Evening star., 1955-10-20
Andrews Calls
Tax Claim No
Barrier TO Job

Internal Revenue Commis-
sioner T. Coleman Andrews says
he is convinced-and has made
certain aout Of an abundance
of caution"-that q Government
tax claim against the American
Fidelity and Casualty Co. is no
legal or ethical bar to his becom-
ing chief executive oficer Of that
firm.
He made public today the
text of a letter explaining the
situation to Secretary Of the
Treasury Humphrey. The tax
deficiency case involves about
$5.5 million and is pending In
the United States Tax Court.
The claim was fled with the
Internal Revenue Service in
1852, q year before Mr.. Andrews
became commissioner.
The letter to Secretary Hum
|phrey was dated October 10,
five days before Mr.. Andrews
announced he Is resigning at
the end Of this month to become
chairman Of the board and chief
executive officer Of the company,
with headquarters in his home
city Of Richmond.
Knows Little Of It
II have not gotten into the
case ct all" he wrote, ''and / do
mot even know enough about It
to enumerate and. define the Is
sues exactly
The alleged tar deficiency,
which would amout to $5. $50 ,698,
Including penalties ard interest.
covered returns from 1914
Through 1949. The claim was
|filed against the insurance arm
and its affiliates. Markell Services,
Inc.
The companies contend that
they actually overpaid their
taxes and that the dispute in
wolves technical interpretations
LOT insurance accounting. A Tax
Court ofiicial said the case prob
ably viii be heard later this year.
after several continuances Of pre-
viously scheduled trial dates
since January.
Internal Revenue Service
spokesman said Mr.. Andrews
would have no further comment
on the matter after giving out
the text Of the letter to Secretary
Humphrey.
Consulted Attorney
Mr.. Andrews explained he had
consulted outside counsel and
was confident the tax claim
would not bar his acceptance OF
the company position or create
"a conflict Of interests problem.
"As . matter Of policy he
wrote, II do not attempt to IN
fuence the handling Of any In
dividual case. particularly as to
decisions on technical questions
raised by either the taxpayer or
the Service. ! do sometimes
inquire the aspects Of q case
where it appears that q question
of general policy Is involved,
particularly If ! get q complaint
from q taxpayer raising such q
question.
II asked the chief counsel sew
eral months ago how this par
ticular case was progressing and
aSked him to make sure that the
preparation Of the case. was as
thorough as II could be made.
Both the taxpayer end myself
being In Richmond, I lid not
want any doubt on the part Of
anyone that the case was thor
oughly developed and handled.
Other than that, ! have not got
ten into the case at all and I
do not even know enough about
it TO enumerate and define the
issues exactly"
Win Not BE Involved
As for his intended ofIicial con-
nection with the company, Mr..
Andrews explained that the firm
does not expect me to direct
or In any way participate In the
handling of the case" He de-
clared that under my contract
with the company neither my
status nor my compensation will
be affected by the outcome Of the
case. no matter how the case
comes out"
"Out Of an abundance Of
caution" he added, II propose
to have the company's board Of
directors adopt q resolution
which viii state that it Is to be
understood between US that / am
not to have any authority or re-
sponsibility with respect to the
case. that ! am not to take any
part in the handling Of 1t. and
that all authority and response