ANNUAL REPORT

OF THE COMMISSIONER OF INTERNAL REVENUE

FOR THE FISCAL YEAR ENDED JUNE 30

1952

UNITED STATES COVERNMENT PRINTING OFFICE WASHINGTON,1953

For ...Ic by the Su~rint.endlt11t oE Document.J. U. S. C~ernmcnt Printina OIJic:e Wa"hinllOft 15. D. C. Prke 70 ItCnb (paper cover) LETTER OF TRANSMITTAL

TREASURY DEPARTMENT, OFFICE OF COMMISSIONER OF INTERNAL REVENUE, Washington, D. C., January 16, 1953 The honorable the SECRETARY OF THE TREASURY. SIR: I have the honor to present to you the "Annual Report of the Commissioner of Internal Revenue for the Fiscal Year 1952," which describes the activities and indicates the progress of the for the past year. Your attention is invited to the form of this report, which departs from that of previous years. The difference in the form of presenta- tion is the result of reporting the operations on a functional instead of an organizational basis. The main purpose of this new presentation TREASURY DEPARTMENT is to facilitate appraisal, on a program-by-program basis, of the Document No. 3182 accomplishments of the Internal Revenue Service. Internal Revenue Reorganization Plan No. 1 of 1952, providing for the complete overhauling of the organization, policies, and procedures in Federal tax administration, will make the 1952 fiscal year one of the most notable in the 90-year history of the Internal Revenue Service. This report describes this reorganization. Without your vision and guidance, I do not believe that so adequate and complete a reorganization of Federal tax administration could have been accomplished. Your firm leadership toward an improved tax administration, based on a broad understanding of the Treasury's and Nation's needs in this field, has secured for the American people a sound organization of Federal tax administration. I am happy to report that the officers and employees of the Internal Revenue Service have wholeheartedly and enthusiastically responded to your direction and leadership. I know they can be depended upon to continue to raise the quality and dependability of the tax service rendered to the American taxpayer. JOHN S. GRAHAM, Acting Commissioner of Internal Revenue. HON. JOHN W. SNYDER, Secretary of the Treasury. CONTENTS

REPORT ON OPERATIONS Pan Internal revenue collections 3 Collections from income and profits taxes 4 Corporation income and profits taxes_ 4 Individual income taxes 5 Employment taxes 5 Miscellaneous internal revenue 5 Returns filed 6 Enforcenlent work 7 Returns examined 7 General 7 Mathematical verification 7 Selection of returns for examination 7 Examination of returns 8 Fraud investigations 9 Alcohol and tobacco tax regulatory work 11 General 11 Liquor plants and per mittees II Production of distilled spirits 11 Tax-paid withdrawals of distilled spirits 12 Tax-free withdrawals of distilled spirits 12 Transfers in bond of distilled spirits to industrial alcohol plants and bonded warehouses 12 Production of rectified products 13 Consumption of distilled spirits 13 Stocks of distilled spirits 13 Fermented malt liquors 13 Wines 13 Production and importation of ethyl alcohol 14 Tax-free withdrawals of ethyl alcohol 14 Production of denatured alcohol 14 Tax-paid withdrawals and stocks of ethyl alcohol 14 Transfers in bond of ethyl alcohol to registered distilleries and internal revenue bonded warehouses 14 Production of vinegar 15 Production of volatile fruit-flavor concentrates 15 Laboratory activities 15 Inspection activities 15 Basic permits 15 Labels 16 Advertising 16 Trade practices 16 Interlocking directorates 17 Seizures and arrests 17 Tobacco activities 18 Firearms program 18 Legal work on criminal cases 18 Delinquent returns and collection of delinquent accounts: Delinquent returns 19 Warrants for distraint 20 Collection through litigation, by claims in noncourt proceedings, and through discharges of liens 20 Appellate work and civil litigation 21 General 21 Adjustments protested by taxpayers 22 Appellate Staff consideration of cases not before the Tax Court 22 Cases petitioned to the Tax Court 23 Federal courts 24 VI CONTENTS CONTENTS VII

Page STATISTICAL TABLES Changes in tax liability 25 RECEIPTS FROM INTERNAL REVENUE TAXES Additional tax assessed 25 Table 26 Page Overassessments and overpayments 1. Receipts from specified sources of internal revenue, fiscal year ended Refunds and repayments 26 June 30, 1952, by collection districts, States, and Territories 110 Excessive prepayments of individual income tax 28 2. Comparative internal revenue collections, fiscal years 1951 and 1952, Claims for relief from 28 by collection districts, States, and Territories 148 Tentative adjustments 29 3. Summary of internal revenue collections, year ended June 30, 1952, Other claims 30 by States and Territories 31 154 Review of overassessments exceeding, $200,000 4. Summary of monthly internal revenue tax receipts for the fiscal year Offers in compromise 31 ended June 30, 1952, by sources 156 Interpretative and other technical functions 33 5. Summary of internal revenue collections, years ended June 30, 1951 Inspection Service activities 35 and 1952, by sources 162 Investigations of alleged misconduct and irregularities on the part of 6. Summary of internal revenue receipts by principal sources, fiscal employees and officials 35 years 1916 through 1952 164 Field office inspection 35 7. Internal revenue tax on manufactured products from Puerto Rico, Employees' financial statements, Form 1361_, 36 fiscal years 1951 and 1952, by objects of taxation Audit of employees' tax returns 36 165 Personnel summary 36 ADDITIONAL ASSESSMENTS RESULTING FROM AUDIT BY Disciplinary actions against employees 37 INTERNAL REVENUE AGENTS Rules of conduct revised 38 8. Additional income and profits tax assessments on the Commissioner's 38 - Cost of administration and collectors' lists made during the fiscal year 1952, by tax years 168 Rewards to informers 39 9. Income and profits tax deficiencies appealed to the Tax Court, fiscal Improvements 39 year ended June 30, 1952 Tax forms revision 39 174 New tax form mailing assembly 40 ALCOHOL, DISTILLED SPIRITS, BEER, WINES. ETC. Changes in organization and procedure 40 Changes in fraud procedure 41 Plants and permittees Operating manuals 41 10. Plants and permittees qualified to engage in the production, distribu- Regional finance offices 41 tion, or use of alcohol and alcoholic liquors, by States, as of June New equipment 42 30, 1952 176 Inspection Service 42 11. Permits under sections 3070 through 3125, , Other actions 43 fiscal year 1952 180 Legal functions 44 12. Permits under the Federal Alcohol Administration Act, fiscal year Tax conventions affecting the Bureau of Internal Revenue promulgated 1952 180 during the fiscal year 1952 46 13. Permits under the Federal Alcohol Administration Act, by States, as Important legislation enacted during the fiscal year 1952 affecting the of June 30, 1952 181 Bureau of Internal Revenue 47 Undenatured ethyl alcohol REORGANIZATION OF THE INTERNAL REVENUE SERVICE 14. Materials: Used at industrial alcohol plants in production of ethyl alcohol, by kinds and by months, fiscal year 1952 182 Record of reorganization 55 15. Materials: Used at industrial alcohol plants in production of ethyl History of the reorganization 55 alcohol, by kinds and by States, fiscal year 1952 183 Enactment of Reorganization Plan No. 1 56 16. Materials. Used at industrial alcohol plants in the production of ethyl Provisions of the Plan 56 alcohol, by kinds, and quantities of ethyl alcohol produced there- Implementation of the Plan 58 from, fiscal year 1952 185 Advantages of the reorganization 62 17. Summary: Production, withdrawals, and stocks of ethyl alcohol, by months, fiscal year 1952 186 EXHIBIT A 18. Summary: Production, withdrawals, losses, and stocks on hand June 30, of ethyl alcohol, and premises operated, by States, fiscal year Reorganization Plan for the Internal Revenue Service and accompanying 1952 187 message, as submitted to the Congress by file President 65 19. Summary: Production, withdrawals, losses, and stocks on hand June 30, of ethyl alcohol, and premises operated, fiscal years 1934 to EXHIBIT B 1952, inclusive 189 Charts showing organization of Bureau of Internal Revenue under Re- Undenatured Imported ethyl alcohol organization Plan No. 1 of 1952 73 20. Summary: Importations, withdrawals, and stocks at industrial alcohol bonded warehouses, of imported ethyl alcohol, by months, fiscal EXHIBIT C year 1952 190 21. Summary: Importations, withdrawals, losses, and stocks at industrial A report to taxpayers with foreword by the Honorable John W. Snyder, alcohol bonded warehouses, of imported ethyl alcohol, by States, Secretary of the Treasury_ 79 fiscal year 1952 191 22. Summary: Importations, withdrawals, losses, and stocks at industrial alcohol bonded warehouses, of imported ethyl alcohol, fiscal years 1943 to 1952, inclusive 192 VIII CONTENTS CONTENTS IX Denatured alcohol Distilled spirits and wines: Rectified Table Page Table Page 23. Production: Ethyl alcohol used for denaturation and completely and 53. Materials: Used in production of rectified spirits and wines, by kinds specially denatured alcohol produced, by months, fiscal year 1952__ 193 and by months, fiscal year 1952 216 24. Withdrawals: Completely denatured alcohol, by formulas and by 54. Materials: Used ini production of rectified spirits and wines, by kinds months, fiscal year 1952 193 and by States, fiscal year 1952 216 25. Withdrawals: Specially denatured alcohol, by formulas, fiscal year 55. Production: Rectified spirits and wines, by kinds and by months, 1952 194 fiscal year 1952 217 26. Withdrawals: Specially denatured alcohol, by leading formulas and by 56. Production: Rectified spirits and wines, by kinds and by States, and months, fiscal year 1952 194 premises operated, fiscal year 1952 217 27. Summary: Ethyl alcohol used for denaturation, and production, with- 57. Summary: Materials used for rectification and production of rectified drawals, stocks on hand June 30, and losses of denatured alcohol, spirits and wines, and premises operated, fiscal years 1936 to 1952, and denaturing plants operated, by States, fiscal year 1952 195 inclusive 218 28. Operations in specially denatured alcohol by bonded dealers: By States, fiscal year 1952 196 Consumption of distilled spirits 29. Operations in specially denatured alcohol by manufacturers: By States, fiscal year 1952 197 58. Bottling: Distilled spirits (rectified and unrectified) bottled for con- 30. Summary: Ethyl alcohol used for denaturation, and production, with- sumption, fiscal year 1952 219 drawals, receipts, quantities used, and stocks on hand June 30, of 59. Summary: Distilled spirits (rectified and unrectified) bottled for con- denatured alcohol, and premises operated, fiscal years 1934 to 1952, sumption, fiscal years 1941 to 1952, inclusive 220 inclusive 198 Denatured rum Distilled spirits: Unrectified 60. Summary: Rum used for denaturation, and production, removals, and 31. Materials: Used at registered distilleries in production of distilled stocks of specially denatured rum at distillery denaturing bonded spirits, by kinds and by months, fiscal year 1952 199 warehouses, by months, fiscal year 1952 220 32. Materials: Used at registered distilleries in production of distilled 61. Summary: Rum used for denaturation, and production, removals, and spirits, by kinds and by States, fiscal year 1952 200 stocks on hand June 30, of specially denatured rum at distillery de- 33. Materials: Used at fruit distilleries in production of brandy and naturing -bonded warehouses, by States, fiscal year 1952 221 spirits, by kinds and by months, fiscal year 1952 201 62. Operations in specially denatured rum by manufacturers: By States, 34. Materials: Used at fruit distilleries in production of brandy and fiscal year 1952 221 spirits, by kinds and by States, fiscal year 1952 201 35. Production: Distilled spirits, by kinds and by months, fiscal year 1952_ 202 Fermented malt liquors and cereal beverages 36. Production: Distilled spirits, by kinds and by States, fiscal year 1952_ 203 37. Production: Brandy and spirits by fruit distilleries, by kinds and by 63. Materials: Used in production of fermented malt liquors and cereal months, fiscal year 1952 203 beverages, by kinds and by months, fiscal year 1952 221 38. Production: Brandy and spirits by fruit distilleries, by kinds and by 64. Materials: Used in production of fermented malt liquors and cereal States, fiscal year 1952 204 beverages, by kinds and by States, fiscal year 1952 222 39. Withdrawals: Distilled spirits, total tax-paid, by kinds and by months, 65. Summary: Production, withdrawals, losses, and stocks of fermented fiscal year 1952 204 malt liquors, by months, fiscal year 1952 224 40. Withdrawals: Distilled spirits, total tax-paid, by kinds and by States, 66. Summary: Production, withdrawals, losses, and stocks on hand June fiscal year 1952 205 30, of fermented malt liquors, and breweries operated, by States, 41. Withdrawals: Bottled-in-bond distilled spirits, tax-paid, by kinds and fiscal year 1952 225 by months, fiscal year 1952 206 67. Summary: Production, withdrawals, losses, and stocks on hand June 42. Withdrawals: Bottled-in-bond distilled spirits, tax-paid, by kinds and 30, of fermented malt liquors, and breweries operated, fiscal years by States, fiscal year 1952 206 1934 to 1952, inclusive 226 43. Withdrawals: Distilled spirits, total tax-free, by kinds and by months, 68. Summary: Production, withdrawals, and stocks of cereal beverages, fiscal year 1952 207 by months, fiscal year 1952 227 44. Withdrawals: Distilled spirits, total tax-free, by kinds and by States, 69. Summary: Production, withdrawals, and stocks on hand June 30, of fiscal year 1952 208 cereal beverages, and plants operated, by States, fiscal year 1952 227 45. Losses: Distilled spirits in internal revenue bonded warehouses, by kinds and by States, fiscal year 1952 209 Wines 46. Stocks: Distilled spirits in internal revenue bonded warehouses, by 70. kinds and by months, fiscal year 1952 209 Materials: Used in production of still wines, by kinds and by months, fiscal year 1952 228 47. Stocks: Distilled spirits in internal revenue bonded warehouses, by 71. Materials: Used in production of still wines, by kinds and by States, kinds and by States, June 30, 1952 210 fiscal year 1952 229 48. Stocks: Distilled spirits in internal revenue bonded warehouses, by 72. kinds, and by years and seasons of production, June 30, 1952 210 Production: Still wines produced and treatment of wines after fer- mentation, by months, fiscal year 1952 230 49. Stocks: Whisky in internal revenue bonded warehouses, by years and 73. seasons of production, and by States, June 30, 1952 211 Production: Still wines produced and treatment of wines after fer- mentation, by States, fiscal year 1952 231 50. Summary: Production, withdrawals, and stocks of distilled spirits, by 74. Withdrawals: Still wines, by months, fiscal year 1952 months, fiscal year 1952 213 232 75. Withdrawals: Still wines, by States, fiscal year 1952 233 51. SuMmary: Production, withdrawals, and stocks on hand June 30, of 76. distilled spirits, and premises operated, fiscal year 1952 213 Summary: Production, withdrawals, losses, and stocks of still wines, by months, fiscal year 1952 234 52. Summary: Production, tax-paid withdrawals, and stocks on hand June 77. 30, of whisky and of total distilled spirits, and premises operated, Summary: Production, withdrawals, losses, and stocks on hand June fiscal years 1934 to 1952, inclusive 215 30, of still wines, and premises operated, by States, fiscal year 1952_ 235 X CONTENTS CONTENTS XI Page Table Table Pan 99. 78. Summary: Production, withdrawals, losses, and stocks of sparkling Cigars weighing more than 3 pounds per thousand: Number removed wines, by months, fiscal year 1952 236 tax-paid, by classes, calendar year 1951, by collection districts__ 256, 79. Summary: Production, withdrawals, losses, and stocks on hand June 100. Cigars weighing more than 3 pounds per thousand: Manufactured 30, of sparkling wines, and number of premises operated, by States, and removed tax-paid for domestic consumption from customs fiscal year 1952 236 bonded manufacturing warehouses, class 6, by classes, calendar 80. Summary: Production, withdrawals, losses, and stocks of vermouth, year 1951 258 by months, fiscal year 1952 237 101. Cigarettes weighing not more than 3 pounds per thousand: Number 81. Summary: Production, withdrawals, losses, and stocks on hand June of factories operated, quantity of tobacco used, number of cigarettes 30, of vermouth, and number of premises operated, by States, fiscal manufactured and removed, calendar year 1951, by collection 237 districts 259 year 1952 102. 82. Summary: Production, withdrawals, losses, and stocks of aperitif Cigarettes weighing more than 3 pounds per thousand: Quantity of wines other than vermouth, by months, fiscal year 1952 238 tobacco used, number of cigarettes manufactured and removed, 83. Summary: Production, withdrawals, losses, and stocks on hand June calendar year 1951, by collection districts 261 30, of aperitif wines other than vermouth, and number of premises 103. Leaf tobacco used in manufacturing cigars, cigarettes, and tobacco operated, by States, fiscal year 1952 238 and snuff, calendar years 1947 to 1951 261 104. 84. Summary: Production, tax-paid withdrawals, and stocks on hand Production of manufactured tobacco, snuff, cigars, and cigarettes, , June 30, of still and sparkling wines, and premises operated, fiscal calendar years n47 -to- 1951 262 years 1934 to 1952, inclusive 239 105. Summary of operatiops of manufacturers of tobacco and cigars, 85. Summary: Materials used for the production of ethyl alcohol, dis- calendar years 1950 and 1951 263 tilled spirits, fermented malt liquors, and vinegar, by kinds, fiscal 106. Tobacco products withdrawn for consumption, computed from collec- year 1952 241 tions from the sales of stamps, fiscal year 1952 264 107. Domestic and imported cigarette papers and tubes withdrawn tax- Vinegar free and tax-paid, fiscal years 1951 and 1952 265 108. Withdrawals of manufactured tobacco,. snuff, cigars, and cigarettes Summary: Materials used at vinegar plants, and production and stocks from bonded internal revenue tobacco export warehouses, for 86. 241 of vinegar, by months, fiscal year 1952 export, year ended June 30, 1952 265 87. Summary: Materials used at vinegar plants, production and stocks of 109. Withdrawals of manufactured tobacco, snuff, cigars, and cigarettes vinegar, and premises operated, fiscal years 1943 to 1952, inclusive_ _ 242 from factory in bond, for shipment or delivery as sea stores, year ended June 30, 1952 265 Volatile fruit-flavor concentrates 110. Withdrawals of manufactured tobacco, snuff, cigars, and cigarettes from tobacco sea stores warehouses, for shipment or delivery as Production: Volatile fruit-flavor concentrates, by kinds, and by 88. 243 sea stores or export, year ended June 30, 1952 265 months, fiscal year 1952 111. Exportation in bond of manufactured tobacco, snuff, cigars, and eigarettes,-etc., year ended June 30, 1952, by collection districts_ Claims _ 266 STAMP TAXES 89. Claims for redemption of stamps and remission, abatement, and refund of taxes, fiscal year 1952 243 112. 243 Number of each class of special-tax payers purchasing special-tax 90. Claims for drawback, fiscal year 1952 stamps covering the fiscal year 1952, or portion thereof, under the various annual rates, by collection districts and States 268 Label activity 113. Production and withdrawals of renovated butter, year ended June 30, 1952, by collection districts 274 Label activity under Federal Alcohol Administration Act, fiscal year 114. Summary of production and tax-paid withdrawals of renovated 91. 244 1952 butter, years ended June 30, 1943 to 1952 274 115. Production, importation, and withdrawals of playing cards, by Enforcement, Alcohol and Tobacco Tax Division months, year ended June 30, 1952 274 116. Enforcement, Alcohol and. Tobacco Tax Division: Seizures and Summary of internal revenue stamps issued to collectors of internal 92. 245 revenue and the Postmaster General during the fiscal years 1951 persons arrested, by months, fiscal year 1952 and 1952 Enforcement, Alcohol and Tobacco Tax Division: Seizures and 275 93. 246 persons arrested, by States, fiscal year 1952 APPELLATE WORK AND CIVIL LITIGATION TOBACCO 117. Analysis of the work of the Appellate Staff during the fiscal year 1952—Income, profits, estate, and gift tax cases 94. Dealers in leaf tobacco in business, leaf tobacco exported and received 118. 278 from farmers, calendar year 1951, by collection districts 248 Summary: Income, profits, estate, and gift tax appeals docketed, Manufactured tobacco: Number of factories operated, leaf tobacco stipulated, defaulted, and defended on the merits before the Tax 95. 250 Court (formerly Board of Tax Appeals), fiscal years 1940 to 1952, and other materials used, calendar year 1951, by collection districts_ _ inclusive Tobacco and snuff manufactured and removed, calendar year 1951, 280 96. 251 119. Analysis of work on compromise, extension of time, and final closing by collection districts agreement cases, fiscal year 1952 97. Quasi tobacco manufacturers classified: Number of factories operated 280 252 120. Summary of receipts, dispositions, and pending inventories of non- and tobacco material handled, calendar year 1951 docketed, docketed, and compromise work (income, profits, 98. Cigars: Number of factories operated, quantity of tobacco used, estate, and gift tax cases), fiscal years 1943 to 1952, inclusive number of cigars manufactured, and removed without payment 121. 281 254 Progress in disposition of cases pending before The Tax Court of of tax, calendar year 1951, by collection districts the , fiscal year 1952 122. 281 Analysis of cases disposed of in Tax Court, fiscal year 1952 281 XII CONTENTS

Table Page 123. Tax Court cases on review in courts of appeal or Supreme Court, fiscal year 1952 282 124. Analysis of Tax Court cases on review in courts of appeal or Su- • preme Court, fiscal year 1952 282 125. Suite by taxpayers, fiscal year 1952 283 126. Claims and suits by the United States, fiscal year 1152 283 127. Lien cases, fiscal year 1952 283 COMMISSIONERS OF INTERNAL REVENUE FROM JULY 1862 1 TO 128. Insolvency and other debtor proceedings, fiscal year 1952 284 JANUARY 1953 129. Results obtained in insolvency and other debtor proceedings closed, fiscal year 1952 284 Service COST OP ADMINISTRATION Name 2 State 130. Expenses of the Internal Revenue Service, fiscal yew ended June From— To— 286 30, 1952 George S. Boutwpll 131. Cost of prini,ing and binding for Internal Revenue Service, fiscal Massachusetts July 17, 1862 Mar. 4, 1863. Joseph J. Lewis Pennsylvania Mar. 18,1863 June 30, 1865, years 1951 and 1952 291 William Orton New York July 1.1865 Oct. 31, 1865. Edward A. Rollins New Hampshire . Nov. 1,1885 Mar. 10, 1869. INDEX 293 Columbus Delano Ohio Mar. 11. 1889 Jan. 2, 1871. Alfred Pleasonton New York Jan. 3.1871 Aug. 8, 1871. NOTE John W. Douglass Pennsylvania Aug. 9, 1871 May 14. 1875. Daniel D. Pratt Indiana May 15,1875 July 31, 1876. In tables where figures have been rounded to unit, the components Green B. Raum Illinois Aug. 2, 1878 Apr. 30, 1883. a apeattieci Walter Evans Kentucky May 21, 1883 Mar. 19, 1885. may not necessarily add to totals. Percentages have beezi calculated on un- Joseph S. Miller West Virginia Mar. 20,1885 Mar. 20, 1889, rounded figures. John W. Mason do Mar. 21, 1889 Apr. 18, 1893. Joseph S. Miller do Apr. 1%1893 Nov. 26, 1896 - W. St. John Forman Illinois Nov. 27, 1896 Dec. 31. 1897. Nathan B. Scott West Virginia Jan. 1,1898 Feb. 28, 1899. George W. Wilson Ohio Mar. 1,1899 Nov. 27, 1900. John W. Yerkes Kentucky Dec. 20, 1900 Apr. 30, 1907. John G. Capers South Carolina June 5, 1907 Royal E. Cabell Aug. 31, 1909. Virginia Sept. 1, 1909 Apr. 27, 1913. William H. Osborn North Carolina Apr. 28,1913 Sept. 25, 1917. Daniel C. Roper South Carolina Sept. 26, 1917 Mar. 31. 1920. William M. Williams Alabama Apr. 1, 1920 Apr. 11, 1921. David H. Blair North Carolina May 27, 1921 May 31, 1929. Robert H. Lucas Kentucky June 1,1929 Aug. 15, 1930. David Burnet Ohio Aug. 20, 1930 May 15, 1933. Guy T. Ff elvering Kansas June 6.1933 Oct. 8, 1943. Robert E. Hannegan Missouri Oct. 9, 1943 Jan. 22, 1944. Joseph D. Nunan, Jr New York Mar. 1, 1944 June 30. 1947. George I. Schoeneman Rhode Island July 1, 1947 July 31, 1951. PAP B. Dunlap Texas Aug. 1,1951 Nov. 18, 1952.

1 Office of Commissioner of Internal Revenue created by Act of Congress, July 1, 1862. 2 In addition, the following were Acting Commissioners during periods of time when there was no real Commissioner holding the office: John W. Douglass, of Pennsylvania, from November 1 870, to January 2, 1871; Henry C. Rogers, of Pennsylvania, from May 1 to May 10, 1883; John J. Knox, of Minnesota, from May 11 to May 20, 1883; Robert Williams Jr., of Ohio, from November 28 to December 9, 1900; Millard F. West, of Kentucky, from April 12 to May 26, 1921; H. F. Mires, of Washington, from August 15 to Au- gust 20, 1930; Pressly R. Baldridge, of Iowa, from May 15 to June 5, 1933; Harold N. Graves, of Illinois, from January 23 to February 29, 1944; and John 8. Graham, of North Carolina, from November 19, 1952, to present.

• EJII REPORT ON OPERATIONS INTERNAL REVENUE COLLECTIONS

During the 1952 fiscal year, the Bureau of Internal Revenue col- lected $65 billion from the internal revenue taxes. This is the largest amount of internal revenue tax collections ever made during any year. The previous high was in fiscal 1951 when over $50 billion was col- lected. Collections include tax payments made by cash, check, money order, depositary receipt, etc., received in the Internal Revenue Service offices. The amount of these collections for any time period will differ from the amount reported in daily Treasury statements for the same period because: (1) depositary receipts for tax withheld from wages are reported in the Treasury statements when received by Federal depositaries, whereas the collections represented by these depositary receipts are not reported by the Internal Revenue offices until they are received with the filing of the quarterly tax returns; and, (2) tax payments received in the Internal Revenue offices during the last few days of any period may not be immediately deposited and, therefore, may be reported as part of the collections for the sub- sequent period. Most of the $15 billion increase in tax collections realized during the fiscal year ended June 30, 1952, over the preceding fiscal year primarily reflects the converging effects of the increased taxes enacted by the 1950- and 1951 tax legislation to help finance the increased defense expenditures following the outbreak of the Korean hostilities. A lesser portion of the increase can be attributed to the higher levels of net income and profits realized by taxpayers. The accompanying table shows the internal revenue collections by major groups of taxes. In addition to the actual amounts collected during the 1951 and 1952 fiscal years, it shows the amount and per- centage increase (or decrease) in 1952 over 1951.

Summary of internal revenue collections,' fiscal years 1951 and 1952

Fiscal year Increase or decrease General source 1951 1952 Amount Percent Income and profits taxes: Corporation $14, 387, 569,403 $21, 466, 910, 019 $7,079,340,618 49.2 Individual: 2 Withheld by employers 13,089, 770,178 17, 929,046, 578 4,839, 276, 400 Other 9, 907, 539, 091 37. 0 11,345, 060, 075 1,437, 520, 984 14.5 Total individual income taxes 22,997,309, 269 23, 274, 106, 653 6.276, 797, 384 27. 3 Total Income and profits taxes 37,384, 878, 672 50, 741, 016, 672 13,358, 138, 000 35.7 See footnotes at end of table. 229047-58-2 3 4 REPORT OF COMMISSIONERS OF INTERNAL REVENUE ` REPORT ON OPERATIONS 5 Summary of internal revenue collections,' fiscal years 1951 and 1952—Continued porate incomes and fiscal 1952 tax collections, whereas they were only partly effective on 1950 corporate incomes and fiscal 1951 tax collec- Fiscal year Increase or decrease (—) tions. Similarly, the 1952 collections were higher because the in- General source ereased corporate tax liability under the Excess Profits Tax Act of 1951 1952 Amount Percent 1950 was fully effective with 1951 profits and only partly effective with 1950 profits. Also, the acceleration of tax payments by corpora- Employment taxes: insurance (Federal Insurance tions as provided by the accounts for a part of 013ZtestionS Act) l 12, 810, 749, 000 $3, 584.025,406 1773, 276,406 27. 5 Unemployment insurance (Federal Un- the 1952 increase 7 collections. Finally, the increase in the fiscal employMent Tax Act) 236,951,546 259, 616, 431 22, 669,885 9.6 year Carriers taxes—old-age benefits (Rail- 1952 corporate tax collections is also attributable to the increase road Retirement Tax Act) 579, 778,133 620, 621, 752 40, 843, 619 7.0 in corporate income tax provided by the . Total employment taxes 3,627,478, 679 4,464, 263, 589 836, 784, 910 23.1 Individual income taxes. —The 1952 collections from the individual income taxes were $29.3 billion, or $6.3 billion more than in the 1951 Miscellaneous internal revenue: Estate tax 638, 523,188 750, 590, 517 112, 067, 331 17. 6 fiscal year. i Gift tax 91, 206,651 82, 556,471 —8,650,181 —9.5 The $4.8 billion increase in the 1952 fiscal year collections from Alcohol taxes: tax withheld by employers reflects the record level of Distilled spirits (imported, Misr) 172,-361, 778, 187,478,577 -15,5, 116p799 : & 8 wage and salary Distilled Writs (domestic, exbist)... . 574;472, 600 1, 402, 251, 860 —172,220, 740 —10:9 payments during this- period, and also the increases in withholding Distilled spirits rectification tax 38,052,750 31,812,387 —6,240,364 —16.4 Wines__ 67, 253, 9O3 72,373,725 5,119,822 7.6 rates from 15 'to 4S pnreent, beginning October 1, 1950, under the Floor taxes, wines and liquors 12,124 93, 808,383 93,796, 259 Bottle or container stamps 16,023,002 13,393, 406 —2, 629, 596 —16.4 Revenue Act of 1950, and from 18 to 20 percent, beginning November 1, Fermented malt liquors 685,008, 720 727, 60.3, 681 62, 594,961 9.4 1951, under the Revenue Act of 1951. 6,774,623 49.7 Special or occupational taxes 13,623,097 20,397, 670 The $1.4 billion increase in 1952 collections from individual income Total alcohol taxes 2, 546,807, 925 2, 599, 119,689 2,311,765 0.1 tax not withheld also reflects the increased levels of personal income Wagering taxes 5,345,066 ',/: 5,345,066 received by individuals, the full-year effects of the tax increases pro- Tobacco taxes 1,380,396,001 1, 565, 162,382 ", 189,766,381 13.4 Stamp taxes 93,106,547 93,106, 84,905,421 v „ —8, Ill, 126 —8.7 vided by the Revenue Act of 1950, and the part-yelt effects of tax Manufacturers' excise taxes 2,383,676,698 2,348, 943.116 ''''; —34, 733, 582 —1.5 increases under the Revenue Act of 1951. Retailers' excise taxes 457,011,493 475, 465, 936 % 18, 452,443 4. 0 Other taxes (communications, transpor- tation, admissions, oleomargarine, etc., EMPLOYMENT TAXES and repealed taxes not Dated above) 1,842, 598,464 1.942, 126, 700 99, 528, 236 5.4 The 1952 collections from the several employment taxes aggregated Total miscellaneous internal revenue 9,433,328.964 9,804,305, 298 370, 976,334 3.9 $4.5 billion, or $0.8 billion more than in 1951. The increase is ex- Grand total 50,445,686,315 65,009,585, 560 14,563,899, 244 28.9 plained by: (1) the full-year effects of the extended coverage under the Amendments of 1950, compared to the part-year 40.0.0.1ais AiNaffn ralialort the receipts from tax :(00.1dis• speCksdtaxes (such as licensing); amounts effects on 18511-sol year collections, and (2) the record level of wage paid the year toward 'discharging the tax liability reported on returns filed; and collections received as a direct result of enforcement efforts, such as additional tax, interest, penalties, costs, court fines for and salary fiapuettollaring fiscal 1952. violation of the narcotic laws, proceeds from seizures in connection with attempted evasion of taxes on distilled spirits, judgments, offers in compromise, etc. insciimanzotrs INTERNAL REVENUE 3 Estimated, for purposes of comparison with earlier years. Beginning January 1951, collections of tax withheld are not separated as between income tax and old-age insurance. The collections of old-age insur- The total of miscellaneous tax collections during the 1952 fiscal ance tax imposed on self-emplovment income for taxable years beginning on or after January 1951, are re- year was $9.8 billion or about $0.4 billion more than in 1951. The ported in combination with individual income tax other than tax withheld. The figures shown reflect the estimated components of the combined amounts. foregoing table shows that this increase is attributable to the estate tax, tobacco taxes, and a variety of excises included under "other COLLECTIONS FROM INCOME AND PROFITS TAXES taxes." The 1952 collections from income and profits taxes aggregated $50.7 The Revenue Act -of 1951 made many increases in the excise tax billion. This is $13.4 billion, or 35.7 percent, more than was collected area. The most important of these were the increases in the taxes on in 1951. Stated another way, $13.4 billion, or 91.7 percent of the alcoholic beverages, cigarettes, gasoline, automobiles, and related total increase of $14.6 billion in the 1952 collections is attributable to products. With certain exceptions, these increases were made the individual and corporate income and profits taxes. effective November 1, 1951. Consequently, the full-year effects will Corporation income and profits taxes—The 1952 collections from this be realized in the tax collections of the 1953 fiscal year. Adding to source were $21.5 billion, or $7 billion more than the 1951 fiscal year the fiscal 1952 collections, however, were the floor-stock taxes imposed collections. This increase resulted in part from a record level of on tax-paid stocks of distilled spirits, beer, wine,- cigarettes, and corporate profits in calendar year 1951, and in part from new tax gasoline held by wholesalers and retailers at places other than retail legislation. establishments. Two separate tax acts were enacted in 1950 and one in 1951 which The 1951 Revenue Act also contained tax-decreasing provisions, the increased the 1952 fiscal year corporate tax collections over the col- most important of which were the repeal of the electrical energy tax, lections in the 1951 fiscal year. First, the corporate tax increases exemption of certain items from the taxes on admissions and photo- levied by the Revenue Act of 1950 became fully effective on 1951 cor- graphic apparatus and film, and reductions in the taxes on telegraph messages and manufactured tobacco. As already noted.

6 REPORT OF COMMISSIONER OF INTERNAL REVENUE REPORT ON OPERATIONS 7 the effects of these tax-decreasing provisions on collections were more ENFORCEMENT WORK than offset by the tax increases and the higher level of business activ- RETURNS EXAMINED ity during fiscal 1952 compared with thelevet in fiscal 1951. General.—Our national tax system is characterized by an exception- RETURNS FILED ally high degree of voluntary tax compliance,- with the overwhelming There were 89,295,005 tax returns filed in fiscal year 1952, as com- majority of_ taxpayers responding conscientiously to their obligations pared with 82,624,960 returns filed during the preceding fiscal year. under the tax laws enacteffiby -the Congress. If this were not so, the Of the total number of returns filed 62,658,502 were income tax re- tax enforcement problems facing the Internal Revenue Service would turns, including 5,774,975 declarations of income. The payroll tax be greater both in amount and difficulty, and together with the returns, which totaled 16,752,232, comprised the next largest group. . additional administrative burdens which would be imposed, would The income tax returns filed in any one fiscal year are, for the most present a task manifestly impossible to accomplish with the Bureau's part, returns for the tax year ending 6 months earlier. Returns filed available resources. in fiscal year 1952 are largely those filed for calendar year 1951 and Although, it is unnecessary to make a thorough examination of all part-year returns and fiscal-year returns fer,rwhich the filing period of the 90 million tax returns filed, it is incumbent upon the Bureau to ended in the latter part of the calendar year 1051. The number also insure maximum compliance with the tax laws. To this end, those includes delinquent returns for prior tax years, and amended returns returns believed to be most in need of correction, are segregated which show an increase in tax. Amended returns showing a decrease through a preliminary inspection process, and as many are examined in tax are considered as claims and are not counted as returns filed. each year as the Bureau's resources will permit. The payroll tax returns filed in the fiscal year 1952 include em- Mathematical verification.—The first step in determining the ployers' quarterly returns of tax withheld on wages (a combined re- accuracy of the tax returns is a verification, by calculating machine turn covering both income, and Federal insurance contributions act -operators of the taxpayers computations. In this step there is no taxes withheld), employers' quarterly returns of railroad retirement attempt to' make corrections which require statutory notices of tax, and annual returns of unemployment tax filed by employers of deficiency, such as the disallowance of exemption for dependents, eight or more individuals. travel expenses, erroneous deductions, etc. Therefore, the notices The table that follows shows the number of returns filed by principal sent to taxpayers with respect to such corrections state that the type of return for fiscal years 1951 and 1952. adjustment is the result of a mathematical verification of the return and 1952 and that if subsequent audit discloses that additional information is Number of returns filed during fiscal years 1951 necessary or further changes must be made, the taxpayer will be duly Advised. Type of return 1951 1952 The mathematical verification is not always a preliminary action Income taxes: but is sometimes deferred and combined with subsequent examination. Corporation: When that is done, of course, the mathematical errors are included in Income and profits 878,038 1 748, 517 5, 528 0 836 Personal holding companies 242 227 the notice of adjustment sent to the taxpayer, as part of the over-all Army and Navy contracts 119,418 Exempt organizations 83,749 proposed deficiency or overassessment. maiCidual: and resident aliens 52,383,403 54,602,736 There is no mathematical verification with respect to individual 74.568 77,91P Nonresident aliens 5, 330, 680 5,774,975 income tax returns filed on Form 1040-A. This is due to the fact that Declaration of Income 366,870 377,340 the tax computations on such returns are not made by the taxpayers Fiduciaries 891,277 922.925 Partnerships 10,104 7,994 but by Internal Revenue personnel. Withholding agents 17,815 19,828 Other Selection of returns for examination.—Since it is neither necessary Total income tax returns 59,842,254 62, 858, 502 nor possible to examine thoroughly every tax return filed, a basis must be established for selecting the returns to be examined. Stated in its Payroll taxes: 13,428,435 18,152,841 Withheld Income and old-age insurance 24, 575 21, 667 broadest terms, the basic selection principle is that those returns will be Carriers Unemployment insurance 556, 789 577,724 examined which upon preliminary inspection indicate the largest Total payroll tax returns potential deficiency or overassessment of tax. A preliminary inspec- tion of more than 74 million returns of all types was made in the Estate tax fiscal year 1952 to Gift tax select those to be examined, and of this number, Miscellaneous taxes 4,564,673 were selected for examination. Spacial taxes All other Included in the returns selected for examination were those returns Grand total 82,624,960 89, 295, 095 requiring audit because of related claims, taxpayers' requests, or other mandatory adjustments. Other returns were selected through a pro- I The Revenue Act of 1951 provided for several new taxes, the returns for'wkiith are 'shown for the first cedure involving close inspection of each return to discover indications time in the 1962 figures. These new returns shown in 1952 include the follow fuel, 38,558; wagering excise, 39,472; wagering special, 18,550; floor taxes on cigarettes, distilled spirits. gasoline, 847,053. of potential error in certain areas where past experience indicates that z Increase over 1951 is due primarily to filing of second returns by Corporatinnwhose first returns were errors commonly occur. invalidated by Excess Profits Tax Act of 1950 and Revenue Act of 1951. 8 REPORT OF 0EANUSSIONER OF INTERNAL REVENUE REPORT ON OPERATIONS 9 An additional group of returns was selected on a scientific sample Examination of tax returns, fiscal years 1951 and 1958 basis by the Statistical Division in Washington from returns for- warded by the field for the regular compilation of statistical data. Number of returns examined This selection is part of the Bureau's audit control program, which was Type of return Total Additional tax No change or over- begun in 1949 as a means of increasing the effectiveness of audit and assessment investigative techniques; of achieving the maximum possible enforce- ment coverage with available personnel; and of bringing within the 1951 1952 1951 1952 1951 1952 scope of examination a number of taxpayers whose returns might not Income and profits tax: have been selected under other methods. Corporations: Income Examination of returns.—An examination may be defined as an 197,198 146.711 81,901 65,157 115, 297 81, 554 Excess profits 16, 583 7, 227 , 5, 128 2, 455 11, 457 audit of a tax return which involves contact with the taxpayer or his Individual 8,861, 101 3,555,265 1, 939, 4, 772 Partnership 719 1,830,613 1, 921,382 1,724.652 representative. Examinations are of two types—office audits and 65, 985 49, 870 (2) 55, 985 49, 870 Total income and prof- field examinations. The former involve contact with taxpayers its tax. through correspondence or interview on Internal Revenue premises, 4,130,867 3, 75%073 3024746 I, 898, 225 2,104,121 1, MO, 848 Other than income and prof- while the latter involve examination of theapayartabooks, records, its tax: bank accounts, etc., in his home or place of business. Returns of Estate aud gift 56,110 59, 989 14, 688 14,999 Miscellaneous 195, 587 41, 422 44,990 greater complexity and those involving the larger businesses usually 235, 464 155,725 190, 722 39, 862 44, 742 Total other than in- require field examination. come and profits 251,097 295, 453 17%418 205, 721 81,284 89, 732- Where an examination discloses liability for additional payroll or Grand total excise tax, a supplemental return is prepared covering the additional 4,382, 564 4.054, 526 2,197,159 2,103,946 %185, 405 1,950,580 tax. If overpayment of such taxes is determined, the taxpayer is . advised to take credit for the amount in returns to be filed for sub- *Adjustments to partnership Income are reflected In the income tax returns of the partners. sequent periods or, if the amount is in dispute, to file a claim for refund. . Where an apparent deficiency or overpayment of income, profits, FRAUD INVESTIGATIONS estate or gift taxes has been determined and the taxpayer has not In addition to the regular examination of returns, special considera submitted a signed agreement to the examining agent, a 30-day tion is given to returns of taxpayers who attempt to evade the tax preliminary notice of adjustment is forwarded to the taxpayer accom- properly due from them. Where fraud is suspected, the returns are panied by a copy of the audit report. This notice afforda the taxpayer subjected to a joint investigation with special agents to determine if a period of 30 days in which to sign an acceptrtnee or submit a protest fraud is involved and the extent of the fraud. This fraud work is requesting a conference under the appellate procedures described on reported on a case basis rather than on number of returns as regular 25. If the adjustment results in an overassessment and the pages 21 - examinations are reported. A case may involve several returns of taxpayer signs an acceptance or fails to respond to the 30-day notice, one taxpayer and/or returns of several taxpayers. (These returns the overassessment is scheduled for refund or abatement. are included in the examinations shown in the foregoing table.) Where the adjustment involves a deficiency in income, profits, A total of 3,872 suspected fraud cases were disposed of in 1952. estate or gift taxes and the taxpayer fails to respond to the preliminary A breakdown of this total shows that 1,247 cases were referred to the notice, a 90-day statutory notice of deficiency is issued. If the Chief Counsel's field offices with recommendations for prosecution; taxpayer signs an agreement, or fails to respond to the statutory fraud penalty but no prosecution was recommended in 1,597 cases; a notice within the 90-day period, the deficiency is listed for assessment. deficiency but no fraud penalty was recommended in 263 cases; 132 However, if the taxpayer appeals to The Tax Court of the United cases were closed without change; and 633 cases were found not to States for a redetermination of the tax, assessment of the deficiency is warrant a fraud investigation. A table showing the fraud cases deferred pending final determination of tax liability (see pages 23-24). included in the examination work for fiscal years 1951 and 1952 The following table shows the number of returns examined during follows: the fiscal years 1951 and 1952 by type of return.

REPORT ON OPERATIONS 10 REPORT OF COMMISSIONER OF INTERNAL REVENUE 11

Progress in disposition of cases involving suspected fraud, during fiscal years 1951 93 judicial districts to act in a liaison capacity between its field offices and 1952 and the special grand juries. The racket squads' participation in this Nation-wide investigation of organized crime has aided considerably Increase or decrease (—) the achievements of many of the special grand juries. Item 1951 1952 Number Percent ALCOHOL AND TOBACCO TAX REGULATORY WORK General.—The Internal Revenue Service is charged with the admin- 3, 219 3, 363 144 4. 5 Pending, beginning of period 4,162 823 24. 6. Receipts 3, 339 istration and enforcement of the laws and regulations relating to 3,195 3, 872 677 21.2 liquor, tobacco, and firearms, including the determination of liability Total disposals (action recommended) 104.8 699 1,247 638 Prosecution 1, 886 1,597 —289 —15.3 for taxes imposed by these laws. This involves the regulation of Fraud penalty (no prosecution) —31 —10.5 Deficiency (no fraud penalty) 294 263 over 500,000 individuals or firms operating under the internal revenue 58 132 74 127.6 No change 81.9 Fraud investigation not warranted 348 633 265 alcoholic beverage laws and over 4,000 dealers and manufacturers 3, 383 3, 653 290 8.6 of tobacco or tobacco products. It also involves the detection and Pending, end of period seizure of installations operating illicitly to evade the taxes imposed by these laws, as well as the detection and arrest of persons engaged While many fraud cases are discovered in the routine examination in the illicit operations. of returns, special attention is given the returns of persons allegedly The alcohol and tobacco tax activities of the Internal Revenue engaged in illegal activities to see that they comply fully with the Service are summarized in the following paragraphs. More detailed law. To insure that these returns receive special attention, the best data with respect to such operations appear in the Alcohol section qualified investigative personnel in the Bureau have been assigned to of the Appendix. them. Liquor plants and permittees.—Qualification under the internal The investigative personnel assigned to this work has varied between revenue laws is required of any person engaging in the manufacture, 1,800 and 2,300. Groups of these men, known as "racket squads," storage, processing, or distribution of alcohol and alcoholic liquors. were welded into coordinated forces within each of the major field On June 30, 1952, there were authorized to operate a total of 2,016 offices of the Bureau. Within their respective geographic areas these registered and fruit distilleries, internal revenue bonded warehouses, several squads were placed under the over-all direction of special industrial alcohol plants and warehouses, denaturing plants, rectifying agents in charge, Intelligence. In order to facilitate the national plants, tax-paid bottling houses, wineries, breweries, vinegar plants, effort, seven regional coordinators were designated to serve as liaison and fruit-flavor concentrate plants as compared with 2,102 as of June officers between the field offices and the Director of the Special Tax 30, 1951. This represents a decrease of 86 establishments. As of Fraud Drive. June 30, 1952, there were 488,969 wholesale and retail dealers, as On July 1, 1951, the master lists compiled from all available sources compared with 483,967 a year ago, representing an increase of 5,002 contained names of 27,734 individuals who were allegedly engaged in dealers, or 1.0 percent. The total number of plants and permittees of illegal activities and were therefore scheduled for investigation. Al- all classes, as of June 30, 1952, was 507,747 as compared with 502,818 though 19,489 cases were closed during the fiscal year, many new a year ago, representing an increase of 4,929 or 1.0 percent. A table cases were added, and there were still 20,723 cases awaiting final showing the number for arch class, by States, as of June 30, 1952, investigative action at the close of the year. (These cases are included is included in the Appendix. in the table relating to regular examinations and, if fraud is suspected, Production of distilled spirits.—The total production of all distilled in the table relating to fraud cases.) spirits for the fiscal year 1952 (by registered and fruit distilleries) Since the passage of the wagering tax law, many cases involving amounted to 221,865,781 tax gallons, as compared with 401,452,796 violations of this law have been the subject of fraud investigation. tax gallons produced during the preceding fiscal year. The produc- During the period November 1, 1951, through June 30, 1952, a total tion of whisky for 1952 amounted to 103,543,953 tax gallons, as of 881 cases in this category have been investigated for fraud, of which compared with 205,702,460 tax gallons for the preceding year. 525 have been referred to the field offices of the Chief Counsel with The production of each kind of distilled spirits, produced by regis- recommendations for prosecution. tered or fruit distilleries, for the fiscal year is compared with such On January 5, 1952, the Attorney General of the United States production during the preceding year in the following table: requested the impaneling of special grand juries in each judicial district, for the purpose of surveying the conditions of organized crime throughout the United States. In order to give full cooperation to this action the Bureau designated a special agent in each of the

12 REPORT OF COMMISSIONER OF INTERNAL REVENUE REPORT ON OPERATIONS 13 Production of distilled spirits, fiscal years 1951_and 1955 effective November 7, 1951, issued pursuant to House Joint Resolu- tion 73 (Public Law 76, 82d Cong.) there were transferred 11,269,533 Tax gallons produced Change tax gallons of distilled spirits from registered distilleries and internal Kind of spirits revenue bonded warehouses to industrial alcohol plants and industrial Fiscal year Fiscal year Amount Percent 1951 1952 alcohol bonded warehouses. After transfer these spirits are not separately reported but are included in statistics as alcohol. By registered distilleries: Production of rectified products.—The total tax-paid domestic and

rhisky: I 1 84,025,801 —63,604,379 1eg imported distilled spirits and wines used in the production of rectified Bourbon 147,630, 180 9, 517, 107 —7,824, 555 row Rye 17, 341, 662 products during the fiscal year 1952 amounted to 94,041,702 proof 9,273,156 —25,973, 281 7 I Corn 35, 246, 437 76,993 —76, 993 g

gallons, consisting of 29,392,847 proof gallons of whisky, 40,275,918 Scotch-type 727,889 —4,679,289 Other : 5, 407,188 proof gallons of spirits, 20,444,551 proof gallons of alcohol, and 158, 507 —49. 7 Total 205, 702,480 103, 543,953 3,928,386 proof gallons of other materials. 184, 655 3, 270 —102,158, 385 —98.2 Brandy The total production of rectified products for the fiscal year 1952 Rum: 240, 828 148.499 —92,327 —38.3 Beverage 1,763,339 —26,015 —1.5 amounted to 93,927,938 proof gallons, consisting of 83,145,894 proof Industrial 1,789,354 1,911, 838 —118,342 —5.8 gallons of whisky, 4,109,710 proof gallons of gin, 3,482,925 proof Total 2.030, 180 8, 962, 289 8,156,782 —805, 507 —9.0 gallons of cordials and liqueurs, and 3,189,409 proof gallons of other Gin 148, 101 362,007 +213,906 +144. 4 Vodka 62,814, 538 —85,450,434 —57.6 products. The total rectified production in 1951 was 122,373,347 Spirits 148,264,970 365,292,655 176,792,386 —188, 500, 269 —51.6 proof gallons. (Included in the Appendix are data covering produc- Total tion of rectified products and showing quantities of domestic and By fruit distilleries: 11,399,831 9, 517, 770 —1,882,061 —18.6 imported spitittand wives used therein.) Brandy 35, 555,625 +10, 795,315 +43. 6 Spirits 24, 760, 310 Consumption -o ilisttlled spirits.—The total distilled spirits bottled 45,073, 395 +8,913,254 +24. 6 Total 38,160, 141 during the year (exclusive of distilled spirits bottled for exporta- 401, 452, 796 221,865,781 —179,587,015 —49.7 tion) amounted to 159 1687,467 wine gallons, of which 109,169,682 Grand total wine gallons were rectified products, 41,435,431 wine gallons were t Represents bourbon mash whisky, rye mash whisky, etc., so designated by virtue of being packaged unrectified products (other than bottled-in-bond), and 9,082,354 in re-used cooperage. wine gallons were bottled-in-bond products. This compared with a internal revenue total of 195,068,320 wine gallons bottled during the fiscal year 1951. Tax-paid withdrawals of distilled spirits.—The Stocks of distilled spirits.—The tax must be paid on all alcoholic liquors withdrawn for domestic total stocks of whisky, brandy, beverage use. Tax is also paid on distilled spirits withdrawn for use rum, gin, vodka, and spirits as of June 30, 1952, amounted to 937,156,333 original tax gallons, as compared with 901,106,188 orig- in the manufacture of certain nonbeverage products such as medicinal inal tax gallons as of June 30, 1951, an increase of 4.0 percent. The preparations, flavoring extracts, etc. The total tax-paid withdrawals stocks of whisky increased from 751,233,178 original tax gallons as of of all distilled spirits (including alcohol) amounted to 141,790,630 June 30, 1951, to 767,557,977 original tax gallons as of June 30, 1952, tax gallons during the fiscal year 1952, as compared with 174,625,188 or 2.2 percent. The stocks of whisky 4 years old or older amounted tax gallons for 1951. to 196,389,534 tax gallons as of June 30, 1952, as compared with Tax-free withdrawals of distilled spirits:—The law permits alcoholic liquors to be removed free of tax under certain conditions. Generally, 155,564,166 tax gallons as of June 30, 1951, an increase of 26.2 percent. The stocks of spirits increased from 134,816,711 original tax gallons tax-free withdrawals may be made for export, for use of the United as of June 30, 1951, to 151,959,204 original tax gallons as of June 30, States, for hospital and experimental purposes, etc. During the 1952, or 12.7 percent. fiscal year 1952 a total of 52,880,182 tax gallons of distilled spirits Fermented malt liquors.—Production were withdrawn tax-free, as compared with 45,080,342 tax gallons of fermented malt liquors during the fiscal year amounted to 89,600,916 barrels, or 0.7 percent for 1951. Included in the total tax-free withdrawals were 38,262,302 tax more than the preceding year (88,976,226 barrels). Tax-paid with- drawals were 84,293,646 barrels, or 1.3 percent more than the pre- gallons of distilled spirits (spirits—fruit and brandy) for fortification ceding year (83,246,162 barrels). Tax-free withdrawals for export of wine, as compared with 32,063,968 tax gallons in 1951. were 1,143,551 barrels, an increase of 284,297 barrels as compared There were 8,852,680 tax gallons of distilled spirits withdrawn for with the fiscal year 1951. use of the United States, as compared with 9,532,295 tax gallons Wines.—Production during 1951. This included 8,784,417 tax gallons of spirits in 1952 of still wines amounted to 169,121,331 wine for use by Government-owned plants in the production of butadiene gallons, 24.1 percent more than the preceding year (136,300,127 for the synthetic rubber program, as compared with 9,509,670 tax wine gallons). Tax-paid withdrawals of still wines amounted to 121,808;732 wine gallons, 1.2 percent less than the preceding year gallons for this purpose during 1951. Transfers in bond of distilled spirits to industrial alcohol plants (123,253,307 wine gallons). Tax-paid withdrawals of domestic authority of Treasury Decision 5864, sparkling wines amounted to 22,500,104 half-pint units, a decrease and bonded warehouses.—Under of 5.4 percent from the preceding year (23,789,448 half-pint units). REPORT OF COMMISSIONER. OF INTERNAL REVENUE 14 IMPORT ON OPERATIONS 15 Tax-paid withdrawals of vermouth produced at wineries amounted to- distilleries and internal revenue bonded warehouses. After transfer 2,744,432 wine gallons, an increase of 2.7 percent from the preceding this alcohol is not separately reported but is included in statistics as year (2,673,420 wine gallons). Tax-paid withdrawals of aperitif spirits. • wines produced at wineries amounted to 217,975 wine gallons as Production of vinegar.—The production of vinegar by the vaporizing compared with 234,881 wine gallons for the preceding year. total ethyl alcohol process for the fiscal year 1952 amounted to 9,327,613 gallons (100- Production and importation of ethyl alcohol.—The grain strength) as compared with 8,884,283 gallons for the fiscal year production for the year amounted to 467,389,720 proof gallons, as 1951. compared with 444,935,011 proof gallons for 1951, an increase of 5.0 Production of volatile fruit-flavor concentrates.—The production of percent. The total withdrawals from customs custody for the fiscal volatile fruit-flavor concentrates for the fiscal year 1952 amounted year 1952 amounted to 131,831,458 proof gallons as compared with to 345,312 wine gallons as compared with 387,980 wine gallons for 200.379,401 proof gallons for 1951, a decrease of 34.2 percent. the fiscal year 1951. alcohol withdrawn Tax-free withdrawals of ethyl alcohol.—Primarily, Laboratory activities.—The laboratory performs all the chemical tax-free is for denaturation. The total tax-free withdrawals of ethyl research and laboratory work for the Bureau of Internal Revenue and alcohol during the year, amounted to 608,847,206 proof gallons of analyzes samples submitted by the Bureau of Narcotics. It also domestically produced ethyl alcohol (including imported alcohol collaborates with the Association of Official Agricultural Chemists in mingled with domestic alcohol). developing and selectirr,g methods of analysis for official adoption. The total quantity of domestic and imported ethyl alcohol with- The United States raid and Drug Administration, Bureau of Customs, drawn for denaturation during the year amounted to 489,788,861 Department of Commerce, Tariff Commission, The Committee of proof gallons as compared with 455,999,873 proof gallons for 1951, Revision for the Pharmacopeia of the United States, The Committee an increase of 7.4 percent. (This represents the quantity of domestic on National Formulary, members of Congress, and representatives of and imported alcohol, and spirits produced by registered distilleries other nations often confer with the Bureau's laboratory personnel. and redesignated upon receipt at denaturing plants as alcohol, which at denaturing plants for denaturation.) The total Collaborative work is done with the United Nations to improve the was actually used methods of assaying opium and to determine the country of origin. quantity of domestic and imported ethyl alcohol withdrawn for use The field laboratories received during the fiscal year 40,707 samples, of the United States amounted to 116,536,570 proof gallons, of which which is 2,494 more than during the preceding year. The field chem- 114,273,530 proof gallons were withdrawn tax-free for use by Govern- ists spent 1,034.0 days in court and 205.9 days in inspections, which is ment-owned plants in the production of butadiene for the synthetic 435.2 more than the preceding year. Of the samples examined by the rubber program. During the year 2,336,133 proof gallons of domestic field laboratories, 37.7 percent were narcotics. The Washington lab- ethyl alcohol was withdrawn for hospital.? scientific, and educational oratory received 4,472 samples, 828 more than during the preceding year. use. the year there were Production of denatured alcohol.—During Inspection astirititts.—Ittspentietis of plants and permittees by field produced 261,500,458 wine gallons of specially denatured alcohol, as office personnel during the year totaled 138,941 of which 2,753 were compared with 243,998,614 wine gallons for the fiscal year 1951; and made pursuant to original applications filed by persons entering the 993,027 wine gallons of completely denatured alcohol, as compared beverage or industrial alcohol industries. There were 2,563 tobacco, with 1,438,564 wine gallons for the fiscal year 1951. The total pro- cigar and cigarette, and tobacco products factories and storage duction was 262,493,485 wine gallons, as compared with the total' warehouses inspected during. the year. production of 245,437,178 wine gallons for 1951. Final administrative review of the action taken with respect to The quantity of specially denatured alcohol used in the manufacture applications, notices, bonds, plats, plans, and other documents re- of synthetic rubber amounted to 72,682,818 wine gallons for the fiscal quired by law and regulations to be filed in connection with new year 1952, as compared with 17,415,696 wine gallons for 1951. the year, establishments, discontinuarrees, changes in premises, equipment, and Tax-paid withdrawals and stocks of ethyl alcohol.—During personnel, was given 20,630 items, an increase of approximately tax-paid withdrawals of ethyl alcohol amounted to 27,693,219 proof 3,000 over the preceding year. gallons, as compared to 42,824,251 proof gallons for 1951. Basic permits.—The Federal Alcohol Administration Act requires all As of June 30, 1952, the stocks of domestic and imported ethyl distilled-spirits bottlers, rectifiers, and wine blenders, as well as pro- alcohol amounted to 88,376,108 proof gallons, as compared with ducers (other than brewers)', importers, and wholesalers of alcoholic 118,766,184 proof gallons as of June 300051, a'- decrease of 25.6 beverages to secure basic permits. The number of outstanding basic percent. Transfers in bond of ethyl alcohol to registered distilleries and internal permits of all classes in effect on June 30, 1952, totaled 17,105 as authority of Treasury Decision compared with 17,686 in effect at the end of the preceding year. revenue bonded warehouses.—Under Tables reflecting permit activity under the Federal Alcohol Adminis- 5864, effective November 7, 1951, issued pursuant to House Joint tration Act during the year, and showing the number of Resolution 73 (Public Law 76, 82d Cong.), there were transferred permits of each class in effect on June 30, 1952, by States, are included in the 11,641,154 proof gallons of domestic ethyl alcohol from industrial Appendix. alcohol plants and industrial alcohol bonded warehouses to registered 16 REPORT OF COMMISSIONER OF INTERNAL REVENUE REPORT ON OPERATIONS 17 All basic permit application forms were revised to require applicants Interlocking directorates.—Eighty-five interlocking directorate appli- to submit more detailed information respecting their business histories, cations., submitted pursuant to section 8 of the Federal Alcohol financial standings, and reputations as law observers. As a further Administration Act, were received and approved. safeguard, new procedures were devised to permit the Washington Seizures and arrests.—Violations of the internal revenue liquor laws, headquarters office to post-audit all original permit issuances by the as reflected by enforcement statistics for the number of stills and district offices. In addition, there has been published in the Federal gallons of mash seized, continued to increase. This upward trend Register a notice of the proposed amendment of the procedural was first observed in December 1947 following the abandonment of regulations to make available to the general public certain data with sugar rationing in June of the same year. The increase m violations respect to applicants for basic permits. has been confined principally to the Southern States and a few metro- Labels.—The Federal Alcohol Administration Act provides that no politan areas on the east coast. The underlying reason for the large person engaged in business as a bottler or importer shall bottle, or volume of violations in the Southern States is the preponderance of low remove from customs custody for consumption, any distilled spirits, income groups which furnish the demand for cheap spirits, coupled wine, or malt beverages, unless he has obtained and has in his posses- with the fact that more than 40 percent of the population is located sion a certificate of label approval, or certificate of exemption from in local option counties, where tax-paid liquor is not readily available. label approval, covering the labels affixed to the products domestically During the fiscal year 10,269 illicit stills were seized, together with bottled or withdrawn in bottles from customs custody. In the case of 5,700,599 gallons of mash, 160,738 gallons of illicit liquors, and 2,183 malt beverages, the labeling requirements of the Act are applicable automobiles and trucks valued at $2,817,032. In connection with only to the extent that the laws of the State into which such malt the seizures of automobiles and trucks, 124 administrative petitions beverages are introduced are similar to the Federal malt beverage for remission or mitigation of forfeiture were processed and disposed of. labeling requirements. During the year, 33,575 applications were There were 9,851 persons arrested for violations of the internal received as compared with 36,173 applications received during the revenue liquor laws, and recommendations were made for the prosecu- fiscal year 1951. A table, showing the volume of work handled in this tion of 8,250 persons in Federal courts in alcohol tax cases, a decrease field during the year, appears in the Appendix. of 783 or 8.7 percent as compared with 1951. Advertising.—For the purpose of determining compliance with the The following table summarizes seizures and arrests for liquor law advertising provisions of the Federal Alcohol Administration Act and violations during the fiscal years 1948 to 1952: regulations issued thereunder, 153,153 alcoholic beverage advertise- ments, appearing in 30,275 publications, were reviewed during the Seizures and arrests for liquor law violations, fiscal years 1948-1955 year. Radio continuities numbering 5,700 and 3,926 pieces of " point- of-scale" advertising material were also examined Regulatory action Number of a corrective nature was taken in 964 cases where minor technical Fiscal year Gallons Number of Number of of of cars and persons irregularities were observed. Five cases involving more serious stills mash trucks irregularities were closed upon the acceptance of offers in compromise. arrested 1948 As a service to the industry and to forestall the dissemination of 1949 6, 757 2, 715 801 1, 177 7.640 improper advertisements, the division reviewed and commented upon 1950 8.008 3, 661, 432 1, 596 8, 915 1951 10,030 4, 892,698 2, 074 10, 236 2,893 advertisements or advertising campaigns prior to publication. 1952 10,177 5, 545, 411 2, 246 10,384 10, 269 Trade practices.—Administrative proceedings, looking toward the 5, 700, 599 2, 183 9,851 possible suspension of the basic permits of three wholesale liquor dealers, were instituted on charges of violations of the terms and con- There were 3,540 floor stocks tax cases perfected from November 1, ditions of their basic permits through unlawful "tie-in" sales of ills- 1951, the effective date of the Revenue Act of 1951, through June 30, tilled spirits. One of the proceedings culminated in a 15-day permit 1952, involving the seizure of 40,754 gallons of tax-paid liquors valued suspension to take effect in July 1952, the other two are pending at $941,575. before hearing examiners. Four other basic permits were suspended On April 5, 1951, enabling legislation enacted by the legislature of for varying periods and one was revoked for violations of the Federal the State of Oklahoma was signed by the Governor entitling the State Alcohol Administration Act and the internal revenue laws. Four- to protection under the Liquor Enforcement Act of 1936 on the part teen permits were revoked, as required by law, because the holders of the Federal Government. The Act prohibits importation or the thereof had not engaged in operations for more than .2 years; 4 per- attempt to import liquors into a dry State unless in accordance with mits were annulled; and 128 cases (76 involving . unlawful operations the provisions of the State law. As a result of enforcement activities without permits, 26 involving trade practice 'violations, and 26 in- in Oklahoma under this Act during the fiscal year, 47 persons were volving labeling violations) were closed upon the acceptance of offers arrested, and 40 vehicles and 1,525 wine . gallons of tax-paid spirits in compromise, pursuant to section 7 of the Federal Alcohol Adminis- valued at $81,267, were seized. tration Act.

IS REPORT OF COMNIRMIONER • OF INTERNAL REVENUE REPORT ON OPERATIONS Tobacco activitita—Tobacco activities involve administration of the 19 laws and regulations relating to (1) the purchase, sale, and movement of leaf and other types or classes of tobacco material; (2) the manu- offers in compromise in cases where criminal prosecution has been facture, packaging, stamping or taxpayment recommended or criminal proceedings have been instituted; prepares l removal and sale of opinions construing the criminal and percentage penalty statutes; and chewing and smoking tobacco, snuff, cigars, cigarettes, and cigarette papers and tubes; (3) handles miscellaneous law questions involving criminal cases. At the the collection of the taxes imposed on such request of the Department of Justice or United States attorneys legal articles; and (4) the removal and shipment of such articles, without assistance is furnished in grand jury investigations; in preparation and payment of tax, for export, for use as sea stores, for use of the United States, and for other tax-exempt purposes. trial of criminal tax cases; and in preparation of briefs on appeal. During the year 1,414 cases involving Detailed statistics covering the manufacture, removal, and impor- 1,529 defendants and relating principally to income and wagering tax violations were transmitted tation of manufactured tobacco, snuff, cigars, and cigarettes, the re- to the Department of Justice. Of these cases 1,284 were recom- ceipt, shipment, and use of leaf and other tobacco materials, and the mended for prosecution, and in 130 prosecution was not recom- removal of domestic and imported cigarette papers and tubes, will be found in tables which appear in the Appendix. mended. Included in the cases referred to the Department of Justice Firearms program.—In September were 649 in the racketeer class, of which 426 were wagering tax cases. 1945 an intensive investigative The Chief Counsel's office concluded against recommending prosecu- program was started for the purpose of bringing about the registra- tion in 269 tion of machine guns, machine pistols, and other firearms coming cases. There were 1,830 cases received in connection with within the purview of the National Firearms Act. This program was criminal tax fraud matters (exclusive of alcohol and tobacco tax cases); necessitated by the fact that a large number of these firearms brought 1,079 cases were closed; and at the end of the year the closing inventory or sent to this country by members of the armed services were finding totaled 2,473 cases, of which 1,693 were awaiting prosecutive or closing action in the Department of Justice or the courts. The De- their way into the hands of criminals, by either illegal sale or theft, and were being utilized in the commission of violent crimes. partment of Justice returned 68 cases without prosecution. As of June 30, 1952, Indictments were returned against 1,063 defendants, and the grand a total of 107,321 investigations had been juries refused to indict 27 defendants. In the conducted, resulting in the registration with the Commissioner of cases reaching the trial Internal Revenue of 16,285 stage 74 defendants were convicted; 489 defendants in 446 cases en- firearms. During the fiscal year 1952, 175 cases involving violations of the Firearms Act were submitted tered pleas of guilty or nob contendere; indictments involving 72 de- fendants in 46 cases were dismissed or nol prossed; and 26 defendants to the Department of Justice for prosecution. in 10 cases were acquitted. LEGAL WORK ON CRIMINAL CASES The record on racketeer cases shows that indictments have been Special agents' recommendations for criminal prosecution are for- returned in 274 cases involving 392 defendants, and convictions were received in 133 cases involving 229 defendants. At the close of the warded to the regional or district offices of the Chief Counsel of the year 393 Bureau for decision as to whether institution of criminal proceedings is wagering tax cases were pending with the Department of Justice and United States attorneys. Of the wagering tax cases to be recommended to the Department of Justice. This procedure closed by the Department of Justice, more than 60 percent were dis- obtains for practically all classes of internal revenue taxes, including posed of by pleas of guilty or nob contendere. income, profits, estate, gift, and most miscellaneous taxes with the principal exception of alcohol and tobacco taxes. (As regards crim- In internal revenue liquor law violation cases prosecuted during inal cases involving violations of the internal revenue laws relating to the fiscal year, 6,109 persons were indicted and 5,122 persons convicted. distilled spirits and tobacco, the Liquor Enforcement Act of As of the close of the fiscal year 3,876 persons were awaiting grand 1936, the jury action, and 1,611 persons were awaiting trial. Federal Alcohol Administration Act, and various laws relating to fire- DELINQUENT RETURNS AND arms, the Chief Counsel's Office does not pass upon the reference of the COLLECTION OF DELINQUENT ACCOUNTS case to the Department of Justice but does assist in the prosecution of Delinquent returns.—In addition to examination of returns timely the case.) Law and fact letters or criminal reference reports are pre- filed, the enforcement work includes the securing and examination pared to accompany those cases which are forwarded to the Depart- of returns in cases where returns were not timely filed. As a result ment of Justice for criminal prosecution. Since January 8, 1952, of this work there were 1,352,128 delinquent returns secured in fiscal criminal tax cases other than wagering occupational tax cases, have year 1952, reporting tax liability of $163,163,178. This amount is been referred directly to the Department of Justice in Washington by included in the additional assessments shown on page the regional and/or district penal counsel. Wagering occupational tax 26. The number of delinquent returns secured during fiscal 1952, cases are referred directly to the various United States attorneys by together with amounts collected or reported for assessment, are regional and/or district counsel The Chief Counsel also considers compared with those for the preceding fiscal year in the following table:

229047-53-3

20 REPORT OF COMMISSIONER OF INTERNAL REVENUE REPORT ON OPERATIONS 21 Delinquent returns secured during fiscal years 1951 and 1952 legal entities are involved in proceedings under the Bankruptcy Act, Amount collected or re- Federal or state receiverships or other insolvencies (including insol- Number ported for assessment vent banks), assignments for the benefit of creditors, or corporate Type of tad dissolutions, or in the administration of estates of decedents, special Fiscal year Fiscal year Fiscal year Fiscal year 1951 1952 1951 1952 procedures have been devised in order to protect Federal tax interests and claims. These cases for the most peat involve court proceedings. Income 59,246 61,629 $27, 820, 250 $28, 837, 343 In such cases the Office of the Chief Counsel bears the responsibility Payroll 798,778 598 010 89, 782, 808 106,331.943 839,255 692, 489 26, 950, 004 27, 993, 892 in the Bureau for initiating and perfecting all legal actions which may Miscellaneous be necessary to protect the interests and claims of the United States. Total 1,697, 279 1, 352, 128 144,553, 062 163, 163, 178 During the fiscal year 1952 there were 9,790 such cases disposed of in which the Federal taxes claimed amounted to $52,327,030, and the Warrants for distraint.-Taxes are listed for assessment by internal amount collected was $17,725,302. Tables dealing with the handling revenue offices on the basis of liability shown on returns filed or as a of these cases appear in the "Appellate Work and Civil Litigation" result of the disclosure of additional tax liability subsequent to the section of the Appendix to this report. filing of the original return. After certification of the lists, notices Where suits are instituted to foreclose mortgages or other liens on are given each person liable to pay any taxes stated in the lists. property to which Federal tax liens have attached, the Office of the If any person neglects or refuses to pay such taxes within 10 days Chief Counsel also assumes prime responsibility in the Bureau for after the notice has been issued, it is lawful for the collector (director) initiating and perfecting all legal actions which may be necessary to of internal revenue or his agent to collect the taxes, with such interest protect the interests of the United States. Furthermore, where and other additional amounts as required by law, by distraint and applications are filed for the administrative discharge of property sale of personal property and real estate of the person delinquent in from the effect of Federal tax liens, the Office of the Chief Counsel the payment of these taxes. exercises original jurisdiction in connection with a number of such In order to collect by distraint it is necessary that a warrant for noncourt lien cases. During the fiscal year 1952, a total of 966 lien distraint be prepared. The warrant, issued over the signature and cases in court were disposed of, in which the amount collected was seal of the collector (director), sets forth all of the facts regarding the $186,070 and 466 noncourt lien cases were disposed of in which the account of the taxpayer and authorizes the performances of such acts amount collected was $1,847,192. Tables dealing with the handling' as necessary, within the requirements of law, to satisfy the taxes as of these cases appear in the "Appellate Work and Civil Litigation" shown in the statement of account. section of the Appendix to this report. In the fiscal year 1952, there were collected 1,389,297 distraint warrants involving $455,752,213 in past due tax liability. A break- APPELLATE WORK AND CIVIL LITIGATION down of these totals by kinds of tax involved discloses that 1,035,697 General.-A taxpayer who does not agree with an examiner's warrants in the amount of $331,346,953 involved income tax; 303,205 findings with reference to the tax due the Government, may request warrants in the amount of $104,905,033 involved withholding and a conference in the revenue agent's office in an attempt to reach employment taxes; and 50,395 warrants in the amount of $19,500,227 agreement; may ask for a hearing before the Appellate Staff, the involved miscellaneous taxes including taxes on distilled spirits. appeal agency of the Bureau; and may petition The Tax Court of There were 151,938 distraint warrants involving $51,066,513 re- the United States for a redetermination of the tax, if a deficiency is ported uncollectible in 1952; while 892,662 warrants totaling $692,177,- involved. An alternative to these avenues of appeal is to pay the 450 were pending collection at the end of the year. Part payments tax and sue for its refund in a United States District Court or the were being made on 228,622 of those pending. United States Court of Claims. The following table shows comparative data on warrants for dis- Where a conference is held in the revenue agent's office and no traint for the fiscal years 1949 through 1952: agreement is reached, the taxpayer may ask for a hearing before the Warrants for distraint Appellate Staff. If the taxpayer is not satisfied with decision reached by the Appellate Staff conferees, he may still petition the Tax Court Collected Returned as uncollectible On hand, end of period for a redetermination. Instead of filing a petition with the Tax Fiscal year Court, the taxpayer may pay the tax, file a claim for refund, and start Number Amount Number Amount Number Amount suit for refund in the United States District Court or the Court of Claims. Such a suit may be settled, after recommendation of the 1949 1,432, 541 $346, 509.480 222, 511 $33, 500, 793 1, 010, 810 $540,483,060 1950 1, 317, 879 368, 384, 768 237,367 50, 027,059 848,744 526, 121,823 Chief Counsel, by the Department of Justice, or it may go to trial. 1951 I, 341, 237 376, 506, 016 198, 380 55,967, 858 823,027 545, 885, 694 455, 752, 213 151, 938 51,066, 513 892, 662 692,177, 450 A taxpayer who has petitioned the Tax Court, may request a con- 1952 1, 389, 297 ference for the purpose of arriving at a settlement without a trial. Collection through litigation, by claims in noncourt proceedings, and Such conferences will involve Appellate Staff conferees. If such a individuals, corporations, or other settlement is reached, the court will enter a decision in accordance through discharges of liens.-Where with the stipulation between the parties, and a hearing will be unnec-

REPORT ON OPERATIONS 23 22 REPORT OF COMMISSIONER. OF INTERNAL REVENUE malfeasance, concealment, or misrepresentation of material fact or essary. In cases where no conference agreement is reached or no an important mistake in mathematical calculations. conference is requested, a hearing is conducted before the Tax Court. An exception to the Appellate Staff's jurisdiction is in issues arising If a hearing is held, the Tax Court may sustain the Commissioner's under section 722 of the Internal Revenue Code. In such cases the determination, may reverse the entire determination, or may call for Staff is subject to the authority of the Excess Profits Tax Council.' recomputation of tax in accordance with its findings and opinion. Similarly, the Appellate Staff may not eliminate the ad valorem fraud A taxpayer who does not agree with the decision of the Tax Court or negligence penalties except with the concurrence of the Chief may file a motion for rehearing or for reconsideration by the division Counsel. which heard the case; may file a motion for review by the full court; The progress in settlement of cases considered by the Appellate and may file a petition with a United States Court of Appeals for Staff prior to the filing of a petition with the Tax Court is shown review of the decision. below for the fiscal years 1951 and 1952. If the taxpayer desires to appeal from the decision of the court of appeals or the Court of Claims, a petition for writ of certiorari must Appellate Staff progress in the settlement of cases not before the Tax Court be filed with the Supreme Court of the United States. The granting [Income, profits, estate, and gift taxes] of the petition is in the discretion of the Supreme Court. Such a review is granted only for special and important reasons. Number of cases I Adjustments protested by taxpayers.—During the fiscal year 1952 Status taxpayers filed protests with respect to adjustments proposed by Fiscal 1951 Fiscal 1952 35,684 income, profits, estate and gift tax returns. examiners in Opening inventory 10, 340 10, 207 Conferences arranged in revenue agents' offices in response to such Received 7, 236 7, 642 protests were held before personnel entirely different from those who Dispositions, total 7, 369 7, 772 made the original recommendations. Decisions were reached after a Settled by agreement 4, 374 4, 634 Defaulted after statutory notice 776 802 study of the examiners' reports, the evidence presented by the tax- Petitions filed after statutory notice 1, 568 1,570 Unagreed overassessment and claims rejections 429 522 payers in their protests, and any additional facts brought out in the Returned to revenue agent without action 168 173 course of the hearings. Transferred to other Bureau agencies 54 71 The number of adjustments protested and the nature of their Closing inventory 10, 207 10, 077 disposal are shown in the following table for the fiscal years 1951 and 1952: A case may Include several tax years of one taxpayer. Progress in disposition of protested cases by revenue agents' offices Nom—Since appellate jurisdiction with respect to excise and employment taxes was assigned to the Appellate Staff late in the fiscal year, no cases of either claw are included in this report. [Income, profits, estate, and gift taxes]

Number of returns involv- During fiscal year 1952, in addition to the above dispositions, 815 ing tax adjustments subsidiary cases were closed in accordance with action taken in the Item respective principal case, as compared to 436 such cases closed in 1951. Fiscal year Fiscal year 1951 1952 There were 10,077 cases on hand June 30, 1952, of which 8,867 cases, involving $348,765,459 additional taxes and penalties and $62,195,528 48, 028 35, 684 proposed overassessments, were awaiting action by the Appellate Protests received Protests disposed of: 34,460 26,644 Staff, and 1,210 cases involving $49,852,959 additional taxes and Closed by agreement or payment 4, 415 4, 355 penalties and Unagreed, statutory notices issued 10, 641 13 701 $4,802,650 proposed overassessments were awaiting Unagreed, referred to Appellate Staff taxpayers' action on statutory notice. 49,516 39,700 Total disposals Cases petitioned to the Tax Court.—A taxpayer who does not agree to a deficiency determined by the Bureau and desires a judicial opinion of his case may file a petition asking a redetermination of the tax by Appellate Staff consideration of cases not before the Tax Court—Where a taxpayer is not satisfied with the decision reached after a conference The Tax Court of the United States, an independent agency having in a revenue agent's office, he may request a hearing before conferees no connection with the Bureau of Internal Revenue. of the Appellate Staff. The Appellate Staff acts on behalf of the After a petition is filed with the Tax Court, the Appellate Staff, Commissioner to review protested determinations of tax liability in with the concurrence of the Chief Counsel, may arrange a settlement by Federal income, profits, estate and gift taxes prior to the filing of a stipulation of a case before it goes to trial. However, the Staff may petition to The Tax Court of the United States. Late in the fiscal not modify any determination of an issue under section 722 except with the jurisdiction was extended to include Federal excise taxes concurrence of the Excess Profits Tax Council, and may not act in year 1952 any case in which criminal prosecution is under consideration. (other than alcohol, tobacco, narcotics, and firearms) and employment taxes. 1 On April 28,1952, executive direction of the Excess Profits Tax Council was assigned to the Head of the Any settlement effected by the Appellate Staff is final and will not Appellate Staff. be reopened unless it is shown that the disposition involved fraud, 24 REPORT OF COMMISSIONER OF INTERNAL REVENUE REPORT ON OPERATIONS 25

The Chief Counsel's office has exclusive authority to represent the Tax court cases on review in courts of appeal or Supreme Court, fiscal year 1952 Commissioner in the defense of all cases pending before The Tax Court of the United States which represent appeals from determina- Number of cases tions by the Commissioner with respect to income, excess profits, Status In courts of In Supreme estate, and gift taxes. The defense of such cases includes the prep- appeal Court aration of motions, answers, and other pleadings, the conduct of Pending, July 1, 1951 351 hearings thereon, the trial of the cases in the Tax Court, the prepara- Appealed 3 tion and submission of briefs and recomputations, and the conduct 334 4 Closed, total 207 2 of hearings on recomputations, motions, etc. Favorable to Commissioner 126 Favorable to taxpayers 270 2 Cases petitioned to the Tax Court which were closed during the Modified fiscal year 1952 numbered 4,913. The Appellate Staff, with the con- 18 currence of the Chief Counsel, effected settlement by stipulation in Pending, June 30, 1952 414 5 3,373 of these cases, while 596 were closed by default of the taxpayer. The Tax Court rendered decisions on the merits in 944 cases. Excludes cases in which the Supreme Court granted certiorari. The table which follows shows the disposition of petitioned cases During the fiscal year 1952 there were 367 cases involving tax by the Appellate Staff, Office of the Chief Counsel, and the Tax Court issues decided by the Federal civil courts (exclusive of bankruptcy, during the fiscal year 1952: receivership, insolvency, compromise, and liquor cases) in addition Disposition of cases petitioned to The Tax Court of the United States, fiscal year 1952 to the appeals from Tax Court decisions noted above. [Income, profits, estate, and gift taxes] The distribution of these cases, by the court involved and according to the nature of the decision, is as follows: Number of Status cases Number of Internal Revenue cases' decided by the Federal civil courts during the fiscal year 1952

Pending, June 30, 1951 8, 610 6, 402 Partly for Filed and reopened For the Against and partly Courts Govern- Dispositions, total 4, 913 Govern- against Total Settlement by stipulation 3,373 ment ment Govern- Dismissed 595 ment Decision on merit, total 944 Favorable to Commissioner 369 District courts aw Favorable to taxpayer 175 137 15 282 400 Courts of appeal 20 1 59 Modified Court of Claims -

. 16 23 Supreme Court Pending, June 30, 1952 10,095 3 Total 178 173 le 367

It is the custom to publish in the Internal Revenue Bulletin acqui- Excludes bankruptcy, receivership, insolvency, compromise, and liquor eases and cases originating in escences and nonacquiescences of the Commissioner in adverse The Tax Court of the United States. decisions of the Tax Court. These actions are initiated in the Office As of June 30, 1952, there were of the Chief Counsel. During the fiscal year ended June 30, 1952, 2,447 civil cases involving tax decisions of the Tax Court, and questions pending in the district courts, 73 pending in courts of appeal, acquiescences were published in 204 324 pending in the Court of Claims, and acquiescences in part in 19 decisions. Nonacquiescences were pub- 2 pending in the Supreme Court. lished in 54 decisions and nonacquiescences in part in 11 cases. CHANGES IN TAX LIABILITY Federal courts.—Tax issues ordinarily arise in the Federal and civil courts in one of the following ways: (1) through appeal by the ADDITIONAL TAX ASSESSED taxpayer or the Commissioner from a decision of the Tax Court; Understatements of tax were found on slightly more than half of (2) by institution of suit in a district court or the Court of Claims by the 4 million tax returns examined during the year. These under- a taxpayer for refund of taxes or for injunction; (3) by institution of statements of tax were due to errors in reporting income, in claiming suit by the United States to collect taxes or recover an erroneous exemptions or deductions, or in computing the tax. The amount of refund; or (4) by the filing by the United States of a tax claim in an the deficiencies adjusted to reflect any change resulting from the fore- insolvency or other debtor proceeding. going appellate procedures, was assessed against the taxpayers. The Chief Counsel's Office exercises general supervision over civil The total amount of tax deficiencies, including interest and pen- tax litigation and advises and participates with the Department of alties, assessed against taxpayers during the fiscal year 1952 was Justice in the handling of such litigation. $1,840,162,452. This amount includes duplicate assessments against The progress of cases in appellate courts on appeals from decisions transferees and jeopardy assessments made to protect the interest of of the Tax Court for the fiscal year ended June 30, 1952, is indicated the Government, but excludes collections resulting from distraint by the following table: warrants. 26 REPORT OF COMMISSIONER OF INTERNAL REVENUE REPORT ON OPERATIONS 27 9 ass d

2 9 ETS' 999' WE ' 1 236 9 11

The following table shows a comparison of additional assessments 31' 36 d 61 80 2 We ' 2 379 bairr em ' de 3 gt 3 022 on 16I

1952, by general classes of tax: 9, 1951 and 9, for the fiscal years d) 1 49 27, 5

lu 232, Is$ 51 '1 de et '9 inc Additional assessments, fiscal years 1951 and 1952 L 15, fun d ( Increase or • t re a

Fiscal year 816 '

349

decrease (-) tto ' L wo lowe 16 ' l 46 ft 782 General classes of tax 797 ' 297 7 216

541 a ti

19 - S 6 9 t a 91 699 ' 28' 9, 1, 1 61 56, 1951 1952 Amount Percent amoun 31 342, 969, 293, 274 R 0 in 36 2, 2$ 0, teres 17, 2

Individual income tax $797, 595, 666 $832, 705,181 $35,109, 515 4.4 In Corporation income tax 496, 281, 244 500, 740, 752 4,459, 508 0.9 0

989 696 890' 280, 934, 526 201, 972, 933 -78, 960, 593 803 Excess profits tax d i 97 43 66 10 672 924 468 9 0 ' a 362 0 966 951 095 ' 3261 RiEnfl'

393' 9 628 6, -39,391, 570 -2. 6 9, 1, 535, 418, 866 p 1, 574, 810, 436 t tt NI. Cq 6, 2, 1, Total income and profits taxes m.o. 31 41 782, 18 420, 875, 18 529, 234, 3

c15323g6 0 t ' 27, 809, 448 26.4 '1 105, 265, 937 133, 075, 385 d or 8 Payroll taxes 4 95, 6 ' 110, 2, 545,166 3, 551, 251 1,006, 085 39.5 867, Alcohol and tobacco taxes de 22 1 Estate and gift taxes 129, 922,349 121, 420, 925 -8, 501, 474 -6. 5 1, 690 963

6.0 fun ses ' 339 2,636, 593 9 SIP ' 44, 059, 482 46, 696, 025 ' 369 oeo ' Zit Excise taxes WO 0 7 6 501 966 989 ' 6 ' 840 ' t re 812

19 MEM W9 ' 321

-0.9 918 -16, 440, 918 80 1, 856. 603, 370 1,840.162, 452 ose ' 666 Grand total 90 ' 20 01 51, 16, 9 ' 600, 357,

' 6 t 6 "Rgc 291, L 1 T 8 S 428

additional assessments 2,

1952 81

The above comparison shows that in 9

R A - 134, Amoun 644, 208, 1951.

$16,440,918, or 0.9 percent, from fiscal , decreased by 1,

/

060' o 1 There were small increases in most of the general classes of tax, but I1' r! ' 9£ 38 138 616

150 - ' 3961

2 rwp $78,960,593. This is Ige ro

decrease of 9

profits tax there was a 93

excess 8 3, in the -

a m .

10,

002 40 the excess profits tax under section 710 of the Internal Revenue Code, 'tz ao 1, 28, which was repealed for tax years beginning after December 31, 1945. quff The work on returns of this tax is almost completed. The excess i profits tax provided by the Excess Profits Tax Act of 1950 is included x with corporation income tax, and only a few returns reporting such 1961 tax were closed in fiscal year 1952. 0

0

OVER ASSESSMENTS AND OVERPAYMENTS

The examination of returns and the consideration of taxpayers' a claims often disclose that more tax has been assessed than is properly due the Government under the internal revenue laws. The determina- Se tion of these overassessments often involves the settlement of tax- payers' claims filed under various provisions of the Internal Revenue Code, and requires the time and effort of many of the technical per- sonnel of the Bureau. An overassessment of tax may be applied as an abatement of unpaid tax; as a credit against taxes due; as a refund if all other taxes have been satisfied; or a combination of these adjustments, as circumstances am may require. Interest at the rate of 6 percent is allowed on all over-

ove,

payments, except in cases on which interest is restricted or prohibited xo r JO

by law. taxes =iv t 30, 1952, the amounts of over- sou Ag

During the fiscal year ended June l men D assessments or overpayments determined were applied as follows: s:

a $490,696,654; and refunds, loy Abatements, $1,375,138,836; credits, taxe ises c ti t tax

$2,333,544,315. insurance po

including interest, nue

d emp e l revenue refunds and repayments made to ' ex Refunds and repayments.-The taxes men ions ome an t l reve ue: fits taxpayers (including draw-backs and stamp redemptions), together ld-ag ilers loy terna inc n

ro mp ta t- in s: for the fiscal year 1952 and were d o $2,333,544,315 0- with interest, totaled rance de terna income d p t su d re U8 an l A in d emp l reve

made from the appropriation "Refunding internal revenue collections, re men a f in an tamp

B 2 ay t o

" an ' an and prior years. mp 1952 r f s tax, idu

llaneous terna ds ta s o k tax rep Following is a summary of the refunds paid, showing the number tiremen in ome men l ics div 3, ing l s p t isce

tax mme fun income toc x e taxes turers

in tion er ta ho inc d re

and amounts of refunds and repayments allowed and the amounts of loy ta iv l income ous l s l taxe bacco l ing her l m l re fac ion To ta mp 1, te t ho er

interest paid thereon, with respect to each general class of tax during mp r ita ta ta Alco Wag Silver Ot Narco To ilroa her bacco ta de To llane he idua ora To the fiscal years 1951 and 1952: To Excess Ot Ra Une Cap Es Gift tax Alco To Wag Re Manu Ot rp div Co In Misce 2,

28 REPORT OF COMMISSIONER OF INT'E'RNAL REVENUE REPORT ON OPERATIONS 29

Excessive prepayments of individual income tax.-During the last Applications for excess profits tax relief (sec. 722, Internal Revenue Code)-Cumu- half of the fiscal year 1952 there were 29,831,430 individual income lative receipts and disposals, fiscal years 1942-1952 tax returns received by field offices of the Bureau showing prepay- ments of 1951 income tax by the taxpayers in excess of their 1951 Excess profits tax reduction ' Item Number Increase in tax liability. By July 31, 1952, the processing of these returns was income tax virtually completed, with 29,043,194 overpayments totaling $1,903,- Claimed 1 Allowed

826,861 scheduled for refund to the taxpayers and 590,286 amounting Net receipts (excluding transfers and reopened to $179,999,253 scheduled for credit to taxpayers' accounts. cases) 54, 642 $6, 556, 949, 082 Disposals: This compares to the 30,751,170 overpayment returns filed for Allowed in whole or in part 16,120 1,109, 081, 749 $325, 423, 087 $134, 777,661 1950 with a total of $1,606,690,988 scheduled for refund to taxpayers Disallowed 18, 807 1, 455, 986, 851 Withdrawn 10,826 891, 354, 074 and $151,566,247 scheduled for credit to taxpayers' accounts. The Eliminated 3 3, 535 22, 142, 302 following table shows for the tax years 1948-1951 the number and Total disposals 49, 288 3.478, 564, 976 325, 423, 087 134, 777, 651 amount of prepayment refunds and credits. On hand June 30, 1952: In agents' offices: Overprepayments of individual income tax scheduled for refund or credit, tax years Awaiting investigation 6 5, 468, 466 Under investigation 29 115,410,868 1948-51 Investigated, awaiting field conferences, etc 67 91, 858, 542 In Excess Profits Tax Council: s Refunds Credits Awaiting decision 600 773, 246, 713 Taxable year Awaiting review 198 254,309, 639 Unagreed, statutory notice outstanding or to Number Principal Interest be issued 1, 604 614, 242, 239 Before the Tax Court 2, 155 390. 907, 203 In process of closing 695 832,940, 426 1948 36, 595, 450 $2, 131, 276, 668 $1, 464, 013 1,130, 943 $302.603,844 1949 28,255,094 1,475, 432, 894 721, 951 885, 831 237, 105, 584 Total pending 5,354 3,078,384,106 1950 29, 835, 574 1, 606, 690, 988 1, 752, 834 661, 780 161, 566, 247 1951 29,043, 194 1, 903, 826, 861 3, 622, 692 590, 286 179, 999, 253 1 Amount of tax reduction claimed does not take into account tax adjustments made subsequent to the filing of relief applications. 2 Consists of applications eliminated from further consideration upon agent's finding that no tax liability existed. Claims for relief from excess profits tax.-Section 722 of the Internal Based on field office reports. Includes cases in transit. Revenue Code provides that a corporation may file an application for relief from excess profits tax (Revenue Act of 1940) in any case Tentative adjustments.-Section 3780 of the Internal Revenue Code in which the taxpayer establishes that the tax computed using the provides that a taxpayer may file an application for a tentative carry- average base period net income would result in an excessive and back adjustment of the taxes for preceding taxable years affected by discriminatory tax. In its application the corporation must establish a net operating loss carry-back or an unused excess profits carry-back what would be a fair and just amount representing normal earnings from any taxable year ending on or after September 30, 1945. to be used as a constructive base period net income for the purposes Since April 1, 1952, these applications for tentative carry-back of computing the excess profits tax. adjustments have been processed in the field offices. The field offices Applications filed for relief under section 722 represent only a small act upon the applications and, if found acceptable, allow and schedule percentage of the total number of claims filed by taxpayers, but they for refund, credit, or abatement decreases in tax in an amount of involve many problems of procedure, interpretation, and general $10,000 or less resulting from tentative carry-back adjustment. The policy. In respect to these claims, the technical personnel issue determination involving consolidated returns, decreases in tax in interpretative rulings, review recommendations of the examining excess of $10,000, and certain other special features are subject to officer, hold hearings on unagreed cases, and give technical assistance review and scheduling by the Washington office. to the legal staff with respect to claims pending before The Tax A comparison of work done on applications for tentative carry- Court of the United States. back adjustments for fiscal years 1951 and 1952 is shown in the The work of adjusting section 722 claims is nearing completion. following table. The following cumulative report shows the number of applications for relief under section 722 which have been received and disposed of by the Bureau through June 30, 1952:

REPORT ON OPERATIONS 31 30 REPORT OF COMMISSIONER OF INTERNAL REVENUE and 1952 Review of overassessments exceeding $200,000.-In cases where the Summary of applications for tentative adjustments, fiscal years 19.51 net amount of the tax reduction, whether abatement, credit, or refund, [Individual and corporation income and profits taxes] exceeds $200,000, the allowance is reviewed by the Chief Counsel's office. These cases include overassessments of income, excess profits, Amount - Amount Number estate, gift, and miscellaneous taxes proposed for allowance; allow- Status claimed allowed ances already made of tentative amortization and carry-back adjust- ments of income and excess profits taxes; and interim refunds allowed 175CAL YEAR 1951 to taxpayers entitled to the benefits of section 22 (d) (6) of the Internal 3, 422 $17, 221, 734 Pending at beginning 22, 836 94, 712, 460 Revenue Code. Any deficiencies coupled with such tax reductions Applications received 106, 712,651 $101, 548,598 Applications adjusted, total 24, 919 under review are likewise subject to review. 21,930 94.24& 933 94, 356, 191 Allowed in whole 1,348 8, 567,794 7, 192,407 A report is prepared for the Joint Committee on Internal Revenue Allowed in part 1,641 3,897,924 Rejected Taxation as required by section 3777 of the Internal Revenue Code 5, 221, 643 pending at end 1,339 where the net overpayments of income, excess profits, estate, or gift meat YEAR 1052 taxes exceed $200,000. During fiscal year 1952, there were reported 1, 339 5, 221, 543 to the Joint Committee of Internal Revenue Taxation, 213 cases Pendineat beginning 23, 608 127, 412, 303 Applications received 90,113,37790,113, involving total overassessments in the amount of $353,828,370. 20,369 95,298,830 Applications adjusted, total 18, 167 85, 634,373 Si, 737, 421 Allowed in whole 682 4, 376, ISO Allowed in part 11, 533, 502 OFFERS IN COMPROMISE Rejected 1, 340 4, 128 760 4,678 37,337, 216 Pending at end Under section 3761 of the Internal Revenue Code, the Commis- sioner, with the approval of the Secretary or Under Secretary of the Treasury, or of an Assistant Secretary of the Treasury, may compro-

Applications for tentative LIFO adjustments received during the mise for a lesser amount liabilities in any civil or criminal case arising fiscal year 1952 numbered four, with net tax reduction sought in the under the internal revenue laws before it is referred to the Department amount of $8,510,534. All of these applications were acted upon of Justice for prosecution or defense. Mutual concessions are es- during the year, resulting in allowances totaling $6,382,900. sential to a valid compromise agreement. Where liability is undis- r, Other claims.-In addition to the two types of claims described in puted, or has been established by a valid judgment and there is no the foregoing paragraphs, all other claims, involving all classes of doubt as to the ability of the Government to collect, there is no room tax which were processed by the Bureau in fiscal year 1952, numbered for "mutual concessions," and therefore no basis for a "compromise". 508,040. In cases where there is a bona fide dispute as to either a question of Included in this total were taxpayers' claims Form 843 for adjust- fact or of law with respect to liability for or collection of taxes, interest ment of tax (including amended returns showing a reduction in tax and/or penalty, there is room for mutual concession. The adequacy which are treated as Form 843 claims); claims for special refund of the concession or consideration sufficient to justify the acceptance under section 1401(a) of the Federal Insurance Contribution Act; of an offer in compromise is determined by the exercise of sound claims for redemption of tobacco and liquor stamps; and claims for discretion following an exhaustive analysis and evaluation of all draw-back of tax on distilled spirits used in nonbeverage products. facts and circumstances applicable to each case. to summary of these claims by class of tax for fiscal year 1952 is When a violation of the internal revenue laws is deliberate and shown in table which follows: with intent to defraud, criminal liabilities will in no case be com- promised by the Treasury Department. Summary of claims, fiscal year 1962 An offer in compromise of taxes, interest, ad valorem and specific penalties may be based on either inability to pay, or doubt as to Pending Pending liability. Disposals June 30, Class of tax July 1, Receipts 1951 1952 Offers in compromise of tax liability arise, usually, when payments of assessed liabilities are demanded, ad valorem penalties for delin- 54,062 54, 540 31,973 32, 451 quency in filing returns are asserted, or specific civil or criminal Corporation income and profits 208,400 337, 424 266,350 279,474 Individual income 183, 533 20, 906 Income tax withheld and old-age insurance 61, 972 122, 467 penalties are incurred by taxpayers upon the doing of certain acts 5, 248 16,938 15, 818 6,368 Unemployment insurance 42 109 73 78 specifically prohibited by, or failure to perform certain acts specifically Railroad retirement 1, 448 1,017 1,049 1,416 Estate and gift 92 2,089 1, 742 439 required by internal revenue laws and related statutes. In most Tobacco 1,470 17, 971 16,917 2,524 instances the offers are tendered to internal revenue officers as they Alcohol 10, 337 10,107 6,491 Miscellaneous 5,261 conduct their collection operations or as they perform their functions 540,325 508,040 370,758 Total 338,473 relating to the enforcement of regulatory provisions. However, in case of ad valorem penalties asserted for delinquency in filing returns,

RETORT OF COMMISSIONER OF INTERNAL REVENUE 34 REPORT ON OPERATIONS 35 may be involved and a report is prepared for the signature of the The great number of rulings is indicative both of the infinite variety Secretary discussing such problems and stating whether the Depart- of the circumstances which give rise to requests for rulings, and of ment favors or opposes the enactment. Over 100 such reports were the nonstatic nature of the tax law. Thus, the recent enactment of prepared during this fiscal year. Similarly, after a bill has passed many new statutory provisions resulted in a substantial increase in both Houses of Congress and is forwarded for the signature of the the number of rulings of the Bureau. President, a report is prepared, also for the signature of the Secretary, The interpretative function also includes the preparation and pub- recommending approval or disapproval of the proposed legislation. lication of the Internal Revenue Bulletin in which is included, among After the enactment of an internal revenue law, the Bureau in- other things, Treasury Decisions and the more important precedent terprets its provisions. This interpretation consists primarily of the rulings of the Bureau. During the fiscal year 79 rulings were preparation of regulations and the issuance of rulings based unnn published. specific fact situations. INSPECTION SERVICE ACTIVITIES The regulations prepared are submitted for approval and for pub- lication in tentative form in accordance with the Administrative To insure maintenance of high standards of conduct by all Bureau Procedure Act (Public Law 404, 79th Cong. (1946), approved June 11, personnel and to insure strict and scrupulous compliance with all 1946). All data, views, and arguments presented within 30 days fol- applicable laws, policies, regulations, practices, and procedures pre- lowing publication in tentative form by interested persons with respect scribed by appropriate authority, a uniform and thorough inspection to the proposed regulations are carefully considered prior to the system has been provided throughout the headquarters and field preparation of such regulations in final form. offices of the Internal Revenue Service. During the fiscal year 1952 As a result of four major revisions of the Internal Revenue Code the inspection system was materially strengthened and consolidated during the past 2 years (Revenue Act of 1950, Social Security Act by the establishment of the Internal Revenue Inspection Service (see Amendments of 1950, Excess Profits Tax Act of 1950, and the Revenue "Improvements," page 42). Act of 1951), the Bureau has prepared an unusually large volume of The Service is charged with the investigation of applicants for posi- regulations during the fiscal year 1952. The social security tax regula- tions in the Internal Revenue Service, investigations of misconduct tions under the Federal Insurance Contributions Act were rewritten and irregularities on the part of the employees and officials of the (Regulations 128); regulations under the wagering tax provisions were Bureau, and conducting frequent and thoroughgoing inspections of promulgated (Regulations 132); and seventy-one Treasury Decisions the administrative management, operating, and employee-conduct amending existing regulations were issued. aspects of all departmental and field offices. After the regulations are prepared, adopted, and promulgated in Investigations of alleged misconduct and irregularities on the part of final form, the Bureau continues its interpretative function by issuing, employees and officials.—When reports of alleged misconduct or irreg- upon request, rulings under the law and regulations as applied to ularities on the part of an internal revenue employee are received, a specified fact situations. In administering the law and the regulations, thorough and impartial investigation of the charges is made and a a considerable volume of such rulings normally result. report submitted either clearing the employee of the charges or rec- It is impractical in this report to furnish any realistic concept of ommending that some disciplinary action be taken. The charges the nature and variety of subject matter of the rulings issued by the against employees may involve not only improper relations with tax- Internal Revenue Service. Some idea of their volume, however, can payers or embezzlement, but also matters of personal conduct not be given. During the fiscal year 1952, for example, in the field of involving tax matters or dishonesty. income, estate, and gift taxes alone there were 40,400 interpretative During the fiscal year 1952 there were 629 charges of misconduct rulings issued to taxpayers and field offices of the Bureau, exclusive or irregularities disposed of after investigation. In 345 of these cases of opinions (numbering about 2,500) issued by the Chief Counsel for the employees involved were cleared of the charges, and in the remain- the Bureau. In addition, the Bureau issued over 14,700 rulings per- ing 284 cases some disciplinary action was recommended. In these taining to the various excise taxes; over 7,200 rulings in employment 284 cases, separation from the Service was recommended for 174 tax cases; over 4,050 rulings relative to alcohol tax; and nearly 800 employees. A more detailed summary of disciplinary actions taken rulings on wagering taxes. The number of rulings referred to above against employees is to be found in the "Personnel summary" section represent generally the more complex rulings. In many cases, addi- of this report, page 37. tional correspondence is necessary to develop the factual situations Field office inspection.—To appraise management, operations, and involved, to clarify doubtful issues, and to resolve differences of efficiency, frequent and systematic examinations of all Bureau offices opinion and interpretation. In many cases, too, for these same pur- are made by the thirteen field offices of the Inspection Service. These poses, conferences are held with taxpayers or their counsel prior to inspections are for the purpose of ascertaining and evaluating the issuance of the ruling. The stated figures do not include rulings of effectiveness of the organizational structure of the offices; the status a routine nature issued by the Bureau in an even greater number. of all phases of the work and the quality of its performance; the

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36 REPORT OF COMMISSIONER OF INTERNAL. REVENUE REPORT ON OPERATIONS 37 efficiency of its procedures, methods, and systems; the conduct of Average number of employees on rolls, fiscal years 1951 and 1952 personnel administration, such as staffing, training, and utilization of employees; the conduct of all fiscal and tax accounting aspects of Average number on roll, fiscal year the office with particular reference to the examination of all tax revenue Type of personnel Increase or decrease (—) accounts maintained; the adequacy of supervision and control over 1951 work-measurement standards and review procedure; the utilization 1952 Departmental of space, furniture, and equipment; the maintenance and disposal of 4,208 3.953 -255 records; and the conduct of all other matters concerned with the Field enforcement: Field deputy collectors 10,176 administrative and operational management of the office. Cost and Collectors' office auditors 1 10,485 309 Returns examiners 3, 258 1 3,303 45 productivity reports, operational statistics, etc., are also reviewed 912 1 873 —39 Returns coordinators 56 and analyzed to detect current and potential problems in adminis- Internal revenue agents ss 2 7,806 7,973 167 Special agents (tax fraud ) tration and operation of the offices. Alcohol tax Inspectors 1.236 1,206 -30 601 542 -so During the fiscal year reports were submitted by inspection officials Alcohol tax investigators 872 Storekeeper-gaugers 853 —19 Supervisory 1,464 1,495 31 covering examinations of 86 field offices. 332 340 —In an effort to isolate 8 Employees' financial statements, Form 1361. Total enforcement the relatively few employees who might have realized financial gains 26,713 27,128 415 Other field: in an unauthorized manner by reason of their official positions, finan- Legal Other technical 210 220 10 cial statements and related instructions were drafted and distributed 2,086 Z 268 182 Stenographers and typists 6,670 Clerical (excluding temporary) 6, 732 62 to about 32,000 employees. As of June 30, 1952, approximately 14, 927 14,988 61 Messengers and laborers 182 31,500 of these statements had been analyzed and closed. One Temporary employees 180 —2 809 840 31 resignation and one removal from the Service have resulted from Total other field unwillingness to execute such statements. Difficulties were met in 24, 884 25, 228 344 Total field a few cases, but the vast majority of the employees who received them 51, 597 52,356 759 Grand total fully completed the statements. It is intended that the periodic 55,805 56,309 504 filing of financial statements be required. has always been the policy of 2 Includes personnel of this type in the former collection d shirts at Chicago and Springfield, Illinois Audit of employees' tax returns.—It who were transferred to the offices of Director of Internal Revenue at Chicago and Springfield. the Bureau to select for examination the individual tax returns of officials and employees of the Internal Revenue Service on the same Disciplinary actions against employees.—In the cases of the 284 basis as those of other taxpayers. During the year this policy was employees for whom some disciplinary action was recommended after amended to require the examination of the income tax returns filed investigation of alleged misconduct or irregularity, there were 174 by all top officials, front-line enforcement employees, and certain separated from the Service, 25 suspended from pay status for varying other employees. As a starting point, 91,075 returns filed by em- periods, 4 demoted, 8 reassigned to different duties or areas, and 73 ployees for the years 1948, 1949, and 1950 were selected for audit. officially reprimanded. There were 90,258 of these returns examined, of which 83,323 were Separations during each of the fiscal years 1950-1952 resulting from found to be correct as filed. On 6,059 returns deficiencies totaling investigations are shown in the following table by reason for action $369,105 were determined, while on 876 returns the tax was found to and by class of employee: be overstated by a total of $50,922. Separations for cause during the fiscal years 1950-1952 PERSONNEL SUMMARY (a) BY REASON FOR ACTION During the fiscal year ended June 30, 1952, the number of em- ployees on the rolls of the Internal Revenue Service averaged 56,310. Fiscal year Appointments to the Service numbered 6,888, while separations Reason totaled 9,312. Included in the separations are 128 military furloughs, 1950 1951 1952 669 retirements, of which 134 were due to disability, and 174 sepa- Acceptance of gratuities, bribes, etc rations for disciplinary reasons. The average number of employees Embezzlement involving United States Government funds or property ..... 21 19 53 Failure of employee to pay proper tax 5 10 24 21 in the field and departmental service of the Bureau during the fiscal Falsification or distortion of Government reports, records, etc Unauthorized outside activity 3 4 5 years 1951 and 1952 are compared in the following table, by type of Failure to properly discharge duties 1 15 Personal misconduct unrelated to tax cases 2 1 7 7 personnel: Refusal to cooperate in an official Investigation 23 45 Divulgence of confidential information 1 2 Failure to ale financial statements 2 Total number 39 62 174 38 REPORT OF COMMISSIONER OF INTERNAL REVENUE REPORT ON OPERATIONS 39 Separations for cause during the fiscal years 1950-1952--Continued guide to the proper scale of administrative activity or as a measure of (b) BY CLASS OF EMPLOYEE relative efficiency of operation from year to year. An annual ratio Fiscal year of cost to collections is determined by many factors, most of which Class have no relationship to these objectives. To illustrate, the higher 1950 1951 1952 the level of tax rates and the more numerous the levies that are inherently economical to collect, the lower will be the average cost 7 ratio. The prevailing level of salaries paid to Bureau personnel Collectors 3 Assistant collector s 30 Internal revenue agents 5 10 and the volume of essential services performed for taxpayers are Deputy collectors 19 28 79 other examples of these determinative factors. Administrative officers 3 3 12 5 Rewards to informers.—Under 3463 Administrative assistants 4 section of the Revised Statutes Special Agents and section 3792 of the Internal Revenue Code, persons supplying Investigators 2 Criminal investigators information to the Bureau relative to violations of the internal rev- Technical clerks 2 Alcohol and tobacco tax inspectors 1 enue laws may submit claims for rewards. During the fiscal year Miscellaneous tax investigators 1952 Accountant-auditors 2 1 there were received 1,849 of these informers' claims. A table storekeeper-gaugers 2 3 showing the receipt and disposition of claims for informers' rewards Position classiters Auditors 3 during the fiscal years 1951 and 1952 follows: Tax accounting clerks 6 Claims examiners 1 2 4 7 Disposition of claims for informers' rewards, fiscal years 1951 and 1952 Clerks 102 Clerkstenographer s 2 Clerk-typists Bookeeping machine operators 3 Status Fiscal year Fiscal year Bindery workers 1951 1952 Messengers Laborers 39 62 174 Pending, beginning of period 4, 199 5, 388 Total number Received 1, 461 1, 849 Dispositions, total 272 1, 262 Rejected 151 1,043 Rules of conduct revised.—The booklet entitled "Rules for Conduct Allowed: Number 121 219 and Other Instructions for Employees of the Internal Revenue Amount' $499,997 $499,995 Service" was revised during the year. A copy of the revised booklet Pending, end of period was sent to each employee with instructions that it be studied care- 5,388 5,975 fully and that there be compliance with the spirit as well as the letter Amount available for payment of rewards limited to $500.000 of the rules. Among the revisions in this booklet were the rules relating to outside IMPROVEMENTS employment or business activities. Procedure was revised to require that permission to engage in outside employment or business be Reorganization Plan No. 1 of 1952, was the high point of manage- ment interest during the past fiscal year. However, the steady requested in writing. Permission will not be granted where the progress which has characterized the Bureau's improvement program personal interest of the employee may conflict with his official re- since its inception in 1946, continued throughout the year with sponsibilities or infringe upon his official time or duties. Neither outstanding results in the institution of procedural advancements will permission be granted where the activity might tend to bring and in the elimination of unnecessary work. discredit on the Service or be inimical to its best interests. Tax forms revision.—With a view to eliminating a major source COST OF ADMINISTRATION of taxpayer error and the consequent need for investigation, indi- vidual income tax returns, Forms 1040 and 1040A, were revised to The amount appropriated for administrative expenses of the Bureau include a uniform exemption schedule designed to focus attention on for the fiscal year 1952 was $273,000,000, of which $271,872,192 was dependency tests and requiring supplementary information with expended, leaving an unexpended balance of $1,127,808. Expendi- respect to claimed dependents outside of the immediate family of the tures for the year exceeded 1951 expenditures by approximately taxpayer. Other changes in these forms included: the simplification $26,000,000. This increase was due primarily to additional salary of tax computation for individuals and married couples with surtax obligations arising from the general pay increases provided for by net income under $2,000; revision of instructions to incorporate the Public Law 201, Eighty-second Congress. Notwithstanding the provisions of the Social Security Act Amendments of 1950 to permit increased outlay, the cost of collecting $65,009,585,560 during the credit against income tax of certain FICA taxes overwithheld, thus year was approximately $0.42 per $100 compared with $0.49 per eliminating certain assessment and refunding operations; and pro- $100 in 1951. visions for the reporting of self-employment tax on Form 1040. Data on the annual cost of administration, although of interest Revisions were made in the typography and design of these forms to and value for certain purposes, cannot be relied upon either as a facilitate their preparation and processing. A Spanish language 40 REPORT OF COMMISSIONER OF INTERNAL. REVENUE REPORT ON OPERATIONS 41 Form 1040-PR was designed for use of taxpayers in Puerto Rico and ment or overpayment of tax on fermented malt liquor where there is Form 1040-VI was designed for use of taxpayers in the Virgin Islands. no evidence of intent to defraud; (8) the certification of mutilated, Other forms were improved as follows: the Withholding Statement, unused strip tax stamps by storekeeper-gaugers, thus facilitating the Form W-2, was revised to decrease the number of entries and reduced processing of claims for the redemption of such stamps. in size to facilitate preparation and handling; Form W-3, Reconcilia- As a step toward its planned and orderly liquidation, as its work- tion of Income Tax Withheld from Wages, was revised to permit the load decreases, the Excess Profits Tax Council was placed under the use of the same form from year to year; the Employer's Tax Return executive direction of the Head of the Appellate Staff. The offices Under Railroad Retirement Tax Act, Form CT-1, was simplified of chairman, vice chairman, and the executive committee were and a schedule for listing of depositary receipt payments added; abolished. Members of the executive coramitteee were restored to Social Security Tax Form SS-8 was revised to provide more adequate full-time duty as council members. information for determining the employer-employee relationship, The mail opening operation in collectors' offices was improved and Form SS-14 was improved in typography; Tax Transfer Voucher, and standardized, resulting in a more rapid and efficient handling Form 514, was revised, bringing all pertinent information to the of mail and remittances with a marked saving in labor. The stand- front of the voucher and eliminating entries on the back; and Form ardized operation includes improved mail room layout, use of spe- 940, annual unemployment tax return of employers of eight or more cially-designed equipment, a minimum production standard, general individuals, was redesigned with a detachable schedule to facilitate organization of work, and improved management of personnel. certification of credits by State officials. Changes in fraud procedure.--Strengthened and improved fraud New tax form mailing assembly.—A "package" mailing unit for procedures installed during the year have proved to be of consider- distribution of the individual income tax return, Form 1040, was able value in expediting the processing of criminal tax fraud cases. tested during the 1952 filing period, resulting in its approval for The former policy under which criminal prosecution was not recom- Nation-wide use in the 1953 filing period. The plan involves the mended in cases where taxpayers made voluntary disclosures of in- assembling of instruction material and the tax returns in book form, tentional violation of internal revenue laws prior to investigation was and the mailing of the entire assembly in a flat package without abandoned. Also eliminated as a consideration in determining envelope. Not only is the printing cost lower, but the mechanization whether to recommend prosecution was the health of the taxpayer of the mailing operation possible with the "package" provides a sharp involved. Such determination was held not to be a proper function contrast to the usual assembling and folding of instruction booklets of the Bureau, but rather one to be taken into account within the and forms and stuffing them in envelopes. The funds saved on judicial process. A revised procedure for handling criminal prosecu- envelopes alone were sufficient to purchase and install the 52 labeling tion cases prescribes direct referral of such cases by the district penal machines required for Nation-wide use. The test also showed favor- counsel of the Chief Counsel's office to the Department of Justice able acceptance of the "package" form by a majority of taxpayers in Washington, D. C., thus eliminating case review by the Regional and indicated possible improvement in the quality of reporting, Counsel and Washington headquarters offices. because of the availability and better presentation of the instructions. Operating manuals.—Considerable progress was made in the The absence of the "fold" in the return is also a distinct improvement formulation of new instruction manuals and the revision of existing which should produce further savings manuals to cover enactment of new legislation, consolidation of Changes in organization and procedure.—A number of actions were functions, and simplification of procedures. The Collectors' Manual taken during the year to streamline and reorganize the work of the was revised to include some 200 pages of new or revised text, and a Bureau along more efficient lines. These included: (1) the re- new volume on field procedure was issued; the Raw Materials Manual organization of the Income Tax Unit, resulting chiefly in the reduction and parts of the Office Procedural Manual relating to alcohol and of its 13 primary organizational units to 5 branches and the elimination tobacco tax were revised, while work on the Seized Property Manual of 113 positions, and the establishment of an Analysis and Planning and Manual of Instructions for Investigators was substantially com- Staff, an office of Executive Management Officer, and a Field Super- pleted; The Special Agents' Manual, in the process of revision, visory Service; (2) the transfer of excise tax investigative personnel neared completion; the Appellate Staff Manual was issued during the to the Income Tax Division and their integration into the offices of year, and manuals pertaining to excise tax and employment tax internal revenue agents in charge; (3) the extension to excise tax activities of the Appellate Staff were started. Procedural manuals cases of appellate procedure through the medium of the Appellate for the Inspection Service were issued. A fully integrated nine- Staff,• (4) the transfer of audit of unemployment tax returns, from the volume loose-leaf manual system covering all permanent operating Employment Tax Division to collectors' offices; (5) the merger of the instructions, will be provided under the Reorganization Plan. processing and audit work of the Employment Tax Division and the Regional finance offices.—As part of a continuing program to resulting elimination of the Control Branch of that Division; (6) the obtain more effective accounting controls for operating and budget integration of tobacco and alcohol tax work and the transfer of tobacco purposes, eight additional regional finance offices were established tax field work to district supervisors; (7) simplification of the post during the year, bringing the total number of such offices to 11. audit procedure for reporting errors of taxpayment on distilled spirits, Other regional offices will be established coincident with the in- as well as the procedure to be followed upon discovery of underpay- stallation of district commissioners' offices. A study of the Bureau's REPORT ON OPERATIONS .43 42 REPORT OF COMMISSIONER OF INTERNAL REVENUE headquarters to facilitate interchange of experience and ideas between accounting systems was begun in April 1952, in conjunction with the forces, (b) projected plans for interchanging field supervisory forces reorganization and also as a part of the Government-wide survey between districts so that offices will be examined by different staffs, provided for in the Budget and Accounting Procedures Act of 1950. (c) initiated a policy of interchanging personnel between inspection New equipment. —Continued progress was made in the use of time- forces to facilitate a "new look" from men in different although re- saving operating equipment. The use of electronic accounting and lated activities; (5) completed plans for a training school for inspection calculating machinery was extended to include the maintenance and personnel; and (6) took many other steps to strengthen and improve billing of revenue accounts, the addressing of wage and excise tax the Internal Revenue Service. returns, and the checking of records to indicate delinquent taxpayers Other actions.—The utilization of Federal records centers, estab- for enforcement purposes. A punched control card accompanied lished by General Services Administration during the latter part of approximately 39 percent of the blank individual income tax returns the fiscal year, is expected to be of material aid to departmental and mailed to taxpayers, and its use eliminated from some collectors' field offices in the storage of record material. Space currently offices the yearly repetitive "listing" operation. required for the storage of inactive records not eligible for disposal Further mechanization of work during the year was accomplished may thus be released for other requirements. The use of these by the installation of electric typewriters and automatic posting centers also should prove of assistance in the transfer of certain files machines in 12 additional collectors' offices, making a total of 18 now incident to the reorganization of field offices. having such equipment. Three other districts were supplied with Depositary receipt procedures were improved by revision of Forms electric typewriters having dual feed platens. The Intelligence 450 and 479 to expedite processing and to alleviate problems of getting Division installed electric typewriters in a number of offices to resolve employers to forward validated receipts with their returns. Form their particular multiple copy problems. The Appellate Staff found 450 is now mailed to all employers whose returns show a tax liability use of mechanical dictating and transcribing equipment, as well as of $300 or over, in an effort to improve compliance with the depositary electric typewriters, of material aid in expediting work. Specially receipt procedures by these employers. developed window-teller machines were ordered for 10 collection The program for exchanging abstracts of income tax audit reports districts on a pilot installation basis. with State Governments, which was inaugurated in 1950 with the Inspection Service.—The Inspection Service, which was activated on States of North Carolina and Wisconsin, was extended to include October 1, 1951, to provide a continuing check on efficiency of oper- Colorado, Montana, and Kentucky. ations and integrity of employees, has had a steady record of develop- In an effort to locate payees of tax refund checks which had been ment and accomplishment. Originally established to intensify and returned as undelivered by post offices, collectors' offices cooperated coordinate the activities of existing staffs of each operating division with the press by making available for publication the names and and to appraise management improvements and techniques, the last known addresses of such payees. From January 1 to April 30, Inspection Service was strengthened on March 15, 1952, by the 1952, a total of 210,098 of these checks were delivered. consolidation of these staffs into the Inspection Service proper. Executive management and other officials were relieved of con- Full authority to exercise general superintendence over all inspection siderable paper work by use of powers of delegation under Reorganiza- activities was delegated to the Director of the Inspection Service. tion Plan No. 26 of 1950. The field organization is coprisedm of 13 offices of Chief Inspector Operating procedures and delegations of authority on actions responsible to the Director who in turn reports directly to the affecting the departmental and field personnel programs were drafted Commissioner. during the last half of the fiscal year. One significant effect of these The Inspection Service is charged with the review of administra- procedures will be the achievement of considerable economy in the tive management and operating procedures of all departmental and processiiT of personnel actions and the maintenance of personnel field offices and with the investigation of employee conduct, including records, including, for example, the decentralization to the field the thorough and impartial investigation of character and ability of service of more than 50,000 official personnel folders for field employees. applicants for employment. Minimum qualification standards were raised for the positions of The Inspection Service ascertains and reports on the manner in deputy collector, internal revenue agent, and special agent (tax fraud). which Bureau affairs are conducted; whether there is strict compliance In addition to establishing higher educational and experience require- with all applicable laws, policies, regulations, practices, and proced- ments for these positions, oral interviews to determine personal ures; and on the conduct and integrity of employees. qualifications were made an integral part of the examination for the During the fiscal year the Inspection Service (1) installed a system position of deputy collector. The entrance grade for deputy collectors for control and follow-up on all complaints of whatever nature was raised from GS-5 to GS-7, and appointments from registers for received; (2) required more frequent and intensive inspection of field this position will be probational rather than indefinite, with permanent offices; (3) inaugurated a systematic program for the audit of em- status resulting after satisfactory completion of a 1-year probationary ployees' income tax returns; (4) (a) effected a plan requiring rotation period. of field inspection personnel to 60-day assignments in Washington REPORT ON OPERATIONS 45 44 REPORT OF COMMISSIONER OF INTERNAL REVENUE LEGAL FUNCTIONS functions by each of the legal units within the district. Under the general supervision of the district counsel, the performance of the The legal work of the Bureau of Internal Revenue is performed legal work of the district will be directed by the Appellate Counsel by the Assistant General Counsel whose office is established by section (in connection with Tax Court litigation and the work of the Appellate 2(b) of Reorganization Plan No. 1 of 1952 and who is appointed by Division), the Enforcement Counsel (in connection with criminal the Secretary of the Treasury under the classified civil service as prosecutions for alleged violations of internal revenue laws), the Civil provided by section 3 of that Plan. This was the first to be filled of Advisory Counsel (primarily in connection with assessment and col- the offices created by the Plan. This Assistant General Counsel uses lection problems), and the Attorney in Charge (Alcohol and Tobacco the operating title of Chief Counsel, Bureau of Internal Revenue. Tax) (in connection with laws pertaining to alcohol, tobacco, and The authority, duties, and functions of the Chief Counsel are firearms matters). The heads of the Washington headquarters divi- vested in him by delegation from the General Counsel for the Depart- sions concerned with these matters will maintain, through district ment of the Treasury, who is the chief law officer of the Department. counsel, technical and advisory contact with and coordinate the work The Office of the Chief Counsel is, however, an integral part of the of the attorneys in the field. Internal Revenue Service. During the fiscal year there was a material increase in the over-all The functions of the Chief Counsel include the following: Render- workload of the office. The number of legal cases of all types in- ing of legal opinions, written or oral, for the guidance of officers and creased from 32,776 on June 30, 1951 (exclusive of reward claims, employees of the Bureau; preparation or review of regulations, Treas- which cases were transferred out of the Office of the Chief Counsel ury Decisions, and certain other materials for publication; review of during the year), to 34,811 on June 30, 1952. An extraordinary certain rulings, closing agreements, and compromises (including per- amount of interpretative work has resulted from the major revenue formance of the functions prescribed for the General Counsel by acts approved during 1950 and 1951 (the Social Security Act Amend- section 3761(b) of the Internal Revenue Code); preparation or review ments of 1950, the Revenue Act of 1950, the Excess Profits Tax Act of recommendations to the General Counsel for changes in internal of 1950, and the Revenue Act of 1951). Not only have these enact- revenue laws and, when requested, the furnishing of technical assist- ments resulted in an unusual volume of work in preparing regulations, ance in the development and drafting of legislation; supervision and but there has been a heavy demand for rulings under these new laws. control of defense of petitions to The Tax Court of the United States At the same time, there has been an increased volume of petitions to and determination of whether to acquiesce or nonacquiesce in adverse the Tax Court and of district court and Court of Claims litigation. decisions of the Tax Court; recommendation to the Department of The criminal cases recommended to the Department of Justice for Justice of what civil suits should be brought in the courts under the prosecution have also increased, due partly to the special tax fraud internal revenue laws (including claims for taxes in bankruptcy and drive and the enactment of the wagering tax. However, the number receivership cases), what criminal cases involving violations of such of attorneys on the rolls was about the same at the close of the fiscal laws should be prosecuted, what defense should be made in suits year 1952 as at the close of the preceding fiscal year. brought in the courts against the United States or Government There were a number of management improvements and procedural officials under such laws, what court decisions under such laws changes introduced during the fiscal year affecting the work of the (including decisions of the Tax Court) should be appealed, and how legal office. As mentioned earlier, the function of recommending the any such court actions should be handled; and review of proposed approval or disapproval of informers' claims for reward for informa- abatements, refunds or credits of taxes (including interest or penalties) tion relating to the detection and punishment of violators of the of any taxpayer amounting to $200,000 or over and preparation of internal revenue laws was transferred from the Office of the Chief the required reports to the Joint Congressional Committee on Internal Counsel to the Income Tax Division on November 7, 1951. The Revenue Taxation. Engineers and Auditors Section was transferred from the Office of A partial description of the legal operations for the fiscal year ended the Chief Counsel to the Income Tax Division on March 11, 1952. June 30, 1952, is included under the following headings of this report: Three changes relating to the handling of criminal cases—the direct Alcohol Tax Seizures and Arrests; Legal Work on Criminal Cases; referral of such cases to the Department of Justice by the field offices, Delinquent Returns and Payments; Offers in Compromise; Appellate the abandonment of the "voluntary disclosure" policy, and the Work and Civil Litigation; Overassessments; Interpretative and Other abandonment of the health policy—are discussed in the "Improve- Technical Functions; and Improvements. ments" section of this report. Changes have been developed in the organization of the Office of Much attention was given during the year by the Office of the Chief the Chief Counsel with a view to the most efficient rendering of legal Counsel to management planning with a view to future procedural services to the reorganized Bureau of Internal Revenue. In each of and organizational improvements. the reorganized districts there will be a district counsel. The district During the year, outside counsel conducted a survey of the organiza- counsel will be the Chief Counsel's legal representative in the district tion and procedures of the Office of the Chief Counsel and submitted and will serve as principal legal advisor to the district commissioner a comprehensive report. Some recommendations from the report and his staff. The district counsel will be responsible to the Chief have been adopted; others were under active consideration at the Counsel for the supervision and performance of all legal duties and close of the fiscal year.

48 REPORT OF OMMIIISMONER OF INTERNAL REVENUE REPORT ON OPERATIONS 49

harvesting, and preparing for consumption crops grown in the United sent] g to a reduction in the basis of its properties in an amount States. Section 505(b) of such Act, as amended, amends section equal to the amount excluded; extends to January 1, 1954, the ex- 1426(b) (1) of the Internal Revenue Code to exclude from the defini- piration date relating to the exclusion from gross income of com- tion of "employment" services performed by such workers employed pensation of members of the Armed Forces received for service in in accordance with the terms of Public Law 78, so that there will combat zones, including compensation of military personnel received be no liability for the tax imposed by the Federal Insurance while hospitalized as a result of wounds, disease, or injury incurred Contributions Act. while serving in a combat zone; eliminates the five percent limitation Public Law 82, approved July 23, 1951, amends section 220 of the with respect to the deduction of medical expenses paid during the Revenue Act of 1950 to postpone for 1 year the application of the taxable year in cases where the taxpayer or his spouse attains the income tax to salary paid by the United States to its citizens employed age of 65 years before the close of the taxable year; permits the in its possessions. changing of an election respecting the taking of the standard deduc- Public Law 124, approved August 24, 1951, amends section 1700 tion; raises from $500 to $600 the amount of gross income which a (a) (1) of the Internal Revenue Code to provide that no tax shall be person may receive without losing his status as a dependent of a imposed in the case of admission free of charge of a member of the taxpayer; permits a taxpayer and his spouse to file a joint return Armed Forces of the United States when in uniform. after having filed individual returns for the taxable year; removes Public Law 140, approved September 1, 1951, amends section 3508 the exemption of mutual savings banks, building and loan associations, of the Internal Revenue Code to extend the termination date for the and cooperative banks from the income tax; taxes certain farmers' tax on sugar from June 30, 1953, to June 30, 1957. marketing and purchasing cooperatives on certain net earnings which Public Law 145, approved September 14, 1951, extends the pro- are retained without- allocation to patrons, and generally requires visions of sections 9 and 10 of the Federal Trade Commission Act to cooperatives to file information returns with the Bureau of Internal authorize the requirement by subpoena of the attendance and testi- Revenue; eliminates capital gains in the computation of net income mony of witnesses and the production of documentary evidence at for the purpose of computing the additional tax under section 102 hearings respecting denials and revocations of industrial alcohol of the Internal Revenue Code for improperly accumulating surplus; permits; and authorizes the Secretary of the Treasury to grant ex- provides for the nonrecognition of gain to a stockholder from the tensions of time not beyond November 15, 1951, for filing the income receipt of stock when a corporation "spins off" a part of its assets to tax return of any corporation subject to the excess profits tax for a a corporation formed to receive such assets and receives back all the taxable year ending after June 30, 1950, and before February 1, 1951. stock of the corporation so formed; provides for the nonrecognition Public Law 161, approved October 10, 1951, amends section 2801(c) of gain to a taxpayer in the sale of his residence when within specified (1) of the Internal Revenue Code to exempt from the rectification tax periods he purchases or constructs another residence; liberalizes the certain blends of whiskies and brandies when reduced to as low as requirements for the exemption from taxation of income earned by 80° of proof. a United States citizen for personal services rendered in a foreign Public Law 166, approved October 10, 1951, amends that part of country; provides for treatment as a capital gain of livestock held for section 437(c) of the Internal Revenue Code, relating to the definition 12 months or more for draft, breeding, or dairy purposes; provides of equity capital of an insurance company, so as to provide for the for capital gain treatment of a lump-sum payment received by an allowance of a credit for the reserves of marine insurance companies employee upon termination of his employment, in return for a re- and mutual fire insurance companies issuing perpetual policies, with lease of all rights to a percentage of his former employer's future respect to the inclusion of their reserves in the computation of their profits; permits net operating losses for 1948 and 1949 to be carried invested capital credit for the purpose of determining the excess profits forward 3 years; provides that if the grant of a restricted stock option tax. is subject to stockholder approval, the date of the grant of the option Public Law 183 (Revenue Act of 1951), approved October 20, 1951, shall be determined as if the option had not been subject to such increases the combined normal tax and surtax on individuals by approval; authorizes the Secretary of the Treasury to require infor- 11% percent, the increased rates to terminate on December 31, 1953; mation returns reporting interest in any amounts; abates certain increases the normal tax on corporations from 25 percent to 30 per- income taxes in the case of members of the Armed Forces who die cent, and the tax on capital gains from 25 percent to 26 percent, such while serving in a combat zone; subjects Government colleges, uni- increases to terminate on March 31, 1953; provides new withholding versities, and their wholly-owned corporations to the tax on unrelated rates and tables to take into account the increased tax rates; provides business net income; provides that expenditures paid or incurred for a head of household approximately one-half of the income-splitting prior to the development stage of a mine, for ascertaining existence benefits available to a husband and wife who file a joint return; or quality of ore may, to the extent of $75,000 in any taxable year, excludes from gross income, not exceeding $5,000, amounts' paid by be deducted in computing taxable income; permits an individual in an employer to beneficiaries of deceased employees under an agree- his computation of a net operating loss, to take into account prop- ment legally obligating the employer to pay such amounts; provides erty losses arising from fire, storm, shipwreck, or other casualty, or for the exclusion from gross income of income attributable to the from theft, even though such losses are on nonbusiness property; discharge of certain indebtedness in the case of a corporation con- removes the tax on free admissions; restores generally the exemptions 50 REPORT OF COMMISSIONER OF INTERNAL REVENUE REPORT ON OPERATIONS 51 from the admissions tax which were in effect prior to October 1, 1941; Public Law 353, approved May 21, 1952, applies the same tax increases the tax on cigarettes 50 cents per thousand; imposes a tax provided by section 2720(a) of the Internal Revenue Code with of 2 cents a gallon on fuel used in a diesel highway vehicle; tempo- respect to the transfer of machine guns and short-barreled firearms rarily increases the tax on alcoholic beverages; imposes an excise and upon the making of such weapons, subject to certain exceptions and occupational tax upon wagering; temporarily increases the tax on requires a declaration of intention to be filed, in accordance with trucks, busses, passenger automobiles, and motorcycles; repeals the regulations prescribed by the Secretary, prior to such making. tax on electrical energy for domestic or commercial consumption; Public Law 355, approved May 22, 1952, exempts from the rectifi- temporarily increases the tax on gasoline; reduces the tax on domestic cation tax imposed on spirits and wines by section 2800 (a)(5) of the telegraph, cable, or radio messages; exempts from the tax on telephone Internal Revenue Code vodka produced from pure spirits in the messages, payments for telephone messages originating within a com- manner authorized at registered distilleries. bat zone from a member of the Armed Forces performing service in Public Law 361, approved May 23, 1952, exempts from the stamp the zone; reduces the percentage of the average base period net in- transfer taxes the delivery of stocks and instruments to a trustee, come to be taken into account in computing the excess profits credit when made pursuant to a law to secure the performance of an obliga- tion, and the redelivery of such stocks and instruments to the trans- based on income; provides a credit against the estate tax for the foreign feror. death tax paid on property situated in a foreign country when such property is included in the gross estate of a resident or citizen of the Public Law 386, approved June 10, 1952, repeals chapter 8 of the United States; excludes from the additional estate tax imposed by Internal Revenue Code imposing the Alaska Railroads tax. subchapter B of chapter 3 of the Code the transfer of the net estate Public Law 391, approved June 12, 1952, exempts coconut oil of a citizen or resident of the United States dying after June 24, 1950, produced in, or produced from materials grown in, the trust territory and before January 1, 1954, while in active service in the Armed of the Pacific Islands from the additional tax of 2 cents per pound Forces of the United States; and removes from the tax-exempt status imposed by section 2470(a)(2) of the Internal Revenue Code. the expense allowance provided for the President, the Vice President, - Reorganization Plan No. 1 of 1952, which became effective, pursuant to section 6 of the Reorganization Act of 1949, on March 15, 1952, the Speaker of the House, and Members of Congress. Public Law 215, approved October 26, 1951, authorizing the dis- provided for the abolition within the Bureau of Internal Revenue of the pensing of habit-forming or toxic drugs under certain conditions pro- offices of assistant commissioner, special deputy commissioner, deputy vided m the Federal Food, Drug, and Cosmetic Act, provides that commissioner, assistant general counsel for the Bureau of Internal nothing therein contained shall relieve any person from any require- Revenue, collector, and deputy collector on or before December 1, ment prescribed by or under authority of law respecting opium, coca 1952, and the establishment of not to exceed 99 new offices, appoint- ments to which shall be made by the Secretary of the Treasury under leaves, isonipecaine, or opiate mentioned in section 3220 of the the classified civil service. Internal Revenue Code or marihuana as defined in section 3238 of the Code. Public Law 247, approved October 31, 1951, repeals section 3796 of the Internal Revenue Code respecting the purchase of stationery for the Internal Revenue Service and section 3945 of the Code respect- ing the payment to collectors of certain office expenses. Public Law 251, approved October 31, 1951, provides for the non- recognition of gain in cases in which, prior to the receipt of the proceeds for property compulsorily or involuntarily converted, the taxpayer purchases replacement property similar or related in service or use to the property converted or purchases stock in the acquisition of control of a corporation owning such property, to the extent that the amount realized upon such conversion does not exceed the cost of the other property, and for the recognition of loss in such cases. Public Law 255, approved November 2, 1951, provides increased and uniform penalties for violations of certain provisions of the Narcotic Drugs Import and Export Act and the Internal Revenue Code with respect to narcotics and marihuana. EIGHTY-SECOND CONGRESS, SECOND SESSION Public Law 352, approved May 21, 1952, exempts unperforated microfilm from the excise tax imposed on photographic apparatus by section 3406 of the Internal Revenue Code. 229047 53-5 REORGANIZATION OF THE INTERNAL REVENUE SERVICE RECORD OF REORGANIZATION History of the reorganization.—The reorganization of the Internal Revenue Service is the culmination of a long series of actions taken to meet the responsibilities which have resulted from changes in the Federal tax system during the past decade. World War II overwhelmed the Bureau's collection and auditing machinery, geared to handle a relatively small number of prewar returns, by adding an army of taxpayers as incomes grew and exemp- tions were lowered. In the past decade the number of returns has increased fourfold and the volume of tax collections tenfold. With the broadening of the base of the personal income tax, wage and salary withholding was introduced, creating many new problems, not the least of which was that of mass refunding operations. The excess profits tax, the extension of social security coverage, and the wagering tax have each made a new and substantial contribution to the work- load. Our tax system today bears little resemblance to that of 1940. The heavy volume of recent tax legislation, designed to finance defense expenditures, has strained severely the administrative forces of the Revenue Service. In the space of a little more than a year the Bureau's staff has been required to assimilate four major enactments— the Social Security Act of 1950, the Revenue Act of 1950, the Excess Profits Tax Act of 1950, and the Revenue Act of 1951. These developments have been accompanied by an increase in appellate work and cases in litigation. By 1946 the tremendous expansion which took place during World War II had already revealed many organizational and procedural weaknesses. In such a period of vastly increased activity, the dis- ruption of day-to-day operations would have had serious repercussions. Every change had to be well thought out and every detail considered before its initiation. With this thought in mind, the Secretary of the Treasury introduced on a trial basis a work simplification program of management improve- ment in the Bureau which started at the lowest supervisory level. This program was coupled with the establishment of an employee incentive award system, in order to tap the accumulated knowledge and experience of every employee, and constituted the first step on the road to reorganization. This program was officially adopted and expanded to include the entire Revenue Service in 1947. At the same time, management improvement efforts were started in other directions. In October 1946 the first large-scale conference in several years was held in Washington between field and depart- mental officials of the Revenue Service m order to survey its operational and administrative problems. A month later there was established a special committee on administration to analyze the suggestions made at this conference. The next step was the creation of a com- mittee of highly qualified men from both inside and outside Govern- 55 REORGANIZATION OF THE INTERNAL REVENUE SERVICE 57 56 REPORT OF COMMISSIONER OF INTERNAL REVENUE grades 16 through 18 —to some of the newly established positions in ment to direct the management studies of the Internal Revenue order to obtain and hold persons with top qualifications. The entire Service and to act as consultant in the solution of administrative plan is set forth in five short paragraphs. (See Exhibit A.) problems. These few simple paragraphs, however, make possible far-reaching The Congress also took an active interest in the improvement of changes in the century-old structure of the Bureau. The former the Bureau's operations. The House Committee on Appropriations basis of organization for most of the divisions and offices of the Bureau made a number of recommendations, and the Advisory Group to the with the exception of the collectors' offices, depended upon the type Joint Committee on Internal Revenue Taxation also submitted a of tax collected—for example, the Bureau had an Income Tax Divi- series of recommendations. Virtually all these recommendations sion, an Excise Tax Division, and an Employment Tax Division. were adopted. Under the old organizational structure of the Bureau some 200 main In April of 1948 a Management Staff was created in the Commis- field offices reported to the Commissioner through seven more or less sioner's office to assist him in integrating and coordinating the various autonomous divisions at Washington. Included in the 200 main diverse functions of the Bureau. This group, under the direction of field offices were 64 offices engaged in the two-fold task of collecting the Assistant to the Commissioner, was selected from employees who taxes and auditing the smaller returns; 39 audited the larger classes were technicians and specialists widely experienced in the various of returns; 14 dealt only with the fraud aspects of tax cases; 15 technical, procedural, and basic operational aspects of the Bureau. enforced the alcohol and tobacco taxes; and 12 were district offices of This Staff has been of considerable assistance to the Commissioner in the Bureau's Appellate Staff. Over two thousand subordinate offices advising him on matters relevant to effective management and oper- and posts were under the supervision of these main field offices. ation, and in furnishing facts and opinions to serve as a basis for In the present organizational structure, three fundamental changes action and policy formulation. have been made. First, the actual basis for organization of the One of the outstanding management firms in the country was Bureau (see Exhibit B) has been changed from type of tax collected engaged in September 1948 to make a comprehensive analysis of the to purpose or function. For example, there are now a Collection organization and procedures of the Bureau. The firm's report and Division, an Audit Division, and an Appellate Division. Each recommendations were received in August 1949. handles all types of tax returns. All of these improvements took time—time to plan, and time to The only exception to this principle of functional organization install—before their full benefits could be realized. The present is the semisegregated status of the alcohol and tobacco tax operations. Reorganization Plan brings to fruition intensive studies which have The responsibilities in collecting these taxes have unique character- been under way much of the time since 1947 when the management istics, not entirely of tax administration, but rather of industry improvement program was begun. Not only does the reorganization regulation and suppression of unlawful operations by police activity. seek to repair basic weaknesses in the old structure, but it includes In the words of a Bureau official, it was decided "not to make a pr ovisions for further improvements which will be ma,de in the future. fetish of rigid consistency in the face of inconsistent circumstances." Enactment of Reorganization Plan No. 1—Recent Congressional The unique character of this policing function accordingly was investigations focused public attention on the need for a Revenue recognized and a separate Alcohol and Tobacco Tax Division Service completely responsive to top direction and control and free established. of the defects of the old system, among which were political appoint- The second basic change called for complete revamping of the ment of collectors, assistant commissioners, and the Chief Counsel; organizational framework of the Bureau and drawing new lines of scattered ruling and policy-making authority; and lack of an inte- reporting authority and responsibility. grated inspection service. At Washington there are now three Assistant Commissioners of The President accordingly submitted Reorganization Plan No. 1 equal rank. Each has responsibility for one of the three major func- of 1952 to the Congress on January 14, 1952 (Exhibit A to this report tions at the headquarters level—technical tax work, direction of sets forth the Plan and the President's message transmitting it to the inspection activities, and management of field operations. The Congress). Motions to defeat the plan were disapproved by both Assistant Commissioner (Operations) has a direct line of control over the House of Representatives and the Senate, and the plan became all field offices, except those of the Chief Counsel and the Inspection effective March 15, 1952. Service. Provisions of the Plan—Reorganization Plan No. 1 is a relatively In addition to the three Assistant Commissioners, there are four simple plan. In essence, it abolishes all appointive offices in the other principal officials in the Commissioner's immediate office. These Bureau except that of Commissioner. It furnishes the framework are the Assistant to the Commissioner, who heads the Commissioner's for a reorganization of the headquarters office in Washington by pro- Management Staff; the Administrative Assistant to the Commissioner, viding for the appointment under the classified civil service of the who supervises the activities of the Personnel, Budget and Finance assistant commissioners and an assistant general counsel, who serves Training, Statistical, and Administrative Divisions; the Technical as Chief Counsel of the Bureau. Formerly these were all political Reviewer; and the Information Officer. The Chief Counsel of the appointments. The plan furnishes the framework for the reorgani- Bureau continues to be the principal legal adviser to the Commissioner. zation of the field service by providing for not more than 25 new offices and 70 suboffices, and it permits assignment of supergrades-

60 REPORT OF COMMISSIONER OF INTERNAL REVENUE REORGANIZATION OF THE INTERNAL REVENUE SERVICE 61 a smooth transition to the new plan of organization, and to provide a In carrying out the Washington headquarters reorganization, the firm foundation for future understanding of each other's problems. special task force prepared sets of organization charts and detailed For example, about a month prior to the establishment of the newly functional descriptions covering both immediate changes and ultimate reorganized Chicago district—the first to be established—a key objectives. The installation group also engaged in the same detailed Revenue official from Illinois was brought to headquarters to work planning for the headquarters installation that had been done for the closely with the installation group. Then, just prior to the installa- previous district installations in Chicago and New York. tion, the new district commissioner and other top officials came to The Bureau now entered the fourth phase of the reorganization Washington for several days' intensive indoctrination. In addition, program—the establishment of the remaining districts. Two addi- 2 weeks before the event, an installation team was appointed in the tional districts—Baltimore and Buffalo—had been established by the district and a representative of the headquarters' installation group end of September, and other installations were to follow rapidly was sent to Chicago to provide liaison. A few days in advance of the until December 1. installation, the entire installation group went to Chicago to complete With the further perfection of the installation manual, which covers the final arrangements with local internal revenue officials. During not only steps preliminary to the establishment of new districts but most of the planning and arrangements an observer from the New each further step necessary to implement the district reorganization, York district, which was next on the slate for reorganization, was there has been a steadily decreasing need for assistance from Wash- present. ington. Target dates have been set, however, for the various steps On May 20, 1952, ceremonies were held in Chicago, establishing the of each reorganization and its subsequent detail work, and the new first of the new internal revenue districts and installing the new district commissioners are required to submit regular progress reports. district commissioner, directors of internal revenue, and eight other One of the most important administrative problems encountered key officials. Among the speakers on this occasion were the Secretary during the course of the reorganization has been that of recruiting of the Treasury, the Under Secretary of the Treasury, the Commis- personnel to fill the new key positions established by the plan. The sioner of Internal Revenue, and the Executive Director of the Civil speed with which this could be accomplished has in part determined Service Commission Following the ceremonies a seminar was held the order of establishing the new districts, and this made it difficult by Bureau officials to explain the reorganization to local tax attorneys to adhere to any pre-arranged time schedule. and accountants. A series of internal revenue supervisors' meetings It was realized that first consideration should be given to experi- also was held to discuss the reorganization and clear up questions enced internal revenue employees in filling these positions. This was concerning their own work under the new system. not only in accord with the promotion policies of the Treasury De- Another aspect of the Chicago installation which deserves mention partment, but was also highly desirable where the positions required is the space problem. One objective of the reorganization is to house practical, working knowledge of the technical operations of the rev- all internal revenue offices in each city under a single roof. Although enue system. this necessarily will have to be a long-term project in many areas, A Personnel Selection Board was appointed to nominate candidates Bureau and Treasury space experts, working in cooperation with the for the key field positions of district commissioner, assistant district General Services Administration, were able to obtain contiguous space commissioner—of which there are six in each district—and director in the State Madison Building to house all Federal revenue activities of internal revenue. This Board included the Bureau's Assistant in Chicago. Commissioner (Operations), the Treasury Department's Director of In planning the Chicago installation, the installation group took Personnel, the Assistant to the Fiscal Assistant Secretary, the a flexible approach, attempting to work out the best methods and Director of the Inspection Service, and the Chief of the Intelligence order of procedure. As a result of this experience, a comprehensive Division. installation manual was developed showing the step-by-step procedure Every employee whose position or grade indicated that he would for reorganizing each district, and including sample forms, orders, etc. be qualified for one of the key positions was considered automatically The manual was developed for use by district officials who are respon- by the Board. All other employees who believed they met the Civil sible for various phases of the reorganization. It was first used in the Service qualification standards for these positions were invited to establishment of the second district, in New York, on June 30, 1952. apply to the Board for consideration. For certain positions in which The Bureau entered the third phase of the reorganization on August knowledge of Bureau operations was not essential, applications were 11, 1952, when ceremonies were held in Washington to announce the also invited from employees outside the Bureau who had Civil Service reorganization of the headquarters office and install the new head- status. quarters officials. These were the three Assistant Commissioners, four In the course of this selection process, the Selection Board has other principal officials in the Commissioner's office, and the Chief traveled to all sections of the country to interview applicants. The Counsel. (As originally planned, reorganization of headquarters in Board has considered 1,835 applications and interviewed 654 Washington would have preceded the establishment of all of the new candidates. Eligibles recommended by the Board were ranked in district offices, but to speed the field reorganization, in view of the order of preference for consideration by the Commissioner and rec- December 1 deadline, it was decided to proceed with the first two ommendation to the Secretary of the Treasury for final selection. district installations.) Following this, the names were submitted to the Civil Service Com- • 62 REPORT OF COMMISSIONER OF INTERNAL REVENUE REORGANIZATION OF THE INTERNAL REVENUE SERVICE 63 mission for thorough investigation of the ability and fitness of the applicants, a process which followed along the same lines as an unas- The reorganization of the Bureau according to purpose or function, sembled Civil Service examination. rather than by type of tax, opens the third large area of probable Collectors of internal revenue who had Civil Service status have benefit. For example, lack of sufficient enforcement personnel is been given the same consideration for the new position of director as one of the most serious problems of the Bureau, and bringing together other employees of the Bureau. The other (nonstatus) collectors these slender resources in the new Audit Division makes it possible have had to qualify through open, competitive examination by the to apply these resources more effectively. One visit by Bureau Civil Service Commission before they could be considered. The representatives to examine all classes of returns is possible, instead Commission has held such examinations for the position of director of separate examiners making separate calls for each kind of tax— in 26 locations. income, excise, etc. This saves the manpower of the Bureau and To select nominees for subordinate positions in the district com- provides greater convenience to the taxpaying public. missioners' and directors' offices, district selection boards have been The new functional arrangement brings the whole revenue service set up in the field. These boards are composed of the top officials to the people, as it is not necessary for a person to travel outside his in the district offices as well as the directors. own home State to take care of any normal tax matter. Each State has at least one director's office, and in this office are combined the ADVANTAGES OF THE REORGANIZATION functions formerly carried on at scattered points, in some instances Many of the administrative advantages of the reorganization are outside the State boundaries. readily apparent from the description of the old and new structure of The functional organization plan also provides a revenue system the Bureau. In summary, however, the principal benefits to be readily adaptable to changes in tax structure, and this will be of expected, in terms of the results of the major changes made in the particular value in times of national emergency. Administration organization, are as follows: in the field offices will be improved greatly as a result of the l'irst, the abolishment of all appointive offices except that of Com- establishment of the office of Assistant District Commissioner for missioner makes it possible for the Bureau to be completely a career Administration. The former field installations were not well equipped service, with all the attendant administrative gains. For the first to handle administrative matters. time, the Bureau has full control over the actions of all employees And, fourth, the strong, independent Inspection Service assures and is able to assume full responsibility for such actions. All positions thorough and continuing checks on the conduct of Bureau employees are filled solely on the basis of competence and integrity, and con- and the performance of the Bureau's field offices. tinuity of tenure and promotion on the basis of merit are assured. In addition, greater flexibility in assigning personnel is possible, because key officials can be transferred from one area to another as required. Second, the changes result in a fully responsive and fully responsible field organization. There is one unified line of command from the Secretary to the Under Secretary, Commissioner, Assistant Commis- sioner (Operations), district commissioners, and directors. This per- mits clear and extensive delegations of authority. Establishment of a system of strong district offices reduces the number of field offices reporting to Washington and facilitates their closer supervision and control. Out of this will come more uniform administration of the tax laws. Moreover, with more direct control over field operations and a strong Inspection Service, many functions can be safely decentralized, thus allowing the headquarters office in Washington to place more concentration on executive direction, plan- ning, and research. At headquarters, integration of field operations at a high level in the organization permits more efficient planning • and coordination than were previously possible. With all revenue offices brought together under the director, more effective planning is also possible at the field level. Greater flexibility and more effective utilization of manpower and equipment are pos- sible. A large number of interoffice routines are being eliminated. Furthermore, it will be possible to centralize many large-scale process- ing and filing operations, and to consolidate certain common services such as property management, and personnel and payroll operations. EXHIBIT A

Reorganization Plan for the Internal Revenue Service and accompanying message, as submitted to the Congress by the President

65 To the Congress of the United States: I transmit herewith Reorganization Plan No. 1 of 1952, prepared in accordance with the Reorganization Act of 1949 and providing for reorganizations in the Bureau of Internal Revenue of the Depart- ment of the Treasury. A comprehensive reorganization of that Bureau is necessary both to increase the efficiency of its operations and to provide better machinery for assuring honest and impartial administration of the internal revenue laws. The reorganization plan transmitted with this message is essential to accomplish the basic changes in the structure of the Bureau of Internal Revenue which are necessary for the kind of comprehensive reorganization that is now required. By bringing additional personnel in the Bureau of Internal Reve- nue under the merit system, Reorganization Plan No. 1 likewise removes what the Commission on Organization of the Executive Branch of the Government described as "one of the chief handicaps to effective organization of the Department * * *" It is my determination to maintain the highest standards of integ- rity and efficiency in the Federal service. While those standards have been observed faithfully by all but a relatively few public servants, the betrayal of their trust by those few demands the strong- est corrective action. The most vigorous efforts are being and will continue to be made to expose and punish every Government employee who misuses his official position. But we must do even more than this. We must correct every defect in organization that contributes to inefficient management and thus affords the opportunity for improper conduct. The thorough reorganization of the Bureau of Internal Revenue which I propose will be of great help in accomplishing all of these ends. It is an integral part of a program to prevent improper con- duct in public service, to protect the Government from insidious influence peddlers and favor seekers, to expose and punish wrong- doers, and to improve the management and efficiency of the executive branch. I am confident that the Congress and the public are as deeply and earnestly concerned as I am that the public business be conducted entirely upon a basis of fairness, integrity, and efficiency. I there- fore hope that the Congress will give speedy approval to Reorganiza- tion Plan No. 1, in order that we may move ahead rapidly in achieving the reorganization of the Bureau of Internal Revenue. The task of collecting the internal revenue has expanded enormously within the past decade. This expansion has been occasioned by the necessary additional taxation brought on by World War II and es- sential postwar programs. In fiscal year 1940, tax collections made by the Bureau of Internal Revenue were slightly over 5% billions of dollars; in 1951, they totaled almost UN billions. In 1940, 19 million 229047-53-0 67 68 REPORT OF COMMISSIONER OF INTERNAL REVENUE EXHIBITS 69 tax returns were filed; in 1951, 82 million. In 1940, there were 22,000 Instead of the present organization built around the offices of employees working for the Bureau; in 1951, there were 57,000. politically-appointed collectors of internal revenue, plan No. 1 will Throughout this tremendous growth, the structure of the revenue make it possible for the Secretary of the Treasury to establish not to collecting organization has remained substantially unchanged. The exceed 25 district offices. Each of these offices will be headed by a present field structure of the Bureau of Internal Revenue is comprised district commissioner who will be responsible to the Commissioner of of more than 200 field offices which report directly to Washington. Internal Revenue and will have full responsibility for administering Those 200 offices carry out their functions through more than 2,000 all internal revenue activities within a designated area. In addition, suboffices and posts of duty throughout the country. The Wash- all essential collection, enforcement, and appellate functions can be ington office now provides operating supervision, guidance, and control provided for in each local area and under one roof so far as is practi- over the principal field offices through 10 separate divisions, thus cable. It is not proposed to discontinue any essential facilities which further adding to the complexities of administration. now exist in any local areas Rather, the facilities will be extended Since the end of World War II, many procedural improvements have and the service to taxpayers improved. These new arrangements been made in the Bureau's operations. The use of automatic machines should make it possible for the individual taxpayer to conduct his has been greatly increased. The handling of cases has been simpli- business with the Bureau much more conveniently and expeditiously. fied. One major advance is represented by the recently completed In addition to making possible greatly improved service to the arrangements to expedite criminal prosecutions in tax fraud cases. taxpayer, the establishment of the district offices will provide op- In these cases, field representatives of the Bureau of Internal Revenue portunity in the field service of the Bureau of Internal Revenue for will make recommendations for criminal prosecutions directly to the the development of high caliber administrators with experience in Department of Justice. These procedural changes have increased the all phases of revenue administration. These offices will be the back- Bureau's efficiency and have made it possible for the Bureau to carry bone of a modern streamlined pattern of organization and operations its enormously increased workload. However, improvements in with clear and direct channels of responsibility and supervision from procedure cannot meet the need for organizational changes. the lowest field office to the Commissioner, and through him to the Part of the authority necessary to make a comprehensive reorgani- Secretary of the Treasury. The creation of this new framework of zation was provided in Reorganization Plan No. 26 of 1950, which district offices is a necessary step in carrying out the over-all re- was one of several uniform plans giving department heads fuller organization of the Bureau. authority over internal organizations throughout their departments. Plan No. 1 also makes it possible to provide a new framework of The studies of the Secretary of the Treasury have culminated since supervisory offices in the headquarters of the Bureau of Internal that time in a plan for extensive reorganization and modernization of Revenue. Under plan No. 1, the offices of Deputy Commissioner, the Bureau. However, his existing authority is not broad enough to Special Deputy Commissioner, and Assistant Commissioner are permit him to effectuate all of the basic features of the plan he has abolished. Three Assistant Commissioners, all in the classified civil developed. service, are authorized, and will be available to perform such functions The principal barrier to effective organization and administration as may be assigned to them. The intention of the Secretary of the of the Bureau of Internal Revenue which plan No. 1 removes is the Treasury under the comprehensive reorganization is to utilize one archaic statutory office of collector of internal revenue. Since the Assistant Commissioner to assist the Commissioner of Internal collectors are not appointed and cannot be removed by the Commis- Revenue in supervising the operations of the district offices, another sioner of Internal Revenue or the Secretary of the Treasury, and since Assistant Commissioner to aid in the preparation of technical rulings the collectors must accommodate themselves to local political situa- and decisions, and the third Assistant Commissioner to supervise for tions, they are not fully responsive to the control of their superiors in the Commissioner the inspection activities of the Bureau. the Treasury Department. Residence requirements prevent moving Two additional advantages will be obtained when the reorgani- a collector from one collection district to another, either to promote zation around this new framework is completed. impartiality and fairness or to advance collectors to more important First, the strong inspection service which the Secretary is estab- positions. Uncertainties of tenure add to the difficulty of attracting lishing will keep the work of the Bureau under close and continuous to such offices persons who are well versed in the intricacies of the observation. Working under the direct control of the Commissioner revenue laws and possessed of broad-gauged administrative ability. of Internal Revenue, it will be responsible for promptly detecting and It is appropriate and desirable that major political offices in the investigating any irregularities. executive branch of the Government be filled by persons who are Second, the new pattern of organization will strengthen and clarify appointed by the President by and with the advice and consent of lines of responsibility throughout the Bureau, thus simplifying and the Senate. On the other hand, the technical nature of much of the making more effective and uniform the management control of the Government's work today makes it equally appropriate and desirable organization. This is essential in any effort to provide our principal that positions of other types be in the professional career service. revenue collection agency the best possible administration. The administration of our internal revenue laws at the local level In circler to eliminate Presidential appointment and Senatorial calls for positions in the latter category. confirmation with respect to the Assistant General Counsel for the Bureau of Internal Revenue, and in order to provide a method of EXHIBITS 70 REPORT OF COMMISSIONER OF INTERNAL REVENUE 71 I cannot emphasize too strongly the importance which should be appointment comparable to that obtaining in the case of other assistant general counsel of the Department of the Treashry, plan attached to the reorganization plan that I am now transmitting to No. 1 abolishes that office and provides in lieu thereof a new office of the Congress. The fair and efficient administration of the Federal Assistant General Counsel with appointment under the classified internal revenue laws is of vital concern to every citizen. All of us have a right to insist that the Bureau of Internal Revenue be provided civil service. The success of the reorganization of the Bureau of Internal Revenue with the finest organization that can be devised. All of us are entitled to have that organization manned by personnel who get their jobs will to a considerable extent depend upon the ability to attract the and keep them solely because of their own integrity and competence. best qualified persons to the key positions throughout the Bureau. This reorganization plan will be a major step in achieving those In order to do so, it is necessary to make provision for more adequate objectives. salaries for such key positions. Plan No. 1 establishes in the Bureau of Internal Revenue a maximum of 70 offices with titles determined HARRY S. TRUMAN. by the Secretary of the Treasury. Those offices are in addition to THE WHITE HOUSE, the offices with specific titles also provided for in plan No. 1 and to January 14, 1952. any positions established under other authority vested in the Depart- ment of the Treasury. The compensation of these officials will be fixed under the Classification Act of 1949, as amended, but without REORGANIZATION PLAN NO. 1 OF 1952 regard to the numerical limitations on positions set forth in section Prepared by the President and transmitted to the Senate and the 505 of that act. This provision will enable the Chairman of the Civil House of Representatives in Congress assembled, January 14, 1952, pursuant to the provisions of the Reorganization Act of 1949, ap- Service Commission, or the President, as the case may be, to fix proved June 20, 1949. rates of pay for those offices in excess of the rates established in the Classification Act of 1949 for Grade GS-15 whenever the standards BUREAU OF INTERNAL REVENUE of the classification laws so permit. SECTION 1. Abolition of existing offices.—There are abolished the All organizational changes under plan No. 1 will be put into effect offices of Assistant Commissioner, Special Deputy Commissioner, as soon as it is possible to do so without disrupting the continued Deputy Commissioner, Assistant General Counsel for the Bureau of collection of revenue. Plan No. 1 will in any event be effective in Internal Revenue, Collector, and Deputy Collector, provided for in its entirety no later than December 1, 1952. sections 3905, 3910, 3915, 3931, 3941, and 3990, respectively, of the The taking effect of the reorganizations provided for in Reorgani- Internal Revenue Code. The provisions of the foregoing sentence zation Plan No. 1 of 1952 will make possible many benefits in improved shall become effective with respect to each office abolished thereby organization and operations which may be expected to produce sub- at such time as the Secretary of the Treasury shall specify, but in no stantial savings in future years. Those savings should not be expected event later than December 1, 1952. The Secretary of the Treasury to be reflected in an immediate reduction in expenditure by the shall make such provisions as he shall deem necessary respecting the Bureau of Internal Revenue but in an improved service to the public winding up of the affairs of any officer whose office is abolished by and a more efficient collection of revenue. the provisions of this section. It should be emphasized that abolition by plan No. 1 of the offices SEC. 2. Establishment of new offices.—(a) New offices are hereby of collectors and others will in no way prejudice any right or potential established in the Bureau of Internal Revenue as follows: (1) three right of any taxpayer. The abolition of offices by plan No. 1 will not offices each of which shall have the title of "Assistant Commissioner abolish any rights, privileges, powers, duties, immunities, liabilities, of Internal Revenue"; (2) so many offices, not in excess of 25 existing obligations, or other attributes of those offices except as they relate at any one time, as the Secretary of the Treasury shall from time to to matters of appointment, tenure, and compensation inconsistent time determine, each of which shall have the title of "District Com- with plan No. 1. Under the Reorganization Act of 1949, all of these missioner of Internal Revenue"; and (3) so many other offices, not attributes of office will attach to the office to which the functions of in excess of 70 existing at any one time, and with such title or titles, the abolished office are delegated by the Secretary of the Treasury. as the Secretary of the Treasury shall from time to time determine. After investigation, I have found and hereby declare that each (b) There is hereby established in the Department of the Treasury reorganization included in Reorganization Plan No. 1 of 1952 is a new and additional office which shall have the title "Assistant necessary to accomplish one or more of the purposes set forth in General Counsel." section 2(a) of the Reorganization Act of 1949. SEC. 3. Appointment and compensation.—Each Assistant Commis- I have found and hereby declare that it is necessary to include in sioner and district commissioner, the Assistant General Counsel, and the accompanying Reorganization Plan No. 1, by reason of reorgani- each other officer provided for in section 2 of this reorganization plan zations made thereby, provisions for the appointment and compensa- shall be appointed by the Secretary of the Treasury under the classified tion of the officers specified therein. The rates of compensation fixed civil service and shall receive compensation which shall be fixed from for these officers are not in excess of those which I have found to time to time pursuant to the classification laws, as now or hereafter prevail in respect of comparable officers in the executive branch. 72 REPORT OF COMMISSIONER OF INTERNAL REVENUE amended, except that the compensation may be fixed without regard to the numerical limitations on positions set forth in section 505 of the Classification Act of 1949, as amended (5 U. S. C. 1105). SEC. 4. Transfer of functions.—There are transferred to the Secre- tary of the Treasury the functions, if any, that have been vested by statute in officers, agencies, or employees of the Bureau of Internal Revenue of the Department of the Treasury since the effective date of Reorganization Plan No. 26 of 1950 (15 F. R. 4935).

EXHIBIT B

Charts showing organization of Bureau of Internal Revenue under Reorganization Plan No. 1 of 1952

73 BUREAU OF INTERNAL REVENUE DECEMBER 1,1552

AS 0r4 wAMISSIL]ER pc To COMMISSIONER ThE COYER FORMATION CAL RE]ILRR

tlI IEF COUNSEL ASSISTANT COMISSIONER ASSISTANT COMISSIONER Inamical ASSISTANT COMA SSIONER AW 1113711ATIA (colonic's, IINspEcTIONI CLAM OFFICE OF INTEUATIAAL FIELD ANAGEMNI AND PLANA AO PROMANDA AFACENENT TAX AFL/TINS PLAARING LITIGATION IFCRNICAL PLANNING ANALYSIS An APPRAISA L COLLECTION] PERSONNEL EVA/MOON AEC/MICA MINOS AUDIT SPECIAL TECHNICAL SERVICES LIAISON AND SPECIAL INTELLIANCE INYESTIBATIOS ALCOHOL AND IVACO TA REVIEW APPELLATE ill137EATI. YE

ISTRIC COINS

OPT DISTRICT PECTO ALCOHOL MN TOBACCO TA APALLATE ENFORCEIMIT COMMISSIONER

ASSISTANT DISTRICT COMISSINERS FOR ANINISTRATIN COMEAU/IS AIM ATE/LIAM ALCOAL u0 TOBACCO TAX APPELLATE

Flab Aria MSTRICT COUNSEL MOLowIlm DIRECTOR APPELLATE DIVISION OF INTERNAL REVENUE

1111117/0111 COLLECTION AVIA AMA Amu,' C 0 SIAN DAMN DIVISION

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76 76 REPORT OF (COMMISSIONER OF INTERNAL REVENUE EXHIBITS 77

INTERNAL REVENUE FIELD SERVICE DICIDABER

COMMISSIONER CHIEF COUNSEL

ASSISTANT ASSISTANT ASSISTANT CONISSIONER CONIMSSICIWA CANNISSIORTR (ATTuwas) DANNIAL

estent DISTRICT COMMISSIONERS I ROOM* PI

ASS STANT ASSISTANT ASSISTANT ASSISTANT ASSISTANT ASSISTANT DISTRICT DISTRICT DISTRICT DISTRICT DISTRICT DISTRICT 03INISSICHR COMMISSIONCR COMMISSIONER COINISSIONER COl&ISSIDER CONISSIOIER MINOTRATM /LOMA AND Walla= RIMCOO 11“ APPELLATI 9 ft 9 DIRECTORS ON INTERNAL REVENUE • -T- -T- (M)

AICDNa ADMIPOSTRATI CZU.ECTION AUDIT INTELLIGEra APPELLATE DIVISION DIVISION DIVISION DIVISION TOBACCO T DIVISION I I DIVISION 3 _r_ _r_ _r_ -1— —I- a 8

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9

N —T- EXHIBIT C

A REPORT TO TAXPAYERS

WITH FOREWORD BY THE HONORABLE JOHN W. SNYDER, SECRETARY OF THE TREASURY Released by the Treasury Department, September 10, 1959

79 FOREWORD If the taxpayer is to understand what his Government is doing, he must be informed. One of the responsibilities of the Government is to inform him. The story that is told in these pages is one that few citizens could know if it were not made available by those who possess the facts. The story to my mind is an important and unusual chapter in the history of one of our most vital agencies, the Bureau of Internal Revenue. It is a remarkable story of determined progress toward improve- ments. As is frequently true when traveling a long mad through developing and expanding territory, we came upon one bad spot. It was found, unfortunately, that there were some employees who could not resist temptation and fell into irregularities. These have been firmly and courageously eliminated. While this bad spot slowed the way momentarily, the real story represents a period of persistent and successful effort to overcome extraordinary difficulties and to shape a service that fully merits public confidence. My associates in the Treasury and I are proud to have had a part in these achievements. They could not have been brought about, however, without the tireless and unstinting efforts of the Commis- sioner of Internal Revenue and the great body of associated workers in the Bureau itself; or without the alert interest and assistance of Congress and its committees concerned with internal revenue affairs: The Senate Committee on Government Operations, the House Com- mittee on Expenditures in the Executive Departments, the House Committee on Ways and Means, the Senate and House Appropria- tions Committees, the Senate Finance Committee, the Joint Com- mittee on Internal Revenue Taxation, the King Subcommittee on Administration of Internal Revenue Laws of the House Ways and Means Committee, and the Kefauver Special Senate Committee to Investigate Organized Crime in Interstate Commerce. Finally, this progress would not have been possible without the wholehearted and unflagging encouragement and backing of President Truman. I am sure the taxpayer will find this story one well worth his interest and his reading. The success of the efforts that have been made to provide the citizen with a sound internal revenue system will depend in considerable part on his understanding of what has been done and what is being done to give him the best possible service. JOHN W. SNYDER, Secretary of the Treasury. 81

84 REPORT OF COMMISSIONER OF INTERNAL REVENUE EXHIBITS 85 audit, investigate, and enforce collections on all the returns involving The cases the public is most likely to hear about are the relatively understatements. For the same reason, the Bureau is unable to few which involve large tax amounts. By far the largest number of refund much that has been overpaid. To the extent, however, that cases compromised or removed from the collection records are those returns can be examined, the Bureau voluntarily makes refunds of of small taxpayers. No field agent or lower official can write off a unintentional overpayments as readily as it asserts added taxes in tax debt on his own authority. All compromise cases must be re- the case of underpayments. viewed and approved at several levels, with final approval at the top administrative level. THE NATURE OF THE BUREAU'S JOB The public attention given to large tax cases also sometimes leads to the impression that large taxpayers are treated more leniently The collection of taxes involves an especially personal and intimate than small ones. This is not true. The large taxpayer is, in fact, relationship between the citizen and his Government. Paying taxes given more thorough and careful attention. The taxpayer reporting and voting represent the two functions that the average citizen regu- an income of $25,000 or more is sure. to have his tax report audited larly performs personally and directly, rather than through repre- and examined at least every 2 years. The taxpayer with earnings sentative means, in the exercise of the privileges and obligations of under $5,000 will rarely hear from the tax collector unless he has citizenship. claimed an exemption to which he is not entitled. Examination has The tax collector is equally the trustee of the taxpayer and the shown that seven out of ten of the $25,000 and over returns are likely Government. He must see that each citizen pays his full taxes as to be in error, but errors, except for exemption claims, are rare among required by law. He must also see that no taxpayer is favored or those reporting less than $5,000. discriminated against, or is overcharged, if he can prevent it. The Government also concentrates its heaviest enforcement artillery The tax collector also is the confidante of the citizen, in that he on the potential cases of fraud and tax evasion, including gamblers is entrusted not only with the taxes paid, but also with detailed and racketeers. Thirty-four percent of the cases recommended for facts about the citizen's personal and private financial affairs which prosecution in fiscal 1952 were in the gambler and racketeer category. are disclosed in the tax return. These are some of the things about the nature of tax collecting The Congress has determined by law that this confidence must be with which the average taxpayer is often not familiar. They are, respected. The public disclosure of tax return information, except nevertheless, matters which concern him because they involve not under specified conditions, is prohibited by law as being an un- only the proper and effective conduct of the Government's business, warranted invasion of the citizen's privacy and as possibly endanger- but also, in the case of taxes, his own personal affairs and interest. ing the willingness of the citizen to make full disclosure of his affairs, on which our voluntary system of self-assessment and payment is WAR STRAINS BROUGHT TAX STRAINS based. The foregoing portrays in brief the Bureau's operations in 1952. This required secrecy on tax returns sometimes results in public The same story could not have been told 6 years earlier. misunderstanding as to the Bureau's willingness to make full public Present performance did not just happen. The taxpayer may be disclosure of tax cases which have become matters of controversy. aware of some changes and improvements affecting him directly that Responsible review of any tax case is, however, provided. Three have taken place since the end of the war in the collection of his taxes. Congressional committees may on request examine any tax return. He probably knows little or nothing of the critical problems in tax A Congressional committee staff regularly reviews all refunds of more administration brought on by the war or of the things that have been than $200,000, and these records are open to the public. All tax done since the war to solve them. This report is to tell him something cases brought before the United States Court of Tax Appeals or any of those problems and how they have been met. other court, and all prosecutions for fraud become public records. No taxpayer needs to be reminded that one of the costs of World The President may also, by Executive order, authorize public dis- War II was higher taxes. Even though his earnings also increased, closure of tax returns, and has, in fact, recently empowered the higher taxes created problems for him Secretary of the Treasury, at the latter's request, to release informa- They also created serious problems for his tax collector. During tion on cases where tax debts are compromised in accordance with the war years these are some of the things that happened to the Bureau ability to pay, if this appears to serve the public interest. of Internal Revenue and its operations: A compromise of tax debts also is not always understood. The Within a few years the Bureau grew from a $5 billion to more than power to accept a compromise offer is vested by law in the Com- a $40 billion business. Its collection job was multiplied eight times missioner of Internal Revenue. in dollar volume from 1940 to 1946. A compromise usually involves a case where there is no dispute as Its customers quadrupled, from nearly 20 million to more than to the amount the taxpayer owes. The Government settles for a 80 million, in tax returns filed during the same period. lesser amount if that is all that the Government can collect because Its work force, however, expanded only two and a half times, from the taxpayer has nothing more with which to pay. These may be 22,000 to near its present 57,000 level. persons gone bankrupt, widows whose inheritance has been only a These magnified tasks had to be met with a prewar machinery that tax debt, others who have suffered sharp business losses. was neither designed nor equipped to handle them. They were 86 REPORT OF COMMISSIONER OF INTERNAL REVENUE EXHIBITS 87 aggravated by many new and complex taxes imposed and super- tion and production and with a large part of the huge war bill still to imposed during the war—excise taxes (taxes on things), income taxes, be paid. victory taxes, excess profits taxes,—and by major changes in the SIX YEARS OF RECONVERSION AND MODERNIZATION methods of tax collecting, notably the withholding tax. While in the long run adding greatly to convenience and effectiveness of taxpaying While the war was on, neither time nor manpower permitted the and tax collection, this new pay-as-you-go tax system called for basic large-scale overhauling that was • needed in the organization and changes in tax collection administration that had to be made in the methods of the Bureau of Internal Revenue to meet its multiplied responsibilities. midstream of war. Fundamentally the collection job was transformed into that of With the war-strains over but with the postwar strains still ahead, collecting a broad-based mass tax. The former job was concerned with the new Secretary of the Treasury, John W. Snyder, launched a con- taxpayers with fairly substantial incomes who generally kept records, certed program to overhaul, streamline, and modernize the whole utilized the services of accountants, maintained bank accounts, and tax collection system. possessed a general knowledge of tax requirements. Practically over- The program was started in October 1946, when Secretary Snyder night this tax was extended to the millions of modest income people called to Washington all the key revenue officials to plan and initiate whose records were scanty, who were untrained in tax requirements, this transformation of a near-century-old organization. often had no bank accounts and changed jobs frequently. New and The October meeting was the first of a continuing series of moves difficult problems were thus forced upon the people of the Bureau. and actions through the ensuing months and years that began to take The Bureau's difficulties during the war years were further in- form in major changes and innumerable lesser improvements in the creased by the severe shortage of manpower and mechanical equip- Bureau's methods and administration. ment and the necessity for rapid training of new personnel when it Officially this was labeled the "Management Improvement Program." In every day terms, it meant cutting red tape, speeding up operations, could get them. The Bureau met these tasks as many another emergency had to be cutting down overhead, streamlining administration, replacing obso- met in those times. It pinpointed its limited facilities, putting them lete methods with modern ones, getting more done with the same man- to work in areas where enforcement was needed most. The increasing power and money, making both taxpaying and tax collecting simpler. tax revenues were kept flowing to help pay the cost of the Nation's It was not just an overnight job. The unremitting job of catching successful fight to defend itself and the world against conquest and up and keeping up with the heavy workload of tax collections had to go on, as incomes and the volume of returns increased The plant enslavement. could not be closed down for repairs, or for new models, or for retooling But the Bureau emerged from the war much the worse for wear, and replanning the assembly lines. and with a still gigantic job ahead of it. Individual tax returns were being received twice as fast as they Furthermore, much of what had to be done was trail-blazing. His- tory and experience just didn't provide any precedents or foreknowledge could be handled. The backlog of individual returns continually mounted. on the best ways to collect $65 billion from some 90-odd million tax- The investigation of corporate and profits taxes had fallen nearly payers. Consequently, many major changes were first tried out on a "pilot" basis. After sufficient experience and adjustment, they were 2 years behind. It was taking 12 months or more to make refunds to taxpayers who extended to general use if they worked, discarded if they didn't had overpaid their taxes, particularly through the withholding tax. A SUMMARY OF RESULTS Furthermore, as taxes increased, the temptation among many tax- Here, in broad terms, is what the Bureau of Internal Revenue payers to avoid and evade these higher taxes and the danger of fraud accomplished under this 6-year program of efficiency, economy, and also increased. Wartime tax evasion by black market operators added modernization: another difficult area of enforcement. On this front, the Bureau could Measured up to its new $65 billion responsibilities. spare only limited manpower from its most essential functions to Caught up with the war backlog. obtain better enforcement and collection. The best that could be done Assumed new duties, such as the wagering tax, new social security with the limited manpower was to spot those most troublesome areas taxes, and launched an all-out drive on racketeer tax evaders. and concentrate upon them. Handled more work at less cost * * *. War's end brought some initial relief by increasing the availability And thereby expanded enforcement efforts with a resulting increase, of manpower as servicemen were demobilized. Personnel was added for a single year, of $800 million in unreported and unpaid taxes— particularly to expand enforcement activities to collect more of the about three times the entire annual cost of operating the Bureau. taxes due by ferreting out evasion and prosecuting fraud. A more detailed accounting of the program's results is given later But a great deal more than added personnel was needed. A in this section. thorough, drastic, and far-reaching revision of the whole tax-collecting The Bureau has not as yet, however, been able fully to realize all mechanism was essential to catch up with the past and to keep up its goals, including more complete audit and examination of income with the future of a world-power economy, with its expanding popula- tax returns which, if manpower permitted, would produce substantial amounts of additional revenue. 88 REPORT OF COMMISSIONER OF INTERNAL REVENUE EXHIBITS 89 STRATEGY OF THE IMPROVEMENT PROGRAM The easier it is for the taxpayer to file, the easier becomes the job of the tax office. Bringing experience and management skill from every source, inside and outside the Government, from the lowest level field worker to the When the taxpayer makes an error, it means work and expense in most skilled management experts in the country, to bear on the up- the tax office, as well as added work and possible inconvenience and dating of the Bureau's organization and operations—this was the annoyance to the taxpayer. strategy of the campaign to solve the war-born problem of increased Most taxpayers today, when they think back, know how greatly the tax collection. standard tax forms have been simplified. For most wage earners, the The grass roots had to be tapped, the Secretary felt, to make the income tax return can now be made out in a few minutes. program really effective and to reach the people in the field down to the Four out of five taxpayers who use the long form, 1040, take the last of the clerks who handle the multitudinous tasks connected with standard deduction rather than attempting to itemize all the possible notices, returns, queries of millions of taxpayers. deductible items, from depreciation on a rented room to interest on the A work simplification program was initiated at the grass roots level mortgage. That saves his time and it saves the collector's time and to provide training and instruction down to the lowest supervisory the Government's money. Most of these forms are now checked and level in simplifying and organizing work operations efficiently. Some verified electronically. From 15 to 20 million taxpayers with earnings of less than $5,000 2,200 improvements in operations and procedures resulted. Employee incentive awards were established, with cash awards merely fill in certain data on Form 1040A, send it in with the with- offered to employees at all levels who produced ideas or suggestions holding form provided by the employer, and the tax office computes the tax. This is done by remarkable electronic machines that can that paid off. compute a return in 1/70th of a second. If the taxpayer has overpaid At the top levels, major changes were shaped, on the basis of his tax, he receives a refund; if he has underpaid, he is billed for the recommendations of the Bureau's key officials, and as a result of top- balance. level studies. A special committee on administration was set up by the Revenue Some other aids with which the taxpayer is now familiar and which Commissioner, and later, at the Secretary's direction, a management he accepts as a normal service are these: The simple and understandable instructions he now receives with staff was established as part of the Commissioner's office. A management committee was also established by the Secretary in his tax notice, telling him not only what income is taxable but also what he doesn't have to pay on. the Treasury Department to serve as a consulting group for improved The booklet, "Your Federal Income Tax," one of the Government's management throughout the Department, including the Bureau of most widely read documents, giving a comprehensive account of in- Internal Revenue. Later the Secretary created a Special Committee come tax matters in man-in-the-street language and sold through the to Direct the Management Studies of the Bureau of Internal Revenue, Superintendent of Documents for 25 cents. composed of well qualified people from both inside and outside the The punch-card notices the taxpayer now receives that enable the Government, and headed by an experienced business man and former Under Secretary of the Treasury, A. L. M. Wiggins. tax offices to handle notices and payments mechanically. All of these developments are outgrowths of the efforts and ideas The Congress also took an active interest in the improvement of the Bureau's operations. The House Committee on Appropriations to simplify and modernize tax collections. The results are better service to the taxpayer and more efficient and economical performance made a number of recommendations, and the Advisory Group to the by the tax collector. Joint Committee on Internal Revenue Taxation also submitted a Modernized methods.—To anyone who would go through a large tax series of recommendations. Virtually all of these recommendations collection office today and compare it with several years ago, probably were adopted. the most striking visible change would be in the modern devices and One of the outstanding management firms in the country, Cresap, equipment that have replaced much of the hand-handling of the past. McCormick, and Paget, was engaged in September 1948, to make a This comprehensive analysis of organization and procedures in the col- change, though well advanced, is still going on. When the war expansion in revenue workload came, it was obvious lectors' offices with recommendations for improvement. When this that mechanization was the answer to many workload problems. study was completed, the firm was engaged to do a similar study on But that couldn't be achieved during the war. the organization of the Bureau itself. One of the primary objectives of the management improvement WHAT THE PROGRAM DID program has been to convert manual operations to labor-saving and mechanical methods as rapidly and as extensively as was feasible. To give a better idea of what this meant, here are some of the things Today much of that progress has been achieved through the electronic that were done: and mechanical marvels of the modern business world. Aiding the taxpayer.—Much of what goes on in the collection of Electronic computers, punch-card recording machines, electric type- taxes is of no direct concern to the taxpayer—unless it goes wrong. writers, high-speed posting machines, mechanical validators for tax But some of it does affect him directly and the taxpayer plays an im- stamps, devices in distilleries that automatically measure the volume portant part in making tax collecting more efficient and less costly. of alcoholic beverages and record the tax—all of these and others have 90 REPORT OF COMMISSIONER OF INTERNAL REVENUE EXHIBITS 91 been developed, tried out, and installed as rapidly as possible to mul- The administration of alcoholic beverage and of tobacco taxes has tiply the output of the Revenue Bureau's manpower. been consolidated into a single unit, permitting better enforcement Refunds on overpayments to some 30 million taxpayers as a result coverage of the alcohol and tobacco industries. of the withholding tax, which run annually close to two billion dollars, Since the same field agents handle and investigate both income and have been speeded up through modern methods to the point where estate and gift taxes, the administration of estate and gift taxes was most of them are now mailed out in approximately a month after the combined with the income tax administration, permitting consolida- March 15 closing date for tax returns. During the war, when the tion of reports and instructions. withholding tax was initiated, as much as 12 months was required for Modern cost accounting systems were set up in the collector's office refunds. This speed-up of refunds is not only a welcome service to to make it possible to relate staff size more accurately to the actual the taxpayer who usually wants to recover his excess payments as work requirements. soon as possible, but it also represents a significant savings to the Top-side administration was also tightened by consolidating all government in interest payments that would otherwise have to be operating functions into one group and all technical functions intoi made on these sums. another group, with each group reporting to a single Assistant Com- Such interest payments have been cut by $3 million in a single year missioner. through the speed-up of these refunds. A separate Inspection Service was established reporting directly to A standardized mailing system has been instituted in tax offices to the Commissioner on the performance and conduct of Bureau offices effect a $500,000 savings annually. and employees. A new flat-package mailing system for income tax forms has been What the employees did.—One of the most significant and useful tried out successfully and will be instituted generally at a savings of contributions in improving the Bureau's operations was that made by $350,000 per year. the rank-and-file of the employees. On January 14, 1947, the Secre- Space-saving has been another economy goal. One of the first steps tary of the Treasury set up a Department Committee on Employee taken was to convert the voluminous files and records of the revenue Awards, and invited all employees to send in their ideas and sugges- establishment to microfilm, saving acres of file cabinets and storage tions for improved operations. Cash incentive awards were made to space. Initial savings ran to more than a million dollars, and an employees whose ideas paid off in economies. estimated $100,000 annually is being saved through microfilming as The Commissioner invited employees from all levels of the Internal new files and records must be added. Revenue Service to participate. The service responded. Red tape cutting.—Simplifying administrative procedures, reducing They sent in 15,065 recommendations of how the work could be the volume of forms, reports, and copies, is a continuous necessity in done faster, better, and cheaper. Of these, 2,285 were adopted. The any large organization to streamline operations and save waste motion result was an estimated savings of 1664,000 annually to the Govern- and manpower. During the past 6 years such red tape cutting has ment been a major point of attack in improving the Bureau's operations. Many of the suggestions appeared trivial on their face—an unneeded Some examples: copy or superfluous form eliminated, or a simpler method of indexing A detailed review was made of relationships between the field oflices some records. But when applied throughout the service, they added and Washington. Where some centralization was desirable in making up. One man who made a suggestion that he felt was hardly worth effective use of modern mechanized and mass servicing operations, the time and notice of Washington, was amazed to receive a cash decentralization of functions increased efficiency and economy in award of $375 for his proposal. It had been adopted with a resulting matters that could otherwise be adequately handled at the field level. annual saving to the Government of $37,500. The flow of reports, forms, copies, and actions that came in from The idea involved in this suggestion provided for the discontinuance the field to Washington was examined to determine if "this trip is of the stamping or imprinting of the internal revenue collection district necessary." For many things, it was and is necessary. For many it on withholding receipts, Forms W-2, at the time they are detached was found to serve no useful purpose. Routine actions and functions from the income tax returns. The elimination of this operation saved were left with the field offices, and many lesser decisions and deter- 28,040 man-hours which were released for other purposes. minations delegated to them. The highest award paid to date was $725. This suggestion involved The result was to speed up operations and to cut down greatly the an improvement in the business schedule of the income tax return, volume of reports, copies, duplicate reviews and approvals, and file Form 1040, relating to "cost of goods withdrawn for personal use." records. In addition to bringing in substantial additional revenue, the change Combining reports for withholding tax, and social security tax on has decreased administrative costs through follow-up investigations a single form saved $250,000 a year. to an extent estimated at approximately $161,500 annually. Consolidating administrative operations has been another impor- Examples of other suggestions.—Devices helpful to telephone opera- tant means of increasing efficiency and reducing the number of forms tors in handling calls on frequently requested and often busy numbers; and reports and the overhead. elimination of unnecessary markings on tax returns; improved methods of standardization, sampling, manufacturing, and testing of various types of distilled and fermented beverages; revision of interoffice forms REPORT OF COMMISSIONER OF INTERNAL REVENUE 92 - EXHIBITS. 93 and records to reduce typing; addressographing addresses on cover of the Treasury's direction to investigate racketeering-type cases, follow- pamphlets to avoid use of envelopes; methods for speeding up lines ing the Kefauver Committee disclosures. Special racket squads of waiting taxpayers; and development of a method for the detection involving 2,100 top enforcement officers, were organized under Jobi and estimation of heroin in the presence of other alkaloids. B. Dunlap, who shortly thereafter became Commissioner. Thirty- four percent of the cases recommended for prosecution in fiscal 1952 ADDING UP THE BENEFITS were in the gambler of racketeer category. Some of the money savings resulting from specific measures have In addition, the Bureau for the first time had the job of initiating already been mentioned. But they are merely examples of the full and enforceing the new wagering tax enacted by the Congress. benefits that are disclosed in some of the over-all results of the Bureau's Both the racket squad drive and the wagering tax enforcement, operations. however, have impeded other operations. Since no funds were pro- Here are some of the results: vided by the Congress for either of these activities, they have had to With only a 3 percent increase in personnel over the 6 years, the be carried on at the expense of other functions. Necessarily, the Bureau of Internal Revenue has absorbed a 13 percent increase in diversion of these forces to these new and special duties removes them income tax returns, a 144 percent increase in those over $10,000— from the work force available for the regular audit of tax returns and those requiring more work and individual attention—and a 61 percent limits the recovery through these channels accordingly. increase in corporate income tax returns, as well as catching up on the This is the 6-year story of the efforts of the Treasury Department wartime backlog. Expanding population, increased earnings, and and the Bureau of Internal Revenue to revamp, modernize, and over- business expansion have continued to add to the Bureau's workload haul the Nation's tax collecting system. Seldom has any large during the postwar period. Government operation undergone so intensive and complete scrutiny But that is not all. and change or been so extensively transformed in so short a time. Additional tax assessments and collections on unpaid taxes—money The program is not completed even now—indeed, it may never end, the Government would not otherwise have collected—were nearly for improvement measures will have to go on as conditions change. $800,000,000, or 55 percent, greater in 1952 than in 1946. The effect and the dividends of the improvements thus far made are This resulted from diverting more manpower from the processing of also only partially realized. Much of the benefit and savings is still tax returns, which must be done but produces no additional revenue, to come in future years. to the examining and investigating of tax returns which failed to report the full taxes owing to the Government. For every dollar THE BUREAU GETS REORGANIZED spent in this fieldhe Government has collected on an average an In view of the changes wrought under the improvement program, additional $20. ManpowerM savings through streamlining and modern- a "reorganization" of the Bureau of Internal Revenue on top of all ization of mass handling of returns has made this increased collection that was done may seem superfluous. effort possible. Efforts to improve the Bureau's management and operations, how- An audit control program was instituted to identify the types of ever, made evident a need for something more fundamental. 'Pune- programs that held greatest promise of "pay dirt"—those most likely tions could be improved within limits, but some of them could not be to be incorrect or understated—and efforts were concentrated most changed because the Bureau's basic legal structure did not permit it. heavily on these returns. Intensive studies have been made to The Bureau had developed over the years on a framework originally analyze the nature and extent of enforcement and management prob- established during the Civil War, when the first income tax was im- lems in different tax categories in order to focus effort on the most posed. (The Supreme Court later ruled the income tax unconsti- productive areas and avoid wasted effort. tutional and it was necessary to amend the Constitution before the In addition, issuance of warrants to collect taxes reported but not present-day income tax could be levied.) In 1862 the first collector's paid increased to a total of about $400 million, about twice the amount offices were set-up for the purpose of gaining acceptance and coopera- 6 years before. tion of the taxpayers and forwarding the tax collections to Washington. Investigations and prosecutions of tax frauds were also stepped up The number of collector's offices increased to 64, with responsi- through the release of more manpower as part of the drive to collect bility chiefly for collecting the various types of taxes. Meanwhile, more taxes due the Government. In fiscal year 1952 suspected fraud the policy, enforcement, and administration of the various major cases investigated were increased 20 percent over the previous year, types of taxes were carried on by separate units in Washington and criminal prosecutions recommended jumped 105 percent, and con- the field, with the Commissioner as the only common point of admin- victions and pleas of guilty or nob contendere obtained through the istrative control. The revenue operation was handled through some Department of Justice were about 75 percent greater. Claims for 200 different offices throughout the country. This made for diverse additional taxes and penalties involved in the cases investigated by and scattered administrative direction and difficulty for the taxpayer the Bureau special agents totaled more than $250 million. who had to deal with different offices on different problems. The stepped-up activity in fraud investigations resulted in con- The collectors, moreover, were political appointees, not career civil siderable part from increased efforts undertaken at the Secretary of servants, and their tenure was of uncertain duration. 94 REPORT OF COMMISSIONER- OF -INTERNAL REVENUE EXHIBITS 95 Modernization and improved management and direction were previously be economically applied in offices serving less populated limited by this kind of organizational framework, which no longer areas and having smaller workloads. fitted the times. The business of revenue administration had become a complex and special field where merit, training, and experience, pro- The Act also maintains the recently created Inspection Service, through which the Commissioner and the Secretary of the Treasury tected by secure tenure, were essential. will have a direct line of supervision and information on the per- Out of the management studies and surveys, a plan was developed formance of offices and the conduct of personnel independent of to reorganize the Bureau along modern lines. These proposals were embodied in Reorganization Plan No. administrative and operating channels, and will be better able to 1 for 1952 which President maintain high standards of service and behavior throughout the Truman sent to the Congress on January 14, 1952. It became effec- country. tive 2 months later with Congressional assent, and was to be put into Full development of the benefits of the new organization will require effect by December 1 of the same year. time, but the fundamental steps have now been taken. WHAT THE REORGANIZATION PROVIDED THE INTERNAL REVENUE SERVICE Here is what the reorganization plan did: It eliminated the political appointment of collectors and brought Without the steady flow of revenue from the people, Government all Bureau personnel, except the Commissioner, under Civil Service would cease to function. A strain on the revenue system is in effect appointment and the merit system. a strain on the heart of Government. A breakdown in its functions It established not more than 25 district offices to be headed by affects all functions. a district commissioner. These offices were to have full adminis- That is why extraordinary measures were called for and taken to trative responsibility for all internal revenue activities within a regenerate the Bureau's operations after the strains of war. That, designated area, regardless of function or kind of tax. The district too, is why unusual and special safeguards have been instituted to commissioner was to report directly to Washington. assure among revenue service personnel a high level of competence, It abolished the collector's offices and in their stead established complete integrity, and freedom from personal interests that may not more than 70 local area offices under the direction and supervision conflict with public responsibility. of the district offices, with a director of internal revenue in charge Better supervision, closer surveillance, and improved training of of each. These are the offices with which the taxpayer will deal on personnel were among the needs brought out by the program to virtually all revenue matters, whether it is to pay a tax or to appeal improve the Bureau's service and to repair the effects of the strains a ruling. It is the intention, in time, to have all these functions, of war. For these strains had had their effect on the people as well now physically scattered, brought together under one roof. as on the operations. The Act provided for three Assistant Commissioners in Washington, A PROGRAM TO IMPROVE PERSONNEL one for operations, one for technical rulings and decisions, one for the Here are measures that have been taken to root out failures in the Inspection Service. service and insure and safeguard high standard performance and WHAT THE REORGANIZATION ACCOMPLISHED conduct in the future: the things that this reorganization will mean in Long-standing policies of the Bureau have called for thorough Here are some of character checks and statements on financial worth and interests by terms of improved service to the public and the taxpayer: persons appointed to positions of trust; the bonding of all employees It will provide a one-stop service for the taxpayer to take up any handling public funds; investigation of any reports of improper revenue matter without leaving his state. activities by employees; and a periodic check of office operations. It will make possible the development of a strong corps of trained These measures have been augmented and strengthened by other and experiened tax administrators available to serve where they are actions designed to eliminate any who are unworthy and to assure needed, by making them all a part of the career service, by giving them that only persons of integrity and competence are admitted to and continuity of tenure on the basis of their merits, and by permitting retained in the service. key officials to be moved from one area to another as needed, whereas Some 32,000 internal revenue employees holding positions of trust in the past collectors were required to be residents of the areas they are now required periodically to fill out detailed financial question- served. naires, and to disclose any outside interests that might bear on their It will streamline administration and make for tighter control Bureau employment. and more efficient direction by providing for the directors' field offices Income tax returns of all enforcement and other key personnel in to be supervised by the district commissioners' offices, which in turn the service have been audited as a check on their sources of outside will report directly to Washington income. It will permit the extension of many improvements by permitting The Inspection Service has been established as a separate division consolidation of more mass operations in the district offices, the to investigate and check on the performance and conduct of employees, delegation of more operating functions to the taxpayer level, and and to keep the Commissioner and the Secretary of the Treasury the extension of modern mechanized operations which could not 96 REPORT OF COMMISSIONER OF INTERNAL REVENUE EXHIBITS 97 apprised of personnel activities and problems at all levels independ- This was not true of all. Some were unequal to handling their ently of operating and administrative channels. greater tasks and responsibilities. Others succumbed to temptations At the request of Internal Revenue Commissioner John B. Dunlap, for personal gain. More vigorous measures to stamp out and prevent the Civil Service Commission has set higher minimum standards for wrongdoing were added to the task of reconstructing the Bureau's appointment of enforcement officers. operating machinery, while the job of collecting the Nation's taxes An improved training program for Bureau personnel has been set went on without interruption. The situation was summed up by Commissioner John B. Dunlap up. The Secretary of the Treasury and the Commissioner of Internal in these words: Revenue have amplified and reemphasized basic rules laid down for While our main attention was focused on solutions of our management prob- lems brought on by the vast wartime increase in our tax system, some of the men the conduct of employees. They include prohibition against accept- charged with the responsibility for proper administration of our Internal Revenue ing gifts, fees, or favors from taxpayers or attorneys involved in Service proved too little or too weak for their heavy public trust. matters before the Bureau; and avoidance of outside activities or interests that niay be in conflict with their employment by the Bureau With few exceptions, those who proved too little or too weak were or the Federal Government. discovered and investigated by the Bureau itself, and action was The elimination of political appointments and the coverage of all taken, ranging from dismissal to criminal prosecution, as soon as the employees and staff under the merit system have further strengthened facts could be established. these procedures and the control and direction of employees' Congressional committees, particularly the King Subcommittee of performance and conduct. the House Committee on Ways and Means, also undertook investiga- tion under their special powers, with the full cooperation of the THE WAYWARD ELIMINATED Bureau and the Secretary of the Treasury. Every personnel file of the Bureau since 1945 was made available to the Committee along These measures to protect the full integrity of the Internal Revenue with the cooperation of the Bureau's agents. Referring to the Service were strengthened when it was discovered that some employees Bureau's assistance, Chairman King of the House Subcommittee had failed in their public responsibilities. Separations for cause in said: • 1952 resulting from investigations instituted over a much fiscal year One of the most satisfactory experiences I have had in the course of our work longer period are given in the following table: has been to have the cooperative and able assistance of Special Agents and Rev- NUMBER OF SEPARATIONS DURING THE FISCAL YEAR 1952 enue Agents. Some of the Committee's most difficult investigations could not Number of separations have been carried out as successfully as they were without the persevering and July I. HMI— skilled help we received. June &I, lose Cause of separation Weeding out wrongdoers was only half the job. Strengthening the Acceptance of gratuities, bribes, etc 53 Embezzlement involving United States Government funds or prop- controls, supervision, and training of personnel to protect against erty 24 future laxness and assure high performance standards was equally Failure of employee to pay proper tax 21 essential. Additional measures were instituted to maintain in all Falsification or distortion of Government reports, records, etc 5 offices and personnel the honesty and integrity that generally character- 103 izes the Bureau's employees. Full integrity in the Service has to go along with modern efficiency. In addition to the above separations, 71 employees in 1952 were separated for miscellaneous reasons involving such matters as personal STEPS TO HIGHER STANDARDS misconduct, failure to properly discharge duties, infractions of the In brief, this is the story of what the Bureau and the Department rules and regulations, etc. (Total number of employees in the 1951: 57,557.) of the Treasury have done to bring the quality of the Revenue Service Bureau of Internal Revenue July 1, personnel to the same high standards that have been set for the When the first irregularities began to be uncovered, considerably efficiency of its operations: before they were brought to Congressional and public attention, 1. Thorough investigation has eliminated those shown to be Secretary of the Treasury Snyder personally instructed the Com- unequal to present-day tasks or unworthy of public trust and has missioner of Internal Revenue to get to the bottom of every evidence firmly established the integrity of the great body of Revenue Service or report of misconduct. Full investigations were ordered in all employees. instances of alleged wrongdoing, and a sweeping review of personnel was instituted by the Commissioner with the Secretary's full support. 2. Action has been successfully taken to recover or prevent any known financial loss to the Government resulting from wrongdoing in Investigation showed that the great body of workers in the Revenue Service had shouldered the added burdens ably and without deviation the Service. The taxpayer's dollar has been thoroughly protected. 3. Political appointments have been eliminated, and all personnel from sound principles of public service. They had responded vigor- below the Commissioner have been brought under the merit system. ously to their leadership to increase their output, improve their 4. Through reorganization and special safeguards, closer super- efficiency, and adjust to new methods and demands. vision and direct control of performance and conduct have been 98 REPORT OF COMMISSIONER OF INTERNAL REVENUE EXHIBITS 99 instituted, and training systems have been undertaken to better Secretary of the Treasury, John W. Snyder, when he launched the equip revenue workers to fulfill their duties and obligations as public improvement program of the Bureau 3 months after he took office in servants. 1946, had told its officials at that time: WHAT LIES AHEAD You are urged to make a continuous effort to simplify procedures, streamline The proper functioning of any organization, public or private, operations, obtain a higher degree of efficiency, improve the effective utilization depends fundamentally on the quality and effort of the people who of personnel, and to eliminate work and expenditures which are not essential to man it and, particularly in a large operation, the opportunity given good administrative practice and sound fiscal policy. these people, through effective organization, methods, and adminis- In August 1952, with the establishment of the new headquarters trative direction and supervision, to apply their efforts successfully to organization in Washington under the reorganization plan, Secretary their functions. Snyder was able to say:

The 6 - year effort of the Department of the Treasury and the This plan marks the culmination of long and earnest efforts to remold the Bureau of Internal Revenue has been directed toward developing the Revenue Service into a modernized agency, better able to discharge its tremendous type of organization and machinery that will most efficiently meet the task of administering the revenue system of our country * * * As the changes in the Bureau's operating machinery are implemented, we are assured of newly enlarged and complex responsibilities of collecting the Nation's increased efficiency, high integrity, and equitable, impartial administration of the taxes and toward assuring a service of competent workers and leaders internal revenue statutes * * * I know every employee of the Bureau from to carry out these responsibilities. top to bottom will respond wholeheartedly and that with the completion of the The Bureau's ability to do the full job, however, by increasing its reorganization and the revitalizing of the Revenue Service, we will have the soundest revenue-collecting agency in history, manned by capable and trust- examining and enforcement activities so that all taxpayers are assessed worthy men and women the full taxes they legally owe the Government and no taxpayer is The American people are entitled to a Federal Revenue Service of top efficiency, overcharged on his tax bill, still depends on sufficient personnel to of unquestioned integrity, and of maximum operating economy. We are confident expand these operations. Even with the high level of efficiency that today the Bureau is providing this type of service. equalled the full measure of achieved, enforcement staff has not yet CHRONOLOGY OF ACTIONS TAKEN TO IMPROVE ADMINISTRATION IN THE BUREAU needed enforcement work. Adequate funds for this purpose remain a OF INTERNAL REVENUE necessity for a fully adequate tax collecting job. The management improvement program and the Reorganization October 7-9, 1946.—Conference of collectors and internal revenue Plan have, nevertheless, largely accomplished the administrative and agents in Washington The conference, called by the Secretary, operating changes that were necessary. The personnel was for the stirred interest in better management in the Bureau of Internal most part already available, but its effectiveness and quality has been Revenue and resulted in the submission of a number of plans for strengthened both by the administrative improvements and by the improving the operations of the Internal Revenue Service. Many of protections and assurances that have been provided for quality these ideas and suggestions were adopted in 1947 and 1948 after service and performance. These have included the full establishment study and experiments showed they were worth while. of career service, based on the merit system and the reward and October 31, 1946.—The Secretary addressed a letter to all Bureau promotion of those who earn it, the elimination of wrongdoers in high chiefs urging the streamlining of operations and other administrative or low places, greater safeguards against failures in public responsi- improvements. bility, and the enlistment of the efforts of the whole body of workers November 15, 1946.—Special Committee on Administration in in the continued improvement and maintenance of the tax collecting Bureau of Internal Revenue appointed. This committee appraised operation. the ideas and suggestions submitted by key officials at the October Much of this accomplishment is in effect and producing results, conference and immediately afterward. Its final report was submitted while some of it promises its major returns in future years. The in August 1947. Over 100 of the ideas or plans were adopted and Bureau of Internal Revenue is, however, already a rejuvenated and placed in effect in the past 5 years. Some of these were: (a) micro- strong organization, and the imperfections that resulted from the filming of records, commencing in 1947; (b) revision of internal forms, strains of wartime expansion have either been remedied or are being from 1946 to date; (c) new sorting and filing methods for processing returns; progressively overcome. (d) reduction of interest payments through improved pro- Commissioner John B. Dunlap, himself a career revenue employee, cedures in scheduling refunds; (e) change in tolerance used in comput- who helped fashion the reorganization plan and is now putting it into ing taxes on Form W-2, to simplify adjustments between the taxpayer effect, and who carried out the final clean-up of wrongdoers after his and the Government; (f) use of pre-assembled forms where prac- appointment in 1951, has this to say of his confidence in the Bureau's ticable to increase productivity and improve service. Other projects begun in 1947 which resulted in improvements in future: operations included: I believe that the vast majority of our people are just as fully devoted to their duty as any employees you could find in any business. It's a shame that those The microfilming program, to preserve permanent records but save who have gone wrong have blackened the reputation of those who are trying to space and equipment required for records storage. This is now one do an excellent job. of the standard practices of the Bureau of Internal Revenue and over I feel that the Internal Revenue Bureau is in a healthy condition. I will never lose faith in the people in the Internal Revenue Service. $100,000 per year which would otherwise be required for file cabinets 229047-58-8 100 REPORT OF COMMISSIONER OF INTERNAL REVENUE EXHIBITS 101 and storage space is now saved. The value of file cabinets and floor November 1, 1947.—Wage and Excise Tax Division was formed in space released by this program to date is over $1,300,000. collectors' offices by combining the Miscellaneous and Employment Improvements were worked out in the scheduling of payments for Tax Divisions and the Witholding Tax Subdivision of the Income refund accelerating the process sufficiently to save over $3,000,000 Tax Division. This permitted the consolidation of certain forms and in interest charges during one year by getting refunds to taxpayers records and the performance of a better coordinated service to taxpayers. more promptly. March 23, 1948.—Organizationa1 meeting of the Treasury Depart- The procedure for paying alcohol taxes by bottlers was simplified. ment Management Committee was held. This committee was estab- Instead of the proprietor having to submit bottling tank forms to the lished to act as a consulting organization for improving management storekeeper-gauger for verification, then to a deputy collector with the throughout the Department. remittance, then the receipted form back to the storekeeper-gauger for April 22, 1948.—The Commissioner's management staff was estab- release of the spirits for bottling, the new procedure eliminates all of lished'by the Commissioner's order. The management staff has as a the delay. The proprietor may now purchase stamps in advance, primary objective the improvement of management in the Bureau of attach the exact value to the bottling tank form, and present the form Internal Revenue. It has taken a position of leadership in manage- with attached stamps to the storekeeper-gauger who releases the spirits ment activities since that time. to be bottled. April 1948.—Report of the Advisory Group to the Joint Com- The use of transfer stamps on all containers of industrial alcohol mittee on Internal Revenue Taxation was released. This report transferred in bond from one bonded warehouse to another was elimi- made a number of recommendations, among them: nated as investigation revealed there was sufficient protection to the (a) The establishment of a management staff in the Commissioner's revenue without them. office. February 1948.—Report by the House Committee on Appropria- (b) The decentralization of all routine work to the field offices tions. This committee report made a number of recommendations leaving Washington a supervisory and management headquarters. for improving the operations of the Bureau of Internal Revenue. (c) The extension of the use of depositary receipts. February 20, 1948.—The Secretary instructed the Commissioner to (d) Improvements in tax return forms. augment the Commissioner's staff to have the function of broad-scale (e) The use of modern sampling techniques to measure the adequacy management. of enforcement methods and the volume of tax evasion. January 14, 1947.—Letter to Bureau heads announced the appoint- (f) The employment of outside management specialists to study ment of a Treasury Department Committee on Employee Awards. the organization and operations of the Bureau of Internal Revenue. The committee was organized in January and began planning fora All of these recommendations were accepted and became objectives, program. The regulations and instructions were issued in June and for installation as rapidly as possible. the formal announcement to employees inviting them to participate July 2, 1948.—By Order No. 5-784, the Secretary established a by submitting suggestions was made on July 30. Since that time Committee to Direct the Management Studies of the Bureau of Bureau of Internal Revenue employees have submitted over 14,500 Internal Revenue. Hon. A. L. M. Wiggins was named chairman. suggestions. Of these, 2,170 have been adopted and 1,876 cash This committee brought together a group of highly qualified men, awards made. Estimated first-year's savings total $663,900. This from both inside and outside of Government, and focused their atten- is still a very vital and active program, 24 suggestions were adopted tion on the management problems of the Bureau of Internal Revenue last month. Most of these improvements are small, an improvement for purposes of discussion and analysis. It has been most helpful in in a form, or the elimination of an unnecessary step in a procedure, its advice to the Commissioner of Internal Revenue and in expediting but when an organization is handling forms by the millions, 50,000,000 improvements. income tax returns and 40,000,000 other tax returns per year, these September 1948.—Congress authorized the employment of a firm of small savings in time and work are enormously multiplied in some management consultants to make a comprehensive survey in the cases. Bureau of Internal Revenue. March 25, 1947.—Letter to Bureau heads urging again their September 30, 1948.—The services of Cresap, McCormick and Paget accelerated efforts toward improvements to reduce expenditures. were obtained to analyze the organization and procedures of the June 1947.—Inauguration of work simplification program The collector's offices. Their recommendations were received in 1949. program was begun with a "pilot" installation in the collector's office There were also numerous other developments during 1948 which in St. Paul, Minn. The program might be called the grass-roots improved the organization and operations of the Bureau of Internal approach to management improvement, as it starts with the lowest Revenue, such as— level of management, the first-line supervisor, and trains him to Successful experiments were conducted in the collector's office in apply simple techniques of management analysis. Within 5 years it Cleveland on the use of punch-card tabulating equipment for com- has resulted in the installation of more than 2,200 improvements, and puting tax liability on W-2 returns. an active interest in better management-among the lowest supervisory Orders were issued for the retention of excise tax returns in the levels of the internal revenue service. collector's offices instead of being forwarded to Washington. This eliminated a duplicate copy which had been retained in the collector's 102 REPORT OF COMMISSIONER OF INTERNAL RENENUE EXHIBITS 103 office, and, also, the handling of original returns in the Washington 6. Use of high-speed posting machines with direct subtraction office. using continuous carbon-interleaved forms for preparing accounting Photocopying was introduced in many offices to reduce the typing records. workload and relieve the shortage of typists and stenographers. August 1949.—Report of management consulting firm Cresap, Your Federal Income Tax booklet was rewritten in nontechnical McCormick and Paget, on organization of the Bureau of Internal language and became a best seller. Revenue was received. It included a number of recommendations The instructions to taxpayers enclosed with their income-tax return for organizational and procedural changes. forms were clarified so the taxpayer would know not only what he November 14, 1949.—Division of responsibilities between two should report but what he had a legal right to omit or deduct. assistant commissioners. The Commissioner of Internal Revenue The new Form 1040A was introduced to simplify computation of tax issued an order defining the authority and responsibility of the two liability by collectors and insure better compliance with income-tax Assistant Commissioners. One was given supervision over the law requirements. technical functions of the Bureau of Internal Revenue and the other Authority to approve routine personnel actions was decentralized to was given supervision over the operating activities of the Bureau. field officials. This provided a logical division of the organization responsibilities Authority was decentralized to the collectors to approve special and provided more adequate assistance to the Commissioner. refunds of social security taxes. Fall 1949.—The Processing Division was given the task of inserting Estate and Gift Tax Division transferred from Miscellaneous Tax and mailing income tax forms and instructions for several collectors' Unit to Income Tax Unit, providing closer linking of field and head offices. By the fall of 1951 this was extended to 37 collectors' offices. quarters' offices as all field examinations of estate and gift tax returns Economies were achieved with mass-production methods impossible were performed in the field by revenue agents. with the job being done in 64 collectors' offices where skilled tax- The surveying, classifying, and storing of 2,500,000 individual collecting personnel were directed to this nontechnical task. income tax returns, previously performed in Washington, was trans- December 16, 1949.—Collectors were delegated authority to make ferred to the field. refunds under $10,000. This results in collectors processing about January 29, 1949.—Final report of management consulting firm on 100,000 overassessments per year instead of their being sent into the study of collectors' offices received. It was a comprehensive and Washington office for review and scheduling. detailed document with many plans and recommendations for improve- Many other management improvements were made in 1949. ment in the organization and operations of the Bureau of Internal Some of the more important ones are: Revenue. The audit control program was placed in operation. This involved February 1949.—The same firm, Cresap, McCormick and Paget, was the Ample selection of individual income tax returns for field investi- engaged to study the organization of the Bureau of Internal Revenue gation to determine the compliance of taxpayers and the direction of (previous study was on collectors' offices). investigative efforts to the best advantage. it Spring 1949.—Punch-card tabulating equipment was extended to New procedures were adopted for processing information docu- seven additional collection districts from original installation in Cleve- ments. These were directed at accelerating the processing, saving land. In 1948, equipment had been used only for 1040A income-tax time and obtaining better utilization of the documents in auditing returns, and in 1949, the experiments were extended to 1040 income- returns. tax returns, 1040 ES returns and related documents. Post audit review work was redesigned to cover the results of audit Summer 1949.—Tests were made as recommended in report of the of individual income tax returns by collectors and to stress uniformity management consulting firm. in field application of the tax laws and regulations. 1. Use of electric typewriters, continuous forms, dual roller platens, Collectors were delegated full authority to assert delinquency as posting machines for processing individual income tax returns. penalties for late filing of all types of returns. 2. Discontinuing of separate accounts to record: (a) collection of Collectors were delegated responsibility for the handling of all accrued penalties and interest; (b) collections obtained after abate- requests for certified copies of individual income tax returns, and also ment of assessments as uncollectible; (c) excess collection of income for the transcript service for the States in respect to such returns. and withholding taxes. January 1, 1950.—Federal Insurance Contributions Act and income 3. Use of new and simplified scheme for block numbering of returns tax withheld combined in one form. This saves work for the taxpayer to reduce typing and proofreading. and saves Bureau of Internal Revenue about $250,000 per year in costs 4. Use of validating machines and bank-proofing machines for of processing these returns. Also, this permitted extension of the processing and control of remittances; also adaptation of cash-register depository receipt system to Federal Insurance Contributions Act machines to validate special tax stamps. taxes. 5. Simplified procedure for control and disposition of unclassified January-Apra—Electronic computers were used with punch-card collections. tabulating equipment for calculating tax liability on income tax returns. 104 REPORT OF COMMISSIONER OF INTERNAL REVENUE EXHIBITS 105 Spring 1950.—Agreements were made with 5 States for cooperation November 2, 1951.—The Income Tax Unit was reorganized to in the investigation of income tax returns of residents of those States. reduce the number of primary organizational units from 13 to 5 (Wisconsin, North Carolina, Kentucky, Montana, and Colorado.) eliminating 113 positions. September 1, 1950.—Bulk gauging tanks were installed in internal During the year several other changes to improve the operations of revenue bonded warehouses, which saved considerable time of store- the Bureau of Internal Revenue were also made. These included: keeper-gaugers. Loss allowance schedule was eliminated in connection Decentralized to collectors the audit of Form 940, annual return of with remission claims filed by warehousers of distilled spirits. This employer of more than eight persons under the Federal Unemploy- reduces the workload for both Government and taxpayer. Eliminated ment Tax Act (formerly handled by Employment Tax Division in tax payment of distilled spirits prior to bottling in bond and arranged Washington.) This expedited the process by having collectors deal for payment when cases are removed from bond. This simplified tax directly with the State unemployment compensation agencies. In- payment procedure and eliminated delay in releasing cases from bond. stalled new method of processing monthly returns of manufacturers of Eliminating reporting of wine gallons as well as proof gallons and tax tobacco products and annual accounts of dealers in leaf tobacco, gallons. This simplified reporting, and reduced work of storekeeper- which eliminated clerical work. Allowed revenue agents to authorize gaugers and audit clerks. Delegated to district supervisors the au- payment of claims up to $3,000 on prima facie evidence without field thority to approve qualified documents for alcohol production plants. examination so their efforts could be directed to more productive This reduced departmental workload and costs. examinations. Installed a procedure for alphabetical prefix in classi- October 30, 1950.—Discontinued preparation of separate reports of fication and numbering of income tax returns to provide for quick concurrent examination of income-tax returns covering 2 years or more, identification of the class of return and simplify numbering. which saved costs equivalent to salaries of revenue agents and typists. December 11, 1951.—Procedure in the consideration of criminal Numerous other improvements were made during the course of the fraud cases revised by eliminating the health of the taxpayer as a year. These included the following: Eliminated certain nonproductive basis for refraining from recommending criminal prosecution for tax arithmetic verification procedures. Numerous minor delegations of violations. authority were issued, such as the authority to collectors, acting col- January 8, 1952.—Establishment of a more efficient procedure in lectors, and deputy collectors to sign various forms and documents the routing of criminal tax evasion cases by providing for a direct for the Commissioner. These delegations simplified procedures and referral of such cases from the field by the district penal attorney of expedited action. the Bureau to the Department of Justice. January 1951.—Operational cost system installed in collectors' January 10, 1952.—Further improvement in the handling of crim- offices Provided data for businesslike cost control in collectors' inal fraud cases by abandonment of the former policy under which offices. This facilitates operations analysis and makes it possible to criminal prosecution was not recommended in cases where taxpayers staff offices on the basis of workload. made voluntary disclosures of intentional violation of the internal January-April.—New Office of Budget and Finance was created. revenue laws prior to the initiation of the investigation by the Bureau. The first three of Bureau of Internal Revenue's regional finance offices January 14, 1952.—The President's Reorganization Plan No. 1 of were established to provide better and more economical fiscal service. 1952, for the Bureau of Internal Revenue submitted to Congress by July 1, 1951.—Uniform stock-control system was adopted to provide President Truman. for better control of stock issues, inventories, and requisitions for re- The reorganization will include a realinement of activities in the placement. Decentralized stationery procurement was effected to field and in Washington. The separate field offices engaged in simplify procurement of those items. New system of administrative different specialized activities, for example, will largely be consolidated. control over budget and expenditures was adopted covering obligations It is expected that the new organization will be more efficient and and expenditures in the offices of those collectors who handle their own provide better service to the taxpayer. accounting. New system of appropriation accounting was also placed January 30, 1952.—Ten task forces were established to work out in effect to simplify appropriation expense accounts. details of plans and procedures for the proposed reorganization under September 1951.—Report of survey of management improvement plan No. I. facilities of the Bureau of Internal Revenue completed by committee March 14, 1952.—Reorganization Plan No. 1 became effective. appointed by the Secretary and the Commissioner. March.—Use of fiat package for mailing income-tax forms and October 1951.—Internal Revenue Inspection Service established. instructions. For the first time a manufactured flat package of This will provide effective inspection of field offices for both efficiency forms and instructions was used for two States, Indiana and Mas- and integrity. sachusetts. It will be used in all districts in the future. The experi- November 14, 1951.—Tobacco tax functions transferred from Excise ment was very successful. Higher manufacturing costs were more Tax Division to new Alcohol and Tobacco Tax Division. This con- than offset by savings in labor. solidates field inspection and enforcement activities in one staff for April.—Standard mail-opening methods. The standardized mail- both kinds of taxes. room system installed in all collectors' offices was very successful, will save about $500,000 per year. It provides much more rapid and efficient handling of mail and remittances with a marked saving in 106 REPORT OF COMMISSIONER OF INTERNAL REVENUE labor. It will be refined and strengthened in all collectors' offices during 1952. CONCLUSION • The foregoing chronology of the actions taken and the improve- ments made in management and operations of the Bureau of Internal Revenue clearly sets out the painstaking care that went into the complete reorganization of the Bureau, which culminated in the final step represented by the President's Reorganization Plan No. 1 of 1952, which was adopted by the Congress on March 14, 1952.

APPENDIX

STATISTICAL TABLES

NOTE.—In tables where figures have been rounded to a specified unit, the components may not necessarily add to totals. Percentages are calculated on unrounded figures.

107 RECEIPTS FROM INTERNAL REVENUE TAXES

TABLES 1-7 110 REPORT OF COMMISSIONER OF INTERNAL REVENUE STATISTICAL TABLES 111

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STATISTICAL TABLES 121 120 REPORT OF COMMISSIONER OF INTERNAL REVENUE

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_ _ ES )__ bia AT ST lum Co f FOR T?"I : 1, t o 2, ic

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ka hing r s ry liforn nnsy

giliatlitden;3t 51102nii 4 =, lino Alas Ca Ma Missour New New Ohio Pe Pue wwEir zzr.,E.wi40e4iFiEgc200E.6% Il Texas Wa

STATISTICAL TABLES 122 REPORT OF COMMISSIONER OF INTERNAL REVENUE 123 ZFRVARREMINHERIRFEIHRREFRERFREFE MRHIRERRAHARRgE4aaHin '41 ARREERAEng igggiwggg4g,04giggorgiagagggig gggggsvgiggvEsgiggvwggigr itaftag

CI CO CO CV

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thlh AEE ,L1 '40Z-o og SA 4 11 to iog O.Z.4A-5 1 SO A 4 a ,z 2 ,4m g:gflad e o Ag is to 910.g.5 m 033x- ttzt '71 To 4 ^-0 = 1112. a,b4 g g8 rig o.ogoa. 9 v tg .9 9.2T2JE.g laZZI, Z8Ebu-O ° 13 8 oft.'"°E't g.-.4" h_, so gd26v‘,. me -5qtArroao.Btftts gig04 284=^gieeA.. SAt8§ .0-teagtralerc, 4 ■ 4 0 MOMOOVO4, .0nt8.tgflritE4-49;0°16.n1 9.4 >• 741MMAr7.0g LR4 .A21.4002Z ZZPIPOZ440 ew&■ EZZwE-004,E.E, gc&SEa3 7`41`1410ali 124 REPORT OF COMMISSIONER OF INTERNAL. REVENUE STATISTICAL TABLES 125 gs" ig 0 8gooL):). .ns EFsgg igEEE 0.0,2.0,0 Z 4..0..0 a -16ga:1 S-D NM :.5 ea a 44a "omm8 FN' "ag a ga' rgel aF:ggg'. -n6e gl 3.§g;to 7g=9,1§P

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les ViqggVgggWggriggiggg'Egggi insur llec de aVgIgaggaggggE7Vsgriggg-gggg' n a gEgaggElg f cap Sa e

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pr5 THAN O s ; 4 d 4-.2..5 inue t n 7EEE 55 EP' tEE-5 gc gni: E 0 MERU gg . A Co ER S EggEggEER glarj. jg tz_4- m- gee Ng" g Ed F OR MORE — 4 El . g sg.= g Min ... .: a .4. I e E1 60664 Eit'n, ei T O turers AR

fac Lt0 u " c 112.4? k I. man flE.-8 . falro.

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re 22 gr- wrote n n pc .V;-,4:4 g CV •• a 1;1' "5 Rg '2" 2gg2 .: 557 gg giggg g" Cig gs C RRITORIES COMPRISING P

059, va TE y 4, da 47 1, AND S T m

FOR S

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CP S 6 148 g

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g ''afillrk.mrili., a ... gvs --= g40“0414 4 7.' •al 0 . ! d "-- i ganep.s,= ..,1,t = E 2ggexIggg2127.441avid_E-wisgoace2m,BB.go A

6-4-4Nwo8SM44WW4 C-) 126 io ti O tl ro O F eQ 1) O P. a W ) .

Manufacturers ' excise taxes REPORT OFCOMMISSIONERINTERNALREVENUE A A 21sE8 Sat4 omAmo gss "Ew

Floor tax, Tins (wholly gg Districts Silver bullion Lubricating Gasoline, gasoline, Si or in part of c

transfers, 50 ta oils, per gal- per gallon, cent per gal- rubber), per percent of lon, 6 cents 2 cents profit lon pound, 5 cents 1 degAg EEREREEE14 R E 4 g g -„-- t2ME2 _ itEEEE2MiEg4RgElEiRggEgEHEERREEERERgR 1;'5.1 .g..4 §ploo Ara ar. 4 gRAERRERRRihRigERv4RAttERacivgai A RA IL tva - 6 27. g - t:gdg HER s, ,rn . Is , 7, a i - . 51 44 1:2 an . „ , 55 -

6 - gAwinigi 80- v. ?A',7.mbinEil5 aer g:=6 ti -a - 2 g , r 5 e , UREEREREgEREERE2E1 A, a eIciggWg' EgEE224EgERRRERREERRERRE EEREREER a a „ ggig7evgesgggpg.Tig MEW .. di--t A 2 ..; =s _

ER la - -

t:t4ds „„ c., m i., 3 6 ts E REIM gflggggg aaea 6564 iiER, _ ER -$ t 4 g s ERR ""gR do 4 E 1

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a4 F q- 8 c c ... 66g5I R22gtt aa a 6a RE9 gg - aaag E6,,.% ” Ag'.° g - ,.,. ..- ggics ' 6 6 ti c EA g R ce' . gW5 S'ar-Rf220,42 6K4d, a g 5 f0 .4 fl; 'tT2 ; 0. gr= t i1 Xd E - ' aaaaa 1- 5ffigg gceac - „.,...., - ' ' i _ c12 -°"- 6P64W ' g STATISTICAL TABLES gaag ZS,. --.-8. A6:156 — 2

g 2 c i aa a4 , 2 _ .-., . 4 I,

S .' 2 2 g z' ;: - 127 STATISTICAL TABLES REPORT OF COMMISSIONER OF INTERNAL REVENUE 129

128 $10

R Itg - - EETP'RE'A VIER E 6 6 4 6 g le me 4'

m-

ho ”:c.iwci t te tc.,

p n co e a a a ts, ts, ts, hs, erce n se se n rap ne dio 10 p io o is p nog Ra v 89

R E5 1 ' m a ma in 984 -ri '''''gg aa 4 g filan g gl: ' ,o.fa, Og : P —'4 0 cl 1.1°113=0c

6 , 8 1 1 1 2 9 8 3 2 5 1 8 1 2 89 81 08 2, 51 46 45 49 81 90 66 13 07 81 899

252 682 84 FiRRTERREREARREEEERRE 5 305 614 33 755 0 364 s, 57 61 20 280 li- 169 5 695 0 1 372 50 3 736 975 1 67 67 4, t 4 44 3, a 41

9, 2, 5, 6. 6, 8, 3, 9, n 2, 2, 8, 3, 0, 9, 0, 8, 9, 9, 19, 34, 54 6, 2, 3, 7 26, 3 g 1 1

24, gill 57, 20 7

7 676, 96 20

74 19 '; Wil ''sgl' 65' 51 770, 265, no, 53 48 71 548, 80 1 120, 21 25 81 $4

2 r0 ic, 27 n ces, 6 6 4 1. 1, 4 N 89, il app erce 5, 3, 2, 5, 1, 3, 4, 8, tr 1 an p d o 10 Elec an SW 8 9 8 3 3 14 3 60 96 084 3 03 673 8 105 ' 886 79 4 t 4 61 MO

EFEREEREEEIEEREER5REER NE l 1, 1, 5,

6, n a 09, 03, O 13, 37, 16 92 4 4 044, 07 2 $ 269, 67 ic

215.

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n MEREEIIFFIgE4RAE'llgt c 91 MOR a an s r d ac le fo erce

an s OR bi torcy ts ie 8 p 0 ' mo mo )1 sor Par 210

0

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. B ma O t

ElqW h Ca Da Caro Da ia ur en sse To lan ns Yo Virg is Je d ty Tex to n Pe

h Ohio n

m hing m ka nsy

414Zztzg. h ho h h hing h h o t lft n n in so de t

e§ '# h o s

= Ai. t

.. t t t mon w

t t t t w

0 .c.)O xas n hte lifor ve s r nne hio 2 atttBatgloc, u u

Ii— . w ho A 4....1 2 or tg le kla irs Puer O Pe Te Was Ca Mary Mis Ne Ne

, ,..uv Ala Illino A- -0.004r..,5-xfli a0Zza,A.cdge. f cor Firs Nin t lig ) )reg F Twe Twe R So So Te Fir Seco Uta Ve Virg Was Wes Wisco Wy 3, 4, tao TABLE 1.— Receipts from specified sources of internal reve rt l REPORTOFCOMMISSIONERINTERNALREVENUE 0 0 0 4

excise taxes—Co

Matelres, per -. .9 Mechanical re- Photographic mhS Districts thousand, 2 cents, Business and Phonograph Musicalins tru- frigerators, quick- and fancy wooden apparatus and ' free ze units, air- ' store machines, records, 10 ments, 10 or colored stems films, 20 8 nt alK percent percen t conditioners. 51/2 cen ts per 10 perce Percent e tc., 1 0 percent thousand i R a; Poi '''''1471=" .44664r74Omi'r:14 - , g EMEER.I.EgggEggggC.OgRgn' Roc-'735441:' ace° neinuqmm ser T 0 Eg gr^Xg . . ER F- E4nn gRE M 6-„,- = o .— -1 ., 6 . 0 . g F g gR i_ e) § 49A:0 n 4Enng '''- E; ERE -; 4 61 g t0 '' gqg -EmtRR:- om , g m. z,.:i_r c 510.7 EgEHREEEER4 _ - . , = g-r gREE

R 4 ' 2 5g . -R%az:- " 4 n ...0

- T' fl 2 RgER '5:1= nms:m9. t . EEF ggI leg R 4 = 0- 5 R:g 2 2._ - gR g En. c m g i 4 a

6 — 4 t -,1,a 04,A=-Q3 m REE ' 4 nzr4wizr WIZIztz ' ig..ig I6 RRE 'RX .5'ae Igg R REM5RR r "- a !flan 'I HR „ g Z - r g Ngge. Altg NIRR giEg ggr 5gg' EggE .,.., . 2 c.,52.° r 9 .0Z: AE4 ;p:d x gti .. °,1 ,I d

EgR

■ g5 Eig !' RE

a ag gg „,.„.,-„, 6, „ u„, ER gErgrigggggEFFREEERE4P 74N Rg Twenty-eighth New York m 4 North Carolina North Dakota 220041 —511 - EE H^ Pggn 5 'AM .... nr-'nR Plg HEE ei :7] First Ohio .. - g2 MHO Tenth Ohio - , gg gg Eleventh Ohio sg.-ragaag ti .T Eighteenth Ohio co_ Oklahoma ERgP R4g crt ifii

Oregon gg 5E . ro mm 4 ERRS First Pennsylvania N

Twelfth Pennsylvania ' 10 g . Et: RR Twenty-third Pennsylvania .7. -, n 1 , Rhode Island 6:

South Carolina . ctE ' South Dakota REER .. FE:7E -- Tennessee a. 7-- gns.744m s"snn First Texas R 4 m g Second Texas r , STATISTICAL TABLES Utah g g F.-

Vermont 'pe' -Nraas Eng rd,: 4E Virginia •:. Et:RE .: P . . Washington -r West Virginia . . ui 4 " 4 if: c. . 7j g Wisconsin K

Wyoming

9 1' 1/2

OW n OW 6 6 ' tit 365 365

85 85 ' 19 2 ' Z ER 'ret) 'ret) e e

Total 99

57, 969, 730 33, 765, 542

3 3 6 ON

iI iI V ,1 11 JO

OF OF TOTALS .L FORSTATES AND TERRITORE OR MORE TITAN ONE COLLE CTION DIST 13

Alaska .,...... ,— ,,,, n4nPnc“Wgn s ngs EggEREFERE acci ig R.R 4 a,m California • g .,,.-a EUIERUER

. $254, 197 a Illinois . -.D.:cm a

10, - m4,m0mm 677, 063 de Maryland (including District of Columbia) 2

252, 970 - Missouri - pggiggi 30, 646 ;tzg4g26 ngg"

New Jersey m .-

0.- 164, 414 m ,e New York 1. 855, 271 aa Ohio . 1 2, 905, 542 RF. Pennsylvania 8, 101. 499 Texas_ 26, 957I Washington 4. Puerto Rico 4, 923 131 REPORT OFCOMMISSIONERINTERNALREVENUE HEEESiggagMEMEUMIEORMEM gatig155601aralitM0 EigggaggEgMEMEENIEEOEFOSE gPJfl5trAtiT-ArilWiE45ggialWITOM aaaaaaa c"=. tai§M3nl a figfl aiaaoe)ArTiaww$ §11=Qu'eds4tap-ea go-4 24 gag X a aa :a °'!.m'@= oa e 011inUaglIB - ^2n i aniigTaTan aaaaaaa aaa4aaa CNCCt,t4C.N4CNO,A NC P-ES'547dE "q§ C.4 2 -21 ” , ,40 EF 2 115 aggRasErim niER5Eniri '-tE-012a1 al401>mem 'Fano .mPam ;4 ROEFEPEUEria M . aZZZ441 qmxzgzm 4641666 4wm 2 r ,-.5 -8 1 ;Z:;c go!E OE FIEHE , 0:E. EZOagiWagerag-olgagng 5 texIt 4 OEL ; - Vg Fig waw m - t .EFZ U E Etz Fat

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0 FOEP aa'aa aaa - STATISTICAL pitat a g liat, 'a ,.4 s ct 0?, g ;-T a N g

AYES AND TERRITORIES COMPRISIN OFO R MORE THAN ONE COLLECTION DISTRICT TABLES ggErtilagiM 0.400.4g0 ggO§ggUEE MEEEEEM iiMiREMT1 aaa4a, agt IEWErra ag ust:zei - §EgEEEMIA , E land (including District of Columbia) c7 „_-- -7 i4aa "PT 4 g 133

STATISTICAL TABLES 134 REPORT OF COMMISSIONER OF INTERNAL REVENUE 135 1E, ERA Budi 3 2 E321 t g 2.g:trsg!tAt4142gg gr.gg n rigg n fa- e- io

cen a gg g t gi 535 ip at tgg-egg-; gg .,

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n EEEEREEA ELEERIEMREAgiRIEEM EHREEE5E ho t ggaggagg -4ftgiggggg 15 flggs.:fati n Ig5Aggr'; agigggEligglatqlgOg §rg--4114 g lep g..„,,, ..„;iri 4 1 _,._, Ar6A55A-r-; ice, g„,,,, g v erce l te p er s ION DISTRICT Loca

es EEE1E5ERRR3REAEPAAAE A53,3WHE x REEEFREA Eig5IERREEPER5E5 MA FERAER5 ER

ta 5555E55s5.=.=555 mm Eg.155g•s- 1 Irttiigli 171 - LLECT us rin4ggn'teg t 1 °1 ^ °C°°1 01'n° o :7346 areas A ' 41 ne la l ONE CO Misce REEREARERREEEEEREREEERER5g35RARREEREERRER TAIERHAEREEARiREEEEHE N 5-i555g-fger555ggqiti-rEEF:A5g5-65E55 gOggggag ggg“ggrgiV z g-om m- m,„-- m-E mm--m m --E5.%._. S MORE TITA S - C S t ERE 5E5ER E 5 5 'EEE, R Rio OR en roxi er

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r, a aa4. y

ap e a e gi a ly d, g n te Sug ou ma p SLUgN:9 Ri3REEERREE3553EREER33351EREREEREEVARREE NEREE3EREEREEHERRRERE ING PART cogre8M118,- 44 E115501EREEEEERREgAgElAMEASEIggEgEgga ggIgggtigligaggaggld 3 i.4agg..ra t4,4.4 g..7aeee.e.4eaae4a a44.4,4ggacee 88,..zeta,96F,co COMPRIS

RHEA:3E535in 5MEEREEE 3 IES El EERE25RE

EUEREEEEEEENIEREERERRAREEEREfl'ERREERERE OR glggIg5i5Wiggggiggiggglegggggg5gglggi ggMgrUgniliggiga gE5EWAIRE , ,,, -, - a-r- S AND TERRIT O 1 80 OR STATE

ts Jd ic tr Dis tA,m TOTALS F ;z,Z - 55 -44 r>.e..e.: R;AJta= m m- ..-aER .. MO wc,za .1 ..,,e.„ gitlIZZZM $...,, IA0 c0111U0°1t,0.001-!em 1&014g:s RV 4% cttglat ingl 0:81 Oc) ..4÷4EIMCC$CW4WairCI4o21W1,4% '6 ZWZromWZrol E ro4E. 1-Zto4E-.3t.

136 REPORT OF COMMISSIONER OF INTERNAL REVENUE STATISTICAL TABLES 137 2 9: 19 M RI g v FE F t tiPc 1 '

. 6 Rg g nin . .. 40 ga y aas-ga

ze

t E F 0, N§ o'

in Fm ' gE _ ns 3 F,5

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o - p

ke gg iss "-"7 e qggcs ss les, Tic bro 0 p sa mou ffice 2 xce o a Adm e

N 961 ' 4 OLL 94 557 316 062 275 985 223 eve 783

gEiggEggggginEgEEMEigH5gREggag 111 495 297 004 161 058 959 244 555 241 069 430 00 535 625 975 168 818 7 740

9,

1 El:A gggaVF 68 36, 16, O 346, 776, 925, 193, 098, 488, 418, ye., 067, 429, 17 438, 6 586,

Itaaa5tiataalailataflaagaa4ffiallga 193, 2 669, 020, 837, 137, ' 054, 494, 319, 491, 138, 678: N 6, 2, 3, 5,

soe-rae-ra -aa e 3, 83 tr 6, 593, pi tiggEEFF da.;',14.6,6 aa4'.4E4ae.saa.:-TE: 4, 3, 7, 2, 1, 5, 2, 1, 5, 6, 1, ma, - 5, 6, 2, 5, T 12, ; gg F-'06t:cr, ' 599, IO 1

0, ODI d ior d 95 l ing

r igiggigEggrallEEFgEggFORMgEgFigAl ' te ices, 1 2

250 ggg ggEO.E3F ) t an .2 $ (p am ra n 1, 8

e gilagq:agaaa5gallgagaaVgggagE4g.4 ice ' d dev ice 8

r g &V FIggag v me e B 1 N 4 de ing Nov.

I imop dev 10 an

m $ to 150 p a er Co $ g amuse p RE THAN ONE( „Vic„ igg5EgEgggriggEERAFFPUgMEEMAggg InggragggaggEFFIEERHEFF 039 '

969 ' EH gAgggMgg FAtr8.z pagagaeggaaggagaagagagtaaa aagdi a"tr:Rtaflagaa5aaagaggaacz5aa"-"ragaga Flag-a s

gtiki! 2 gal s 2,1° 1' OF OR MO] I ' Tal ggEitlEggEEARFEEFFEEFREFggMUEFgERR 029

IggEFEFFEUMFgAgggigggEgM011 '

40E 1 ..2, . gagagaglItg agalFIrllaagallegaVi.4 ilaitMlaailaadalgalWalgtg 69 ' ,, a e )PR t e 4;R'' ggFFEEggiEggEgEFFERgEgelgEggEggEREFE 961 ..- ri REFEFgaigAggREVAEFEtaUgiggg ' VW aggWriggrIngggPSIONAW ggiq guaar4pagauggagalgga4gaa OM .4-0....J 2 a ' 01

S COMPRISING PAR H1E 693'

.-4-41 UiEgiggggErsigEggiMagagigigERERIAM EEMEggEgEgiRrilMEEFEMAggERgEE 4 0 673 471 817 111

, 544 990 90 006 386 488

ni

822 257

g 749 -.-1 - • ' rz,-,; 11. se.r.-ra a g t 't).,..21 0E26-8ttig2Mn.g.tn. glaggiia'aEgag I W F EOMFIgU ata ggiF154 05, 125, 060, 153, 996, 563, '899 093, 069, 745, 46 .1.; .6 .6 , 863,

1.6.60c4,6.6,:4e.4. 0.-&tgoo.°. - N..47,,se .6.6 gg a-ae -;aagaagaa . aaa a.i- c€ 47 $412, 2 6, 2, 1 3, 98,

r60-t0tZt 32, 18, 18, 51, 2 18. 91,

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cc

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138 REPORT OF COMMUSSIADNER OF INTERNAL REVENUE STATISTICAL TABLES 139 nRARR2 it i21 R &FA XgR 9natga. a§ ggge g g ggg g a . 'g 0 - - t 0 •

0 29' 9 g,MAPAAREFAAMIIPI'n 2RE, 8 577

AUAR4 835 339 428 50 884 785 803 294 agEggAMR'4 PnPREA,'WERligARP 08 91 1, 1, -y 81, a H IXaM

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140 REPORT OF COMMISSIONER OF INTERNAL. REVENUE STATISTICAL TABLES 141 0.0 - c t-t- 'SS 1 WI Z ' 9 116 ' 9414 894 tg ,L 100' OZZ se CO Con 9T g

9 gg 4i L .;52‘7,1555 2 Z Eg 5 5 1Z Z

TRICT . 1294 g g COLLECTION DIS

49

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0 0 MR p_,g252 AFX-." !Egra ggg2 g2MPA P4AP 24 98 144 156 197 702 364 408 588 AND TERRIT $164 "59 TES TA

td S LS FOR S ..“, Y

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STATISTICAL TABLES REPORT OF COMMISSIONER OF INTERNAL REVENUE 143

142 t49 ' S'a Iz . . 691 ace P I O

d E e cess o E66 r p ICT ls i o ble ta e veg r [ON DISTR he t E

t E

d o . . n « se.Ag LLECT. t a CO nu 699 t o eg S. Coc 2°42 pH 1 ONE 9

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§ ZI ICT NI DISTR _E:, E 995' E E5 a 8 6 BIS wit4 986' -g EENEE?5?.. E k'Erga :inn NE ict gUI F. E NEEEEENNEE ge .,, 49£' cg.. !»% P,;- gE cte g Etr -I g45g..4

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AND TERRITORIES COMP

) bia lum f Co o LS FOR STATES t ic ia k tr r k lvan k. TOTA • Dis r ia Yo w Yor ia K Yo w ding lvan k w lu sy h Ne c lvan Ne ta d Pennsy d t ta ia lina ht Yor lina in W I M n l xas h Ne Ohio in ko h Ohio w ig hir ko irs t t lan f Penn t k to ta d ( ton - -e h - in t ia i Ohio t Caro rsey lvania Rico h ing Is ia ty ty Ohio ty n n To d Te ur lan teen h h h Da homa Pennsy Virg is Yor d Ne o Texas ral MO n h Caro lft to t t t de n hing Je t t in t t ka forn hing t th Da h hteen om s ur s (V w w u li u co xas nnsy las CV Fo Thir Twe Twen Nor Nor Firs Eleve Okla Oreg Firs Ten Eig Twen Rho Twe So So Tennessee Firs Se Uta Was Vermon Virg We Wiscons Wy Ca A Illino Mary Misso Ne Ohio Pe Ne Te Wa Puer 146 REPORT OF COMMISSIONER OF INTERNAL REVENUE STATISTICAL TABLES 147 MEBRRAJIREMBEFEHRRAMEEREHIARI WinagagER Oni#011i6HOMOgMUMRgRIn Finh-MtUggg gRUMAggRUMIOR4IHRIgUg:IgElgi 1.11- .111111 aa N a rg.e4a.4a4.4a

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34 a mp lo TOTA mp

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150 REPORT OF COMMISSIONER OF INTERNAL REVENUE STATISTICAL TABLES 151 ■ W04Wt■ ■ 4 .144W,.WWWW,-.4.40WWW.Wr-Mt I.0000014t-WW00WI nr-Www, 04000 0000. C.WW4M,A4401N.-0404m 1 °" 00 01 -4gMgg7A,14.,1A4z4gAggth-AISFIgg;iMggishg;1 AzelgriggoActdMI4AilAth:clEaflet A 'r222SMigAgn tcu

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152 REPORT OF COMMISSIONER OF INTERNAL REVENUE STATISTICAL TABLES 153 .0.000—...coomom °":°"'a 46.&.646e6r4oles5.4C ;;;;;;t1th“iggs:ris:AdAgithlgOiz'AgAg ?:gel ct1RagSg$MgrAR4glitt2MRSIP,AFAAPR .mcloi•OmmotMlqn. 1 1 .814 ions

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STATISTICAL TABLES 155 154 REPORT OF COMMISSIONER OF INTERNAL REVENUE 247.M22:22:94825 8 g 08 .0 822N2222. 22F=82892tt. g! 2M'a=t-4. 6rgNL7,agi7.N a 2a c c g EI4k " -I ' a ptagE a 8

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156 REPORT OF COMMISSIONER OF /NEER:NAL REVENUE

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❑ moron 1.76nrqed AIBIliter REPORT OF COMMISSIONER OF INTERNAL REVENUE REVENUE INTERNAL OF OF COMMISSIONER REPORT Guru 4416 1€11/ Sources Sources o

nue reve f

3261

E el Ca 1. 0 e> ti 0 O "-a C 160

164 REPORT OF COMMISSIONER OF INTERNAL REVENUE STATISTICAL TABLES 165

TABLE 6. - Summary of internal revenue receipts by principal sources, fiscal years TABLE 6 - Summary of internal revenue receipts by principal sources, fiscal years 1916 through 1952 1916 through 1952-Continued

Manufacturers' Total internal Income, profits and employment taxes Year Alcohol taxes Tobacco taxes All other taxes excise taxes 4 revenue receipts Estate and Year Individual in- Corporation in- Total income, gift taxes come and em- come and profits profits and em- 1945 $2, 309, 865, 790 $932,144,822 $782, 510, 640 $2, 292, 107,635 $43, 800, 387, 576 ployment taxes' taxes ployment taxes 1946 2, 526, 164,686 1,165, 519, 283 922, 670, 741 2, 921, 944,159 40, 672, 096, 998 1947 2, 474,762,398 1,237,768, 302 1,425, 269, 662 2, 147, 183, 534 39, 108, 385,742 1948 2, 255, 326, 754 1,300, 280, 153 1, 649,234,053 2, 206, 82,007 41,864,542,295 2, 210, 607, 168 1, 321, 874, 770 1, 771,532,723 2, 280,968, 532 40,463,125,010 1916 $67, 943, 595 $56,993,658 $124, 937, 253 1999 180, 108, 340 207, 274,004 387,382,344 $6,076,575 1950 2, 219, 202,085 1, 328, 464,346 1, 836,053,455 2,214,951, 467 38,957, 13L 768 1917 2,852,324,866 47,952, 880 1951 2, 546, 807, 925 1, 380, 396,001 2, 383,676, 598 2,392, 718, 504 50,495, 686,315 1918 2, 600, 783, 903 82, 029,983 1952 4 2, 549, 119,689 1, 565,162,382 2, 348,943, 116 2, 507,933, 123 65,009, 585, 560 1919 3, 956,936,004 103,635, 563 1920 3,228, 137,674 154,043, 260 1921 2,086,918,465 139, 418, 846 •Beginning January 951, withheld income taxes and social security employment taxes on employees and 1922 1, 691, 089, 535 126,705,207 employers are paid into the Treasury in combined amounts without separation as to type of tax. The 1923 1,841,759,317 102, 966, 762 figures for prior periods have been combined accordingly in this table for purposes of comparison, but are 1924 108, 939, 896 shown separately in previous annual reports. 1925 845, 426, 352 916, 232, 697 1,761,659,049 879, 12A, 407 1,094, 979, 734 1,974, 104, 141 119, 216,375 Separate figures on corporation and individual Income and excess profits tax collections not available 1928 2, 219, 952, 444 100, 339,852 1927 911,939,911 1, 308, 012, 533 for the years 1918 to 1921. 882, 727, 114 1,291,845,989 2, 174,573,103 60,087,284 3 Includes munitions manufacturers' tax, excess profits on Army and Navy contracts. 1928 2,331,274,428 61, 897, 141 1929 1,095, 541, 172 1, 235,733, 256 For 1916 through 1932 includes taxes on sales under Act of Oct. 22, 1914; manufacturers', consumers' 1, 146, 844, 784 1, 263, 414, 466 2,410, 269, 230 64, 769,625 and dealers' excise taxes under the war revenue and subsequent acts (except soft drink taxes), and all taxes 1930 1,880,040, 497 48,078,327 1931 833, 647,798 1,026, 392,899 paid by manufacturers of and dealers in adulterated and process or renovated butter, mixed flour, and 427,190, 582 629,566,115 1,056, 756,697 47,422, 313 filled cheese. For 1933 and subsequent years includes manufacturers' excise taxes (Act of 1932, as amended) 1932 746,791,404 34, 309, 724 1933 352, 573,620 394,217,784 except soft drinks. 419, 509, 488 400, 146, 487 819,655,955 113, 138, 364 4 Revised to include adjustments made subsequent to issuance of press release dated October 3, 1952. 1934 1, 105, 790, 865 212,111,959 1935 527, 112, 506 578, 678, 359 674, 464,353 753, 031,620 1, 427, 995, 873 378,839, 515 1936 2, 445, 587,143 305, 547, 766 1937 1,367,486,054 1,088,101,089 2,028,972, 108 1,342,717,850 3,371,689,957 416,874,065 TABLE 7. - Internal revenue tax on manufactured products from Puerto Rico, fiscal 1938 1,769, 262, 662 1, 156,280, 509 2,925, 543, 170 360, 715,210 years 1951 and 1952, by objects of taxation 1939 1,815, 538, 352 1, 147, 591, 931 2,963, 130, 283 360,071,167 1940 407,057,797 1941 2, 343, 511, 587 2,053,468, 804 4, 396, 980, 391 4, 448, 162,234 4, 744, 083,154 9, 192, 245, 387 432, 590, 238 1942 17,797, 593,125 447,495, 678 Increase or 1943 8,128,637,023 9,668,956,103 Articles taxed 1951 1952 19,999,377,847 14,766,798,477 34,766,174,324 511, 210,337 decrease(-) 1944 36,840, 703, 613 643,055,077 1945 20,813,400, 787 16,027, 212, 826 20,405, 363, 840 12, 553, 601, 987 32,958, 965, 827 676,832,302 1946 31,044, 120,771 779, 291,074 Distilled spirits, excise tax $13,042,774 $14,389, 540 $1,346,766 1947 21,387, 662,091 9, 676,458,680 23, 379, 123,052 10, 174,409,834 33, 553, 532,885 899, 345,444 Distilled spirits, floor tax 1948 796, 537,914 Distilled spirits, rectification tax 439,957 436,090 -3,867 1949 20, 527,934, 679 11, 553,669, 234 32,081,603,913 19,797,882, 768 10,82, 351, 109 30,652, 233, 877 706,226, 538 Wines 1950 729, 729, &37 Fermented malt liquors 1951 26, 624, 787, 948 14, 387, 569,403 41,012, 357, 351 33, 738, 370, 243 21, 486, 910,019 55.215, 280, 262 833,146, 988 Cigars, large: 1952 Class A 40 1 -39 Class B 150 212 62 Class C 134 218 84 Manufacturers' Total internal 208 -227 Tobacco taxes All other taxes Class D 435 Year Alcohol taxes excise taxes revenue receipts Class E 2,202 2,012 -190 Class P 4,317 3,682 -635 Class G 655 585 -70 $247, 453, 544 $88,063,948 $4,218,979 $48, 049, 564 $512, 723, 288 Cigars, small 79 79 1916 27,949, 538 809, 393, 640 1917 284,008, 513 103, 201, 592 775,078 Cigarettes, small 634 890 256 443, 839, 545 156,188, 660 36,636,807 162 513, 263 3, 698,955,821 1918 398,881, 981 3, 850,150,079 1919 483,050,854 206,003,092 79,400,266 Total 13,491, 298 14,'833,517 1,342, 219 139, 871,150 295,809, 355 267,968, 579 643, 359, 601 5, 407, 580, 252 1920 645, 935, 477 4, 595, 357,062 1921 82,623,929 255, 219, 385 229,307,837 45,609,936 270, 759,384 174,361, 288 480, 383,664 3,197, 951,083 Non.-Stamp sales for Puerto Rican tobacco and liquor manufacturer are deposited at San Yuan to the 1922 279,459,849 2,621, 745, 228 1923 30, 358,086 309, 015,493 185, 117,058 credit of the treasurer of Puerto Rico and consequently are not shown in other collection statements herein 27, 585, 708 325,638, 931 200, 921,721 297, 306,818 2, 796, 179, 267 except that liquor and tobacco taxes amounting to $32,111 in 1952 and $736 in 1951 were collected at the ports 1921 2, 584, 140,268 192 25,904,775 395, 247, 211 140,877,326 201, 512,011 of entry and were covered into the Treasury of the United States to the credit of the treasurer of Puerto 26,452,029 370, 666,439 150, 220,488 195, 340,420 2,835,999, 892 Rico, under the Act of Mar. 2, 1917 (sec. 3360, Internal Revenue Code). 1926 81,174,968 2, 865, 683, 130 1927 21, 195, 552 876,170,205 66,850, 109 1928 15, 307, 796 396,450,041 51,951,894 92, 165, 670 2,790,535,538 1929 12,776,728 434,444, 543 5,723, 791 92, 937,744 2,939,054,376 11,695, 268 450, 339,061 2, 676, 261 100,406,288 3,090, 145, 733 1930 2,42, 228, 754 1931 10,432,064 444, 276,503 149,744 65,251,619 8, 703, 963 398,578,619 98,195 46,171,256 1, 557, 729,043 1932 1, 619, 839,224 1933 43, 174, 317 402, 739,059 243, 600,368 149,224,352 258, 011, 3334 425,168,897 385, 291,214 670,073,432 2,672,239,195 1934 299,435, 572 1935 411,021,772 459, 178, 625 342,144,686 769, 187, 665 3, 505,469,037 501, 165, 728 382,716, 142 324, 527,086 3,520,208,381 1936 4,653, 195, 315 1937 594,245,086 652, 254,145 449,853, 630 305, 707,545 1938 567,978, 602 568, 181,968 416, 753, 516 317,287,205 5,658, 765, 314 587, 799, 701 580,159, 206 396, 891,003 330,465,663 5, 181, 573,953 1939 5, 340,452,347 1940 624, 253,156 608, 518, 444 447,087,632 337,391,665 820, 056,178 698,076, 891 617,373,372 430, 563, 800 7,370,108,378 1941 771,902, 259 821, 681,660 13,047,868, 518 1942 1,048, 516, 707 780,982, 216 1, 423,646, 456 923, 857,284 504,746,434 1, 274,047, 519 22,371,386,497 1943 40,121,760, 1944 1,618, 775, 156 988, 483,237 503,461,802 1, 733, 655, 377 233 See footnotes at end of table. ADDITIONAL ASSESSMENTS RESULTING FROM AUDIT BY INTERNAL REVENUE ACIENTS

TABLES 8-9 168 REPORT OF COMMISSIONER OF INTERNAL REVENUE STATISTICAL TABLES 169

income and profits tax assessments on the Commissioner's TABLE 8. - Additional income and profits tax assessments on he Commissioner's and TABLE 8.- Additional and collectors' lists made during the fiscal year 1952, by tax years collectors' lists made during the fiscal year 1952, by tax years- Continued (Excludes additional assessments resulting from collectors' examinations] (5) TOTAL REGULAR ASSESSMENTS-Continued (a) TOTAL REGULAR AND JEOPARDY ASSESSMENTS Tax year Items Tax Interest ' Penalty Total

Items Tax Interest Penalty Total . Tax year Income and profits tax 1 , -Continued 1950 81,063 $50,165, 609 $2, 836, 285 $2, 071, 997 $55, 073,371 1951 364 622,021 15.341 8,847 646,209 Income and profits tax: 1 ." .."" $60, 992 1952 925 and prior $20, 995 $31, 613 $8,384 1 222 222 10,702 18, 196 7, 968 36,866 926 37, 096 971 11, 742 16, 602 8, 752 Total 331, 987 705, 893, 406 147, 210, 234 41, 606, 493 894, 010, 183 8, 909 40,327 928 13,347 18, 071 14, 927 19,308 11,196 45, 430 Excess profits tax: 929 Nr 27, 551 25, 791 10, 624 63, 916 1940 41 537,113 995,467 19,327 1,051, 907 930 9, 890 44, 670 1941 137 931 16, 933 17, 847 2, 379, 634 1,883, 687 134, 016 4, 397,337 24, 390 25, 971 14, 206 69,567 1942 411 36, 878, 903 11, 581, 539 619, 571 48, 880, 013 932 4 177,906 188,332 91,777 458,015 1943 727 32,3111123 13, 743, 546 1, 874,086 47, 927, 755 933 An' 535,359 1944 214,488 211,046 109,825 821 31, 484, 856 12, 833, 072 2,316, 807 46, 634, 735 934 155,546 699,278 1945 1, 027 935 281,189 262,543 32, 374, 250 11, 038, 575 I, 547, 445 44, 960, 270 472, 629 412, 784 262, 939 1, 148, 352 19413 252 1, 621, 476 499, 280 77, 557 2,198, 313 936 m 310,973 1,471,047 937 643,087 517,487 597,678 413,326 273,173 I, 284, 177 Total 3, 418 137, 386.355 52, 075, 166 6, 588,809 196, 050.330 938 191, 742 3,672, 379 939 2,075, 820 1, 404,817 3, 937, 765 2,323, 057 368,102 6. 628,924 Grand total 335.403 843, 279, 761 199, 285, 400 49, 096, 302 1, 090, 660, 483 agRER 940 ,434 18, 268, 374 5,652,027 775, 060 24,895, 461 941 44, 783, 544 942 30, 539, 240 11,552, 565 2, 691, 739 55,381, 984 21,560, 647 8,114, 475 85, 057, 006 (a) ASSESSMENTS ON AGREEMENT WITHOUT 90-DAY LETTER 943 99, 489, 243 944 64, 435,530 22,352,694 12, 701, 019 68, 501,695 71, 863, 699 15,178, 975 105,342,319 945 v Income and profits tax: ,, 81, 827,231 22, 006,088 15,625, 729 119,359, 048 1 gE 946 si 99,806, 845 20,870,583 11,085, 293 131, 762, 721 1915 and prior 50 $18, 955 $28, 484 $6. 854 $54. 293

947 qd 150,451, 726 23,091, 765 7, 650.957 181, 194,448 1926 5 541 3, 218 348 4,107 948 in 167, 907, 398 16.819,268 6, 619,186 191,345,852 1927 4 509 719 328 1,556 949 64,176, 710 1928 4 641 868 380 1,889 950 56,341, 800 3, 205,341 4,629, 569 1, 243, 632 17, 248 24, 278 1, 285, 158 1929 1 238 308 178 724

- 951 $ . 222 1930 6 6, 706 974 319 7, 999 952 222 1931 3 500 588 326 1,419 1,064, 783,127 1932 5 1,645 1,768 1,070 4,483 Total 338,161 803, 246, 826 174,898, 516 86,837, 785 1933 4 2, 476 2, 052 1, 419 5, 947 1934 8 5, 034 11, 978 Excess profits tax: 4, 438 2, 506 542,025 499,343 19, 327 1,061,695 1935 13 24,054 22,220 12.085 58,359 1940 42 1936 1941 139 2,389,904 1, 889, 572 134,858 4,414,334 36 79,705 68,426 38,676 186,807 11, 742, 706 620,462 49,352, 575 1937 46 195,923 155, 380 62,043 413,346 1942 419 38, 989, 407 1938 747 33, 078, 583 14,573.953 2.040, 703 49, 693, 239 74 219, 460 123,349 48, 632 391, 441 1943 1939 92 1,804,846 1944 852 32, 542.694 13, 259, 917 2, 842,316 48, 444, 927 1. 212,301 89, 878 3,107, 025 11,355, 010 1, 989, 598 46, 625, 749 1940 373 3, 357, 086 1, 986, 510 193,017 5, 516, 5M 1945 I, 052 33, 281.141 1941 263 1, 725,301 530, 894 124, 219 2,380, 414 972 18, 664, 844 4,809, 813 467, 805 21.942, 462 1946 1942 I, 350 25, 810, 750 9, 228, 969 1,130, 960 36,170, 679 1943 2, 816 40, 493, 833 14, 809, 661 3, 000, 275 58,303, 769 Total 3,514 140, 550, 055 53, 851,395 7, 571, 483 201,972,933 1944 4, 045 41, 547, 875 13, 932, 553 4, 384,122 59,364, 550 1945 Grand total 341, 675 943, 796, 881 228,549, 911 94, 409, 268 1, 266,756, 060 5, 680 42, 897, 773 12, 892, 862 6, 190,384 60, 981,019 1946 11, 708 52.338, 550 13, 570, 917 4, 839, 905 70, 749.372 1947 20.527 75, 525, 598 15, 416, 962 4, 484.698 95, 427, 258 (5) TOTAL REGULAR ASSESSMENTS 1948 74, 676 133, 845, 667 20, 272, 805 3, 258, 056 157. 378. 528 1949 135,309 153, 851, 978 15, 222, 083 2.070, 244 171,195,305 1950 Income and profits tax: 1 60, 837 49, 898, 551 2, 819,198 2, 042, 490 54, 760, 239 $28, 484 $6, 854 $54, 293 1951 363 621,948 15,339 8,847 646,134 1925 and prior 50 $18, 955 1952 1926 5 541 3, 218 348 4,107 1 222 222 4 509 719 328 1, 551 1927 Total 1928 4 641 868 380 1,888 319,008 639, 215, 888 126,083, 765 31,335, 845 796, 635. 498 238 308 178 729 1929 1 Excess profits tax: 1930 24 14, 299 9, 389 685 24,372 2,225 638 1,201 4,06: 1940 28 - 347, 460 377, 913 11, 393 736, 766 1931 5 1941 1932 8 3.532 2, 816 1,939 8,261 95 I, 750,302 1, 544, 910 77, 743 3,372. 955 80,126 82,520 40,343 202,981 1942 299 33, 535, 666 10,100,153 412, 427 44,048, 246 1923 8 1943 1934 14 120, 749 117, 721 60, 322 298, 79: 527 26, 703,154 11,341 065 1,251,048 39, 296, 267 165,948 152,271 82,831 101.055 1944 644 26, 091 083 10, 734, 029 1,435,378 38, 261, 490 1935 19 1945 49 296,335 253,484 146,326 896,141 809 27, 686, 987 9, 429,378 1, 015. 010 38,131,375 1936 1946 1937 65 471, 269 372,680 199, 262 1, 043, 211 214 1, 266, 998 382, 454 38,608 1,688,060 392,041 250, 937 127,736 770, 71 , 1938 95 Total 1939 117 1, 908, 893 1, 283, 846 104, 919 3, 297, 651 2, 618 117,382, 650 43, 910,902 4,241, 607 105, 535,159 452 3, 637, 190 2,130, 636 225,406 5, 993, 23: 1940 Grand total 1941 1.173 18, 007, 629 5, 501, 948 658, 499 24,168,071 321,624 756,598,538 169, 994, 667 35,577, 452 962,170,657 1942 ],648 27, 742. 978 10, 106,159 1,643, 463 39, 492,601 18,142.353 4, 403,520 70, 532, 981 1943 3,611 47, 987,107 See footnote at end of table. 1944 5, 204 52, 081, 505 17.542, 021 6,658, NM 76, 282, 13 1945 7, 194 53,311, 707 16, 428,887 7,363, 972 77,104, 561 1946 13, 454 64, 904,452 17,142, 333 6, 461, 024 88, 507, 80 1947 22, STA 86, 610,093 17, 872, 558 5, 473, 929 109, 958, 581 1948 77,511 140, 152, 848 21,330, 853 3,536, 927 165, 020, 62 ..... pi., non 1 K7 100 lea is Ann 055 2.277.152 175.021.83

See footnote at end of table. 170 REPORT OF COMMISSIONER OF INTERNAL REVENUE STATISTICAL TABLES 171

TABLE 8.-Additional income and profits tax assessments on the Commissioner's and TABLE 8.-Additional income and profits tax assessments on the Commissioner's collectors' lists made during the fiscal year 1952, by tax years-Continued and collectors' lists made during the fiscal year 1952, by tax years-Continued (5) ASSESSMENTS ON AGREEMENT AND 11EFAULT AFTER ISSUANCE OF 90-DAY (s) ASSESSMENTS BASED UPON STIPULATION BEFORE THE TAX COURT-Continued LETTER Tax year Items Tax Interest Penalty Total Tax year Items 'Pax Interest Penalty Total Income and profits tax I-Continued Income and profits tax: I 1950 $1,467 $110 $176 $1,753 1925 and prior 1951 73 2 75 1926 1952 1927 1928 Total 3, 323 19, 270, 952 7,181, 082 2, 933, 111 29, 435,145 1929 Excess profits tax: 1930 21, 020 1931 1940 12,831 8,189 1932 1941 218,159 133,511 3,568 355, 238 1933 1942 1, 553, 316 715,284 50,117 2,318, 717 1 $1,226 $1,229 $621 $3,076 1943 3,325, 961 1,367,407 256,993 4, 949. 861 1934 11, 885 3, 260, 070 1935 1 4, 866 4,686 2, 433 1944 2,196, 267 820.881 242, 922 1936 4 6,914 6, 092 3, 449 16.455 1945 1,798,393 630,335 121,571 2, 550, 299 1937 6 731 403 288 1, 512 1946 21,173 8, 987 3, 180 31,320 11 10.203 7, 781 2,326 29,310 1938 36,974 1939 9 18,856 13,315 4,803 Total 318 9. 125, 600 3,682, 574 678,351 13, 486, 525 1940 42 114,223 71.920 19,772 205.915 1941 88 571,549 281.271 141, 669 994,489 Grand total- 3,641 28,396, 552 10,883, 656 3,661, 462 42, 921, 670 1942 122 817,868 283,137 188.354 1,067.359 1943 281 2, 828, 893 I, 277, 230 693, 947 4, 800, 070 1944 416 4, 305, 716 1, 705,805 1, 367, 010 7,378,331 (I) ASSESSMENTS MADE AFTER DECISION BY THE TAX COURT 1945 615 4, 803, 935 1, 638, 949 1, 553, 688 7, 996, 472 1946 871 8.333, 475 2, 359, 537 1, 289.536 11. 982,548 1947 1.461 8, 374.618 1, 844, 205 691.917 10, 910, 740 Income and profits tax: I 1948 2.312 5, 474, 328 921, 478 282344 ,696 6, 830, 902 1925 and prior 1949 1,561 3, 207, 785 360,179 149,577 3, 717, 541 1926 1950 219 264, 535 16, 922 28, 216 309.873 1927 1951 1928 1952 1929 1930 $7,031 $8,078 $15,109 Total 8,040 38, 939, 721 10, 793, 929 6,350,102 56, 083. 752 1931 1932 Excess nrofits tax: 1933 940 61,445 38,937 7,934 108318 1934 199,888 112,384 52,705 364. 977 1935 941 A 153,426 1, 583, 772 041 964,163 468,183 1936 '" 943 1,355, 295 587,465 251,057 2,193,817 1937 2,774 2.143 $1.390 6,307 892, 772 567, 531 3, 695,198 1938 3,141 2, 214 1, 572 6,957 2, 244. 895 "41 944 2, 965,152 6, 871 045 1, 922.372 658, 986 383, 794 1939 3, 304 2, 037 1, 530 946 170,448 61.131 18,127 249,706 1940 110,727 62 259 2,201 175,187 1941 514,503 285,313 6,360 806,178 2, 817, 858 1, 434, 574 11,160, 938 1942 3 431,593 197.546 57,917 687,058 Total 273 6, 908, 506 nE 1943 I, 437, 574 657, 054 193, 724 2, 288,352 Grand total 8, 313 45, 848, 227 13, 611, 787 7, 784, 676 67, 244, 690 1944 1, 816, 624 746, 002 155,197 2, 717, 823 1945 1, 826, 566 610,583 139,395 2,676,544 1946 W 1,360, 500 380,106 88,459 1,829,085 (e) ASSESSMENTS BASED UPON STIPULATION BEFORE THE TAX COURT 1947 786,980 173,216 163.878 1,124,074 1948 S' 111,725 18,539 22,648 152,912 Income and profits tax: I 1949 52 747 6,303 Z 649 61,599 1,708 1925 and prior 1950 a 1,056 35 615 1926 1951 ______1927 1952 ______1928 Total 1,616 8, 466, 845 3,151,458 837,435 12, 455, 738 1929 $1, 28P 1930 - $562 $337 $366 1Q11 1,725 48 875 2,64E Excess profits tax: 1932 1, 887 1, 048 869 3.804 1940 5 115,377 70,428 185,805 UM ^a, 650 BO, 468 3P.924 197,045 1941 13 211,285 92,882 304,167 193 114, 489 112 054 57.195 284, 735 1942 41 625,758 299.919 3,601 929,278 18415 137, 028 125,465 68, 313 330.801 1943 40 926. 213 446, 609 114, 988 1, 487, 810 15416 209, 716 178, 968 104, 201 492, 88: 1944. 39 961,611 385. 390 70,976 1,417,977 1917 271,841 214.664 135, 541 622,041 1945 55 986,498 319,876 27,070 1,313, 444 1938 159,237 117, 563 75, 206 352,00( 1946 16 162, 857 4% 728 17, 642 229,227 1919 81, 887 66.193 8. 708 148, 7711 1940 55,174 29.947 10, 416 95, 53' Total 209 3, 969, 599 1, 663, 832 234, 277 5,867, 708 1941 256.733 125, 551 42,665 424,941 1942 892, 76,7 396, 507 239, 232 1, 567, 501 Grand total 1,825 12, 436, 444 4, 815, 290 1, 071, 712 18, 323, 448 1943 3. 226, 907 1, 399. 408 615,574 5, 140, 781 1944 4,411, 290 1, 657, 861 752.276 6,821, 421 1945 3, 793, 433 1, 288, 493 480,605 6, 650, 53' See footnote at end of table. 1046 2, 871, 927 831.773 243.124 3, 946, 82 1947 1, 922, 897 438,175 133, 436 2, 494.59 1948 721, 128 118,031 21,627 860,78 ...., 84 rnil 11 Al4 4. 792 97. 43 See footnote at end of table.

STATISTICAL TABLES 173 • 172 REPORT OF COMMISSIONER OF INTERNAL REVENUE TABLE 8. - Additional income and profits tax assessments on the Commissioner's and Additional income and profits tax assessments on the Commissioner's and collectors' lists made during the fiscal year 1952, by tax years-Continued TABLE S. - years-Continued collectors' lists made during the fiscal year 1952, by tax (4) JEOPARDY ASSESSMENTS UNDER BANKRUPTCY AND DISSOLUTION PROCEDURE-Continued (g) TOTAL JEOPARDY ASSESSMENTS

- Penalty Total' " Interest Penalty Total Tax year I tego s Tax Interest' Tax year Items Tax

Income and profits tax I-Continued Income and profits tax: $1,530 $6,699 163 $1, 119, 753 $113, 893 $57,089 $1, 290, 735 $2,040 $3,129 1949 837,140 1925 and prior 14, 978 7, 620 32, 759 141 720, 790 44, 611 71, 748 10,161 1950 4, 769 109,147 1926 15, 883 8, 424 35, 540 1951 12 103, 179 1,199 11, 233 38, 438 1927 12, 706 17, 203 8, 529 1952 1928 11, 017 44, 706 14, 689 19, 000 10, 314, 286 1929 16.352 9, 939 39, 543 611 8, 047, 753 I, 748, 596 517, 937 13, 252 40,008 Total 1930 14,708 17, 211 8,689 1931 12, 267 56,280 20, 858 23,155 Excess profits tax: 9, 788 1932 105, 812 51,434 255, 026 1940 1 5,912 3,876 97,780 236, 567 3, 902 '10, 803 1933 93, 739 93,325 49, 503 1941 1 6,901 1934 72, 715 298, 228 4 124, 677 63, 644 188,321 1 115.241 110, 272 1942 968,171 1936 159, 300 116, 613 452,937 6 334, 924 633, 247 1 176, 294 1943 123,365 30,289 417, 049 . 1936 144. 807 111, 211 427, 836 1944 7 303,395 1 171, 818 513,463 102, 288 106, 718 483, 835 1937 205,637 162,389 145,437 1945 6 274, 829 1938 1 86, 823 374, 721 4 39,948 11, 234 8,850 60,032 20 166, 927 120,971 1946 1939 192, 421 142, 696 635, 692 35 300, 575 145, 857 2, 177, 990 1940 150,079 116,561 527, 385 Total 29 1, 090, 586 941, 556 61 260,745 5, 290, 944 1941 2, 796, 262 1, 446, 406 1, 048,276 198 14, 524, 026 640 9, 138, 339 2, 890, 152 663,794 13,492,285 1942 313 7, 394, 877 3, 418, 194 3, 710, 955 Grand total 1943 4, 810, 673 6, 042, 414 23, 207,112 461 12, 354, 025 28, 237, 753 1944 15,189, 988 5, 234,762 7, 813, 003 642 30, 851, 239 (1) FRAUD JEOPARDY ASSESSMENTS 1945 799 16, 922, 779 4, 863, 755 9, 064, 705 1948 2, 998, 025 5, 611, 364 21, 306, 141 837 13, 196, 752 16,113, 822 1947 10, 298,880 1, 760, 912 4, 1 14, 030 989 16, 323, 971 1948 925 10, 713, 652 1, 218, 285 4, 392,034 Income and profits tax: I 1949 2, 558, 072 9, 103, 339 1 $2, 040 $3,129 $1, 530 $6, 699 761 6, 176, 191 369, 076 1925 and prior 32, 759 1960 15, 431 638, 949 2 10,161 14, 978 7, 620 33 621, 611 1, 907 1926 8, 424 35, 640 1951 1927 2 11, 233 15, 883 1952 2 12, 706 17, 203 8, 529 38, 438 1928 44,706 45, 331, 292 170, 172, 994 2 14, 689 19,000 11,017 97, 353, 420 27, 488, 282 1929 9,939 39,543 Total 1930 2 13, 252 16, 352 6 14,708 17,211 8,689 40,808 1931 56,280 Excess profits tax: 3, 876 9,788 6 20,858 23,155 12,267 1 5,912 16,997 1932 51, 434 255,026 1940 5,885 842 1933 8 97, 780 105, 812 2 10,270 472,562 93, 325 49, 503 236,567 1941 310,504 161,167 891 1934 9 93, 739 8 1, 765, 484 115, 241 110, 272 72, 715 298,228 1942 20 768, 460 830, 407 166, 617 1935 11 325,509 1, 810, 192 14 176, 294 159,309 116, 613 452, 207 1943 31 1, 057, 838 426,845 1936 1944 442, 153 1, 665, 479 17 171, 818 144,807 111, 211 427,836 ' 25 906, 891 316, 435 1937 513,463 1945 31, 614 46,662 182, 101 18 215,637 162, 389 145,437 11 103,825 1938 88,823 374,721 1946 1939 20 166, 927 121,971 34 289, 869 185, 402 142, 696 617, 967 1940 116, 423 525, 581 Total 1941 57 259, 663 149, 495 176, 095, 597 1, 075, 075 I, 048, 019 4, 185, 737 100, 517, 120 29, 264, 611 46, 313, 966 1942 194 2, 062, 643 Grand total 6,272 207 6,527,203 3,119, 284 3, 674, 226 13,320, 713 1943 5, 994, 910 22, 389, 285 1944 440 11, 652, 119 4, 742, 256 620 14, 713, 710 5, 072, 806 7, 746. 649 27, 533, 165 (4) JEOPARDY ASSESSMENTS UNDER BANKRUPTCY AND DISSOLUTION PROCEDURE 1945 29, 945, 467 77 0 16, 287,56 2 4, 681, 188 8, 976, 717 1946 5, 524, 110 19, 718,166 1947 785 11, 531, 418 2, 662, 638 843 9, 286, 665 1, 598,190 4, 055,923 14, 940, 778 1948 4, 334, 945 15, 033, 236 Income and profits tax: 1949 762 9, 593, 899 1, 104, 392 1925 and prior 620 5, 455, 401 324, 465 2, 486, 324 8, 266,190 1950 10, 662 529, 802 1926 1951 21 518,432 708 1927 1952 1928 159, 858, 708 1929 Total 5, 563 89, 305.667 25, 739, 686 44, 813, 355 1930 1931 Excess profits tax: 1932 1940 842 6,194 1933 194 1 1 3, 389 1, 983 1934 4 185,827 97,523 891 284,241 1942 797, 313 1935 1943 14 433, 536 197,160 166, 617 1936 24 754, 443 303, 480 295, 220 I, 353, 143 1944 335, 435 1, 181, 644 1937 1945 19 632, 062 214, 147 1938 7 63,877 20,380 37, 812 122, 069 $17, 725 1946 1939 $7, 019 1 $10,706 $138 1, 804 834, 873 836, 817 3, 744, 604 1940 1, 082 584 Total 69 2, 073.114 4 257 1,105, 207 1941 4 733, 619 371,331 1942 298, 910 36, 729 1, 203, 313 5, 632 91, 378, 781 26, 574, 359 45, 650, 172 163, 603, 312 16 867, 674 817, 827 Grand total 1943 701, 906 68,417 47, 504 21 66, 354 704, 588 1944 22 476, 278 161, 956 1945 182, 567 87, 988 905, 772 I Includes corporation tax under the Excess P ofits 'Pax Act of 1950. 29 635, 217 2, 087,975 1946 1, 665,334 335, 387 87, 254 52 58, 107 1, 233, 044 1947 146 1, 012, 215 162, 722 1948 See footnote at end of table. 174 REPORT OF COMMISSIONER OF INTERNAL REVENUE year TABLE 9.-Income and profits tax deficiencies appealed to the Tax Cour , fiscal ended June SO, 1962

Returns Penalty Total Tax year. involved Deficiency

- $76, 051 $2, 677 $78,728 " 1930 and prior 9,156 4,700 13,856 1931 20,526 13,721 8,805 1932 103,921 12,093 116,014 1933 8 170, 299 89,103 259, 402 1934 R 217,805 73,725 291,530 1935 44 285, 875 215,963 69, 712 1936 648,245 93,399 741,644 1937 *E 701,447 67,964 769,411 1938 1,027, 503 61, 416 1,088, 919 1939 F 4§EUR 2, 507, 533 1940 2,325,052 182,481 4, 354, 320 390,367 4, 744, 687 1941_ 22, 705, 495 2,615, 500 26, 320, 995 1942 ' tintiti 55,701,023 6,005, 718 61, 706, 741 1943 44, 295, 291 8, 214, 427 52, 509, 718 1944 52, 418, 464 8,626,084 61, 044, 548 1945 EgR§E 40, 003, 159 10,185,499 50, 188, 658 1948 44, 495, 638 5,932,492 50, 428,130 1947 N

ti 31,020, 309 5,208,026 36,228,337 1948 14, 448, 422 12, 554. 548 1, 893, 874 1949 4,084, 371 1,396,490 5, 480, 861 1950 2c 569,827 75,793 645,620 1951 144,399 144,399 1952 E Year and amount undetermined 42,069 8, 797 50, 866 369, 115, 220 Total 13,278 317,898,076 51,217,144 ALCOHOL, DISTILLED SPIRITS, BEER, WINES, ETC.

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180 REPORT OF COMMISSIONER OF INTERNAL REVENUE STATISTICAL TABLES 181

TABLE D.—Permits under sections 3070 through 3125, Internal Revenue Code, fiscal TABLE 13.— Permits under the Federal Alcohol Administration Act, by States, year 1952 as of June 0 1952 Ware- Winn Wine Din- housing Recti- producers Im- Whole- Industrial Carriers of State blend- salers Total alcohol plants, Dealers in Users of Users of users of tillers and Hers and ers porters tax-free and bottling blenders bonded ware- specially specially specially specially Total tax-free "ER houses, and denatured denatured denatured lohol denatured 88 denaturing alcohol alcohol rum alcohol Alabama 1 27 plants I Alaska 94 Arizona 120 27 N M"

Vi Arkansas

1, 187 103 33 4,284 7, 592 457 12, 525 California 57 363 In effect July 1, 1951 1 2 101 33 16 10 313 c° 392 766 Colorado Issued 2 97 Terminated 21 10 371 325 34 767 Conneetlut 9 3 23 Revoked 3 an Delaware

34 NnT

e Voluntarily surrendered 21 10 264 224 16 538 District of Columbia 183 Involuntarily surrendered._ 7 9 16 Florida 2 5 97 ' 92 18 210 2 107 Expired 2: Georgia

60 nERFAM In effect June 30, 1952 98 33 4, 226 7, 659 456 12, 524 Hawaii 4 30 3, 967 7 7, 295 437 11, 873 1 95 Renewals approved 97 ;=1 Idaho 5 1,132 Amended 60 3 1, 325 1, 051 55 2, 505 Illinois 15 Indiana 15 283 1 8 231 Iowa 207 Permits cover industrial alcohol plants, bonded warehouses, and denaturing plants either singly or in Kansas 236 combinations. Kentucky 98 2 Represents permits terminated due to failure to file renewal applications, or to disapproval of renewal Louisiana 4 4 162 2 73 applications. Maine 178 Maryland 25 3 ENWP Nov5.—For permits by States, see table 10. Massachusetts 15 4 177 Michigan 3 12 454 1 930 under the Federal Alcohol Administration Act, fiscal year 1952 Minnesota 81 TABLE 12.— Permits :4 Mississippi 316 Missouri 6 5 Montana 75 Ware- Wine pro- Nebraska 1 120

Dis- housing Recti- ducers Wine Im- Whole- 52 4 Total Nevada 33 tillers and fiers and blenders porters salers New Hampshire ME bottling blenders 13 22 325 New Jersey 62 New Mexico 1 12 New York 35 75 968

In effect July 1, 1951 358 402 77 1, 287 14, 598 17, 686 7 186 g North Carolina 76 Issued 37 46 19 157 1,893 2,223 North Dakota aRni Terminated 65 76 17 161 2, 378 2, 804 Ohio 8 72 989 Revoked 2 13 15 Oklahoma 132

4 12 132 a Annulled Mi 1 3 Oregon 1 1, 402 1, 063 6 2,273 Voluntarily surrendered 23 47 0 15 113 Pennsylvania 37

29 2 46 960 1,122 13 11 485 "g Automatically terminated 42 na"- Puerto Rico In effect June 30, 1952 330 372 79 1, 283 14, 113 17, 105 Rhode Island 39 26 77 14 116 1, 148 1, 487 3 76 Amended South Carolina 99 Suspended 3 4 rO South Dakota 179 Reinstated after suseension 4 5 1 Tennessee 696 In suspension June 30, 1952 Texas 7 L

59 Var Utah 32 Vermont 175 Virginia 4 7 Washington 1 15 172 West Virginia 157 Wisconsin 5 1 773 Wyoming 72 Total 330 372 241 687 79 1,283 19,113 17,105 DEF NITIONB Gallon: A "gallon" or "wine ga Ion" is a United States gallon of liquid measure equivalent to the volume of 231 cubic inches. Proof: "Proof" is the ethyl alcohol content of a liquid at 60 ° F., stated as twice the percent of ethyl alcohol by volume. Proof gallon: A "proof gallon" is the alcoholic equivalent of a United States gallon at 60° F., containing 50 percent of ethyl alcohol by volume. Tax gallon: A "tax gallon" for spirits of 100 proof or over is equivalent to the proof gallon. For spirits of less than 100 proof the "tax gallon" is equivalent to the wine gallon. Barrel: A "barrel" represents 31 wine gallons. Half-pint: The "half-pint unit" is the taxable unit for reporting sparkling wines and certain cordials and liqueurs. The tax is payable on each one-half pint or fraction thereof in each bottle or other container. 100-grain gallon: A wine gallon of vinegar which contains 10 percent acetic acid by weight is equivalent to one "100-grain gallon." In a wine gallon of vinegar which contains more or less than 10 percent acetic acid by weight, the number of "100-grain gallons" is proportionately greater or smaller than one. The "100-grain gallon" is equivalent to the "10-percent gallon."

•

182 REPORT OF COMMISSIONER OF INTERNAL REVENUE STATISTICAL TABLES 183

H. 47NDENATURED ETHYL ALCOHOL TABLE 15. - Materials:' Used at industrial alcohol plants in production of ethyl alcohol, by kinds and by States, fiscal year 1952 [Relates to ethyl alcohol produced by Industrial alcohol plants)

TABLE 14. - Materials: I Used at industrial alcohol plants in production of ethyl Grain and grain products alcohol, by kinds and by months, fiscal year 1952 State Corn Malt Wheat S mghaill Other Total Grain and grain products grain Month Sorghum Pounds Pounds Pounds Pounds Pounds Pounds Corn Malt Wheat grain Other Total California Florida Hawaii Pounds Pounds Pounds Pounds Illinois 5,076,639 1,336 50,037 117,233 26,050 5, 271, 296 Pounds Pounds Indiana 39,098, 755 3, 984, 780 158,040 43, 241.676 July 15, 085, 929 3, 141, 002 1, 381, 377 15, 874, 569 35, 482, 877 143, 4* 806 4,444,397 73, 640, 386 108,ON, 206 Iowa 105,0438,045 11, 856, 414 26, 562, 847 August 20, 414, 409 9, 658, 034 Kansas 1, 560, 540 3, 652,770 24, 560,110 6,237,445 6, 620,370 42 471, 236 September 22,166, 007 8,044,241 17, 452, 600 38,288, 916 14, 954,853 98, 904,617 52,374, 594 32, 938, 417 117, 036, 123 Kentucky October 17, 202, 688 9,949, 822 5, 572, 602 Louisiana November 28, 867, 673 6,234,793 3, 346, 611 28 642, 936 17,'225,163 84,317,166 315, 840 95.889, 473 Maryland 8,679,000 710,758 2,914,350 7, 204, 108 December 23, 620,290 6,220, 911 4, 872, 220 60, 860, 212 Massachusetts UMW] 59, 958, 669 7, 291, 464 4, 097, 048 35, 398,155 275 000 106, 513,336 3, 351, 725 30,818,915 34, 170,640 98, 823, 160 10,211, 764 8,084, 826 25, 429, 798 1,344 142, 550, MA Michigan Rental? 109,005 720 Missouri_ 5 470,642 11, 809, 392 85 344, 608 89,764,592 144,389, 234 March 51, 894, 252 8,132, 256 9,607, 927 39, 374,294 Nebraska 106, 525,852 23,490,064 81,280 139, 419, 205 15178, 825 288,695,206 April 10, 875, 901 4 427, 212 4, 501, 195 35, 423, 219 55.227, 527 28. 583,184 4,138, 911 7 98,8 17, 120, 777 29,300 52,285 202 New Jersey May 810 47,008, 190 New York June 37, 948, 643 3, 680, 282 4, 840, 884 537, 571 Ohio 12,342, 880 1,881,102 9,250,416 23, 474, 288 1, 0E2, 275 335 Oregon Total 2 414, 938, 805 89,639,692 70,609, 716 425 863, 405 85, 233. 717 Pennsylvania 135,305 652 20,892, 261 15,009,394 150,017, 801 585,840 321,901, 948 Puerto Rico Texas Products Utah Ethylene Ethyl Sulph to Other materials Virginia Month Molasses sulphate liquo s used in re- Washington dad distillation West Virginia Wisconsin Proof Total 3 414,938,805 80, 630,692 4 70,609, 716 420,883,405 3 65,233, 717 1,052, 276,385 Pounds Gallons Gallons Gallons gallons Gallons Pounds July 7, 788, 526 12.902, 833 14 690, 980 20,0* 900 1, 89,183 5 385 819 269, 458 August 7, 275187 17, 427, 473 13, 856, 988 21,775, 600 4, 282,163 7, 553,811 283,991 16, 482, 552 13, 351,123 19, 490, 900 5, 025, 221 4,144, 296 236, 875 See footnotes at end of table. September 6,327,152 197155 October 7,095 931 15, 285 988 15.499, 539 21,647,300 3, OK 201 2,487 507 November 5, 828, 440 15, 899. 015 15 964, 985 21,042, 300 663,8 4,888.927 172,817 December 6, 961, 987 12. 857, 111 13, 902, 962 18, 830, 000 1, 541. 177 7, 147. 752 176. 798 15, 315, 957 25 848, 000 995 300 5 473, 581 162. 364 January 7, 115, 986 1Z 908, 532 115 831 February 7, 368,382 5 873, 070 14,704,560 27 775 000 1, 227, 760 7.315,5595 16,989,6995 15 407, 310 24, 075, 200 734, 830 5 804,824 126,538 March 7, 161. 670 690 128,852 April 5 055, 189 0, 054. 598 13, 773, 772 23, 235 100 851, 288 9, 511, 803 11, 222, 878 24, 265, 700 I, 174, 320 3,019. 642 247, 538 May 71, 400 194,944 June 1, 649, 391 15 660, 917 17 375 955 15,838,500 1.035,7781.035, 9, 695 485 Total ...... 65 409, 741 158,158,354,091 168, 020, 007 254, 882, MO 27200, 754 2 88, 359,893 1 7 312, 159

I For those plants in which ethyl alcohol s a byproduct of the butyl process, only the estimated amounts of material allocable to ethyl a robot have been included. Includes 1,566, 60 pounds o corn meal. Includes 30,818,015 pounds of a wheat byproduct and 22,010,610 pounds of wheat flour. Represents 84,432,333 pounds of mixed grain, 615,140 pounds of rice, and 186,244 pounds of rye, 23,432,371 gallons of whey, 17,005,156 gallons of petroleum products, 7,498,201 gallons of p 6 Represents apple juice, 6,461,674 gallons of wood sugar Utmos t 6,837,070 gallons of enzyme extract, 2,559,357 gallons of cellulose pulp and chemical mixtures, 1,868,050 gallons of yeast beer, 1,258,180 gallons of citrus press lulus ' concentrate, 918,576 gallons of crude alcohols mixtures, 845,801 gallons of apple pectin residue, 489,490 gallons of citrus waste concentrate, 184,448 gallons of corn sugar sirup, 15,834 gallons of wood sugar molasses, and 5,685 gallons of grape material. Represents 2,189,330 pounds of whey, 75,000 pounds of dextrose, 47,045 pounds of dried skim milk, and 784 pounds of enzyme extract, Nora.-In addition to the materials reported above, the following were used at industrial alcohol plants in the production of products other than ethyl alcohol: 71,081,264 pounds of corn, 10,173,692 pounds of sor- ghum grain, 1,241,148 pounds of wheat, 346,830 pounds of rye, 2,181 pounds of malt (a total of 82,844,915 pounds of grain and grain products), 1,858,767 pounds of soybean meal and distiller's solubles, 12,614 pounds of enryme extract, 14,000 pounds of copra meal, 3,400 pounds of cotton seed meal, 8,476,915 gallons of whey, 2,517,683 gallons of molasses, 102,289 gallons of grain sirup, 47,561 gallons of alcohol and acetone mixture, and 5934 gallons of corn sugar byproduct.

184 REPORT OF COMMISSIONER OF INTERNAL REVENUE STATISTICAL TABLES 185

TABLE 15. - Materials:1 Used at industrial alcohol plants in production of ethyl TABLE 16.-Materials: Used at industrial alcohol plants in the production of ethyl alcohol, by kinds and by S ales, fiscal year 195Z-Continued alcohol, by kinds, and quantities of ethyl alcohol produced therefrom, fiscal year 195R Products Ethyl used In Other materials State Molasses sulphate redistillation Quantity used Ethyl alcoho produced Kind of material ofercent Gallons Canons Proof odious Gallons Pounds Amount Unit Proof gallons Ptotal California 6,232,434 55, 516 & 495,175 7 75,000 Florida 7 1,258,180 Hawaii 77,498,201 168, 020,007 Gallons 208, 595,268 42.81 7 115 0 784 Ethyl sulphate Illinois Mob sses 1 158, 269, 621 Gallons 128, 570,003 26.28 Indiana 10, 612, NO 1, 882, 867 Grain and grain products 9 1,052, 276.335 Pounds 89, 291,187 18. 23 Iowa 1,032, 817 7 294, 765 Ethylene gas 69.999, 791 Pounds 29, 982,948 6.12 Kansas 22, 209.754 Proof gallons__ 21, 714, 661 4.43 a 2, 195,092 Products used in redistillation Kentucky Sulphite liquors 254, 882,900 Gallons 5,817,252 1.19 Louisiana 77,174,235 35, 286,007 1,238.342 Cellulose pulp, chemical and crude alcohols Maryland 460.482 6,068,221 mixtures: 9, 369, 524 Massachusetts 10 11 47,046 Cellulose pulp and chemical mixtures 2,559,357 Gallons 2,046, 228 .92 Michigan 13, 182,420 Crude alcohols mixtures 918,576 Gallons n 7, 644, 484 10 2,189, 330 Missouri 0 f 23, 432, 371 Gallons 1,023,003 .21 Nebraska 21, 349 Whey 1 2,189,330 Pounds New Jersey 30, 277, 454 403,099 Citrus press juice concentrate I, 258, 180 Gallons 769,301 .16 New York 1, 752, 502 A 1,868,050 Pineapplejuice 7,998, 201 Gallons 581,025 .12 Ohio Petroleum products 17,005,156 Gallons 566,461 .11 Oregon A 6, 477, 508 Citrus waste csucentrate 489, 490 Gallons 291, 259 .06 9 5, 552,190 Pennsylvania 28, 768, 971 11, 426, 596 Wood sugar liquor , 6,317, 099 Gallons 100,045 .02 4, 299, 204 83,580 .02 Puerto Rico 60,499, 741 Yeast beer 1,868, 060 Gallons Texas 84, 568, 900 86,417 n 17,005,156 A Apple pectin residue 1 643, 075 Gallons 39, 534 .01 Utah 13,785 Grape material 5, 685 Gallons 1,155 0) .Virginia 4,350 17 2, 559.357 Other mixtures: Washington 9 254, 882,400 Apple pectin residue 202, 728 Gallons West Virginia 37, 552, 200 10,180 17 918, 576 Corn sugar sirup 169,498 Gallons 10 1, 420,644 Wisconsin Wood sugar liquor 144,625 Gallons 126,684 . es 71,811, 90D Molasses 84,470 Gallons Total 158, 354, 091 168, 020, 007 22, 209, 754 323, 212, 293 Dextrose 75,000 Pounds Wood sugar molasses 15,834 Gallons 1 See footnote 1, table 14. Total 7 489, 599,474 100.00 Includes 1,566,460 pounds of corn meal. Includes 30,818,915 pounds of a wheat byproduct and 22,010,610 pounds of wheat flour. 4 Represents 64,432,333 pounds of mixed grain, 615,140 pounds of rice, and 186,244 pounds of rye. Additional amounts used in combination wi h other materials included unde "other mixtures." • Represents 489,490 gallons of citrus waste concentrate and 5,685 gallons of grape material. 7 In addition 5,837,070 gallons and 784 pounds of enzyme extras were used in the production of ethyl alcohol Dextrose. from grain and grain products. 7 Citrus press juice concentrate. In addition 47,045 pounds of dried skim milk were used in the production of ethyl alcohol from whey. Pineapple juice. Less than 0.01 percent. Enzyme extract. 7 Represents gross production. Net production-that is, the gross production minus products used In Whey. redistillation-was 467,389,720 proof gallons. n Dried skim milk. Is Represents 6,634,215 gallons of whey, 845,801 gallons of apple pectin residue, and 164,448 gallons of corn sugar sirup. 99 Yeast beer. I4 Represents 6,461,674 gallons of wood sugar liquor and 15,834 gallons of wood sugar molasses. Petroleum products. , 15 Ethylene gas. 17 Cellulose pulp and chemical mixtures. as sulphite liquors. 17 Crude alcohols mixtures. Nora.-See note, table 14.

STATISTICAL TABLES 187 186 REPORT OF COMMISSIONER OF INTERNAL. REVENUE TABLE 18.-Summary: Production, withdrawals, losses, and stocks on hand June 80, year 1952 TABLE 17.-Summary: Production, withdrawals, and stocks of ethyl alcohol,' by of ethyl alcohol,' and premises operated, by States, fiscal months, fiscal year 1952 (Proof gallons] (Proof gallons] Withdrawals Withdrawals Tax-free Month Production Tax-free State Production Tax-paid For hospb Tax-paid tal, scion- Used for de- For use of the Used for de- For use of natmation 1 United States the United tine, and Other natumtion 1 States educational use July 35,997,062 2, 232,910 43, 654,861 13,813, 628 August 44,665,033 3, 032, 853 42, 608, 789 14,010,436 September 40, 944,565 3, 595,118 39, 923, 966 10, 740, 383 California 4,853,199 593,375 5,357, 412 381,554 166,873 29 October 47, 335, 886 3,016,437 43, 361, 563 9,983, 432 District of Columbia 651, 949 November 40, 477,497 3, 178, 913 45, 739,033 8,442, 834 Florida 769,301 564, 974 44 December 39, 825, 468 2, 398, 654 42, 060, 716 10.677,856 Hawaii 581,025 1,640 469,318 103 4,022 January 42, 25,9,911 1, 992,958 48, 916, 926 6, 783,481 Illinois 327, 2'0 1,7,416, 921 11,519,836 35,808 311, 879 February 42, 420, 688 1, 788,300 44.935. 140 6,088,945 Indiana 18, 721,507 334, 221 17,689,383 4,817 08, 054 March 41, 128, 586 1, 860, 626 40, 939, 433 9, 373, 693 Iowa 11, 671, 242 April 33, 856,609 1, 754, 794 34,107, 686 9,054, 340 Kansas 3,546,00 31, 949 75,856 May 26,062, 133 1,394, 984 30, 538, 753 9, 718,937 Kentucky 62, 404 3, 081, 264 102, 905, 520 1,607 8,996 June 32, 922, 282 1,446, 672 33, 101, 965 7,850, 705 Louisiana 105, 778,155 602, 026 59, 645, 687 1, 799, 433 237, 050 216 Maryland 1, 252,993 5, 513, 524 8,383,650 78, 645 216, 947 Total 5 467,389,720 27, 693, 219 4 489, 788,831 116,636, 570 Massachusetts__ 8,046, 127 288,091 7,694,055 48,395 183,056 Michigan 3, 928, 612 295,497 913,447 1,564 105,495 Missouri 12,076, 342 124,987 1, 741, 425 28,841 114,161 1,326,476 Withdrawals-Continued Nebraska 23, 638, 402 309 New Jersey 24,061,827 4,336, 533 47,082,116 31,965 408,306 9,031 1,489,003 82,349 4,851,082 22, 721 79,399 6,156 New York 5, 658 169,162 Tax-free-Continued Ohio 2, 252,660 1, 036,141 Oregon 113,211 71,568 Stocks end 49, 4M, 711 114,091,946 245,962 24,859 Month of month Pennsylvania 51,071, 981 2,922, 903 Puerto Rico 1, 714, 798 1, 331, 403 6, 627 145,351 For hospital, Grand total 107, 271, 141 580 scientific, and Texas 129, 897, 524 Other Total Utah 7,136 949 1,026 educational 1,500, 907 use Virginia 1,626, 747 Washington 6,817, 252 6,744 3,044,021 1,212 17,490 West Virginia 63,158,677 24,745 56, 315, 152 1,231 2,074 27,324 July 221, 507 12, 822 57, 702, 818 59.935, 728 101, 248, 200 Wisconsin_ 27,324 August 194, 979 20, 299 56, 734, 503 59, 767,356 107, 737,912 489,788,861 116, 536, 570 2,336, 188 6 183,642 September 173, 921 lb, 568 50, 853, 838 54, 448,950 101, 680, 728 Total 5 467,389, 720 27,693, 219 4 October 202, 813 13,621 53, 561, 419 56, 577,856 103, 927, 191 November 207, 746 15,303 54,904, 915 57, 583, 828 91, 110,043 December 163, 759 18,982 52, 921, 353 55,320,1E7 89, 360, 601 See footnotes at end of table. January 188,547 10, 147 56, 899, 101 57, 892,069 94,441, 657 Feb! tuiry 211,894 17, 242 51, 251, 221 53,039, 521 94, 665, 041 March 178, 831 13, 327 50, 605, 184 52, 365,910 95,361, 420 April 199, 827 22, 681 43,384, 534 45. 139,328 97, 5E0, 276 May 210, 227 11,421 40, 479, 338 41, 874,322 82,344, 081 June 182,083 14,229 41, 148, 982 4%595, 654 74, 420, 162

Total 2,336, 133 5 185, 642 008, 847, 206 636,540, 425 74, 420,162

Represents production at industrial alcoho plants, withdrawals from industrial alcohol plants, in- dustrial alcohol bonded warehouses, and denaturing plants, and stocks at industrial alcohol bonded ware- houses and denaturing plants. Withdrawals and stocks include imported alcohol mingled with domestic alcohol. For withdrawals and stocks of imported alcohol, see table 20. 1 Represents domestic ethyl alcohol, imported ethyl alcohol, and spirits produced by registered distilleries (redesignated upon receipt at denaturing plants as alcohol). 8 Includes 11,641,154 proof gallons transferred to registered distilleries and internal revenue bonded ware- houses which could be withdrawn as spirits for either industrial or beverage purposes. 4 In addition 1,763,529 proof gallons of rum (table 60) were used for denaturation at distillery denaturing bonded warehouses. Represents withdrawals from industrial alcohol bonded warehouses in United States of 39,162 proof gallons for export, 1,129 proof gallons for transfer to customs manufacturing bonded warehouses; and with- drawals in Puerto Rico of 71,167 proof gallons for beverage purposes, 63,323 proof gallons for medicinal use, 10,261 proof gallons for export, and 600 proof gallons for industrial use. 188 REPORT OF COMNLISSIONEB OF INTERNAL REVENUE STATISTICAL TABLES 189

TABLE 18.-Summary: Production, withdrawals, losses, and stocks on hand June 80, TABLE I9.-Summary: Production, withdrawals, losses, and stocks on hand June 30, of ethyl alcohol, 1 and premises operated, by States, fiscal year 1952-Continued of ethyl alcohol, and premises operated, fiscal years 1934 to 1952, inclusive [Proof gallons] [Proof gallons]

Withdrawals-Con. Number of premises Withdrawals Losses in operated a industrial State Tax-free-Con. alcohol Stocks Tax-free bonded June 30 Industrial Fiscal year ended June 30- Production Grand ware- Industrial alcohol total houses alcohol bonded Tax-paid For use of Total plants warehouses For dena- the United Other turation 1 States California 5,895,8'8 6,489, 243 22,881 366,603 e 1,787, 340 District of Columbia 551, 949 551,949 _ 1934 165,103,582 16,154, 614 137,41 1, 765 793,803 Florida 565, 018 565, 018 2,241 11,642 1935 180,695, 920 16,990, 972 163,009,786 852,115 2,242,386 2, 413, 785 Hawaii 963, 443 465, 083 2,135 37, 979 < 1936 196,126,236 24, 052,532 172, 478, 748 993,734 13,284,444 64,853 2,169,2=3 2, 534, 972 Illinois 11,867,523 ~ w 1937 223,181, 228 32, 289,650 179,324, 373 1,011, 828 Indiana 17, 762,254 25, oas, 475 196,488 6,618,352 1938 201, 033,858 28,975,102 164,253, 210 960, 7 0 2,687,998 Iowa 12,635 534, 589 1939 201, 017,546 22,1.50, 969 175, 644, 641 1,057,712 2,878,176 Kansas 75,356 107,305 225,571 1940 243,727, 756 21,344, 360 223, 321, 704 1,224,504 2,930, 214 102,016, 123 105,997,387 5,870 11, 533, 970 3, 696,008 3,055, 303 Kentucky m~ro~. e ~ mN 1991 298, 845, 417 27,883,523 274,887, 261 Louisiana 61, 682,386 62, 284, 412 39,610 2,133,922 1942 + 421,804,091 24,932,310 374,7 0,259 93,319,325 3,013, 982 Maryland 8, 679, 242 14,192, 766 32,620 615,244 1943 447, 781, 568 5, 675, 341 408, 303, 779 103,124, 789 2,119,0E8 Massachusetts 7,925,506 8,213,597 14,317 297,881 1994 636,575,216 6,178,698 973,439,553 122,397, 846 2, 310, 431 Michigan 1,020,106 1,316,003 9,038 10,885 1945 a 683,431, 514 27,835,574 971, 441, 910 111, 210,119 2, 205,138 Missouri 1, 884, 427 2,009,414 39,292 133,345 1946 329, 385, 962 97, 233,159 393, 458, 500 12,751,3 17 2,620,142 Nebraska 1,326,475 1,326, 784 17,037 681,330 1947 248, 798, 639 47, 144, 016 338, 029,989 2,933,908 2, 611, 377 New Jersey 47, 631,418 51,817,951 77, 475 7,213,603 1948 332, 282,198 38, 754,397 301,101,1E8 284,447 3, 437, 774 New York 4, 959, 358 5,041, 707 17,823 599,993 1949 351,015,361 90,815, 714 321, 222,197 644,889 2,698,020 Ohio 174,820 1,210,961 17,028 17, 709 1950 313,535,129 40,564, 876 322, 681,322 581, 210 4, 237, 215 Oregon 71,568 71,558 1,173 1951 444, 935.011 42, 824, 251 455, 999,873 35,178,191 2, 521, 229 Pennsylvania 163,827,478 166, 750,381 253,847 36,831,254 1952 467,389,720 27, 693,219 489,788, 861 116,536,570 2, 521,775 1, 246, 482 Puerto Rico 1,483,381 1,483,381 22,975 M H Texas 107, 271, 721 107,271, 721 40,416 2, 273, 644 1,975 1,975 5,161 Utah Withd awaLs-Continued Number of premises Virginia 1,500,107 1,500,107 operated Washington 3,032, 723 3,0 9,4 7 3,697 65,639 Losses in West Virginia 56,318,457 56, 343, 202 10,617 759,198 industrial Tax-free-Con. Wisconsin_ 27,324 27,324 Fiscal year ended alcohol Stocks Industrial June 30- bonded June 30' Indus- alcohol Total 608,847, 206 636, 540,425 7 849,088 74, 420,162 45 72 Grand total ware- trial houses alcohol bonded Total plants ware- I Represents production at industrial alcohol plants, withdrawals from industrial a cobol plan s, industrial houses alcohol bonded warehouses, and denaturing plants, and stocks at industrial alcohol bonded warehouses and denaturing plants. Withdrawals and stocks include imported alcohol mingled with domestic alcohol. For withdrawals and stocks of imported alcohol, see table 21. 1934 139, 997, 908 156,152,522 490,854 27,970, 640 34 70 See footnote 2, table 17. 1935 166,101, 787 183, 095, 759 491,226 25, 252, 75 1 32 74 1936 175,885, 2 '8 199, 938, 800 438, 851 21,300, 340 35 72 See footnote 3, table 17. 528,194 28, 461,541 38 73 4 Bee footnote 4, table 17. 1937 182, 931,173 215, 220,823 Bee footnote 5, table 17. 1938 167, 901, 959 196, 878,568 529,879 32,016, 632 36 68 201, 731, 498 496,086 30,860,351 36 63 I Represents number operated during any part of the year- 1939 179,580, 529 In addition, losses in denaturing plants amounted to 200,818 proof gallons. 1940 227, 476, 422 251, 820, 728 496,294 21,798, 554 37 65 7 1941 281,638,572 309,505,095 697, 140 10,392,352 39 62 1942 421,143,546 946,075,886 824, 254 29,014,265 46 68 1943 513, 547, 656 519,222,997 2,007,409 212,923,256 63 111 1944 1,028, 177, 833 1,104,356,531 1,688, 524 127,919, 567 66 111 1945 1,084, 862,167 1,112,698, 741 1, 378, 624 143, 639, 094 62 90 1946 308,830, 009 956,093,168 1,133,305 110, 538,987 48 90 1947 343,581, 279 370, 725,340 1,046,462 27, 016,234 38 74 1948 304,825, 389 343,583, 786 897, 782 38, 273,358 47 76 1949 324, 555,103 365, 410,820 1,018, 775 51,015,381 46 76 1950 327, 399, 747 367,964,623 935,133 23, 247,967 88 73 1951 493, 699, 293 536,523,544 893,601 99,684,133 49 77 1952 608,847, 206 636,540, 425 899,058 74,920,162 45 72

I Represents withdrawals for denaturation 1934 through 1941, and 1948 through 1910. For 942 through 1947, 1951 and 1952 represents products used for denature ion, that is, domestic ethyl alcohol, imported ethyl aloohol, and spirits produced by registered distilleries (redesignated upon receipt at denaturing plants as alcohol}. During such years denaturing plants were permitted to store ethyl alcohol for purposes other than for denaturation. Accordingly, the quantity of ethyl alcohol used for denaturation is reported for such years in lieu of withdrawals for denaturation. ' 2 Represents withdrawals for hospital, scientific and educational use, for export, and withdrawals in Puerto Rico for medicinal, beverage, export, and Industrial use. Beginning with 1947, includes transfers to customs manufacturing bonded warehouses. Represents gross production. Net production for such years-that Ls, the gross production minus prod- nets used In redistillation-was 419,536,593 proof gallons for 1942, 339698,97) proof gallons for 1943, 590,929,095 proof gallons for 1944, and 650,089,874 proof gallons for 1945- + Exclusive of losses in denaturing plants. I Represents stocks in industrial alcohol bonded warehouses and for 1942 through 1952 Includes stocks at denaturing plants.

190 REPORT OF 'COMMISSIONER OF INTERNAL REVENUE STATISTICAL TABLES 191

M. UNDENATURED IMPORTED ETHYL ALCOHOL TABLE 21. - Summary: Importations, withdrawals, losses, and stocks at industrial [Relates to ethyl alcohol imported tax-free for industrial purposes] alcohol bonded warehouses, of imported ethyl alcohol, by States, fiscal year 1952 [Proof gallons] TABLE•20.-Summary: Importations, withdrawals, and stocks at industrial alcohol bondechwarehouses, of imported ethyl alcohol, by months, fiscal year 1952 Tax-free withdrawals from customs custody [Proof gallons] For transfer to Tax-free w tbdrawals from Indus- State industrial alto- Tax-free withdrawals from customs For transfer to trial alcohol plants and bonded hol plants and denat tno Total imports- custody warebou es I industrial alco- lions Stocks end hol bonded of month warehouses at Indus- For transfer Month For hos- trial al- to industrial For trans- For use cohol bond- alcohol plants For trans- pital, sd- Illinois for to d Total im• ter to de- of the entitle, and ed ware- Louisiana 108, 367,038 13,340,083 121, 707,121 and Indus- portations naturing United housest trial alc o- natant; educe- New Jersey 1,953, 405 1,953,405 plants 2 States hol bonded plants tional use New York 1, 264,187 1,264,187 warehouses Texas 8, 906, 745 6.906, 745 Total 111, 584,630 20, 2M, 828 131, 831,458 July 12,990,425 12, 990, 425 29, 190,474 2, 847, 118 August 26,405, 420 2,008,433 27, 413,863 18,083,837 10, 172,037 September 11,194, 761 11,194,761 8 967,060 12, 383,276 Tax-free withdrawals from industrial alcohol 7, 289,605 15,605, 604 Stocks October 10,516, 859 1.845, 817 12.362,676 plants and bonded warehouses i Losses at June 30 at November 1,062,663 2, 471, 620 3, 534,283 13,701,386 2.976.707 industrial December 10, 503, 544 1, 551, 562 12,055,106 7, 850, 354 5,630, 779 alcohol industrial 13,676, 252 11,025, 598 State alcohol January 18,967,662 6,901,624 25, 869,286 For hospital, bonded bonded February 10,381,220 10,381,220 4, 839, 105 16, 567,138 For transfer to For use of the scientific, and ware- 8, 937,918 denaturing March 05,086 5, 467, 772 5, 562,857 7, 718, 338 United States educational houses 2 ware] houses i April 6,438, 336 6,438,336 3, 430,934 11, 932.856 plants 2 use May 129, 385 129,385 1,013,668 11,036,944 June 3,899, 270 3,899, 270 968,688 13,955,946 Illinois 322,198 969 Total 111, 684, 630 20.246,828 131, 831, 458 116, 629, 689 13, 955.946 Louisiana 111, 583,844 103,399 13,926,061 New Jersey 3,255,977 3,706 New York 1,467,670 4,816 29, 885 Represents imported alcohol not mingled with domesec alcohol. Texas Imported alcohol received at denaturing plants either direct Boni customs custody or by transfer from an industrial alcohol plant or bonded warehouse is not separately reported after receipt. Total 116, 629, 689 112, 890 13, 955, 946

See footnote 1, table 20. 'See footnote 2, table 20.

192 REPORT OF COMMISSIONER OF INTERNAL REVENUE STATISTICAL TABLES 193 IV. DENATURED ALCOHOL TABLE 22. - Summary: Importations, withdrawals, losses, and stocks at industrial alcohol bonded warehouses, of imported ethyl alcohol, fiscal years 1943 to 195t, [Relates to denatured alcohol produced by denaturing plants] inclusive !Proof gallons[ TABLE 23.-Production: Ethyl alcohol used for denaturation and completely and specially denatured alcohol produced, by months, fiscal year 1952 Tax-free withdrawals from Indus- Tax-free withdrawals from customs custody trial alcohol plants and bonded Production warehouses 1 Ethyl alcohol Month used for de- Completely Specially Fiscal year ended For transfer to naturation June 30- denatured denatured Total industrial alcohol For transfer For transfer For use of alcohol alcohol plants and Indus- Total the United Other 3 to denatur- importations to denatur- trial alcohol irm plants 5 ing plants a States bonded ware- Proof gallons Wine callow Wine gallons Wine gallons houses July 43, 654, 861 230,146 23, 118, 208 23, 348, 354 August 42, 508, 789 133, 559 22, 623, 592 22, 757,151 September_ 39, 923, 966 95, 059 21, 326, 086 21, 421, 145 1043 1 3.338, 635 4, 659, 807 a 9, 291, 332 39, 717 October 43, 361, 553 174, 901 23, 100, 685 23, 275, 586 1944 2,053,072 30, 485, 607 32, 538, 679 5, 272, 716 November 45, 739, 033 86, 809 24, 338, 477 24.425,288 1945 45, it64, 198 31, 784,148 77. 648.344 December 92, 060, 756 46, 054 22, 412, 242 22, 458, 298 1946 a 31, 800,940 15, 541,232 47. 342, 222 9, 861, 079 January 48, 916, 926 74, 980 26,033 991 26,105, 971 20,348.242 11, 405.310 31, 953, 552 22, 474, 318 3, 246 83,864 24,017, 472 24, 059, 549 1947 a 55,274 18,843 February 44, 935,140 42, 097 1948 30, 481, 068 2, 363.681 32, 844, 749 34,865,994 March 40, 939, 433 46, 946 21.877, 277 21, 924. 223 1949 635, 238 635, 238 960, 887 April 34,107, 686 15, 085 18,353. 148 18, 368, 231 1950 48,690 May 30, 538, 753 22, 263 16,459, 163 16, 481, 426 1951 163, 248,135 37, 131,266 200.379,401 118,854,886 23, 506, 995 June 33, 101, 965 26, 128 17,843, 119 17, 868, 247 1952 Ill, 584, 630 20, 246,828 131, 831, 458 116, 629.689 Total 489, 788, 861 993,027 281, WO, 458 262, 493, 485 Imported alcohol mingled with Losses at Indus- Stocks June 30 1 Represents domestic ethyl alcohol, imported ethyl alcohol, and spirits produced by registered dis- domestic alcohol trial alcohol at Industrial tilleries (redesignated upon receipt at denaturing plants as alcohol). Fiscal year ended June 30- at industrial bonded ware- alcohol bonded alcohol bonded houses 1 warehouses 1 warehouses TABLE 24.-Withdrawals: Completely denatured alcohol, by formulas and by months, fiscal year 19,52 81, 948 3,402 3, 233,570 1943 4 [Wine gallons] 1944 25,013 45, 864,196 1945 9, 232.132 1946 a 14,843.393 49,478 Formula 1 - - 6, 1884 279 167, 377 5, 988.57E 1,398, 598 123.439 970,575 Month Total 1948 7, 829 1949 Special 12 13 14 15 formula 1950 278,483 19,082,051 1951 13,955,901 1952 112,890 July 11, 075 187, 528 20, 695 5 219,303 has been August 13,609 5, 608 113. 436 134, 653 1 Represents imported alcohol not mingled with domestic alcohol Imported alcohol which September 16, 001 29, 603 41, 318 86, 920 mingled with domestic alcohol is included in table 19. October 47, 830 21, 617 110, 763 180, 210 Imported alcohol received at denaturing plants either direct from customs custody or by transfer from November 24, 519 20, 832 53, 195 98, 546 an industrial alcohol plant or bonded warehouse is not separately repor ed after receipt. December 4, 119 2, 846 33, 983 40, 948 use and for export. Represents withdrawals for hospitals. scientific and educational by January 16, 974 19,128 46, 318 972 83, 390 4 The importation of alcohol free of tax for industrial purposes was au horned, effective October 22, 1942, February 16,891 1, 937 14, 993 33, 821 the . March 5, 094 862 27, 575 33, 531 a Includes 1,392,890 proof gallons withdrawn for use of the United States. bonded warehouses as April 1, 014 972. 18, 301 20, 290 Imported alcohol was transferred from denaturing plants to industrial alcohol May 7, 225 1, 608 12, 378 21, 211 follows: 2,198,301 proof gallons in 1948 and 7,854,735 proof gallons in 1947. June 9,728 1, 209 16,172 27,109 Total 176, 079 293,748 608, 128 5 972 z 979.932

1 Information relative to the composition and authorized uses of these formulas will be found in the Ap• Pendia to Regulations No. 3, "Formulae to Completely and Specially Denatured Alcohol" (revised 1942), Treasury Department, Bureau of Internal Revenue, as amended by T. D. 5733. 2 Experimental and governmental use. Includes 16,928 wine gallons withdrawn for use of the United States.

196 REPORT OF COMMISSIONER OF INTERNAL REVENUE STATISTICAL TABLES 197

TABLE 27.-Summary: Ethyl alcohol used for denaturation, and production, with- TABLE 29.-Operations in specially denatured alcohol by manufacturers: By States, drawals, stocks on hand June 30, and losses of denatured alcohol, and denaturing fiscal year 1952 plants operated, by States, fiscal year 1952-Continued [Wine gallons] Specially denatured alcohol Number of Used in State Total losses plants manatee- Number of Received Production Withdrawals Stocks operated 5 State Recovered turfing Losses Stocks manufac. after use I (including June 30 tuners recovered operating ' alcohol) gallons Wine gallons Wine Wine gallons Wine gallon C.... California 3, 102, 098 3, 104, 081 17,980 5,234 District of Columbia 568, 731 568, 068 663 Alabama 74.328 1, 965 78,756 5 10,149 2 Florida 308,868 301,228 8,306 156 Arizona 139 152 15 "` 244,164 243, 678 1,556 234 Arkansas 409;115 Hawaii CP 418,575 21,753 California 3, 201, 734 1, 516, 576 1R Illinois 6, 917, 849 6, 910, 228 29,328 3,082 Ca .0 4, 762.268 1, 914 239, 230 Colorado 33,033 Indiana 9, 393, 771 9, 364, 832 48, 662 31, 241 34, 504 12, 694 Kansas 41, 768 3, 949 37, 818 1 Connecticut 604, 989 2, 560 WA 644 500 32, 779 Kentucky 53, 846, 982 59, 917, 459 1, 793,145 38, 900 11C Delaware 45,352 56, 845 244 4.395 District of Columbia Louisiana 31, 422, 084 29, 813, 395 2, 066, 691 17, 047 .. 584.977 586, 678 131 15, 304 Maryland 4, 405, 444 4. 332, 440 67, 885 9,819 Florida 95,097 81, 265 175, 109 45 8,936 gr Massachusetts 4, 205, 708 4,190,0324,190, 26, 304 719 Georgia 195,805 199.301 275 7,627 Michigan 500,138 513, 459 1, 760 Hawaii 8, 954 8, 991 38, 974 M 60 I, 124, 150 56, 898 Idaho 69 Missouri 1,131, 634 1, 051 ..e 73 11 Nebraska 730,410 726,560 400 Illinois 7,129, 443 1, 504, 331 8,716 119 11, 935 331,199 Indiana S New Jersey 25, 318, 847 25, 392, 362 142, 493 28, 263 2, 474, 397 8,767,6858,767, 11,178, 741 146 248, 694 New York 3, 346, 377 3, 340, 092 7, 810 809 Iowa 30, 779 29, 027 45 4, 551 tr i: Oregon 39,417 36, 917 4, 676 , 81 Kansas 55, 615 56, 248 13 3, 294 4 Kentucky 60,027, 708 Pennsylvania 26, 214, 476 25. 105, 935 757,580 74, 116 60,028,072 7 9, 771 718, 321 2, 136 Louisiana 1, 547, 104 11, 667, 850 13, 261, 013 Puerto Rlco 680, 228 52, 324 an 5 19,936 Maine 491 754

Texas 56,812, 354 56, 320, 374 2, 669, 915 7,327 ... 1 1. 791 Utah Maryland 3, 041. 010 254, 100 3, 380, 984 865 88. 270 Virginia 794,137 794.137 Massachusetts 3,457, 929 5, 670, 427 9,127. 742 4, 687 127, 669 g Michigan 3, 136,874 559, 009 3, 840, 815

Washington 1, 602, 929 1, 602, 929 CZ 7, 061 138, 864 Minnesota 179.395 58 182,161 3 West Virginia 29, 833, 951 29, 646, 759 186,864 16,286 . 14 17. 393 Wisconsin Mississippi 166, 683 5, 781, 700 6, 955,042 2 1 14

25, 288 r Missouri 2, 629, 298 3, 424, 799 6, 060, 282 4, 118 164.134 Total 261, 500, 458 5 254, 033, 241 8, 015, 009 240, 025 55 Montana 60 64 6 Nebraska 75, 135 74, 909 387 Nevada 1, 365,067 1, 293, 813 108,006 n I Represents domestic ethyl alcohol, imported ethyl alcohol, and spirits produced by registered distilleries New Hampshire 64,10{ 64, 894 2, 593 (redesignated upon receipt at dena uring plants as alcohol). New Jersey 22, 397, 579 15, 943, 292 38, 338, 147 29, 579 885, 704 i c Includes 16,928 wine gallsns withdrawn for use of the United States. New Mexico 241 , 277 4 l 3 In addition to these stocks at denaturing plants, stocks held by bonded dealers are shown in table 28 and New York • 3 8, 152, 938 1,320,807 9,09, 579 16,490 470,517 stocks held by bonded manufacturers are shown in table 29. North Carolina 598, 842 609,822 5 35, 194 gr Represents number operated during any part of the year. North Dakota 10 17 1 ip 5 Includes 3,369,740 wine gallons withdrawn for use of the United States. Ohio 1, 569,147 468, 466 2, 098,196 14, 888 136, 111 Oklahoma 45,290 93,375 8,848 ; Oregon 352, 8553 336, 693 2 31. 842 R TABLE 28.-Operations in specially denatured alcohol by bonded dealers: By States, Pennsylvania 19, 897, 333 19, 002, 255 38, 997.990 5,061 282,019 11 .1 fiscal year 1952 Puerto Rico 680, 225 679.359 19 1, 405 .11 Rhode Island 70, 960 1,082, 915 1,130. 442 10, 311 1 South Carolina 3,159 3, 040 868 .1 [Wine gallons] 1 South Dakota 35 38 10 1 Tennessee 24, 403.421 279 25, 247, 395 I, 701 1, 902, 898 1 Texas 28, 202, 868 43,079 28, 229. 78.8 16,492 398,126 Number of Utah 2" State Received I Removed I Losses Stocks dealers 3,142 3,445 3 231 June 30 Vermont - 903 20 40 @ operating 3 Virginia 471, 417186 2, 776, 744 3, 092, 400 13 96, 211 VA 1 1 Washington 9,475 62,880 72,125 1 2,227 West Virginia 62, 942, 269 12, 846, 310 71, 194, 162 1, 576, 240 8, 430,196 Connecticut 21, 762 21, 560 3, 581 Wisconsin S' Illinois 4, 659.259 4, 499,146 4, 879 338,478 394,318 4,378 947,792 1, 107 19,263 Wyoming 40 ? Kentucky 31,983, 29, 604 3, 929 38 16 Maryland 27, 576 38, 637 24 5, 269 Total Massachusetts 50,085 60,518 8 8,283 260,882, 447 92, 763, 730 350, 179, 599 1, 693.614 14, 331, 828 4, 054 Michigan 50, 327 52, 680 4 2, 587 Minnesota 80, 885 72 252 2 11, 358 lin some Industries where the denatured alcohol does not become a part of the product, a portion is Missouri 68, 805 66, 736 37 11, 628 recovered and reused. New Jersey 22,434, 016 22, 381, 021 3, 625 106, 664 Represents number operating during any part of the year. New York 2044 2 437 143 s Includes 81,522 wine gallons Ohio 172, 691 170, 692 23 13.784 recovered from solutions received containing specially denatured alcohol. Texas 28, 992 760 28, 949,122 24, 897 782 786 Utah 2,617 3,152 816 Washington 4.288 3, 558 3 2,466 Total 54, 599,098 54, 351, 105 33, 502 1, 291, 770

Excludes interdealer shipments. Represents number operating during any part of the year.

STATISTICAL TABLES 199 198 REPORT OF COMMISSIONER OF INTERNAL REVENUE V. DISTILLED SPIRITS: UNREC17FIED TABLE SO.-Summary: Ethyl alcohol used for denaturation, and production, with- drawals, receipts, quantities used, and stocks on hand June 30, of denatured alcohol, [Produced by registered and fruit distilleries] and premises operated, fiscal years 1934 to 1952, inclusive TABLE 3 1.-Materials: Used at registered distilleries in production of distilled spir by kinds and by months, fiscal year 1952 Denaturing plants Ethyl Grain and grain products Fiscal year alcohol Completely denatured alcohol Specially denatured alcohol ended used for Month June 30- denatura- Corn Rye Malt Wheat Sorghum tion Produc- With- Stocks Produc- With- Stocks grain tion drawals June 30 tion drawals June 30 Pounds Pounds Pounds Pounds Pounds Proof Wine Wine Wine Wine Wine Wine Jul? 106, 940,988 21, 781, 136 21, 044, 287 1, 851, 000 41, 794,192 gallons gallons gallons gallons gallons August 86. 658, 680 17,858. 852 18, 135.802 1, 557, 700 36.012, 808 gallons gallons 777, 674 September 139, 681,129 27, 174, 311 28, 443,067 748, 967 65, 067, 092 54, 734, 827 92.190. 557 19. 727.619 19, 788.705 5.801, 720 21, 587,714 1934 58, 284, 395 58, 833, 468 368,743 October 106, 591, 517 27.708, 358 21, 899, 280 6.652.038 30. 051,291 1935 185, 233, 806 38, 746, 679 38,050, 525 1, 4s3, 844 35, 700,192 2, 250, 899 64, 955, 486 64,819, 485 465, 724 November 113, 906, 210 22.946, 843 21. 924,824 7, 904, 564 23,158,97723,158, 1936 174, 357, 295 36, 522, 358 799, 458 December 181,034,322 23, 118, 378 23, 484,104 857, 683 80, 084, 281 79, 881, 876 114.817.349 20, 906.018 19,130,076 7, 886,193 11,990,406 1937 69,009,024 69, 253, 258 491, 852 January 108, 661,144 23. 961,039 18.860, 221 11, 290.290 11, 829,006 1938 165, 848.248 25, 598, 717 25, 727, 946 699, 772 17, 204, 615 655,996 83,561,077 82, 866 014 1, 325, 563 February 112, 328, 858 20,053. 832 17, 606. 784 1, 402, 471 11, 634.072 1939 177, 338, 688 17,179, 433 1, 163, 490 March 325, 160, 792 15, 352,033 15, 495, 290 498,982 III, 409, 797 III, 509, 432 113. 788, 084 18,165, 531 17, 409. 463 524.160 11, 482,044 1940 135, 834, 201 136, 319, 810 830, 474 April 102. 563. 331 18. 219, 531 15. 818. 100 479.305 9. 723, 155 1941 276, 766, 363 17, 676, 172 17, 723, 882 438, 835 28, 958, 998 94, 442 179, 217,163 177, 058, 630 2,721,991 May 87. 212, 619 14, 265.322 13.051.107 241,920 5, M8, 452 1942 376, 624, 412 28, 628, 181 7,181,323 June 408, 303, 779 24, 369, 788 24, 320, 681 143,208 198, 524, 631 193, 977,658 86. 793, 894 9.501.022 9, 347, 607 183,680 3, 817.438 1943 471, 781, 825 465, 909, 511 18, 154, 806 1944 973, 439, 558 52, 331, 761 52, 210, 817 224, 133 33, 087, 533 32, 288, 945 1, 013, 268 494, 008,004 491, 445, 833 20, 823, 245 Total 3 1,209, 433,179 235,095, 095 214, 018, 256 1 45, 775, 941 217, 429, 503 1946 971, 448, 910 197, 554, 311 8, 919, 858 1946 393, 458, 500 26 144, 437 27, 118, 835 45, 595 186, 657, 873 36, 324, 125 102, 261 147, 348, 371 154, 927, 752 1, 878, 777 1947 338,029,989 395, 846,682 339, 851, 745 34,887,789 34, 748, 659 226, 077 149, 394, 037 150, 359, 372 Grain and gram products- 1948 164, 273, 211 158, 389, 294 8,640, 586 1949 321, 925, 930 10, 221, 492 10, 321, 778 105, 362 Continued Products 4,397,981 85, 961 170, 259, 583 176, 804, 418 2,012, 789 Other ma- 1950. _ 322,838, 727 4, 414, 058 8.747.342 Month Molasses used in re- 455, 999, 873 1, 438, 564 1, 456, 480 47, 726 243, 998, 614 237,192, 954 terials 1951___.. 261, 500, 458 264,033, 291 8,015,009 distillation 1952 489, 788, 861 993,027 979, 932 40, 455 Mixed grain Total

Specially denatured alcohol Pounds Pounds Gallons Proof gallons Pounds Number July 123, 412, 431 206,164 1. 418, 781 33,830 Number Number August 6. 918, 068 168,169.910 228.214 of dena- of manu- 1, 634, 534 36.640 Fiscal year Bonded dealers Manufacturers of dealers facturers September 24, 634. 209 183, 730, 524 208.972 1, 594.374 35, 668 ended turing operat- October 3, 068, 696 195. 971. 178 245, 614 1, 579.863 36.069 plants operat- November June 30-- operated ing ing 1,218,000 191. 059. 418 265.525 1, 955,692 29.792 Stocks December 174, 730, 042 170, 858 1, 095, 490 26.953 Stocks Used Receipts June 30 June 30 January 172.201,694 186, 348 778.464 22.762 February let 026,017 174.964 714.431 17,835 March 161, 349, 282 211,698 1, 133, 266 23,351 Wine Wine Wine Wine April 146, 803, 412 178, 892 1, 377,198 10,189 gallons gallons gallons gallons May 120, 319,420 171,824 1,434, 404 21,008 492, 381 98,302 843 2, 837, 211 41 70 4.686 June 88,443, 039 199,038 1,160, 206 17,006 934 4,184, 596 39 71 4,279 935 3, 976, 293 MI, 240 99, 452, 531 Z 760,802 393, 542 109, 525, 613 2, 771,921 37 67 3,889 Total 35, 888,973 1, 957, 616, 947 4 2,447, 111 15, 876,893 1 318„093 3, 682,183 46 67 4, 323 937 3, 997, 465 339, 789 139,054, 515 a. 309, 088 293;206 127, 456, 902 Z 708, 739 43 64 4, 321 938 3, 019, 005 56 4, 405 939 3, 243, 249 378,009 142, 969, 775 3, 162, 641 88 I Whisky, rum, gin, vodka, and spirits. For materials used at fruit distilleries in production of brandy 381, 855 177, 333, 764 s, 974, 138 40 52 4, 283 and spirits-frait, see table 33. 940 3, 441, 108 51 4, 30L) Includes 853,700 pounds of corn meal. 941 4, 053, 733 279, 383 223, 745, 001 8, 217, 469 43 325, 714,889 7, 927, 892 62 53 4, 213 8 Includes 16,229,911 pounds of wheat Hour. 942 9, 738, 837 5, 801, 635 4, 031 7, 590,158 9, 080, 979 395, 807, 595 18, 874,162 76 50 Used in production of rum. 943 88 42 4,019 Represents 329,897 pounds of diamalt, 83,223 pounds of malt sirup, and 3,023 pounds of enzyme extract. 944 5,155, 405 3,841, 185 687, 731, 298 12, 118, 670 761, 526, 288 10, 975, 875 65 38 4,061 945 16, 177, 196 164,153 36 4, 239 946 18, 000, 320 190, 055 325, 206 701 9,097, 977 50 295, 487 293, 281, 330 8.361, 845 49 39 4, 288 947 21, 241, 606 48 39 4, 206 948 20, 361, 336 180,057 278,083,935 8, 347, 893 877,028 266, 174,133 13, 979, 713 47 37 4,153 49 a 783, 315 35 4,176 50 43, 725, 971 972,437 293, 245, 411 8, 427, 429 46 1,071, 839 351, 915, 212 12 939, 023 48 36 4, 128 51 80, 955,109 34 4.054 52 M, 599, 098 , 1„ 291 770 350, 179, 599 14, 331,828 55

For 1934 through 1941 represents wit/ideas/4s of all products for denaturation, that is, domestic ethyl alcohol, spirits produced by registered distiller es (redesignated upon receipt at denaturing plants as alcohol), and rum. For 1942 represents all products used for denaturation, that is, domestic thyl alcohol, spirits, and rum. For 1943 through 19 2 represents all products (except rum) used for denature ion, that is, domestic ethyl alcohol, imported ethyl a cohol, and spirits. Rum is included for 1934 through 1942 because denatured rum is included with specially denatured alcohol for those years. Prior to fiscal year 1943, ins udes denatured nun. Excludes interdealer shipments. Includes recovered alcohol.

200 REPORT OF COMMISSIONER OF INTERNAL REVENUE STATISTICAL TABLES 201

Used at registered distilleries in production of distilled spirits,' TABLE 33.- Materials: Used at fruit distilleries in production of brandy and spirits, TABLE 32. - Materials: by kinds and by States, fiscal year 1952 by kinds and by months, fiscal year 1952

Grain and grain products Fruit and fruit products 1 Month State Sorghum Grape Raisin Total Grape Raisin Corn Rye Malt Wheat grain Pounds Pounds Pounds Gallons Gallons Pounds Pounds Pounds Pounds Pounds July 177, 270 229,811 407,081 689,984 1,735 473, 368 California 12,117, 407 1, 967, 335 1, 700,070 August 1. 392, 810 1, 602, 475 2, 995, 285 9, 331, 739 82, 621 195, 440,823 46, 654, 594 43, 698,203 26, 857, 690 109, 579, 257 September 9, 248, 700 695, 878 9, 944, 578 73, 042, 484 92,180 Illinois 5, 041, 606 Indiana 279, 466, 210 20, 981, 278 33, 238,181 October 11, 552, 190 1, 489, 786 13, 041, 076 158, 214, 637 41, 796 10, 927, 300 1, 747, 200 6, 557,617 November 3, 280, 860 1, 706, 391 4,987, 251 93, 739, 828 46, 097 Iowa 9,190, 590 Kansas 672,620 22, 310 2, 532, 730 15, 229, 911 December 3, 342. 370 1, 333, 284 4, 675, 654 28, 934, 343 77, 402 Kentucky 636,051, 791 129, 244,141 95, 515, 834 3, 688, 340 January 1, 329, 200 2, 033, 898 3. 363,098 7. 777, 824 54, 346 Maryland 86, 815, 275 27,794, 899 14,388,443 3, 508, 176 February 1, 608, 320 1. 698. 320 3. 721, 619 107. 993 Massachusetts 9, 056, 544 794,416 1,074,472 March 1, 073, 404 1, 073, 404 2, 162, 140 1, 727,998 285.908 2,66 7,894 5, 600, 392 April 707. 966 707, 966 1, 196, 841 Missouri 29.105,627 Nebraska 2,662,605 May 559,853 559, 853 1,171, 962 11, 626,108 2, 119, 938 7,339, 808 June 973,608 973,698 305,326 14, 135 New York 37,956,688 Ohio 64, 626,102 4,129,795 9, 002, 329 Pennsylvania 6,98 7,949 1, 676, 387 748,175 3, 077, 384 Total 30, 323, 400 14,104, 764 44, 428,164 380, 288, 727 518, 305 Tennessee 2,564,744 698,880 1,018, 320 Virginia 2, 564, 744 789,152 591,864 1 217, 429, 503 Fruit and fruit products 1-Continued 1 1,209, 433,179 235, 095, 095 214, 016, 256 45, 775, 941 Total Month Apple Fig Peach Pear Other Total Grain and grain products- Con inued Products Other ma- State Molasses used in re- Wrials Gallons Gallons Gallons Gallons Gallons Gallons distillation July 99, 004 4, 000 2, 003 796, 726 Mixed grain Total August 417, 499 35,501 78,455 6,700 9, 952, 515 September 357, 976 20,137 5, 664 73, 518.441 October 427,350 158, 683, 783 Pounds Pounds Gallons Proof gallons Pounds November 451, 520 2.390 94, 239, 835 16, 258,170 15,164 December 264, 867 510, 552 60, 836 1, 590 29, 839, 640 California 311, 830 Illinois 6, 160, 100 428, 390, 667 1,059, 418 1 January 248,855 542,121 2,073 8, 626, 219 Indiana 338, 727, 275 4, 893.906 February 168,800 7,307 4, 005, 719 Iowa 19, 232,117 420, 759 March 216,143 2. 378, 28,3 Kansas 789,761 28, 437, 922 205,015 April 210, 212 7, 221 1, 414, 274 Kentucky 764, WO, 106 1,444,328328 973, 225 May 100,009 220 1, 272. 191 . 4,263 Maryland 132, 562, 793 1, 205, 108 1 June 12,700 5, 550 337,711 Massachusetts 10, 925, 432 1,002, 783 Missouri 28, 917, 112 40, 479, 304 Total 2, 974, 935 1, 088,174 102, 592 50, 886 1 40, 718 385,054.337 Nebraska 31, 768, 232 19, 405 New York 21, 199, 360 231, 776 Ohio 105, 713, 914 2, 939, 441 1 In addition 172,531 proof gallons of brandy were used in redistilla Pennsylvania 6, 739, 895 3,983, 476 Represents 19,753 gallons of cherry, 8,335 gallons of blackberry, 5,664 gallons of boysenberry, 6,376 gallons Tennessee 8, 736.000 of loganberry, and 1,590 gallons of currant. Virginia 3,945, 760

316, 093 - Total 35,856, 973 1, 957, 616, 947 1 2,447, III 15,876, 693 TABLE 34. Materials: Used at fruit distilleries in production of brandy and spirits, by kinds and by States, fiscal year 1962 Whisky, mm, gin, vodka, and spirits. Fo materials used at fruit distilleries in production of brandy and spirits-fruit, see table 34. Fruit and fruit products' 1 See footnote 2, table 31. See footnote 3, table 31. Kind Represents 227,411 pounds of dismal& 81,396 pounds of malt sirup, and 3,023 pounds of enzyme extract. 4 California California Colorado Connecticut Missouri New Jersey 6 Represents 2,436 pounds of diamalt and 1,827 pounds of malt sirup. 4 See footnote 4, table 31. Pounds Gallons Gallons Gallons Gallons Gallons Grape 30.323,400 379, 195, 948 5, 386 3.176 302,350 Raisin 14,104, 764 518, 305 Appel 841, 131 199, 468 505, 627 Fig 1, 088, 174 Peach 98, 592 4,000 Pear Cherry 3,442 5.003 2,170 2,300 Boysenberry 5, 664 Loganberry 3, 373 Currant Total 44, 428,164 381, 747, 814 14.371 3, 176 19%468 1, 21% 277

See footnote at end of table. REPORT OF COMMISSIONER OF INTERNAL REVENUE 202 STATISTICAL TABLES 203 TABLE 34.-Materials: Used at fruit distilleries in production of brandy and spirits, by kinds and by States, fiscal year 1952-Continued TABLE 36.-Production: I Distilled spirits, by kinds and by States, fiscal year 1952 [Tax gallons] Fruit and fruit products I-Continued State Whisky Brandy Rum Gin = Vodka Other spirits Total Kind United States New York Ohio Oregon Washington total California 1, 435, 393 9, 031, 096 52, 441 20, 815 35, 560, 235 46,099, 980 Colorado 4,469 4,469 Gallons Gallons Gallons Gallons Gallons Connecticut 1,014 1,014 41,851 740, 016 380, 288, 727 Illinois____-_-__- 20, 547, 951 1, 629, 372 80,915 16, 690, 416 38,948,654 Grape 518, 305 Indiana 9, 465, 803 1, 365, 587 29, 346 19, 066, 686 29, 926, 922 Raisin 47, 050 48,125 159, 724 92,242 2, 974,935 Iowa 2, 556 2, 113, 80 9 2, 116, 365 Apple 1, 088, 174 Kansas 33,433 2, 775, 175 2, 808, 608 Frg 102, 592 Kentucky 61, 993, 643 1, 144, 701 566,420 5, 606, 557 69, 311, 321 Peach 50, 886 50,886 Maryland 7, 373, 963 101, 884 ______4,185, 269 11, 660, 916 Pear 19, 753 Massachusetts 604, 955 767,137 50,032 081,499 1, 721, 176 Cherry 390 10, 921 3, 865 8, 335 Missouri ______187,790 2,081, 499 2,209,2893,09 Blackberry 5, 664 Nebraska 3, 094, 574 3, 094, 574 Boysenberry 2. 003 5,376 New Jersey 183,125 842,883 Loganberry 1,590 1, 590 New York 9, 121 1, 018, 383 820, 379 1, 842, 883 Currant Ohio 535, 658 22, 217 2, 918, 791 143, 121 6, 686,049 10, 305,836 47,050 04,231 210,610 846,772 385, 064, 337 Oregon 56, 074 08,662 Total Pennsylvania 311, 708 504,104 1,788 0 -609,539 746,515 Tennessee 746, 515 746, 515 I In addition 172,531 proof gallons of brandy were used in redistillation. Virginia 341, 074 41,564 418, 514 Includes 681,568 gallons in Virginia. Washington 141, 564 141, 564 Total 2 103, 543, 953 2 9, 521,040 0 1, 911, 838 8,156, 782 362, 007 1 98, 370, 161 221, 865, 781 TABLE 35.-Production: I Distilled spirits, by kinds and by months, fiscal year 1952 [Tax gallons] I Represents production of whisky, brandy, rum, gin, vodka, and pints by registered distilleries, and brandy and spirits- ruit by fruit d'stilleries. For purposes of withdrawal, see tables 40 and 44. For production of gin at reetilyng plants, see table 56. Brandy Rum Gin s Vodka Other spirits Total Represents net production, that is, the original production plus production by redistillation of spirits, Month Whisky minus the quantity of spirits used n redistillation (previously reported as production). Where production for any State is only by redistillation of products, and spirits are produced in the same period that products 58, 067 159, 699 681,132 5, 927 8,125, 968 18, 774, 113 were used for redistillation, the ne production for such State results in a negative figure, due to losses in July 9, 763, 320 16, 376, 561 redistillation. A negative figure a so results where the redistillation of products is not completed in the August 6,904, 533 307, 617 172, 192 795, 592 21, 317 8, 225, 310 8,158, 346 1, 254, 423 144, 119 504, 719 26, 788 12, 058, 427 22, 146, 822 same period that the products were used for redistillation. September 34, 751,202 4 See footnote 3, table 35. October 10, 321, 992 2, 239, 224 190, 803 454, 913 31, 754 21, 512, 516 2, 448, 580 208, 458 641, 010 19, 524 14, 141, 438 28, 419, 583 Includes 3,270 tax gallons produced at registered distilleries. For kinds of brandy and spirits-fruit November 10, 960, 573 19, 396,143 produced, see table 38. December 10, 464, 626 1, 305, 058 155, 644 467, 781 23, 577 6, 979, 457 9, 547, 954 566, 940 149, M5 490, 886 4, 364 6, 273, 539 17, 033, 218 See footnote 5, table 35. January 5,189, 397 15, 546, 601 7 See footnote 6, table 35. February 9, 113, 520 628,005 134, 523 476, 367 4, 789 312,906 165,083 625,489 24,179 5, 232, 602 15, 008, 582 March 8, 648, 373 14, 193, 699 April 8, 044, 683 136, 577 190, 668 1, 207, 940 38, 227 4, 625, 599 6, 792, 621 223,411 138,265 881,841 140,536 3, 465, 349 11, 642, 0/3 TABLE 37.-Production: Brandy and spiris by fruit distilleries, by kinds and by May 2, 543 559 8, 577, 229 June 4, 823, 412 40, 232 152, 839 999, 162 21, 025 months, fiscal year 1952 98, 370,161 221,865, 781 Total 2 103, 543, 953 4 9, 521,040 2 1, 911, 838 8,156, 782 362,007 + [Tax gal oils]

I Represents production of whisky, brandy, rum, gin, vodka, and spirits by registered distilleries, and Month Grape Raisin Apple Fig Pear Peach Other Total brandy and spirits-fruit by fruit distilleries. For purpose of withdrawal, see tables 39 and 43. For production of gin at rectifying plants, see table 55. Represents 84,025,801 tax gallons of bourbon whisky, 9,517,107 tax gallons of rye whisky, 9,273,156 tax July 56,143 29,398 13, 162 896 350 99,949 rollout, of Corn whisky, and 727,889 MX gallons of other whisky designated as bourbon mash whisky, August 931,874 34, 735 69.129 10, 132 2,069 1,037, 039 rye mash whisky etc.,, by virtue of being paekaged in reused cooperage. September 7, 552, 219 28, 750 55, 931 2, 824 191 6, 342 7,648, 257 Includes 3,270 tax gallons produced at registered distilleries. For kinds of brandy and spirits-fruit October 18, 128, 395 2,127 41, 650 1,453 18, 173, 625 produced, see table 37. November 10,941,977 33,328 49,381 826 11, 025, 512 Represents production for beverage and industrial purposes. Includes 1,763,339 tax gallons removed for December 3, 432, 820 18,133 35, 710 29,969 3,928 979 3, 521, 539 January 1, 235, 897 98,642 35, 415 92, 767 1,462, 721 denaturation. purposes. Represents 36,555,625 tax gallons of spirits- 4 Represents production for beverage and Industrial February 740,647 81,180 23,396 16.045 1,541 862,809 fruit produced at fruit distilleries and 62,814,536 tax gallons of spirits-grain, spirits-cane, etc., at registered March 412,143 62, 981 26, 657 501, 781 distilleries. Includes 1,880,189 tax gallons removed for denaturation and 11,269,533 tax gallons transferred April 248, 465 15, 291 25,119 896 289, 771 to industrial alcohol plants and bonded warehouses Which could be withdrawn for either industrial or May 311, 444 27, 270 11, 177 87 349, 978 beverage purposes. • June 67, 537 22, 286 7, 235 3, 252 1,204 101, 514 Total I 44,059, 561 2 454,121 4 383. 962 4 141, 005 4 17, 503 2 7, 238 a 9, 405 45,073, 395

I Represents 8,521,971 tax gallons of brandy and 35,537,590 tax ga Ions of spirits-fruit. I ; Represpnts 946,827 tax gallons of brandy and 7,204 tax gallons o spirits-fruit. Represents 378,221 tax gallons of -brandy and 10,741 tax gallons-of spirits-fruit. Brandy. e Represents the following quantities of brandy: 3,348 tax gallons of cherry, 3120 tax gallons of blackberry, 1,886 tax gallons of loganberry, 688 tax gallons of boysenberry, and 366 tax gallons of currant. 204 REPORT OF COMMISSIONER OF INTERNAL REVENUE STATISTICAL TABLES 205

TABLE 38.-Production: Brandy and spirits by fruit distilleries, by kinds and by TABLE 40.- Withdratoals: Distilled spirits, total tax-paid,l by kinds and by States, States, fiscal year 1952 fiscal year 1952 [Tax gallons] [Tax gallons]

State Whisky Brandy Rum Gin Vodka Kind California Colorado New Jersey Ohio Oregon Waning- Total

California 2,291,243 994,429 5,290 50,120 1& 728 Grape 43, 861, 670 907 68, 075 8, 205 119, 790 1 44, 059, 561 Colorado 900 712 Raisin 454, 121 454,121 Connecticut 128,822 5,391 62, 505 Apple III. 556 112,324 9, 741 38, 571 19,368 3 383, 962 Georgia 9,428 373 890 Fig 141, 605 141,605 Hawaii Pear 17, 503 17,503 Ithuois 8, 830, 3% 196,068 2,329 1, 590, 701 13,585 Peach 6,342 896 7,238 Indiana 7,796,344 280,668 33,857 1, 760, 277 3,021 Cherry 406 1,184 68 1,690 3,348 Kansas 2,072 Blackberry 1,621 566 933 3,120 Kentucky 29,437, 610 79,091 13, 074 180, 728 13,197 Loganberry 1, 535 350 1, 885 Louisiana Boysenberry 636 686 Maine 163 1,599 Currant 366 368 Maryland 4,088, 602 6,869 5,537 105,302 Massachusetts 559, 625 146,140 193,157 2, 658 46,417 Total s 44, 575, 980 4 4, 469 1 182,045 3 18, 947 1 56, 074 4 141, 564 45,073, 395 Michigan 12,095 166,316 6,429 68,201 Minnesota 29,964 22,440 260 Missouri 157,216 127 4,924 1 Includes 1,014 tax gallons of brandy in Connecticut. Nebraska Includes 10,741 tax gallons of spirits-fruit in Missouri, 4,12 tax gallon of brandy in New York, and 77,440 New Jersey 97, 603 136, 418 235 tax gallons of brandy in Virginia. New York 1,547,250 94,915 1, 018, 383 Represents 9,031,095 tax gallons of brandy and 35,544,884 tax gallons of spirits-fruit. Ohio 1,256,377 144,945 2, 920, 408 46,369 Brandy. Oregon 322 Pennsylvania 8,141,196 447,329 43,051 520,150 6,677 Tennessee 345,345 1,463 TABLE 39.-Withdrawals: Distilled spirits, total tax-paid,' by kinds and by months, Virginia 177,412 387 fiscal year 1952 Washington West Virginia [Tax gallons] Total 64, 907, 563 2, 67 , 790 302,724 8, 217, 306 219,214

Month Whisky Brandy Rum Gin Vodka State Othe spirits Total Alcohol Grand total July 3, 686, 907 155,232 19,673 780,898 13,170 August 5, 001, 627 188, 722 23, 311 918, 716 15,736 California 1,190, 897 4, 550, 707 593,375 6,144,082 September 6, 887, 621 225,408 26, 541 595,166 24, 822 Colorado 1, 545 3,157 3,157 October 9,129, 476 440,750 43,605 608,941 31,172 Connecticut 1,096,279 1, 242, 997 1, 2A2, 997 November 6, 673,987 305, 786 32, 661 520, 665 27,088 Georgia 10, 691 10, 691 December 4, 682, 073 226, 321 27,376 384, 218 8,409 Hawaii 1,640 1,640 January 4, 095, 331 229,682 20,199 366,110 13,521 Illinois 8, 846, 300 19,479. 351 1,416,921 20, 896,272 February 4, 645, 503 186,699 15,839 438,173 7,367 Indiana 7,490, 791 17,364, 953 7,334,221 24, 699,179 March 5, 536,073 196, 979 21, 664 675, 558 16,453 Kansas 13, 616 15, 688 31,949 47, 637 April 4, 997,495 154, 097 23,951 1, 202, 090 19, 524 Kentucky 7,131, 691 36, 855, 391 3,081,264 39,936, 655 May 4,545,724 901, 856 19,205 807, 033 15, 092 Louisiana 602,026 602,026 June 5, 026, 246 163, 252 25, 699 919,739 26, 860 Maine 1, 762 1, 762 Maryland 3, 554, 020 • 7, 760,330 5, 513, 524 13,273,854 Total 64, 907, 563 2, 674, 790 302,724 8, 217,306 219, 214 Massachusetts 1, 410, 243 2, 358, 240 288,091 2,646,331 Michigan 42,316 295,357 295,497 590.854 Minnesota 106,293 158,957 158,957 Missouri 30,679 192,946 124,987 317,933 Month Other spirits Total Alcohol Grand total Nebraska 309 309 New Jersey 167, 905 902,161 4, 336, 533 9,738, 694 New York 1, 290, 684 3, 900, 732 82, 349 3,983,081 July 2,362,325 7,017,705 2,232,910 "9,250,615615 Ohio 1, 202,889 5, 570, 988 1,036,141 6,607,129 August 2, 490,427 8,638,539 3,032,853 11, 671, 392 Oregon 322 322 September 3,493,181 11,252, 738 3, 595,118 14, 847, 866 Pennsylvania 4, 249, 666 13, 908, 069 2,922,903 16,330, 972 October 5,418, 599 15,672, 549 3,016,437 18, 688, 9813 Tennessee 346,808 346,808 November 3, 493,232 11,053,419 3,178,913 14,232,332 Virginia 177, 799 177, 799 December 2, 402, 298 7, 730, 695 2,398, 654 10,129,349 Washington 6,744 6,744 January 1,863,057 6,587,900 1,992,958 8, 580, 858 West Virginia 24, 745 24, 745 February 2,453,318 7,746, 899 1, 788, 300 9,535,199 March 3, 307,304 9, 757,031 1, 860, 626 11,617, 657 Total 37, 775, 819 3 114, 097, 411 27, 693,219 141, 790, 630 April 3,176,029 9, 573,186 1, 754, 794 11,327,980 May 3,756,491 9,345,401 1, 394, 984 10,740,385 June 3, 559, 553 9,721,349 1,446, 672 11,168,021 Represents withdrawals upon taxpayment of whisky, rum, gin, and vodka from mgl tared distilleries and internal revenue bonded warehouses; brandy from fruit distilleries and internal revenue bonded ware- Total 37, 775, 814 1 114, 097,411 27, 693, 219 141,790,630 houses; other spirits from registered distilleries, fruit dietteries, and internal revenue bonded warehouses; and alcohol from industrial alcohol plants and bonded warehouses. Withdrawals of whisky, brandy, and rum from internal revenue bonded warehouses include bottled-in-bond tax-paid withdrawals as reported 1 Represents withdrawals upon taxpayment of whisky, rum, gin, and vodka from registered distilleries in table 42. Tax rate on and after Nov. 1, 1951, $10.50 per tax gallon; before Nov. 1, 1951, $9. and internal revenue bonded warehouses; brandy from fruit distilleries and internal revenue bonded ware- I For tax-free withdrawals, see table 44. houses; other spirits from registered distilleries, fruit distilleries, and internal revenue bonded warehouses; and alcohol from industrial alcohol plants and bonded warehouses. Withdrawals of whisky, brandy, and rum from Internal revenue bonded warehouses include bottled-in-bond tax-paid withdrawaLs as reported in table 41. Tax rate on and after Nov. 1, 1951, $10.50 per tax gallon; before Nov. 1, 1951, $9. 1 For tax-free withdrawals, see table 43.

206 REPORT OF COMMISSIONER OF INTERNAL REVENUE STATISTICAL TABLES 207

TABLE 41.-Withdrawals: Bottled-in-bond distilled spirits,* tax-paid, by kinds and TABLE 43.-Withdrawals: Distilled spirits, total tax-free; by kinds and by months, by months, fiscal year 1952 fiscal year 1958 [Tax gallons] [Tax gallons)

Month Whisky Brandy Rum Total For For fortification of For denaturation For use of the United States vesselsand wine 1 aircraft ? .E July 403,308 . 405,848 Month August 68.5,374 667, 477

September .F 1,034, 334 1,036,397 Brandy Spirits- Rum Spirits Whisky Brandy Spirits Whisky October 1,893,629 .s 1, 901, 301 ram November 1, 063, 675

E* 1, 071, 330 December 695 632, 543 January 465. 654 44,738 25,431 159,699 1,141,1,141,809 267 : 9" 459,338 July February 472. 624 102, 123 648, 547 172,192 20,718 1, 200 923 786, 881 82 Rn 476,733 August March 640,333 646.093 September 466,153 6, 767, 867 138, 515 1,070 1, 632, 249 123 April 614, 551 517,972 October 1, 113, 388 15, 624, 718 181,996 34 1, 783, 677 85 May 511,863 November 838,141 7, 977, 267 161.013 4, 464 1, 895,837 175 r 512,790 June 753, 479 4 755,534 December 284, 786 1, 776 023 135, 200 968,432 100 January 236,793 803,779 146,768 10,0)4 34 577,182 112 Total 9,035, 521 45,418 1,415 9,082,354 February 103,218 361, 634 131, 844 560,913 106 March 104,497 112, 410 133,887 389,415 11, 950 81 April 109,477 209,173 131, 940 637,376 3,924 336 I Represents withdrawals in cases of bottled-in-bond distilled spirits from internal revenu bonded ware- May 28,368 359, 717 135, 031 197,123 4, 017 633 houses. The withdrawals in this table are included in total tax-paid withdrawals reported in table 39. June 55,932 106, 252 135, 254 160, 171 3, 461 137 25, 690 923 8, 826, 067 7 2, 226 TABLE 42.-Withdrawals: Bottled-in-bond distilled spirits,' tax-paid, by kinds and Total 3, 487, 484 34, 774, 818 1, 763, 339 1, 880,184 by States, fiscal year 1952 To customs menu acturing [Tax gallons] For report warehouses Month Total State Whisky Brandy Rum Total Whisky Spirits Other Whisky Spirits Other

California 858,977 7,649 860,626 Colorado July 55, 115 16, 052 514 17, 134 2,263 1,1610 1, 464, 622 271 27/ 48, 618 104 118 16, 935 10, 763 5, 373 1, 814, 577 Connecticut 1, 347 1,347 August Illinois September 84,199 44, 023 14, 029 3,137 3, 501 9, 204.866 468.354 4,346 482,699 81, 443 3 20, 944 9,169 7, 269 18, 822, 726 Indiana 52, 178 52, 175 October Kentucky November 114. 021 22, 210 510 26, 000 14, 740 2, 212 11, 056, 590 8, 618. 202 22,184 6, 840, 381 63,700 203 802 27, 340 22,981 9,195 3, 286 771 Maryland 128, 278 18 126 290 December Massachusetts January 92,066 311 28,782 22,378 7,980 1,928, 189 30,992 1,284 3k 2711 102, 450 8,098 688 42,913 23, 853 7, 820 1, 343, 536 Minnesota 26 159 26,169 February Missouri March 190,398 52,846 21,945 23,943 6,288 1, 047. 660 150, 105 64,626 130,357 42,250 1. 456 27,144 13.367 10,750 1,217, 550 New Jersey 20,751 8,876 24,622 April New York May 121,848 30, 652 1, 080 22,004 16, 415 5,468 922, 224 55,865 1,064 68,919 15,010 163 23, 481 13, 577 5,007 778, 871 Ohio 190,001 6,274 196, 275 June 260,426 Pennsylvania 1,069,613 1,118 131 1,010,862 1,344, 641 231, 759 3 5,334 288, 651 176, 586 a 72, 471 52,830, 182 Virginia 34, 428 34,428 Total Total 0,035, 521 45,418 1,415 9,062,854 I Represents withdrawals of whisky, rum, gin, and vodka from registered distilleries and internal revenue bonded warehouses; brandy rom fruit distilleries and internal revenue bonded warehouses; and other 3 Represents withdrawals in eases of bottled-In-bond distilled spirits from Internal revenue bonded wares spirits from registered distilleries, fruit distilleries, and internal revenue bonded warehouses. In addition houses. The withdrawals in this table are included in total tax-paid withdrawals reported in table 40. 11,269,533 tax gallons of spirits were withdrawn for transfer to industrial alcohol plants and bonded ware- houses. Represents 2,358,922 tax gallons of brandy and 31,655,166 tax gallons of spirits-fruit withdrawn from fruit distilleries and 1,128,562 tax gallons of brandy and 3,119,652 tax gallons of spirits-fruit from internal revenue bonded warehouses. (Under the Act of June 24, 1940 (Public Law 655, 76th Cong.), effective July 1, 1940, the tax on brandy and spirits-fruit used in fortification is Included in the wine tax.) 3 Represents whisky, with the exception of six tax gallons of gin. Represents 4,028 tax gallons of gin, 930 tax gallons of brandy, and 376 tax gallons of rum. Represents 51,484 tax gallons of gin, 9,967 tax gallons of brandy, 8,482 tax gallons of rum, and 2,558 tax gallons of vodka. STATISTICAL TABLES 209 208 REPORT OF COMMISSIONER OF INTERNAL REVENUE TABLE 45.-Losses 1 Distilled spirits in internal revenue bonded by kinds and by States, warehouses, by TABLE 44.-Withdrawals: Distilled spirits, total tax free, ) kinds and by States, fiscal year 1952 fiscal year 1952 [Tax gallons] [Tax gallons]

For State Whisky Brandy Rum Gin Vodka Other For fortification of For use of the United States vesselsand spirits Total wines For denaturation aircraft

California 2K State 515, 137 166,047 1, 767 277 733, 192 Colorado 86

2 114 Connecticut 38.009 766 i Spirits- Spirits Whisky Brandy Spirits Whisky 39 41,636 Brandy fruit Rum Georgia ' 707 3,689 1 Illinois 4,397 1, 986, 271 39,180 569 57 3 2, 426, 885 Indiana 2, 352, 412 63, 633 8, 904 48, 075 34, 685, 562 4,024 1,098- Iowa 2,858, 853 California 2 889, 527 Kansas 5 , 701 Colorado 3, 687 Kentucky 633 Connecticut, 21,498 1,948, 505 15, 275 4, 616 36 10 8, 195,328 Maine 35 300

Georgia 7,280 5 335 28, 134 104,418 6,036 5,247,376 Maryland 1,281,929 2,335 793 3 Illinois 2E 1, 475, 248 Indiana 1, 482, 955 983,647 Massachusetts 100,750 12,266 51,202 15 58 171, 358 42,362 61,294 Michigan 1, 718 9, 467 786 205 Kansas Minnesota 22 6,329 Kentucky 1,131, 608 923 826 6, 427 7. 502 240 76 Missouri 41, 044 30 9 Maryland 3,430 Nebraska 2E2 50, 745 Massachusetts 631,731 3, 851 Michigan 8,585 4, 241 New Jersey 16, 719 28, 097 2 46, 474 11, 712 34 1, 559, 292 New York 412, 924 13, 072

17,909 S 2 426, 551 Missouri 974, 458 Ohio 265, 886 17, 301 Nebraska 213, 555 2 464 2 344, 352 Oregon 398 New Jersey 213, 224 67,106 5 398 1, 061 Pennsylvania 2, 828, 619 76, 229 18,194 3, 023 New York 42, 394 Tennessee 2 3, 104,999 21, 277 57,721 426 58,147 Ohio Virginia 49,179 1, 863 Oregon 25,412 Washington 51, 042 Pennsvlvania 25, 182 15,356 7 7 Virginia_ 79,053 Washington 143,983 Total 17, 898, 477 450, 808 86, 731 61, 537 744 1, 525, 780 20, 014, 077 Total 3, 487,484 34.774, 818 1, 763, 339 1, 880,184 25,690 923 8, 826, 067 4 2, 235 + Represents original tax gallons less tax gallons withdrawn (includes losses tax-paid). • To customs manufac using For expos bonded warehous s TABLE 46.-Stocks: Distilled spirits in internal revenue bonded warehouses, by kinds State Total and by months, fiscal year 1952 I Whisky Spirits Other Whisky Spirits Other [Tax gallons]

California 99, 014 15, 316 2, 836 3, 349 1,101 5,945 37, 707, 772 Month Whisky Brandy Rum Gin Vodka Other spirits Total Colorado 3, 687 Connecticut 9, 419 30, 917 Georgia 7,280 July 755, 767, 716 11,175, 527 2,199, 437 1, 209, 776 28,102 139, 953, 217 910,333, 775 Illinois 386, 039 122, 759 2,004 6, 761 1, 043 4, 289 5, 908, 859 August 756, 411, 230 11, 171,033 2, 170, 113 1,023, 814 36, 240 149, 611, 981 915, 424, 411 118, 024 18, 903 2, 603, 529 September 755, 456, 892 11, 736, 981 2,139, 210 926,903 35, 715 144, 281,100 914, 676, 801 Indiana 103, 656 October 754, 147,017 12, 263, 798 2 095, 228 760,198 32,136 Kansas November 142, 965, 086 912, 263, 463 Kentucky 391, 402 86,611 3, 680 2, 661 1, 596, 885 756, 520, 758 13, 485, 814 3,169,8622,100, 864, 005 27, 371 144, 295, 773 917, 204, 683 Maryland 274, 364 178, 886 112, 167 569,163 December 760, 802, 770 14, 388, 780 2,083, 562 952, 801 42, 494 146, 924, 979 925, 195, 386 Massachusetts 773 376 1,643 918 1,848 637, 289 January 765, 029, 230 14, 434, 344 2, 054,957 1,070, 602 33, 318 149, 955, 980 932, 578, 431 Michigan 12, 826 February 767, 818, 541 19,664,266 2, 033, 927 I, 086, 421 23, 580 150, 792, 789 936, 419, 524 Missouri 1, 588. 947 March 768, 744, 775 14,690,902 2, 033, 444 1, 021, 737 24, 403 163, 566,040 940, 071, 301 Nebraska 1,188, 013 April 769, 763,073 14, 620, 792 2, 004, 953 989, 747 55, 434 153. 623, 089 941, 057,088 New Jersey 670 281.000 May 769, 996,118 14, 558,135 1, 988, 502 1, 076, 424 179, 738 152, 653, 582 940, 452, 499 New York 42, 533 85, 988 June 767, 557, 977 14, 345, 041 1, 972, 233 1,148, 460 173, 418 151, 959, 204 937, 156. 333 Ohio 118 21,395 Oregon 25,412 22,403 8,170 94,332 58,696 60.3139 284, 528 I Represents original entry tax gallons except for distilled spirits in cases, for which losses have already Pennsylvania 79, 053 been determined. Stocks of distilled spirits in oases as of June 30 were as follows: 708,946 tax gallons of Virginia 143.983 whisky, 27,014 tax gallons of brandy, 3,668 tax gallons of ruin, and 121 tax gallons of gin. Washington I Represents spirits produced by registered and fruit distilleries. Total 1 344,641 231, 759 4 5, 334 288, 651 176, 588 172, 471 52,880, 182

I See footnote 1, table 43. 2 See footnote 2 table 43. Represents whisky, with the exception of six tax gallons of gin withdrawn in California. 4 See footnote 4, table 43. See footnote 5, table 43. 210 REPORT OF COMMISSIONER. OF INTERNAL REVENUE STATISTICAL TABLES 211 by III ' TABLE 47.-Stocks: Distilled spirits in internal revenue bonded warehouset, ❑ 91 friviilg gE. Eil gEgEg to E 131

kinds and by Sates, June 30, 1952 3 ,

6 gri ga:2714 [Tax gallons] vo qg 6E

0 00 O 6

Total u Whisky Brandy Rum Gin Vodka Other spirits ' 9t la State 1 igH gR igEggER '695' O sad eJ 6I

s ggg V 1g g jr:i&s 10, 234.166 03 Califemila 5, 348, 320 9, 961, 471 35, 403 29,480 1, 589 3, 857.903 - Colorado 96 2,487 240 1,236 4,059 Connecticut 262,635 26,305 14,834 2,556 250,311 656,841 258.119 2, 576 14.093 3, 782 33.750, 704 128, 231,509 Ru 91 94, 292, 236 PE15 g 41 Egitig 500 Illinois ,

43, 927, 749 135,031, 078 61 Indiana 88, 360, 268 1,487,419 221, 790 1,007, 525 28, 325 a 576, 214 676. 214 Iowa min 6' "=-1":gE 622, Z 526 6, 564 3, 634, 805 3, 643.896

Kansas 16, I 98, 057 144, 9,176 1, 386 13, 222, 981 382,326, 430 , 1 Kentucky 368, 860;695 135 809' 206,828 448, 587 a, S uud Louisiana 241,759 966T 3, 832 4,128 1P1 E 1g g14 Maine 296 662 61, 713, 827 13, 798 8, 721 3,948 13, 344,993 75, 035, 287 Maryland g g tzgar g gg ,4 Nr.a"5. Massachusetts 2,343, 772 176,017 1,038, 892 2, 722 18.823 1, 055, 658 4, 636,384 ,1 Michigan 6, 375 74, 369 8, 709 7, 905 5, 362, 240 5,459, 598 133, 690 267,484 tst'

3,374 IPA Minnesota 8,363 122,057 11 3, 870, 919 5, 683,966 Missouri 1, 811, 247 155 1, 644 61 R 11R 1 g1 E g 298 sit

296 Nebraska 17, 333 394, 922 New Jersey 27, 638 349.951, S

247, 758 241,876 499. 748 939, 382 08 New York 12,326.555 41,546,435 0 316,479 10,091 826 102, 272 1

28, 776, 212 ing Ohio r 141, 751 141, 751 4, 921 Oregon 16, 131, 637 128, 717, 512 1 Pennsylvania III, 251, 380 975,242 295,689 80,838 1,976 13. Sp 2,079 2, 517, 957 Tennessee 2, 512,713 66£' Virginia 1, 430,900 62,079 1,492,979 - 9,483 232 9. 715 gi = g Washington 148,961 fri g T

148.981 ion Wisconsin 9 Ott

a t uud c LIM . . c 937, 156,333 767, 557,977 14. 345, 041 1,972, 233 1,148, 460 173, 418 151, 959, 204 1- 5 ' Total du g 1 6 ro C f p 1 See footnote 1, tab e 46. 96 o See footnote 2, tab e 46. g -4 cz ° 2 9 n " a '5 Distilled spirits in internal revenue bonded warehouses, by so Stocks: 2 TABLE 48.- , LZO a t 9161 kinds, and by years and seasons of production, June 30, 1952 qad . I d sea . „. n _ . (Tax gallons] s a „- r Other . . . LEE

Total Yea Year Season Whisky Brandy Rum Gin Vodka spirits 2

. 5

30 tl ing r

1911 Spring 30 91 Fall 135 135 1 69 Sp 1912 Spring 69 l 117 99 ot Fall 9 108 ro 61 117 0 0. 13 2 1913 Spring 117 61 Fall 3 3 1914 Syring 568 568 165 166 Fall 72 CC . 1915 Spring 72 0., 237 24 261 fr.g Fall 3, 027

3, 027 2 1916 Spring 2'. LIT u 3, 645 123 105 3, 873 £161 . c Fall 1.212 lad 1917 Spring 1.140 24 48 1,394 6 105 67 1,572 g Fall 180 1921 Spring 180 Fall 558 558 = 22 Co 0 415,187 84,189 94,905 415 594,696 1944 Fall 2,017, 866 4". 1945 Spring 1,799.668 89,965 116,901 11, 332 9 Fall 16, 622, 500 351.298 128, 594 568 107, 266 17, 210, 226 69 u 3161 0

182,125 21.092, 949 1946 Spring 20,359, 909 300, 510 245, 055 5, 350 pd 0 18,424.122 1, 133, 462 186, 308 864, 660 20.608, 552

Fall 45, 596,814 1, 438, 650 218, 374 180 1, 479, 575 48. 733. 593 S ti 1947 Spring 2, 509, 541 18,496, 578

15, 334, 761 483, 695 168, 581 EV Fall 81, 566, 101 1948 Spring 77, 825, 947 109, 709 64.512 3, 462 3, 552,471 2 6, 287,022 79, 825, 041 Fall 73,126 497 323,983 87, 539 Spring 72, 048,110 5,112 97,786 3,426 4,341,885 76,496, 319 ks Euud

1949 OE Fall 48,770, 232 663,294 110,299 454 3,103,977 52. 648, 256 = 6, 012, 944 76,126. 941 c., 60,674 73,364 61, 854 61 1950 Spring 68,918,105 135, VA, 821

27, 448,899 Stoc Fall 105,253,988 2,398, 744 120,994 2,196 g a 1951 Spring 100,074,045 588.279 110, 642 72.056 1,832 49,426, 274 150, 273, 128 Fall 56,118, 705 4, 842, 297 82, 298 196,684 4, 006 29, 304, 266 90. 548, 256 -- 0 Spring 46, 858,761 1, 470,172 65.823 805, 625 164.118 17,316, 562 66, 681. 051 S 1952 49.

E A Total 767, 557, 977 14, 346,041 1, 972, 233 1, 148. 460 173,418 151,959,204 1137, 158,333 K RI

BL E c, 5 3 S Bee footnote 1, table 46. rig Bee footnote 2, table 46 TA . 2 00 CV 4 ,: zz 0 A. E.

220047 - 53 15 •

212 REPORT OF COIVLEVIISSIONER OF INTERNAL REVENUE STATISTICAL TABLES 213

O lo EFEREFEEREFEEREFEREIg TABLE 50.-Summary: Production, withdrawals, and stocks of distilled spirits,'by U 10 os vtaaaa4 aataa-rt-z,za-raia mi months, fiscal year 1952 1 X A'ATS A rg gclgriag= . .d. gt g spa - gEl a.4. [Tax gallons] to ' 0•2 24 FREE Tax-paid withdrawals

qad E 44FE 44 R Produe- Tax-free Stocks' nd 0 g i gg g gg ='; ELEE Month ton 1 Bottled-in- with- bond dis- Othere dis- drawals 1 of monht- 4 tilled tilled Alcohol Total spirits spirits 11 19 E: 4 R3 3 ERFEE 0 61 3 Fs gE s E.1. R■ --i-R-rss F. d CV g 0 d .- ..2 err July 18,774,113 405, 848 6,611,857 2,232,910 9,250,815 1,464,622 910, 333, 775 August 16, 376, 561 667, 477 7, 971, 062 3, 032, 853 11, 671, 392 1, 814, 577 915,424,411 y . ; September 22,146, 822 1, 036, 397 10, 216, 341 3, 595,118 14, 847, 856 9,204, 866 914, 576, 801 .65 October 34, 751, 202 1, 901, 301 13, 771, 248 3, 016.437 18, 688, 986 18, 822, 726 912,263, 463

S November 28, 419, 583 1, 071, 330 9, 982, 039 3,178, 913 14, 232, 332 11,059, 590 917,201, 583

.0 a 1161 A 31334 EE FE EREE

lad December 19, 396,143 632, 543 7, 098,152 2,398,654 10,129, 349 3, 280, 771 925, 195, 386 January 17, 033, 228 459, 336 6,128, 564 1, 992, 958 8, 580, 858 1, 926,189 932, 578, 431 s 6 ia,g F21 ga Mg February 15, 546, 601 976,733 7, 270, 166 I, 788, 300 9, 535, 199 1, 343, 536 936,419, 524 March 15, 008, 582 615, 093 9, Ill, 938 1, 860, 626 11, 617, 657 1,017, 660 940, 071, 301 S 1 0 April 14,193, 694 517,972 9, 055, 214 1, 754, 794 11, 327, 980 1, 217, 550 941,057,0813 Fmom May 11, 612, 023 512, 790 8, 832, 611 1, 394, 984 10, 740, 385 922,224 910, 452, 490 988 11 0461 d ERR FE EERIE June 8, 577, 229 755, 534 8, 965, 815 1,446, 672 11,168, 021 778, 871 937, 156, 333 11 g ',ff.: ea -tneLsge 41 .- .-..; ue 53,

2 oa 2 EVA to .--:4 r, it 2 so 2 Total in 221, 865, 781 9, 082, 354 105, 015, 057 27, 693, 219 141, 790, 630 52, 880,182 937, 156, 333 t co-,' a a aa

n .. ci 105, 0. 1 1

Co Represents production of whisky, rum, gin, brandy, vodka, and spirits by egistered distilleries and 'CI H brandy and spirit by fruit dis illeries. — uir 06I 2 9 Represents tax-paid withdrawals of whisky, rum, gin, vodka, and spirits f om registered distilleries ion ci

t and internal revenue bonded warehouses; brandy and spirits from fruit distille ies and internal revenue

o g to Gee e6 at a e bonded warehous s; and alcohol from industrial alcohol plants and bonded warehouses. Bottled-in-bond

ea duc distilled spirits to -paid after bottling. Other distilled spirits tax-paid prior to bottling.

ro a Represents tax free withdrawals for fortification of wine, for denaturation, for use of the United States, for vessels and aircraft, and for export, and transfers to customs manufacturing bonded warehouses. In f p a 11E1 6161 g :: .7. RFE addition 11,269,533 tax gallons of spirits were withdrawn for transfer to industrial alcohol plants and o P-b....° a Roi e ' ,6 .fi ”9 - E 8 bonded warehouses.

FA 24 ”. ti 7.1 F28 2,1 Represents stocks of whisky, rum, gin, brandy, vodka, and spirits In internal revenue bonded C oryi g a ,..ra warehouses. 3

• rfri; d season 8 TABLE 51.-Summary: Production, withdrawals, and stocks on hand June 30, of

an in .0 pej REE F EE F.3 RERE 9 distilled spirits, and premises operated, fiscal year 1952 ar ing

r :ca" yr El 94 [Tax gallons] 1 •-• Ye 3 'gg 3 ig '7' Kg5 Sp 0‘) .. . a Tax-paid withdrawals I

83 E FEE E FR ER ERRS

61 State 0 Production 1 Bottled-in- g ""EF d gg g Mg Other dig- A ci ce yr R ar.g bond distilled tilled spirits lcohol Total y . S spirits 43) 0 £36' 0 g u 84 EEE R Eg EFREREFF California 46,099, 980 366,526 as 4 91 4,184,181 593, 375 5,144, 082 pti . ... 61 Colorado 4,469 271 zi 3RF 8' 2,886 ______3,157 g tg -rde(Fiagg Connecticut 44 1, 014 1, 347 1, 241, 650 1, 242, 997 8: -7 er e oi-tr Georgia 10, 691 10, 691 Hawaii 1, 610 1, 640

194 ‘ S Illinois 38,948,654 462, 699 19, 016, 652 1, 416, 921 20, 896, 272 Indiana 29, 926, 922 £3 gEF E IR ER 3EFE 52,178 17, 312, 780 7, 334, 221 24, 699,179 '45 e.r.4-, tEE Iowa 2,116, 365 61 4,4 r ' Kansas 2, 80A, 608 15,688 31,919 47,637 0) SI 6 Kentucky 69, 311, 321 6, 610, 386 30, 215, 005 3,081, 261 39, 936, 655 Louisiana S 602, 026 602, 026

318 Maine 1,762 1,762

g Maryland II, 660,916 ' 2 128, 296 7, 632, 034 5, 513, 524 13, 273,854 u ( Aig FEUER

FE; 3 969 ' MI ild te toi ice; 4 ad ..trt:•t■S Massachusetts 1, 721, 176 32,276 2, 325, 964 288,091 2,616, 331 X rot Michigan 295,357 295, 497 590,834 s .;1 c' '! Po g , c nker cd •e R 91 Minnesota 26,159 132,798 158,957 Missouri 2, 269, 289 50,105 142,841 124,987 317,933 t' Nebraska 3, I194, 571 309 309 0 New Jersey 189, 045 24, 627 377, 534 4, 336, 533 4, 738, 694 New York - 1, 842, 883 56.919 3, 813, 813 82,349 3, 983, 081 Ohio 10, 305, 836 195, 275 5, 375, 713 1, 036,141 6, 607,129 Oregon 56.074 322 322 Pennsylvania 203,062 1, 010, 862 12, 397, 207 2, 922, 903 16, 330, 972 ora St Tennessee 746, 515 36,808 346,808 S Virginia l 418,514 3,428 143,371 177, 799 - s .4 Washington 141, 564 6, 744 6, 744 9. ... West Virginia 4 g ot)..61 g 24, 745 24,745 g Wisconsin

E mll=g - . Kt 2:8.. So"g.gtqg- _ I s -, g.g. rzi-912.43' :a 20-= = tc.1)- ° Total 221, 865, 781 9,082, 354 105, 015, 057 27, 693, 219 141, 790, 630

TABL Cea5,a.5 04a3 See footnotes at end of table. STATISTICAL TABLES 215 214 REPORT OF COMMISSIONER OF INTERNAL. REVENUE TABLE 52.-Summary: Production, tax-paid withdrawals, and stocks on hand June TABLE 51.-Surnmary: Production, withdrawals, and stocks on hand June 30, of 30, of whisky and of total distilled spirits, and premises operated, fiscal years 1934 distilled spirits, and premises operated, fiscal year 1952-Continued to 1952, inclusive [Tax gallons] [Tax gallons] Production I Tax-paid withdrawals Premises operated I. Fiscal year ended June 30- Tax-free Stocks, June Whisky Total distilled Whisky Total distilled State . .• Internal rev spirits spirits w ithdrawals $ 30 $ Registered Fruit am- distilleries tilleries 3555 b°1111551 warehouses 1934 62, 352, 666 76,306,388 18, 875, 964 38, 601, 236 1935 149, 112, 923 169, 126, 472 50, 780, 940 1-- 75.073.993 37, 707, 772 19,234,166 1936 223, 659, 539 253. 867, 925 67, 299, 166 100, 383,056 California 1937 223. 457, 850 258, 956, 886 72, 616, 195 120, 011,294 Colorado 3,687 4,059 1938 102, 895. 872 150, 155, 924 68, 611, 650 114, 926, 395 Connecticut 30,917 556,641 7,280 1939 93, 003, 917 145, 326, 176 72, 059, 023 114, 578,069 Georgia 1940 98, 993, 303 143, 455. 192 81, 267, 368 128, 325, 941 Hawaii 5,!08,859 128, 231, 509 1941 121, 851, 943 175, 208, 746 80, 541, 979 1311, 552,198 Illinois 1942 120, 257, 424 a 256, 392. 401 84, 709, 171 199. 207, 510 Indiana 2, 603, 529 135,031,076 576,214 1943 19, 529, 698 a 426, 474, 962 87, 913, 792 136, 836, 551 Iowa 1944 8 429, 069, 171 58, 832, 992 90, 463, 887 Kansas 103, 656 3, 643, 895 1, 596, 885 382, 336, 430 1945 41, 562, 303 $ 535, 939, 513 63, 891. 224 142 330, 770 Kentucky 1946 147, 464. 516 305, 066, 637 63, 226, 912 178, 131, 350 Louisiana 448, 587 4,128 1947 167, 994, 805 315, 157, 700 58, 822, 676 173. 505, 111 Maine 1948 129, 597. 067 244, 127, 392 53, 003, 200 197, 160, 331 569,163 75, 085, 287 M Maryland 1949 149. 595, 239 266, 592, 499 52, 674, 964 141, 766, 697 Massachusetts 637,289 9,635,384 12, 826 5, 459, 598 1950 118, 760, 487 208, 235. 050 60. 499. 332 144, 123, 699 Michigan 1951 205, 702.460 4 1, 452. 796 76.442, 149 174, 625, 188 267, 484 . M Minnesota . 1952 103. 543, 953 221, 865, 781 64, 907, 563 141, 790. 630 Missouri 1, 588, 947 5, 683, 965 Nebraska 1, 188, 013 296 New Jersey 281,000 394,922 .N. NN New York 85,988 989,382 a v Stocks June 30 1 Number of premises operated Ohio 21, 395 41, 546, 435 Oregon 25,412 141,751 Pennsylvania 284,528 128, 715, 512 titi Fiscal year ended June 30- Internal 2,517,957 Tennessee Whisky Total distilled Registered Fruit revenue Virginia 79,053 1, 492, 979 spirits distilleries distilleries bonded Washington 143, 983 9, 715 warehouses West Virginia r 148, 961

Wisconsin ME 1934 57, 717, 662 63, 065, 017 51 81 113 234 Total 52, 880,182 937,156,333 1935 152, 807, 235 160, 755, 394 88 1936 300. 658, 508 310, 803, 839 121 1937 445, 285, 663 462, 607.980 137 RE 1 See footnote 1, table 50. 1938 471, 159, 539 497, 527, 755 118 $ See footnote 2, table 50. 1939 478, 899, 618 522, 058, 134 112 RM 3 Sec footnote 3, table 50. 19.10 480, 937, 009 525, 394, 924 101 I See footnote 4, table 50. 1991 504. 080, 691 551, 429, 175 105 $ Represents number operated during any part of the year. 1942 516, 918, 887 587, 751. 374 116 'Operations during year consisted only of transfers in bond., 1943 424, 824, 966 476, 345. 030 130 1944 348. 646, 381 376, 277, 850 122 ARRE 1945 305 587, 545 338, 172, 677 138 1946 374. 072, 055 420, 262, 363 144 1947 464, 825, 305 525, 827, 726 147 1948 522, 260, 756 594, 733, 095 130 1949 602, 925, 861 677, 343, 619 99 AM 1950 643, 279, 511 708.562,193 82 1951 751, 233,178 901. 106, 188 109 1952 767, 557, 977 937, 156, 333 81

Exclusive of ethyl alcohol Includes ethyl alcohol. Represents gross production. Net produc ion for such years-that is, the gross production minus prod- ucts used in redistillation-was 255,915,204 tax gallons for 1942, 407,568,226 tax gallons for 1943, 420,833,502 tax gallons for 1944, and 524,301,407 tax gallons for 1945. 216 REPORT OF COMMISSIONER OF INTERNAL REVENUE STATISTICAL TABLES 217

VI. DISTILLED SPIRITS AND WINES: RECTIFIED TABLE 55 .-Production:1 Rectified spirits and wines, by kinds and by months, fiscal (Produced by rectifying plants) year 1952 [Proof gallons] TABLE 53.-Materials:1 Used in production of rectified spirits and wines, by kinds and by months, fiscal year 1952 Cordials [Proof gallons] Month Whisky Gin and Brandy Vodka Other Total liqueurs

Month Alcohol Spirits 5 Whisky Brandy Wines Other Total July 5, 836, 989 299,679 189,079 88,491 41, 517 28,029 6, 483, 784 August 6, 901, 135 428,677 279,031 110, 972 102,231 20,987 7, 841,033 July 1, 520, 596 2,710,584 2, 038, 586 117, 801 59, 901 46, 224 6, 493,192 September 9, 500, 638 352,039 319, 353 105,076 83, 792 20,780 10, 381, 678 August__ 2, 255, 718 2, 971, 180 2 503,880 168, 199 67, 089 38,211 8,504,267 October 11, 271,178 475, 313 507,566 258,108 95, 714 37, 445 12, 695, 324 September 2, 855, 742 3, 953, 302 3, 436, 321 189, 152 87, 194 42, 244 10, 563, 955 November 8, 520, 785 311, 592 400, 698 194,481 86,619 36,078 9, 550,248 October 2,144, 672 5, 964, 902 3.944, 707 363,803 123, 597 70,201 12, 611, 880 December 8, 515, 568 258, 395 313, 977 143, 749 89,135 33,660 7, 354.482 November 2, 206, 270 3, 853, 589 3, 003, 402 284, 695 89, 834 73, 285 9, 511,075 January 4, 347, 755 190, 477 304, 699 128, 178 94,123 34, 891 5, 100, 073 December 1, 665, 362 2, 970, 975 2, 262. 082 199, 897 67, 921 61, 594 7, 227, 331 February 5, 410, 463 217, 574 221, 025 119, 869 73, 039 48,906 6, 093, 876 January 1, 231, 220 2, 004, 543 1, 554, 257 213, 425 47, 070 61, 551 5, 112, 066 March 6, 185, 702 368, 002 245, 584 108, 427 133, 316 48, 607 7, 089, 638 February 1, 341, 088 2. 507, 342 1, 866, 573 152, 299 56, 719 61, 372 5, 985.338 April 6, 037, 149 362,458 239,593 123,997 125,894 55,269 6, 944, 360 March 1, 562, 905 3.091, 323 2, 163, 153 169, 993 70, 841 58.951 7, 117, 166 May 6,468,541 430,716 241,981 113,826 117,860 49,385 7, 422, 309 April 1, 440, 801 3. 117, 919 2, 204, 845 150, 323 59, 120 86,118 7, 059,126 June 6,199,993 416, 788 220,389 121, 716 68,326 48,921 7, 024, 133 May 1, 042. 394 3. 735, 883 2, 211, 392 185, 288 64. 793 58, 939 7, 298, 689 June 1,177, 783 3. 394, 376 2,203,649 156, 742 53, 791 71, 276 7, 057, 617 Total 83, 145, 894 9,109, 710 3, 482, 925 1, 616, 890 1, 109, 561 2 462, 958 93, 927, 938 Total 20, 444, 551 40, 275, 918 29, 392, 847 2, 351, 560 846, 870 a 729, 956 94, 041, 702 For production of distilled spirits at regis ered distilleries, see table 35. Represents 2,294 proof gallons of alcohol, 22,694 proof gallons of high-proof spir ts, 65,368 proof gallons 1 Includes imported 'guars as follows: 2,086 proof gallons of whisky, 23,676 proof gallons of brandy, 10,726 of rum, 91,219 proof gallons of wines, 5,395 proof gallons of unclassified spirits, and 275,988 proof gallons of proof gallons of wines, 70,041 proof gallons of other liquors consisting of 3.760 proof gallons o rum, 2,288 products for exportation. proof gallons of gin, 694 proof gallons of vermouth, 745 proof pa Ions of cordials and liqueurs, 20 proof gallons of unclassified spirits, and 2,534 proof gallons of products for exportation. Represents high-proof spirits produced at registered and fruit distillerie . TABLE 56.-Production:1 Rectified spirits and wines, by kinds and by States, and Represents 124.755 proof gallons of rum, 165,920 proof gallons of gin, 92,524 proof gallons of vermouth, premises operated, fiscal year 1952 46,521 proof gallons of cordials and liqueurs, 5,789 proof gallons of vodka, 38,050 proof gallons of unclassified spirits, and 256,391 proof gallons of products for exportation. [Proof gallons]

Cordials Number TABLE 54 .-Materials:1 Used in production of rectified spirits and wines, by kinds State Whisky Gin and Brandy Vodka Other Total of plants and by States, fiscal year 1952 liqueurs operated 4

[Proof gallons] W-IhM0 California 1, 628, 394 276, 506 39, 651 864, 355 293,114 81, 349 3,180, 369 Colorado 1,181 854 1, 148 3, 183 718,002 15, 703 1, 279, 421 State Alcohol Spirits: Whisky Brandy Wines Other Total Connecticut 218, 362 103,995 223, 359 Illinois 12, 924, 493 511,026 96,702 37, 134 96,603 13, 665, 958

Indiana 21, 321, 944 8, 371 238,169 191, 747 28, 767 36, 071 21, 825, 069 4,+ Kentucky 16, 211, 886 625 17,939 53,406 11,575 16, 294, 931 California 289, 032 1, 329, 759 591, 036 882, 917 46, 166 68, 298 3, 203, 208 5, 692 Louisiana 894 3, 573 1, 225 . Colorado 1,819 322 1,202 3,343 19, 059 Connecticut 10, 054 1, 085, 690 119, 698 5, 389 1, 765 57, 261 1, 271, 857 Maine 10, 570 5, 508 2, 981 9rNO4 Maryland 11, 279, 119 14, 715 68, 153 60 33,303 11, 395, 440 Illinois 412,166 8, 651, 068 4, 173. 710 161,548 134, 356 105, 583 13, 638, 431 57,149 2, 113, 247 Indiana Massachusetts... 1,014, 241 390,854 600,484 44,738 5,783 6, 395, 082 7, 336, 545 7, 445, 812 273,596 223,766 143, 071 21, 817, 872 10, 361 2, 299 39, 550 988, 341 Kentucky 3, 817, 836 6, 411, 096 5, 899, 686 55, 840 119,865 15,236 16, 314, 559 Michigan 436, 131 Minnesota 15, 200 97,847 2, 107 754 2,699 118, 607 Louisiana 1,847 1,153 937 915 994 5,896 212, 203 4, 515 Z.001 Maine 15,614 3,463 195 19,302 Masotti 2, 805 1,399 203,484 New Jersey-_. .. 210, 854 3, 019, 220 323, 482 10, 899 6, 324 31, 609 3, 602, 383 Maryland 1, 692, 421 5, 751, 065 3, 791, 300 3, 631 113, 019 52, 850 11, 904, 286 1, 121 Massachusetts 48, 817 1, 395, 819 410,664 132,231 3,226 119, 085 2, 109, 842 New Mexico 923 198 94, 877 27, 197 7, 490 8, 107 4, 256, 297 New York 4, 084,884 33, 742 - Michigan 161,083 52, 372 18,421 192, 592 35, 679 30,360 488,507 -RN. Ohio 3, 007, 384 7, 353 284, 463 53, 527 5,567 11, 775 3, 370, 069 Minnesota 85,448 4,099 22,881 2, 546 4, 916 119, 689 12, 064,862 Pennsylvania.... 11, 210, 043 246,528 320,419 261,853 5,026 20,993 Missouri 113, 065 92, 887 1,062 5, 472 212, 486 401 620 New Jersey ______2, 967, 459 481,333 103, 368 51,122 15,511 26,430 3, 645, 223 Washington 191 28 1,840 9,499 31,066 New Mexico 906 394 1, 300 Wisconsin 3, 420 16,307 New York 716, 496 1, 889, 396 1, 545, 205 44, 053 13, 728 40, 650 4, 279, 528 1,109, 561 +462, 958 93, 927, 938 169 Ohio 941,409 1, 188, 136 1, 069, 732 142,539 14,331 22,815 3, 378, 957 Total 83, 145, 894 4,109, 710 3, 482, 925 1, 616, 890 Pennsylvania 2, 837, 590 4, 501, 678 4, 221, 588 378,848 112, 242 40,436 12, 092,382 Washington 538 79 637 Wisconsin 8,735 4,221 For production of distilled spirits at registered distilleries, see table 36. 5,010 3,659 9, 468 304 31, 397 Represents number operat d during any part of the year. Total 20, 444, 551 40, 275, 918 29, 392, 847 2, 351, 560 846, 870 : 729, 956 94, 041, 702 x See footnote 2, table 55.

See footnote 1, tab e 53. See footnote 2, table 53. See footnote 3, table 53. 218 REPORT OF COMMISSIONER OF INTERNAL REVENUE STATISTICAL TABLES 219

VII. CONSUMPTION OF DISTILLED SPIRITS TABLE 57. - Summary: Materials used for rectification and production of rectified spirits and wines, and premises operated, fiscal years 1936 to 1952, inclusive [Distilled spirits bottled by rectifying plants, tax-paid bottling houses, and internal revenue bonded warehouses] [Proof gallons] TABLE 58.-Bottling: Distilled spirits (rectified and unrectifted) bottled for con- Materials used for rectification sumption, fiscal year 1952 Fiscal year ended June 30- [Wine gallons] Alcohol Spirits Whisky Brandy Other Total Rectified products 1936 18, 002, 394 O 14, 072, 589 172, 408 569, 348 32, 816, 739 1937 29, 258, 533 ) 15,123, 437 208,962 658, 041 45, 248, 973 539, 288 43, 987, 846 Kind Bottled at tax- 1938 29, 626, 345 ( 4) 13, 573, 665 248,548 Bottled at rec- 1939 17, 522, 484 11, 848, 021 13, 554, 212 250, 514 507,411 43, 682,64Z tifying plants paid bottling Total 1940 17, 475, 958 13, 901,129 15,295, 513 321, 911 586, 877 47, 581, 388 houses 1941 22, 844, 540 13, 391, 833 17, 021, 767 563, 257 687,775 54, 509,172 1942 19, 675, 212 25, 892, 987 20, 650,946 904.227 897,793 68, 021,165 1943 1, 734, 604 35, 690, 096 29, 037, 012 2, 901, 863 1. 657, 855 71, 021, 430 Whisky 86, 620, 651 9, 409,162 2 96, 029,816 1944 2, 331, 970 25, 160, 722 32, Ill, 417 2, 772, 289 5, 557, 375 67, 933, 773 Brandy 1, 916, 601 1, 113 1, 917, 714 1945 21, 185, 331 44, 366, 831 40, 848, 886 3, 417, 792 9, 766, 036 119, 589, 876: Rum 73, 412 73, 412 1996 42, 301,841 51, 399,168 45, 829, 758 3, 939, 793 5, 003, 234 151, 473, 794 Gin 4, 471, 815 1, 709 4, 473, 524 1947 42, 285, 350 57,106, 092 43, 692, 046 2, 475, 048 3, 070, 329 48, 628, 865 Cordials and liqueurs 5,195, 527 158,076 5, 353, 603 1948 33, 674, 979 49, 916, 952 39, 596, 883 1, 067, 008 1, 319, 933 25, 575, 845 Vodka 1, 307, 039 7, 637 1, 314, 676 1949 35, 824, 521 42, 192, 873 38, 117, 617 1, 560, 360 1, 276, 490 18, 971, 861 Alcohol 1950 34, 092, 237 37, 119, 549 33, 269, 402 1, 818, 176 1, 651, 908 07, 951, 272 Other spirits 6, 937 6, 937 1951 34, 675, 480 95, 893, 475 37, 801, 722 2, 294, 496 1,864,185 22, 529, 358 1952 20, 449, 551 40, 275, 918 29, 392, 847 2, 351, 560 1, 576, 826 94, 091, 702 Total 99, 591, 985 1 9, 577, 697 109,169,682

Production Unrectified products Number Fiscal year ended of plants Bottled-in- June 30- Cordials operated Kind Bottled at bond Grand total Whisky Gin and liqueurs Brandy - Other Total Bottled at tax-paid products rectifying bottling Total Plants houses 1936 21, 726, 565 6, 767, 295 3, 117, 552 93, 435 743,959 32, 448, 806 379 1937 31, 586, 870 8, 147. 844 3, 812, 852 79,321 684,085 49, 310, 972 340 1938 32, 675, 622 7, 663, 863 2, 721, 758 33,824 461,883 43, 559, 9511 304 Whisky 21, 536, 495 9, 485, 365 31, 021, 860 9, 035, 521 136, 087, 197 1939 33, 593, 409 7, 231, 564 2, 192, 964 57,549 325, 769 43, 401, 295 284 Brandy 494,413 214, 237 708,650 45,418 2, 671, 782 1940 37, 977, 224 6, 866, 097 2, 437, 706 74,372 301, 171 17, 656, 570 255 Runs 499,929 45, 503 545,432 1,415 620, 259 1941 44, 317, 166 6, 764, 707 2, 642, 178 184,835 348,712 54, 157, 628 245 Gin 4, 029, 397 4, 817,237 8, 846, 634 13, 320,158 1942 55, 961, 730 7, 597, 941 3, 228, 135 366,321 616,776 67, 770, 903 232 Cordials and liqueurs 5, 353, 603 1943 60, 794, 623 2, 965, 280 3, 965, 502 1, 361, 541 1, 037, 875 70, 124, 821 215 Vodka 226,332 226,332 1, 541, 008 1944 57, 862, 477 898,304 3, 935, 429 1, 515, 052 3, 425, 143 67, 686, 405 229 Alcohol 55,433 1,123 56, 556 56, 556 1945 101, 645, 006 7,057,8377,057 6, 696, 947 1, 677, 186 1, 796, 413 18, 863, 389 259 Other spirits 29, 448 519 29, 967 36,904 1946 124, 727, 150 11, 497, 751 11, 308, 854 1, 942, 399 1, 402, 734 150,878,888 261 1947 130, 700, 615 10, 547, 373 4, 545, 503 1, 677, 869 1, 088, 993 148,560,353 254 Total I 26, 871, 447 a 14, 563, 984 41, 435, 431 a 9,083, 354 159, 687, 467 1948 114,016, 903 7, 267, 090 2, 207, 673 654,478 686,678 125,732,822 237 1949 107,781 521 6, 601, 847 2, 817, 735 I, 042, 745 710,764 118,959,612 209 1950 94, 907, 517 7, 784, 318 2, 916, 210 1, 199, 163 1, 021, 275 107,861,483 178 [ Includes Imported distilled spirits used for rectification as ollows: 2,086 proof gallons of whisky, 23,676 1951 108, 152, 351 7, 790, 752 3, 518, 490 1, 587, 452 1, 324, 299 122, 373, 347 17t proof gallons of brandy, 63,760 proof gallons of rum, 2,288 proof gallons of gin, 745 proof gallons of cordials 1952 83,145, 894 4,109, 710 3, 482, 925 1, 616, 890 1, 572, 519 93, 927, 938 16£ and liqueurs, and 20 proof gallons of unclassified spirits. Represents 777,779 wine gallons of blends of whisky 4 years old or older, 296,059 wine gallons of other blended whisky, and 94,955,978 wine gallons of spirit whisky. ] Included with alcohol. a Includes imported rectified distilled spirits used in bottling as follows: 54 proof gallons of brandy and 841 proof gallons of cordials and liqueurs. Includes imported unrectlfied distilled spirits used in bottling as follows: 288,087 proof gallons of whisky, 223,863 proof gallons of brandy, 254,724 proof gallons of nun, and 6,238 proof gallons of unclassified spirits. Includes imported unsaddled distilled spirits used in bottling as follows: 55,792 proof gallons of whisky, 63,631 proof gallons of brandy, 4,747 proof gallons of rum, 505 proof gallons of gin, and 39 proof gallons of unclassified spirits. 6 Represents tax-paid withdrawals of distilled spirits bottled in bond. Exclusive of 226,856 wine gallons of rectified distilled spirits and 112,003 wine gallons of unrectified dis- tilled spirits bottled for exportation and 313,896 tax gallons of whisky, 2,219 tax gallons of gin, and 195 tax gallons of brandy bottled in bond for export. 220 REPORT OF COMMISSIONER. OF INTERNAL REVENUE STATISTICAL TABLES 221

TABLE 59. - Summary: Distilled spirits (rectified and unrectified) bottled for TABLE 61.-Summary: Rum used for denaturation, and production, removals, and consumption, ) fiscal years 1941 to 1952, inclusive stocks on hand June 30, of specially denatured rum at distillery denaturing bonded [Wine gallons] warehouses, by Stales, fiscal year 1952 1

Fiscal year ended June 30- Whisky Specially denatured rum Number of Brandy Rum Gin distillery Rum used for denaturing State denaturation bonded 1941 119, 548, 126 2, 010, 621 1, 378,192 13, 316,856 Stocks 1942 136,038, 633 2, 340, 879 Production Removals Losses Tune 30 warehouses 1, 813, 449 14, 396, 909 operated 2 1943 135, 273, 247 4, 493,152 2, 917, 579 6,323, 482 1944 96, 430, 899 4, 538,048 12, 994, 466 7, 461, 770 1945 143, 171, 432 4, 053, 886 2, 024, 582 10.009, 224 Proof gallons Wine gallons Wine gallons Wine gallons Wine gallons 1946 163, 796.884 3, 612, 167 951,314 19, 912, 036 1947 166, 218, 217 Kentucky 1, 131, 798 762, 061 749, 923 5, 875 27, 584 1 2, 835, 939 688.880 18, 615, 945 Massachusetts 631.731 425,321 422,922 3,037 21,338 1 1948 149, 232, 495 1, 242, 383 9(0.298 11, 409, 038 1949 142, 633, 709 1, 888, 404 389, 038 11, 355. 715 Total 2 1950 139, 653, 133 2, 205, 635 602, 706 13, 515, 693 1, 763, 529 1, 187, 382 1,172, 845 8, 912 48,922 1951 167, 508, 763 2, 832,056 680, 775 17, 494, 804 1952 136, 087,197 2, 671, 782 620, 259 13, 320,158 1 See footnote 1, table 60. Represents number operated during and part of the year. • Cordials and Fiscal year ended June 30- liqueurs Vodka Alcohol Other spirits Total TABLE 62.-Operations in specially denatured rum by manufacturers: By States, fiscal year 1952 [Wine gallons] 1941 3, 754, 858 (I) 341, 125 151, 872 140. 501, 659 1942 4, 755, 808 Gi 232,167 170, 735 159, 748,580 1943 5, 994, 371 (1) 45,265 255,612 155, 302. 738 Number of . 1941 5, 949, 531 (1) 35, 916 2, 791, 290 130, 201, 920 State Received Used in Stocks June 30 manufacturers 1995 9, 166, 562 (1) 31, 502 1, 285, 811 169, 742, 999 manufacturing operating 1946 13, 985, 185 (I) 132, 697 1, 176, 418 203, 566, 700 1047 6,702,954 iin, 119, 614 324, 906 (2) 195, 531, 435 1948 3, 380, 369 77, 901 146, 199 165, 888, 683 Florida 8,524 8,734 232 1949 4, 315, 258 (2) 62, 342 286, 778 160, 931, 244 Indiana 250 500 50 -N 1950 4, 990, 533 (2) 73,539 575,809 161, 117, 048 Kentucky 318,790 318,029 21, 612 m 1951 5, 411, 974 995, 696 98, 782 45,170 195,068,326 1952 Michigan 2, 338 1, 878 326 5, 353, 603 1, 541, 008 56, 556 36, 904 159, 687, 487 Missouri 34, 313 35, 669 1,405 New Jersey 546 518 50 NWH I Prior to 1941 consumption was represented by tax-paid withdrawals. See table 52. New York 8, 796 8, 615 584 North Carolina 421, 573 413, 046 29, 956

2 Included with "other splr ts." . PP Ohio 33,718 31,793 56 Pennsylvania 14,303 14,478 933 VIII. DENATURED RUM 0 Tennessee 550 564 68 [Relates to denatured rum produced by dist'llery denaturing bonded warehouses] Virginia 342,527 338,826 24,188

West Virgbda 1,800 1,702 308 'r9 to TABLE 60. -Summary: Rum used for denaturation, and production removals, and Total 1,188, 028 1,174, 352 79, 768 53 stocks of specially denatured rum at disti lery denaturing bonded warehouses, by months, fiscal year 1952 1 1 Represents number operating during any part of the year.

Specially denatured rum It FERMENTED MALT LIQUORS AND CEREAL BEVERAGES Month Rum used for [Produced by breweries] denaturation Production Stocks end of Removals month TABLE 63.-Materials: Used in production of fermented malt liquors and cereal beverages, by kinds and by months, fiscal year 1952 Proof gallons Wine gallons Wine gallons Wine gallons [Pounds] July 173, 306 116, 687 107,839 51, 544 August 169, 251 113, 955 123, 40, 764 September 158, 871 106, 970 III, 3 35, 602 Grain and grain products October 144,920 97,575 91, 636 40, 877 November 147, 753 99, 482 115, 427 24,034 Month December 120, 882 81, 389 66,197 38, 7W Sor- January 152, 003 102,343 92, 075 48, 181 Malt Corn Rice Wheat Barley ghum Total February 139,164 93, 699 89,794 51, 494 grain March 126, 450 85,138 93,133 42, 866 April 151, 517 102, 017 93, 800 50,448 May 122,449 82,444 100, 207 32, 003 July 270, 137, 808 89, 993, 549 33, 747, 801 624,465 45, 975 77, NB 399, 727,198 June 156,963 105, 683 87, h)2 August 268, 084, 457 91, 215, 267 34,336, 645 635,975 94, 868 84, 200 394,451, 412 48, 922 September 209, 135, 183 70, 441, 505 27, 941, 920 485,155 62, 780 308,066, 593 Total 1, 763, 529 1,187,382 1, 172, 845 48,929 October 203, 420,997 71, 545, 500 23, 317, 388 533, 650 68,140 298, 885, 675 November 181, 295, 012 61, 395, 124 25, ISO, 851 449,730 42,500 268, 333, 217 December 187, 467, 966 65, 535, 906 22, 199, 937 441, 610 45, 790 10, OM 275, 701, 209 I Formula 4 (Appendix to Regulations No. 3) is used in all denaturation of rum. January 206,970, 607 72, 162, 106 25, 186, 164 496,720 67, 970 143, 900 305, 027, 367 February 195, 991, 549 68, 437, 715 25, 322, 172 443,010 47,900 100,000 290, 342,346 March 215, 828, 536 75, 720, 759 28, 418, 702 454, 340 53,100 98, 950 320, 574, 387 April 219, 130,989 79, 163, 297 26, 903, 165 496, 680 51, 360 98, 800 325, 844, 291 May 233,376, 190 81, 345, 376 31, 493,182 133,200 60, 440 8,400 346, 816, 788 lune 262, 679, 683 93, 416, 709 33, 287, 615 641, 550 62,005 207,896 390, 295, 362 Total 2, 653, 518, 877 920, 372, 813 337,305,542 6, 236, 085 802,8282 829, 650 , 919, 065, 796

222 REPORT OF COMMISSIONER OF INTERNAL REVENUE STATISTICAL TABLES 223

TABLE 63.-Materials: Used in production of fermented malt liquors and cereal TABLE 64.-Materials: Used in production of fermented malt liquors and cereal beverages, by kinds and by months, fiscal year 1952-Continued beverages, by kinds and by States, fiscal year 1952-Continued

[Pounds] Wound ]

Soybeans Cassava and Soybeans and Cassava and Sugar and Hops and hop cassava Month soybean Sugar and Hops and hop cassava State and soybean sirups extracts situps extracts products products products products

July Arizona 9, 270 432,880 44, 107 325, 044 13, 078, 077 3, 620, 851 3, 338 California 270,479 2, 723, 837 1,996,9;0 ___, August 334, 614 12, 887, 328 3, 589, 408 September Colorado 5,217 321,820 4 249, 250 9. 562,136 2, 796, 302 Connecticut 33,000 755,802 47,100 October 247, 982 10, 302, 896 2, 707, 398 November Delaware 5, 028 14,387 204, 987 8, 446, 822 2, 429, 926 1, 333 District of Columbia 135, 000 91, 097 December 213, 371 8, 486, 272 2, 469, 810 Florida 21, 375 1, 549, 526 138, 146 8,676 January 242,498 9, 924, 332 2, 739, 631 Georgia . 308, 200 18, 433 February 236, 760 8, 480, 935 2, 595.795 2,003 Hawaii 9, 844 446, 208 30, 225 March 245, 559 8, 832, 281 2, 856, 700 Idaho 6,548 90 18,061 April 259,857 9, 300, 933 2, 900, 064 May Illinois 345, 641 2, 254, 495 1, 465, 508 250, 750 9.692. 263 3,068, 194 Indiana 1, 600 703, 032 905,171 rune 288, 979 11, 435, 742 3, 459, 928 2,002 Iowa 2, 705 94, 373 30, 055 Kentucky 130,300 580,450 770,317 Total 3, 099, 651 119, 930, 017 I 35, 233, 507 8,676 Louisiana 9, 592, 928 777,951 Maryland 1, 110 3, 499, 623 913, 706 Massachusetts 222,925 10, 877, 876 626, 917 1 Represents 35,196,731 pounds of hops and 36,776 pounds of hop extracts. Michigan 6,130 3, 501, 295 1, 754, 359 Minnesota 4, 688 3, 448, 644 978, 367 Missouri 73,240 9,457,099 3,682 397 TABLE 64.-Materials: Used in production of fermented malt liquors and cereal Montana 4, 359 452, 200 87, 280 beverages, by kinds and by States, fiscal year 1952 Nebraska 1, 158, 900 357,846 Nevada 673 8,090 [Pounds] New Jersey 52, 930 19, 779, 523 3, 028, 453 New York 244, 650 9, 400, 386 9, 930, 258 North Carolina 301,0323 19,188 Ohio 170,941 5, 761, 714 1, 717, 970 Grain and grain products Oklahoma 15, 553 16, 649 Oregon 17,400 289,114 108,593 State Pennsylvania 43, 798 32, 592,115 3, 096, 323 Malt Corn Rice Wheat Barley 90rghum Total Rhode Island 35,850 3, 066, 030 292,642 in gra Tennessee 107, 800 43, 490 Texas 780 88,300 655,444 Arizona Utah 100 64,380 5, 471, 800 993,550 792.900 10,000 7, 268, 250 Virginia 14,095 413,606 65,645 : California 153, 896, 768 48, 874, 230 18, 053, 930 220, 824.928 Colorado Washington 65,839 2, 701, 225 735,865 21, 783, 098 1, 527, 790 11,015, 095 34, 325, 983 West Virginia 3, 900 367, 519 26,330 Connecticut 3, 898, 640 995, 778 36, 500 4, 930, 918 Delaware Wisconsin 1, 289, 631 2, 627, 397 5, 383. 605 1, 352, 906 372, 800 41, 872 5, 400 1, 772, 978 Wyoming 16. 000 435, 900 20, 378 District of Columbia 3,481,760 1, 448, 900 1.000 4, 931, 660 Florida 10, 408, 795 3, 793, 640 5, 400 1, 000 21, 700 19, 230, 535 Total 3,099, 651 119, 930,017 1 35,233,507 8,676 Georgia 1, 635, 600 604,10 80, 200 2, 320, 600 Hawaii 2, 521, 007 511,698 461, 461 3, 494,126 Idaho 1, 734, 372 690,550 2, 324. 922 I See footnote 1, table 63, Illinois 112,220, 865 62. 480, 830 730,100 500 11,700 175, 461, 095 Indiana 71, 377, 957 31, 259.605 136, 000 102, 773, 062 Iowa 2, 332, 514 781, 400 3,113, 914 Kentucky 59, 402.450 21, 578, 725 9, 491. 700 85, 472.875 Louisiana 57,197, 269 17, 307, 000 8,189, 810 82, 694.079 Maryland 69, 861, 420 25, R94, 380 158,000 84,955 95, 988, 755 Massachusetts 43,051, 201 4, 231, 200 9, 715, 263 304, OW 10,000 52, 311,664 Michigan 133, 109, 801 61, 456, 990 8. 171, 390 500 202, 733, 681 Minnesota 83. 798, 996 26, 071, 087 7, 126. 767 116, 995, 350 Missouri 243,604,898 33, 364, 102 91, 206, 970 368, 175, 970 Montana 7, 011, 468 2, 389.400 83, 600 9, 484, 958 Nebraska 26, 599, 460 6, 995.200 5, 989, 421 39, 084,081 Nevada ... 800,100 811,450 New Jersey 219, 132, 244 76.021, 000 21, 456, 380 318. 609, 624 New York 346, 202, 456 142, 003, 579 36, 948, 832 2, 423, 235 51, 940 728, 150 528, 358,192 North Carolina 1, 503. 645 659,600 1,800 2, 165,045 Ohio 138, 506, 8M 51, 123. 567 14, 426, 174 356,900 404,883 204, 818, 420 Oklahoma 1,477.600 489,580 1, 967, 180 Oregon 11, 210, 950 2. 336, 100 1, 595.600 15.132, 650 Pennsylvania 241, 237, 977 70, 493, 164 10, 953, 893 2,834.3.50 20,700 __ 325, 530, 084 Rhode Island 22, 970, 550 8, 686, 320 95. 200 31, 752, 070 Tennessee 3,660,840 903, 500 699,100 21, 000 5, 2144, 440 Texas 57, 231, 295 21, 652, 090 5, 080, 600 69, 800 83, 933, 785 Utah 5, 755, 414 921, 255 818, 930 7, 495, 599 Virginia 4, 775,350 2, 214. 500 7. 019, 850 Washington 58,057, 765 23, 043, 343 3, 984, 344 13,520 85. 098. 972 West Virginia 1, 832, 800 664,3%0 2, 497, 180 Wisconsin 922, 655, 800 165, 292, 220 78, 559, 700 120, 030 666, 627, 750 Wyoming 1, 039, 900 125,900 82, 910 1, 248, 710 Total 2 653, 518, 877 920, 372, 813 337, 305, 542 6, 236, 085 802, 828 829, 650 3, 919, 065, 795

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Withdrawals Ztt V4 0s iA 3 , Tax-paid Fiscal year ended June 30— 3

Tax-free Grand total 5

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I 0 1 In bottles In barrels 0 and cans and kegs g7;ffelgtziggg6igagg4ci gsgF:sggigga EangiRgHigaMAR AltggiEn•ffp:igggggi iggit.e:xwgdsIesol ggirMIE=URC*FEni . iiEligengrieEtsgg gliKtggrsigt.;argigg Occat5igggagg EMERF 06tgtg RRREREPaggbirirg EI1001515MAIII .mr4.00';.,.,.s,.nglit.g -..wor-oo.F,A2sr,n?, Mlarltiltglialt: ScRoIR°48tzn , gl.Igggiegggtigg R'a .-Z ivA"flore.;EgLV,P81 Einali L'F.,egS4SOMF,A2a MUUMEERnceliqg at& RocSco il 4 r ,4 MIggran3aTiM, agnWiggliV -;. A 4 ' g 24RiRF3 4 - '.c.'-4'cie5ci3i'c5c56i6i3i•ic-s .0,0,- ScnSco - 2§Vaintign - ii:signgi - gEgRiniRE ceceSaiScicOO-TO .SE2F el aigiF3 - ggsg ..- E k .. - - July November September August TABLE Wisconsin Virginia New Jersey Illinois June April January December October Pennsylvania Missouri Minnesota Massachusetts Delaware Connecticut TABLE May March February 3 Representsnumberoperatedduringanypartoftheyear. Containing lessthanone-halfof1percentalcoholbyvolume. See footnote1,table68. Total Total 229047-53 68. 69. cereal beverages,'andplantsoperated,byStates,fiscalyear1952 - - Summary: Summary: State Month 16 Production, withdrawals,andstocksofcerealbeverages," Production, withdrawals,andstocksonhandJune30,of by months,fiscalyear1952 STATISTICAL TABLES

. Production [Barrels of31gallons] [Barrels of31gallons] 30, 328 7,030 2,780 6,819 8,275 4, 203 230 575 305 95 16

Withdrawals Production 28, 905 30,328 6,632 2,382 6,393 8, 212 4,188 3,096 3,307 2,070 2,176 3, 2, 4,055 2,737 3,162 1,177 1, 51.18 226 563 294 886 903 171 15

Stocks June30 Withdrawals 28, 905 3, 2, 2,041 2,990 2, 913 2,995 1,455 1.163 1, 1, 805 2, 513 3, 369 1, 969 615 461 675 525 175 558 591 30

Stocks endof which cereal transactions breweries at Number of occurred beverage month 227 2,063 2,495 2,190 2,191 2,165 1, 916 1,926 1,253 1,267 1,205 L 580 1, 969 1,969 2

11

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916' DE te S 1

EC tra g R E ERRS u

EFOCREIR Z£ 08 ' n mo - 011 R E E Eg g

) gg gggEgtof ce C ae 10

1 am ds on 471 1 .._

un C o ad c 13

TOO

190 ea it (p ln ' Sna gEE I o EE EgEREER re ERIEEEEE Ea ' k r '

hes n 4E F EE E ER Eggggg Fru .. ... r F, e g c t

1 ti e ae c e: ,, .,.6.4.4- ac 1 1 r.. Yor m 2 EV,: °' cg. .. 2-' A. Pe w ci a Ne 169 ' 0

sa 20

EEREg EEE 001 el idd MEP, R 'E. RE g g E a rsey

gRIgg ERg 731, .,, 4 y 2, ..7 Je ggrgR F. gi W4

w e a I Ne 291 ' 93 SO gidd I:

7 IERREEERFEEF

gEgagEggREg L m* 1 IT 1 E R E; 42,

le :5mIssIgg.d1,1 ' 7 y Gigangiai ..7 1 1

az 0

8, c

1w a 2 ewe. i 3.111 910

PRWaN§ ,... I MARE§Egm sm, e LOI g gggE geeegaegR ia EER EREEIE E ; E g ...

' 13

Grap a.4a.-7 ggiRgg g 1 g LEP

gt.ig tl liforn g‘r -- -

Ca 18 0

ERTEREEREFEE

s orr.:4.:eeagggegg e 032,

6fleom,..-=

Grap 7 .id.- gvgar-_ 117, 3, ,;:.

. 2 Ti $ Fi nal C h

t '' Mon l l

a a r m am. r ta r ta

er tii"Deni . er

bill.t ber be ry b b r be be t a To t To

er 1. ry m m h

c..0.01,A01M m h m s ary be m

b l c us il e u i te rc ,,,,,,, , .c.,-, ,..gmgmr..48..A4a,,,4!./ tem r ce to bru r ce to bruary ly ne ly Ap Fe Ma May Aug Sep Oc Nove De Jun Ju Janu Ju Aug Sep Oc Nove De Janua Fe Mar Ap May Ju -,:. 4 230 REPORT OFCOMMISSIONERINTERNALREVENUE Treatment of wines IL e C 0

Amelioration 0 O SD ;I pc- ▪ ▪ 5 • S O

81. 2 ' EgElElgg42E; gREIEURRSEg gg1000560 :71. .7.6creciegs-tadeece ag4d061446 AggNERNE4gA gE;;;;EMEEH4 ..4.4"-Taaaaaa-r-r,4 aggrWilig 4EEEEFE A2E REE4IREELERE a„Taie4,4aci.;4-T-4 ragVILMA 15411a44Mg ggElgAggAggE iggiding ggEliggREEE5 .4dgggga.raa-r-r gEERIEEggER REEMEEERgg - 4a844411 - a aaan cqfsgge a4gteaap:m 1E404E2Eg4 4 g iggaaa 41 o,tEtt „ 8t °Sn - 1 aaa - -1A-i - ga - -

ts L.; is, C-

TABLE 73.— Production: ta, by States, fiscal year

Production Treatment of wines

State Over 14 and Amelioration Fortification Blending Not over 14 not over 21 Distilling percent alco- percent Total ' materials 1 Grand total hol hol Wines u Resulting Resulting sed product Wines used product Wines used t R'n ggRE '4 gARE 0 EE Eggg 2-2 aaan ...a .Ugg '1 ;4; ' . 4_ .. 4 co , Ea- ERE g4g al STATISTICAL TABLES v ;2 2 22 2 2

' ; ua

. 1 n g 0 4 EggEgl gi A. "ir E4AE ' E4gR 'gr CAI HER 9R gEgg g a A a g . am 2 telqgq,8,” „gl.no rai g 0A ng '4;PERERIV-E1 ERREggEERREgggg '''IliW ERREgggigilEEEH gREg0 g ili ER2gFEEiggERE - 2 EU4 arABBBAAar„2 . - a, E G't PE: gEi 44E FA 41; 5 2 1 P41§RtEF. 4. E -

2 t .4 ° FIRgEr01 E ggiEggAgE A Att 4RiggiEll .4, n 4 -i g E - , 2 8S E4g ggt rd RE UE A 4E; , , a - 2 gg420 ,2L'ca- g - 8 2 " GR i5 24 4E. gE ED- A

E , ., , 2

s s 9 9 90 ' 4 3 9 soo soo ' ea wa ' za 91 91 N NO ' CD /1/ 691 ' IV ' ICE 62£ 988' 6' ' lt E 093 36 8 D E 919 ' 6 01 11 8 ' N O '

El, 113, 577, 073 RN $ A CI 4 a 8 14 .0 0-•8 S, BQ SA 0 A 5 a A S h t 5 , clo ■ s c 33 . ' a. 231

232 REPORT OF COMMISSIONER OF INTERNAL REVENUE STATISTICAL TABLES EMEA'ARFREJ eq REM RR'RM E iiIMEEEEER24E1 . 436 3 3 4.4ccc-.1e e a 4 eeeee e4444 se4 EgiagEaM 2 c .-. - -^& 2 -",-;BA Wt= 582, g 4sggggee444 .-7 6,

I ,15 37

2 55

EREEEEEEUEE 113 N N 1

66M9,11.6:4 g - § 575, A52 2. 354, 68 9

AIRREEREERRE eq 10i .1E1 FR ' „ 0, , .c 699 ' raggaalil .:are c.- 4 4asa4 a4 ,.F,FJ a 91 ..t7,2 g 0,21 nEr'44FEEPEr 241 10.;AS 4 of

0 . ls ls a a ts e,„. ssE s - 7, aw 612 .4g MEREHRERR PREPRE PARR

H 9, 1 hdraw it ithdr Ri w w g Fia 312 , AFEHFREiREE n al o2

free free .7 . . - 193,

230 Tax § Tax- gel WiRaRgREErg co _k REF...... % a0o q 2PEIggg2gg8Ra .. e 4ee s so W AO .5: 4211

agg4 105 eq FEEERER g g F . 993 eea aee 02.1.2 ..., - R c,f0R-t12.26 55£ ' MREEREEEr.ig it s 8- Rs .. E ei E E ..m 4 -1- g 15 5 . 3 w '-' RIE.3"ERIFSE 4.F.,,r,n1 t 859 REFMIEEFERE „, ..„...... n2tils 4 :.zs• .0 71,

. 2 W A -f I, I 732

MERPIEFERk R InEFEZERUMMEREEESRR3E2

sa -ee4eee—Rs 8,

gc 80 F EIMER gRnEssRsA-Essss sss. ti.°. t.■ 1,

12 1 '- -

ls ls a Elpflp, FR ,g8 ,45:- 0,7300;o1 hdrawa hdraw it it 151 ' -"I "' '' 8 R 58 E n.wmp; EsER;5E5ARE id w id w 4 a a 96

-p ggaa t O°. t t' E 2 R

EEMERE HEsasEsE vzs 4RR. '41 og76ag 00054 g .4. a 4a4 a ,. 4 e 4 3 Tax-p Tax ra424RWiRE44 REEORRREPEREEERWERERRRREEIR 29T' 0g 83

2g g 8 04R827,121.RR ga ^'-Wgigc- 8'°- E.4. e's'6 '-rgcict..—2 6L-4 m r,-.g27 1 4aaesseaeaaa 2.°' a 4 a e 4 22

.0

019 1

1 g 13 A 1k 3 ..E vl Kgd g44404 -dll-. 7,, F Et t g 14.0 2 o A., .0 .0 t,R24a48 5 &).° 1- 5 q,mr.taM-gad --oDtoNO-N.0, 0 allAA'AL-94. 3;s;55n31.0,t4 4kk 234

by months, fiscal year 1952 REPORT OFCOMAUSKONERINTERNALREVENUE

Withdrawals Stocks end of month 4

4 .

78 nd Over 21 and , Over 14 a

, , d

Month Not over 14 Fle

, , 1 30 3 11 e e , , 1 3 1-X1 001 not over 21 not over 24 Tax-paid 2 percent percent percent alcohol alcohol alcohol EMAMEHE g,2Fmtss.-n;m ee,reeeeexce..:_r_r REHP_RUagn 9.FIRREiMIN ea.,;,:eeeeeee•,: thL6gg gMlgglig sgasigpfteiggag MiggitiSig ERMEHEM gt EUEERAUEM gigggtagM EiTigiVagi .4214.46gaM EiiRMEREH ggesdgg --g4AgiR .....

July -;47,igtia4 August ...r.i..e. September 4 October ,, -ggy m_.

November 7 December griM January g;.. February , March ....7.1 , fe April r 6 ,

May ,

June 1VggE

' TOE 0 0 95 '09 '09

92$ ue ue l tag tag 4, 231, 998 Total 498, 391, 168

?I gAngERRIRgRnRR ot.ot..,.. mrFiclgrctrieg5e.

..t

TAB LE 77.— Summ ary : grAMFAMMURRIEELRE wines, and premises operated, by States, fiscal

MilggtftWi MilggtftWi gMlgggg gMlgggg

ea ea e a a e [Wine gallons]

Number of premises

Withdrawals Stocks June 30 1 operated

ms ms e 1.

Over 14 and Over 21 and Bonded

1 30

Not over 14 11 g g not over 21 not over 24 Bonded storerooms Tax-paid 1 Total percent percent percent wineries and Held alcohol alcohol alcohol warehouses ERRRRREMIRERaEURERRRERREM .... URRRWARREHMEREE: wigialgEEHRgO„RFMEn§gagiNgli FARli REMEH WitUtlig g,m24-6.004311 c486Ap7.8glaawazZoOgt?, tiff 1P ee RE gggggireagggP.Vg4gVg agggrggeOt MEM= cl:: Oggtg ads §En . - m . e .7 to crifl a g STATISTICAL TABLES , 1 :s. e F:. . "S'e : c - o 1 a e0c, gl.i ''i gg tis .

-.00c„

EE EE REgin.5.RgRROINEgRHE °RR gMnraPEARRREME.W.R

559' ' 659 659 g-t::^4tArd.77if gesg-.11 , 01gyr 6 6 ggaaggaggitgga c‘

r RR

3 3 Z1 903 903 '

' 38 5 3 3

A' ' 261

52 . L13 $ L13 aaaea

'

6

r

gOlg:4 6 ' 6 981 981 L1 11, 129

.„...—,—..„. 862 862 8 '389' sAV44

g R

g.

'633 '633 III III 3, 685

. e e0 31 ' 31 5 3 3 985 ' 985 3, 284

l'..74 KR,PMERRUll

88o

'198 '198 15, 828

s

t, cg., . 5 5 ' 663 ' le 3 3 75, 098

o.,

II II ' 1 L8 995, 351

,q

. as as !; s s %N 1 1

'9 858 Igg4"gg" Me

r

.4 , '963 '963 T8 T8 E 1, 820, 155 1

g

R I ' 29 5 ' 25

14 11, 035 0frig

141ffli : ,

jag411

63 63 '5 309 309 174, 956

g3

9 ' 569 ' TOE TOE 211, 050 ,,t

5 5 9 EL9 ' EL9 331, 911

°

02 L ' 86E 20

1 ' 386 ' OT T 28 aa

1.0

6 28 4 COE COE 319, 495 -0

".g-

o

1 42 $ 110L 110L 776, 455 ,

I, 350

: ,

389 6' 8 '0 E39 2 2 ZEL ' ZEL

00 8' ' Z 22 13T ' 808 g 7 lzg 376, 582, 436 116, 207, 742 235

238 REPORT OF COMMISSIONER OF INTERNAL REVENUE STATISTICAL TABLES 239

- TABLE 82. Summary: Production, withdrawals, losses, and stocks of aperitif wines s

d other than vermouth, by months, fiscal year 1952 ld use ises de fie ho m [Wine gallons] n d d re n Bo te a torerooms f p ware s o Withdrawals era

Product Stocks end op Month lion Losses of month ber VA PRFEI§Ealii5E-H3 Tax-paid I Tax-free Total gA

Num LC a July 32, 394 13, 381 108 13, 489 405 14, 273 August 12, 909 31, 872 6, 400 38, 272 46 88, 678 u. MRP:TIME.MEERFAi September 157 4, 593 11, 684 16, 277 222 72, 336 °a October 11, 991 14, 171 30 14, 201 74 70,066 .,o 'w 24,-,8;c P28R. 282. 20inS November 20,586 13,825 13, 825 88 76,760 December 702 19, 982 144 20,126 634 56, 642 ggKe ggg'igtigg... January 44,097 10, 523 42 10,565 74 90,040

February 29, 098 21, 828 21, 828 189 97, 123 ) March 30,969 58, 311 120 58,431 334 69,328 ,iM MUFAMER@ERERR 10, 822 45 58, 460 April 10, 822 llons May 20,356 7,563 7,563 241 71,011 a a0, WOMIMWEI77106 June 31, 872 11, 104 11, 104 324 91, 455 g .4-f, E.22 I. 744tgg364olgnagge.e.F4gtlj ine 1 Total 235, 131 217, 975 18, 528 236, 503 2, 654 91, 455 w n ( ls I Represents wines over 14 and not over 2 percent alcohol. Tax rates on and after Nov. 1, 951, 67 cents ia MiiMZIERPPLCIPn per wine gallon on aperitif wines other than vermouth over 14 and not over 21 percent alcohol before Nov. ter I, 1951, 60 cents. a 0, t3 MgH122HAnthS12P8 Represents 432 wine gallons removed for export, 18,084 wine gallons removed for use in the production m !:-.5grattfirl' of still wines, and 12 wine gallons removed for use in the production of vermouth. ---.. Il416 illing t

- Zs F rS' cS q 2° t-g TABLE 83. Summary: Production, withdrawals, losses, and stocks on hand June 30, dis .gib . „ ..H E_ R . of aperitif wines other than vermouth, and number of premises operated, by States, d Et. gWES:H§64

fiscal year 19,52 an [Wine gallons] .IZ S ggEIWAI ines

-...... ,c,,. ill w Withdrawals n ro V* 3 1 :7- 2f_ 71 q 'a 2 io

Number St Produc- Stocks of prem- t w '4='Pngiflg 7;

State Losses s occo,cwt..00t.,

Con June 30 !see oper- , Tax- duc Tax-free Total ated 3 Paid I Icit,fggflgggcla Pro

d California 1, 811 1, 254 18,084 19, 338 657 7, 579 s LI lno t_nra so tz".. 21 t l

Connecticut 1,000 1,000 245 7,580 ine 9 an ho

New York 1, 567 2, 755 12 2, 767 244 6, 741 ver 1 !:ZSZE2SWala lco 55 2, 210 ercen

Ohio t o ill w

a ,..r Pennsylvania 231, 753 212,966 432 213, 398 1,453 167,345 p St no Over Total 235, 131 217, 975 3 18, 528 236, 503 2, 654 191, 455 13 14 t l

r HVilliPM n

ho 4, 6e-scst.:occ7c-ej74/ I See footnote 1, table 82. ve

Represents wineries, bonded storerooms, and field warehouses that operated during any part of the year. rce 222'SP/O8g.,...S e lco t o a See footnote 2, table 82. P rgg.s:ggage No

0— 3

June d ble. de ta

ti n f e r

so d o ea n l y t e

tC ca Fis Gc M 5E61 1261 to 98 82 6E61 Ota 31 9461 SPST 646 00 7 T111 PPP LtS 461 , o 6T 6T 61 IT l l T 1 1 (

240 REPORT OF COMMISSIONER OF INTERNAL REVENUE STATISTICAL TABLES 0.0,0m 241 tiN El 4 TABLE 85.-Summary: Materials used for the production of ethyl alcohol, distilled P, 04 a spirits, fermented malt liquors, and vinegar, by kinds, fiscal year 1952 1 g E gmtc6.6 Vinegar plants co3135. Industrial Kind alcohol Registered using the Total a distilleries B-mw enes. vaporizing 0. ca qig.gg Plants process "ts 0 A tl Grain and grain products: Pounds Pounds Pounds Pounds Pounds iK Malt 80, 630, 692 214,016, 256 2, 653, 518, 877 731,866 2, 948, 897, 691 a Corn 414, 938, 805 1, E9, 933,179 963, 372, 813 6, 397, 240 2. 551, 142,037 8 Sorghum grain 420, 863, 405 217, 429, 503 829, 650 Ed id gag: 639,022,556 Rice 615,140 337, 305, 612 337, 923, 682 Rye 186.244 235, 095, 095 692, 744 235, 974,083 Wheat 70,-609, 716 45, 775, 941 6, 236, 085 122, 621, 742 n o Mixed grain 64, 432, 333 35, 866, 973 100, 299, 306 t- Barley 802,828 802,828 o Total 1, 052, 276, 335 1, 957, 616, 947 3, 919, 065, 795 7, 821, 850 6, 936, 780, 927 .^cs Sugar and sirups 83, 223 119, 930, 017 51, MO 120. 064, 840 P" Ethylene gas 69, 499, 741 69, 499, 741 :1 4 .22.'s 22- -9 [2" ,f Hops and hop extracts 35, 233, 507 35, 233.507 Soybeans and soybean prod- zoogPi ucts 3, 099, 651 3, 099.651

Other materials 2, 312, 159 232, 870 8, 676 72, 363 2, 626, 068 ,0 a> ) a cs Galknis Gallons Gallons Gallons Gallons llons :2 ZEMERESHUM Sulphite liquors 254, 882,400 a 264, 882, 400

F02 g Ethyl sulphate 168, 020, 007 168,020,007 g0:611:401VAg Molasses 158, 354, 091 2, 447,111 1, 536, 210 162, 337, 412 oC) ine Other materials 68, 359, 893 684, DO .69, 044,193

g (w 4 Products used in redistilla- Proof gallons Proof gallons Proof' gallons Proof gallons Proof gallons h t EMARMREEgiEU tion 22, 209, 754 15,876, 693 38, 086, 447 V ad ce Exclusive of materials us d at fruit distilleries for the production of brandy and spirits-fruit and at oe; Vermou wineries for the production of wine. tra 3 =,.:. R5'NZERE§..1Mg6 XI. VINEGAR U 0 giWdOikggiM [Produced by vinegar plants using the vaporizing process] --4wacdwet-raciciw o TABLE 86.-Summary: Materials used at vinegar plants, and production and stocks 0 ti °#1, 22 ';II R'KRRR2SSS244.t.R of vinegar, by months, fiscal year 1952 0 o Materials used O c4 a Month Grain and grain products ]. i VIIHNMMEUM Citrus waste 5 Molasses ll-p concentrate acqgAR2c.a,Igg.12g0Eg Corn Rye Malt ata

3 5

Pounds Pounds Pounds Gallons Gallons rs. ines 4,3 Mif§g g July 530,000 60, 480 64,800 125, 391 88, 575 a iMOinni te w 0 August 170,000 19,040 20,400 132, 157 72,175 ragala06ggiclOgg September 245,000 27, 440 29,400 121,902 67,400

rmen October 330,0011 36, 960 39, 600 130, 546 76,800 kling ... ,, M22Bc1S4g1 November 375, 000 42, 000 45, 000 96,202 73,375 fe ar B December 500,280 57,672 60,440 112,065 51, 650 Sp 56 3i2UREMERFUH January 723, 952 80,192 82, 234 160,061 57,375 February 793,488 84,800 88, 312 119, 721 58,775 d from 0. March 825,760 84, 648 95, 048 103. 182 92, 075

ove April 740, 760 78, 512 81, 368 142, 145 8,900 a May 586, 640 60, 798 62, 686 148, 066 37, 700 Rine 576, 360 60,202 62.578 145, 272

0 A s o Total 6, 397, 240 692, 744 731, 866 1, 636, 210 684,300 a a, cc 7,28.

spaNam oo ai !II 411MEgiNtikEHOR oPa

STATISTICAL TABLES 242 REPORT OF COMMISSIONER OF INTERNAL REVENUE XII. VOLATILE FRUIT-FLAVOR CONCENTRATES TABLE 86. - Summary: Materials used at vinegar plants, and production and stocks of vinegar, by months, fiscal year 1952- Continued [Produced by concentrate plants]

Materials used-Continued Vinegar TABLE 88.-Production: Volatile fruit-flavor concentrates, by kinds and by months, fiscal year 1952 I Month Stocks end Chemicals Cane sugar Production of month [Wine gallons]

100-grain 100-grain Month Grape Apple Cherry Berry Other Total Pounds Pounds gallons gallons July 5,474 891,112 1, 225, 738 1,965 cr 151 July 4,724 16 231 . 4 August 6, 637 841,165 I, 090. 264 132 August 12,478 11 2

845,948 618. 262 -1Ehliflri September 7, 318 25 - 8, 072 8666,390 727, 144 September 55, 384 g—t -October October 108,852 10 3 35 November 5, 819 693, 822 811, 659 November 474 7 3 44 - December 5,364 642, 145 967, 746 3 Deeember 4 as• January 6,137 654, 482 I, 098, 061 49 January 1,466 49 -s February 5,086 675, 428 1, 251.088 Febry 4,962 5 75 2 g March 5,088 788, 363 1, 494, 741 1 March 25,554 41 lug April 6, 498 42, 900 757,420 1, 569, 269 1, 669, 596 April 26, 759 9 21 May 5, 979 8, 700 837,052 10 5 4, 891 834, 286 1, 678, 730 May 44,505 June June 48, 261 4 453 5.823 72, 363 51, 600 9, 327, 613 1, 678, 730 Total Total 333,439 2,837 166 8 976 7 7,894 345,312

I Represents operations under Regulations 30. Volatile Fruit-Flavor Concentrates, effective Sept. 27, 1949. TABLE EL - Summary: Materials used at vinegar plants, production and stocks of Represents 519 wine gallons of strawberry, 287 wine gallons of raspberry, 105 wine gallons o elderberry, vinegar, and premises operated, fiscal years 1943 to 19,52, inclusive and 65 wine gallons of blackberry. 8 Represents 5,824 wine gallons of pineapple, 1,965 wine gallons of currant, 79 wine gallons of Odom, 25 Materials used wine gallons of plum, and 1 wine gallon of peach. XIII. CLAIMS Fiscal year ended June 30- Grain and grain products Molasses TABLE 89.-Claims for redemption of stamps and remission, abatement, and refund of taxes, fiscal year 1952 Corn Rye Malt Wheat Other

Redemp- Remis- Abate- 11 l- Pounds Pounds Pounds Pounds Pounds Gallons Refund ib Total Total Con of S on ment f tax es 1]edible number amount 1943 13, 703, 436 952, 050 2, 149, 426 65, 374 96, 000 4, 048, 706 stamps of taxes of taxes o taxes 1944 4, 064, 120 933, 920 1, 378, 186 5, 767, 582 2 10, 865 5, 438, 244 1945 7, 587, 069 892,104 1,370,059 1, 401, 731 5. 178, 148 1946 3, 826, 424 872, 292 1, 172, 477 3, 795, 255 346, 851 5, 331, 935 272 19 24 707 46 1,063 $778,519 5, 483, 613 On hand July 1, 1951 1947 8, 441, 974 981, 826 1, 334, 799 735,445 Received during year 1,459 706 328 6, 834 9, 327 8,902, 767 1948 8, 472, 182 951, 180 1, 053, 847 5, 770, 950 Reopened during year 13 1 8 1 23 27,053 1949 8, 396, 560 950, 634 1, 026, 640 5, 877, 515 2,902, 107 1950 7, 994, 000 896, 230 912, 970 Total 1, 744 720 353 7, 549 47 10,413 9, 708,339 1951 7,195, 000 807, 900 867, 950 1, 603, 892 1952 6, 397, 290 692, 749 731, 866 1, 536, 210 Allowed 1,443 584 126 6,076 34 8, 263 7, 906, 839 Rejected 137 128 64 152 6 487 418, 203 On hand June 30, 1952 164 8 163 1,321 7 1,663 1,313,297 Materials used-Cont* nued Vinegar Number Total • 1,744 720 353 7,549 47 10,413 9,708,339 Fiscal year ended of plants June 30- Stocks operated Yeast mash Chemi- Other materials Production beer cals June 30 TABLE 90.-Claims for drawback, fiscal year 1952 100-grain 100-grain Gallons Pounds Pounds Gallons gallons gallons Products exported 1943 10, 287, 191 17, 559 80,1300 s 1, 210, 946 22,126, 578 3, 065, 621 18 1949 14, 045,890 16, 271 24, 516, 355 3, 521, 233 15 Distilled spirits used 1945 19, 907, 360 20,914 24, 755, 614 4, 264, 553 15 in noobeverage Distilled spirits and Distilled spirits ex- 1946 22, 036, 550 24,759 25, 235, 255 3, 014, 634 13 products wines bottled es- ported in original 1947 21, 187, 375 38, 073 23, 933 26, 855, 444 3, 588, 247 11 pecially for export packages 1948 6, 790, 400 46, 662 7,358 259, 861 24, 816, 502 4, 428, 397 11 1949 4, 829, 034 42, 467 153,440 6 404, 473 25,417, 460 2, 877, 138 11 1950 2, 571, 450 47, 648 14, 448, 276 1, 448, 877 10 Number Amount Amount Amount 1951 20, 000 is 300, 574 8, 884, 283 1, 251, 984 8 1952 72, 363 51, 600 684 300 9, 327, 613 1, 678, 730 8 On band July 1, 1951 3207, 995 2, 614, 674 Barley. Received during year Oats. 2, 822, 569 2 Represents 273,556 pounds of barley and 73,295 pounds of oats. Total 4 Corn sugar. 2, 162, 528 s Corn sirup. Allowed 30, 937, 199 Rejected 56, 311 16, 222 Citrus sirup. 2, 513, 109 643,819 7 A molasses product. On hand June 30, 1952 s Represents 254,311 gallons of citrus waste concentrate and 550 gallons of cane sirup. Represents 125,890 pounds of corn sirup, 26,550 pounds of raw sugar, and 1,000 pounds of hydro]. Total 4, 025 33, 506, 619 4,223 2,822, 589 6 Citrus waste concentrate. o Cane sugar. 229047-53-17 244 REPORT OF COMMISSIONER OF INTERNAL REVENUE STATISTICAL TABLES 245

TABLE 90.-Claims for drawback, fiscal year 1952-Continued XV. ENFORCEMENT, ALCOHOL. AND TOBACCO TAX DIVISION TABLE 92.--Enforcement, Alcohol and Tobacco Tax Division:I Seizures and persona Products exported- Continued arrested, by months, fiscal year 1952

Seizures Alcohol used in Ea- Stills exported Total voring extracts and toilet and medici- Noretax- Non-tax- Persons nal preparations Month paid arrested distilled 1,121 Mash Property Stills wines Auto- spirits (wine mobiles Trucks (appraised (wine gallons) value) . Number (wine Amount Number Amount Number Amount gallons) gallons)

On band July I, 1951 96 $95, 055 1 $22 407 4760, 766 July 776 13, 792 . 4 Received during year 681 846,522 2 88 8,621 36, 510, 109 409, 803 145 39 $184,999 809 August 783 13, 495 5 353,966 124 ao 191,594 767 September 785 12,043 Total 777 941, 577 3 110 9,028 37, 270, 875 177 458.323 116 49 209, 653 720 October 901 12, 598 35 462,843 148 42 191,853 811 November 711 10, Allowed 709 846 657 3 110 8, 135 33,948,494 696 81 432,180 104 35 177, 645 613 Rejected December 825 11, 158 236 511, 366 142 45 240, 681 874 304 32 72,837 January 996 On hand June 30, 1952 68 92, 616 861 3,249,644 13, 798 198 570, 386 127 39 234, 709 909 February 944 13, 396 154 569, 779 144 67 330,120 934 March 977 21 Total 777 941,577 3 110 9,028 37, 270,875 13, 929 532,880 122 47 227, 373 1,015 April 969 16, 681 520 537, 386 162 44 289,118 849 May 804 IA 480 212 481,671 148 59 325, 597 781 June 798 13,672 138 378, 016 142 59 213, 690 769 XIV. LABEL ACTIVITY Total 10, 269 160,738 1, 781 b, 700, WO 1, 624 559 2, 817, 032 9,851

TABLE 91. -Label activity under Federal Alcohol Administration Ac , fiscal year 1952 Includes seizures and arrests in cases adopted, as well as originated by the Alcohol and Tobacco Tax Division. Does no Include seizures and persons arrested in cases arising out of violations of laws relating Applications received to tobacco after the transfer on Nov. 13, 1951, to the newly designated A cohol and Tobacco Tax Division Certificates issued Applica- (formerly Alcohol Tax Unit) of functions concerning such laws, as follows: Property seized, valued at 346, and 1 person arrested. tions Total For For Exemp- dLsap- Includes 881,267, representing the appraised value of 32 automobiles, 8 trucks, and 1,575 wine gallons of approval exemption Total Approvals dons proved tax-paid liquors, seized for violations of the Liquor Enforcement Act of 1936, and the value of 12,394 a cne gallons of tax-paid liquors seized for violations of other internal revenue laws. In addition as a res ilt of floor stocks tax evasion, there were seized 16,313 wir e gallons of tax-paid distilled spirits, 24,441 wine gallons of DISTILLED SPIRITS tax-paid wine, and 45 wine gallons of tax-paid fermented malt liquor, valued at a total of 8941,575.

Domestic 9, 990 93 10, 083 9,176 83 212 9, 471 Imported I, 192 1, 192 1, 210 70 1, 280 Total 11,182 93 11,275 10,386 83 282 10,751 WINES

Domestic 13,184 193 13,377 12, 769 165 234 13,168 Imported 7,642 7, 642 7,137 192 7,329 Total 20,826 193 21,019 19, 906 165 426 20,497 MALT BETERAOES

Domestic 1,118 1,118 1,012 21 1,033 Imported 163 163 139 9 148 Total 1, 281 1, 281 1,151 30 1,181 Grand total 33, 289 286 33, 575 31, 443 248 738 32,429

246 REPORT OF COISANOSSIONER OF INTERNAL REVENUE

TABLE 93.-Enforcement, Alcohol and Tobacco Tax Dirition: 1 Seizures and persons arrested, by States, fiscal year I952

Seizures

Non-tax- Persons /Maki paid dis- Nell-tss- Property arrested tilled Paid Mash Automo- Stills spirits wines (wine bil es Trucks (app (wine (wionsne rl gallons) value) 2

gallons) 1 via Alabama 1,613 13,509 709,709 175 2294,576 Arizona 3 1 77 1 500 Arkansas 66 944 '25,015 19 29,012

California 7 290 430 750 19 12,038 ,--w Colorado 1 1,500 Connecticut 4 144 190 7,295 2,100 Delaware 2 262 5,040 3 1,623 2 675 District of Columbia_ 1 105 w- 87 176,109 Florida 304 9,813 394,213 a 354,598 Georgia 1,774 33,661 165 960,825 184 Hawaii 4 4,840 70 Idaho 2 96 100 1 n 300 27,346 Illinois 4 8 2 n- Indiana 19 121 765 3 1,440 2 1,600 Iowa r Kansas 3 8 36,661 mEnm Kentucky 527 3, 706 17 89, 565 44 104,949 Louisiana 9 62 1,030 4 6,092

Maine 1 am Maryland 70 1,190 122 32,541 14 16,850 TOBACCO 2,978 Massachusetts 9 49 3,550 2 m2 Michigan 12 313 260 3, 550 6 9, 785

2 2 145 l Minnesota iwo- 208,458 Mississippi 651 8, 544 394,280 123 Missouri 3 14 29,440 Montana 1 M Nebraska ” Nevada 10 TABLES 94-111 1 1, 987 New Hampshire 1 335 1,300 v New Jersey 45 934 159,001 10 192,435 New Mexico 1 1,300 ii- 46, 129 35 347,027 New York 40 5,175 3 a North Carolina 1,600 27,515 902,820 256 347,027

North Dakota 5 N 6,285 Ohio 17 193 150 7,318 5 r Oklahoma 209 1,795 67,318 79 111,577 1,656 4 40 127 1 i

Oregon I 111,656 Pennsylvania 105 2,485 4 68,802 66 -

Puerto Rico ppsi South Carolina 1,168 14,078 511,405 154 192,976 'Tennessee 1, 172 14, 122 1 542, 270 121 192,976 Texas 56 233 9,805 22 31,262 Vermont 3 58 107 5 647 rr" Virginia 648 20,112 332 668,189 147 141,847 Washington 6 114 2,3 4 7,440 West Virginia 115 709 12,603 3 7,440 Wisconsin 2 Wyoming

Total 10,269 1110,738 1,781 5, 700,599 1,624 559 2,817,032 9,851

See footnote 1, table 92. I See footnote 2, table 92. 248 ta " ro ti 4 ti S A , tl e PI a O cg C? 0 11) )

Dealers in leaf to Leaf tobacco exported by dealers Leaf tobacco received from farmers by i- bacco REPORT OFCOMMISSIONEIRINTERNALREVENUE 4 4 tr 4 t

.64

boos

lig

E

L 1 1 1 11

District 0 .4 S S A affIe 1 1 1 0 oE 0g4 r 13 f f f fa lI Sd fc! fc! tsu mmo pa ts ame g U pec a 1 S Dealers in 0 -. . - g : i Ir . leaf tobacco l n

ig a. 1 4 4; 0. 0. I 0. 1 z 1 2. rs-gs0 ix. g t g

; R 4N.garr. Agail1:AsgRAUtRA4wrtPstal lael04.p4glithihzztat,02-LW

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stj EE e az; g' I''" e 0 e" 't4 m------,2 ,2 P - '. 4 1 1 g siltergas° -""."" - S 4" RE g a seVz Pi E 1 ,j, 1 . :

g ,a, 2 gc° M RAI e4010, Nr. S Eg ee 0 §1 co. ga m ciir e-r .R8 il 'St --: : : : ggai mY. I r fl 1504 4° EREREARER

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STATISTICAL TABLES 249

250 REPORT OF COMMISSIONER OF INTERNAL REVENUE STATISTICAL TABLES 251 aOr tag T1

5' Mk ts d 4MIEREMU_ m_Rg1 .12 ",""nimcoi- erigt ..= 3.. M740 of UOV 691

i .51g1E51E-EENREENEE3ERRERRRNFREgigE gr un o t gii.gtir: 546-

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no ' £2 51 seN 86 42 5 move Imo 112

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252 REPORT OF COMMISSIONER OF INTERNAL REVENITE STATISTICAL TABLES 253

TABLE 97.-Quasi tobacco manufacturers classified: Number of factories operated TABLE 97.-Quasi tobacco manufacturers classified: Number of factories operated and tobacco material handled, calendar year 1951 and tobacco material handled, calendar year 1961-Continued

Number On band Jan. 1, 1951 Number On band Jan. 1, 1952 of fare of fee- Class torles in tories In business Class business Jan. 1, 17nstemmed Stemmed Scraps In process Stems Sittings Jan. 1, Unstemmed Stemmed Scraps In process Stems Siftings 1951 1952

Pounds Pounds Pounds Pounds Pounds Pounds Pounds Pounds Pounds Pounds Pounds Pounds 1 4 53, 666 5 54, 967 2 42 4, 965 67,433 305 2 36 44,183 162, 364 11 a ZI 610, 114 137,654 341; 761 56, 984 91, 620 8 22 1, 227, 078 117, 985 842, 555 80,815 4 27 2,205, 788 14,312 1,072, 573 2, 348 380, 950 150, 693 4 30 1, 676, 952 2, 654 1.080,832 2,398 306,600 5 4 2, 444 14, 204 86,180 2, 5 39 4 138 4, 137 3,413 34, 841 264, 723 6 9 149 69, 424 14, 877.448 3, 282, 177 6 6 560 530 951 17, 863, 664 3,494. 221 7 27 2,911, 291 24,882 I, 507, 515 6,636, 409 473, 233 3, 650 7 28 2, 437,453 11, 466 1, 602, 657 7, 534, 114 674, 466 137, 651 8 18 292,685 8 15 344,167 9 2 1,200 9 2 600 Total 166 5, 732„ 257 469,543 8, 109,816 6,711, 145 15, 899, 431 3, 439, 314 Total 148 5, 386, 364 476, 805 3, 647, 963 7, 621, 290 18,879, 571 3,897,314 Loss 34, 677, 888 17, 577, 917 1%869, 834 Opened Received Gain 606, 639 17, 177, 118 14, 685, 077

I 280, 639 & Description of classification: Class 1, dealers in imported scrap tobacco; class 2, dealers in domestic 2 39, 787 7,081 470, 434 14,180 scrap tobacco; class 3, dealers in imported and domestic scrap t bacco; class 4, producers a scrap 0ller 3 2 22,423,076 7, 753, 304 9, 049, 324 3, 201, 528 9, 450 29, 027 tobacco; class 5, reclaiming scraps from stems; class 6, manufacturers of fertilize, insecticide, nicotine, etc.; 4 4 16,096,927 19, 506 384 12, 232, 425 1, 594, 682 dams 7, storage, scraps, etc.; class 8, growers of, and dealers in perique tobacco; class 9, miseellaneous. 5 918 6,163194, 757 3, 299 1, 651,139 16,082 2 Grown. 6 12 429 183,106 1, 870, 954 199, 240, 589 36, 989, 074 Transfened to registries. 7 2 24,071, 743 267, 437 7,608,428 7, 684, 028 9, 764, 807 1, 151, 106 Used in production of nicotine, extract, and fertilizer. 8 + 16,249 248,161 & Exported. 1 1, 400 97,271 9 3, 115 Total 13 62,1562, 524 8,575,860 23, 887, 921 10, 891, 968 222, 899, 410 39, 794, 157

Closed Removed

1 278, 088 2. 9 371, 269 15,184 3 3 14,850,071 384. 678 16, 669, 559 96,700 419, 260 4 1 47,851 3,359 16, 661, 417 4, 205 12, 710, 271 2, 607, 518 a 379, 656 32, 074 1,412,983 18. 872 e_ 3 (33 49, 978 2,357, 572 314,374 111, 678 1,586 983,911 184, 763,065 22,011, 518 7 I 18, 920, 932 274,054 6, 134,514 24, 626, 816 1,011,392 1,079, 599 +39,951 8 4 & 271, 615 9 3,715

Total 21 28, 330, 482 175,243 40, 526, 892 24, 666, 900 262,351,353 26,468,823

Bee footnotes at end of table

254 REPORT OF COMMISSIONER OF INTERNAL REVENUE STATISTICAL TABLES eti 52 tau 1

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256 REPORT OF COMMISSIONER OF INTERNAL. REIVENUE STATISTICAL TABLES 257 689 t

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258 REPORT OF COMMISSIONER OF INTERNAL REVENUE STATISTICAL TABLES 259 HE 2 oo 60 73 OS d 55 80 80

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E-1 r Fi Firs Sec Thir Four Nor Te Eig Firs Tw Virg 229047-63----18 REPORT OF COMMISSIONER. OF INTERNAL REVENUE STATISTICAL TABLES 261

TABLE 1 02. -Czgarettes weighing more than 3 pounds per thousand: Quantity of A calendar year 1951, id 4 tobacco used, number of cigarettes manufactured and removed, a I 8 16 by collection districts

d tax-p Cigarettes weighing more than 3 46 Tobacco used pounds per thousand 2 as Remove Removed !ikis 1 District Scraps, cuttings, Manu- Unste mmed Stemmed Without and factured Payment clippings of tax Tax-paid Se for export ee RE "f• :481 6 Pounds Pounds Pounds Number Number Number First New York 292 895 263, 940 5,000 258,940 0 Second New York 100 927 65 269, 050 3, 600 267, 730 0000 Third New York 5 500 600 North Carolina 161 90,900 90,900

S Virginia 1,060 241, OOD 11,090 230,000 a 66 § OE 1, 822 1,125 815,390 19, 600 798,070 f tax tqa rice Total, 1951 558 Total, 1950 826 2,097 88 685,920 16,150 671,780 t o

n mm Increase 1,037 129,470 3,450 126,990 me Decrease 268 275 00 ay 6 2 t p

434, 6 6 Average quantity of leaf tobacco used per thousand large cigarettes, 5.5 pounds.

hou None.-The number of factories in business is Included in table 101. it 513, t 1, d w e 2g TABLE - 103.-Leaf tobacco used in manufacturing cigars, cigarettes, and tobacco and b 000 1 snuff, calendar years 1947 to 1951 1 Ni S S Remov S 41 LEAF TOBACCO USED Cl Cigars Cigarettes

WWeighing Tobacco and Year Weighing not more .„,.. - Weighing not snuff Total more than 3 than 3 ne n' "e- more than 3 ei sds . 3 poun pounds 8 m 2 pounds per pounds per thou- n" thousand I per thou- • sand- and thousand

Pounds Pounds Pounds Pounds Pounds Pounds 1947 135,028, 366 309,472 2,785 1, OM, 591,192 164,184, 731 1,355,116.546 1948 139, 465, 561 367, 340 3,263 1, 099, 173,092 161.092,053 1,400,091,309 1949 124,842, 632 330, 787 3,837 1,096, 150.593 161,019, 845 1, 382,347,694 1950 127,134, 693 274,865 3, 739 1,106,064 292 159, 878,374 1, 393, 354,8E4 1951 129, 546,010 272, 576 4, 487 1, 184, 628, 490 150, 210, 581 1, 454,662,199

The quantities given are unstemmed equivalent of all kinds of tobacco used. Stemmed I of and scram, etc., used in manufacturing have been converted to unstemmed equivalent at the ratio of 3 pounds stemmed, etc. to 4 pounds unstemmed. Does not include tobacco used in bonded manufacturing warehouses.

.8 8

1.12 Sri Z>U, gg EQ St Y,>,z4 0 0:2 - tgitoWlzae4g WI fl )vq0011:4$ ??, tg ou„,grzA5c, e S...RW4igt 401 44

264 REPORT OF COMMISSIONER OF INTERNAL. REVENUE STATISTICAL TABLES • 265

TABLE 107.-Domestic and imported cigarette papers and tubes withdrawn tax-free and tax-paid, fiscal years 1951 and 1952

'0 0 Cigarette papers Cigarette tubes Tax-free packages, Tax-paid packages, Fiscal year books, or sets books, or sets Tax-free Tax-paid

Domestic Imported Domestic Imported Domestic Imported Domestic mported ro Number Number Number Number Number Number Number Number 1952 517. 272, 863 64, 881.599 328 000 115, 734, 260 5, 573, 200 52 1951 538, 549,376 78, 259, 630 296,000 9, 717,400 7,468,300

sik TABLE 108.-Withdrawals of manufactured tobacco, snuff, cigars, and cigarettes 0 from bonded internal revenue tobacco export warehouses,' for expor , year ended June 30, 1952 E Withdrawn Tax-paid or from ware- ti Class of product houses during Exported returned to year factory

Tobacco and snuff pounds. 2 2 Large cigars number_ 1, 350 Small cigarettes do 19, 132, 400 19, 147,400

2 There were 3 such warehouses in operation at the close of the year.

TABLE 109.-Withdrawals of manufactured tobacco, snuff, cigars, and cigarettes Fa. from factory in bond, for shipment or delivery as sea stores, year ended June 30, tI 1952

Withdrawn Delivered to Tax-paid or Class of product from factory sea stores Delivered to returned to during year warehouses velssse factory

Tobacco and snuff pounds__ 93,650 89.56E 353 88 Small cigars number__ 16, 000 21, 000 9.000 Large cigars 1 do_... 4, 740, 700 4, 741, 950 7, 500 27.500 Small cigarettes do__ 4,048, 128 880 &18Z551,640 1, 510,000 10, 752,040 ti Class C, 435,000; class D, 14,500; class E, 4,167,600; elms F, 119,000; class G, 4,600 cigars.

TABLE 110.-Withdrawals of manufactured tobacco, snuff, cigars, and cigarettes from tobacco sea stores warehouses,' for shipment or delivery as sea stores or export, year ended June 30, 1952

Withdrawn Delivered 4. from ware- Tax-paid or Class of product houses during returned to To vessels for factory I V year sea stores For export OV O Tobacco and snuff pounds__ 9 181 65, 722 28, 358 Small cigars number__ 21, WO W. 000 9, 000 Large cigars d0- 4, 991, 450 2, 995, 350 2, 024 700 Small cigarettes do__ 4,141, 421,980 8, 736, 207,740 412,600,920 0 Cigarette papers booklets__ 75,000 75,000

a o There were 47 bonded internal revenue and 16 Navy warehouses in operation at the dose of the year. 04 f Figures include tobacco, cigars, and cigarettes destroyed at the warehouses. 41

266 • REPORT OF COMMISSIONER OF INTERNAL REVENUE

TABLE M.-Exportation in bond of manufactured tobacco, snuff, cigars, and cigarettes, etc., year ended June 30, 1952, by collection districts I

Manufactured tobacco Cigarettes weighing not more than 3 pounds and snuff per thousand 5 District Removed for Tna Removed for Delivered to exportation Exported-- exportation Exported export ware- houses

Pounds Pounds Number Number Number First California 54, 665 55, 039 First Illinois 35, 752 35, 617 Kentucky 619, 711 642, 931 325, 502 380 347, 630, 380 4, 400 First Missouri 1, 217,149 1,107, 388 85, 533, 590 98 002, 390 Fifth New Jersey 235, 879, 600 248, 472, 600 First New York 1, 358 I, 358 1, 981,180 4, 326,180 Second New York 139 139 7,925,480 7,892,480 14,165, OW North Carolina 854,176 893, 894 13, 429, 910, 980 13, 793, 203, 380 First Ohio 192, 752 213, 576 Tenth Ohio 432 432 First Pennsylvania 256, 805 256, 673 1,117,372,6801,117, 1, 138,097,600 Tennessee 3, 662 8 562 Virginia 3, 247, 747 5,428,00328 17, 949, 535, 200 18,030, 804, 880 9 962 000 West Virginia 27,992 27,866 5, 910, 000 670,000 Total 6, 512 240 6, 66$ 478 33,154, 551, MO 33, 666, 099, 810 19,131,40019,131,

Cigars weigh ng more Unmanufactured than 3 pounds per Cigarette Paper books I thousand I tobacco materials District Removed Removed Removed STAMP TAXES for expor- Exported for expor- Exported for expor- Exported tation 4 tation tation

Number Number Pounds Pounds Number Number First California 5, 863 5, 863 TABLES 112-116 Sixth California 15, 250 42, 750 Connecticut 3, 520,140 $, 210, 800 Florida 18, 662 615 18,300,215 3,679 5,359 Indiana $100 8,100 Louisiana 24,110 19, 804 Massachusetts 20,000 2.000 8 860, 884 8 768, 044 Michigan 25, 500 10, 500 First Missouri 125 125 New Hampshire 10, 900 400 First New Jersey 264,800 215,080 Fifth New Jersey 1, 903, WO 1, 872950 54, 992 65, 014 Second New York 21, 282 21, 282 10, WO 15,800 Third New York 5,000 5, 000 120 Fourteenth New York 28,500 17,580 North Carolina 109 015 W, 805. 400 35,336,6803$33$ Tenth Ohlo 146, 000 128 000 First Pennsylvania 31,460,200 33, 875, 950 94$192 868 669 Twelfth Pennsylvania 20,053, 000 20, 553, 500 3, 579 14, 344 South Carolina 8 598,000 8644,000 Tennessee 74.865 W.480 Virginia 1,533,200 1, 582 700 375, 866 375, 666 West Virginia 1,000 6, 250 Total 77, 674,465 80, 279, 065 1, 518, 718 1, 573, 621 66,197, 224 50, 326,244

I Tax-paid or returned to factory, or destroyed after removal and prior to exportation: 319 pounds of tobacco and snuff, 11,569,120 small cigarette , 1,000 large igarettes, and 29,500 large cigars. Cigarettes weighing more than 3 pounds per thousand: 25,500 removed for exportation, 24,500 exported. I Cigars weighing not more than 3 pounds per thousand: 332.000 removed for exportation, 332.000 exported. 4 class A 90,000; class B, 218,000; class C, 25,353,620; class D, 1,797,670; class E, 49,495,900; class F, 5.15,700; class G, 203,575 cigars. I Cigarette tubes; 108,933,000 temoved for exportation, 110,433,000 exported.

268 REPORT OF COMMISSIONER OF INTERNAL REVENUE STATISTICAL TABLES 269

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STATISTICAL TABLES 275 274 REPORT OF COMMISSIONER OF INTERNAL BIDVENUE of internal revenue stamps issued to collectors of internal TABLE 113.-Production and withdrawals of renovated butter, year ended June SO, TABLE 116.-Summary 1962, by collection districts revenue and the Postmaster General during the fiscal years 1951 and 1962

On hand On hand Quantity Value District July 1, Produced Withdrawn Lost or June 3 1951 tax-paid destroyed 1952 13, Kind 1951 1952 1951 1952

Pounds Pounds Pounds Pounds Pounds 425, 665 Alabama 792, 676 808,110 410, 231 Liquors: WM, 830, 612 Georgia 26.372 304,296 306,918 23,750 Distilled spirits, bulk lots 1,959,380 334,210 $3, 741, 545, 925 Distilled spirits, cask stamps 1, 671,000 637, 700 794, 339,100 346, 292,790 Total 452,037 1,098,972 1,115,023 433,981 Certificate of tax payment, dis- tilled spirits for shipment in tank cars 14,950 7,200 (1) 0 Export (secs. 2878 and 2885, I. R. C.). 34,400 43,200 3,440 4,320 Bottled-in-bond, export (blue TABLE 114.-Summary of produc ion and tax-paid withdrawals of renovated butter, strips) 3, 550,000 2,331,400 24,625 22,902 years ended June SO, 1943 to 1952 Bottled-In-bond, domestic (green strips) 120,242, 000 86,625,000 1, 119, 920 815,588 Container or bottle stamps (red strips) 1, 8CS, 465, 000 1, 142, 751, 000 15, 665, 775 11,131,631 Year Withdrawn Year Withdrawn 348,200 298, 800 39, 727, 032 25, 719,223 Produced tax-pald Produced tax-paid Rectification tax Rectified, Puerto Rico 550,000 610, 000 341,000 377,000 Rectified, class A (tax-free) 1, 600 2,100 (') (X) Alcohol warehousing 1,250 52,500 (5) (5) Pounds Pounds Pounds Pounds 44,800 (') 1943 3,442,384 3, 433, 385 1948 1,246,535 1, 252, 693 Wholesale liquor dealer's packages 66,000 (') Wine 30,786, 200 67,981,750 57,178, 402 25, 540,000 1944 3, 144. 299 3.121, 526 1949 1,327,209 1, 316, 265 42,184, 558 656,696,000 729,972,980 1945 3, 173, 629 3, 189, 298 1950 1,451,179 1,453, 333 Fermented malt liquor 47,156, 300 Tobacco: 1946 1,751, 116 1, 737, 289 1951 938,065 941.006 1,336,383,840 1,217,850,880 34,946,452 22,192, 777 1947 1,017, 115 1,068,777 1952 1,096,972 1,115,023 Manufactured tobacco 9,836, 316 Snuff 320,974,832 312,980, 882 7, 543, 593 Cigars, large 180,283,120 192,206,080 46,264,385 48,002,176 Cigars, small 8, 549, 000 6,677,000 64,485 50,475 Cigarettes, class A 18, 651, 063,100 19,357,637,200 1, 305,180, 767 1,483,381, 809 Cigarettes, class B 103,100 254,400 17,893 44,643 Cigarettes, tubes TABLE 115.-Production, importation, and withdrawals of playing cards, by months, Oleomargarine: year ended June SO, 1952 Domestic, colored Domestic, uncolored 60, 000 113,000 1,500 4, 230 Process or renovated butter 7, 516,171 Playing cards 72,908,900 57,816,700 9,478,157 Withdrawn 37,327,140 39,187,888 67, 527,857 80,401,669 Documentary 31,528,473 22,221,394 Withdrawn Withdrawn free of rat Lost or Stock transfer 4,789,740 4,187,688 Month Produced for use of Imported 15,268 22,080 110,379 397,026 tax-paid for export united destroyed Silver transfer 385,004 Narcotic 9,71%100 9,451, 275 415,839 States Order forms for opium 1,613,000 1,689,000 16, 130 16, 890 Marihuana Order forms for marihuana On hand July 1, 1951 21.125.776 21,125, National Firearms Act (sec. 2720, I. R. C.): 1951 Machine guns, silencers, etc 40 40 8,000 8,000 July 2, 534,490 2,760,07 353, 511 17,688 75 Certain short guns 600 200 600 200 August 4, 023, 627 4, 468. 771 651.595 198,568 15 Special or occupational stamps 1,519,420 2,058,200 5913, 217, 256 587,000, 215 September 4, 454, 791 9,639, 979 627,019 27,824 9 October 5,831, 900 5, 709,195 524,408 3,996 57 Total 22, 440,155, 380 22, 546,034 819 7,399,962, 984 4,128,065, 591 November 5, 262, 711 5, 940, 635 838,393 29.976 146 December 4,316, 718 4, 581, 058 584,673 7,632 213 I Value Inserted when purchased. 1952 Have no money value. January 5,359,178 5, 760.425 1,050,282 169, 349 5 February 5,404. 027 5, 392, 026 552.350 10, 512 126 March 6, 277, 977 4, 893,880 58%210 1, 224 April 6,091, 867 4, 201,745 617,333 123.40 May 5.30.5, 629 3, 637,070 286, 783 3,024 June 5,270,677 9,152,118 566,437 6,326 Total 611. 033,112 50, 436,718 7.241,994 599,399 668 On hand June 30, 1952 16,880,782

229047-53-19 APPELLATE

TABLES 117-129 278 REPORT OF COMMISSIONER OF INTERNAL REVENUE STATISTICAL TABLES . 279

TABLE 117.-A nalysis of the work of the Appellate Staff during the fiscal year 1952, TABLE 117. - Analysis of the work of the Appellate Staff during the fiscal year 1952, Income, profits, estate, and gift tax cases Income, profits, estate, and gift tax eases-Continued

FIELD OPERATIONS-ALL DISTRICTS, CONSOLIDATED FIELD OPERATIONS-ALL DISTRICTS, CONSOLIDATED -Continued

PART I.-CASES NOT BEFORE THE TAX COURT PART IL-CASES DOCKETED BY THE TAX COURT (A) PROGRESS OF WORK (A) PROGRESS OF WORK

Revenue agent's finding o statutory Amount stated in statutory notice I notice' Number Number of oases of oases tmlIciency- penalty Overas- Overas- in tax sessment seesment

Pending at beginning of year: Pending at beginning of year 7, 543 $406, 419,807 157, 649, 596 $51, 256,877 Awaiting Staff action 9,212 $338, 320, 805 118, 221, 614 Received during year (net-transfers, etc., deducted): Awaiting taxpayer's action on statutory notice 1,435 directed or sustained 975 Cases considered before jpetition Received during year (net-transfers, etc., deducted). Cases not considered before petition 4, 943 7,398 Cases reopened after trial 56 Total 17, 605 562, 313, 812 39, 910, 987 Total receipts 6,434 249, 703, 840 41, 324, 303 29, 307, 646 Disposed of Total to be accounted for 13, 977 856, 121, 647 98, 973, 899 80, 564, 59 Closed 5,95S 102,651, 907 5, 391, 582 Petitioned to Tax Court 1,570 91, 181,089 4,381,803 11, 497, 733 Disposed of during year 19, 811, 29 10, 247,167 Total disposed of Closed by stipulation-agreed settlement 3,373 106,825,382 7, 528 193, 832, 996 9, 773, 385 34, 134, 777 Closed by dismissal or default 596 3,676, 579 932 542 69, 830 Pending at end of year: Tried before the Tax Court on merits 1,002 39, 100,998 2, 639, 169 4,841, 768 Awaiting Staff action 8, 887 322, 112, 443 26, 653, 016 62,196, 196,528 23, 382,934 15, 158,785 Awaiting taxpayer's action on statutory notice Total disposed of 4,971 149,602,957 directed or sustained 1, 210 46, 363, 373 3, 484, 586 4,803,650 PenIcliin atdesnol of roar: advisors 48, 528,059 Total al 5,120 302,901,391 42,893, 970 10, 077 368, 480, 816 30, 137,602 66, 998,178 In bands of district counsel 3, 886 203,619, 299 27, 062,906 22, 511, 788 9, 006 506, 520, 690 75, 590, 965 65, 405, 758 I For cases originally received in pre-90-day status, amount of finding of internal revenue agent In charge; Total for cases originally received in 90-thy status, amount of statutory notice; for estate tax eases, net amount after deducting additional State tax credit allowable If substantiated. I Includes amount of overassessments stated in statutory no ice, and, in addition, overassessments in certain associated eases in the amount of prior findings of the internal revenue agent in charge or of the (B) RESULTS OBTAINED IN CASES CLOSED Staff. For estate tax cases net amounts are used after deducting additional State tax credits allowable if substantiated.

Staff decision (B) RESULTS OBTAINED IN STIPULATED CASES Number of eases Penalty Overas- Stipulations sessment Bled

Agreements before statutory notice (including agreed Number of eases 3,373 overassessments and agreed claim rejection) 4,097 $43,851,641 Agreements on agents' statutory notices during 90- $41, 933,075 day period Deficiency in tax 466 461, 580 Penalty 6,940,805 Agreements on reconsideration after Staff's statutory Overassessment 12, 633, 584 notices 71 881, 817 Defaults on Staff's statutory notices (no petition filed). 647 9,405,235 $36,240, 396 Defaults on agents' statutory notices sustained by Net deficiency and penalty Staff (no petition filed) 155 1,336,694 Unagreed overassessments and claim rejections 522 60,493 Total 958 55, 977, 260 2, 793, 124 17, 543, 700 STATISTICAL TABLES 280 REPORT OF COMMISSIONER OF INTERNAL =PENCE 281 .

TABLE 118.-Summary: Income, profits, estate, and gift tax appeals docketed, TABLE 120.-Summary of ' receipts, dispositions,' lanapendingT inventories of stipulated, defaulted, and defended on the merits before. The Tax Court (formerly nondocketed, docketed, and compromise work (income, profits estate, and gift tax Board of Tax Appeals), fiscal years 1940 to 1952, inclusive cases), fiscal years 1943 to 1952, inclusive

Cases 1943 1944 1945 1946 1947 1948 1949 1950 1951 1962 Number Number Defended docketed stipulated Number on the Fiscal year per Tax per Tax defaulted merits per NONDOCILICT5 Court Court per Bureau Bureau Receipts 6, 730 6, 845 6,087 5, 661 5,325 7, 515 8,036 7,384 7,014 7, 398 compilations compilations statistics statistics Dispositions 15, 930 6, 480 5, 764 4, 579 5, 243 6,473 6, 108 8, 896 7, 147 7, 538 Inventory 4,020 4, 386 4, 718 5, 800 5, 882 7,924 9, 85210, 340 10, 207 10, 077

1940 4,240 NOU DOCKETS 1941 4, 366 Receipts 3, 432 3, 278 3,181 2, 745 3, 332 4, 598 4,624 5,335 6,115 6, 434 1942 3, 676 Dispositions 4,081 3,019 2,922 2,816 2,986 3,879 4,484 4,097 4,941 4,971 1943 Inventory 3, 479 3,738 3,997 3,926 4, 272 4,991 5,131 8, 369 7, 643 9,006

3,380 RRE 1814 3,178 1945 3, 185 COMPROMISE 1946 Receipts 947 783 960 787 1,075 1,629 2,434 3,810 3,862 3,184

2, 777 RMig 1947 3, 652 Dispositions_ 1, 062 817 815 702 883 1,293 1, 942 2,327 3,348 3, 445 1948 4,402 Inventory 453 419 564 649 861 1,197 1,689 3, 172 3,686 3,425 1949 4,537 1950 5,362 TOTAL 1951 6,137 Receipts 1, 109 0,906 10, 228 9,193 9, 732 13, 74215, 09416, 529 18, 991 17,016

. Dispositions 11, 07310, 316 9, 491 8, 097 9, 09210, 645 12, 534 13,320 15, 436 15, 944

1952 6,870 Inventory 7, 952 8, 542 9, 279 10, 37511, 015 14, 112 16, 672 19,881 21, 436 22, 508 Total 55, 762 34,182 3,970 13, 731 Conferees 140 139 144 155 171 169 214 223 232 227

Nors.-Excess of total flip 55,762g's, docketed cases, over total disposals o 51,883 represents an increase of 3,879 cases in previously exist ing case invent° ies. TABLE 121.-Progress in disposition of cases pending before The Tax Court of the United States TABLE 119.-Analysis of work on compromise, extension of time, and final closing FISCAL YEAR 1952 agreement cases, fiscal year 1952

ge Pending July 1, Filed or reopened Disposed of during Pending June 30, Extension 1951 during year year 1 1952 Compromise of time CBS65 Kind of tax CAMS l' Num- Amount in Num- Amount in Num- Amount in Num- Amount in

ber dispute her dispute bar dispute her dispute On hand, July 1. 1951 3,886 78 Received (net) 3, 184 89 100 Income and profits 8,014 $864,146,943 6, 009 $579, 721, 457 4, 588 $195,453, 524 9,435 $1, 248,414, 876 Estate, and gift 593 110, 615, 452 393 31, 160,006 325 47,602,887 661 94,172, 591 Total to be disposed of 6, 870 89 268 Processing 3 8, 152, 858 3 8,152,858 Accepted, granted or approved 1,134 33 221 TotaL E 810 982,915, 253 6,402 610, 881,463 4,913 243, 056, 391 10,099 1,350, 740, 325 Rejected 1,677 55 36 Withdrawn 471 Transferred 163 'Includes cases in which the Tax Court's decision was appealed. Total disposed of 3,445 88 257 TABLE 122.-Analysie of cases disposed of in Tax Court On band, June 30, 1952 3, 425 1 11 FISCAL YEAR 1952

Amount in dispute Amount approved Saved or recovered

Basis of closing Percent- Over- age of Deficiency payment Deficiency payment Amount ' amount in dispute

Income and profits: Dismissed 589 $4, 551, 771 $3,007, 850 $4, 261, 551 $29,089 $7, 240, 312 95.8 Decision on merits. 881 41, 524, 580 6,434, 198 12,122, 927 1, 141,438 17, 415, 687 36. 3 Agreed settlement.. 3,118 85, 401,119 54, 534,006 39, 813,245 8, 045,160 Kan, on 61.7 Total 4, 588 131,477,470 68, 976, 054 56,197, 723 9, 215, 687 110, 958, 090 56.8 Estate and gilt:

Dismissed " 57, 350 9,102 57,350 66, 452 100.0 Decision on merit__ 5,818, 610 103, 509 1, 227,307 3,047 1,327, 769 22.4 Agreed settlement.. 41, 235,486 378, 810 9, 060, 635 10, 218 9,429, 227 22.7 Total 325 47,111, 446 491,421 10, 345, 292 13, 265 10, 823, 448 22.7 Grand total 4, 913 178, 588, 916 64, 467,475 66, 543, 015 9, 228, 952 121, 781, 538 50.1

1 Amount of deficiency approved plus excess of overpayment in dispute over overpayment approved. 282 REPORT OF COMMISSIONER OF INTERNAL REVENUE STATISTICAL TABLES 283

TABLE 123.-Tax Court cases on review in courts of appeal or Supreme Court TABLE 125.-Suits by taxpayers 1 FISCAL YEAR 1952 FISCAL YEAR 1952

Pending July 1, Appealed during Disposed of during Pending June 30, Pending July Instituted Closed during Pending June 1951 year year 1952 1, 1951 1 during Year year 3 30, 19524

Kind of tax pa a n 12

ut s nrul

s und und Amount Amount Amount Num* Amount Court in ;m ; an se te is mmoni mou

r be —1-n n 1111 t t u

quin dran qt e s n e ou r() 0 rp rp an 0I s disp Income and profits__ 818, 751,171 319 $31, 901, 912 249 $14, 848, 947 401 $35, 804,138 s y V x ld i y br a Estate and gift 1, 737, 483 15 2, 780, 056 20 1, 287, 411 18 3, 210, 129 si Amoun Amou

Total 354 90, 488, 654 334 34, 861, 968 289 16,136, 358 419 39, 014, 284 Court of Claims 247 832,389,388 142 $13,876,08 64 $3,080,314 $1,163, 956 37.8 325 $43,185,161 District courts 2, 068 52, 606,491 1, 018 20, 306,169 83910, 739,158 5,035, 361 46.9 2, 247 62,173, 502 Total 2,315 84, 995, 879 1,160 34,182, 256 903 18, 819, 472 TABLE 124.-Analysis of Tax Court cases on review in courts of appeal or Supreme 8,199, 317 44.9 2, 572105, 358, 863 Court I Primarily suits for refund of taxes or to enjoin the collection of taxes (other than those relating to alcohol, FISCAL YEAR 1952 tobacco, and firearms taxes). Includes 10 processing tax eases: 1 pending in Court of Claims, $46,207 in dispute 9 pending in district courts, 8398,027 In dispute. 8 Includes 1 processing tax case In district court, $1,349 in dispute, nothing refunded. Cases In courts In Supreme of appeal Court Includes 9 processing tax cases: 1 pending in Court of Claims, 846,207 in dispute; 8 pending in district courts, $396,677 in dispute. Pending July 1, 1951: Appealed by Commissioner 95 TABLE 126.-Claims and suits by the United States Appealed by taxpayers 246 3 Appealed by both 10 FISCAL YEAR 1952 Total 351 3 Ninumnil Appealed during year Status bet r Nnumot inber Total Am:rati n Amount Percentage By Commissioner 87 suit number dispute recovered of recovery By ta xpayers 234 4 By both 13 Pending July I, 1951 238 313 551 851, 353,704 Total 334 4 Received during year for institu- tion of suit 848 348 176,586 Disposed of during year: Favorable to Commissioner 146 Total 681 Favorable to taxpayers 91 2 Modified 30 Suits Instituted during year 114 (114) Total to be accounted for 352 547 899 51,530,291 Total 1 287 2 Closed during year 69 111 180 3,125,230 $1,018,492 32.6 Pending June 30, 1952 283 436 719 48,405,060 Pending June 30, 1952: Appealed by Commissioner 126 Appealed by taxpayers 270 5 1 Primarily suits to collect taxes or to recover erroneous refunds (other than those relating to alcohol, Appealed by both 18 tobacco, and firearms taxes). Total 414 5 TABLE 127.-Lien cases 1 Excludes cases in which the Supreme Court granted certiorari. FISCAL YEAR 1952

Cases in court 1 Cases no in court Status Number Amount Amount collected Number collected

Pending July 1, 1951 981 96 Instituted or received during year 986 473 Total to be disposed of 1, 967 569 Closed during year 966 $186,070 466 $1,847,192 Pending June 30, 1952 1,001 103

1 Primarily suits for foreclosure or to quiet title by mortgagees and other secured creditors, to which the United States is made a party. Primarily applications for discharge of property from tax liens.

229047-53-20 284 RETORT OF COMMISSIONER OF INTERNAL REVENUE

TABLE 128. - Insolvency and other debtor proceedings FISCAL YEAR 1952

Reorganize- aBnathui'vet7. and receiver- Mim eIlene- Status tion proceed- ship proceed- ous proceed- Total ings ' ings ings I

Pending July 1, 1951 1, 253 8,014 4,357 13, 624 Initiated during year (net) 4 653 5, 828 2, 554 8, 833 Total to be disposed of 1,908 13,840 6,911 22,457 Closed during year 807' 6,503 2, 480 9, 790 Pending June 30, 1952 1, 099 7,137 4, 431 12, 667

I Proceedings instituted under the following sections or chapters of the Bankruptcy Act: Sections 75 (agricultural compositions and extensions) and 77 (railroad reorganizations) and chapters X (corporate reorganizations), XI (arrangements of unsecured indebtedness), XII (real property arrangements), and XIII (wage earners' plans) which involve tax Claims and other rights and interests of the United States. 2 Strict bankruptcy proceedings and Federal or State receivership proceedings which involve tax claims of the United States. 3 Proceedings relating to corporate dissolutions, insolvent banks, assignments for the benefit of creditors or administration of estates of decedents which Involve tax claims of the United States. 4 Reflects adjustment for proceedings shifted from reorganization to bankruptcy and receivership (264), from bankruptcy and receivership to reorganization (18), and from miscellaneous to bankruptcy and receivership (23).

TABLE 129. - Results obtained in insolvency and other debtor proceedings closed FISCAL YEAR 1952

Type of proceeding and character of closing Amount Amount Percentage Number claimed collected collected COST OF ADMINISTRATION

Reorganization proceedings: I P Payment 13, 989, 295 $3, 827, 728 91.4 Uneollectible 104,891 - TABLES 130-131

Abatement RE No amount due Other 8 224, 849 20, 501 .7.0 ' Total 807 4, 368, 835 3, 848, 229 83.6

Bankruptcy and receivership proceedings I 8, 503 28, 960, 035 6, 367, 706 23.6

Miscellaneous proceedings: 3 Payment 1, 841 9,098, 995 6,976,524 85.7 Compromise 139 4, 374, 303 1, 732, 844 39.6 Uncollectible 416 1, 608, 313 Abatement 39 102, 832 Barred by limitations 1 1, 029 Other 44 5,812,688 Total 2, 480 *998,160 7, 709, 367 36.7 Grand total 9, 790 52, 327,030 17, 725, 302 33.9

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A Abatements: Page Amounts determined 26 Explanation 26 Results obtained in insolvency and other debtor proceedings closed 284 Abstracts of income tax audit reports exchange program 43 Additional assessments. (See Assessments.) Adjustments protested by taxpayers 22 Administrative forms, cost of printing and binding 291 Admissions tax 5, 136-138, 158, 161, 163 Advertising.-- (Bee FederalAlcohol Administration Act.) Agents, internal revenue: Finding or statutory notice 278 Obligations incurred for 288, 291 Protested cases 22 Agreement cases: Agents, internal revenue 22,278 Appellate Staff 23,278,280 Tax Court 24,280 Agricultural Act of 1949, legislation amending 47-48 Alaska Railroads tax: Collections 155,163 Repeal of 51 Alcohol (see also Distilled spirits): Bottling 219,220 Claims. (See Claims.) Denatured: Dealers operating, number 196, 198 Losses 196, 197 Manufacturers operating, number 197, 198 Plants operated, number 196, 198 Production 14, 193, 195, 196, 198 Stocks on hand 195, 196, 197, 198 Withdrawals 193-195, 196, 198 Ethyl. (See Ethyl alcohol.) Permits 180, 181 Plants and permittees qualified in production, distribution, use of 11, 176-179 Withdrawals 204, 205, 213 Alcohol and Tobacco Tax Division enforcement, seizures, and arrests_ _ 17, 245-246 Alcohol and tobacco taxes: Additional assessments 26 Regulatory work 11 Alcohol taxes (see also Receipts; specific types): Claims 30 Offers in compromise 33 Redemption of stamps 27 Refunds 27 Aliens, resident and nonresident, returns filed 6 American Samoa, coconut oil from 144 Amusement and gaming devices, coin-operated: Premises, special-tax payers purchasing special-tax stamps 270 Receipts 136 293 294 INDEX INDEX 295

Page Pass Appeals to Tax Court 24, 174, 280 Bureau of Internal Revenue-Continued Appellate Staff: Interpretative and other technical functions of 33-35 44-46 Agreement cases 23 Legal functions Analysis of work Organization and procedure, changes in 40-41 278-279 36-38 Consideration of cases not before the Tax Court 22-23 Personnel summary Obligations incurred for field divisions 289 Reorganization: Progress in settlement of cases not before the Tax Court Charts 75-77 23 67-72 Appellate work and civil litigation 21-25 Plan No. 1 of 1952 Apples and apple juice, used in production of: Record of 55-63 81-106 Brandy and spirits 201 Report to taxpayers Wines Tax conventions affecting 46-47 228, 229 12, 14 Appropriation, salaries and expenses of Bureau of Internal Revenue 291 Butadiene, production of Apricots and apricot juice, used in production of wines 228, 229 Butter: Army and Navy contracts: Adulterated: 272 Receipts 110 Special-tax payers purchasing special-tax stamps Returns filed Process or renovated: 6 272 Arrests, Alcohol and Tobacco Tax Division enforcement 17, 245, 246 Special-tax payers purchasing special-tax stamps Assessments, additional tax: Tax 138, 155, 163 274 Agreement and default after issuance of 90-day letter 170 Renovated, production and withdrawals Agreement without 90-day letter 169 Amounts of 25-26 C Decision by the Tax Court 171 242 Fiscal years 1951-1952, by general classes of tax 26 Cane sugar, used in production of vinegar Income and profits, by tax years 168-173 Capital stock tax: Refunds 27 Jeopardy: 124 Bankruptcy and dissolution procedure 172-173 Stamp taxes Fraud 173 Carriers, payroll taxes: Collections 4 Regular 168 6 Stipulation before the Tax Court Returns filed 170 Cassava and cassava products, used in production of fermented malt liquors Audit control program 92 222, 223 Automobile trucks and buses, manufacturers' excise taxes 128, 157, 160, 162 and cereal beverages Cereal beverages' Automobiles and motorcycles, other, manufacturers' excise taxes 128, 227 157, 160, 162 Breweries operated, number Production 227 Automobiles and trucks, seizures 17, 245, 246 227 Automobiles, parts and accessories for, manufacturers' excise taxes 128, Stocks on hand Withdrawals 227 157, 160, 162 on of Bureau under Reorganization Plan No. 1 B Charts showing organiza of 1952 75-77 Cheese, filled: Bankruptcy and receivership proceedings 284 138, 158, 163 Barley, used in production of fermented malt liquors and cereal beverages Receipts 221, 272 222 Special-tax payers purchasing special-tax stamps Chemicals, used in production of vinegar 242 Berries and berry juice, used in production of wines 228, 229 228, 229 Billiard or pool room premises, special-tax payers purchasing special-tax Cherries and cherry juice, used in production of wines Chief Counsel: stamps 270 44 Binding. (See Internal Revenue Service.) Authority, duties, and function Field offices 44-45 Bonds of indebtedness, stamp taxes 124 18-19 Bowling alley premises, special-tax payers purchasing special-tax stamps_ _ 270 Legal work on criminal cases Obligations incurred for field divisions 290, 291 Bowling alleys, pool tables, etc., taxes 136, 158, 163 44-45 Brandy: Reorganization Workload 45 Bottling 219-220 122, 157, 160, 162 Losses 209 Cigar and cigarette floor tax Cigarettes: Materials used in production of 201-202, 216 259 Production 202, 203, 204, 217, 218 Factories, number Manufactured, number 260, 261, 262 Stocks on hand 209, 210 124 Withdrawals: Manufacturers' tax Paper books, number removed for exportation and number ex- Tax-free 207, 208 265, 266 Tax-paid 204, 205, 206 ported Papers and tubes: Breweries operated, number 225, 226, 227 124 Brewers tax 120 Manufacturers' tax Withdrawals 265 Bureau of Internal Revenue: 262 Bureau's improvement program 39-43 Production Cost of administration 38-39 Removed: Tax-paid 260, 261 Important legislation affecting 47-51 Z60, 261 Inspection Service activities 35-36 Without payment of tax

296 INDEX INDEX 297 Pate Cigarettes-Continued Corn, used in production of: 199,200 Withdrawn for: Pate Distilled spirits Consumption Ethyl alcohol, undenatured 182,183 260, 264 221,222 Export 260, 261, 265, 266 Fermented malt liquors and cereal beverages Sea stores, use as Vinegar 241,242 260, 265 Receipts): United States, use of 260 Corporation income and profits taxes (see also Cigars: 26 Additional assessments 30 Factories, number 254, 263 Claims Manufactured, number Comparative collections, fiscal 1951-1952 152 254, 258, 262 27 Manufacturers' tax 122 Refunds Production 263 Returns: Removed: 9 Examined 6 Tax-paid Filed 256, 258 110 Without payment of tax 254 Specified sources of internal revenue, 1952 Warehouses, number 258 Summary: Withdrawn for: By months, fiscal 1952 156, 159 Consumption By sources, fiscal years: 264 164 Export 265,266 1916-1952 Sea stores, use as 1951-1952 3, 4-5, 162 265 154 Citizens and resident aliens, returns filed 6 By States and Territories Citrus waste concentrate, used in production of: Cost of administration 38-39,286-291 Ethyl alcohol 185 Court of Claims: 25 Vinegar 241 Internal Revenue cases, number, decided in Claims: Suits by taxpayers in 283 Alcohol: Courts of appeal: Drawback Internal Revenue cases, number, decided in 25 243 282 Redemption of stamps 243 Tax Court cases on review in Excess profits tax, for relief from 28-29 Credits: 26 Informers, rewards to 39 Amounts determined Noncourt proceedings Overprepayments of individual income tax 28 20-21 18-19 Payment approved from refunding appropriation 291 Criminal cases, legal work on Rejections: Cuba, tobacco imported from 264 228,229 Agreed 278 Currant juice, used in production of wines TJnagreed 23, 278 Summary by class of tax 30 United States, by 283 Dealers: Club dues and initiation fees, receipts 136, 158, 161, 163 Denatured alcohol, number operating 196, 198 Coconut and other vegetable oils processed, receipts 142-144, 158, 161, 163 Special-tax payers purchasing special-tax stamps 268, 270, 272 Coconut oil, legislation exempting production in Trust Territory of Pacific Taxes: 138 51 Cheese, filled Coin-operated devices: Fermented malt liquors 120 146 Premises, special-tax payers purchasing special-tax stamps 270 Guns, certain short 2-barrel Receipts 136, 158, 161, 163 Liquor 116 Collections (see also Receipts): Machine guns, silencers, etc 144 Delinquent accounts 19-20 Malt liquors at large 120 Insolvency and other debtor proceedings 142 284 Marihuana 116 Lien cases, amount of 283 Medicinal spirits Litigation, discharges of liens, by claims in noncourt proceedings_ ___ 20-21 Narcotics__ 140 Summary, by general source, fiscal 1951-1952 3-4 Wines 118 Collectors of internal revenue: Wines and malt liquors 118 Obligations incurred for 286, 291 Decisions: 24 Stamps issued to 275 Acquiescences and nonacquiescences of the Commissioner Collectors, sales by, stamp tax Progress of Appellate Court cases on appeals from 24-25 124 34 Commissioners of Internal Revenue, July 1862-January 1953 XIII Treasury Compromise cases: Declarations of income, returns filed 6 124 Analysis of work on 280 Deeds of conveyance, stamp taxes Results obtained in insolvency and other debtor proceedings 284 Defaults: Summary of receipts, dispositions and pending inventories of On statutory notices 23,278 281 280 Conferences resulting from protests by taxpayers 21, 22 Per Bureau statistics Contracts, Army and Navy: Deficiencies: Receipts Additional assessments 25-26, 168; 169, 170, 171, 172, 173 110 278 Returns filed 6 Appellate Staff decisions Cordials 116-118, 156, 159, 162 Cases awaiting action by Appellate Staff 23 Cordials and liqueurs: Income and profits, appealed to the Tax Court 174 278 Bottling 219, 220 Revenue agent's finding or statutory notice Production 217, 218 Tax Court cases 279, 281 298 INDEX INDEX 299

Page Pao Delinquent returns and collection of delinquent accounts Enforcement work: 19-21 11-18 Departmental service and field forces operating from Washington, obliga- Alcohol and tobacco tax regulatory work tions incurred for Delinquent returns and collection of delinquent accounts 19-21 290, 291 Depositary receipt procedures Fraud investigations 9-11 Diesel fuel tax 43 Legal work on criminal cases 18-19 50, 146, 158, 161, 163 7-9 Disciplinary actions against employees Returns examined Distilled spirits: 37-38 Equipment, new 42 Bottling for consumption Estate and gift taxes: Consumption of 219-220 Additional assessments 26 Legislation amending transfer of 13 Claims 30 47 9 Materials used in production of Examination of returns Production of 241 Receipts 164 Receipts 11 Estate tax (see also Receipts): Rectified: 112-116, 156, 159, 162, 165 Collections 4, 112, 156, 159, 162 27 Materials used in production of Refunds Production of 216, 218 Returns filed 6 Seizures 13, 217, 218 Ethyl alcohol: 112, 245-246 Stocks on hand Production and importation of 14 13 14 Transfers in bond to industrial alcohol plants and bonded warehouses_ Stocks on hand Unrectified: 12 Transfers in bond 14 Losses Undenatured: 209 Losses 188-189 Materials used in production of 199-202 Premises operated, number Materials used in production of 182-185 Production 214, 215 Premises operated, number 188, 189 Stocks 202-204, 213, 214 Production 186, 187, 189 209-212, 213, 215 Withdrawals Stocks on hand 188, 189 Withdrawals: 204-208, 213, 214, 215 Withdrawals: 186, 187, 188, 189 For fortification of wine Tax-free 12 Tax-paid 186, 187, 189 Tax-free 12, 214 Tax-paid Undenatured imported: Distilled spirits and wines: 12, 215 Importations 190, 191, 192 Rectified: Losses 191, 192 190, 191, 192 Materials used in production of Stocks on hand 216, 218 Withdrawals, tax-free 190, 191, 192 Premises operated, number 217, 218 Production Withdrawals: Distilleries: 217, 218 Tax-free 14 Fruit: Tax-paid 14 182, 184 Production of distilled spirits by Ethyl sulphate, used in production of ethyl alcohol Registered: 12 Ethylene gas, used in production of ethyl alcohol 182 7-9 Materials used for production of ethyl alcohol, distilled spirits, Examination of returns Excess profits tax: fermented malt liquors, and vinegar, by 241 Production of distilled spirits by Additional assessments 26 12 28-29 Transfers in bond of ethyl alcohol to Claims for relief from Distillers permits 14 Examination of returns 9 District courts: 180, 181 Excess Profits Tax Act of 1950 34 Excess Profits Tax Council: Internal Revenue cases, number, decided in 25 Suits by taxpayers in Issues arising under section 722 of Internal Revenue Code 23 283 Obligations incurred for 290 District supervisors' offices, obligations incurred for 289, 291 Docketed cases Excessive prepayments of individual income tax 27,28 279, 280, 281 Excise tax agents, obligations incurred for 290 E Excise taxes (see also Receipts): Additional assessments 26 Electric, gas, and oil appliances, manufacturers' excise tax_ __ _ 128, 157, 160, 162 Collections 4, 5 4, 112, 116, 118, 156, 159, 162, 165 Electric light bulbs and tubes, manufacturers' excise tax 157, 160, 162 Distilled spirits Electric light bulbs, manufacturers' excise tax Manufacturers' 4, 126-132, 157, 160, 162-163, 164, 165 Electrical energy: Offers in compromise 33 Manufacturers' excise tax 128, 157, 160, 162 Retailers' 4, 132-134, 157, 160-161, 163 Repeal of tax Wagering 146, 157, 161, 163 50 156, 159, 162 Employees' financial statements, Form 1361 36 Wines, cordials, etc Employees' tax returns, audit of 36 Exempt organizations: Employment taxes (see also Individual income taxes; Payroll taxes): Business income tax 110 Collections Returns filed 6 4, 5 38-39, 286-291 Offers in compromise 33 Expenses of the Internal Revenue Service Enforcement, Alcohol and Tobacco Tax Division 245, 246

300 INDEX INDEX 301

Exports: Pan Forms, tax return: Paso Alcohol used in flavoring extracts, toilet, and medicinal preparations. 244 Cost of printing and binding 291 Cigarette paper books 266 New mailing assembly 40 Cigarettes 260, 261, 266 Revision of 39-40 Cigars 254, 266 Fortification of wine 12 Distilled spirits 207, 208 Fraud: Distilled spirits and wines 243 Investigations 9-11 Fermented malt liquors 224, 225 Procedure, changes in 41 Stills 244 Progress in disposition of cases 10 Tobacco: Fruit and fruit products used in production of: Leaf 248 Brandy and spirits 201-202 Manufactured._ 251 Still wines 228-229 Manufactured; cigarettes, cigars, snuff 265, 266 Fruit-flavor concentrates, volatile, production of 15, 243 Tobacco materials, unmanufactured 266 Furs, retailers' excise tax 132, 157. 160, 163 Wines, still 232, 233 Extension of time cases, analysis of work of Appellate Staff 280 G F Gasoline, including floor tax, manufacturers' excise tax 126, 157, 160, 162 Factories operated, number: Gasoline, manufacturers' excise tax 126 Cigar 254, 263 Gift tax (see also Receipts): Cigarette 259 Collections 4, 112, 156, 159, 162 Tobacco 250, 252-253, 263 Refunds 27 Federal Alcohol Administration Act: Returns filed 6 Advertising 16 Gin: Interlocking directorates 17 Bottling 219, 220 Label activity 16, 244 Losses 209 Permits 15, 180-181 Production 12, 202, 203, 217, 218 Trade practices 16 Stocks on hand 209, 210 Federal courts 17, 24-25 Withdrawals 204 Federal Food, Drug, and Cosmetic Act, legislation approved 50 Grain and grain products used in production of (see also respective kinds): , Federal Insurance Contributions Act (old-age insurance) 4, 34, 39 Distilled spirits 199, 200, 241 Federal records centers 43 Ethyl alcohol 182, 183, 185, 241 Federal Trade Commission Act, legislation extending provisions of 48 Fermented malt liquors 241 Federal Unemployment Tax Act (unemployment insurance) 4 Fermented malt liquors and cereal beverages 221, 222 Fermented malt liquors: Vinegar 241, 242 Breweries operated, number 225, 226 Grapes and grape juice, used in production of: Losses 224, 225, 226 Brandy and spirits 201, 202, 203, 204 Materials used in production of 241 Wines 228, 229 Number of special-tax payers purchasing special-tax stamps 270 Production 13, 224, 225, 226 H Receipts 4, 118-120, 156, 159, 162 Stocks on hand_ 224, Hops and hop extracts, used in production of fermented malt liquors and tax-free and tax-paid 13, 224, 225, 226 cereal beverages 222, 223 Fermented malt liquors and cereal beverages, materials used in production of 221-223 I Fiduciaries, returns filed 6 Illegal activities, investigation of returns of persons allegedly engaged in__ 10 Field Inspection Service, Alcohol Tax Division, obligations incurred for_ 290 Importers permits 180, 181 Field offices: Imports: Examination of returns 8-9 Alcohol, ethyl 190, 191, 192 35-36 Inspection of Cigarette papers and tubes 265 Figs and fig juice, used in production of wines 228, 229 Tobacco products from: Figs, used in production of brandy and spirits 201, 202, 203, 204 Cuba 18 264 Firearms program Other countries 264 Firearms, shells, and cartridges, manufacturers' excise tax_ _ _ _ 132, 157, 160, 163 Income and old-age insurance (see also Federal Insurance Contributions Firearms transfer and occupational tax 144-146, 158, 161, 163 Act): 132, 157, 160, 163 Fishing rods, creels, etc., manufacturers' excise tax Claims 30 Floor stocks taxes: Collections 4, 110, 156, 159, 162 Alcohol: Refunds 27 Distilled spirits 112 Returns filed Fermented malt liquors 118 Income and profits taxes (see also Corporation income and profits taxes; Miscellaneous 156, 159 Receipts): Wines, cordials, etc 118 Additional assessments 122 168-173 Cigar and cigarette Deficiencies appealed to the Tax Court 174 Liquor 17 Manufacturers' excise: Gasoline 126 Returns filed 6 INDEX 303 302 INDEX Internal Revenue Service-Continued Income tax: Page Separations from: rage Collections 3,4,5 By class of employee 38 Delinquent returns 20 By reason for action 37 Refunds 27. Internal revenue stamps issued to collectors of internal revenue and Post- Returns: master General 275 Examined 9 Interpretative and other technical functions of the Bureau 33-35 Filed 6 Investigations: Individual income taxes (see also Receipts): Alleged misconduct and irregularities on the part of employees and Additional assessments 26 officials 35 Claims 30 Applications for relief from excess profits tax 29 Excessive prepayments 28 Fraud 9-11, 92-93 Forms 1040 and 1040A, revision of 39. Income and employment: Comparative collections, fiscal 1951-1952 148-150 Jeopardy assessments: Specified sources of internal revenue, fiscal 1952 110-112 By tax years 172 Summary: Fraud 173 By months, fiscal 1952 156, 159. Under bankruptcy and dissolution procedure 172-173 By sources, fiscal years: Jewelry, retailers' excise tax 132,157,160,163 1916-1952 164 Justice, Department of: 1951-1952 3,4,162 Increase of cases recommended to 45 By States and Territories 154 Work on criminal cases 18-19 Refunds 27 Returns: L Examined 9 Filed 6 Label activity under Federal Alcohol Administration Act 16, 244 Unemployment insurance 6, 27, 30, 112, 150, 156, 159, 162 Laboratories: Withheld and not withheld by employers 3, 110, 148, 156, 159, 162 Marihuana: Informers' claims for reward 39 Special or occupational tax 142 Insolvency and other debtor proceedings 284 Special-tax payers purchasing special-tax stamps 272

Inspection Service activities 35-36 - Narcotics: Inspection Service field force, obligations incurred for 290 Special tax 140 Instructions for tax returns, cost of printing and binding 291 Special-tax payers purchasing special-tax stamps 272 Insurance companies, legislation amending determination of excess profits Laboratory activities 15 tax 48 Leaf tobacco. (See Tobacco.) Insurance policies, foreign, stamp tax 124 Leased wires, tax 134, 157, 161, 163 Intelligence Division field force, obligations incurred for 290 Leases of safe-deposit boxes, tax 136, 158, 161, 163 Interest: Legal functions of Bureau of Internal Revenue 44-46 18-19 Additional assessments 168, 169, 170, 171, 172, 173 . Legal work on criminal cases Refunds 27, 28 Legislation enacted, affecting Bureau of Internal Revenue 47-51 Interlocking directorates, pursuant to section 8 of the Federal Alcohol Letterheads, miscellaneous binding, etc., cost of printing and binding_ _ 291 Administration Act 17 Licorice, used in manufacture of tobacco 250 Internal Revenue: Lien cases• Agents, obligations incurred for 288, 291 Collection through discharges of liens 20-21 involvingnvolving tax issues and nature of decisions by Federal civil Status 283 courts LIFO adjustments, tentative, applications for 30 Collectors, obligations incurred for 286-287, 291 Liquor law violations 17 Miscellaneous collections 5-6, Liquor plants and permittees 11, 176-181 134-146, 152, 154, 156-158, 159-161, 162-163 Liquors, fermented malt. (See Fermented malt liquors.) Receipts, fiscal years: Litigation, collection through 20-21 1916-1952, summary 164-165 Lubricating oils, manufacturers' excise tax 126, 157, 160, 162 1951-1952, comparative 3-4, 148-153, 162-163 Luggage, retailers' excise tax 132, 157, 160, 163 1951-1952, manufactured products from Puerto Rico 1952, by collection districts, States, and Territories 110-147 M 1952, by months 156-161 Machine guns and short-barreled firearms: 1952, summary, by States and Territories 154-155 144-146 Refunds 27 Collections Legislation affecting transfer of 51 Internal Revenue Code, public laws enacted, amending sections of 47-51 130, 157, 160, 163 Internal revenue laws, technical development of 33-35 Machines, business and store, manufacturers' excise tax Internal Revenue Service (see also Reorganization): Malt liquors. (See Fermented malt liquors.) Cost of printing and binding 291 Malt, used in production of: Distilled spirits 199, 200, 241 Employees on rolls, fiscal 1951-1952 36-37 182, 183, 241 Expenses of 38-39, 286-291 Ethyl alcohol, undenatured Fermented malt liquors and cereal beverages 221, 222, 241 Inspection activities 35-36 241, 242 Legislation affecting Vinegar 50 Management planning and improvements by Office of Chief Counsel 45-46

306 INDEX INDEX 307 Page Petitions to Tax Court 23-24, 278 Receipts-Continued Philippines, coconut oil from , tax Corporation income and profits taxes: Phonograph records, manufacturers' excise tax 130, 157, 160, 162 Fiscal years: Page Phonographs, radio sets, television sets, components, etc., manufacturers' 1916-1952, summary 164 excise tax 128, 157, 160, 162 1951-1952, comparative 3, 152, 162 Photographic apparatus and films, manufacturers' excise tax 5, 130, 157, 160, 163 1952, by collection districts, States, and Territories 110 Pistols and revolvers, manufacturers' excise tax 132, 157, 160, 163 1952, by months 156, 159 Plants and permittees 11, 176-181 1952, summary, by States and Territories 154 Playing cards: Estate and gift tax: Production, importation, and withdrawals 274 Fiscal years: Stamp tax 126, 157, 160, 162 1916-1952, summary 164 Position classifiers, obligations incurred for 290 Estate tax: Postmaster General, internal revenue stamps, issued to 275 Fiscal years: Postmasters, sales by, stamp tax 124 1951-1952, comparative 4, 162 Practioners: 1952, by collection districts, States, and Territories 112 Marihuana: 1952, by months 156, 159 Special or occupational tax 142 Excise taxes: Special-tax payers purchasing special-tax stamps 272 Fiscal years: Narcotics: 1916-1952, summary 164-165 Special tax 140 1951-1952, comparative 4, 162-163 Special-tax payers purchasing special-tax stamps 272 1952, by collection districts, States, and Territories_ _ 112, 126-134 Preliminary notice of adjustment, 30-day 8 1952, by months 156, 157, 159, 160 Printing and binding, cost for Internal Revenue Service 291 Gift tax: Processing Division, obligations incurred for 290 Fiscal years: Property: 1951-1952, comparative 4, 162 Conversion of, legislation approved 50 1952, by collection districts, States, and Territories 112 Seizures of 1952, by months 156, 159 Transportation of 136, 158, 161, 163 Individual income and employment taxes: Protested cases, progress in disposition by revenue agents' offices 22 Fiscal years: Puerto Rico: 1916-1952, summary 164 Tax Form 1040-PR 39-40 1951-1952, comparative 3, 4, 148-150, 162 Tax on' manufactured products from 165 1952, by collection districts, States, and Territories 110-112 Tobacco products withdrawn for consumption, from 264 1952, by months 156, 159 1952, summary, by States and Territories 154 Q Miscellaneous taxes: Qualification standards for position of deputy collector, internal revenue Fiscal years: agent, and special agent 1951-1952, comparative 163 43 1952, by collection districts, States, and Territories 134-146 R 1952, by months 157-158, 161 Racket squads Stamp taxes: 10, 93 Fiscal years: Racketeer cases 19 1951-1952, comparative 4, 162 Radio sets, television sets, phonographs, components, etc., manufacturers' excise tax 1952, by collection districts, States, and Territories 124-126 128, 157, 160, 162 1952, by months 157, 160 Railroad employees' representative tax Tobacco taxes: Railroad employment compensation tax 110 Fiscal years: Railroad retirement: 164, 165 Claims 1916-1952, summary 30 1951-1952, comparative 4, 162 Refunds 27 122-124 Withheld taxes 1952, by collection districts, States, and Territories 156, 159, 162 1952, by months 156-157, 159-160 Railroad Retirement Tax Act (carriers taxes-old-age benefits): Collections Reconciliation of Income Tax Withheld from Wages, Form W-3, revision 4, 110, 156, 159, 162 of 40 Revision of Form CT-1 4, 114, 156, 159, 162, 165 Raisins, used in production of: Rectification tax, distilled spirits Rectified products. (See Distilled spirits.) Brandy and spirits 201 Wines Rectifiers: 228, 229 Permits 180, 181 Receffits (see also Collections; Internal Revenue receipts; specific taxes): Alcohol taxes: Special-tax payers purchasing special-tax stamps 268 Fiscal years: Redemption of stamps: Claims 243 1916-1952, summary 164-165 Refunds 27 1951-1952, comparative 4, 162 Refrigerators, air conditioners, quick-freeze units, etc., taxes.._ 130, 157, 160, 162 1952, by collection districts, States, and Territories 112-120 Refunding appropriation, claims approved for payment from 291 1952, by months 156, 159 Refunds: Amounts determined 26 Amounts refunded in suits by taxpayers 283 Efforts to locate payees of tax refund checks 43 308 INDEX INDEX 309 Pan Refunds-Continued Rice, used in production of fermented malt liquors and cereal beverages__ 221, Explanation 26 222 Number and amount, including interest, fiscal 1951-4952 26, 27 Regional finance offices: Rubber. (See Synthetic rubber.) Rules of conduct, revision of 38 Establishment of additional 41-42 34-35 Obligations incurred for 290 Rulings issued by Internal Revenue Service Rum: Rent: 219,220 Obligations incurred for: Bottling Appellate Staff field divisions 289, 291 Denatured: Losses 221 Chief Counsel field divisions 290, 291 221 Collectors of internal revenue 286, 291 Manufacturers operating Production 220, 221 Departmental Service and field forces operating from Wash- 220, 221 ington 290, 291 Removals Stocks on hand 220, 221 District supervisors' offices 289, 291 209 Internal revenue agents 288, 291 Losses Production 12, 202, 203 Reorganization of Internal Revenue Service: 209, 210 Advantages • 62-63 Stocks on hand Withdrawals: History 55-56 207,208 Reorganization Plan No. 1 of 1952: Tax-free Tax-paid 204,205,206 As submitted to congress by the President 67-71 241,242 Charts showing organization of Bureau under 75-77 Rye, used in production of vinegar Enactment of 56 Implementation of 58-62 S Legal work of Bureau 44-46 Safe-deposit boxes, lease of, tax 136, 158, 161, 163 Legislation enacted 51 Salaries: Provisions 56-'58 Obligations incurred for: Reorganization Plan No. 1 of 1952. (See Reorganization of Internal Reve- Appellate Staff field divisions 289, 291 nue Service.) Chief Counsel field divisions 290, 291 Reorganization proceedings, under Bankruptcy Act 284 Collectors of internal revenue 286, 291 Repeal of tax: Departmental Service and field forces operating from Washington_ 290, Alaska Railroads 51 291 Electrical energy 50 District supervisors' offices 289, 291 Report to taxpayers: Internal revenue agents 288, 291 Chronology of actions taken to improve administration in the Bureau Sea stores, for use as: of Internal Revenue 99-106 Cigarettes 260 Duties of the Bureau of Internal Revenue 82-83 Cigars 254 Expansion of tax problems due to war 85-87 Manufactured tobacco, snuff, cigars, and cigarettes 265 Foreword by The Honorable John W. Snyder, Secretary of the Seizures and arrests for liquor law violations 17, 245, 246 Treasury 81 Seizures and penalties, distilled spirits, tax 112 Improvement program: Silver bullion, sale or transfers of, stamp tax 126, 157, 160, 162 Benefits 92-93 Silver, redemption of stamps 27 Explanation of program 88-89 Snuff (see also Tobacco and snuff): Strategy of program 88 Manufactured, production of 262 Nature of the Bureau's job_ 84-85 Receipts 156, 159, 162 Provisions and accomplishments of Reorganization 94-95 Withdrawn for consumption 264 Six years of reconversion and modernization and a summary of results_ 87 Social Security Act Amendments of 1950 34, 39 Size of the Bureau's job 83-84 Social Security Tax Form SS-8, revision of 40 Reports, regulations, etc., cost of printing and binding 291 Sorghum grain, used in production of: Reproductions, cost of printing and binding 291 Distilled spirits 199, 200 Retail dealers: Ethyl alcohol, undenatured 182, 183 Special-tax payers purchasing special-tax stamps 268, 270, 272 Fermented malt liquors and cereal beverages 221, 222 Special taxes 118 Soybeans and soybean products, used in production of fermented malt Retailers' excise taxes: liquors and cereal beverages 222, 223 Receipts (see also respective types) 4 Special or occupational taxes: Refunds 27 Brewers, dealers in malt liquor 156, 159, 162 Returns examined: Collections, summary 4 Examination 8 Distilled spirits 116 Mathematical verification 7 Fermented malt liquors 120 Selection of returns 7 Firearms 144 Returns filed, number, by type of return, fiscal 1951-1952 6 Marihuana „- 142 Revenue Act: Narcotics 140 1950 34, 45 Rectifiers, liquor dealers, manufacturers of stills 156, 159, 162 1951 34, 45 Returns filed 6 Revolvers and pistols, tax 132, 157, 160, 163 Special-tax payers purchasing special-tax stamps 268-273 Rewards to informers 39, 45 Wagering 146, 157, 161 Wines, cordials, etc 118 INDEX 310 INDEX 311 T Page Page Special-tax payers purchasing special-tax stamps, number of___. ______268-273 Tax conventions, affecting the Bureau of Internal Revenue 46-47 Spirits and wines, rectification tax, legislation exempting Tax Court of the United States, The: Spirits, production by registered and fruit distilleries 12 AdditionaL assessments, made after decision by 171 Sporting goods, manufacturers' excise tax 130, 157, 160, 163 Stamp taxes Analysis: (see also Receipts): Cases disposed of 281 Bonds, issues of capital stock, deeds of conveyance, etc 124, 157, 160, 162 Playing cards Cases on review in courts of appeal or Supreme Court 282 126, 157, 160, 162 Appeals to 174, 280 Silver bullion sales or transfers 126, 157, 160, 162 Applications for excess profits tax relief, pending before 29 Transfers of capital stock and similar interest sales 124, 157, 160, 162 Cases docketed by 279, 280, 281 Stamp transfer taxes, legislation exempting 51 Stamps: Disposition of cases petitioned to 24 Case, for distilled spirits bottled in bond Tax liability, changes in 25-31 156, 159, 162 Tax return forms: Cigar, value of 258 Claims for redemption of Cost of printing and binding 291 243 New mailing assembly 40 Container 4, 114, 156, 159, 162 Distilled spirits intended for export Revision of 39-40 114, 156, 159, 162 Tax Transfer Voucher, Form 514, revision of 40 Internal Revenue, issued to collectors of internal revenue and the Taxes. (See Collections; Receipts; specific types.) Postmaster General 275 Redemption of Taxpayers: 27 Adjustments protested by 22 Special-tax payers purchasing special-tax stamps 268-273 Statutory notices: Appeals by, number of cases 282 79-106 Appellate Staff decisions Report to 278 Suits by 283 Defaults after 23 Deficiency, 90-day Telegraph: 8 Obligations incurred for: Issued in cases of protest 22 Stills: Appellate Staff field divisions 289, 291 Manufacturers' tax Chief Counsel field divisions 290, 291 114 Collectors of internal revenue 286, 291 Number of manufacturers purchasing special-tax stamps 268 Departmental Service and field forces operating from Washing- Seizures of 17, 245, 246 Stipulations: ton 290, 291 District supervisors' offices 289, 291 Additional assessments based upon 170-171 Cases disposed of, number Internal revenue agents 288, 291 24, 279, 280 Telephone: Results obtained in 279 Sugar: Local service tax 134 157, 161, 163 Obligations incurred for: Tax receipts 134, 157, 163 Used in manufacture of: Appellate Staff field divisions 289, 291 Tobacco Chief Counsel field divisions 290, 291 250 Collectors of internal revenue 286, 291 Vinegar 242 Sugar and sirups, used in production of fermented malt liquors and cereal Departmental Service and field forces operating from Washing- ton 290, 291 beverages 222, 223 Suits: District supervisors' offices 289, 291 By taxpayers Internal revenue agents 285, 291 283 Telephone, telegraph, radio, cable, leased wires, etc., tax 134, 157, 161, 163 By United States 283 Sulphite liquors, used in production of undenatured ethyl alcohol Television sets, radio sets, phonographs, components, etc., manufacturers' 182 excise tax 128, 157, 160, 162 Supervisors, Accounts and Collections, obligations incurred for 290 Supplies and equipment: Tentative adjustments: Obligations incurred for: Explanation 29 LIFO 30 Appellate Staff field divisions 289, 291 Chief Counsel field divisions Summary of applications, fiscal 1951-1952 30 290, 291 Tires and tubes, manufacturers' excise tax 157, 160, 162 Collectors of internal revenue 286, 291 Departmental Service and field forces operating from Wash- Tobacco (see also Cigarettes; Cigars; Receipts; Tobacco and snuff; To- ington 29(1 291 bacco taxes): District supervisors' offices Chewing and smoking 264 289, 291 Factories operated, number 250, 252, 253, 263 Internal revenue agents 288, 291 Supreme Court: Fine-cut 251, 262 Imported 264 Internal Revenue cases, number, decided in 25 Tax Court cases, on review in Leaf: 282 Dealers in 248 Synthetic rubber program, production of butadiene for 12 Synthetic rubber, quantity of specially denatured alcohol used in manu- Exported by dealers 248 facture of Received from farmers 248 14 Used in manufacture of cigars, cigarettes, and tobacco and snuff_ 261 INDEX 310 INDEX 311 T Page Page Special-tax payers purchasing special-tax stamps, number of____ -- 268-273 Tax conventions, affecting the Bureau of Internal Revenue 46-47 Spirits and wines, rectification tax, legislation exempting 51 Tax Court of the United States, The: Spirits, production by registered and fruit distilleries 12 Additional assessments, made after decision by 171 Sporting goods, manufacturers' excise tax 130, 157, 160, 163 Stamp taxes Analysis: (see also Receipts): Cases disposed of 281 Bonds, issues of capital stock, deeds of conveyance, etc_ 124, 157, 160, 162 Playing cards Cases on review in courts of appeal or Supreme Court 282 126, 157, Appeals to 174, 280 Silver bullion sales or transfers 126, 157, 160, 162 Applications for excess profits tax relief, pending before 29 Transfers of capital stock and similar interest sales 124, 157, 160, 162 Cases docketed by 279, 280, 281 Stamp transfer taxes, legislation exempting 51 Stamps: Disposition of cases petitioned to 24 Case, for distilled spirits bottled in bond Tax liability, changes in 25-31 156, 159, 162 Tax return forms: Cigar, value of 258 Claims for redemption of Cost of printing and binding 291 243 New mailing assembly 40 Container 4, 114, 156, 159, 162 Distilled spirits intended for export Revision of 39-40 114, 156, 159, 162 Tax Transfer Voucher, Form 514, revision of 40 Internal Revenue, issued to collectors of internal revenue and the Taxes. (See Collections; Receipts; specific types.) Postmaster General 275 Redemption of Taxpayers: 27 Adjustments protested by 22 Special-tax payers purchasing special-tax stamps 268-273 Statutory notices: Appeals by, number of cases 282 79-106 Appellate Staff decisions Report to 278 Suits by 283 Defaults after 23 Deficiency, 90-day Telegraph: 8 Obligations incurred for: Issued in cases of protest 22 Stills: Appellate Staff field divisions 289, 291 Manufacturers' tax Chief Counsel field divisions 290, 291 114 Collectors of internal revenue 286, 291 Number of manufacturers purchasing special-tax stamps 268 Departmental Service and field forces operating from Washing- Seizures of 17, 245, 246 Stipulations: ton 290, 291 District supervisors' offices 289, 291 Additional assessments based upon 170-171 Cases disposed of, number Internal revenue agents 288, 291 24, 279, 280 Telephone: Results obtained in 279 Sugar: Local service tax 134 157, 161, 163 Obligations incurred for: Tax receipts 134, 157, 163 Used in manufacture of: Appellate Staff field divisions 289, 291 Tobacco Chief Counsel field divisions 290, 291 250 Collectors of internal revenue 286, 291 Vinegar 242 Sugar and sirups, used in production of fermented malt liquors and cereal Departmental Service and field forces operating from Washing- ton 290, 291 beverages 222, 223 Suits: District supervisors' offices 289, 291 By taxpayers Internal revenue agents 288, 291 283 Telephone, telegraph, radio, cable, leased wires, etc., tax 134, 157, 161, 163 By United States 283 Sulphite liquors, used in production of undenatured ethyl alcohol Television sets, radio sets, phonographs, components, etc., manufacturers' 182 excise tax 128, 157, 160, 162 Supervisors, Accounts and Collections, obligations incurred for 290 Supplies and equipment: Tentative adjustments: Obligations incurred for: Explanation 29 LIFO 30 Appellate Staff field divisions 289, 291 Chief Counsel field divisions Summary of applications, fiscal 1951-1952 30 290, 291 Tires and tubes, manufacturers' excise tax 157, 160, 162 Collectors of internal revenue 286, 291 Departmental Service and field forces operating from Wash- Tobacco (see also Cigarettes; Cigars; Receipts; Tobacco and snuff; To- bacco taxes): ington 290 291 District supervisors' offices Chewing and smoking 264 289, 291 Factories operated, number 250, 252, 253, 263 Internal revenue agents 288, 291 Supreme Court: Fine-cut 251, 262 Imported 264 Internal Revenue cases, number, decided in 25 Tax Court cases, on review in Leaf: 282 Dealers in 248 Synthetic rubber program, production of butadiene for 12 Synthetic rubber, quantity of specially denatured alcohol used in manu- Exported by dealers 248 facture of Received from farmers 248 14 Used in manufacture of cigars, cigarettes, and tobacco and snuff_ 261

312 INDEX INDEX 313

Tobacco-Continued U Page Manufactured and removed: Page. Unemployment insurance: 30 Tax-paid 251 Claims Without payment of tax 251 Form 940, revision of Materials used in manufactured 250. Receipts 4, 112, 150, 156, 159, 162 27 Plug 251, 262 Refunds Production of manufactured 262 Returns filed Products withdrawn for consumption 264 United States: Quantity used in manufacture of: Armed Forces, member, legislation amending tax imposed 48 Cigarettes 259,261 Court. (See respective names of courts.) Cigars Court of Claims 21,22,24,25 254,258,261 25 Quasi tobacco manufacturers classified 252-253 Courts of appeal Removed for: District Court 21,25 144 Export 251 Possessions, coconut oil OM Sea stores, use as Supreme Court 22,25 251 21,22,23,24,25 United States, use of 251 Tax Court Scrap chewing 262 Scrap chewing, smoking and snuff 251 V Scraps 248, 250, 252, 253, 258. Scraps, cuttings, and clippings Vegetable, coconut, and other oils processed, tax 142-144, 158, 161, 163 254, 259, 261 (See Wines.) Siftings 252, 253 Vermouth. Smoking Vinegar: 262 241-242 Stemmed 248, 250, 252, 253, 254, 258, 259, 261 Materials used in production of Stems 248, 250, 252, 253 Plants: Twist Number operated 242 251, 262 241 Unstemmed 248, 250, 252, 253, 254, 258, 259, 261 Vaporizing process, using Production 15,242 Tobacco activities 18 Tobacco and snuff: Stocks on hand 242 Virgin Islands, Tax Form 1040-VI 40 Leaf tobacco used in manufacture of 261 Manufactured and removed Vodka: 251 Bottling 219,220 Summary of operations, manufacturers of 263 Withdrawn for: Legislation affecting: Rectification tax 51 Consumption 264 Export Transfer by pipeline 47 265, 26• 209 Shipment or delivery, as sea stores 265- Losses Tobacco taxes (see also Receipts): Production 12,202,203,217 209,210 Claims 30 Stocks Leaf dealers penalties, etc Withdrawals, tax-paid 204,205 157, 160 Volatile fruit-flavor concentrates, production of 15,243 Manufacturers 122-124 Redemption of stamps 27 Refunds 27 Toilet preparations, retailers' excise tax 134, 157, 161, 163 Wagering tax: Trade practices, violations of Federal Alcohol Administration Act and in- Excise and occupational 50 ternal revenue laws 16. Law, violations of 19 Transfers in bond of: Receipts 4, 146, 157, 161, 163 Distilled spirits to industrial alcohol plants and bonded warehouses_ _ 12-13 Redemption of stamps 27 Ethyl alcohol to registered distilleries and internal revenue bonded Refunds 27 warehouses 14-15 Regulations 34 Transportation taxes: Special-tax payers purchasing special-tax stamps 272 Oil 134, 157, 161, 163 Warehousing and bottling permits 180, 181 Persons 136, 158, 161, 163 Warrants for distraint 20, 92 Property 136, 158, 161, 163 Wheat, used in production of: Travel expenses: Distilled spirits 199, 200 Obligations incurred for: Ethyl alcohol, undenatured 182, 183 Appellate Staff field divisions 289, 291 Fermented malt liquors and cereal beverages 221, 222 Chief Counsel field divisions 290, 291 Vinegar 242 Collectors of internal revenue 286, 291 Whiskies and brandies, legislation amending rectification tax 48 Departmental Service and field forces operating from Wash- Whisky: ington 290, 291 Bottling 219, 220 District ssupervisors' ooffices ffi 289, 291 Losses 209 Internal revenue agents 288, 291 Premises operated, number 215 Treasury Decisions 34, 35, 44 Production 12, 202, 203, 215 Trust accounts, collections for credit to 163. Stocks en hand 209, 210, 211-212, 215 Withdrawals: Tax-free 207, 208 Tax-paid 204, 205, 206, 215

314 INDEX Pallse Wholesale dealers: 268, 270, 27 Special-tax payers purchasing special-tax stamps 140 Special taxes 180,180 181 Wholesale permits Wines (see also Distilled spirits and wines): Aperitif other than vermouth: 238 Losses 238 , 240 Premises operated, number 238, 240 Production 238, 240 Stocks on hand Withdrawals: 238 Tax-free 14, 238, 240 Tax-paid 180, 181 Permits, producers and blenders 4, 116-118, 156, 159, 162, 165 Receipts Rectified: 216 Materials used in production of 13, 217 Production 45, 2 246 Seizures Sparkling: 236 Losses 236, 240 Premises operated, number 236, 240 Production 236, 240 Stocks on hand Withdrawals: 236 Tax-freeree 13, 236, 240 Tax-paid Still: 234, 235 Losses 228, 229 Materials used in production of 235, 239 PPremises operated, number 13, 230, 231, 234, 235, 239 Pducti 234, 235, 239 Storocks oonn hand 230, 231 Treatment of wines Withdrawals: 232, 233, 234, 235 Tax-free 13, 232, 233, 234, 235, 239 Tax-paid Vermouth: 237 Losses 237, 240 Premises operated, number 237, 240 Productionro 237, 740 Stocki on hand Withdrawals: 237 Tax-free 14, 237 40 Tax-paid 116-118, 156, 159,, 2162 Wines, cordials, etc., taxes 134 Wires, leased, tax Employment; Individual income; Payroll taxes): Withheld taxes (see also Income and old-age insurance: 30 Claims 110, 156, 159, 162 Receipts 6 Returns filed 110 Railroad employees' representative 110 Railroad employment compensation 156, 15159, 162 Railroad retirement 6 Withholding agents, returns filed 40 Withholding Statement, Form W-2, revision of Y Yeast mash beer, used in production of: 185 Ethyl alcohol 242 Vinegar O