The Bridgeport evening farmer., 1916-05-05
QUESTION RULING ON INCOME TAX
 LAW PROVISION
Investment Bankers Criti- else Treasury Department
 In Statement

The Investment Bankers Assocla- ton of America gave out yesterday, through the office of Lewis B. Frank, | lin, president, copies of coESespon- dence which the Associations coun- seI, Read & McCook, had recently ! with the Federal Treasury Depart
 ment at Washington regarding ru- ling on the income tax on interests payable to nonresident aliens and a
 statement explaining a difference of 1 opinion which has arisen over the question. The statement says: '"The Investment Bankers Associa- ton feels compelled to give this cor resp pondence to the press. It empha- sizes as nothing else could do the
 unprecedented course which the Trea-
 sury Department has pursued in re- fusing to follow the opinion of the Att torney-General, which has governed
 the administration of the law for over two years. This opinion holds that interest payable to nonresident aliens is not subject to the income tax. We have not requ ested the Department to defend it's construction of the law, but simply to state, as is customary, and in a case of this kind essential, the legal view on which it bases a regu- Iation reversing the meaning and op- eration of the law.
 'sThe Department has promulgated a regulation which on it's face has not even the appearance of support in the law and which is opposed to. the spe- 5cif1c opinion of the Attorney-General, the legal adviser of the Department and the, Administration as to the meaning of the law. It both refuses to submit the reasons for it's action to the Attorney General and declines to disclose them to the public. It undertakes to make over the law, re- fusing Nto state the interpretation on which 1t acts
 The letters accompanying the statement ask on what grounds the Departure decision in the Brusha- Der case (tf1e case in issue) ren- ders the former opinion of the Attor- ney General inoperative'' and the De partment's reply through W. P Nal bern, assistant secretary S The reply, in part, follows:
 I cannot see the materiality of your question The question we are Nall trying to answer is the proper con struction of the income tax law. The ultimate construction of the law is for the courts and not for the Trea- sury Department of the Department of Justice. The administration of the law is imposed on the Treasury Department, which is consequently required to construe5 it. Whatever construction it gives to the law must probably be defended in the Supreme Court or the On1Led StaIeS- 10 aSk 1I to defend it's construction before any taxpayer who questions it would be to impose a burden upon it, which, to the best of my knowledge, has never been done in any case, and which would be of no advantage to it or to you.
 You assume that, in view of the opinion of the Attorney General, to which you refer. the construction of the Treasury Departme entIisS incorrect. If it is incorrect, relief will be given by the courts. This Department does not, agree with you, nor does it feel called upon to explain why it does not agree, as nothing could be gained thereby and the only result would be to complicate the issue between you and it.