Mineral Point tribune. (Mineral Point, Wis.) 1869-1938, 1871-08-10

LEI AnlhrNI Or ctoAlSEt
OFFICE OF SOLICITOR OF TREASURY,
WASHINGTON. d. G. July2l, 1871.
SIR II have the honor of acknowl-
edging the receipt of your letter of the
Sd inst, transmitting onc from the
auditor of the joint railway companies
of New Jersey, and one from the Com
missioner of Internal Revenne in rela-
ton to claims for taxes under the act
of July 10th, 1870, made on said COM
panies by the Internal Revenue Office,
for 1871. 1t appears that on the 9th
of February, 1871, the Commissioner of
internal Revenue decided in respect to
the liability of corporations to tax on
the interest of coupons, under sections
126 and l22 of the act of July 30th, 1864,
as amended by the act of July l4th,
1870, that no tax should be withheld
from interest, or coupons representing
interest, falling due and payable within
the period of five months from August
LIST, 1870, to December 3lst, 1870, and
that interest falling due on or subse-
quent to July LIST, is taxable at the rate
of two and half per cent, and if such
interest accrued either prior to August
| LIST, or subsequent to December 31st,
| 1870. From such Of it as accrued with
1 in the last five months of 1870, no tax
is to be withheld.
Acting in accordance with this decis-
ion, the joint companies Of New Jersey,
on the 1st Of May, 1871, having cou-
pom interest falling due, deducted from
the holders of the coupons, being Ii
per cent. tax only, being a proportion
~ a in IN
the eleventh of May, 1871, the Attor-
nev General, to whom this question
had been referred by the Secretary of
the Treasury, having decided that the
tax on interest, or coupons, imposedby
the 18th section of the act of July 14th,
1870, is applicable to interest paid sub
sequently to August LIST, 1870, and
prior 10 January LIST, 1871, the Commits
sioner of Internal Revenue on the lith
Of May, 1871, in accordance with in
structions from the Secretary of the
Treasury, revoked his former decision,
and made in conformity with the decis-
ion of the Attorney General. When
the companies who, by the 18th sec
ton above-referred to, we're authorized
to deduct the tax in question, made re-
turnof the amounts retained for the Gov
eminent to the Collector of the district
they were informed of the revocation of
the decision OF February eth, and de-
mand was made for return of 1-2 per
cent Upon application to the Com
missioner, on the 26th Of May ultimo,
requesting that, as they had complied
with the instructions of the Depart
meut in making returns of IL per
cent, they should be permitted to
make such return To the Assessor, they
were informed that he could not accede
to the request until authorized to do so
bv the Secretary Of the Treasury. On
this state of facts, my opinion is asked
whether the companies can be legally
or equitably held to account Tor the
deficiency that has occurred In conse-
quence of the action of the
/ proper officer of the Government.
Such being a brief history of the
question involved i'll the case, | have to
say that the Commissioner of Internal
Revenue is the recognized authority
under the law and in practice through
whom decisions arising under the inter
nal revenue are promulgated to the
public. His decision of the 9th of
February was one, therefor, upon which
applicants in this case had right to
act. The joint railway companies of
New Jersey did not act upon it so far
as to adjust the interest due upon their
coupons and pay the same to holders
thereof. The companies can only be
regarded, under the law, rs agents of
the government in reserving the tax
from their bondholders and paying the
same into the Treasury. They acted
in this case under direction OF the
principal in the first instance, and by
reason of that proper action became in
volved in the present controversy. 1t
is, perhaps, fair to assume, that owing
to the change of ownership which IL
constantly occurring in this form OF
property, the companies would be UNI
able to enforce the collection
of the balance OF tax now
held to be due from those to
whom interest was paid, and from
whom. in fact, the tax is due, and 1t
could not be legally enforced to the in
Jury OF any persons from whom the tax
was not due Ideem it unfortunate for
the government that the question has
assumed al attitude where the alterna-
tive seems to be to compel the depart
ment to forego the collection OF the
proper tax in the simple manner point
ed out by the statute, or expose 1t to
the charge Of working greater or less
degree Of injury upon the companies or
their bondholders. Under all the cir
cumstanees / am of the opinion that,
legally and equitably, the department
is under the necessity of yielding tothe
present request and of desisting from
enforcing the collection Of the, tax IN
question from the companies who pre-