New-York tribune., 1920-12-21
Rockefeller Is
SuedbyU.S.for
$292,678 Tax
Government Seeks to Col
lect on Difference Ee
tween Par aud Market
Value of Stock Dividends
1915 Income Involved
Oil Man Contends Levy Is
Not Legal; Asks Refund
of S754,734 Once Paid

The government filed suit yesterday
IN the United States District Court
against John D. Rockefeller, charging
that his income tax return, fled or
March 26, 1916, vas incorrect. mislead-
ing, and false.
The suit, which was brought by
Assistant United States Attorney Rich
ard S. Holmes for the government
seeks to obtain judgment against Mr..
Rockefeller for S292 CTS, with penalty
of per cent and interest thereon at
the rate of per cent from June 80,
1916.
Mr.. Rockefeller believes that the
amount claimed by the government is
rot a legal tax under the decisions Of
the Supreme Court and, for that rea-
son. pending q decision by the courts,
he has declined to pay it.
The complaint filed by the govern
ment alleges that Mr.. Rockefeller
failed to include in the return of his
profits and income for 1915 any part
Of so 104 shares of the capital stock
of the Illinois Pipe Line Company or
67,l76 shares of the capital stock of
the Prairie Pipe Line Company or the
value of those shares.
Stock Acquired as Dividend
According to the complaint. Mr..
Rockefeller during 1915 was the own
er and holder of 150.315 shares of the
capital stock of the Ohio Oil Com
pany, which on February Is, 1915, de-
livered to him as a dividend 50,104
shares OF the capital stock of the
Illinois Pipe Line Company. Of a par
value of 500 each.
At the same time, the complaint
states, Mr.. Rockefeller was the owner
and holder of 44,784 shares Of the
Prairie Oil and Gas Company, which
on March %, 1y;~, paid him as divi-
dend 67,176 shares of the stock of
another company, known as the Prairie
Pipe Line Company. These shares,
TOO, were Of a par value of 500 each
The par values of these two patches
Of stock amounted altogether TO S11,-
1880 ~b.34. The marAet value of the
Illinois Pipe Line Company's stock was
S6,663,965 and the market value of the
stock of the Prairie Pipe Line Com
paHy was 50 !9A2, ,04S. The total market
value of the two stocks was $lGG03 Nl3 :.
Mr.. Rockefeller's return for 1915 was
corrected by the Commiss soner Of In
te1nal Revenue so as to show that
on July 9, 1917, the value Of the stocks
of the Illinois Pipe Line Company and
Of the Prairie Pipe Line Company was
S11,72S,033.34. An additional tax of
$754,73a on the stock distributed as
dividends by the Ohio Oil Company
was assessed against MIR. Rockefeller.
lie paid it on September "a. 1917.
Government Sues for Difference
This suit is designed to make Mr..
Rockefeller pay tax on the difference
between the market value Of the afore-
mentioned shares of stock at the time
they were distributed and their par
value. The complaint figures the diff
ference between $16,606Ol3 and Sill
'28 ,O33.34 is 1896. Six per cent
Of s4,S77,979.66 is 1922, ,678.7S. That IS
what the government claims is due and
nas not been paid.
John D. Rockefeller is in the South
Ills representatives issued last night
The following statement:
Mr.. Rockefeller received in 1915
rom the Ohio Oil Company a pro rata
distribution of stock of the Illinois
Pipe Line Company, issued for the pipe
lne properties of that company turned
over to the Illinois Pipe Line Company.
He also received from the Prairie Oil
and Gas Company stocks of the Prairie
Pipe Line Company, issued by the
Prairie Oil and Gas Company pro rata
20 its stockho olders for its pipe line
properties turned over to the Prairie
Pipe Line Company.
These stocks we're regarded as stock
dividends of the oil companies, and as
the United States Treasury Department
rulings at that time did not hold stock
dividends as taxable they were not in
ciuded in Mr.. Rockefeller's income
when he made his income tax return
for the year 1915.
Later, in 1917, the Treasury De-
partment changed it's rulings Ia hola
that stock dividends were taxable un
der the income tax law Of 1918, and
Mr.. Rockefeller's return for the wear
1915 was revised to include these
stocks at their par value, and the de-
partment made an additional assess