Evening star., 1937-04-22

as other States have done, and place
it to the credit OF the District OF
Columbia.
The Bureau Of Internal Revenue is
on record as saying that There has
been no disposition on the part of the
Government to question the validity Of
the exaction Of the State"
How have these States accomplished
their purpose to get back from the
Federal Government, money already
paid out?
The State of Indiana is good ex-
ample. 1t was the Hoosier State. as
matter of fact, which drew from
the Bureau of Internal Revenue, an
official statement, virtually approving
the principle of the retroactive clause.
Indiana had provided with other
things that its new estate tax should
"apply to estates of decedents dying
on or after the effective date of the
Federal revenue act Of 1926"
The new District of Columbia bill
does have a general provision provid-
ing that the tax of 80 per cent shall
"be levied and assessed upon transfers
OF estates which would be liable TO
the Federal tax as assessed before de-
ducting the 80 per centum provided,
but there is no specific recapture
provision.
OF course the statute of limitations
now might run against any recapture
clause in the District bill which at
tempted to reach back as far as 1926,
when the 80 per cent provision became
effective. No provision now could 60
back that far. But the general princi-
pal Of the statute of limitations would
allow the District of Columbia to
reach back as far as four years. In
other words, the District would have
to file claim for refund from the Fed
eral Government within four years Of
the actual date of the filing of the Fed
eral estate tax return.
The validity of such procedure. has
been upheld by officials of the Bureau
of Internal Revenue, and careful check
today failed to find anything which so
far has invalidated it.
The recapture approval was given
by H. F. Nires, who then was acting
commissioner of Internal Revenue.
He wrote in answer to a query con-
corning the Indiana recapture clause ::
The Indiana statute, section 38 Of
chapter IS. laws Of 1881 provided that
additional inheritance tax Is imposed
upon all the estates subject to an
estate tax under provisions of the
United States revenue act of 1925
equal to the difference between the
total of an transfer and inheritance
taxes paid by the several States Of
the United States, and 80 per centum
of the Federal tax.
The provisions of this section, 4"
said Mires, "apply to estates of de-
cedents dying on or after the effective
date Of the revenue act of 1926
1t is provided that if the United
States Government should refuse to
allow credit or should collect
the amount Of the credit previously
allowed by for the additional Inherit
ance tax, then the treasurer OF the
State shall refund the amount for
which credit was disallowed by the
Federal Government. 1t is also pro-
vided that if Title III of the Federal
revenue act should be repealed then
the tax imposed by section 38 shall
become void in respect to the estates
Of persons who die subsequent to the
effective dates of such repeal.
apparently the additional tax i'm
posed will be collected by the State
of Indiana" said Mires, regardless
Of whether the administration of the
estate is closed, and regardless of the
fact that its tax liability both under
the Federal estate tax law, and the
transfer tax law of Indiana, in effect
at the date Of the decedent's death
have BEEN entirely settled.
Your letter refers to the fact that
other States have enacted statutes to
absorb the 80 per centum credit in
making the statutes retroactive. In
all cases mentioned, the Government
has allowed the credit.
The statute of Maine was applic-
able only to estates still in process of
settlement. Consequently. the policy
of the government. with respect to