CONGRESSIONAL RECORD - HOUSE August 23

On August 28, 1958:

MRS. FRANK C. GREGG

H. R. 1829. I am withholding my approval from H. R. 1829, for the relief of

the estate of Mrs. Frank C. Gregg.

The effect of this bill would be to accord to the beneficiary a form of tax

treatment that Mrs. Gregg, as a stockholder in a corporation liquidated pursuant to a plan of complete liquidation,

might have elected to receive. Such

election, under existing law, must be

made by four-fifths of the corporation's

voting stock interest within 30 days

after adoption of the liquidation plan.

Mrs. Gregg, who held less than a fourfifths voting stock interest, did not make

an election within the specified 30-day

period.

In support of this claim for special

relief, the taxpayer's representative relies upon the fact that he was unable to

obtain certain forms prescribed for making the election. It appears, however,

that a letter notifying the Commissioner

of the unavailability of such forms and

the desire to make an election would

have been sufficient.

The taxpayer's representative also relies upon the fact that Mrs. Gregg became seriously ill 25 days after the

adoption of the plan of liquidation. A

timely election was not made, however,

by any of the other shareholders in the

corporation who would also have had to

have made such an election for Mrs.

Gregg, or any of them, to have received

the tax treatment in question. Mrs.

Gregg's sickness had no bearing upon

their failure to do so. Accordingly, even

If she had made a timely election, Mrs.

Gregg would not have been entitled to

the tax treatment this bill would now

accord her estate.

This legislation would, therefore, confer benefits on Mrs. Gregg's estate which

none of the other shareholders in the

corporation are entitled by law to receive.

Because such special relief would constitute an inequitable discrimination

against other taxpayers similarly situated, I am constrained to withhold my

approval from the bill.

On August 28, 1958:

BONIVACIO SANTOS

H. R. 6773. I am withholding my approval from H. R. 6773, for the relief of

Bonifacio Santos.

This bill would authorize the payment

of $1,500 in reimbursement for a contribution made by Mr. Santos in 1944

to the Philippine guerrilla forces fighting

the Japanese.

The beneficiary states that in 1944 he

made a contribution of 3,000 Japanese

occupation pesos to the Philippine guerrilla forces. He supports his claim with

an affidavit from an American officer

who recalls receiving the money, and also

a receipt for the money, dated in 1944

and signed by the same officer.

After the war, a general program was

established in the Philippine Islands for

the payment of such claims based upon

aid or services furnished the guerrillas

in their fight against the Japanese. Despite the widespread publicity attendant

upon this program, as evidenced by the

hundreds of thousands of claims submitted, no administrative claim was ever

filed by the beneficiary. He states he

was unaware of his right to do so.

Awards under the general claims program were uniformly paid according to

the so-called Ballantyne scale for currency conversion. Under that scale, the

present case would have resulted in an

award to the beneficiary of $16.67. This

bill, in contrast, proposes an award of

$1,500.

Approval of H. R. 6773 would be both

discriminatory and inequitable. The

record on this bill furnishes no valid

basis for distinguishing the beneficiary

from thousands of others whose claims

were rejected because they were not filed

until after the termination of the general program. Furthermore, it would be

entirely without justification to pay to

this beneficiary a sum 90 times larger

than he could have received had he been

paid under the general claims program.

For the foregoing reasons, I have considered it necessary to withhold my approval from H. R. 6773.

On August 28, 1958:

MR. AND MRS. JOHN R. HADNOT

H. R. 9180. I am withholding my approval of H. R. 9180, a bill for the relief

of Mr. and Mrs. John R. Hadnot for the

reason that its major purposes are accomplished by the enactment of the

Social Security Amendments of 1958,

coupled with the provisions of existing

law which authorize the Secretary of

Health, Education, and Welfare to waive

the repayment of incorrect social security payments.

The son of the beneficiaries, his wife,

and 2 minor children were involved in

a tragic automobile accident on July 4,

1956. All perished together except for 1

child under 18 who survived for about

1 2 hours without regaining consciousness.

The beneficiaries, Mr. and Mrs. Hadnot, on December 14, 1956, filed a claim

under the Social Security Act for dependent parents' benefits. After they

had received monthly benefits totaling

$814 each, it was determined that these

payments, entirely without fault of the

beneficiaries, had been improperly made

because of the brief survival of the beneficiaries' grandson. As required by law,

the benefit payments were suspended and

the beneficiaries were notified that the

payments already received had been incorrectly made.

The Social Security Amendments of

1958, approved this day, contain a general provision permitting surviving dependent parents of insured workers to receive monthly benefits even when the

decedent was also survived by a spouse or

child eligible for such benefits. Mr. and

Mrs. Hadnot can, by filing application,

avail themselves of this general provision

and become entitled prospectively to

benefits. With respect to the payments

already made to them, incorrectly, there

is every reason to believe that they will

receive sympathetic and equitable consid-

* eration under the waiver provision of

existing law.

The only remaining question Is whether

this bill should be approved so that Mr.

and Mrs. Hadnot may receive retroactive

payments for the month since April 1957.

To provide such payments would be to

grant preferential treatment and thus to

discriminate against other individuals

who might be similarly situated. Except

in cases of the most compelling equity,

such special treatment should be avoided.

On August 28, 1958:

MR. MARION S. SYMMS

H. 1L. 9765. I am withholding approval

of H. R. 9765, for the relief of Mr. Marion

S. Symms.

The bill would provide that, notwithstanding any statutory period of limitation, refund or credit shall be made or

allowed to Marion S. Symms, Augusta,

Ga., of any overpayments of income tax

for the year 1952, if claim therefor is

filed within 6 months after the date of

enactment.

The records of the Treasury Department show that Mr. Symms filed a timely

income-tax return for 1952 in which he

reported as income certain disability payments received by him. At the time the

taxpayer filed his return for 1952, the

Court of Appeals for the Seventh Circuit

had held that such disability payments

were excludable from gross income,

although the Internal Revenue Service

had ruled to the contrary.

On April 1, 1957, the United States

Supreme Court decided that disability

payments of the type received by the taxpayer were excludable from gross income.

On November 6, 1957, more than 41

years after the taxpayer's return for 1952

was filed, the taxpayer filed a claim for

refund based upon the excludability of

the disability pay received by him in

1952. This claim was rejected because

it was filed after the expiration of the

3-year period of limitations prescribed by

law for the filing of such claims.

The statutory period of limitations,

which the Congress has included in the

revenue system as a matter of sound

policy, is essential in order to achieve

finality In tax administration. Moreover, a substantial number of taxpayers

paid income tax on disability payments

received by them during the period of the

Internal Revenue Service ruling that

such disability payments were Includible

in income. To grant special relief in

this case, therefore, where a refund was

not claimed in the time and manner prescribed by law, would constitute a discrimination against other similarly situated taxpayers and would create an

undesirable precedent.

Under the circumstances, therefore, I

am constrained to withhold my approval

of the bill.

On August 28, 1958:

MISS MARY M. BROWNE

H. R. 9993. I am withholding my approval from H. R. 9993, for the relief of

Miss Mary M. Browne.

The bill would provide that, notwithstanding any statutory period of limitation, refund or credit shall be made or

allowed to the beneficiary of any overpayment of Income tax for the year 1951,

if claim therefor is filed within 1 year

after the date of enactment.

The taxpayer, in filing her Income-tax

return for 1951 and paying the amount

shown on the return, failed to take credit

for a previous partial payment of income

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