (Colorado) . . . .

1 3,1 , : 5 :311

1, 526

1 . 111~ 06

929 3463

16,11.

20,219

33 .511

12 .829

31 25 : 5

11 071

S22 :424

14 1 113

1 .66 4

1 . 11

31 :g5711, 411, :1

Little Rock ----------- (Arkansas) :

No . Orleans. . . . . .. . . (L .. .... 1)

1,878:06

566 1118

1 I!I7!,8J2 t bs

06

,

26

1 3 , : 7 1

1 96

,: 4

89

1 3 IZ7

4 :

21

23 2

37 1 1 1 1

682

1 13

IA72

1 111

16 .7113

1 .319

Oklahoma City . . . . . . . . ~Oklxhrdo.).. . . . . . . . . . .

Wichita . . . . .. . .. . . .. . Karsas)-

1 :111 :153

81A

11 .171

841 662

11 1 :9311 11 11~41411,

,: 9

1' .c21

5

~ :,,7

2 7

20 117

: 68 5

2,323

2: 5

2.690

6

24

2 . :259

--w ...... . . . . . .. . Is

x7 .n,

.,43

U ~

. 1. , Tax

..I. ..'aa .", I

. M :"6 20 .= 20.119

27'

21111

A

h

RoDra_ Media . .. . .. . .. . . I talks) .,

no) -

' '' '

125,452

36 ~1 54

1

92,128

256,186

1~64 5 ;43 1 :,1.2,1 1 ~ 3 211

382

25,284

82 .300

56

371

51

494

2.554

;, 8 .942

Helena ( M..txn 377.968 260 214 1 311 5,005 4. 1 73

90

1 ' "1

to No 11 3

11 wait) . . . . . . . . .

"0""

394,173

:

29 7 599

7:

506 3 7111) 7,141 71 : 3

675

5:

Los Anixelo :: : (Sea (a) 1 ..

*

6 4 0,119

7

9

4 .87 744 88 555 7, to 2779

V

1.234 .27 8 . 1117 6, 513. 81. nit

11mim ~A1, it'. G , ;,,a))., - . .

Pit isnd . :: : . . . ------

832,620

1 . 111 11

620 .17 3

11 51

12.333

11 5I 2

1 : 95 2

l 3 343

H26

17,0.

1 65 : 1

237

47'

1 .2g2 13 1

7121

12 .1 1

20,75 1

Reno

`'' d

27 3 5:

39

:

20 RR 3

2

': :

191 3,309 13,272 " a 312 1 19

S it Cia ~ ;ty all l.~) -x! : ------- ---- 503 .734 37 0,134 9,047 5,388 8,540 17 576 37

S

59

12:

01

,

San Francisco. . . . . . . . . (See (a) below) . . . .

Statt

he

. . . . . . . . . . . . (Washington). . . . . . . .

4.245 719

1, 111, 111

3, 136 .39 1

1,311,

712 42:789

21 191

5920: 16490 M.160

21 31

8

86 2

:53 2

356 g2o

6 , 47 7

1, 1 1 1

7

'

:'714'

745 31 1

oad 1 3 ~717

. .1 . .. I swunall. . . . . . . .

.

In an 2 .M

. .. ~

IT Gas 5

i

U 3

N

., ase I .

Puerto Rna. . . . . . . . . . . . . . . . . . . . . . . .. . "

0

that

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

1

217 482

356:957 3267 5 .052565 1,734325

1 2

239

5.201

18.464

136 . I

7,658

4

991

4 7

359

742

956

(OCaliman .a .- -. . . .

I Ill film is .. . . . . . . . . . .

c) NeworYork

~d) Ohio

P .-O v,na

7 D . . . . . . . . . .

UNIT I., State, of h..D above

10.716,328

6,009.994

10 433,125

5~ 462, 286

I,:III * 411

639, 1',

'1 532 : "' 13:05'2

7 .343,684

4 .164 6 .897 a

'14

85 : 2 174

131 .344

85 727

297, 139

821,2'4

72 3 16,633

135 : 242

64 368

94, Z39

41,1 : 9" 171

63,978

151 939

1 09 0 238:690's

so 462

1 '

4

74: '96'3

2,097 .359

8192 6

2 283 : 3

1, OK 122

1 187,796

: 326, 491

14 .664

M : IN,

6,512

5,552

5 .468

Ind d,I estimated to, declarations no, variable by Diwict,

nclud,, 144,273 forms ID40a NBA, Pit, and V1 which ate inciLded no "all other individual and fiduciary- returns I, this table on p. 17.

12 :456

, 550

19,107

"

7

6 : 14gon

8,38)

1 '7

:189

6, 037

149.711

7

247

7 59:119

99.051

Table 7-internal revenue collections, cost, employees, and U .S . population, 1940 through 197 0

Do", "',

Cost at Paptaxt- to .

Number .1 employee,

ang! a. C.Il .lipos an eating

I

Ililuslods) Il e

F. ..I Year $1 00 a Pa. total N .Ii Dal Fiel d

ific e

(1) (1) (1) Q) V) I-) C)

1940 -------------- - 19 1 7 1

S "

1 111 412

" 7

11 11 1 12 114 11 11 2 1 411 3 .993 19.43

1941 ------ 0

.~ :

65 2 7

1~ ~70 08 : 1

:17 ,

: '' , 3 Ill ~ . ~,~ 04 7 :

1 230 4,151 23 .079

4

1343 ---

71g : 7', 4

093 12 1

3 .04

"' 'I $

, 3

2.. 711 1 .386,49

ba

44

1 311

.373 ' 2

10

1t31:31

00

3 3

2'

. 0'5

G M

4 . 329

4

3 1 '

24 .73661

31 1

4

129,941 .848 40.121,760,233 .32 138:9 288.82 46.171

2

4 : 73

1 ": R

: ::1 .41.390,720 13. .

. '7" '

3 11 411 31 1 11 49 114 4 1 4 4 37 1

1946 174,795 .640 4o.171 .D9G 3 :9 99 :43 '

: ,

41 11

18~~ g~ 6~

3

,: "

4

bil ,

4 :

1947 ---- -

1948 ------ . . . . . . .

203.915 .82 2

III 7 1 1 01

39,108,385 .74 2

1 1 1 14 1 2 1

4 9

.52

'

14

1, ODI

1

270,28

2 3

' 7

11 13

52: 1 43'

1 77 1

462

48 .059

4 7 . 4 l l

1949 ---

In, : 2~ 5 :

1 15

0: : .2 , : 9

4 463 0 1 : 1 19 767

1

270 7 ~2 266 4,554

n

47 ,

1950 . . . 130 401 . 1 31,117 111 .718 .59 151,271

2" "

11.111 4 4 1

1951 ' '

~

245

B,

.53 8

111,1372,191

:6

50,

44, 86

.31 5

65,DOI,585,560

.4

42'

1514

7 151..

, 21:71

412,62

5, 1,,

55:370

4 :

3,08340

7 S

,

1 1 :

2 1

268,590,906 69,696 535 .38 9 :38 160~184

a " 'll

53.463

3 .

'3'

g

4g 2

1954 --------- 269,969,107

9

69.919 .99D,7 1 .38 163,026 42BI 89 51,411 2,707 48,70 4

1955 . . . 111 1 34 278 66.288 692,000 .42 165 931 399.50 50.890 2.675 48,21 5

1956 . .

I 1 ~~:89~ : 7

0

112:

75, 649 .000 40

:

168 903 44 4 .71 50,682

3

2,59

4 8

1957 ------- - --- . . . . . .

1958 . . . - -

305,537 .91 4

337 .1

28

71 1

80.171,971 .000

7l 171 7&414

:38

.42

71 .98

4

114.882

466

457A,

51

50 1 A"6

6D1.

2 638

48,762

48 .17 6

1959 ------- . . . . . . . .

3,~ inig : 22 . 7g 79 72 806 : 7: I

.44 177,830 448.73 50.200 2.633 47,56 7

1960 ------------------- 313 131 311 gI,171,~II2,123 41 1

7

3

50 9

50, 199 112

'

4 7 49~

1961 ------ -

:

295 . 238 N 014 .0 1 11 1

8

:4 13 IG 513.73 53. GM : 3

.

3

:6~

so

1962 ---- -

1963 . . . . . . . . . . . . .

4

450,1180, In

4 1 1

So S 0 o

99: : 5

440, 939 2 4

115 111 .315

' 1

.45

47

1 . ' ~, S s

189 417

5322 75 5

2

'19A

56.51 0

49

,,

3.357

3 56

2

53 . 153

924

1964 ------- "

: 13

549,692

5

2, 260, 2 7, 1 ] 5 : 49 192,120 SRI 32 59: 357

:

3 753 S : 604

1965 ------ . . . . . . 111 317 7l 1 14 414 11 71 1

3 11

194 592 588.07 60.3110 3.11

1966 --- ''~

: : g

624

RSI Is 1 : : 2

1

3 4

2W 879 96 .

,

96~907 654.52

1

87

1967~ : . . . . . . . . .

1968 -------- ---

1197 69 .0110 :29 5

. l 90 304

M.174 .814,55 2

153,636,837, GO

4~1

:4 "10?:1 1IT' 'MI ~ 2: 6'1 65,1 27'

7

4 6d

3,939

Got

C, S

111

1 9709

11 .711 .47 1 B86,,

59,162

1117,919,559 .66 8

195,722,095,497

.40

.45

203,21 3

205,395

-924.74

952.23

64.507

69,0911

4 .037

4.356 la

47 C

13 : 74;

Table 8-internal revenue tax collected on Puerto

Rican manufactured products transported to the

U ited States, by objects of taxation

Ito h-imil-I dollart]

object, at taxatio n 1969 1970

Gill! led spirits- - . . . . . . . .

oil 11ted spirits rectification tax ----- ----

Wr x-- . . ,

Is e-----

Chars,lame :

Class oil I -------

C III, F:'- . . . . . . . .

C 11. G---

Cig-, s .all.--

Cimettes, large----

Ciga etl- small ----

82,29 7

72,548

1,356

5

35

1,124

44

5.942

142

80.21 9

6' 07

1 : 077

4 31

1,211

G 5-~ ,14,

"'88

'69

Note-Anolunts of internal revenue ta,,s collected on Puerto Rican tobacco

and Im- manulact ..x transported to the United St at

.,

or con-ded in the

island (last afiumd, . deimsalks and expenses) ,a co-ed into tire Treasury of

Puerto Rim under the pmvi,~,ionx I sacs. 7652(a)(3) and 5314(ii)(Ont the ~ndarnsl

R . . . . u' Code

c!h T rolir as amounts are induced in overall cc actom

,.suits (table, 1 4) intioning with 1955 .

Table 9 .-Establishments qualified to engage in the

production distribution, storage, or use of a lcohol

and alcohoiic liquor s

Class .1 establishment

As of June 3 0

1969 1 197 0

DiTtillid! ~Oirts Plants :

Plants a 'in,( .at mmmr)~

cil'.In.d .,ti.

.,all hall . . . ing

ng in bond . . . . .. . . . . . .

Dan-,, il- - .

I :xp.id bottling . . .

Denatured and lot free Plod-s(dr,ofids no DR cti'yl"'- . usea, 1,.) :

specialty dDn,t .,d alcohol add dantarsired

Usuds of specially denatured OlCidul and donator d

lo.. . , . . . I . . . - I

Healadhor .. . . I I. . .

. . c as, MI. . at special), do.t.,g

;,("C~:`" . . .

Use,, at t-l- Ic~dbpl .

Beer : Brewu,hn ---

Wine,Is .

Tainpaid ode wine cellars. . .

Vinegar : Vireas, I wine .Oleading h .res using .'.svii-anna ---- prec,.. . . .

B.... ... delta ,

lor,pad a,I

W 1Ds:1c it "1 Z 2

. it,. - i'n b` O-'s- .

It21! 1 et i d.a o '221"'i i be.do' .. .s. . .. . . . .

Oth a, .

Nanutacturers or no,-beverage products (drawback)-

f "ilt-flandr, doce"I'ate plants . . . . .

Bottle damulactu reis - - . - - . .

I Includes 4 extionmelai distilled spirits plants

1 Includes 12 expe nolerdill b,D.D,,.s

I Inclisdat 6 . .plliormntal banded vviou callus .

337

155

275

56

I's11

13 9

42

3, 424

7.94

3647

158

3

2: 063

l 59 5

"1,J114.

134,60 5

1715,

121

325

112 2 "

54

143

13 8

4 1

3, 419

7,95

328'

154

I'll65

3

2:13

3 567

2 .6

3 131..

131 :706

71265

124

I

I

124 / Annual Report /Statistical Tables Annual Report / Statistical Tables / 125
sort, n

517 1 R . Code Section 5271, I.R . Col e

state, Total Distilled all.

--

sers of-

-

spirits in speSperi Speci

hired

alcohol

.11 ,

de -

build

a 1,

d,na.

hired

..

free

arcane ]

alcohol

nom

(1) (7) f3) 4) 5) 6 )

1.1, 1 . Vin- 1 1, 032 02 2 ,404 o 364

6~a 15 4 60

1

74

I elarinaned, total . . . . . 700

-

1 5 6 3

-

1

-

10

-

U Z ----- ---

-- 77 77

----- - -

7=_ Offurs Z .s. . -

heumainaud . . Top

1

21

1

5 3

=~

1U

n effect June 30,1970_ .1~ 1 . 1 ~4

at

0 28

Amended ------ ----- 725 21 1 22 2

Disliffiel spirit, plant s

Grand Win. Win.

status total Tell z istillers ar. usin g

It

,,tifi,,a P,.d a,c Indelc port- oles.fin s

.ad bottling

ad cb , I

all,

(1) (2) (3) 4) 5) 6) 7) ) )

A affect WY 1 . 1969 .. . . . . . . . . . 12 626

3 11 64

T 1

1 Q 063 80

iseed . . . . . . . .. . . . . .. . . . . . . . . . . .

:

1 356

~ 1

-_ 1 = -

3

3

~

4

_

3

5

erminated, total . . . . . . . . . . . .

. .

1 .437 43 ... 2 7 4

- -

7

- - - - -

=

- - - - - - - - -

099

- - - - --

. ..... d---

...

2

1,435

..

I . . . . . . . . it

.

. .. .. . . .

22 7

__

24

~

-

~_

it

I

1

I

n ff .IJ a130 1970 . . . . . . . .

u

5

'

3 34 0 ~ - -6 3 5 3 39 6 5 . . .. . .

mended. . . .. . . . . . . . . . . . . . . . . . . . . . : 37~ 35 . .. .. .. .

. . . . . . 1

0 2 8

3

Table 10 .-Establishments qualified, to engage in the Table 11-faermits relating to distilled spirits under

production or exportation Of tobacco products and chapter 51, Internal Revenue code 1954

cigarette papers and tubes

class of establishmen t

Ma" u~

Tons- inape,t

Table 12-Ildrinnits for operations relating to alcoholic beverages under the Federal Alcohol Administration Act

Status

KI I p I V 1 . 1969

I" ar Issuedt .. .. . .. . .

R. .. tied. . . . . . Otherwise tmer-lan! ----- -

In effect June 30 . 1970 . . . .

Amended . . . . .. . . . . .

Total

(1)

41

_72-

Exclumelf,ernarts ho( customs marn,1actp .,;mR banded evvehumses since such e~l an .bi..h.,enls :ttehannotorneq,ired to fleetly as fistilled spirits plantL

i Calminn ( I do ., art ocill-I th (3),(4) and (5) since one permit may coy me, activity.

-Label Ta ble 13 .-Permits relating to tobacco under chapter Table 14 . activity under Federal Alcohol

52, Internal Revenue Code of 1954

72

392

77

M.ru-

,turer, of

ptobacco

roduct ,

(2)

As of June 39-

196 9

227

20

227

4

lag

44

20 i

44

1970

w Export

ummmiRintior s

(3 )

126 Annual Report Statistical Tables

203

1849

2 B

18933

Administration Act

Type of labe l

Diere.st.-

1 limited

MAI, beverages, total -----------

Do ..at .. .. . . . . . . . . . . .

Imported . . .. .. . . . . ----

Grand total

Distillind spirits, total . . . . . . .. .

Ummosr' .

Imported . . .. . . . . . . . . . .

Wines, total ----

Tota

l

7 1 . W 4

33 .941

115 :~1,131

X 33 50

__

14,043

22,26

2

__I, 658

95S

700

Applications acted upon

I

Approvals I 1,,,mp- reas

1"rI"cltll "lull

71,225

33.57 3

11 11 7.2 6

36,00 7

____

13,926

2Z .0~1_

_L 64 5

95691

2

41

40

40

---

Dnsatilt . . . I

9

table 15-Number of occupational tax stamps issued, covering fiscal year 1970, or portion thereof, by class of tax and by internal revenue regions, districts, and States

Internal -cones-emes, districts and State ,

(States represented b-ind, districts indicated in parre .

tn.ca ; Mail to ,

thairind Sawill. totll~

. ...-andensu . .. . . . .

Albany (Sol (c) her. .)-----

August.-.- (MM'nn')lps;tc)

Vsto . . . . . . . I -c

8-ki.. .. . . lseec)111111 :~

a

. (Sea (c) be]

off In ow)

Hartford BunImgm'____ (Ve'"' ------ LCcnmpcb (c).11).I)__ .

Mae at an --- (S" c I

Portsmouth (V h

."PI-dare- (Rhode NNW), -" "1

RaIi- "iieltune marYland-and G .C .~

,afk . . . . . . . . . . . . . (New Jerfar,) ----

Philaffillpma---- (See (a) be ma)

Pittsburgh

I

(See (a) be ") Richmond- IV, me) ------

is Wilminston (D,I!war,)-,

. "'

thAlMn't'a

Bir 111,8thare (Alableare).-

C lure a_ in . . . (South a

Greensboro- . .- (North C

""",Me, 1 com . ,

Nectiville- , . . . Turn... . .

..nl,.fRegs-, - --- ------- ------------

Cincinjenfi_ 11 dl b :j .1*

Clear it

Detruit ----- -- --- (Mlihinger)

lordilneipailes . . . . . . (Irdhoaa)_ . . .. . .

Lomianhe_ (Ilntuc pokinsmox WestVrigi ~') - n-rat .:

alud .-.;s. in . .. . . . . .

Abinde . . . .. .

IS p` "k

.W .-

Chmego-e, Iles Me , :~ : So (b) below) . . . . . . . .

..a)

Fir . . . . . . . . . .Mg, ----------- - --- - (NW.,rth Dakota) --------

I N -A lif. . . . . . . . . . .

Onallia . idbraTkar) . . . . . . . . .

St. Loull .. . . . . S .. . . . . .. Sp,pau -,d -------- (M.-ta

ingfic - .. - (So. W b.1ml) ----- --

R

Abort lot, unique, w Me,ice) __ 'I I "`u"_- ~

I prim .)

ChIverinSea (1) le *11Wy D a, ea no

D=dr CmD(rf)

fow~_ ~ _~ fS do) . . . . . . . . . . . .

Li

I'll Rack . . . . .. . . . _6- (Arkansas) . . . . . .

Orl,aa. . . . . . . . .. . (Louisiana)-

onmall win 1 I. . . . . 1.1.1 Is), 1~_

. . . . . . Anel, a (Ldare ----- __ (Ar.s1.). _ 8 .) -----

Rilm, p

noluln' LHMpdtaM)a)_-

Los Angel ;s : : (So ( b v)

Phmenir --- M o2l) . .

Portland (01 1.11 Rmm

~ ~" ".'1

(See

Seat a- 11r,""- __ Was

Total

number

.1 -_ pothme

In I

rLdom, i-e d

(1 )

IN,- 10,480

4 3511

'3~ 2

,

31 :10 1

142 .6fIrt 11

13 .777

'3J, 'TO :94011

P11 11 ., 97

11IT :,711

14,9172

s.

11,974

8 .900

12,4074 527

9,291

32 .211

14 .070

.3-11

I ' 17 : 9'2 1' M . 799

1 11 10

7 :52N

I..'res

3.529

28,852

10,890

2 .341

27,342

,~ ~rf 1:07,1

17.076

9,294

31,115

V

10 1151 5, 6

4

16His

1: 2

'C

18"7

431 fifl~

2 7

'1 : 143..

toMIN'

.1

A

MC-Ilmor- K~3114 (b) 3j rifu,~ ' s

(it (0) Nob. ~

or

k

0 10- 44,931

(a) Perrilywa-, 4C .003

49,863

Dortillied spirits -- - --- - ---- ------------------

he's ' Man,- bell- Retail --h- a

:t1fort,:- .1 on . moncla

o,-

relate !

..I

an

,

lure

"I

"

otis Less 20,

offor

125" 454 Net

"", hon, .

stills than proof

cmeof iriffrion" f ain ~ ~ elcmid_ f

S55 20,DOO g.11, L

eduar. inif ~o

TI 1~' M '$ 22'0"

(2)

s1l

2118

(3)

as3

(4)

J2to

. . . . . . . .

(5)

12:1a

12

861

41

25

"1

17

fru51

87

4

43

8

to

1

.

395

1544

60'

2

111

153

20

'2'

Its

3 1

10

83

"I 1

71

a,

23'

101

169

48

13

~3

?.a

to1

1

33

201

58

'22

2

2f)

426

183

U4"

85

150

241,1 :~I :la

3,104

4S7

17 :113 ILI

8 75 7

567

4 .

416

31 , 622

st . .

5 :

12 . MI. .

1: IIS't

331

.11

1 .758 7

1,072

223

5 2'3'6'

839

104:783

14 .460

5,31l

IT

11,086 of f

3,067

1 .037

a 3,111

"ol C3 02

`7

4,12030

]':454'

3

69

5

3

07382

5,484

1,2'1'6

660

1,439

1,212

15,365

2.%7

2,1,1

4

If, fill

'23:923

I&W

16,316 7

j, :11,1 's

13.056

3,889

(7 )

1,1

19- 0

3

11

4' ~1

2

14

3

2

I

rati

- -A23 _

3

89

66

2

"IT

414

00

60

a9.

22

1

lotall for State, lot linown above

3

425

4~1

3 124

(8 )

111

171

4111

I

6

allI

5

ISIfS

7

4

6

3

a

(9)

sa

C r

3

(10)

Is

. 2

Its

3

7

Mine

than

al" "

Ma .

I

7

45

b2

8

87

1 11

31

4

2 2

Annual Report / Statistical Tables / 127

a5

s

4
Table 15-Number of occupational tax stamps issued, covering fiscal year 1970, or portion thereof, by class of tax

and by internal revenue regions, districts, and States-Contine d

War, Bear

Wholesale dealers Retail dealers lbe,ar, TemM.

!,ge,,,al -arre, 11in- uhlblitS, 1105111',s R.t.al dealer ram ,

varis a, ~,euresnbtad by simille diwict, %dicaled an gren n I - Whh'y Win,, 500 Whole. Noted dealers in

th totals In, other States I own M tam of to le) W-s' And Wines, ad

,

0 surel sale do.1", , I

a $255 "a, 411, s

,

$2

5

beer ,

$~4

.1 arm, a

.

$110-

dealers,

$123

$24

"

line

,

$24 '

1, beer )

$ .2 0

anPe r

orth

1 12) (13) (14) (15) (16) (17) (18) (19) (20)

..R.d I... .. . . . . as, 169 1.41, 131 .M .7

.-w-Au.. .all . aneg.. . .

's I a20 as 1.8 24 .321 Is!

Alb,my

August ;! ISChe)'_ .'low)

Bull.. .. . . . . . . . . be. se .cha,ells)

. . .. . . . .

6

3

2

3 2

176'

1

iii

82

? I1

2,40 9

4 '.

11

. . . . . .

5

1

8 49

really,

b

uftalo . atb,o,* ; : . 1

15 183 1 41 21

1920

8975

. . ... . 2.1

barbarism . . . . . . . . . . . . . (Vermont) . . . . . . . . . . 43 9U2 -

Hartford ----- (Connecticut) . 1 96 4

Manhattan. . . .

(See

"'

; :_ . : :

Obr e

P*",Mo,,

hu

212

1

2

3

Il

1

4

722

1

3

1

36

89

25

1 .8

4 .9'7'6

1 .350

. .. . .. .

131

i s

ne'donce . . . :

P

(Rhode Island)

15

1 7 31 . . . . ..

. . . . . . . . I~ . 3 .1 . U I .-

'."1

...

Baltur N .wa .'a. . . . . . . . (Maryland and D .C .) .

. . . . . . . . . . . . . (New J.Isef) . . . . 6

1 2 41%1 1 .2, 11 1 X42q 1,1

~ 363754

Phil .dol,h,, .- .-- . 1 13 13 17' 7* 1

8

:

ea y. - .

ay`fi'

w

't= I' ''

~ . id 3

1 38

. . . . . . .

Va I

Rt ~ . . ~ . _: . .: i.i I

WdhnmRt,m._. . .. . .

. -------

50

2

2 3,251 2 102

9

3,73 1

13

1 2

11

twerl

.-I

Atlanta ------- tGnuo) I i 214 7 1 : 'I o'9

1 41521 112 :194

1 21

1

. . . . . .

1.

Birmingham ~Ilaymnhl) 2

7

31 11 3 . 1 1 1 Cot :~ :

abbis --- South Carolina )

Greensboro 1 11111i Carolina) 2

3 0

38

1

20

1

2 .

2, s1'7 2

24

6

4,7

3 1

4 427 .

2

, . . . . . . . . .

laulson Mmiss'Plu) J ., kill a vrlj~_ . . . . . . . .

Florrda)- 4

.- .

47

. . . . . .

17

2 2

1 111

. . . . . . .

4

79

111

:

4 963

4 171

1

. .. . . . .

7

N . . . . . .

shvill. . . ~ . . . . . . . . . . . .

(Tenn saeej: :~ :

23 75 4 : 2

"

c- " . .

.. -

' 11

I ;. is, I; - 617

.

1 3.

CClever ..ii.nlli- (See (it) bels.j.

.ad. . . . . . . . . . . . (Sea (it) b --

Detroit .. . . . . . . . . (Midaga at..) -

3

I9

11

1741

54

13

2, 4 E7 8

3: 8282 76

5

51

56

'

"'

486 0

1 D`

0

. . . . .. .

--- --

II I

2 3

Indistair al... .. .. . . . (Indiana 1 4 2 2,042 4 206 7 . .. . 2!?

L.ui .,l ----------- (Kentucky)

(West V,rgin;;)i :

_ 1

4

110

3

1

123

101

1 . say 1 27

.is -

Ab,,d,.a --------- (South Dakota) . . . . . .

Chmall. . - __ . . . (S. (b) 1,0.wi.

----

.

1 41, 3

2 .4an,

1"11 " "' 1 . 17 I

'

21 5 I

2 31 3

Dral Names . .. . (Iowa). . . . . . . . . 41 2

. ..

1, 1 1 4

~Nrbth Dak.ts)

'' 1

Mdw'uke Wi-",n).- .

Omaha . .. . . . . . . . . . . . . . . (N .b-Va)_

6 11 112 213 33li1~ 4 .1799 1 1 11 1

St. Lobis. (Missouri)

S P.ul 011 a hu"'). . . . . ..

3 1 3

2

4

9 1 1

6

2

S, 3 :

. .

1

114 5

Sp ingfi;ij_ :. : : :~ : - . . : : . (See (b) beto I .- . - I . . . 23 4 131 236 -

- _

,.. 300

1 . relleve-__ . . - . . . . . . . .

Albuq .,,' I. . . .. . . . . . . . (New Me-b) .. . . . . .

Arjad I . . I (See T bal ..). .. . . . . . .

3

. . . . . . . .

. .

1.

. . .. 9

a s

261

7 .459

5,6272

1 6

(i

$1.

41003

I~

.

. .

14,3282 3

3130

_ . . . .

$1

1h* DID., IS 1 . . . .. . (W nl)- - . 1 1

. . . . . . . . . on (f) below) 2 6 1,667 3 .1 3 .11341

I~2

6

(Colorado) . . . . .. . 41 3 11 1 311

Unit, R ( Arkansas) ---- . . . 1 1 1

1, 19, 44 :382

1 1

New Orion . .. . . . . . . . . . (Louisiana)- 2 1 1 21 3 104 3 1

H

1

Oklahoma City . . . . . . . . . . . . (OklahOM3) 1 8

69 1 ,

1

88

5

_ ._

6

Militia . . . . . . . . . . . . . (Kansas) . . . . .

.-am, Reeled... . . . . . . 21 173

. . . . . .

22

i n

9 .6s,I

. . . . 77

I's

3,26 7

14 .4n

. . . . . . . .

2

2 0

Its

Anphoraga_ (Alaska) h . .- . .

ldl , , ---- - --------- ---

11,7 1, 1 1

480

--- --- - 2

~ a -

M

. . ;.a, a'

. a)_ . . . . . 2

6

66 2

'0

1 1

Haossittla . . . (H.-ly..

La' Angeles . . . . . . . . . . . (Sea (a) hdov) . . 4

~i9

1

33

1,347 6 1138

3

6

5 .559 1 it

Moral . . (A unne) .

.

.

Portland------ - 40; "an). . . . 265 3

2 .749

098

1 1595 32 3

LI 70

. . . . . .

61 Red

. . . . . . . (Neva,10 -

Sall

L", City. tut.h)-

2 25I

.. .. .

9

28 1 .124 12' . . . . . . .

2

Sao I-orsaa ..

(See (a) below) . . . .

. .

21

79

131

6 151 3, a'

.

30 3

Seattle (Washington). . . . . . . . . 3 4

0

2 1 4 1 30 898 . . . . . . 9

~ a C"I'l b)) Illinni"'"a . --- -. :

(i) New York L') Ohio . . . . . . .

10 P

it 7 ,

I ln,l .d,, 5 Waivers at less than 500 b el, .1 $55

Totals to, States hot shown abov e

25 9a 4, 4,11

I I . .. . . .

' 4

41 22 1 "

a

1'2 1 7, 2154

1 32 1, 31324

12

7

14

6

21

9

26

303

58 3

.1"

53113

8.649

451

787

1 : 0"

1

17,463 .234

2

2

31

19

394

355

222

251

Table 15.-Number of occupational tax stamps issued, covering fiscal year 1970, or portion thereof, by class at tax

and by internal revenue regions, districts, and States-Continued

Alvin-.

Internal revenue regions, disl,,cts . and Stales

"ah"ai.

Dealer s

(S; .tr,,!p,a.r1,d li~ single d0nit, md,cal,.' in to a,

'a""'

What- . m Law, . . Pro.

he,as .totalsforol ruStatessholl1toottem,

.1

table)

""to"

"" ,!'!"

P-li. at-d barley Man,- be,]-, this- P,aili . L.dare.

and toordes'a's de . a '

tamals . Pbura- at,,. last- $3 and I

round-

.1 Pa..

$12 S3

S,

returns .

$1

91

;24"1

ill

an 31

(21) (2?) (Ill 111) 11) '21, (27) (28) (29) (30) (31 )

"":led I I'll, . . . . . ----- --- -

Albany--- .

' m c" 1 '

5

A 11, ~ ll Me a ') " - 7

,

sou 3 12 2 1 . a96 I

8

frankly --- - - - - - - ~ ee ,, below) ---- -

15 1'a1 1,111

.963

IS3 .11

802

1 3

28

33

a . . . .. . . . . .

5

I liffal, Sea

II ' (a) below) -------- 3 17 1, Ig 9 .4A 5 177 13 2 7 BuNiqlar-_ . . . . . . . (Vemard)_2

C 927 3 . . . . .. . . Hartford,-- ourectscut)_ ( . . .

Manhattan

11 852

I . M

15,83 1

"' "'

9

. . .

2

33' '3 5 PV.'t_bith___ (he .Hanabahat) .

-id .r-_ (liffirud.1sland) .

1

1

3

6 152554

1 M

1: G48

1

7

2

1

. .

.. .

. . . . . . .

. .

. .

11 .1m . se

r

7" . . 4".,

(MayI' al nd D .b 11 .

Newark (N-T" ) .

.

2

I l

,

17

97 6

2 12

1

9 .137

1 1

11 51? . . . . . 3 4

Philads~phaa . .. . . . _:

Pr(sbough . . . . . . . (See (e) below 1-

' ,,

11

1 :

99,

" . .

4:

7 3

' ' '

53

"'

32

3

1

_

. . . . . .. . 3 7

Rxianmall 7 1 6 li~ 1~ 24 0

1 1 j

Wfladmil .a~ : : Delaware).-- . .. . . . . - 3

11

_ 799 7 4 . . . .

sh .w. In".-

Atlanta- . .- (GrarRus).-

I?

31 LIN S .W

ING

15 4 --- . . . . . .

. .

I . . .

Hunarniah ... . (A abrun . )

Columbia . . . . (South Carhfiba

1

I~ 996

6112

3 .68

2. 7"4

8

1

41

~:

Greensboro (North Carolina Jack 1 1, 1 . ' 5 .514 41 1 1

I "a Kk avill (F'iaai"iPP`) Marbour) : 292

' .61 5

" 75

2,03 7

" 7s'

5 . . . . .

.

Nashville . 4 27 L .51 1: 1 r 29 I7

C-0, . xleaul- .. --- -- -

Cmunhati- (See (it) b :j . . . . . . . .

U

5

138

22

7 .03 0

995

41 305

7:04

Us

15

47

9

1

. . . . . .

1

1

. . . . . . . 1

2 42

Cleveland . --- ISdj~ ( J) 4

'

3

1 "1 1 '

(y . h '

Detroit ----- (laid, .a Ran)

ana)

a

a

6

46

"12

2 : 3 1

1, .21l~1

13 6 5

14. 11 : D 1

11

13

1

1 13 . . . . . . 1 . . . .1. . . . .. .. . . . . . . . . . .

. .

. . . . . Parkersburg-- . (Wes agrua). . . . . . . . . .

*

1 11 342 2,014 1 . . . . . . . . . . . . . . . . . . . ... . . .

.

:

: : :' . - _- ____ -

Ab.,d""' " .e . . . . . . . . . (South D.luda) . .

27

'

earl

y

3

"I"

279

e.

.7.

"'

1 2 2 1 1 1. .1

Cha.,p (So. (b) below)- 4 37 2,131 13, 044 14 L :

Des Morres . . . . . . . . .. (away-- -

To M . . . . . . .. . .

.

(North Dakota)

112 13JR,3 1.14

7573

14 41 3 .

Milwaukee . . . . . .. . . . . . . . (Wisismsm). . 4 16 1 .074 6 977 8 9 . . . . . . . . . . . . . . . . .. . .. . 2

(Nebraska 1 4 482

407

2:

4 4

1 3

Lou . . ~ : : (Missing '

SI : Pau I - ------ - _' . (Mmaesual) ------

1

1

202 1,12 2

969

7,366

1

4'

4 2

7

14

1

. . . . . . .

1

. . . . . . . . . . . . . . . 2 5

Springhill . .. . . . . . . . (Sea (b) bell*) --- 1 7 711

':

31

1 1 1

uthew., .

Albuquerque.

4

3

IT J

.I

' '"

TS 11 a

.

Austin '. _ . ~ --- See (1) below

Ch evenae . . . . . . lWyeari-jr) ------------- -----

21

2

GB G

0

~ 19 : 9

511

X

-

1 5

-------

. . . . . . . . . . . . . . .. . . . 8

,, (I

Dal as . . . .. . . . . . . . . . . . . SeeobelDw) .- 1 21 1,505 7,641 13

1

a

be a----- ------------ (Colorado) . . . . . . . . _ . .

Lit to R.O . (Arkansas) ---- ------ -

Now Orleans. . . . . . . . . . (Linustam .) . . . . . .

. . . . . . . .

. . . . . .

2

1 3

Ill

11

LIM'

4':411

23

5

4,923

13

9

1

12

. . . .

. . . . .

. . . . . . .

.

. . . . . .

. .. .. . . .

1

ki

Oklahoma CA . . . . . .. . . . . (0 1.1hinard, 12 865 4.263 7 3 . . . . . . . . . . . . . . . . . . . . . . . . . . .

Wichil.. . .. .. . . . . ---- (Kansas). . .

.

1

7

0 3 083 3 . . . . . ... .. . . .

Ararlaule --

as - * ** ,

-----

173

1 44

61 ...

272

7 3

. . . . .

Te

. . . . .

3

. .. .. .

. : : . :

. . . . . _

: : : :

.- . . _ .

.

. . . -

I s

. . . '

bad" - __:~ --- _ --- (Idaho) . . . .

Retail- ---- - - ----- (Must... I

21 21

'50

1 17 .

0337

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

. . . . . .

.. . . . .. .

.. . . I . ..

2

. . . . . . . .

Honolulu _ . . .. . . . . . . fl1-1 0

Los Anu,l - . ---- -- 5 741 2 .7'117

1 :211

164

1 1

3 l

2

4

. . . .. . . . .

3

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . mrsamb, : :: : :

- - : (A

tierrt11"d FO epn)-

10 43 3

'

935

066

3

5

2

Re . . 1

.. . Nevada) . I36 720 1 . . . . . . . . . . . . .. . . . . . . . . . .

San 1,amv- FS.,?a) b

21I 1

38

1I.11

1

. .

13 131 . . . .

4

. . . . .

4

2

S.011--- -- - --------- (W..h.ast 21 994 '1841 2 7, . . . . . . . .

Toyota to, State, not shown above

. . . . . . .

Illinois,

i"))

I

5

1 . 4 .843 44

44 2,956

.6~ 7 1

3

a

37s

55

22

. . 3

.

__ : . . . 1 4

c 5 74 5,140 46,21 2 63 61

:~

1 (it) Ohio -- -

(e)PeymsYiv3nra_

9

4

46 2 .394 16.97 9

35 3.128 21~570

4 6

69

22

0 1

2

. . .. . . . 3

i

7

(f) 7 . . . s --- ---------- 1 51 1 3,191 16 .8311 44 24 . . . . . . . .. . .. . . . ------- -

128 / Annual Report / Statistical Tables I Annual Report / Statistical Tables / 129
Table 15-humber of occupational tax stamps issued, covering fiscal year 1970, or portion thereof, by class of

tax and by internal revenue regions, districts, and States .

Nat ional Trial— Act

Deal ., Core- Adult.e .

Marophot or . ... s onschtc, Mancts". nly to perated ated

minct .'s only of lo- only o,m- aming rocessor isa,,.

internal ieveme routers, districts and States cap.,, w weapon, lassified

-

evice elly,ted i

sure, represented b 'Ingle district, i n le

it l T

o'Wi,ed

" i""y

assifie d

A "y

l Ah ~

Other

mise ,

"22o '"

ter and

filed

0

~ ha t -o -1 on, of tabl e

theses: totals 101o 11Srs"'Ithin as , l he,

-

rh .

"

apon, , e ose

Class I . Class 2~ Nut

$200 ..pon ,

Cla s, 4.

eapo n Class 5,a. 6,

$10

-

(32) (33 )

(34) 35) 36) 37) 38) 9) 0)

-

spestras state . . let.. . . . . . .

Is 37 6 5 7 .0. 1 lors

ssap,axi _ . . .

3

s

1

.1

--------

3

A

R

.spen_ (M.s.

loss)

e

2 2 4

2

1

. . . . .

--- -------

. ..

- -- --- -

throckly.. . . . . . (So.

Buffalo. . (Seewto low all;limrtm-------- 4vorrei

:

3

. . . .. . . . . . . . . . . . . . . 2

No IT ad .- . . . _ . (comenot-1- 0

t s

'

2 5

_

Manhattan . . . . . . . . . . . . . . (See W ha n

Portsmouth ----- ( N -H MidProvidence- (Rh .dc'1s`UPmD_ .

A I

i ij id xji~ tim". R" - _

s6 1 1 18

,

i

offifine", , (maryl t ar D --- - .

-

.

(Ne 0 w ( 4"I,'I'w S ~

-----

1

5

o

:

c )

(Se (a) below)

1

9

8

. .. . . .. . i

Richmond. . . . (Virginia) Z 1 2 1 254 l

fterpreft n . siera (Delaware)- .

th.. .

t R"`7-

. . . . . . . . I .. 2 1 o

2

I

1 4 3

I N

Atlanta . . . . . . . . . (Geargo)- . . . . . . . . . . . . . 7 . . .. .

Birmingham 2,224

e fj -Th Comlirta)

-

, 3 --- - -

r,ampo or . . . . . . . .

i si

ll

I : ~ 0 p

(Florics) I . .

2

3

2

2

2 1 1 3

1

.

----- -

Nashville .. . . . . . (T,nrysse . . . . . . . . ..

cent,radl senior .

1m,mn"

`

7

8

4 2

1 mi

and __ : : : T,e: Ixf~ b

2

27

1

7 .

Do" or . . . . . . . . . . . . . (Michigan) 2 . . .

1

4 42

1 1

1 3 1~ ledisne,pa,'- . .. . . . Ohdi-k~. . . . .

. -- -

ll (K t )

---- - -

2

3 ----- --

: Louisv i e . .. . . . . . _ e, uc Y . . . .- . . . .

Parkersburg (West Vilgirra). . . .

. .

-

. . . . . . .

- -

. . . . 3 1 wa . . . . . .. . .. . .. .

end ----- - Aberdeen . . . .. . -6.1ccito . : : ~ .. . (511th

.

. 2 .

-- --- ---

1

a

1

. . . . . . .

Chicago __ ----------- (See (b) below) . . . . . . . ---- - O's rspm~_ . . .

__ (Iowa)- 2 1

Fargo . .. . .. . . . (North Mi . . . . . . .

flvatiley willoole) . . . . . . . . . . 2

2

1

36

. . . .

Tion i!

she Nebraska) ----- ------ -

S L

-- 2 ..

------- -

S j: `v`- - Paul --- - --- - ------ (Minnesota) 3

2

7

135

--- -

1 so Sprimirfield . . --- (See i below) -------- -

conevea.1, shied ..- .- . .- . . . . . . . . . . . .

Albuquerque . . . . . . . . .

-- i s s

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

s

. . . . . . . .

-

11215 -

1

A

ustom, . . .. .. . . . (Sea (0 be see 2 . . I :~ S

1

7

141

6

I

c

h.Vular, . . . . . . . . . . . . . (Wymning), . . . . . . . . . . . . . . . . . ------ -

1

----- -

4

-. . . . . . . . . . .

2

. . T,,a, : : So V) , law) , ) . :

C l d

.~ :

o ora

o - 1 _ ------ -

Little Reel, . . . .

. . . . (Arkansas) . . . . . . . . .

- - ---

---- - --

5

5

1 801

3

2

2A

Now Orlears. . Louisiana)- ,

lot

1

Oklahoma City . . . . . . . . (Oklahoma)

fi (K s .

. . . . . .. . . . . . - -- -

. - ---

-- ~ 1 --------- -

jith

x . . . . . . . . . . . . . . . . en a )

4

.. . . . . . . . . -

as . 3

"

ea

B

1 pi

f

1xi Ilda1o,---- ----------- -- - , _ .. . I : : : :

I

.

_ I

5

H Me tons). .

. .1

l

. . . . . . . . . . .

. . .

-

----------

-

IN"""o Los A n,,y;j 2"es'ail) pi~jpw) . 4 W

------- V

M 4

Peremp, * , (A itoon.) --- ---- --- -

;

--- - - 4 1 . . . . . . . . . . 2

602

-- - : : : ~ : : (

Portland 0 .Vn) :-

1 6

" 10 _

6 Reno . . . . . . -

-

: : . . . . . . . . .

467 : 5 below)

Ss To is

_

3 - -

460

- -- - ---- -

1 :121 Seattle . .. .. . . . . . w.slinglar) . . . . . . . .

------

------ ----- . . . .

-

Calftln's

c) IllinoisOhio

~r) it P,nnW toa ;a -

Is— . . . . . . . . .

lotus tor States hot shown -leal7

173

11

In

10

2

130 Annual Report / Statistical Tables

3'

4

i

5

Iff

Table 16 .-Appellate division receipts and dispositions of cases not before the Tax Court (nonclocketed cases )

A . Progress of work F.Y . 1970

Statu s

ReceivedDisposed ol, total --------- . . . . . . .

6, agreement.

Unallieed : (0... . s,ess,ents, oWers eac,se. employment. ~nd offer cemponese ejectries). . . Byy Vaetpagetode,frit oCstat.tc,y error ------- _ -

-transferred to docketed

8 p

it Tax ourt. status--

Pcnd ing Joe, 30 . . . . . . . . . . . . . . . . . . . . . .

B . Results obtained in disposition s

M,thled

Disposed of, let.] . . . . . . . . . . . .

LByh agreement .__ - _ . . .

speed . (0,crossessments, claims e,,ise ,

B tax

`

,olef.,itt ., sta! ptery imfice . . . .

employment. and after in cmeactrose elections)

y y

. . . . . 1 by lospoth he Tax Cour4-1ranstrred to jorkeei states t ----- - . . .

52,603

52,238

1

1150

Revised.

Table 17 .-Appellate division receipt and disposition of income, estate, and gift tax cases petitioned to the Tax

Court (docketed cases)-

A . Progress of work F.Y . 1970

Star. ,

Pending J..lv I . . . . . . . . . . . . . . . . . . . Received sets_ __ __ . . . . . _

Publions

`9' ' `

11 Dis ncbrr r 1aI. prv n.t,.s

Appellate Division's statutory notice$'

Disposed or, total . . . . . . . . . . . . . . . . . . . . . . .

By stipulated avreemot .

fticionill1l 1, I'll To. Govrj .1 laxiniale, iNtooll . . . . . . . . . . .

of tratore the ox Court on the merits . . . . . . . . . .

Pending )one 30-, . . . . . . . . -- - - . . . - . . . . - - . . . . . . . . . . . . . . . . .

Notate, of c. ...

(1)

22,179

26,13 1

25~29 9

20 7 -

.,1

2 . 338073

23,01 1

Number el cases

(1)

299

0,780

1 .249

1,301

Number .1 cases

(1)

9,843

6,96 8

131

F

l "

~15W

5,278 '682

45S

946

10 111

-13126

. . . . . . . . . . .

. . . . . .

1 Difference from table 16. transferred to dricioled status is caused by excluding district directors' statutory notice$ considered by Appellate ir, 911-day status .

B . Results obtained in disposition s

Method

Disposed .1, total

-----

. . . .

By by the 7x- Cecil or del . .It . . .

Tried a ore the Is, U .It no the ne .,ill I ------

I Represents amounts peLtomed .

Number of

case s

(1)

6,6882

5,2 7

458

946

Deficiency

and penalty

(2 )

255.240

1,331,94 0

1,071, 982

83210.193

.908

3'T : .111

82

51-5 1 9_8

Overas....mee t

(3)

109,981

537

33.948

33.225

211~is

47 9

114, 57 0

Appellate determination

(thousand dollars )

Deficiency

and penalt y

(2)

01ro .slIsintimt

(3)

517,538

,3:925

11 108

la I90

Panamint stated io sts notice

(thousand d=

Defide~fcv ilovtw I

and ina Ow.'s"osineent

(2) (3)

1,343,8228

510 .8a l

3 Is 311 I

W :4

-,368

a9396,852 4

3,158

94 .358

1 .360,26 1

Appollal: Womisat, o

(thop and dello's)

DOanicepcy in ta of x

(2) .. fly

217 :993

1 " " 2,623'

94,358

Overassessamp t

(3)

3,890

3, 890

Annual Report / Statistical Tables / 131
Table IS-Office of Chief Counsel-Processing of income, estate, and gift tax cases in the Tax Court -

statu s

Pending July I .

Filed . . . .. . .. * *. . . - :~ ~:~ _ _

a' '.a

. ad

. . . . . . . . - . .

. 1. . . .A . : . . . . . .

Disposed at . . . . . . . . . . . .. . . .

Pending Joan 30 ~ . . . . .. . .. . .. . . . . . . . . . . . . . . . . . . . .

Number of case s

(1)

11 :04,

6 169

6.%4

11 .453

Amount in dispute (thousand dollars)

P (3) . 41 ,

1,2 '12

" : 70

,

, 1B

364,744

1 .280,165

,109, 063

"34:31

34

JOB 091

(4)

.

' 'I "' V .8

35,553

87.84 3

overpaymen t

, Revised.

Table 19 .-Office of Chief Counstall-Receipt and disposal of Tax Court cases in courts of appeals and in Supreme

Court

1 . C ourts .1 PC.iC in Supreme Co urt

Amount a dispute Amount approved Amount it , dispute Amount pPRURId

(thousand dollars) (thousand dollars) (thmithend dollars) (thousan

'

d

it C t

U

Status

ruarbe,

Number

at cai's

Ditfi-n.

D'"' U"c""' 0-

a' cases Defickhr- Over. Deficien- Tva ,

C, ad pahan, C, ad

afrount

p

C, ad

payment

ty ad ..... . a , R.C.U,

Penalty Penalty penalt y

(1) (2)

(1)

(9)

U))

Pending July 1 . total -302 , 21.726 2 2

App od by C.Inaryinguner .

~' 2

1 170 5

: : * p

.% l b y

A d

laxp yet

. -

'

44 16,005 a . . Vpaa:d

A by both . 26 4,551 9 . . .

Appealed, total .- 319 31,427 243 2 1 2

By Commys,larim- __69

,,

---i-3 97 2

1 l,

-5

17 2 2

byy UXT'sy . . .. . .

H both . . . . . . . . . . . . . .

23 ~B

79

'1, .

onoo.und of. wt.,

.986 ~2 4 0 11 48 2 12 . . . . . . 1 2

F, table to G-Rogisamer- 154 6,772 12 6,772 6

2 12

1 2

Favorable 0 tascRive . . . . . . . . . . . .

Modilled .

* * _

B21 4 . 71817

1 IT

1 . 2i5

I

. . . . . . . . . . .

-

settled . . : : : : : : . : : :1 . :, , - 1 1 .261 915 . . . . . . . . . . . . . . .

Dismissed --- : . . . . . . . . .. . . . . . . . 38 2,402 202 1,079

Pending June 30 .

late . . . . . . 382 37, 167 4 1

All o b 7 8

P

A pp:. by ::d b;

14 514 5

280 19.592 2 7

Appealed by both . . .. . . . . . . . . . . . . 24 3,061 9

R,' Md .

O'll-re . bobae,at tables 17 and 13 .,a occa-med by maeldInU, Channel at late porthren, diumi-I .1 pablains m-coolly filed act in ith-I to - Ital-WRY

notice and a shillat difference I, Jurisdiction bMwe,n Aft and the Ohice a Chief Counsel

Table 20-Office of Chief Counsel-Receipt and dis.

posal of suits filed by taxpayers in Federal courts and

actions by the United States for recovery of erroneous

refunds

Refund SiRts (0m,

than alcohol, tobacco,

and fi-- t .smyt Trip -

Status

t 11 0 01

.1 1

101~ cla I co . .

(3) (4)

Pending July I '

Cases . - nonam 3,414 394 2,984 3 6

Amount in disput

e

thousand dollats 427 .471 187 .837 237.184 45 0

RIC-ed during Yea,

Case, - humbe ,

A .-IRt dispute

1,189 140 1,021 2 8

thousand dWl- 155 424 35 .582 119,628 214

Disposed during yea, C._, . RCRTR . R

Amount a dispute

1 .182 107 1,053 2 2

thousand dollars 86 .335 35 110 49,246 1.979

Refunded during Yen,

Amount - thousand dl),s 34 094 11 .249 2z 4 5

Percent at mr-I disposed at 39.49 32.04 46.3 9

Pending turn 30 :

Cases . . . . . . ..be, 3 .421 , 427 - 2 952 42

Amount in d.spint,

thousand dollar, 496,560 1 183,309 307, 568 1 633

I The number of cases disposed of does got agree with the number of cases in

which decision, war, ordered by in T rdtf,~ni, ,, .d,,, to CIII. . . . I

by st" WIt "on, dismi h, and time rel.i,,.d In a , u!htrcy.,

. at am .1 ta, k ~

1 . the Court at Claims the number .1 deritunn, tan, 35. at which ainct ; In

Gatherhatnal, 16 against the G-Rhount . ad 4 paRtly to, and part" 1 5 *11 , 1, all hu.

Government . lathe districtouits 332 dedshor, were readered,ol which 151 were,

for the (votarnment, 1?3 against the Gove-ent, and 58 parl~ far and Rally

aninst the Government . for it ecceRmy by the couitt at appeals in Supreme Coult,

se, T able 21 .

, Revised .

Table 21-Officeof Chief Council- Decisions of courts

of

B.

ppeals and Su

P

reme Court in civil tax cases

Court

Total

forthe

Go,cuReal

BycC .,U, .f .pmRtlC.t .taI

Orrin-fly led a11L .),, 1Court- .

.11 cmuce. . . . .

By S . ' C.C Churl . lot,[-----

Originally tried inT. . C.. .I

it"Rhyl .ta's . . . . .

court at claims. _

(I

343

33 1

1 200

j 13 1

12

11 2.

(2 )

250

24 t

154

87

Agrun,t

the Gmoorma i

(3)

57

5 4

19

35

3

3

Table 22-Office of Chief Counsel-Receipt and dis

posal of collection, injunction, summons, and

disclosure cases

Statu s

,a, "'I"and

al,fll 11 .1~11

the Gov.

mrannut

(4)

27

9

96I The Courts at Appeal, tendered 124 opinions RI 200 docket ,,,bar, at which

m .r.n, ! far he G-orce.al,1 .2top, ion, or, ontially Jay the Govern .at.

.ad 16 OR, ., --as witte

-gairC, the

not Cat

a, courts of R RtRi 131 cases . of which 65 OR .. . 11,

appeals 'and"" 102 op"a ati

s

to, the Government, 7 upla

in

a, a,, .,ifly far the Ch-ampitt, ad 30

opinam, -th, against the Cover RT mil

I he Supreme Court a up 2 docket o,Rb,,s

"121 a

ahms

T , Supreme C. . . I .ad. d 4

" 3

Commas well

far the Gav-m,m, and I armul, way n .Rsy ;he' "" a' watch

Pending July I . . . . . .

H i,C d

b7spatted at . . . .

Pending Jan. 30

Number of as.,

1,696

1, 73 ~

Nov . This table include, cases hardly

" '1rRt""

1."gd le~,U,, -loct, ", ,

actu, consideration lot soft a, aR, I, suit Federal it coul I does

hot include tes laltithat to 11c .h1l, tCb.ccar and f-Rhas t-, R.' to ....11mu,

and de blot proceedings (table 23), a, tf,hop.~l In I ad other cly,"Inch -induded

able

24

Table 23-Office of Chief Counsel-Receipt and disposal of insolvency and debtor proceedings

Total 1e,,,,m- I .. . ad MRtZ11*

bnr0- c =sh nsW,,

st,R ., T

cead n ~ 3 , ,,

pr- d .

Ings

a', I

(1) (2) (3) (4 )

Pending July 1 . 2,064 1,031 572

Received 3. 156 1 . 5M LIMIT) 45 6 1 U.,latod .f _

Pending June 31) . . .

2,891

2.329

1 .29 3

1 1,29,

I .Q 8

58D,

M2

45 5

- P-edn'91 instituted under

Chat

to

R I

Bar 7

The follow"'R St"t :10d"Ina p a CR.R~~at ,1 Ill,y Act s ; Sec . 7 Wil-al mg.riyations) a y! X .. . . . to

thun ), 11 (m,nagnamnlyas 1. an-unind itudebtudnesty. fill (real property a"arglare

n I

t) and XI -age ttal .-' a as), which l-W, it . claurs a,

d

other tight, ~hd late

~y h U

CI I a It,,VSutoC.

fainkou'lCy fiquiC .U .

, Ron, "I

it, p and 1"d-I .1 state "calim"Ful,

meanings which involve 11. claims 0, Vi Un ad tates .

Proce.Callags ral,brig to corporate dissolution, insolvent bants, assignment,

for I If abenefit of ctedit-, or administration of aslatts at decedents, which

involve tax claims at the United States.

Note ind-, Ca, handled a( istannal and agintul level,.

Table 24-Office of Chief Counsel-Receipt and disposal of miscellaneous court cases, lien cases not in

court, noncourt collection litigation cases, and appeal

cases

,M,,c,l- Lien Martsm . I

na'aus

status Total cap't no, ...~ "Tc . . . . '

use, I coud 3 Cal. . . 6

(3) (4) (5 )

Pending , by

. . .

76 688

Necow,, I,J

D S . 3&0

50

438

1 .766

1 . 7be

3 .34 3

3, 102

n

62

P=Rne 30 . . .- 1. 514 379 84

9

29

1

22

1 .6 day athIs to, Inced.-a or RaRtgag- a, In,, stic-al C,.dRCRt . and

U to met fine to which to . United Stay is y

PURa6l, appl-fiam, I ., dfi.haR,R jh, mnl, t, a . lia.l.

Primarily ane-haduarty a pama tigatnt. after, from lega-I c... W

1. district directors whic

a

ate not elal,it to court proceeding, a, lien cases .

I adud,s cases fit federal and State ppellat, cour

I

s reining 1 . in-l"aRy

and debtor p-eedings, lien case, ,I court, ad collect! so

.

an .

. * . .. ..

. on,

"on

Ca ..

Note. -includes cases handled at national and regional leveh .

132 / Annual Report / Statistical Tables Annual Report / Statistical Tables / 133
I

Table 25 .-Office of Chief Counsel-Caseload repor

t

Pending Reconts Dispinals Pending

July I June30

Activity

(2) (3) (4

)

I .N1 ---- . . . . . 23,268 29, 123 27~ 516 2t, 87

5

Adeanullolice......... 78r~l49 167

63

Alcohol, Tobacco and Fi-ruis 949 7, 850

-

7,7091 . 0

- --

Hafl-I Offir..

- - - --

245

- - --

2,390

- --

2,330

-

-

305

Fald ----- 704

5.460 5 379 785

General Lifigatine. .4. 913 10,803 10 . 138 5, 57

8

N,il nsI office 307 385 332 360

Field ----- -

4 .606 10 .4189 .8065 .218

E.I .couran, 2,073

1. ION) 962.206

rialki G11- 56 54 37

73

Field -----2 .0171 .046 930 133

Interpretative Di'sion 174 505 421 25

8

Logedation

& Regulation -----

Refund Litigation 011111- 4 IT

1 16 1, 182 3,421

Ina Court Litigation-- YSO 7~ 2;F6.805 11 .835

National Off .'s 311 311 241 3152

Field . . . . . .

I BIS 11, 969 R,

'64 11,453

Statutory Notees nor i1clu ed,

Revised,

134/ Annual Report/ Statistical Tables

Table 26 .-Costs incurred by the Internal Revenue Service

he th.... ods ofd.11.14

Personne l T .131 .

nerionsation Inver ~qwiera.nt Ole

"

Inle-I ., .au. Me,. dsuda, or Jet— and hon'Oft

,

(1) (2) (3) (4) (5

)

National Office and einual brals rincludeg district directors' Office$ and servic

e

centers )

Total Intiunal Re,.

..us Service I ---- --- . . . . . . . . . . ------- fron. 159 778,527 21 .439 61527 79,66

7

ational Offic------------- -- . . . . . . . . . . . . ------- -- - . . . . . . . . . . . 107,

W 58.125 E552 2,291 45,59

4

ifirth-Atlanbc --------------- ----- - . . .. . . .. . . . . . -- ------------- . . .

ed-Atlaribi: .. . . . . . . . . . . . . . . . . . . . . . . . . . . 134 .46

3

103 . 26G

127,246

102 .028

2.283

2,269

438

4U9

4,497

3.561

outheart-- . . . . . . . . . . . . .. .. . . . . . . . . . . . . . 87,135 thl'off 2,777 505

3.852

9G .978 90,5402.455 435 3, 549

id-t--- -------. . . . . . . . . . . . . . . . . . . . . . . . . .

outhwest ------ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 .

Put . 672

$2 .474

97 .012

75,776

2. 9 10

2.354

724

454

4.025

3,889

,Its. . . . . . . . --- -------- -- - . . . . . . . . . . .. . . . . .. . . .. li),3W 107 .64 3,489 950 5,39

9

egional counsel------ - ---------- - .- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 .918 11 .476 162 . . . . . . . . . . . . . . 33

0

a guest inspection--------.......... ---- -.............................

Mice , " ------- -- ---- l 'eteini'vina' U raffee,.

.........

H . 19

5

5 852

10,011

5,427

915

204

31

Is

Z34

linea 20

3

Cowers, Caere

----- -------- -- . . . . . . . . 51928 2,808 13 221 2,88

6

RS Data Centel- . . . . .. . . . .. . . . . . . . . . . . . . . . . . . . . . 11-429 10 657 57 58

1 .658

ReRional counnemioners' offices 4-lud,ng district dunctem' Or and s.m,c

u

centers)

or th AUa it --- ---- . . . . . .. . . . . . . . . . . . . . .. 14 .412 13.437 280 46

GM

1'

~2.311

..

92

o0h,asl

7

:

57

04 03 64 j3s

t

!it a

21 14' . 1740

1

13 IN

321

416

130

111

757

894

orth-t

8:660 7,901 303 44 408

e,tl,n . . . . 12,4DO 11 .0% ___457

2

Regional Its tiodst,ita.led

ifi-th -Atlantic- . . . . . . . . . . .. . . . . . . . I'B53 751 664 11 12

7

,

d-Atl.nb----------- . . .. --- ----------------

1 .213W 610 . . . ... 23

ourthrost . 1 .035 Q8 494 12

4

e.trsl- . . . . . . . --------

-

idwest . . . . . . . . . . . . . . . . . - - -

1,286

1 .365

570

624

531

S99

15

19

171

au 12

3

Of eat . . . . . . . 858 395 428 23 il

estern----- - -- --- ------- ------------

- -

1 .223 -

-

411

21

Ocir ct directors' offices and service center

s

orth-2lantir : A

3

"a

41

T

'13

:076

S

J :s4 17

I

244

itan --------- . . . . . . . . . . . . . . . . . . .. . . .. . . . . . . . . . . . . . . . . 14,988 14 111 246 42

34

Weekly ' . .. . . . . . . . . . . . . . . . . . . . . . . . . . . .

8 Li --------- 18 "47

J6~0

9~ 122

3

1

26

S

42

12

Bullies ton ---- . . . . . . ------- -

0

1:001 .44 10 '~

H a rtfold . . Manh .. . . . . . . . . . . . . . . . . . .. . . . . * .. . .. . .. . . . . . . . . . . . . . . . . . 7,572 7,257 114 1 7

1

allan --- - -- ------ -- ---- --- - --------- ----------------- ---- 31,776 30 .979 202 41

5~~

Parla...

Providence"

-- --

1 5 ': '8' 621:'448

53

38

11

10

41

73

Puerto Rico Blanch (Af&F)- . -- - *. . .. . . . . . . . . . . . . . . . . . . . . . . . 145 133

9 V)

2

Z:~1:1 Ig I 1,,i .n,l Ilaune, Centel---- -----

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

tre A~

n~i' firgion-Cowt,alued Training.....

.

264

6 . . . . . . . . . .

RR1

6 . . - . . - -

258 . . . . .

"a

rth-A' antic So-c

. Centel ~.......

id-Ati .ebc 25.4

59 23,869 32 14G i'iim

B.Ibanal . ---------------- --- ----- .. . . . . .. . . . .. . . .. . . . . . . . . . . . . 12,879 11.4

150

13

2 Mark

4

V'7'

423

'7

2

58

32

3

61

:470 16 :882247 153

Pittsburgh- . . . .. . .. . . . . . . . . . . . . . . . . . . . .. . .. . .. . . -------

-

Richmond . . . . . . . . . . . . . . . .. . . ---- - . . . . . . . - . .. . . . 1

224

2:

.11 :112

10 1 Rg11

J .

34

1 71

205

Wderler lon .. ----- -- ----- ------ 2,258 40

1

4

56

,

Mid I ntia, R i . :g,.n I -C,. ah .d I a, 41 . . . . . . .Il1

At an ticS mice Centel . . . . . . . . . . . . . .. . .. . .. . .. . . . .. . . . . . . . . . . . , .in ri,it;

23,825 22,646 28 Ise

1 .563

Atlanta . . . . . . . I . . . . . . . . . . . . . . . . . I . .. . .. .. . . . . . . 8,313

7.771

"1

4120

Birmingham- .- . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . .. . . . . . 5,169

832

4 Is,

3,

141

C-1

unithia. . . . . . .. .. . - .- . .. -- . . . .. . . . . . . . . . . . ------ - 3,578

3:324

116 29

If

Greenstic- -- ------ . . . . . . - . . . .. . .. . .. . . . . . . . . . . . &23

4

3,357

7,703

3,106

3

J42" '24'

185

J .,raui 14

41?1 31

1BG

1

37O

Nish'ille..

....

- ---

~

9 19

.

2s

1

G9

Southeast h1g .-Cent,11lied I-re.it ----- .' - . .. . . . . . . . . . . . . . .

Soothes V Service Centel ------- -- ----------- -------- ----------

55

19.395 18,1394340 143 1,0A7

Memphis Service Centel . . . . . . - ----- - .. . . . . . . . . 30 . . . . . . .. . . .

bounnet ---------- - . . . . . . . - . . .. . . . . 9,202

8.754

"1

3

Cleveland- .-- . . .. .. . . . - -- --------- . . .. . .. . . 14 .3821

714 '1 37 31 .

Detroit---- . ---........ 17

"'

1~:5~

5 392

So. . India

Louisv le n . ...... :

S 727

6,071

9 .131

5,696"18,1

21

20

314

Parkersburg. . . . . . . . .. . . . . . . 3,346 148

11 . . . . .. .. . . . ;

153 143

2

8

Co. e,.e

ContraiServicaGenter..........

id.ait

G9

20,754 . . . . .19,569

61

32 108 1,046

A .erd, .e-- . .----- --------------- . . . . . . . . . . . . . . . . . . . . . . .. 1 .637

chinc----------- -- -- ------ -- - -- ---------

4"

,---

22,64 21 :613 25746

us, Male's.........

.:::::

F. go ------

.

..........

5

.428

Sol '

5,055

1 .375 . .17. 14

7

1 '3

,

Mileauke, . ~ . -- . . . . . . . . . . . . . . . . . . . . . . . . . . 1 81 : 7 7, 391 2566

Gnaah . . . . . . .. . . . . . . . . . . . . . . . --- 3 1 2 " 1

3 "

1

14

1

0 .12

s . . . . . . . . S ;: 'Po .1 ------- . . .. . . . . . . 1

: 3

7

6

7 .754 : 1 .

722

7 364

3 5

1

199

22,2

1

161

3

Splue,firid-- . . . . . . . . . . . . . . . . . .. . . . . . .

-C , forced . . . ...eg'- . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..'s FViCIC,nte --- -------------- . . . . .

6 1 a 09

22~697 . . 5:62

4 . .

20

210

71

20 155

ANNMs

isSwBR0BNMMSwC

INMSCMswD.

Annual Report/ Statistical Tables / 135
Table 26-Costs incurred by the Internal Revenue Service-Continued

fill th.u,aIds .1 d .11a,s l

Internal re,ce., Me,. diltlill. .1 region

Tota l

(1)

Personnel

..dp .O.ti.n

b-It s

(2)

T-a l

(3)

Eq milmuml

(4)

Other 2

(5 )

D. Cm I it, duect-' tho, and lI,Yica ottva-CM-e d

South west

Albuq:.. .qua. . . . . . . . .. . . . .. . . . 77 269 102

Austin .. . . . . . . . .. . .. . . . . . .. . . . 12

-

6813

IT

3

11

46 51i

C eye .... . . . . . . -------- . . . . . . . . .. . . . .. .

t'a '

1,31 4

1 1,947

1 .

-

169

11

318

a

4 8 4'1 !

n . i : : : .

4

1,1

4

6

56 Ml

2

2 19 :

L ttle Rork- . . . . . . . . . . . . . . . . . . . . . . ---- 1 : 36 9 3. 7

15

12~

New Ode,ris . . . . . . . . . . .

Oklahoma City . . .. . . . . . . . .

7 .

6 075 16 1

6,792

5.673

14 7

164

2 4

25

19:

Wi, 21ita. - . .-. . . . . . . 4,989 4 650 177 22 141

So

.lhw,si Haguu-C .hl,el .ad llaun,ug

. h- So-ca Centel. . .

5 9

18 108 ---- ---mm

59

42 162 551 Waste n -

Anchning . . . . . . . . . . . . . . . . . . . . . .

H1 j

1 .028

1 , 1

W

!,a . . . . . . . . . . . . . . . . . . . . . . . . . . 4 , 594 7 8 9

",time . xi,~ . al --------------- ------------------------------- - 1 .91 1

A 'M

1 .594

I 902

96

g

16

3

Los A 5,.Feles, . . . - . ._ : : : . . : ~ 9

:

Z7 412 4 116 1 .01 2

Phoenix . . . . . . . . . . . . . . . . . . . . . . .

' 82 1 1

2

'

32 P Dead . . . . . . . . . . . . . . . . . .

Ron. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

5 : 2

3

127

4 : 62

ED!

13 1

...

47

24

9

2

. .. I

-

-

:I l 1 1k

- -

2 2 1 65

1,

$ 71 l F ,.

n6sca : : : : : : : 1 7

00

18 2 33 174 14

Stattl . . . . . . . . . . . . . . . . . . . . . . . .

W :sl:;n Regional Training Centel.- - ----

7 2

3842

6

7 6 : 3

252

1~,

'

8

2

.

23(]

74 W , n Regi-Cm,44u,n) Training . . . . -

Western Sa,Vi,A Centel . . . . . . . . . .

I

25,82321

_ _

. ,

23 .943

122

67

__ . . . . . . .

CO S

:Le3stha " $500.

Includes $7.0 million financed from reimbursements.

2 Does not include transfer to General Services Administraluin in the amount W $1,427 .000 lot rental of space . and ;495,000 lot Lally Records R filament .

Table 27-0bligations incurred by Internal Revenue Service, by appropriation and activity

[in thoulandsof dollars)

Total Pinsamnal compen.tion Othe r

Appropriation by arti,11,

and benefit ,

1969 1970 1969

Tot,labhg,tY,nr-- .--- .- . . . . . . 758, 785 836,159 667~ 191 778 527 91 . 594 107,63 1

Appropriated I und, total . . . . .. . . . . . . . . 755,305 879,125 W, 228 772, 531

Wantland . pan... :

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 .931 25 .569 18,973 22,214 2,958 3,3'-',

Unuthe direction. . 9,666 11 . 133 8,349 9 .808 1,317 1 . 325

la1a,ral . .d.tacd sexullty . .. . . . . . . . . 12, 265 14,

"1

10.624 12,406 1,641 2, 30

Rownue amounting and procei

Total . . . . . . .. . . .. . . . . . . . . . . . . . . . . . . . . . 189,183 214,199 32 .7 7

--

30,551 36,442

hin .. .. . .. . . . .. . . .. . . . . . . . . . . . . .

. .

. . . .

"

67.015 --199 . 9113

19 ~ji ii

l

6

37, 2 7 9,7 96 2,72 1

2' 6 860 7

RIf 6

~

72

6

L1,1-1 - 1 5: 308 6 65 : 7 2 '

895

15,252 3, 5 1 2, 82

:Ompliance :

Total------ --------- . . . . . . . .. . . . . . . . . . . . .. . . . . . . . . . . . . 544 . 191 639,257 486,623 572, AGO 57 .568 66,797

Audit .1 tax 294,949 321 l 9 257,656 296,856 27,293 3 1 231 ClUencliln *11111"1" , IC..ll, and --if d6hq-t returns- q . . . t 123,970

1~~:

548

109,106 134 .292

14

964

,

Tax I'lud and ". 1,~ . ,.'tiff 1 , 17,256

"

38,536 4

2 " 33 4 "2

4: 540 6,042 AlcohoLlobamandifteurns .. .. . . . . . . . . 41,656 50: 0 .3 34 : 1 11 2 : 4 6,707 7,66 9 Talgayin conferences and IPPe315 .. . .. .. . 21 111 11 l 11 13 . 911 212 1 1 1 . 111 1 7 3 1

T fidings and sery,ces . . .

Legal,an-'s nice 1 . . . . . . . . . . . .

~

18 .452

~: 2~,

21,069

0~4

10 ,

16,9 7

.2 :2,,

19 .224

.7~

1,525

: IN ,

1,84 5

Reimbursements total . . . . . . . . . . . . . . . . . . . . . . . . - 3,480 1, l 7

Note

-A .. .

rus shown do Out include ~anll, ;IS, ISI,forrent of so,,, ,ou7,,tsng to $899,000 in 1969 ; $1,427,000 un 1970 : 7 -,W t. Narcotics at $63,000 in 1969 Transfer in GSA I ., Early Records R.tj,,me .' , of $ 0, 000 ; $495,U 0 in 19 C.

Table 28.-Quantity and cost statistics for printing

Fiscal year 1969 F-I Year 1970

Ci.. of work

fity (th.. . . Id,) QuintitY (thousand,)

Items a P..kaaa,

Cost

(th-mil

d.11 Items .1 Package,

sets W,

(1) (2) (3) (4)

1. Tax packa

s (Mail

r(

Package For.

iblO and instlultlons-20 pages) 100 .079 33 111

9

P.ck.g. 2 (For. 1040, srhajfi.la~ B . D, 1040&S . and x

P k 3 1 41 ' g,

75,607

1 ' 0,

30

P ,in :ck:~':4 1,40: xx a 1Chad'.as n 1 1. D, 104015, and nx1-tY.ns-4n:, x~, ,

F 1 11 C 11 and i st ti 4

If, : .. 3 4 1 . . . . . P

;,, ,Ct , n ox --

P cklg. 5(fonin 1065 . sched,l, 0,

d b

in'

x-16 Pages) ----

- :

a

4 2

'

3 19 0 j58

2 5

. . . . . .

P Ika,A 6 (Farm 1120, schad.la D, For . 346S . and , Ol"intom-24 pga,).

P k 7 F

121 15 : 7 1: 1

7

ac age ( 4

orm 1040A, instfurfions _

It Tax ta6 gas (1969) 1 1

. . . . . . . . . . . . . . . . . . . . . . . 39 440 19,720 176

P ., age A (Far . 1040 c

Package B ( Form 1040 : xRed. 1,, A : B : : L : R : T! -C-, p: ~L----- - ---- -

. and Form 4136) . . . . .. 966 :943 64 .463 2,154

Partnership 11, Package (for- I 0,and

t

IM, s .h .d. A , an s)

50

2

' 58I

1, ,

Corwration lax Package (Ca andar Yell lilet-Form 1120 an d capital gaun s

'

. . . . . . . . .

23 ~ 33

Conh, .dfi:l,,)T _- .-k . . . . . . . . . . . . . . . . . . . .. . .. .. .6 _ .. . . . . *

(I

- al -

F arm 11 2

care -0 Pee -go Y. . . trials

. schedule U . i,stfW,:

4~400 880 33

firml~ F, It. s 1120~ . 3468, 4466, 4626 .

70

D4) . . . . . . . . . . . . . . . . . . .. . . 11, t k . . .

11ol1;31(1,1.1,la,1

Pub 3 ar WV-2 -- -

'

941A W-4 schedule A (W-4) Pub 213 And - -

. .. - 15,000 1,000 :63

, .

, . ,

unemployment ti, chsc~fisl)-- -

Tax 11111n, Ind OsIrvItuits W .-ap -majlj~ij 't;* ijpj ;m.::jojjl~ ---- 72~0004 36 E65

4 .500

81 427

19 1

1 872

IV other I. . raitV, 79.360 4 .960 209

ns use forms ,ubli c . and pam,hl, , I

V Administrative 1 bhstrUdCb' ~ Slh%

5 1 ,

1 .0 " 7

. 4

9

.352-353

1

.. 97

g3,754 -3 .07 3

. mn ~ . t.. . . . . . . . . I 10 3 M

VL Field p,i.[,ng 1 :61al 3:441 121:" 1

1

-

.

- 1 30

-

Vll E-rb'"a" "am"s G

5

2

306 : ~10.,'

07

. 1 1

0756

,

M7.

2 645 543

4

rand total -------- ----- ---------- ---

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

.

14.271

, ,

M88 D

. . . . . . . . . --------- -

In 1970 there we, a major Change in tax form, and ta, package format

.

In Previous as,,. Ile conlent, at the or 'On Package for calendar year and fiscal Year Mail were identical . P-iqu o It R'a 'to, Oil [,a's a -_ Act of !do a tmn,t farm, but fiscal year Kill 1969 made it notes

136 / Annual Report / Statistical Tables Annual Report

/ Statistical Tables / 137
i

Index

A

Acts:

Federal Alcohol Administration, 38, 4 1

Federal Tort Claims, 63

Foreign Investors Tax . 1966, 57

Gun Control Act, 1968, 10 ' 38 48 49

Military Personnel and Civfli~p -Em .

ploy-'s Claims, 63

National Fir"r-s, 4 7

Tax Reform Act . 1969, 5 . 8, 9

Advisory committees, 87 . 88, 89

Alcohol and tobacco tax :

Advertising, 4 1

Chemical analysis and research, 42

Court decisions, 103, 104, 105, 106

Enforcement activity, 22, 23, 24, 25 ,

26 . 27, 28, 29, 30, 31, 32 33

34, 35, 36, 37, 38, 39, 40~ 41',

4 2

Establishments :

Inspection of, 38

Qualified

'

39,40

Industry cir-l.rii, 40

Label circulars, 4 2

Offers in compromise, 42

Operation Dry~Up, 38

Prosecution, 3 9

Pub] ications, 40

Regulations, 40

Seizures and arrests, 39

Supervision on-premises, 40

Statistics on, 39, 40, 125, 126

Appeals :

Appellate division, 28

Chart on, 29

Processing of. 30

Statistics on, 29, 30

Append

"' 10

0

Assessments, additional (See Taxes), 22

Assist:nce :

For ign tax, 58, 59, 60

Ori 59

Overseas, 59

Audit exempt organizations, 24 . 2 5

B

Bulletin . Internal Revenue, 9

Business master file, 14

CCharts:

Ch Organization, 9 2

ief Counsel, Office of, 62

Analysis of cases flowing through, 62,

63 Cases involving criminal prosecution,

34 .35,3 6

Disposals of cases by, 64

Civil litigation, 62 . 63, 64

Claims (See specific item)

Collection litigation legal services (See

General Litigation Legal Services)

Collections:

Alcohol taxes, 111, 112

Corporation income I axes, 110

Disabi lity and old-age insurance, 110

Employment taxes, 110

Estate and gift taxes, 111

Estimated tax, 110

Excise tax6s, I I I

Individuarincome taxes, 110

Interest equalization, 28

Old.age and disability insurance, 119

Other, 11 6

Railroad retirement, 110

Tobacco taxes, 113

Unemployment insurance, 110

Withholding taxes, 110

C ..,,issi .ne,:

Contest of suits, 62, 63 . 64, 65, 103,

1

04,105,106

Commissioners of Internal Revenue, 98

Competent .~P,omj~:uffuoi-ity activity. 55, 56

offers In, 31

Confercnce~ Appellate, 28, 29

Prcrced ... ~, 28

Cooperation . rederartax, 73, 74

Conventions, tax (See tax conventions),

58

Coordination and cooperation with be .

reaus and agencies, 74

Corporation income taxes :

Additional assessments, 28

Claims for refunds. 24

Collections, 11 0

Refunds ' 16

Returns:

Examined, 22, 23

Filed, 17 . 124

Court(

Circuit courts of appeals, * 63, 64, 104,

10 5

Of

claims, 63

Supreme, of the United States, 63. 64 .

103, 10 4

The lax Court of the United States,

62, 63

U .S . District, 62

Criminal prosecution :

Analysis

of

cases, 35, 36

C-es,ch sposals of. 35, 36

Results of, 36

Supreme Court decisions in . 103 . 104

Current research program . 68, 69, 70,

7 1 . 72

DData Processing activities . 14. 15, 16,

1 7, 1~, 1 9

Delinquent accounts :

Disposals, 30

Other . 30 . 31

Statistics on, 30,3 1 Delinquent returns and delinquency in .

vestigations, 3 1

Additional tax from. 33

Analysis of, 32

Statistics on, 32

Determination letters :

Employee benefit plans, 11

Exempt organizations, 26

Pension trust plans, 1 0

Self-employed persons benefit plans .

1 1

Statistics on, I I

Disability insurance taxes :

Collection, 110

Refunds . 1 6

Disallowed . claims, 24

Disciplinary actions. 86

Discriminant function, 2 7

E

Employment benefit plan, . datelnuna.

tion letters on, I I

~mrrloYment taxes :

Collections, 15

Returns filed. 1 7

Entorcement activities :

Additional tax from, 36

Alcohol and tobacco tax, 38, 39

Appeals, 28 . 29, 30

Claims disallowed . 24

Delinquent accounts,

Delinquent returns, 3 301

Examination program, 22, 23, 24, 25.

26, 2 7

Mathematical verification . 18, 19

Offers in compromise, 3 1

Tax fraud investigations, 33, 34, 35

Workfl . . in Service and the courts . 37

Es

. tax Additional assessments, 22 Cot :

lections, 15, 111

Refunds Rct .1, 1 6

. rns:

Examined, 22

Filed . 1 7

Estimated tax, declarations of :

Corporation, 1 5

Individual

.

15

Examination program :

Claims for refund, 2 4

Selection of returns for audit. 27

Overasse ss.tutts of tax . 23

Returns exam I ned, number of. 22

Tax recommended, additional, 22

Excise taxes :

Additional assessments, 22

Collections . 1 5

Refunds of, 16

Returns filed, 17

Exempt organizations :

Determination letters on, 26, 2 7

Master file, 2 6

Facilities management :

Forms and form letters, 83

Motor vehicle fleet, 84

Printing . statistics on, 137

Security, 83

Statistics on :

Tax forms . 83

Telecommunications, 83

Federal

i

rea rms regulations, 8

Federal-State cooperation :

Agreements, 73

Audit coverage . 73, 74

Computer-information exchange, 73

Federal tax deposit system, 14

Financial management :

Statistics on, 135, 136. 13 7

Annual Report / Index / 139
I

Firearms program:

Crime control, 47, 48 . 49

For::gn investors, 57.58

For gn tax assistance program, 58, 59,

60

Foreign tax officials, assistance to, 59 . 60

Forms:

Cost of Printing, 137

Distributed free . 101

Forms and form letters, 83

Fraud investigations. tax, 34, 35 . 36

G

Gasoline taxes:

Collections . 1 14

Refunds. 1 6

General Litigation Legal Services, 64

GIit taxes:

Additional assessments, 22

Claims for refunds. 24

Collections, 1 5

Refunds of, 16

Returns filed, 1 7

Ho-s. 80, 84, 86

Income tax (es) :

Addition al, from enforcement, 36

All returns, 15

Corporation, 1 5

Processing

of

protested ases. 213

in dictment., 35, 1 10

Individual income taxes:

AddfitlonalD~,ssessrnents, 36

Appellate vision, processing of. 29

Claims for refunds . 23

Collections, 15

Mathematical verification of, 18

Refunds of. 16, 123

Returns :

Classification and examination of,

22

Filed . 16, 124

:ndividual master file, 3 2

1 nforming and assisting taxpayers. 4

rispection activities :

: .ternal audit, 94

I nternal Security, 85

rivestigation, 85

Statistics on, 86

intelligence Div, sion:

Statistics on, 34. 3 5

Tax fraud investigation. 34, 35

Inter-American Center of Tax Administra.

tors, 60 .

:nnternational tax training, 58

forest allowed on refunds, 16

Interest equalization tax, 28

International operations :

Activities of, 52

Foreign posts of, 53

U .S. Investment abroad, 55

Withheld taxes, 57

Investigations :

Delinquency. 30

Disciplinary actions. 86

Personnel, 8 6

Prosecutions recommended, 3 5

Annual Report / Index / 140

Statistics on . 35

Tax fraud. 3 2

Interpretative activities, 65

JJoint Committee on Internal Revenue

taxation, 6 5

L

Laboratories:

Testing,,39,42

Legal activ tie , 62

Legislative activities, 64

Legislation :

Firearms, 47 (1969)

Pending, 6 5

Public laws, 6 5

Litigation . appeals and civil, results of .

62

Long-range planning (See Planning-Pro .

gramming-Budgeting System), 7 0

M

M : .gn tic tape, 74

Mapagement activities . 78

of internal revenue regions and dis .

tncts, 93

Master files

Exempt organization, 24 '

Mathematical verification:

Additional tax from. 18

Statistics on, 1 8

Models, tax, 7 2

0

Obligations incurred, Internal Revenue

Service, 78

Occupational I xes :

Collections, 127

Returns filed, 1 7

Offers in compromise, 3 1

Officers, principal, Internal Revenue Sam .

ice, 9

4

Old-age insurance taxes :

Collections, 15, 110

Refunds of, 16, 123

DoOperation Dry-up rat g

! 39

- in Financial Plan, 70, 71

Organization-principal officers, 92

Organized Crime Drive, 44

Overassessments . 2 3

P

Pension trust plans, 10

Personnel :

Equal employment program, 81

Handicapped, use of, 8 0

Intergroup relations seminars, 78 . 79

Investigations, 8 6

Promotions, 78, 79

Recruitment . 78

Statistics on, 79

Planning-Programming-Budgeting System ,

70

Planning activities, 68

Principal officers of Internal Revenue

Service, 94

Programs:

Assessment Center, 78

Delinquency check computer . 32

Equal employment opportunity . 61

Foreign tax assistance . 5 8

Identify U .S. taxpayers, 53

Overseas taxpayer compliance. 53

Racketeer, 3 3

Strike forces, 4 5

Tax return forms. 7, 102

Taxpayer assistance. 5

Taxpayer compliance measurement

.

6

Taxpayer publications, 9 I Do

Teachi ng taxes, 100

Prosecution. .2 . 63

Pretested cases, statistics n~ 24

Public information program . 4

Error prevention . 4

Films, radio. and television, 5

Gun Control Act, 5

New Legislation, 4

Other, 4, 5

Public reading rooms, 94

Publications . taxpayers :

F rmers t x guide, 10 0

F:deral T :x information for Civil Seice retirees, 10 2

Miscellaneous publications and documerift, 100, 101, 102, 103

Questions and Answers on Retiremen t

Plans for the Self-Employed, 102

Questions Asked by the U .S. Taxpayers

Abroad, 102

Tax Advice on Civil Service Disability

Retirement Payments, 102

Tax Information on M .t.a

I

Fund Dis.

"I bution

'

102

Tax Guide for Small Business. 100

Tax Guide for U.S . Citizens Abroad.

1

0 2

Tax Guide for U .S . Citizens Employed

in U .S. Possessions, 102

Understanding Taxes, 100

Your Federal Income Tax. 100

R

Railroad retirement taxes:

Collections, 15, 110

Refunds of, 16, 123

Returns filed, 17, 12 4

Reading Rooms, public, 94

Receipts (see Collections) . 15

Recruitment, 7 8

Refunds :

Claims for, 23, 24

Excessive prepayments. 16

Statistics on, 16

Undeliverable, 16

Regulations :

Alcohol and tobacco taxes, 10

Other . 8. 9, 1 0

Selected regulations published, 8

Releases . news, 5

Requests :

Technical Advice, 1 0

Revenue rulings, analysis of, 8. 9

R:se rch program, 70

R turns filed a' :

Classification and selection of. 16, 27

Examination of, 16, 27

Increase in, 16

Returns filed-Continued

Number examined, 22

Projection, 70

Statistics on, 17. 124

Verification, I S

Revenue rulings and procedures:

Analysis of. 8, 9

Published, 8 . 9

S

Self-employed persons benefit plans, de.

terminations letters on, I I

Seminar, Inter-American, 60

S mice to taxpayers, 5

Statistics of income releases, a ' 71

Supervision of the Alcohol and tobacco

Industries, 38

Supreme Court Decisions:

Civil cases, 103

Other court actions, 104, 105, 106

Systems development, 69

Data Center equipment, 69

T

Tax briefs, 8

Tax conventions, 58

Tax models, 72

Taxes. Additiona l

From delinquent returns secured, 30

From enforcement, 36

From examination, 22

From mathematical verification. IS

Taxpayer assistance program, 5, 6

Taxpayer compliance measurement progra., 6 9

Taxpayer publications (See publications),

100 . 101 . 1 02, 103

Tax reform, 65

Tax rulings :

Request for, 10

Statistics on'

Teaching taxes program, ID 100

Tobacco taxies

)

Arrests, 39

Collections, 15, 113

Refunds of, 16, 12 3

Results of Criminal action, 39

Returns filed, 17

Seizures. 39

Statistics on, 3 9

Tort claims, 63

Training :

Other Foreign, . 81,58, 59

82

U

Unemployment insurance taxes;

Col Refunds of, lections' 15' 110 16. 123

Returns filed, 17, 12 4

V

Verification, mathematical, results of, 1 8

M

Wines . taxes collected. 112

Withholding ta,es . by employer, 15

Workflow in service and the Courts. 3 7

Annual Report / Index / 141