Evening star., 1924-12-17
COUzENS'' CHARGES
ARE MET BY BLAIR
Commissioners Defends Blu.
reau's Determination of
War Amortizations.

Commissioner of Internal Revenue
Blair. in a statement issued last
night, replied to charges by Chair
man Couzens of the Senate tnvesti-
eating committee relating to the
handling of some income tax cases.
Mr.. Blair said determination of
"a reasonable allowance for amorti-
cation as required by law Is O matter
of judgment" Pointing out that
amortization allowances were brought
about as result of wartime condi-
tions, and, once settled, would not
recur, Mr.. Blair expressed the opinion
that the bureaus employees had ''ac-
complished much under the very dif-
hcult conditions resulting from post
war adjustment" with reference 20
the United States Steel Corpora tton
case. he said the amount of aniortiza-
tion due II had not been finally de-
termfned in the Bureau OF Internal
Revenue. and in the ordinary course
considerable time must elapse before
the tax OF this corporation Is finally
adjusted"
Authorization Provided.
During the war" said Mr.. BIair's
statement, the great industries In
this country, in most instances at the
direct request of some Government
agency, Installed large plant facil-
tiles for the production of articles
contributing to the prosecution of the
war. In many cases the industry was
assured by the Government agency
before II began construction that 1t
would be made whole after the war
War prices had to be paid. When the
war did end, these facilities, in large
part, were no longer necessary to the
peacetime requirements Of the indus
try. The Revenue Act of 1918, passed
Immediately after the armistice, pro-
vided for the amortization of these
facilities that Is for a credit to the
Industry of the difference between the
war cost and the postwar value of
the facilities to the industry. Neces-
sarily, a determination of the amount
of amortization required detailed ex-
animation by engineers of the actual
physical properties, which has taken
much time: for example, the amorti-
cation due the United. States Steel
Corporation. the largest industry in
volvedr has not yet been finally de-
termined in the Bureau of Internal
Revenue, and In the ordinary. course
considerable time must elapse before
the tax of this corporation is finally
adjusted.
Reasonable Allowance. ..'.
The law requires that the tax
payer be given a reasonable. allow
ance for amortization. What con-
stitutes a reasonable allowance is in
large part a question of Judgment
which must be submitted to and de-
termined by the officers OF the Bu-
reau of Internal Revenue, to whose
decision this matter Is left by the
law. On questions as complicated as
these men may honestly differ as to
what constitutes in every case a
reasonable allowance. and 1t frequent
ly happens within the Bureau itself
opinion. Under such circumstances It
Is not surprising that the special COM
mittee investigating the Bureau OF
Internal Revenue may express dis
agreement with some 'dete rmiuatfon
OF judgment as to the reasonable
ness of a particular amortization al
lowance. --. .---.~-
The public should bear in mind,
first, that there is no provision for
amortization in the present law, but
the amortization of the cost of war
facilities is entirely war measure
and once settled will not arise again
second, these war questions should be
finally closed, so that the country may
know where It stands, and, third. the
determination of a reasonable al
lowance for amortization as re-
quired by the law is a matter oi
judgment. An honest attempt has
been made to exercise this discretion
with due regard to the law and regu-
lations. The Bureau Of Internal
Revenue does not claim infallibility
but think its employees have accom-.
plished much under the very diff.
ficult conditions resulting from the
postwar adjustment"