Evening star., 1928-05-06
COUzENS WINS TAX |
APPEAL VERDICT.
Board Silent on Charge Mel
Ion Sought Added Levy
as Spite Move.

BY The Associated Press.
The long contested S35. 1000. 900 Ford
stock tax case was settled yesterday by
the Beard of Tax Appeals in favor of
the nine former minority stockholders
Of the Ford Motor Co.
The decision restraints the commits
sionsr of internal revenue from levying
additional tax assessments for the fiscal
year 1919 on profits of the defendants
in the sale OF the stock, the point of
and EdSel Ford.
With the case hinging on profits made
in the sale 70 the stock. the point OF
con6entlon revolved on the increase in
value of the sock from March /, 1913.
the legal basis for computing back
taxes 10 September 81, 1919, the date
of the sale.
The defendants contended that the
stock was worth $9,489.34 a share in
1913, as had been nXed by former Com
missioner Roper, while Commissioner
Blair at the beginning of the reassesS-
ment litigation valued the stock at So
6S4 snare, and later raised it to So, ,o47.
May Claim Refunds.
The board however, in its opinion
yesterday paced the vaiuatiun at
$4,000 II share, or $5l0 higher than tie
uGItnaan,S had flNsa. 1nus the oe-
sSnaantS nct Cnsy won taelr cass. bur
Is Was tn~G3nI !nisht be IN position
20 cam rounds "a taxes aIrsauy paid.
1a> board luiad against the Ceiense
contention, sreSseu particularly by
counsel ior Senator Couzens of Mich
lSAn tnat the commissioner had no
flgnt To reopen the case. The COM
missioner has this right, the board held
II gross error or error OF calculation
were discovered.
Counsel for the Senator. who has lo,c
been at ODDS with Secretary Mellon ot
the Treasury, charged that the pro-
ceed!ngS constituted persecution. in
as much as former commissioner had
placed the $e,4S9.S4 valuation on the
stock, accepted the tax payments and
hao formally closed the case.
On tins pleading the board held that
commissioner RopeT's valuation was "a
voluntary, gTatuisous act. outside tha
scope Of the commissioners duty. snrh
a valuation, the board added, was mot
nlndlng, and by making it the commits
Sioner nau taken over a responsibility
meant by law for the taxpayer.
Over Years Action.
The case came to the board of tax
appeals on January z 1927. after II
mad been reopened by Commissioner
blair on the ground that the former
settlement was based on erroneous val
uation of the stock. Hearings were held
until May 8, 1927, when the board took
the VoiuminouS evidence under consid-
eTaticn, resulting in today's decision.
Although the beard formally passes
- 81.
applies 70 all nine former Stockholders,
A rough estimate of the amount of
taxes saved by them plus interest, as
contained IN the pleadings follows:
James Nj. CouZenS, s9455,3 ,303; John
z. Dodge estate, S4,337. .295: Horace e.
Dodge estate. s4.337. POS: Horace II
Rockham, S4,347 PCS: Paul r. GRAY
32.257.o79: David Gray. 81. .o79:
PhilIp II. Gray estate, S2,277. orc. and
Rosetta V. Hauss. sS4. 4.4o4.
Rules Ethics Out.
The board emphasized in its opinion
that the morals or ethics" of the case
were not within the domain of the
judgment OF the board" and it made no
attempt 70 pass on this phase of the
controversy. which frequently has in
t0lved the name of Secretary Mellon.
whom Senator couzens has charged in
Stlgated the proceedings in retaliation
Tor mis- investigation of the Bureau OF
Internal Revenue
In fixing the value Of The stock. the
board said
Looking at this in the light of all
the circumstances and considering not
only the bright factors. but also the
uncertainties and the risks which were
inevitable, We are of the opinion that
the far market price or value OF the
stock owned by this Petitioner in the
Ford Motor Co. on March /, 1918, was
at the rate Of $4,000 share"
The decision vas the icngest ever
handed down by the tax board, con-
sisttng Of 2I9 miIneosraphed pages. One
member Of the board, Lansdon, dis
sented in part. saying that in his opin-
Ton Commissioner Eoper's act consisted
of more than gTatuitous. unbinding
act and that the board should consider
neral and ethical questions