R-325 

PRICE DANIEL 

ATTORNEY GENERA‘ 

May 1, 1947 

Hon. George H. Sheppard 

Comptroller of Public Accounts 

Austin, Texas Opin ,Son No. V- 176 

Re: The accrual of interest 

and penalties on real 

estate taxes on property 

vested under the Allen 

Dear Sir: Property Act. 

You have requested the opinion of this Department on 

the following situation: 

"Under the provisions of Public Law 671, 79th 

Congress, approved August 8, 1946, the Alien 

Property Custodian now is empowered to pay real 

estate taxes and special assessments affecting 

vested properties whether the taxes accrued prior 

or subsequent to the date of vesting. Provided, 

however, that under this statute such payments may 

only be made where there are sufficient funds held 

in the account of the former owner to cover same. 

"This department is informed that it is the desire of the Custodian to pay all taxes which are 

due and payable, where the Custodian has on hands 

proceeds from the property or other funds of the 

same owner in amount sufficient to pay taxes appropriate under the law. It is the contention of 

the Custodian that no interest and/or penalties accrue after vesting date of the property. 

"This department has been requested to instruct Tax Collectors, where property has vested 

under the Alien Property Law, to revise their rolls 

or statements for delinquent taxes on such property 

to conform with the proposals outlined by the Alien 

Property Custodian. 

"This department will, therefore, thank you to 

advise us whether or not we have the authority to 

authorize such Tax Collectors to accept the money 

as tendered by the Alien Property Custodian In pagment of taxes and clear the rolls of such interest 

and penalties as may be shown to be due." 
Eon. George H. Sheppard - page 2, v-176 

The pertinent parts of Public Law 671, 79th Congress, 

approved August 6, 1946, relating to the payment of taxes by 

the Alien Property Custodian upon property or Interest therein 

which has been transferred to or vested in him, are as follows: 

"Sec. 36. (a) The vesting in or transfer to 

the Alien Property' Custodian of any property or 

interest (other than any property or interest ac‘ 

quired by the United States prior to December 18, 

19&l), or the receipt by him of any earnings, increment, or proceeds therof shall not render inapplicable any Federal, -9 State Territorial, or 

local tax for any p eriod prior or subseauent to 

the date of such vesting or transfer, nor render 

applicable the exemptions provided in title II of 

the Social Security Act with respect to service 

performed in the employ of the United States Government or of any instrumentality of the United 

States. (Emphasis added) 

"'(b) The Alien Property Custodian shall, notwithstanding the filing of any claim or the institution of any suit under this Act, pay any tax 

Incident to any such property or interest, or the 

earnings, Increment, or proceeds thereof, at the 

earliest time appearing to him to be not contrary 

to the interest of the United States. The former 

owner shall not be liable for any such tax accruing 

while such property, interest, earnings, increment, 

or proceeds are held by the Alien Property Custodian, 

unless they are returned pursuant to this Act without aayment of such tax by the Allen Property 

Custodian. Every such tax shall be paid by the Alien 

Property Custodian to the same extent, as nearly as 

may be deemed practicable, as though the property or 

interest had not been vested in or transferred to the 

Alien Property Custodian, and shall be paid only out 

of the property or interest, or earnings, Increment, 

or proceeds thereof, to which they are incident or 

out of other property or interests acquired from the 

same former owner, or earnings, increment, or proceeds thereof. Non tax liability may be enforced 

from any property or interest or the earnings, increment, or proceeds thereof while held by the 

Alien Property Custodian except with'his consent. 

Where any property or interest is transferred, otherwise than pursuant to section 9 (a) or 32 hereof, 

the Alien Property Custodian may transfer the property or interest free and clear of any tax, except 

to the extent of any lien for a tax existing and 
Hon. George H. Sheppare - Page 3, v-176 

perfected at the date of vesting, and the proceeds 

of such transfer shall, for tax purposes, replace 

the property or interest in the hands of the Alien 

Property Custodian. 

"(d) The word ‘tax’ as used in this section 

shall include, without limitation by reason of 

this enumeration, any property income, excessprofits, war-proflts, excise, Estate and employment &x, import duty, and special assessment; 

and also any interest, penaltg, additional amount, 

or addition thereto not arising from any act, omission neglec,t, fallure, or delay on the oart of 

the&stodLan."(Emphasis added) 

In view of the emphasized verbiage of subsection (d), 

supra, it is clear that the Alien Property Custodian need not 

w any interest or penalty arising from any act, omission, 

neglect, failure or neglect on his part, But such conduct on 

the part of the Alien Property Custodian does not prevent the 

statutory accrual of the interest and/or penalty upon the basic 

tax in view of the emphasized portion of subsection (a), which 

provides that the vesting of the title to the property in the 

Alien Property Custodian shall not render Inapplicable any 

State tax for any period prior or subsequent to the date of 

vesting or transfer. 

The contention of the Alien Property Custodian stated 

in your request is without merit, 

subsection (d) referred to above, 

subject to the exception in 

and the Comptroller does not 

have the authority to authorize the Tax Collector to accept the 

taxes and clear the rolls without the payment of the accrued 

penalties and interest. 

SUMMARY 

The Comptroller of Public Accounts is not 

authorized to direet Tax Collectors to receive 

payment of taxes from the Alien Property Custodian 

under the provisions of Public Law 671, 79th Congress, and clear the rolls without payment of 

accrued interest and penalties thereon. 
Hon. George H. Sheppard - Page 4, v-176 

Yours very truly 

ATTORNEY GENERAL OF TEXAS 

CKR/lh/wc 

By s/C.K. Rkhards 

Assistant 

APPROVED:~MAY 1, 1947 

s/Price Daniel 

ATTORNEY GENERAL OF TEXAS