Evening star. [volume] (Washington, D.C.) 1854-1972, 1927-01-03
BLAIR TAX APPEAL
DENIED BY COURT.
Decision Supports U. S.
Board in Dispute With In
! ternaI Revenue Chief.

The District Court of Appeals, IN an
opinion by Justice Van Orsdel, today
denied the appeal of David II. Blair,
commissioner of internal revenue, for
a reversal Of q decree of the District
Supreme Court requiring the coInmls
Sioner TO obey a subpoena OF the
United States Board Of Tax Appeals.
The case had been instituted by the
Oesterlein Machine Co. of Cincinnati.
Ohio, against the commissioners 10
compel him to answer questions t1n"h-
ing the evidence, data and information
on record in his Office on WhIc4. he
based his findings that the company
was deficient in payment OF income
and profit taxes to the extent OF
S1,1263T.
Mr., Blair challenged the authority
OF the Board Of Tax Appeals to review
his finding on the ground that the
finding involved the exercise or dls-
erection. which is not renewable, and
also that 1t compelled him to disclose
records of his office in violation OF sec
ton 1857 Revised Statutes. which i'm
poses a fine for such disclosure.
Judicial Inspection Upheld.
In overruling the latter claim, the
appellate court holds that Congress
did not intend to close the door TO
judicial inspection Of tax records IN
the custody OF the commissioner, as
the statute provides exceptions when
otherwise provided by law" The
commissioner himself. the court points
out, through the Secretary OF the
Treasury, has established a depart
mental policy respecting the furnish-
ing Of records and data in aid OF
judicial proceedings in the courts,
which includes by the most reason
able Interpretation the present case.
The court reviews at length the
authority of the commissioner and
analyses his jurisdiction and that OF
the board of tax appeals and reaches
the conclusion that the board is
vested with full reviewing jurisdiction
over the finding of the commissioner
in cases where q deficiency arises
from q determination under the spe-
cial assessment provisions or the
revenue act.
The appellate power, says Justice
Van Orsdel. includes the authority
not only to review but to investigate
de novo the matters in controversy
between the Government and the tax
mayer. To this end, he points out.
modify in such manner and to such
extent as it may be advised. the
findings OF the commissioner.
Abuse of Power Doubted.
It would be a travesty to hold. says
Justice Van Orsdel, that after Con-
gress has vested the board with the
broad jurisdiction, it could be denied
by a subordinate officer Of the Gov
eminent the evidence needed to pass
inteiiigently on the actions Of that
inferior officer whose decisions the
board is specially vested with power
TO review. The general secrecy acts
in revenue matters are limited by
the special legislation giving the board
the authority to summon witnesses
and to enforce the production of rec
ords and other data, the court de-
clafes.
The court refers to the picture
drawn by the solicitor for the. com
missioner of the possibility of unlinit-
ed abuse of this power by the board
and declares II was not impressed
with IL. It must be assumed that
the board will not abuse its power,
asserts the justice, and will call only
for such documents as were used by
the commissioner in reaching his de-
cision. But the power. he says. is
vested wholly in the discretion and
judgment of the board, and the com
missioner has no option in the matter.
The decision is expected to settle
a much disputed matter In the Treas
ury Department, which has hampered
the functioning of the Board of Tax
AOpoalS.