Commissioner of Internal Revenue

ANNUAL REPORT

OF THE COMMISSIONER OF INTERNAL REVENUE

FOR TIlE FISCAL YEAR ENDED JUNE 30

1949

UNITED STATES GOVE.RNMENT PRINTING OFFICE WASHINGTON: 1950

"~or sale by the Sup=rinlendcnt of Documcnu.. U. S. Govt.enment Printing Oilier. W...hin~tol' 25. D .. C­ Price SO Gent. (paper cover) CONTENTS

Page Introduction 1 General: Internal revenue collections 1 Refunds and repayments 2' Additional tax assessed as a direct result of enforcement efforts 4 Personnel summary Improvements in organization and procedure 15 Cost of administration 7 Conventions affecting the Bureau S Important legislation enacted affecting the Bureau of Internal Revenue & Accounts and Collections Unit: General functions 101 Collectors of internal revenue 11 Supervisors of accounts and collections 11 Processing Division 11 Planning Division 12 Disbursement Accounting Division 12 Employment Tax Unit: General functions 12 Collections 13 TREASURY DEPARTMENT Assessment of employment taxes 13 13 Document No. 3165 Taxes under the Federal Insurance Contributions Act Claims adjusted 14 Internal Revenue Special refunds 14 Offers in compromise 15 Coordination with Social Security Administration 15 Tax under the Federal Unemployment Tax Act 15 Returns received and closed 16 Claims adjusted 17 Offers in compromise 17 Railroad Retirement Tax Act 17 Claims adjusted 113 Coordination with Railroad Retirement Board 13 Income Tax Unit: General functions 15 Collections 15 Returns and declarations filed 19 Preliminary review of income and excess profits tax returns 20 Investigation of tax returns by field offices 29 Revenue results of investigation of income and excess profits tax returns 21 Stage at which additional tax was assessed 22 Tentative LIFO inventory method adjustments 23 Tentative carry-back adjustments 23 Refunds, abatements, and credits 24 Inventory of returns on hand in the field offices 24 Pension trust work 25 Salary stabilization cases 26 Excess Profits Tax Council: Organization of Council 27 Size of job 2S Review of principles 25 Consideration of taxpayer cases 29' Summary of receipts and disposals 29) Miscellaneous Tax Unit: General functions 311 Collections 39 nr

CONTENTS V CONTENTS IV Alcohol Tax Unit—Continued Page Miscellaneous Tax Unit—Continued Page Basic permit and trade practice activities— Permits 47 Estate Tax Division— 30 47 General functions 30 Labels Advertising 47 Collections 30 48 Returns Trade practice 31 48 Additional assessments 31 Interlocking directorates Enforcement activities— Claims 48 Tobacco and Capital Stock Tax Division— 32 Seizures General functions Arrests and prosecutions 48 Tobacco taxes— Applications for pardon and parole 48 32 Transportation of liquor into dry territory 48 Collections 33 Accident investigations 48 Claims 49 Capital stuck tax- 33 Firearms program Technical Staff: Colleetions 33 49 - Claims General functions Field operations 50 Sales Tax Division— 34 52 General functions 34 Coordination of field activities Compromise, extension of time and closing agreements 52 Collections " 34 Assessments 34 Office of the Chief Counsel: General functions 53 Field reports 35 53 Claims 35 Chief Counsel's Committee Engineers and Auditors Section 53 Credit cases 35 54 Off erain compromise 35 Alcohol Tax Division Miscellaneous tax field force Appeals Division 54 55 Miscellaneous Division— 35 Civil Division Claims Division 55 General functions 36 56 Collections Interpretative Division Oleomargarine; adulterated, process or renovated butter; and 56 37 Legislation and Regulations Division Penal Division 56 filled cheese 58 Firearms, under the National Firearms Act and the Federal Fire- 37 Review Division Intelligence Unit 59 arms Act 37 59 Silver 37 Conclusion Field and special squad reports 38 Miscellaneous claims 38 STATISTICAL TABLES Miscellaneous credit cases RECEIPTS FROM INTERNAL REVENUE TAXES Alcohol Tax Unit: 39 Table General functions 1. Receipts from specified sources of internal revenue, fiscal year ended Permissive activities— 39 June 30, 1949, by collection districts, States, and Territories 62 Plants and permittees 39 2. Comparative internal revenue collections, fiscal years 1948 and 1949, Collections 40 by collection districts, States, and Territories 106 Production of distilled spirits 41 Tax-paid withdrawals of distilled spirits 3. Summary of internal revenue collections, year ended June 30, 1949, 42 by States and Territories 110 Tax-free withdrawals of distilled spirits 42 Materials used in production of rectified products 4. Summary of monthly internal revenue tax receipts for the fiscal year 42 ended June 30, 1949, by sources 112 Production of rectified products 42 Consumption of distilled spirits 5. Summary of internal revenue collections, years ended June 30, 1948 43 and 1949, by sources 118 Stocks of distilled spirits 43 6. Summary of internal revenue receipts by principal sources, fiscal years Specially denatured rum 43 120 Fermented malt liquors 1916 through 1949 43 7. Total internal revenue collections, years ended June 30, 1863 to 1949_ _ 121 Wines 43 from Puerto Rico, Production of ethyl alcohol 8. Internal revenue tax on manufactured products 43 fiscal years 1948 and 1949, by objects of taxation 122 Tax-free withdrawals of undenatured alcohol 44 Stocks of undenatured alcohol 44 Production of denatured alcohol 44 INCOME TAX AUDIT Production of vinegar 44 Assessments 9. Additional income and profits tax assessments made by the Income Tax Claims for drawback of tax on distilled spirits used in nonbeverage 44 Unit, during the fiscal year 1949, by tax years 122 products 44 10. Tax items appealed to the Tax Court, fiscal year ended June 30, 1949_ _ 128 Claims for remission of taxes on distilled spirits and wines abatement and refund of taxes 44 Claims for redemption of stamps, 44 TOBACCO, CIGARS, CIGARETTES, ETC. Export claims 45 Offers in compromise under internal revenue laws 45 11. Manufactured tobacco: Number of factories operated, leaf tobacco and Offers in compromise under Federal Alcohol Administration Act_ 45 other materials used, calendar year 1948, by collection districts__ 129 Laboratory activities 45 12. Tobacco and snuff manufactured and removed, calendar year 1948, by Field inspections 45 collection districts 130 Other statistics 46 Administrative procedure CONTENTS CONTENTS VII Vit Page Table ALCOHOL, DISTILLED SPIRITS, BEER, WINES, ETC. 13. Cigars: Number of factories operated, quantity of tobacco used, num- ber of cigars manufactured, and removed without payment of tax, Table Page calendar year 1948, by collection districts 131 37. Plants and permittees qualified to engage in the production, distribu- 14. Cigars weighing more than 3 pounds per thousand: Number removed tion, or use of alcohol and alcoholic liquors as of June 30, 1949__ 158 tax-paid, by classes, calendar year 1948, by collection districts 133 38. Basic permits under the Federal Alcohol Administration Act, fiscal year 1949 15. Cigars weighing more than 3 pounds per . thousand: Manufactured and 158 removed tax-paid for domestic consumption from customs bonded 39. Materials: Used at industrial alcohol plants in production of undena- manufacturing warehouses, class 6, by classes, calendar year 1948 135 tured ethyl alcohol, by kinds and by months, fiscal year 1949 159 16. Cigarettes weighing not more than 3 pounds per thousand: Number of 40. Materials: Used at industrial alcohol plants in production of unde- factories operated, quantity of tobacco used, number of cigarettes natured ethyl alcohol, by kinds and by States, fiscal year 1949 160 manufactured and removed, calendar year 1948, by collection 41. Materials: Used at industrial alcohol plants in the production of un- districts 136 denatured ethyl alcohol, by kinds, and quantities of undenatured 17. Cigarettes weighing more than 3 pounds per thousand: Quantity of • ethyl alcohol produced therefrom, fiscal year 1949 162 tobacco used, number of cigarettes manufactured and removed, 42. Summary: Production, withdrawals, and stocks of undenatured ethyl calendar year 1948, by collection districts 138 alcohol, by months, fiscal year 1949 163 43. Summary: Production, withdrawals, losses, and stocks on hand June 18. Leaf tobacco used in manufacturing cigars, cigarettes, and tobacco and snuff, also quantities of such articles manufactured, calendar years 30, of undenatured ethyl alcohol, and premises operated, by States, 1944 to 1948 138 fiscal year 1949 164 19. Summary of operations of manufacturers of tobacco and cigars, calen- 44. Summary: Production, withdrawals, losses, and stocks on hand June dar year 1948. Number of tobacco manufacturers, aggregate quan- 30, of undenatured ethyl alcohol, and premises operated, fiscal years tity of each kind, and total of all kinds of tobacco produced, classified 1934 to 1949; inclusive 166 as to output and percentage of total production, calendar years 1947 45. Summary : Importations, withdrawals, and stocks at industrial alcohol and 1948 139 bonded warehouses, of imported undenatured ethyl alcohol, by months, fiscal year 1949 20. Exportation in bond of manufactured tobacco, snuff, cigars, and cigar- 167 ettes, etc., year ended June 30, 1949, by collection districts 141 46. Summary: Importations, withdrawals, and losses at industrial alcohol 21. Withdrawals of manufactured tobacco, snuff, cigars, and cigarettes bonded warehouses, of imported undenatured ethyl alcohol, by from bonded internal revenue tobacco export warehouses, for export, States, fiscal year 1949 167 year ended June 30, 1949 142 47. Summary: Importations, withdrawals, losses, and stocks at industrial 22. Withdrawals of manufactured tobacco, snuff, cigars, and cigarettes from alcohol bonded warehouses, of imported undenatured ethyl alcohol, factory in bond, for shipment or delivery as sea stores, year ended fiscal years 1943 to 1949, inclusive 168 June 30, 1949 142 48. Production: Ethyl alcohol used for denaturation and completely and specially denatured alcohol produced, by months, fiscal year 1949 23. Withdrawals of manufactured tobacco, snuff, cigars, and cigarettes 168 from tobacco sea stores warehouses, for shipment or delivery as sea 49. Withdrawals: Completely denatured alcohol, by formulas and by stores or export, year ended June 30, 1949 142 months, fiscal year 1949 169 50. 24. Domestic and imported cigarette papers and tubes withdrawn tax-free Withdrawals: Specially denatured alcohol, by formulas, fiscal year and tax-paid, fiscal years 1948 and 1949 142 1949 169 51. Withdrawals: Specially denatured alcohol, by leading formulas and 25. Tobacco products withdrawn for consumption, computed from collec- tions from sales of stamps, fiscal year 1949 143 by months, fiscal year 1949 170 26. Dealers in leaf tobacco in business, leaf tobacco exported and received 52. Summary : Ethyl alcohol used for denaturation, and production, with- from farmers, calendar year 1948, by collection districts 144 drawals, stocks on hand June 30, and losses of denatured alcohol, 27. Quasi tobacco manufacturers classified: Number of factories operated and denaturing plants operated, by States, fiscal year 1949 171 and tobacco material handled, calendar year 1948 145 53. Operations in specially denatured alcohol: By bonded dealers, by States, fiscal year 1949 172 OCCUPATIONS SUBJECT TO SPECIAL TAXIS 54. Operations in specially denatured alcohol: By manufacturers, by States, fiscal year 1949 172 28. Number of each class of special-tax payers purchasing special-tax 55. Summary: Ethyl alcohol used for denaturation, and production, stamps covering the fiscal year 1949 or portion thereof, under the withdrawals, and stocks on hand June 30, of denatured alcohol, various annual rates, by collection districts and States 146 and premises operated, fiscal years 1934 to 1949, inclusive 174 56. Materials: Used at registered distilleries in production of distilled OLEOMARGARINE, RENOVATED BUTTER, ETC. spirits, by kinds and by months, fiscal year 1949 175 57. Materials: Used at registered distilleries in production of distilled 29. Production and withdrawals of colored oleomargarine, year ended spirits, by kinds and by States, fiscal year 1949 176 June 30, 1949, by collection districts 155 58. Materials: Used at fruit distilleries in production of brandy and 30. Production and withdrawals of uncolored oleomargarine, year ended spirits, by kinds and by months, fiscal year 1949 177 June 30, 1949, by collection districts 155 59. Materials: Used at fruit distilleries in production of brandy and Production and withdrawals of oleomargarine (colored and uncolored), 31. 156 spirits, by kinds and by States, fiscal year 1949 178 year ended June 30, 1949, by months 60. Production: Distilled spirits, by kinds and by months, fiscal year 1949_ 179 Summary of production and withdrawals of oleomargarine (colored and 61. 32. 156 Production: Distilled spirits, by kinds and premises operated, by uncolored), years ended June 30, 1940 to 1949 States, fiscal year 1949 179 Materials used in the manufacture of oleomargarine (colored and 33. 157 62. Production: Brandy and spirits by fruit distilleries, by kinds and uncolored), year ended June 30, 1949 by months, fiscal year 1949 180 Production and withdrawals of renovated butter, year ended June 30, 34. 157 63. Production: Brandy and spirits by fruit distilleries, by kinds and by 1949, by collection districts States, fiscal year 1949 180 at Summary of production and tax-paid withdrawals of renovated butter, 157 64. Withdrawals: Distilled spirits, total tax-paid, by kinds and by months, years ended June 30, 1940 to 1949 fiscal year 1949 181 36. Production, importation, and withdrawals of playing cards, by months, year ended June 30, 1949 157 VIII CONTENTS CONTENTS

Table Page Table Page 65. Withdrawals: Distilled spirits, total tax-paid, by kinds and by States, 94. Materials: Used in production of still wines, by kinds and by months, fiscal year 1949 181 fiscal year 1949 200 66. Withdrawals: Bottled-in-bond distilled spirits, tax-paid, by kinds 95. Materials: Used in production of still wines, by kinds and by States, and by months, fiscal year 1949 182 fiscal year 1949 201 67. Withdrawals: Bottled-in-bond distilled spirits, tax-paid, by kinds and 96. Production: Still wines produced and treatment of wines after by States, fiscal year 1949 182 fermentation, by months, fiscal year 1949 202 68. Withdrawals: Distilled spirits, total tax-free, by kinds and by months, 97. Production: Still wines produced and treatment of wines after fiscal year 1949 183 fermentation, by States, fiscal year 1949 203 69. Withdrawals: Distilled spirits, total tax-free, by kinds and by States, 98. Withdrawals: Still wines, by months, fiscal year 1949 204 fiscal year 1949 184 99. Withdrawals: Still wines, by States, fiscal year 1949 205 70. Losses: Distilled spirits in internal revenue bonded warehouses due to 100. Summary: Production, withdrawals, losses, and stocks of still wines, leakage and evaporation, by kinds and by States, and losses due to • by months, fiscal year 1949 206 other causes, by kinds, fiscal year 1949 185 101. Summary: Production, withdrawals, losses, and stocks on hand 71. Stocks: Distilled spirits in internal revenue bonded warehouses, by June 30, of still wines, and premises operated, by States, fiscal kinds and by months, fiscal year 1949 185 year 1949 207 72. Stocks: Distilled spirits in internal revenue bonded warehouses, by 102. Summary: Production, withdrawals, losses, and stocks of sparkling kinds and premises operated, by States, June 30, 1949 186 wines, by months, fiscal year 1949 20$ 73. Stocks: Distilled spirits in internal revenue bonded warehouses, by 103. Summary: Production, withdrawals, losses, and stocks on hand kinds, and by years and seasons of production, June 30, 1949 186 June 30, of sparkling wines, and number of premises operated, by 74. Summary: Production, withdrawals, and stocks of distilled spirits, by States, fiscal year 1949 208 months, fiscal year 1949 187 104. Summary: Production, withdrawals, losses, and stocks of vermouth, 75. Summary: Production, withdrawals, and stocks on hand June 30, of by months, fiscal year 1949 209 distilled spirits, and premises operated, fiscal year 1949 187 105. Summary: Production, withdrawals, losses, and stocks on hand 76. Summary: Production, tax-paid withdrawals, and stocks on hand June 30, of vermouth, and number of premises operated, by States, June 30, of whisky and of total distilled spirits, and premises op- fiscal year 1949 209 erated, fiscal years 1934 to 1949, inclusive 188 106. Summary: Production, withdrawals, losses, and stocks of aperitif 77. Materials: Used in production of rectified spirits and wines, by kinds wines other than vermouth, by months, fiscal year 1949 210 and by months, fiscal year 1949 189 107. Summary: Production, withdrawals, losses, and stocks on hand June 78. Materials: Used in production of rectified spirits and wines, by kinds 30, of aperitif wines other than vermouth, and number of premises and by States, fiscal year 1949 199 operated, by States, fiscal year 1949 210 79. Production: Rectified spirits and wines, by kinds and by months, 108. Summary: Production, tax-paid withdrawals, and stocks on hand fiscal year 1949 190 June 30, of still and sparkling wines, and premises operated, fiscal 80. Production: Rectified spirits and wines, by kinds and by States, and years 1934 to 1949, inclusive 211 premises operated, fiscal year 1949 191 109. Summary: Materials used for the production of ethyl alcohol, 81. Summary: Materials used for rectification and production of rectified distilled spirits, fermented malt liquors, and vinegar, by kinds, fiscal spirits and wines, and premises operated, fiscal years 1936 to 1949, year 1949 213 inclusive 191 110. Summary: Materials used at vinegar plants, and production and 82. Bottling: Distilled spirits (rectified and unrectified) bottled for con- stocks of vinegar, by months, fiscal year 1949 214 sumption, fiscal year 1949 192 111. Summary: Materials used at vinegar plants, production and stocks $3. Summary: Distilled spirits (rectified and unrectified) bottled for of vinegar, and premises operated, fiscal years 1943 to 1949, consumption, fiscal years 1941 to 1949, inclusive 193 inclusive 215 84. Summary: Rum used for denaturation, and production, removals, 112. Claims for redemption of stamps, remission, refund, and abatement and stocks of specially denatured rum at distillery denaturing of taxes, fiscal year 1949 215 bonded warehouses, by months, fiscal year 1949 193 113. Claims for drawback, fiscal year 1949 216 85. Summary: Rum used for denaturation, and production, removals, 114. Label activity under Federal Alcohol Administration Act, fiscal year and stocks on hand June 30, of specially denatured rum at distillery 1949 217 denaturing bonded warehouses, by States, fiscal year 1949 193 115. Enforcement, Alcohol Tax Unit: Seizures and persons arrested, by 86. Operations in specially denatured rum: By manufacturers, by months, fiscal year 1949 217 States, fiscal year 1949 194 116. Enforcement, Alcohol Tax Unit: Seizures and persons arrested, by 87. Materials: Used in production of fermented malt liquors and cereal States, fiscal year 1949 218 beverages, by kinds and by months, fiscal year 1949 194 88. Materials: Used in production of fermented malt liquors and cereal TECHNICAL STAFF beverages, by kinds and by States, fiscal year 1949 195 89. Summary: Production, withdrawals, losses, and stocks of fermented 117. Analysis of the work of the Technical Staff during the fiscal year malt liquors, by months, fiscal year 1949 197 1949-Income, profits, estate, and gift tax cases 219 90. Summary: Production, withdrawals, losses, and stocks on hand June 118. Summary: Income, profits, estate, and gift tax appeals docketed, 30, of fermented malt liquors, and breweries operated, by States, stipulated, defaulted, and defended on the merits before the Tax fiscal year 1949 198 Court (formerly Board of Tax Appeals), fiscal years 1940 to 1949, 91. Summary: Production, withdrawals, losses, and stocks on hand inclusive 221 June 30, of fermented malt liquors, and breweries operated, fiscal 119. Analysis of work on compromise, extension of time, and final closing years 1934 to 1949, inclusive 199 agreement cases, fiscal year 1949 221 92. Summary: Production, withdrawals, and stocks of cereal beverages, by months, fiscal year 1949 199 93. Summary: Production, withdrawals, and stocks on hand June 30, of cereal beverages, and plants operated, by States, fiscal year 1949- 199 CONTENTS XI X CONTENTS MISCELLANEOUS STATISTICS OFFICE OF THE CHIEF COUNSEL Page Table Expenses of the Internal Revenue Service, fiscal year ended June 30, APPEALS DIVISION 147. 229 Page 1949 Table issued to collectors of internal Cases appealed from Tax Court decisions to appellate courts, fiscal Summary of internal revenue stamps 120. 222 148. revenue and hetstmaster Po G enealduringr d the fiscal years 1948 year 1949 235 Number and amounts, of cases shown in table 120 for the fiscal year and 1949 121. 222 Cost of printing and binding for Internal Revenue Service, fiscal years 1949, by class of tax and amounts involved 149. 235 222 1948 and 1949 122. Circuit and Supreme Court cases pending June 30, 1949 Status of cases pending before the Tax Court of the United States, 123. 222 June 30, 1949 Progress of cases in appellate courts on appeals from decisions of 124. the Tax Court of the United States for the fiscal year ended 223 June 30, 1949_ Disposition of Supreme Court, Circuit Court, and Tax Court cases 125. 223 closed during the fiscal year 1949 Disposition of cases closed by the Tax Court of the United States 126. 223 during the fiscal year 1949 Number, and amounts, of cases pending in field divisions, by class of 127. 224 tax and amounts involved Disposition of cases by the Tax Court of the United States during 128. 224 fiscal year 1949 CIVIL DIVISION Cases received and disposed of during the fiscal year 1949 224 129. 225 130. Results obtained in cases closed during the fiscal year 1949 Results obtained in lien cases closed during the fiscal year 1949 225 131. 225 132. Civil cases pending at the beginning and end of the fiscal year 1949_ _ 133. Number of Civil Division cases tried by the Department of Justice and number decided by the courts during the fiscal year 1949 225

CLAMS DIVISION Processing tax cases appealed to the United States Processing Tax 134. Board of Review and the Tax Court of the United States, includ- ing those appealed to appellate courts, fiscal years 1939-1949, 226 inclusive fiscal year 135. Number, and amounts, of cases shown in table 134 for the 226 1949 only, by class of tax and amounts involved 136. Status of processing tax cases pending before the Tax Court of the United States, including those appealed to appellate courts, June 226 30, 1949 Results obtained in processing tax cases closed before the Tax Court 137. of the United States, including those appealed to appellate courts, 226 fiscal year 1949 Civil cases received and disposed of by Processing Tax Section, Claims 138. Division, and number decided by courts during the fiscal year 227 1949 139. Civil cases received and disposed of by Processing Tax Section, Claims Division, during the fiscal year 1949, by number of cases and 227 amounts involved 140. Cases received and disposed of by Reorganization Section, Claims 227 Division, during fiscal year 1949 Results obtained in cases closed in Reorganization Section, Claims 141. 227 Division, during fiscal year 1949 142. Liability involved in cases of Reorganization Section, Claims Divi- 227 sion, pending June 30, 1949 Cases received and disposed of by Bankruptcy and Receivership Sec- 143. 228 tion, Claims Division, during the fiscal year 1949 144 Cases received and disposed of by Compromise Section, Claims Din- 228 sion, during fiscal year 1949 145. Liability involved in cases of Compromise Section, Claims Division, 228 pending June 30, 1949 146. Results obtained in cases closed in Compromise Section, Claims Divi- 228 sion, fiscal year 1949 ANNUAL REPORT OP THE COMMISSIONER OF INTERNAL REVENUE

TREASURY DEPARTMENT, OFFICE OF COMMISSIONER OF INTERNAL REVENUE, Washington, D. C., January 9, 1950. The honorable the SECRETARY OF THE TREASURY. SIR: I have the honor to submit the following report upon the work of the Bureau of Internal Revenue for the fiscal year ended June 30, 1949: GENERAL The Bureau of Internal Revenue is responsible for the assessment and collection of all taxes imposed by any law providing internal revenue. It also has responsibilities under statutes which, while not imposing taxes, have some relation to internal revenue. These include the Federal Alcohol Administration Act (49 Stat., 977), as amended

(27 U. S. C. and Sup., 201 -212); the Liquor Enforcement Act of 1936

(49 Stat., 1928, 27 U. S. C., 211 -228); the Federal Firearms Act (52

Stat., 1250, 15 U. S. C., 901 - 909); and the Stabilization Act of 1942

(56 Stat., 765), as amended (50 U. S. C., App. Sup., 961 - 971).

INTERNAL REVENUE COLLECTIONS The following table shows the collections by general sources of revenue for 1949 as compared with 1948:

Summary of internal revenue collections, fiscal years 1948 and 1949

Fbeal year Increase or decrease (—) General source 1918 1949 Amount Percent

Income and profits taxes: Individual: Withheld by employers $11,533,576,972 $10,055, 501, 785 —$1,478,075,187 —12.8 Other 9, 464, 203, 727 7,996, 320,132 —1,467,883,595 —15.6 Total individual income taxes 20,997, 780,699 18,061, 821, 917 —2,945,958, 782 —14.0 Corporation: Income taxes 9,851, 499, 537 11, 342, 643, 703 1, 491, 144, 256 15.1 Excess profits taxes: Declared value I 17, 643, 249 16, 233,475 —1, 409,774 —8.0 Revenue Act of 1940. as amended'. 305, 251,476 194,495,199 —110,756,277 —36.3 Army and Navy contracts 15, 572 296,768 281,196 1,895.8 Total corporation income and profits taxes 10,174, 409, 834 11,553,669, 234 1,379, 259,400 13.6 Total income and profits taxes_ 31, In. 190, 6a3 2%605,491,151 —1, 566, 699,382 —5.0 1

REPORT OF COMMISSIONER OF INTERNAL REVENUE 3 2 REPORT OF COMMISSIONER OF INTERNAL REVENUE years 1948 and 1949-Continued Summary of internal revenue collections, fiscal Number of claims paid and the amount of refunds, payments and repayments, including interest, during the fiscal years 1948 and 1949-Continued Fiscal year Increase or decrease (-) General source Percent 1948 1949 Amount Amount refunded or Interest allowed (in. Number of claims paid cludep in amount Class of tax refunded) Employment tans: 'Old-age insurance (Federal Insurance 1,612,720,919 687,150,996 74,930,077 46 Contributions Act) 1948 1949 1948 1949 1948 1949 Unemployment insurance (Federal Un- 226,228,180 17,719,880 8.5 employment Tax Act) 208,508,300 Employment taxes: Carriers taxes-old-age benefits (Rail- 562,733,585 2,620,451 0.5 road Retirement Tax Act) 560,113,134 Old-age insurance (Fed- 4.0 eral Insurance Contri- 2,381,342,353 2,476,112, 762 94, 770,409 Total employment taxes butions Act) 198,896 406, 744 5,073,015 7,858,778 237, 967 Unemployment insurance 139,602 Miscellaneous internal revenue: 6,137, 508 4,414,675 256.2 (Federal Unemploy- 1,722,833 -10.5 ment Tax Act) 11,604 13,126 Capital stock tax 822,380,121 72.6, 780, 589 -86, 599,552 2, 511, 236 2,818,346 98,006 196,980 - 21.1 Carriers taxes-old-age Estate tax 76,965,322 60,757,344 -16,207,978 Glft tax benefits (Railroad Re- tirement Tax Act) 305 412 30,685 570,210 4,722 104, 571 121, 773, 303 11,808,008 10.7 ' Digit-Med :spirits (Imported, excise) 109,985,295 -9.8 Total employment 1,326,267,594 1,276,180,995 - 50.086, 599 Distilled spirits (domestic, excise)._ 33,793,236 -1,190,086 - 3.4 taxes 210,755 420,282 7,619,938 11, 243,339 340,695 390,553 Distilled spirits rectification tax 34,983,322 60,981, 836 65, 4,819,925 7.9 Wines 719, 565 -22,992 -54.0 Miscellaneous internal reve- taxes, wines and liquors 45572, nue: Floor 12,489,467 12, 297,810 -201,657 - 1.6 Bottle or container stamps - 10,729, 742 -1.5 Capital stock tax 136 47 128,040 31,692 28,119 697,097,258 686,357, 516 Estate tax 4, 999 Fermented malt liquors 13, 519,426 14,402,982 883,556 6.5 1,910 2, 384 10, 014,297 17, 741,471 1, 568, 292 1,949, 567 Special or occupational taxes Gift tax 327 448 628, 930 1,136, 224 91, 678 136, 080 -2.0 Alcohol taxes 12,915 2,255,328,754 2,210,607,168 - 44,719,588 17,837 38, 230, 397 42,503, 783 27,503 17,287 Total alcohol taxes Tobacco taxes 27 18 1,344 961 30 32 1.7 Manufacturers' and re- I, 3W,280, 153 1,321,874,770 21, 594,617 Tobacco taxes 72,828,043 -6,637,893 -8.4 tailers' excise taxes 1,148 1,46 1,350,111 1, 422, 438 164,688 193,360 79,485,936 7.4 Other taxes Stamp taxes 1,649,234,053 1, 771, 532,723 122,298, 670 6, 408 4, 815 2,938, 769 2, 691, 086 75,677 95,061 Manufacturers' excise taxes 449,210,787 - 20, 711,951 - 4.4 Retailers' excise taxes 469,922,738 Total miscellaneous in- Other taxes (communications, transpor- ternal revenue 21,871 27,016 53, 291, 988 65,527,635 1,953,985 2,396,365 oleomargarine, etc., 5.9 tation, admissions, 1,855, 711,499 1, 752,792,194 97,080,695 and repealed taxes not listed above)_... Processing and related taxes 21 12 82,108 71,687 32,183 7,885 0.8 revenue. 8,311,009, 410 8,381,521,106 70,511,696 Total miscellaneous internal Total refunds of Internal 41,864,542, 295 40,463,125,019 -1,031,417, 276 -3.3 revenue collections__ _ 2,171,144 39,108,973 2, 293, 744,339 2,899,378, 470 56, 514,935 86, 335, 535 Grand total Repayments (not refunds of taxes erroneously collected): I Repealed for tax years ending after June 30, 1946. Redemption of stamps: Alcohol tax 2,933 2,318 I Repealed for tax years beginning after Dec. 31, 1945. 471,826 349,420 17 25 Repealed for tax years ending after June 30, 1945. Miscellaneous taxes: Narcotics 58 61 1,118 3,300 8 REFUNDS AND REPAYMENTS Silver 453 76 99 Tobacco 2,070 2,195 2,950, 89 2, 770, 742 During the year refunds of tax collections, together with interest, Other miscellaneous in total amount of $2,902,742,898, were made from the appropriation stamps 3,215 3,581 367,918 238,439 15,873 11,317 Total miscellaneous "Refunding internal revenue collections, 1949 and prior years." stamps 5,346 5,818 Following is a summary of the refunds, showing the number of 3,323,379 3,012,557 15,972 11,325 Total stamp re- claims, the amounts of refunds and repayments allowed (including demptions 8,279 8,136 3, 795, 205 3,381, 978 15,989 11,350 drawbacks and stamp redemptions), and the amounts of interest paid Drawbacks: thereon, with respect to each general class of tax during the fiscal Alcohol 5 1,756 Tobacco year 1949 as compared with the fiscal year 1948: 2 9 991 2,451 Total drawbacks 7 9 2, 747 2, 451 Number of claims paid and the amount of refunds, payments, and repayments, Total refunds and re- including interest, during the fiscal years 1948 and 1949 payments of internal revenue 32,179,430 39,117,118 2,297, 542,291 2,902, 742,898 56, 630,924 88,346,884 Interest allowed Cm- Amount refunded or eluded in amount Number of claims paid refunded) Non.-There was also refunded during the fiscal year 1949 the amount of $16,610, with no interest, from Class of tax Puerto Rico trust fund collections, covering 46 claims. The figures in this table will no agree with those in ater sections of this report for the reason that the 1948 1949 amounts shown in the later sections relate to claims disposed of by the Units, whereas this table- shows 1948 1949 1948 1949 the actual payments made.

Refunds of internal revenue collections: Income and profits taxes: 931,895,975 31, 882,485 38,582,744 $1,703,802,201 $2,408,761,223 $22,037,370 Individual 528,953,206 413, 779,591 32, 150, 702 51,844, 756 Corporation 76,012 78,919

Total income and prof- 2,232, 755,407 2,822,535,814 54,188,072 83,690,732 „ its taxes 1, 918, 497 38,681,663

REPORT OF COMMISSIONER OF INTERNAL REVENUE 5 COMMISSIONER OF INTERNAL REVENUE 4 REPORT OF . Summary of personnel, Bureau of Internal Revenue, June 30, 1948, as compared ADDITIONAL TAX ASSESSED AS A DIRECT RESULT OF ENFORCEMENT EFFORTS with June 30, 1949

During the fiscal year ended June 30, 1949, additional assessments Number on payroll as of- Increase against all classes of taxpayers aggregated $1,891,679,000. This repre- or Branch of service decrease sents a decrease of $5,336,000, or 0.3 percent, as compared with June 30, 1948 June 30, 1949 $1,897,015,000 additional assessments made during the preceding fiscal year. Of the 1949 total of additional assessments, $1,698,284,000, Departmental service —108 or 89.8 percent, represents additional income and profits taxes. This Field service: amount is 0.7 percent more than the $1,686,841,000 additional assess- Offices of collectors of internal revenue 30, 692 29, 908 —784 Supervisors of accoonts and collections 71 88 15 ments of income and profits taxes made during the 1948 fiscal year. Internal revenue agents' forces: Income, profits, estate, and gift taxes 8, 398 9,177 779 A comparison of the additional assessments made during the fiscal Miscellaneous and sales taxes 80 86 6 year ended June 30, 1949, with that of the fiscal year ended June 30, Alcohol Tax Unit: Offices of district supervisors 4,054 4,058 4 1948, for the four general classes of tax is shown below: Field inspection force 14 15 1 Intelligence Unit 1,286 1,470 184 Technical Staff 528 607 79 Additional assessments, fiscal years 1948 and 1949 Excess Profits Tax Council 84 149 es Office of the Chief Counsel 370 409 39 1,904 1,747 —157 iTax, interest, and penalties, including duplicate and jeopardy assessments] Processing Division Total field service 47,481 47, 712 231 /Money figures in thousands of dollars/ Grand total 52,143 52,286 123 Increase or Fiscal year decrease (—) General class of tax At the beginning of the year, the number of Bureau employees hold- Amount Percent ing war-service or interim appointments totaled 7,298, or about 14 0.7 percent of the entire personnel. Examinations conducted by the Income and profits tax 15. 7 Civil Service Commission and by examining boards operating in Bu- Employment taxes 26.8 Alcohol taxes —11.6 reau field offices, under supervision of the Civil Service Commission, Other taxes provided opportunities for many employees to qualify for permanent 1,897,015 1,891,679 —5, 336 —0.3 Total status. As a result, 3,892 employees were converted to permanent status during the year. The number of employees holding war- During the fiscal year deputy collectors of internal revenue collected service or interim appointments at the close of the year totaled 3,802, $346,509,480 from taxpayers against whom distraint warrants had or approximately 7 percent of the entire personnel. been issued. This amount, collected through the direct efforts of the Due to the exhaustion of eligible registers in certain areas and in collectors' field forces is not included in the additional assessments anticipation of funds being available for the employment of additional shown above; however, a negligible portion of the additional assess- personnel in the fiscal year 1950, new examinations for the positions ments are collected through the issuance of distraint warrants. of internal revenue agent and zone deputy collector were held gen- erally throughout the country. As a result, lists of qualified appli- PERSONNEL SUMMARY cants are available to meet present and future needs for some time to come. During the fiscal year ended June 30, 1949, there were in the field Supplementing the transfer to the field offices of the preparation of and departmental service of the Bureau 12,721 appointments and personnel action documents, which eliminated a mass of paper work 12,598 separations. Included in the number of separations are 30 theretofore performed in the central office of the Bureau in Washing employees who were granted military furloughs, 445 retirements, of ton, in September 1948, officers in charge of field offices were delegated which 88 were on account of disability, and 18 employees separated authority to approve locally a great majority of personnel actions for disciplinary reasons. The distribution of personnel in the field which are incident to the daily operations of their offices. Experience and departmental service of the Bureau at the close of the fiscal year to date has indicated that this shift of responsibility has resulted in 1948, and the distribution at the close of the fiscal year 1949, are economy of time and effort and in improved administration. compared in the following table: In May 1949, the keeping of retirement accounts and records was decentralized to eight field offices in the New York City area as an experiment to determine the feasibility and advisability of transferring this paper work to the field service generally. The experiment proved successful and, as a result, the maintenance of retirement records and accounts of some 45,000 employees will be decentralized to all field offices, the transfer to be completed in the fall of 1949.

860947-50-2 REPORT OF COMMISSIONER OF INTERNAL REVENUE 7 6 REPORT OF COMMISSIONER OF INTERNAL REVENUE IMPROVEMENTS IN ORGANIZATION AND PROCEDURE that they should be tested in pilot operations before being installed on a Nation-wide basis. Accordingly, several task force groups were Emphasis was placed throughout the year on the development of established to arrange for the necessary tests, analyze the results, organizational and procedural improvements that represent greater and either prepare plans for the implementation of the proposal or efficiency in the Bureau's operations and better service to taxpayers. recommend its rejection. Most of these tests will extend into the The Committee to Direct Management Studies of the Bureau of In- fiscal year 1950. Examples of the tests for which arrangements were ternal Revenue, established by order of the Secretary on July 2, 1948, made by the task forces are the following: afforded valuable consultative assistance to the Commissioner in the (1) Electromatic typewriters, continuous forms, and roller platen formulation of solutions for management problems. A firm of man- posting machines for processing individual income tax returns. agement engineers was employed to make a study of operating meth- (2) Discontinuance of separate accounts to record collection of ods in the offices of collectors of internal revenue, and a report em- accrued penalties and interest, collections obtained after abatement bodying the recommendations arising from such study was submitted of assessments as uncollectible, and excess collections of income and in January 1949. Highly satisfactory results were also obtained from withholding taxes. the work simplification and "cash awards for suggestions" programs, (3) A new and simplified scheme of block numbering of returns to which provide for effective utilization of the constructive ideas of the reduce typing and proofreading. Bureau's own rank and file employees. (4) Validating machines and bank proof machines for the process- Organization changes.—In the Washington office, the Estate and ing and control of remittances; also the adaptation of cash register Gift Tax Division was transferred from the Miscellaneous Tax Unit to machines to the validation of special tax stamps. the Income Tax Unit. This resulted in the closer linking of work in (5) A simplified procedure for the control and disposition of un- the field and headquarters offices, since all field examinations of estate classified collections. and gift tax returns are made by revenue agents. In the area of ad- (6) High speed posting machines with direct subtraction and con- ministrative services, additional decentralization was achieved by the tinuous carbon-interleaved forms for the preparation of accounting transfer of certain personnel records to field offices and by greatly and related records. enlarging the authority of field officers to approve personnel actions. (7) Inserting and mailing machines for use in the distribution of Also, the work of surveying, classifying, and storing approximately tax return forms and instructions. 2,500,000 individual income tax returns, previously performed in Washington, was made the responsibility of field offices. COST OF ADMINISTRATION Internal improvement programs.—The success of the work simplifi- cation and "cash awards for suggestions" programs in reaping the The amount of $210,859,000 was appropriated for the fiscal year benefits of employee interest in improved methods is shown by the 1949 for salaries and expenses in connection with the assessment facts that 871 work simplification recommendations were approved and collection of internal revenue taxes and the administration of and installed during 1949, and that 602 cash awards were made. internal revenue laws. The expenditures and obligations against the Mechanization of operations in collectors' offices.—The processing of Bureau appropriation were $209,205,715, leaving an unexpended nearly 250 million tax returns and associated documents each year is balance of $1,653,285. The expenditures do not include the amounts an operation that can be handled most economically if mechanized expended for refunding taxes illegally or erroneously collected and accounting and recording techniques can be utilized in its performance. for the redemption of stamps. The cost of collecting $40,463,125,019 Accordingly, the Bureau continued throughout the year an energetic during the year was $0.52 per $100 compared with $0.44 per $100 and systematic campaign to mechanize as many as possible of the for 1948. processing and recording operations carried on in collectors' offices. Data on the annual cost of administration, although of interest and Punch card tabulating equipment and processes were installed in value for certain purposes, cannot be relied upon either as a guide seven additional collection districts; namely, the districts of sixth to the proper scale of administrative activity or as a measure of California, first Illinois, Maryland, Michigan, and first, second, and relative efficiency of operation from year to year. An annual ratio third New York. During 1948 such equipment was used only for of cost to collections is determined by many factors, most of which processing those income tax returns for which the collectors computed have no relationship to these objectives. To illustrate, one such the tax liability, but in 1949 experiments were conducted in its use factor is the nature of the tax system. The higher the level of tax for the processing of all types of income tax returns. There was rates and the more numerous the levies that are inherently economical rapid acceleration of the microfilming program, resulting in the re- to collect the lower will be the average cost ratio. Another factor lease of substantial amounts of filing equipment and floor space much is the prevailing level of salaries paid to Bureau personnel. A third in need for current operations. factor is the volume of essential services performed for taxpayers, Plans for tests and pilot operations.—The management-engineering such as computation of tax liability, and the volume of investigative firm's report on operations in collectors' offices contained a number activity required with respect to refund claims, both of which have of recommendations for new equipment and procedures. In view of expanded markedly during recent years. the far-reaching implications of such recommendations, it was evident S REPORT OF COMMISSIONER OF INTERNAL REVENUE REPORT OF COMMISSIONER OF INTERNAL REVENUE 9 INCOME TAX CONVENTIONS AFFECTING THE BUREAU OF INTERNAL REVENUE purposes. Public Law 899 also amends section 3443(a)(3)(A)(i) of PROMULGATED DURING THE FISCAL YEAR 1949 the Code so as to permit the allowance of a refund or credit of the A convention between the United States of America and the King- tax on musical instruments to the manufacturer, producer, or im- dom of the Netherlands for the avoidance of double taxation and porter thereof where such instruments are resold by any person for the prevention of fiscal evasion with respect to taxes on income and the use of any religious or nonprofit educational institution for certain other taxes was proclaimed by the President on December 8, exclusively religious or educational purposes. 1947. 1948. This convention was effective as of January 1, EIGHTY-FIRST CONGRESS, FIRST SESSION A convention between the United States and Denmark for the avoidance of double taxation and the prevention of fiscal evasion Public Law 2, approved January 19, 1949, provides for expense with respect to taxes on income was proclaimed by the President on allowances for the President, the Vice President, and the Speaker of December 8, 1948. This convention was effective as of January 1, the House of Representatives in the amounts of $50,000, $10,000, and 1948. $10,000 per annum, respectively, and provides that no tax liability shall accrue with respect to such allowances. These provisions are IMPORTANT LEGISLATION ENACTED DURING THE FISCAL YEAR 1949 AFFECTING effective at noon on January 20, 1949. THE BUREAU OF INTERNAL REVENUE Public Law 4, approved February 3, 1949, extended through June EIGHTIETH CONGRESS, SECOND SESSION 30, 1949, the applicability of Public Law 769 (Eightieth Congress), approved June 25, 1948, which provides that certain articles donated Public Law 864, approved July 1, 1948, amends Title III of the, 304 by the people or Government of France for sale for charitable purposes National Housing Act, as amended, so as to provide in section in the United States may be entered, or withdrawn from warehouse, thereof that the Federal National Mortgage Association, including its for consunption free of customs duties and internal revenue taxes. franchise capital, reserves, surplus, mortgage loans, income, and Public Law 33, approved March 31, 1949, provides that the import stock, shall be exempt from all taxation now or hereafter imposed by tax imposed under section 3425 of the Internal Revenue Code shall the United States. not apply with respect to articles (other than copper sulphate and amends section 812(e)(1)(G) Public Law 869, approved July 1, 1948, other than composition metal provided for in paragraph 1657 of the of the Internal Revenue Code (relating to the marital deduction for Tariff Act of 1930, as amended, which is suitable for processing into estate tax purposes in the case of life insurance with power of ap- castings) entered for consumption or withdrawn from warehouse for pointment in the surviving spouse) by expanding the application of consumption during the period beginning April 1, 1949, and ending the provision to include cases where insurance proceeds are held by with the close of June 30, 1950. the insured subject to an agreement to pay only interest thereon Public Law 35, approved March 31, 1949, amends section 3469(a) annually or at more frequent intervals and cases where interest is to of the Internal Revenue Code, relating to the tax on transportation of be paid for a period and installments of the proceeds are to be paid persons, so as to provide that a port or station within Newfoundland for a period. The amendment also extends the application of the shall not be considered a port or station within Canada for the purposes provision to annuity and endowment contracts, and to proceeds of the provision exempting from tax certain foreign travel except any under an insurance contract upon the life of a person other than the part thereof which is from any port or station within the United States, decedent where the insured survives the decedent. The amendment, Canada, or Mexico, to any other port or station within the United which is applicable with respect to estates of decedents dying after States, Canada, or Mexico. December 31, 1947, also makes certain clarifying and technical Public Law 72, approved May 24, 1949, by section 120 amends sec- changes in section 812 (e)(1)(G). 3154(a) of tion 2411 of title 28, United States Code, so as to restore provisions Public Law 899, approved July 3, 1948, amends section relating to interest on judgments against the United States or collectors the Internal Revenue Code by adding thereto a provision requiring of internal revenue for overpayments of internal revenue taxes, which the Commissioner of Internal Revenue to refund or credit to any provisions had been omitted when title 28 was enacted into law by brewer taxes paid by him on beer, ale, and similar fermented malt Pubhc Law 773 (Eightieth Congress), approved June 25, 1948. liquor which was lost in bottling operations, such refund or credit for Section 128 of Public Law 72 amends section 1141(a) of the Internal any calendar month not to exceed 2% percent of the tax paid by the Revenue Code by substituting "courts of appeals" for "circuit courts brewer on all beer, etc., removed during such month from his brewery of appeals and the United States Court of Appeals for the District of to his bottling house. It also amends section 3154(b) of the Code to Columbia." provide that no claim resulting from a loss from bottling operations after the close of the Public Law 76, approved May 27, 1949, provides by section 144 shall be allowed unless made within 90 days that the Assessor of the District of Columbia, or his duly authorized month within which such loss occurred. This amendment is appli- 1, 1948. representatives, is authorized and empowered to request mformation cable only with respect to beer, etc., which is lost after July from the Bureau of Internal Revenue relative to any person for the It also amends section 3404(d) of the Code so as to exempt from the purpose of assessing the sales tax imposed by Title I of such law, and tax on musical instruments those sold for the use of religious or non- that the Bureau is authorized and required to supply such information profit educational institutions for exclusively religious or educational_ as may be requested for such purpose. REPORT OF COMMISSIONER OF INTERNAL REVENUE REPORT OF COMMISSIONER OF INTERNAL REVENUE 11 10 of warrants for distraint totaled $346,509,480 for the fiscal year 1949, Public Law 137, approved June 28, 1949, amends sections 403(d)(3) representing a substantial increase over the 1948 total of $280,183,603. and 452(c) of the Revenue Act of 1942 by extending to July 1, 1950, There were 1,010,810 warrants for distraint in custody of the collectors' the period for releasing certain powers of appointment free of estate or field forces on June 30, 1949, as compared with 815,257 on hand June t tax. It also amends section 283 of title 18 of the United States 30, 1948. Code to provide that retired officers of the armed forces of the United An average of 8,451 deputy collectors made a total of 3,252,330 States, while not on active duty, shall not by reason of their status be revenue-producing investigations, including the serving of warrants subject to such section,. which provides criminal penalties for the for distraint, as compared with 2,892,965 revenue-producing invest- prosecution of claims against the United States by officers or employees gations made by an average of 8,228 field deputy collectors in the thereof. preceding fiscal year. ACCOUNTS AND COLLECTIONS UNIT The total amount collected and reported for assessment by deputy collectors was $608,368,524 as compared with $554,578,717 in the The Accounts and Collections Unit is the central administrative preceding year. The average number of investigations made per organization for the 64 internal revenue collection districts and makes deputy and the average amount of tax collected and reported for the administrative audit of all expenditures for the Internal Revenue assessment were 385 and $71,988, respectively, compared with 352 Service. and $67,401, respectively, in 1948. There were 92,841,730 tax returns filed in collectors' offices during Collectors of internal revenue, after having taken the necessary the fiscal year 1949, as compared with 93,810,164 returns filed during administrative action, transmitted to the Bureau or otherwise dis- the preceding year. Of the total returns filed, 72,247,919 were income posed of 693,291 claims, as compared with 787,900 claims in 1948, a tax and excess profits tax returns and declarations, as compared with decrease of 94,609. The number of claims on hand in collectors' 74,410,722 in the preceding year. offices at the end of the fiscal year was 156,721, compared with 128,537 A total of 20,707,066,479 revenue stamps, valued at $3,631,121,654, at the close of the preceding fiscal year. was issued to collectors of internal revenue and to the Postmaster The collectors of internal revenue certified for refund 36,554,135 General, compared with 20,765,825,608 stamps, valued at $3,735,- overpayments of income tax. These overpayments resulted from 387,804, issued during 1948. the provisions of the Current Tax Payment Act and were reflected The face value of revenue stamps returned by collectors of internal on individual income tax returns filed on Forms 1040 and 1040A for revenue and by the Postmaster General and credited to their accounts the taxable year 1948. The refunding operation was completed amounted to $777,740,366. There were 31 applications allowed for within the fiscal year in which the returns were filed and this accom- restamping packages from which the original stamps had been lost, plishment resulted in a substantial saving in interest payments, as mutilated, or destroyed, compared with 39 applications in the pre- will be noted upon reference to the following table: ceding year. During the year, 785,711 individual income tax, 75,175 withholding Taxable year NumberNum of tax, 91,590 miscellaneous tax, and 69,518 employment tax returns refunds Principal Interest were verified by field deputy collectors. The total number of indi- vidual income tax returns disposed of by collectors' offices was ap- 1943 16,059,028 $586, 596, 165 $21,926, 678 1944 22, 211, 755 979,746,659 17,186,337 proximately 53 million, comprised of over 2 million returns which 1945 30,472,926 1, 384, 293, 318 4,708, 759 1946 30, 996, 723 1, 407,052, 911 1,419,296 received office audit or field investigation, and 51 million returns closed 1947 3h 865, 584 1,476, 285,843 1,182,703 after survey, without detailed investigation. At the close of the 1948 36, 554, 135 2,035, 793,715 1,221,156 year, more than 70 million returns remained on hand for survey and possible audit action. Nom—These figures exclude refunds in excess of $1,000 which are certified by the Commissioner. The additional taxes, interest, and penalties collected or reported The Supervisors of Accounts and Collections submitted 77 reports for assessment during the year as the result of collectors' investigative covering their examinations of the accounts of collectors of internal operations totaled $340,168,000. Of this total $289,760,000 in- revenue during the year, compared with 92 reports submitted during volved income and withholding taxes while the balance related to the year ended June 30, 1948. Eight new collectors and four acting employment taxes, alcohol taxes, and other internal revenue taxes. collectors were installed by the supervisors during the fiscal year. These amounts reflect an increase as compared with the preceding The Processing Division was engaged in assembling and sorting the year when the corresponding total was $330,991,000, of which $281,- documents evidencing withholding or prepayment of income tax, 218,000 represented income and withholding taxes. For both periods, associating and comparing them with annual returns filed by individ- the figures are exclusive of amounts collected upon warrants for uals, and in connection with overpayment returns filed in nine collec- distraint (see following paragraph)• tion districts, prepared refund schedules for certification by the In enforcing the collections of overdue taxes, collectors of internal collectors concerned. During the fiscal year, approximately 131,000,- revenue issued 2,086,118 warrants for distraint during the year as com- 000 information documents of all kinds were received and were in pared with 1,752,449 warrants issued in the preceding year. The process. amount collected by field deputy collectors as a result of the issuance REPORT OF COMMISSIONER OF INTERNAL REVENUE 13 12 REPORT OF COMMISSIONER OF INTERNAL REVENUE (Federal Unemployment Tax Act) relates to the tax on employers The Planning Division was expanded with a view to more nearly (other than carriers) of eight or more individuals. These provisions conforming its size to the increasing responsibilities devolving upon it of law were formerly Titles VIII and IX of the Social Security Act and in connection with the decentralization program and the implementa- the Carriers Taxing Act of 1937. tion of the recommendations made by the management engineering Collections of employment taxes for the fiscal year 1949 were firm which surveyed a number of representative collectors' offices $2,476,112,762, an increase of $94,770,409 compared with collections during the year. Successful pilot installations conducted under the for the preceding year. direction of the division led to the delegation to all collectors of Assessments of employment taxes.—During the year, 5,617 assess- responsibility for adjusting special employment tax refund claims not ment lists, consisting of 13,617,219 items totaling $3,125,026,287, an in excess of $1,000, and paved the way for adoption on a national scale, increase of $1,021,937,308 over the previous year, were approved by effective with the quarter beginning January 1, 1950, of a combined the Commissioner. These lists included original and additional return form for use in reporting both income tax collected at source assessments of employment taxes. Included in this total were 2,114 on wages and taxes under the Federal Insurance Contributions Act. lists prepared by the collectors' offices and adjusted by the Bureau, Other tests, stemming from the engineers' recommendations, will be consisting of 13,583,302 items totaling $3,118,479,816, and 3,503 lists undertaken on a wide scale beginning January 1, 1950. One of these prepared in the Bureau, consisting of 33,917 items totaling $6,546,471, experiments which will be viewed with particular interest will be to as further analyzed in the following tabulations: determine the feasibility of using ledger cards in lieu of assessment sheets to permit the grouping of all tax accounts receivable of the Analysis of employment tax assessments appearing on collectors' lists same taxpayer. A number of different types of remittance control machines, cash registering devices, and other labor-saving equipment Source Items Tax and penalty Interest Total endorsed by the engineers also will be tested and a further trial of Federal Insurance Contributions Act___ 12, 914, 563 22, 152,841, 198. 99 2736,943. 14 $2, 153, 678, 182. 13 tabulating procedures and equipment will be conducted. Other Federal Unemployment Tax Act 940, 555 279,668,691. 65 319, 553.46 280,018, 245.11 recommendations of the engineers with respect to forms design, Railroad Retirement Tax Act 28,184 684, 873,652.88 9, 736.20 684, 883,389.08 staffing standards, verification of income and prepayment credits, and Total 13, 583, 302 3, 117,383, 543. 52 1, 096, 272.80 3, 118,479, 816.32 taxpayer education are receiving continuing study. In administering the personnel of the several collection districts, the provisions of the Classification Act of 1923 and amendatory Acts, Analysis of employment tax assessments appearing on Commissioner's lists and decisions of the Comptroller General relating thereto, have been closely adhered to. The policy has been continued of making such Source Items Tax Penalty Interest Total appointments as have been authorized in the field collection service at Federal Insurance Contributions Act__ 9,125 $927, 403.44 $203, 598.07 $58, 291.32 $1,194. 292.83 the minimum salary rate of the appropriate grade, and all applications Federal Unemployment Tax Act 24, 749 4,619,280. 83 351,216. 54 377, 769.54 5,348, 266.91 for positions have been carefully scrutinized and investigated with a Railroad Retirement Tax Act 43 2, 572.16 49.96 1, 288. 75 3, 910.87 view of maintaining the usual high standard of requirement for Total 33, 917 5, 549, 256.43 569,864. 57 437,349.61 6, 546, 470.61 employment. The Disbursement Accounting Division administratively examined Taxes under the Federal Insurance Contributions Act.—Collections and recorded 1,568 monthly accounts of the collectors of internal of taxes imposed under the Federal Insurance Contributions Act revenue, internal revenue agents in charge, district supervisors, heads amounted to $1,687,150,996 for the year, as compared with $1,612,- of Technical Staff Divisions, foreign account (Paris, France), including 720,919 for 1948, an increase of $74,430,077. These amounts include the San Juan, Puerto Rico Branch of the District of Maryland, com- both the employees' tax and the employers' tax, each of which was prising a total of 145,350 vouchers. In addition, 12,514 travel expense imposed at the rate of 1 percent of taxable wages paid. Returns vouchers of employees and 23,295 vouchers covering passenger and under the Act are required on a quarterly basis, 11,282,734 being filed freight transportation and miscellaneous expenses were audited and during the fiscal year, as compared with 10,680,002 filed in the pre- passed to the Chief Disbursing Officer, Treasury Department, or to ceding year. The complete and final audit of returns under the Act the General Accounting Office for payment, making a total of 181,159 is conducted in the offices of collectors of internal revenue. vouchers handled during the 1949 fiscal year. The following table sets forth information relative to claims disposed of under the Federal Insurance Contributions Act and/or Title VIII EMPLOYMENT TAX UNIT of the Social Security Act: The Employment Tax Unit administers the employment taxes imposed under Subchapters A, B, and C of Chapter 9 of the Internal Revenue Code. Subchapter A (Federal Insurance Contributions Act) relates to the taxes with respect to employment by persons other than carriers; Subchapter B (Railroad Retirement Tax Act) relates to the taxes with respect to employment by carriers; and Subchapter C

REPORT OF COMMISSIONER OF INTERNAL REVENUE 15 14 REPORT OF COMMISSIONER OF INTERNAL REVENUE Cairns under the Federal Insurance Contributions Act and/or Title VIII of the Offers in compromise.—On July 1, 1948, there were on hand 227 Social Security Act, except special refunds under section 1401(d) of the former offers in compromise aggregating $94,961 which had been submitted Act, received and disposed of during the fiscal year 1949 Number in settlement of an aggregate liability of $295,147, incurred under Claims: Title VIII of the Social Security Act and/or the Federal Insurance Pending at beginning of year 3, 088 Filed during year (new claims) 17, 438 Contributions Act. There were 308 offers received, in the total Received from other sources 188 amount of $63,548, involving an aggregate liability of $226,936; 179 offers in the amount of $34,681 were accepted in settlement of liability Total to be disposed of of $115,078; 52 offers, amounting to $5,965 and involving liability Allowed in full or in part 16,255 of $37,358, were rejected; 9 offers, totaling $1,453 for liability of 1,273 $4,286, were withdrawn; and 4 offers amounting to $1,294, payable Rejected 434 Canceled on the installment basis, covering liability of $2,066, were terminated 17,962 by default, leaving on hand at the close of the year 291 offers, totaling Total disposed of $115,116 and involving liability of $363,295. 2, 752 Coordination with Social Security Administration,.—The Bureau and Pending at end of year 571 Certificates of allowance issued when no claims were filed Amount the Social Security Administration continued to coordinate their Overassessments settled by: $839, 648. 49 decisions on questions involving provisions common to Title II of the Abatement 2, 546. 25 Social Security Act and the Federal Insurance Contributions Act. Credit 965, 146. 02 Refund At the beginning of the fiscal year, 21 inquiries from the Administra- $1, 807, 340. 76 tion relating to such provisions were pending before the Bureau. Total 136, 420. 23 During the fiscal year, 129 similar inquiries were received from the Interest Administration, and 128 were disposed of, leaving 22 pending at the Grand total $1, 943, 760. 99 close of the fiscal year. Copies of 18 opinions of the General Counsel —The amount involved in claims filed during the year 1949 was $2,168,280. Included in the allowed of the Federal Security Agency were furnished to the Bureau. claimsNOTE. shown in the above tabulation were 7,389 collectors' claims for abatement, of which 422 were multiple- itemc laim s Inolvingv 5 ,197 items There were also allowed 1,839 collectors' claims recommending refunds Tax under the Federal Unemployment Tax Act.—The tax under the of $ 49,227 plus interest of $1,925. The amount involved in the claims rejected during the year totaled Federal Unemployment Tax Act is imposed on employers of eight or $607,607. the provisions of section 1401(d) Of the more. The rate is 3 percent on taxable wages paid with respect to Special refunds.—Under employment. Collections amounted to $226,228,180, as compared Federal Insurance Contributions Act, an employee receiving wages with $208,508,300 for the fiscal year 1948, an increase of $17,719,880. from more than one employer during a calendar year may obtain a Returns on Form 940 are required on an annual basis, 517,769 being refund of the amount of the employees' tax deducted from his wages filed during the fiscal year, as compared with 495,796 filed during the which is in excess of the tax on the first $3,000 of such wages. To preceding fiscal year. obtain such a refund the employee must file a claim after the calendar The return for each calendar year is due on January 31 following year in which the wages were received and within 2 years after the the close of the year unless an extension of time for filing is granted. calendar year in which such wages were received. A taxpayer is entitled to a credit against the tax imposed by the Effective April 1, 1949, the responsibility of adjusting these special Act for contributions paid into unemployment funds under a State refund claims was transferred from the Employment Tax Unit in unemployment compensation law which is approved and certified Washington to the collectors of internal revenue. The following by the Commissioner for Social Security to the Secretary of the Treas- table reflects the action taken both by the Washington and the field ury. For the calendar year 1948 unemployment compensation laws offices on these claims during the fiscal year 1949. of the 48 States, the District of Columbia, and the Territories of Claims for special refund, under section 1401(d) of the Federal Insurance Can- Alaska and Hawaii were so approved and certified. The maximum tributions Act, received and disposed of during the fiscal year 1949 Number credit allowable is 90 percent of the tax and, with certain exceptions, Claims: to be allowable to that extent the contributions must be paid into Pending at beginning of year 53, 361 387, 133 the State funds on or before the date the Federal return is required Filed during year (new claims) 461 Received from other sources to be filed. Contributions paid after that date are allowable as a 440, 955 credit against the tax, but credit with respect to such contributions Total to be disposed of is limited to 90 percent of the amount which would have been allow- Allowed in full or in part 390,339 able had such contributions been paid on or before the due date of the 5,374 Federal return. Rejected 692 Canceled 396,405 Total disposed of 44,550 Pending at end of year Nora.—The amount recommended for refund was $6,508,933, and the amount recommended for rejection was $45,767. 16 REPORT OF COMMISSIONER OF INTERNAL REVENUE REPORT OF COMMISSIONER OF INTERNAL REVENUE 17 Sections 601 and 602 of the Revenue Act of 1943 provide that con- the Federal Unemployment Tax Act and/or Title IX of the Social tributions may be paid at any time and upon such payment may be Security Act: allowable as credit against the Federal tax. Other provisions in- Claims under the Federal Unemployment Tax Act and/or Title IX of the Social corporated in the Revenue Act of 1943 permit certain credits to be Security Act received and disposed of during the fiscal year 1949 allowed notwithstanding that claims for refund or credit were rejected Number prior to the enactment of such Act, and where offers in compromise Pending at beginning of year 4,838 had been accepted prior to such enactment. Filed during the year (new claims) Received from other sources 14,696 For the purpose of enabling the Bureau to determine whether the 24 credit claimed by a taxpayer for contributions to a State fund is Total to be disposed of correct, each State furnishes the Bureau with a statement for each 19,558 employer, showing the amount of contributions paid by the employer Allowed in full or in part Rejected 13,704 on or before the date the Federal return is required to be filed and the Canceled 1,662 amounts and dates of payments made thereafter. During the year 247 there were received from the States 1,105,256 such statements for the Total disposed of 15,613 years 1936 to 1948, inclusive.'" In addition to the credit against the Federal tax for contributions Pending at end of year Certificates of overassessment and certificates of allowance 3, 945 actually paid into State funds, the taxpayer may be entitled to an issued when no claims were filed 1, 317 additional credit under section 1601(b) of the Act. This additional Overassesaments settled by: credit is allowable to an employer if, by reason of having stabilized Abatement Amount the employment of his employees in a State or for some other reason, Credit $2, 332, 144. 71 Refund 50, 216. 54 he is granted an "experience rate" under the laws of the State and is 2, 624, 431. 11 thereby permitted to pay contributions at a lower rate than that paid Total generally by other employers. Certain conditions with respect to a Interest 5, 006, 792. 36 State law are imposed by the Act that must be met before an employer 143, 590. 27 Grand total is entitled to the additional credit. For the calendar year 1948, all 5, 150, 382. 63 of the 48 States, the District of Columbia, and the Territories of Nom-Included in the allowed claims shown in the above tabulation were 1,696 collectors' claims for abatement, of which 69 were multiple-item claims involving 375 items. There were also allowed 3,861 collec- Alaska and Hawaii had enacted a law to comply with the conditions tors' claims recommending refunds of 4208,785 plus interest of $7,996. The amount involved jected in claims re- imposed by the Act. during the year totaled $704,940. Field investigations conducted by the States in connection with the administration of State unemployment compensation laws resulted in Offers in compromise.-On July 1, 1948, there were on hand 181 numerous correction statements being submitted to the Bureau, offers in compromise aggregating $56,950, which had been submitted showing changes in the amounts standing to the employers' credit in settlement of an aggregate liability of $402,185 incurred under in the State funds This causes a considerable number of cases to Title IX of the Social Security Act and/or the Federal Unemployment be reopened for audit by the Bureau. Tax Act. There were 188 offers received, in the total amount of $36,430, involving an aggregate liability of $239,148; 143 offers in the Number of Federal unemployment tax returns (annual) received and closed by the amount of $35,311 were accepted in settlement of liability of $228,365; Bureau during the fiscal year 1949 and the number pending at the beginning and close of the year, by tax years 46 offers amounting to $4,769 and involving liability of $48,366 were rejected; 8 offers amounting to $1,282 and involving liability of $5,751 Received Reopened Disposed On hand On hand were withdrawn; and 4 offers, totaling $8,547, payable on the install- Tax year during during Total of during June 30, July 1, 1948 year year year 1949 ment basis, covering liability of $14,297, were terminated by default, leaving on hand at the close of the year 168 offers totaling $43,471 705 2, 038 3, 510 6, 253 6, 952 301 and involving liability of $344,554. 1936 through 1944 443 1945 565 3,894 7,128 11,687 11, 144 Railroad Retirement Tax Act.-Collections 1946 44,257 5, 947 22, 559 72, 763 69,296 3,467 of employers' tax and 1947 461,094 26,444 10,729 498.267 469,881 28,386 297 487,932 2,822 485,110 employees' tax under the Railroad Retirement Tax Act aggregated 1948 None 487,635 $562,620,309, as compared with $560,061,477 for the previous year, Total 606,621 525,958 44,223 I, 076, 802 569,095 517,707 an increase of $2,558,832. Each tax was imposed at the rate of 5% percent of the taxable compensation paid during 1948, and at the The following table sets forth information relative to claims ad- rate of 6 percent of the taxable compensation paid during 1949. justed and certificates of overassessment or of allowance issued under Collections of employee representatives' tax, which was imposed at the rate of 11% percent of the taxable compensation paid during 1948, and at the rate of 12 percent of the taxable compensation paid during 1949, amounted to $113,277, as compared with $51,657 for the pre- previous year, an increase of $61,620. Returns are required on a

REPORT OF COMMISSIONER OF INTERNAL REVENUE 19 18 REPORT OF COMMISSIONER OF INFERNAL REVENUE collected in 1948, which totaled $31,172,190,533. The comparison in quarterly basis, 25,248 being filed by employers, a decrease of 2,133• detail is as follows: 2,535 returns were filed by employee representatives, an increase of 1,776 over the previous year. The complete and final audit of these Collections during the fisca years 1948 and 1949 returns is conducted in the offices of collectors of internal revenue. The following table sets forth information relative to claims Fiscal year disposed of under the Railroad Retirement Tax Act and/or the Car- Source Increase or decrease (-) riers Taxing Act of 1937: 1948 1949 under the Railroad Retirement Tax Act and/or the Carriers Taxing Act of Claims year /949 Individual income tax: 1937 received and disposed of during the fiscal Withholding-Current Tax Payment Act of 1943._ Number $11, 533, 576, 972 $10, 025, 501, 785 -121: 14-94541978011::,28749150098,56447;12727185966;87 Other 9, 464, 233, 727 Claims: 101 7, 996, 320, 132 -1, 467, 883, 595 Pending at beginning of year 492 Total 20, 997, 780,699 18,051,821,917 Filed during year (new claims) 2 Corporation income tax I 9, 851, 499, 537 11, 342, 643, 793 Received from other sources Declared value excess-profits tax 17,643,249 Excess profits tax 16, 233, 475 595 Army and Navy contracts 305, 251, 476 194,495,199 Total to be disposed of 15. 572 296,768 Grand total 465 31, 172, 190.533 29, 605, 491, 151 -1, 566, 609,382 Allowed in full or in part 32 Rejected 3 I The corporation income tax collections for the fiscal year 1948 Include $6,098 and for the fiscal year 1949 Canceled $6,873 paid by Alaskan railroads under sections 1300 and 1301 of the Internal Revenue Code. In addition, 500 these collections also include tax withheld at source under sections 143 and 44 of the Interns Revenue Code, Total disposed of and reported by withholding agents, although much of this tax was withheld from taxpayers other than corporations. The exact amount of these collections cannot be stated as it has not been tabulated separately. 95 Pending at end of year 19 Certificates of allowance issued when no claims were filed Returns and declarations filed.-The number of all types of income Amount tax returns filed during the past year was 66,413,281, as compared Over assessments settled by: $98, 128. 27 Abatement 5, 222. 00 with 67,478,700 returns filed in 1948, a decrease of 1,065,419. The total Credit 519, 322. 57 number of income tax returns filed by individuals was 53,337,905, Refund which represents a decrease of 3.0 percent from the number received 622, 672. 84 in 1948. The number of returns shown for each fiscal year includes Total 118, 699. 03 Interest the delinquent returns filed during that year relating to prior years. 741,371.87 Declarations of estimated tax filed in the period July 1948 through Grand total January 1949, relating to the 1948 tax year, numbered 1,577,694, and Nova-The amount involved in the claims rejected during the year totaled $15,842. brought the total number of 1948 declarations to 7,364,504. As of June Coordination with Railroad Retirement Board.-The Bureau and the 30, 1949, the number of declarations filed with respect to the 1949 Railroad Retirement Board continued to coordinate their decisions on tax year had reached 4,479,652. Details as to the number of returns and declarations filed are as questions involving provisions common to the Railroad Retirement follows: Act of 1937, the Railroad Unemployment Insurance Act, the Railroad Retirement Tax Act, and the Federal Unemployment Tax Act. Fiscal year Copies of 177 opinions of the General Counsel of the Board were Type of return furnished to the Bureau. 1948 1949

INCOME TAX UNIT Individuals: Citizens and resident aliens Nonresident aliens 154,891,164 53,260,692 General functions.-The Income Tax Unit is charged with the Fiduciaries 86,455 77,213 administration of the internal revenue laws with reference to taxes on Partnerships 389,362 385,148 Employers-income tax withheld 1,012, 441 947,497 the income of individuals and fiduciaries, and on both the income and Withholding agents 10, 299, 710 10, 873,987 Corporations: 11, 154 11, 181 the excess profits of corporations. The administration includes the Income tax 604, 926 Personal holding company surtax 646, 744 preparation of regulations, interpretative and procedural rulings, and Exempt organizations 5, 806 5,836 All other 108, 635 117,257 instructions regarding such laws; the preparation of tax and informa- 62,447 87,726 tion returns to be filed thereunder; and the examination and adjust- Total returns DeClarations of estimated tax 67, 478, 700 66, 413, 231 ment of returns, through office audits and field investigations, to 6,932,022 A 834, 638 Grand total determine the correct tax liability as required by law. 74, 410, 722 72, 247, 919 Collections.-During the fiscal year ended June 30, 1949, collections of income and excess profits taxes amounted to $29,605,491,151. This represents a decrease of $1,566,699,382 as compared with the amount

20 REPORT OF COMMISSIONER OF INTERNAL REVENUE REPORT OF COMMISSIONER OF INTERNAL REVENUE 21 Preliminary review of income and excess profits tax returns.—Of the consisting of 2,023,706 income tax returns and 73,416 excess profits returns filed during the year 1949, as shown in the preceding table, tax returns. In addition, the field offices completed their work on 3,989,011 consisted of returns of individuals and partnerships reporting 29,299 estate and gift tax returns. The results shown include returns income of substantial amounts or involving complex transactions,' which required investigation as well as returns for which investigations taxable returns of fiduciaries, returns of withholding agents, corpora- were deemed unnecessary. The following table shows the number of tion income and excess profits tax returns, personal holding company returns on which action was completed during 1949, compared with returns, and returns of exempt organizations. the number completed during the preceding year: During the year 1949 the Bureau revised the procedure with respect Number of tax returns on which action has been completed by field offices during to the preliminary review of individual returns included in the above fiscal years 1948 and classification, so that such returns for taxable years beginning after 1949 December 31, 1947, are now reviewed and classified by revenue agents in the field offices, instead of the Washington office. The preliminary Fiscal year other than individual returns, continues in the Type of return review of returns , 1948 1949 Income Tax Unit in Washington, as under the procedure prior to Income tax: revision. Corporations, individuals, and fiduciaries: Upon initial review of those returns forwarded to Washington No change 893,450 1, 132,918 (including those on hand in Washington July 1, 1948, relating to Deficiency adjustments 28A 914 244, 295 previous taxable years), 1,814,382 were closed and 603,119 were found Overassessment adjustments 121,139 116,719 Total 1,298, 503 1,533,923 to require further consideration and investigation by the field offices Partnerships 486, 006 489, 783 of the Income Tax Unit. A comparative analysis of the results of Total income tax returns 1,784,539 2,023, 706 this initial reviewing operation is as follows: Excess profits tax: No change 73, 274 35, 147 Deficiency adjustments 36,012 24,808 Overassessment adjustments 15,932 13, 463 Type of return Total excess profits tax returns 125, 218 73, 416 Estate and gift tax: No change 14,246 15,313 Deficiency adjustments 12, 463 12, 590 164, 646 Overassessment adjustments Corporation I 426, 121 1, 255 1,396 Individual 12,352 Total estate and gift tax returns Fiduciary 27,963 29,299 Total

I Figures for the individual returns initially reviewed in the field offices after the change in procedure Petitions to The Tax Court of the United States filed during 1949 above referred to, are not presently available. Accordingly the number of return constituting the work involved 8,520 returns and proposed tax deficiencies of $170,382,276. load of the field offices for the coming year is somewhat greater than is indicated by the number of field This compares with 7,394 returns and tax deficiencies of $164,127,620 returns shown. for the fiscal year 1948. For a statement showing the number of There was also inaugurated during the year 1949, a method whereby returns, amounts of proposed tax, and penalties in cases petitioned, representative samples of individual income tax returns, including classified by tax years, see page 128. many which might not have been selected for field investigation under Revenue results of investigation of income and excess profits tax returns.— previously existing classification procedure, are automatically selected The amount of additional tax, interest, and penalty assessed by the by the Statistical Division in Washington, for intensive investigation Income Tax Unit during 1949 reached an unprecedented total of as a "sample audit." The figures pertaining to field returns do not $1,408,523,728, representing an increase of 0.2 percent as compared include this random sample. with 1948. The portion of this total applicable to income tax returns Investigation of tax returns by field offices .—The number of income and is $846,842,861, and the portion applicable to excess profits tax returns excess profits tax returns investigated during the year 1949 was 614,323, is $561,680,867. Excluding jeopardy and duplicate items, the amounts as compared with 595,729 for 1948. These figures include all returns for these two classes of taxes were $792,183,080 and $511,711,052, for which the examiners' reports have been submitted, whether or respectively. In relation to the total technical personnel assigned not the cases have been finally released by reviewing officers. to the field offices, the amount of additional tax, interest, and penalty Estate and gift tax returns investigated by the field offices during the assessed in 1949 (including the estate and gift tax deficiencies set forth year numbered 18,624, as compared with 18,185 for 1948. on page 31) represented an average of $220,065 for each agent, as The total number of income and excess profits tax returns on which against $237,440 for 1948. An analysis of the additional income and action was completed by the field offices during the year was 2,097,122, I The collectors retained for audit all returns on Form 1040-A, together with returns on Form 1040 which show adjusted gross income of under $7,000 (provided total receipts from business or profession were not in excess of 425,000). During the year 1949, the number of Forms 1040 filed equaled 33,600,363, of which 30,660,554 were retained for audit by collectors under this rule. 880847-50-8

22 REPORT OF COMMISSIONER OF INTERNAL REVENUE REPORT OF COMMISSIONER OF INTERNAL REVENUE 23 excess profits tax assessments for the fiscal year 1949 as compared Additional income and excess profits tax assessments made by the Income Tax Unit with the fiscal year 1948 follows: during the fiscal years 1949 and 1948 by stage at which assessment was made-Con. Additional income and excess profits tax assessments made by the Income Tax Unit during the fiscal years 1949 and 1948, by nature of assessment Returns Additional tax Stage at which addi- tional assessment was Per- Per- Interest Penalty Total Number Additional tax Interest Penalty Total made Num- Nature of assessment of return ber cent of Amount cent of total total

FISCAL YEAR 1949 FISCAL YEAR 1949-00/1. 331,123 $1, 069, 288, 679 202, 969, 750 $31, 637, 703 $1, 303, 894,132 Regular 474 96, 570, 646 In appealed cases, after Jeopardy I 1, 479 69, 024,677 16, 108, 495 11, 437, 969 6,226, 412 1,514,874 317, 577 8,058,950 trial on the merits Duplicate ) and decisions by the 333, 571 1, 144, 537, 855 220, 593, 119 43, 392, 754 1, 408, 523, 728 Tax Court or upon Total_ stipulation before the court of eases settled FISCAL YEAR 1948 by Technical Staff 344,014 1, 107, 458, 590 178,461, 722 26, 695, 257 1, 312, 615,509 and/or Chief Coun- Regular 83, 513, 920 sel 4, 349. Jeopardy 1 1, 900 63, 202, 939 10, 435, 153 9, 875, 828 1.3 $38, 671, 989 3. 6 $14,103,010 $4, 190, 605 $56,965,694 Duplicate 1 1, 890 7,495, 373 1, 899, 787 99, 361 9, 494, 521 Total 332,092 100.0 1, 075, 513,178 100.0 204,484, 624 31, 955, 280 1, 311, 953, 082 Feogear6lirdieffovisions of TotaL 347, 804 1,178,156, 902 190,796,602 36, 670, 446 1, 405, 624, 010 1,479 69, 024, 677 16, 108, 495 11, 437,474 96, 570, 646 Duplicate paspasments made under the jeopardy provisions are included withe jeopady esaeamenta. • 1 Grand total 333, 571 1,144, 537, 855 220, 593,119 43, 392, 754 1, 408, 523, 728 The force of agents decreased from 7,501 at June 30, 1947, to FISCAL YEAR 1948 6,539 at June 30, 1948, but increased during the fiscal year 1949 3n agreements exe- cuted prior to issu- to 7,011 at June 30, 1949. ance of statutory no- effectiveness of the tice 331, 300 95.8 1, 024, 754, 563 91.9 160, 390,076 2, 483, 521 Stage at which additional tax was assessed.-The Default or agreement 1,204,628,159 settlement authority vested in field officers is evidenced by the high after issuance of stat- utory notice 10, 475 3.0 40, 301, 970 3.6 8, 228, 639 2413, 880 proportion of cases closed by agreements with taxpayers, without after 50, 644, 489 the issuance of formal deficiency notices which are otherwise required niga "olnedteltse'xis and decisions by the by law and from which taxpayers may appeal to the Tax Court. Tax Court or upon stipulation before the Of the total number of 332,092 income and excess profits tax returns court of cases settled on which regular additional assessments (including duplicate-regular) by Technical Staff and/or Chief Coun- were made, 318,445 additional assessments, or 95.9 percent, were made sel 4,129 1.2' 49, 897, 430 4.5 11, 742, 794 1,197, 217 62, 837,441 by agreement with the taxpayers without the necessity of a statutory Total 345,904 100.0 1, 114, 953, 963 100.0 180, 361, 509 26, 794, 618 1, 322, 110, 090 notice, as compared with 95.8 percent in the fiscal year 1948. Of the J egear621:drovisions of total regular additional tax assessed (including duplicate-regular), 1, 900 63, 202, 939 10, 435,153 9, 875, 828 83, 513, 920 aggregating $1,075,513,178, the amount assessed by agreement was Grand total 347, 804 1, 178,156, 900 190, 796, 662 36, 670, 446 1, 405, 624, 010 $991,910,896, or 92.2 percent, as compared with 91.9 percent for last year. For a distribution of the additional assessments made during the There follows a table showing, by stage at which additional assess- fiscal year 1949 by tax years for each stage at which assessment was ment was made, the number and amount of additional income and made, see pages 122-128. excess profits tax assessments made during the fiscal years 1948 and Tentative LIFO inventory method adjustments.-Applications for 1949: tentative LIFO adjustments received during the fiscal year 1949 Additional income and excess profits tax assessments made by the Income Tax Unit numbered 129 with net tax reductions sought in the amount of during the fiscal years 1949 and 1948 by stage at which assessment was made $73,968,557. Applications acted upon during the year numbered 126, with requested tax reduction of $73,647,051-allowed $56,792,377. Returns Additional tax At the close of the year, applications on hand numbered three and Stage at which addi- tional assessment was Per- Per- involved net tax reductions of $321,506. made Num- cent of Amount cent of Tentative carry-back adjustments.-Applications ber total for tentative carry- total back adjustments received during the fiscal year 1949 under the pro- visions of section 3780, Internal Revenue Code, numbered 26,044, FISCAL YEAR 1949 with net tax reductions sought in the amount of $198,027,721. Ap- On agreements exe- cuted prior to issu- ance of statutory 596 notice 318,455 95.9 291, 910,896 92.2 $180, 172, 403 $23, 660, 297 1, 195, 743, Default or agreement after Issuance of stat- ntnn rm.-9n 9 22 2.8 44.930, 293 4.2 10, 209, 211 4, 104,22 59, 243, 792 24 REPORT OF COMMISSIONER OF INTERNAL REVENUE REPORT OF COMMISSIONER OF INTERNAL REVENUE 25 plications acted upon during the year numbered 25,491, with re- Number of income and excess profits tax returns on hand in the field offices for in- vestigation and in process of settlemen , by tax years, as of June 80, 1948 and quested tax reduction of $215,706,693. Of this number, 22,116 1949 applications with requests for $180,650,257 in tax reductions were allowed in full, the net amount allowed being $181,945,342. Partial Number of income Number of income allowance was made in 1,836 cases, with $20,873,101 allowed as com- and excess profits and excess profits tax ieturns on tax returns on pared with $24,097,386 requested. There were 1,539 applications Tax years hand as of June 30 Tax years hand as ofJune 30 requesting tax reductions aggregating $10,959,050 that were dis- allowed. At the close of the year, applications on hand numbered 1948 1949 1948 1949

2,958 and involved net tax reductions of $14,990,513. ,C .'

" 1938 835 692

amount involved in income "" Refunds, abatements, and credits.-The 1939 1,428 921 1940 4,986 3,160 and profits tax overassessments of all types for 1949, including cases °

° 1941 13,225 7,952 settled in the collectors' offices as well as in the Income Tax Unit, 34 1942 21,899 13,429 *?? 1943 69, 791 33,112 was $3,512,818,931 as compared with $2,953,437,943 for the preceding .£8 1944 105, 105 52,337 1946 year. The following table shows the amounts of abatement, credit, 5? 249,748 86,225

?4 1948 470,880 180,132 1947 refund, and interest comprising these totals. 4: 38,796 362,296 1948 85 74,203 .2V - 1949 94 Amounts -of overassessment, by method of settlement, and interest allowed on income andtexeess profits tax cases closed during the fiscal years 1948 and 1949 H` Total 968, 746 815, 912

r Total prior year returns 458,985 379,319 :t Fiscal year Total current year returns_._ 609, 761 436,593

1948 1949 The income and excess profits tax returns on hand in the field offices Overassessments settled by- as of June 30, 1948 and 1949, are classified according to pending status Abatements: $184,173,365 $207, 576,323 in the table which follows: Regular 24, 484, Geo 34,086, 295 Duplicate 512, 044, 238 448,620, 499 Credit' 2,178,587,335 2, 738, 995,082 Number of income and excess profits tax returns on hand in the field offices for investi- Refund gation and in process of settlement, by pending status as of June 80, 1948 2,899, 249,871 3, 429, 778,199 and Total 54,188, 072 83,540, 732 / 949 Interest 2, 953,437, 943 3,512,818,931 Grand total Number of income and ex- cess profits tax returns on Excludes individual income tax credits of $1,000 or less resulting from excessive prepayments. Pending status hand es of June 30 Inventory of returns on hand in the field offices.-The total number of 1948 1949 open income and excess profits tax returns on hand in the field offices Returns on which agents' reports have not been completed: of the Income Tax Unit at the close of the year was 815,912, compared Awaiting classification 61,103 51,108 In process of verification 703, 072 576, 959 with 968,746 on June 30, 1948 (excluding in each year returns tenta- In review or typing._ tively accepted without investigation). The net decrease between 104, 041 82, 350 the two dates was 152,834, or 15.8 percent. Returns for 1946 and Total 858,306 710, 417 prior tax years on hand as of June 30, 1949, numbered 379,319, as Returns on which agents' reports have been completed: a In 30-day file 18,114 16, 078 compared with 458,985 returns for 1945 and prior tax years on hand Awaiting action after protest or preliminary notice default 87, 016 84, 248 year ago; thus the prior year returns constituted 46.5 percent of the In 90-day file 5, 310 5,171 total number on hand at the close of the fiscal year 1949, as compared Total 110, 440 105, 495 with 47.4 percent for 1948. Grand total 968,746 815, 912

Included above under "returns on which agents reports have been completed" as of June 30, 1949, are 79,485 income and excess profits tax returns involving adjustments not agreed to by the taxpayers, as compared with 83,340 income and excess profits tax returns in such status at the close of the previous year.

Pension trust work.-The Bureau, through the Pension Trust Divi- .

sion in Washington and through the respective field offices, passes , upon all matters relative to the qualification of stock bonus, pension, 26 REPORT OF COMMISSIONER OF INTERNAL REVENUE REPORT OF COMMISSIONER OF INTERNAL REVENUE 27 profit-sharing, and annuity plans under section 165(a) of the Internal in these cases amounted to $96,604.49, resulting in the imposition of Revenue Code as amended; the exempt status of employees' trusts sanctions in the amount of $8,204.19. under that section; the effect of terminations and curtailments of such Only four of the numerous requests for reopening of cases considered plans on their prior qualification; the effect of investments of trust by the National War Labor Board or the National Wage Stabilization funds in the stock or securities of the employer on the continued qualifi- Board had sufficient merit to justify acting on such requests. In cation of the plans of which the trusts are parts; the taxability of bene- three of these cases the amounts of the sanctions were reduced and ficiaries of exempt and nonexempt trusts under section 165 (b) and in the fourth case the relatively small sanction was eliminated. (c), respectively; the annuity treatment under section 22 (b)(2)(B); No contravention cases are now pending. and related matters. Rulings are issued and advice is furnished to taxpayers and other EXCESS PROFITS TAX COUNCIL interested parties. Rulings issued through the field offices and findings Organizaticm, of Council.—The with respect to tax liability after examination of the applicable tax Excess Profits Tax Council was post review in Washington. Data with respect organized on May 25, 1946, as a field group within the Bureau of returns are subject to Internal Revenue to exercise supervision of and responsibility for the to applications received and rulings issued are summarized as follows: settlement of cases pending before the Bureau with respect to applica- Number of applications,' rulings issued, and cases on hand with respect to the qualifi- tions for relief under the provisions of section 722 of the Internal cation of stock bonus, pensions, profit-sharing, and annuity plans under section Revenue Code. The Council was established pursuant to the pro- 165(a) of the Internal Revenue Code, as amended, the effect of terminations and posal by the Commissioner to the Joint Committee on Internal Rev- curtailments of such plans on their prat qualification, and the effect of investments enue Taxation in his statement of April 1, 1946, and his testimony on of trust funds in the stock or securities of the employer on the continued qualification May 7, 1946, for the creation of a board for the administration of of the plans of which the trusts are parts section 722. The Council and its staff have offices only in Washington but the Original Effect on Effect on Effect on qualifies- prior quell- prior quail- continued Council has technical supervision of the field personnel of the Bureau Won under &anon naafi= qualifies- section because of because of tion be- of Internal Revenue engaged in handling section 722 claims. 165(a) of termina- curtail- cause of in- Between 500 and 600 revenue agents in the 39 field divisions of the the Code tion ment vestments Bureau are working on section 722 claims. Because of part-time assignments, this number is the equivalent of about 280 persons en- Applications on hand at June 30, 1948 271 80 47 4 Applications received during the fiscal year ended June 54 gaged full time. The agents so assigned in each of the field divisions 30, 1949 1,060 235 161 work under the supervision of a small group of specialists known as Total 1, 331 315 208 58 208 88 33 2 the "Section 722 Field Committee." Each claim is investigated under Applications on hand at June 30, 1949 the supervision of the field committee (approximately two-thirds of Rulings issued during the fiscal year ended June 30,1940. 1,123 227 175 68 Rulings issued to June 30, 1948 11,742 484 226 192 the agents working on section 722 claims are engaged in making field 12,865 711 401 248 examinations), and the committee makes the first efforts, through Rulings issued to June 30, 1949 negotiation with the taxpayer, to reach agreement upon the merits of I Only original applications in each category are counted as cases. Thus, cases do not include amendments the claim. to a plan after the original ruling as to the qualification of the plan i issued. Similarly, only the original application for a ruling as to the effect of a curtailment of a plan is counted as a case. If the plan is subse- The Excess Profits Tax Council originally was composed of 15 quently further curtailed it isnot tabulated again. Complete terminations occur only once and are counted members, one of whom was designated as chairman. On October 22, Only once. Only the initial application as to the effect of investments in the stock or securities of the em- ployer is tabulated. Applications for rulings on subsequent investments in the stock or securities of the 1948, the authorized membership of the Council was increased to 25, same employer are not included. including the chairman and vice chairman, and there was established within the Council a five-man executive committee consisting of the Salary stabilization.— At the close of the last fiscal year, 14 cases chairman, vice chairman, and three other Council members. The involving possible contravention of the Act of October 2, 1942, as executive committee was vested with final authority within the Bureau amended, were awaiting settlement. One of these was a previously of Internal Revenue in respect to all issues arising under section 722, determined case on which reconsideration had been requested, but including procedure, interpretation, general policy, and determina- no showing was made which warranted such action. Of the remain- tions made with respect to individual cases. At June 30, 1949, the ing 13 cases, six employers were found to have paid compensation Council had a staff of 91 accountants, economists, and attorneys, totaling $299,211.37 in contravention of the Act, resulting in the impo- most of whom were drawn from the regular personnel of the Bureau. sition of sanctions in the total amount of $68,665.93 by agreement The Council has three principal functions: with these employers. In the remaining seven cases no contravention (1) It issues interpretative rulings with respect to section 722 for was found. the guidance of the field committees and taxpayers generally. Subsequently 16 additional instances of possible contravention were (2) It reviews determinations made by the field committees with considered, of which only 3 were found to have granted salary or respect to all claims, irrespective of whether or not agreement with the bonus increases without approval. The total unauthorized payments taxpayer has been reached. 28 REPORT OF COMMISSIONER OF INTERNAL REVENUE REPORT OF COMMISSIONER OF INTERNAL REVENUE 29

(3) It makes determinations in cases in which agreement was not determined to be attributable either to extraordinary effects of prep- reached by the field committees and taxpayers, and in cases where the aration for the war or to factors resulting from the outbreak of the Council does not approve the field committees' determinations. war on September 1, 1939. The determinations of the Council are made after oral hearings with Consideration of taxpayer cases.—The Council, from the date of its the taxpayer if the taxpayer so desires organization in 1946 to June 30, 1949, has taken final action on Size of job.—As of June 30, 1949, the cumulative total of claims 14,389 claims, representing more than 4,900 corporations in which the filed amounted to 53,651, in which the tax reduction claimed amounted excess profits tax reduction claimed amounted to $773,839,483. to more than $6 billion. The claims still pending before the Bureau Action was taken during the year ended June 30, 1949, on 7,113 as of June 30, 1949, amounted to 22,281, in which the tax reduction claims, in which the tax reduction amounted to $426,464,614. claimed amounted to approximately $4.9 billion. The action of the Council with respect to 12,094 claims, or 84 per- Disposition of these claims must be made under an admittedly cent of the number involved, was agreed to in writing by the claimant complex statute. In addition, the work involves extensive research corporations Agreements on 10,417 claims were obtained by the in the fields of economics, statistics, and related subjects in order to field committees and agreements on 1,677 claims were obtained by determine the constructive average base period net income. The the Council Allowances were determined by the Council with results of such studies must be translated into net income figures, respect to 179 claims, to which there was no agreement in writing by which will require a mass of analytical accounting work. the claimant corporations. Review of principles.—During the first 2 years of operation, The Council has received 12,419 agreed claims from the field com- the Council promulgated certain policies by the issuance of memoranda mittees. It accepted the agreements on 10,417 claims, rejected designated E. P. C. 1-33, inclusive. During the current year, the agreements on 400 claims, and had under consideration at June 30, Council has continued this practice in the light of current case prob- 1949, 1,602 claims. lems and experience. As the result, E. P. Cs. 34-43 have been issued The Council has received 6,540 claims on which the field committees and are summarized below: did not obtain agreements. The Council obtained agreements on E. P. C. 34 restates the organization and general Council procedure 1,401 of these claims, disposed of 2,171 without obtaining an agree- in light of the increase in membership and the establishment within ment, and had under consideration at June 30, 1949, 2,968 of these the Council of the Executive Committee. It supersedes E. P. C. 1, claims. The Council also obtained modified agreements in 276 of which was issued in 1946, immediately following the formation of the the 400 claims on which it rejected agreements by the field committees. Council. The Council, accordingly, obtained agreements on 1,677 claims and E. P. C. 35 is a complete revision of Part VII of the Bulletin, disposed of 2,295 claims on which the claimant corporations did not dealing with invested capital credit taxpayers seeking relief under agree with the Council determinations. section 722(c). The aggregate reduction in excess profits tax claimed in the appli- E. P. Cs. 36-38, inclusive, provide hypothetical case illustrations cations for relief disposed of by the Council from June 30, 1946, to of the application of principles enunciated in E. P. C. 35. June 30, 1949, amounted to $834,507,750. The aggregate increase E. P. C. 39 is a clarification and supplement to E. P. Cs. 2 and 34. in the excess profits credit allowed on these claims amounted to It deals with procedure in the field and before the Council and is $167,943,000. The aggregate reduction in excess profits taxes result- intended to aid in defining the issues involved in each case as well as ing therefrom is estimated to be $142,752,000, or approximately 17 to inform the taxpayers of the procedural means provided for con- percent of the amount claimed. An increase in the excess profits sideration of their claims. credit of a corporation has the effect of increasing its normal tax and E. P. Cs. 40 and 41 are additional hypothetical case illustrations of surtax. When this factor is considered, the relief obtained on claims the principles stated in E. P. C. 35. disposed of by the Council, from June 30, 1946, to June 30, 1949, is estimated to amount to $71,671,606. A corporation was permitted E. P. C. 42 deals with the question of decline in the determination of normal earnings and provides for its recognition where it is deter- to anticipate some of the relief claimed under section 722 by deferring mined to be relatively permanent. This memorandum is a supple. payment of part of the tax shown as due on its return. This anticipa- ment to, or clarification of, both E. P. C. 8 and E. P. C. 13. tion was provided for by the deferment provisions of section 710(a)(5) E. P. C. 43 is a hypothetical case illustrating the Council's position of the Code. The amount deferred with respect to claims disposed in dealing with abnormally high base period net income which is of by the Council as of June 30, 1949, amounted to $68,009,058. The following summary shows additional information with respect to claims received and acted upon and also shows the status of claims pending at the close of the year: 30 REPORT OF COMMISSIONER OF INTERNAL REVENUE REPORT OF COMMISSIONER OF INTERNAL REVENUE 31 Applications for excess profits tax relief (section 722, Internal Revenue Code as ruination of the tax, and later these returns receive a post-audit amended)-Cumulative receipts and disposals, fiscal years 1942-1949, inclusive review in the Bureau at Washington. Field investigations in con- nection with gift tax returns are conducted only in designated cases, Excess profits tax reduction which are likewise subjected to a post-audit review. All other gift Item Number tax returns are audited in the Bureau in Washington without reference Claimed' Allowed to the field

Net receipts (excluding transfers and reopened Number of estate and gift tax returns on hand, received, and audited during the cases) 53, 651 88, 230, 761, 359 fiscal years 1948 and 1949 Disposals: Allowed in whole or in part 7, 791 239, 873,324 891, 650, 443 $37,048,630 Disallowed 10, 659 430, 215,144 Estate tax Gift tax Withdrawn 9, 865 697, 094, 076 Eliminated 3,065 5,857, 077 1948 1949 1948 1949 Total disposals_ 31,370 1,371, 839,621 91, 6W, 448 37,0480830 On hand lime 30, 1949: On hand at beginning of year 21,091 24, 528 19, 276 19,307 In agents' offices: Received 25,493 27, 815 30,603 35, 599 Awaiting investigation 387 79, 205,464 'Under investigation 5, 817 2,122,373, 544 Total to be disposed of 46, 584 52, 343 49, 879 54, 906 Investigated, awaiting field conference, etc_ 6, 632 1,333, 501, 591 Disposed of 22, 056 26,101 30,572 31,479 In Excess Profits Tax Council: ' Awaiting decision 3,129 560, 548, 344 On band at end of year 24,528 26,242 19,307 23,427 Awaiting review 1, 789 373, 355, 494 Unagreed, statutory notice outstanding or to be issued 1,322 116, 304, 768 During the year, 2,486 out of 2,548 gift tax cases requiring post-audit review were disposed of, leaving on Before the Tax Court 437 34,656,033 band only 62 cases requiring similar disposition. In process of closing 2, 768 237, 976, WO Total pending 22,281 4, 857, 921, 738 As a result of field investigations and Bureau audits, additional assessments of tax, interest, and penalty amounting to $113,542,843 Amount of tax reduction claimed does not take into account tax adjustments made subsequent to the were made in estate tax cases and $8,263,653 in gift tax cases. Inter- BIN of relief applications. 2 uomdsts of applications eliminated from further consideration upon agent's finding that no tax liability est included in these totals amounted to $13,258,240 in estate tax existed. cases and $1,117,990 in gift tax cases. Based on field office report& Includes cases in transit. Claims. -There were 1,166 claims for refund of estate tax and gift MISCELLANEOUS TAX UNIT tax received during the year, as compared with 1,085 claims received The Miscellaneous Tax Unit is concerned with the administration during the preceding year. Refunds of estate and gift taxes, with of all internal revenue taxes except the income and excess profits interest thereon, were allowed in the total amount of $18,878,218 taxes, the taxes applicable to alcoholic beverages, and those relating representing 2,833 cases. Included in this amount were refunds of to employment. Detailed statements concerning the particular taxes $10,083,179 authorized as a result of court decisions in 83 cases. administered in each of the divisions of the Miscellaneous Tax Unit Estate tax and gift tax claims received and disposed of, fiscal year 1949 are set forth in the paragraphs which follow. Collections of miscellaneous taxes for the year 1949 were Estate tax claims Gift tax claims $6,170,913,938, an increase of $115,231,282 over the collections for the preceding year. Refund Abatement Refund Abatement ESTATE TAX DIVISION.-This division administers the laws appli- Num cable to the estate tax and the gift tax. (On April 1, 1949,. the division Num- Amount Amount Amount Amount was transferred to the Income Tax Unit and its designation was ber ber changed to Estate and Gift Tax Division.) Claims filed: Collections of estate tax for the year amounted to $735,780,569, a On hand Rine 30, 194& $25, 844, 752.42 9 $35, 541.27 195 $1,850, 708.5 6 $26,361.84 Received 14, 232,975.49 594 9,121,237.65 218 654,170.73 142 243, 718.90 decrease of $86,599,552 as compared with collections for the pre- Reopened 3, 157,553. 26 0.00 3 9,810.54 0.00 ceding year. Total to be disposed Collections of gift tax amounted to $60,757,344, which represents of 1,830 43,235, 281.17 603 9,156, 778.92 416 2, 514, 689.85 148 270,080. 74 a decrease of $16,207,978, compared with such collections for the Allowed 11,440,001.63 8,943,497.85 153 629, 05119 147 270,073. 67 Credited 0.00 198, 257.02 1 21,945.72 0.00 preceding year. Rejected 4,871,225.34 13,805.25 109 657,740.24 1 7.07 Credits under foreign death duty conventions were allowed in the Total disposed of 817 16,311,226.97 602 9,165,560.12 263 1,308,744.15 148 270, 080.74 sum of $699,151 pursuant to the Tax Convention with the Dominion r A of Canada, and $264,186 under the Tax Convention with the United On hand June 30, 1949_ 1,013 26,924,054.20 -- 1,218. 80 1,205, 998.70 0.00 No claims filed, over- A tosesements allowed 1,696 4,352, 424. 5 8,689,617.41 349,140.55 3 5, 778. 80 Kingdom Interest allowed 1, 949, 557.28 0.00 136,079.81 0.00 Returns. -There were 27,815 estate tax returns and 35,599 gift tax Total allowed, hp returns received during the year. Estate tax returns are referred to eluding interest._ 2,385 17, 741, 993.13 883 17,831,372. 448 1,136,22A. 27 150 275,852.47 the internal revenue agents in charge for investigation and deter-

REPORT OF COMMISSIONER OF INTERNAL REVENUE 33' 82 REPORT OF COMMISSIONER OF INTERNAL REVENUE -The Tobacco and revenue tobacco sea stores warehouses, or to sea stores warehouses TOBACCO AND CAPITAL STOCK TAX DIVISION. operated by the supply branches of the United States Army and Navy, Capital Stock Tax Division is concerned with the administration of at ports in the United States for temporary storage and subsequent the laws and regulations relating to the taxes on the manufacture, shipment for such purpose. sale, or removal of tobacco, snuff, cigars, cigarettes, cigarette papers There were 40 bonded internal revenue sea stores warehouses, 16, and tubes, the purchase and sale of leaf tobacco, and the tax-free Army and Navy sea stores warehouses, and 7 bonded internal revenue removal of tobacco products for export, for use of the United States, export warehouses in operation at the end of the year. and for use as sea stores. This division is also concerned with the The tax on large cigars amounted to $45,530,429, a decrease of administration of the capital stock tax, repealed by section 201 of the $1,155,538, compared with such collections for the preceding year. Revenue Act of 1945 with respect to the years ended after June 30, 1945, under which a tax was imposed on corporations carrying on or Number of claims for the refund and abatement of tobacco taxes, for the redemption doing business during any part of the taxable year, the tax being bacco stamps, and for drawback, received and disposed of during fiscal year measured by the declared value of the capital stock of domestic 1f 4/t o corporations, and by the declared value of the capital employed in the United States in the case of foreign corporations. The division Refund Redemption Abatement is still engaged in closing out the capital stock tax returns, claims, and other matters relating to the tax. Number Amount Number Amount Number Amount

collections of tobacco taxes for the year ,9 Tobacco taxes.-The On hand July 1, 1948 $9, 483.02 141 $191,620.36 42 $10,629.15 amounted to $1,321,874,770, an increase of $21,594,617, or approxi- Received 1,391.68 2,121 2,695,012. 58 25, 520.24 Allowed 997.80 2,182 2, 709,811. 59 .9^ 32,834.87 mately 1.7 percent, over receipts from similar sources during the Rejected 9, 876.90 5 41,398.33 1, 914. 52 preceding year. On hand Tune 30, 1949 75 135,423.02 1, 400.00

A comparison of the collections of tobacco taxes for the fiscal yearn 1948 and 1849 Drawback lino° leetible Total

Increase or decrease (-) Number Amount Number Amount Number Amount 1948 1949 Source .

Amount Percent On hand July 1, 1948_ cn $112.00 158 $211,844.53

Received o 2,616. 20 1 $78.48 2,238 2, 724, 619.18 Allowed 2, 728.20 2, 296 2, 746, 372.46 Rejected 1 78.48 24 53, 268.23 Cigars (large): On hand Tune 30, 1949 Class A 842,259.18 $42, 568.17 008.99 0.7 76 136, 823.02 Class B 1, 076,747.22 625, 827. 76 -450,919. 46 -41.9 Class C 5,085, 845. 47 6,911,493.87 1,825,648.40 35.9 Class D 4,900,955.39 3,826,428.34 -1,074,529.05 -21.9 In addition, interest in the amount of $31.5 was allowed. The sum of $2,709,8 1.59, representing claims Class E 30, 487, 921. 92 28, 923, 792.34 -1, 564, 129. 58 -1.7 allowed for the redemption of stamps, includes the following: Stamp which were rendered useless, $1,205,- Class F 2, 312,998.99 2,352,175.92 39, 176. 93 1.7 751.04; stamps for which the owner alleged he had no further use, $182,244.24; and the value of stamps a61xed Class G 2.778, 238.81 2, 848,144. 27 68,905.46 2.5 to packages of tobacco products withdrawn from the market by the manufacturer or importer, $1,341,816.31. 45,530,428. 67 -1,155,538.31 -2.5 Total 46,685, 966. 98 Detailed statistics covering the manufacture and removal of manu- -9.4 Cigars (small) fib, 536.14 59, 372. 68 -6,163.46 4, 601.65 7,115.19 2, 513. 54 54. 6 factured tobacco, snuff, cigars, and cigarettes, the receipt and shipment Cigarettes Cartel? 2.0 Cigarettes (small) 1,208.199,00.10 1, 232, 727, 557.03 24,528, 551. 93 of leaf tobacco, and the removal of cigarette papers and tubes will be -4.3 SnuffTobacco, manufactured 37, 024,391. 73 35, 435, 187. 12 -1, 589, 204.61 found in tables which appear in the Appendix. 400.18 7,272,318.88 -100,081.50 -1.4 Capital stock tax.-Collections of delinquent capital stock tax during Total 44,396,791.91 42, 707, 505.80 -1, 689, 286.11 -3.8 the year amounted to $6,137,508. 693.94 457.08 -236.86 -34.1 As a result of the review and audit of returns, 317 assessments were Leaf tobacco sold -9.6 Cigarette papers 924,384. 23 835,186.19 -89,198.04 made, involving tax, penalty, and interest in the amount of $3,614,248. 1,140.00 5,590.08 4, 00.08 390.4 Cigarette tubes 627.71 1,316. 73 689.02 109.8 Cigar floor stocks tax -82.9 Cigarette floor stocks tax 1,405.28 240.50 -1,164.76 Number of capital stock tax claims received and disposed of during the fiscal year 1949 Grand total 1,300, 280,152. 92 1, 321, 874,769.95 21,594,617.03 1.7 Refund Abatement Uncollectible Total

The tax on small cigarettes amounted to $1,232,727,557, an increase Num- Num Amount Amount Nom' Amount Amount of $24,528,552, or 2.0 percent, over receipts for the preceding year. bar bar bar bar During the year, 41,837,303,690 small cigarettes were withdrawn from On hand July 1, 1948 130 $627, 922.24 $51, 832.68 0, 119. 36 189 $681, 674.26 factories without payment of tax, as compared with 34,696,170,185 Received 109 105, 795.41 1,805.98 9,423.89 188 116,825. 26

1 CO Reopened 400.00 a- 1 400.00 withdrawn during the preceding year. These tax-free withdrawals Allowed 53 27, 193.01 12, 883.17 9,77169 157 49,856.87

included cigarettes for export, for use as sea stores on vessels on the Rejected 69 329, 359,88 6, 279.55 n 1,137.18 77 336, 776.61 On hand June 30, 1949 118 high seas, and for use of the United States. Withdrawals for use as 377, 564. 76 84, 075.92 6226.38 144 412, 267.06 sea stores may be delivered directly to vessels, to bonded internal REPORT OF COMMISSIONER OF INTERNAL REVENUE 35 34 REPORT OF COMMISSIONER OF INTERNAL REVENUE Claims.—The number of claims received and disposed of by the During the year, a total of $3,089, including interest of $525, was Sales Tax Division during the fiscal year ended June 30, 1949, is refunded as the result of court decisions. shown in the following table: SALES TAX Divisiox.—The Sales Tax Division is concerned with the administration of the manufacturers' excise taxes and the retail Number of claims receieved and disposed of by the Sales Tax Division during the dealers' excise taxes on jewelry, furs, toilet preparations, luggage, etc. year 1949 Collections with respect to the taxes administered in the Sales Tax Division are shown in the following table: Refund Abatement lincollectible Total

Claims PI p Collections during the fiscal years 1848 and 1949 Amount Num Amount ber Amount Number Amount -

Increase or de- 1949 Sales taxes: Source 1948 crease (—) On hand July 1,1948. 1,052 $2,606,807.18 586 $731, 141. 60 8 $18,879.06 1,645 $3,358,827.84 Received 1, 694 3,135,989. 88 1, 988 1,108 585.98 Reopened 308 461, 710.45 3,940 4, 706, 286.31 24 163, 218.86 7 9, 201.21 31 157, 420.07 Allowed 1, 598 1,254,938.32 2, 214 987, 465.74 315 480, 694.62 Manufacturers' excise taxes: $80, 88A 921.61 $81,759, 611.97 $872,600.36 Rejected 4,127 E 722,988. 88 Lubricating oils 25,009, 845.09 409 2, 007,198.76 78 172, 266.49 1 4.89 488 2,179,470.14 478, 637,625.15 603, 647,470.24 OnbandJune30,1949_ 713 E 633, 878.84 288 6E4,196.56 Gasoline 159, 284,138.85 150,899, 047.98 —8, 385,090.69 1,001 3,318, 075.40 Tire and tubes 91,962,891.20 136,797,379.13 44,834,487.93 Automobile trucks and bues 61,853,950.16 cycles 270 968, 392.21 2, 12, 342. 37 Oth er automobiles and motor 12,812,468.14— 1,,22, 950708.28 3320,1838,240.14 Parts and accessories for automobiles 69, 700, 529.73 79, 347,495.66 9,646,985.93 In connection with the claims shown in the foregoing table interest Electrical energy —6,923,103.85 87, 857, 612. 46 80,934, 508.61 was allowed in the amount of $152,435, compared with $215,349 Electric, gas, and oil appliances 24, 935, 505.39 26,172,166.87 1,236, 681.48 Electric light bulbs and tubes —18, 107, 306.70 67,288, 866.93 49,159, 550. 23 allowed as interest during the preceding year. Radio sets, phonographs, components, etc 7, 531, 905.10 8, 482, 797.74 —1,049, 107.36 Credit cases.—At Phonograph records s 10, 572,682.91 9, 29E 868.30 —1, 280,014.61 the beginning of the year there were on hand 2,041 Musical instruments 77,833,244. 87 19, 359, 873.65 Mechanical refrigerators, air-conditioners, etc... 58,473,3.72 22 sales tax credit cases involving $3,680,233. During the year 18,265 10, 609, 657.69 8, 737,618.31 —1, 872, 039.38 Matches 32, 707,141.16 83, 343,900.01 636,758. 85 cases involving $49,730,686 were received and 17,084 cases involving Business and more machines excise (suspended Luggage—manufacturers' 189.13 100.40 —88.73 $46,339,137 were closed. Of this number 16,827 cases involving Apo.A. I 1944) 43, 935,373.95 43, 139,668.92 —795, 705.53 $46,269,629 were allowed, while 257 cases representing $69,508 were Photographic apparatus 18,827,947.98 10,846, 484. 74 1,018, 536.76 S ding goods 378,538.42 —898,148.95 rejected. 11,276, 687.37 10, rms, shells, and cartridges 857,913,44 809, 888.11 —48,025.33 Pistols and revolvers Offers in compromise.—On July 1, 1948, there were on hand 6,272 1,649,234,052. 58 1,771, 532, 722.50 122, 298,669.04 Total offers in compromise aggregating $267,709, which had been submitted in settlement of civil and criminal liabilities incurred in connection Retailers' excise taxes: 79, 539, 152.40 61,946,246. 55 —17, 592,905.85 Furs 217,899,249.20 210, 688, 165.33 —7,211,083.87 with various excise and miscellaneous taxes. There were 21,611 Jewelry 80, 632, 323.81 82, 807, 133.49 1,974,809.68 offers aggregating $735,861 received; 23,250 offers aggregating Luggage 91,852,012. 02 93,969,241.32 2,117, 22E1.40 Toilet preparations_ $488,380 were accepted; 241 offers in the amount of $90,623 were 469, 922, 738.33 449,210, 786.69 —20, 711,951.64 Total rejected; and 100 offers amounting to $45,624 were withdrawn during 2,119, 158, 790.89 2, 220,743, 509.19 101, 586,718.30 Grand total the fiscal year. On June 30, 1949, there were on hand 4,282 offers amounting to $378,943 under consideration or awaiting additional evidence. Assessments. —A total of $4,792,587,524, representing 6,371,808 Miscellaneous tax field force.—The small group of internal revenue items, was assessed on 3,473 miscellaneous tax assessment lists, which agents assigned to duty under the direction of the Miscellaneous . Tax included original and additional assessments of miscellaneous internal Unit, which operates chiefly as a mobile organization investigating revenue taxes.' Included in the lists were 21,222 additional assess- various miscellaneous delinquent taxes, continued to obtain excellent ments, resulting from office audit and field investigations, representing results. During the year these field officers reported a total of 3,326 tax, interest, and penalties of $134,369,337. Interest included in cases, involving $7,257,743 in additional taxes, penalties, and interest. this amount totaled $15,685,214. MISCELLANEOUS DIVISION.—The Miscellaneous Division is con- Field reports.—At the beginning of the year there were on hand cerned with the administration of the taxes on admissions, dues, 180 field reports with respect to proposed additional sales taxes, telephone, telegraph, and cable facilities, transportation of persons, amounting to $2,016,793. During, the year, 1,585 field reports were transportation of property, transportation of oil by pipe line, safe received, representing $4,601,714 in proposed additional taxes, and deposit boxes, the processing of coconut and other vegetable oils, 1,566 were examined and closed, representing taxes amounting to manufactured sugar, transfers of interests in silver bullion, hydraulic $4,266,279. On June 30, 1949, there were 199 reports covering mining; the special taxes on the maintenance of coin-operated amuse- $2,352,228 awaiting additional evidence. ment and gaming devices, and on the operation of bowling alleys and Tax Division completes assessments, schedules billiard and pool tables; documentary stamp taxes; taxes on oleo- I As a matter of administrative convenience, the Sales for the Estate Tax Division, claims and certificates of overamessment, and passes on offers in compromise fo margarine, etc., narcotics, marihuana; the administration of the the Tobacco and Capital Stock Tax Divide/I, and the Miscellaneous Division. National Firearms Act and the Federal Firearms Act; and the adjust- 36 RJo~PORT OF COlVL,\USSIONER OF lNn~RNAL REVENUE REPORT OF COrvfMISSIONER OF INTERKAL REVENUE 37 ment of clnims for refund of taxes pftid lUlder the Agricultural Oleomargarine; a-d-u,lterated, proce8S or renovated bUller; and filled Adjustment Act. and. related legislation. cheese.-AL the beglllning of the yeur thoro w~!re 51 mlluuftlctmers of The collections of the tuxes administered in the Miscelluneous oleomnrgllrine engaged in busine8s, 38 of which produced colored Division are shown in the following table: oleoIlllU'gl1rioc: At the clo~e of t.~le yelU' there w~re 50 mauufact,urers of oleomargarme engllged ill buslllrss, 46 of wluch produced colored Collet/ions during the. fiSCCll ye.(fr.~ 191,8 and 1.9·19 olc-omargnrine. In lldditlOn to the mnnufllcturers listed, them were othcTS who incurred linbihLy to the tnx us lllilllUfllcl,urers by renson of coloring and scHillO' Lhe product,. Jo,IIo.nufncture.l's produced Source 1918 I 1919 lJJ~T=-:- I I dceI'Cl1SC (-) 12Il,6iG,6:39 pounds of C?lorcd oleomargllr~ne nnd n~,93;:J,9~7 pounds I i of uncolored oleomarganno. as compll.red WIth product.lOn of '5,242,507 Documentary stnmps: BOIl(.I" "I ir"l'.\~1.<'el~ding year. SUfe \. .. ._ __ 4116.630.216.6-1 1164.690.18:1.28 IJS.(I\I(l.llI M fisl'lll yenr. Filled ehecsc produced amounted to 43,838 pounds as .~(lrnls>inus __ .------.. -- -- •• ----- 38;;, lt~1.';W.12 3ti:>.H3. 79:1.10 74.t.t~1.1Ilt compared with IS.t-\67 pounds pl'oduccd during the preceding yonI'. CnhUI'\)I... • __ ••• .'>3.52:.ltS. 'lit S:ilver.-Secl.ioll 1805 of t1l(> Tntemal RC\'ClllH' Code imposes n, tax 'I'Olal._••• _ __ .. .. ~...---- 2.",7n,(;7!1.:'f' 17.4'n.7S2.1lIl I -S.21~8!lIl ~ eqUlvlIlpnt to 50 porcellt, of the net, profit l'NlIizcu on t.he tl'llllsfel' of ftllllltl'rl'st ion silver' bUllion, sllbjl'ct to cerLnin exempt,ions and lihnte­ nowlino: nllcy". pO(lllflhle~ .. __ ~:______·l.Ofl.~.,;.,.l\t 3.f'(l~.117.S.'i -2S(),M9.IA COill,opl\ratw df\\'i('\..s_. .~ __ ••.• __ ~ •.•••••_...... ~ __ • l{),270,!J·lll.t'VI 21,OSi,;)'li.lQ l.~l",rloll:i.M nlcnts t.o regist/>I'Pc! deale!:; l1.fld prod ucers. The collections of silver Tr3Ils}J())'Ult ion of J)('l1\On~ • __._. • 2·1H. :{2'3. 041. f)fl 2:.1, ~s.."". :..."'11. H h. ()flr_, ....;..t.:J.8S t~)X dUl'Ing the yellr amounted to $687,425. ns comparod \\'1th collec­ Tmnsf.orlatlon "rIlJ·OrlCrty c --- ;j]7.2H3. n1.2-, ;;:\7.02(1.&;11.112 19.826. 755.fl7 1I011.~ of :i)45:3,881 for tho preceding yell-r. 1.otaL...... __ .... __ : __ .. __ ._____ 5&'l.S82. i1l9.47 \t1:Ull.I23. to ~~;.I2I-.3ZUI' held m.d special squad reporl8.-·Thcre were received during t.he Bll~or ..__ , 7l.2·W.S:l:t.,r. 7f>.l7-I.3foG.iW 4.927.522.:1." ml,oolJune"u~ ~7 Y~ill' :3 ,871 reports, rep.I'l>senting ndd j tiona.l tnxes in Llw IInlOunt of Olher I'\) cl'ipl.s_ ... • ______300.2«0. 15 _ 272.71• L Illl -123.~" M.7. _"=::11== t.ill~ (~xntllined 1.735.177.43~.1l711,8:l5.620.237.:!8 OO.H2.NJ~.3l $/ ,170.(i68, alld :3.,84li reports :1rllOlUJ to $6,508,iO'1 were Grun<1 10Ial.. ..__ adn~1 Closed, }ctl.vmg ;319 l'llporis covcrmg $;3,588.382 remaining for 11 JUstment lit. the dose of the year. ~j)OfJ4 7-5lJ--4

REPORT OF COMMISSIONER OF INTERNAL REVENUE 39 38 REPORT OF COMMISSIONER OF INTERNAL REVENUE ALCOHOL TAX UNIT Miscellaneous claims.—The claims involving the miscellaneous taxes, received and disposed of during the fiscal year, are shown in General functions.—The Alcohol Tax Unit is charged with the ad- the following table: ministration of the laws relating to the production, warehousing, tax- payment, rectification, packaging, and distribution of distilled spirits, Number of claims received and disposed of by the Miscellaneous Division during the fiscal year 1949 wines, and fermented malt liquors; the production, warehousing, tax- payment, denaturation, and distribution of industrial alcohol; the

Refund Abatement Redemption Uncollectible determination, assertion, and assessment of taxes and penalties on I I such liquors; the investigation of returns covering occupational and Claims Num - 1 Amount Number Amount ber Amount commodity taxes; the regulation of the manufacture and use of liquor Amount bottles; the chemical analysis of liquors and other products to deter- mine their taxable status and proper labeling; the administration of Miscellaneous excise: 1, 200 $2, 571, 433.87 815 $395, 580.30 85 $73, 587.37 the provisions of the Federal Alcohol Administration Act relating to On band July 1,1948_. 821, 227.08 Received 3 724 2, 600, 275.10 2, 577 731, 346.98 969 the regulation of interstate and foreign commerce in distilled spirits, Reopened 52 63,364. 66 3 4,719.97 2,832 1, 729, 948.90 2,476 526,678. 58 979 729,604.18 Allowed 10, 252.12 wines, and fermented malt liquors, and the labeling and advertising Rejected 655 1, 752, 67472 130 210,930.12 5 On band Jtme 30, 1949 , 489 1, 752, 450..01 589 394,038. 55 70 154, 958.15 thereof; and with the investigation, detection, and prevention of Miscellaneous stamps: 60,016.18 64 49,840.39 380 $75,523.79 49 2, 120. 22 willful and fraudulent violations of the internal revenue laws relating On band July 1, 1948_ 218 27, 081.37 Received 1,566 44,987.98 612 363, 464.04 3, 451 496, 086.96 539 thereto. 24,382. 84 2 13, 312.59 5 288.12 Reopened 4 28,320.98 Allowed 559 49,317. 05 546 327, 471.69 3 193 225,324.92 572 The functions of the Unit are classified as permissive, enforcement, Rejected 37 65, 182. 52 18 15,449. 69 • 213 95, Ill. 26 and basic permit and trade practice. In addition to the headquarters On hand June 30, 1949. 192 14,887. 41 114 83, 695.64 430 251,462.69 16 880.61 Narcotic: office, there are 15 field districts. The supervisors of such districts 12 24.45 3 1,727.51 6 13.89 8 269.32 On band July 1, 1948_ 8, 600.20 Received 113 403.55 18 228.28 61 3, 449.01 25 administer, within their respective districts, internal revenue laws Reopened 8,463.57 and regulations relating to alcoholic liquors and denatured alcohol Allowed 107 375.05 18 1, 848. 22 61 3,294.28 24 Rejected 4 16.00 1 3.00 and the Federal Alcohol Administration Act. On hand June 30, 1949_ 14 36.95 3 107.57 5 166.62 4 405.95 Marihuana: On hand July 1,1948 3 4,414.01 18 1E2, 022. 64 PERMISSIVE ACTIVITIES Received 5 4, 928.22 17 87,672.68 241 1, 017, 565.31 Reopened Allowed 2 745.00 12 67,061. 89 232 1,148,871.67 Plants and permittees.—On June 30, 1949, there were authorized to Rejected 2 3, 188. 09 5 23, 109. 60 operate a total of 2,251 registered and fruit distilleries, internal rev- On bandJune 30, 1949. 1 995.13 3 1,915.20 27 21,016.28 Silver: enue bonded warehouses, industrial alcohol plants and warehouses, On hand July 1, 1948._ I 16,308. 85 25 2,907,804.02 Received 3 16,309. 77 133 86, 185. 86 1 75.94 denaturing plants, rectifying plants, tax-paid bottling houses, wineries, Reopened breweries, and vinegar plants as compared with 2,371 as of June 30, Allowed 129 723, 002. 23 1 76.94 Rejected 5 2, 228, 726.39 1948. This represents a decrease of 120 establishments. As of June On hand June 30,1949_ 4 32,618. 62 24 42,261. 26 Coal: 30, 1949, there were 478,515 wholesale and retail dealers, as com- On hand July 1, 1948 8 746.19 pared with 467,811 a year ago, representing an increase of 10,704 Received 13 5,068.11 44 18, 126. 23 Reopened dealers, or 2.3 percent. The total number of plants and permittees Allowed 4 24.73 52 18, 872.42 Rejected 9 5,043.38 of all classes, as of June 30, 1949, was 497,456 as compared with On band Tune 30,1949_ 487,027 a year ago, representing an increase of 10,429 or 2.1 percent. Sugar: On hand July 1, 1948._ 82 129,646.23 A table showing the number for each class, as of June 30, 1949, is Received 638 14, 788, 853.83 3 571.18 Reopened 2 1, 805. 92 included in the Appendix. Allowed 608 990, 845.52 2 143.17 Collections.—For the fifth consecutive year, over two billion dollars Rejected 21 13, 749, 645.02 1 428.01 Onband June 30, 1949_ 95 179,815.44 were collected in Federal liquor taxes on domestic and imported Total: On handJuly 1,1948._ 1, 613 2, 777, 429.58 710 3,359,366. 23 386 75,537.68 163 228, 745.74 liquors (distilled spirits, fermented malt liquors, and wines), repre- Received 6, 049 17, 455, 758.43 3,373 1, 274, 537.13 3, 513 499, 611. 91 1,818 1, 892, 600.19 senting receipts from excise taxes, rectification tax, floor stocks taxes, Reopened 58 89, 553. 42 5 18, 032.56 5 288.12 Allowed 5 106 2,771,231.52 3,187 1,646,230.51 3,255 228,695.14 1,859 1,933,832.82 special and occupational taxes, and bottle or container stamps. The Rejected 719 15, 570, 706. 35 168 2,483, 687. 19 214 95, 114. 26 5 10, 252. 12 On band June 30,1949- 1, 795 1,980, 803.56 733 522, 018.22 435 251,628.31 117 177,260.99 total collections of $2,210,607,168 during the year represent a de- crease of $44,719,586 or 2.0 percent, as compared with collections of $2,255,326,754 during 1948. Miscellaneous credit cases.—Two thousand five hundred and six The total collections on distilled spirits alone in the fiscal year 1949 cases, involving taxes of $3,713,410, were received during the year. again exceeded one billion dollars, but represent a decrease of approxi- A total of 2,483 cases, involving $4,181,285, was disposed of by the mately 40 millions from collections for 1948. Such collections allowance of 2,186 cases, representing $4,087,641, and the rejection of amounted to 65.7 percent of the total liquor tax collections in 1949, 297 cases, amounting to $93,645. compared with 66.2 percent in the fiscal year 1948.

41 40 REPORT OF COMMISSIONER OF INTERNAL REVENUE REPORT OF COMMISSIONER OF INTERNAL REVENUE The total collections from all domestic and imported liquor taxes The quantity of spirits produced for industrial purposes is not during 1949 for distilled spirits, fermented malt liquors, and wines determinable. In the fiscal year 1949, 713,830 tax gallons of spirits are compared with such collections during the preceding year in the were transferred to denaturing plants for denaturation, as compared with 465,868 tax gallons in 1948, and 28,400,821 tax gallons were following table: transferred to industrial alcohol bonded warehouses as compared with Change 20,920,794 tax gallons in 1948. Spirits transferred to industrial alcohol Tax collections bonded warehouses can be withdrawn as alcohol for industrial or Source beverage purposes. The quantity of alcohol produced for beverage Fiscal year Fiscal year Amount Percent 1949 1948 purposes by industrial alcohol plants is not available. The best available figure is the quantity of domestic alcohol used in production - 2.6 $1,453,275,101 $1, 492, 599,331 -739,$ 313165, 230 Distilled spiritS 701, 119, 310 - 10, ,121 -1.5 of rectified products, which amounted to 35,824,521 proof gallons for 690, 803,189 +8.01 Ferrqented malt liquors 66,528, 878 61,617,113 -1-4, 911, 765 Wines the fiscal year 1949. - 2.6 2, 210, 607, 168 2, 255, 326, 754 - 44, 719, 586 The production of each kind of distilled spirits•produced by regis- Total tered or fruit distilleries, for the fiscal year is compared with such production during the preceding year in the following table: The total excise tax collections on domestic and imported distilled spirits for the fiscal year 1949 amounted to $1,396,954,788, as compared with $1,434,789,176 for the preceding year, representing a decrease of Production of distilled spirits 2.6 percent. Tax gallons Change The total excise tax collections on domestic distilled spirits for 1949 amounted to $1,275,181,485, as compared with $1,324,823,881 for Fiscal year Fiscal year Amount Percent 1948, a decrease of $49,642,396, or 3.7 percent. The total excise taxes 1949 1948 on imported distilled spirits for 1949 amounted to $121,773,303, com- By registered distilleries: pared with $109,965,295 for 1948, an increase of $11,808,008, or 10.7 Whisky 149,595,239 129, 597,067 +19, 998,172 +15.4 Brandy 30, 531 18,455 +12,076 +65.4 percent. Rum- The total excise tax collections from all domestic and imported Beverage 241, 668 441,123 -199, 455 -45. 2 Industrial 1, 757, 078 1,557, 410 +199. 668 +12.8 liquor taxes during 1949 for distilled spirits (exclusive of seizures, Clin 3, 937, 490 3, 691, 196 +246, 294 +6.7 83, 193, 482 -8,162, 384 -9.8 penaties,l etc.), fermented malt liquors, and wines are compared with Spirits 75, 031,098 such collections during the preceding year in the following table: Total 230, 593,104 218, 498, 733 +12,094,371 +5.5 By fruit distilleries: 17,427,034 21,154,197 -3, 727.169 -17. 6 Change Brandy Total excise tax collections Spirits 18, 522, 361 4,474, 413 +14,047,948 +314.0 +10,320,785 +40.3 Source Percent Total 35,919, 395 95, 628, 610 Fiscal year 1949 Fiscal year 1948 Amount Grand total 266,542, 499 244, 127,343 +22,415,156 +9.2

Distilled spirits: $1,324, 823, 881 -$49, 642,396 -3.7 $1, 275, 181, 485 +10.7 Domestic 121, 773.303 109,965,295 +11,808,008 Imported -2.6 Tax-paid withdrawals of distilled spirits.-Distilled spirits (whisky, 1,396, 954, 788 1, 434, 789,176 -37,834,388 Total -1.5 brandy, rum, gin, and spirits) may be tax-paid in bulk and withdrawn 686,367,516 697,097, 258 -10. 729, 742 Fermented malt liquors from registered and fruit distilleries and internal revenue bonded +4, 904,714 +8.4 warehouses, and alcohol may be tax-paid in bulk and withdrawn from Wines: 63, 333.657 58, 428.943 -3.3 Domestic Z 448,104 2,532,883 -84, 789 industrial alcohol bonded warehouses, for bottling without rectifica- Imported +7.9 ed products, and for nonbever- 65,781,761 60,961,836 +4, 819,925 tion, for use in the production of rectifi Total -2.0 age purposes. Distilled spirits bottled in bond prior to tax payment 2,149,104, 066 2,192, 848, 270 -43,744, 205 Grand total are tax-paid at the time the cases are withdrawn from internal revenue bonded warehouses. Production of distilled spirits.-The total production of all distilled The total tax-paid withdrawals of all distilled spirits (including spirits for the fiscal year 1949 (by registered and fruit distilleries) alcohol) amounted to 141,766,697 tax gallons during the fiscal year amounted to 266,542,499 tax gallons, as compared with 244,127,343 1949, as compared with 147,160,331 tax gallons for 1948. tax gallons produced during the preceding fiscal year. The production of whisky for 1949 amounted to 149,595,239 tax gallons, as compared with 129,597,067 tax gallons for the preceding year.

REPORT OF COMMISSIONER OF INTERNAL REVENUE 42 REPORT OF COMMISSIONER OF INTERNAL REVENUE 43 Tax-paid withdrawals of each kind of distilled spirits for the fiscal tained 35.4 percent of whisky, as compared with 34.5 percent for 1948 and 33.4 percent for 1947. year 1949 is compared with such tax-paid withdrawals for 1948 in the Stocks of distilled spirits.—The total stocks of whisky, brandy, rum, following table: gin, and spirits as of June 30, 1949, amounted to 677,343,619 original tax gallons, as compared with 594,733,085 original tax gallons as of Tax-paid withdrawals of distilled spirits June 30, 1948, or an increase of 13.9 percent. The stocks of whisky increased from 522,260,756 original tax gallons as of June 30, 1948, Tax gallons Change to 602,925,861 original tax gallons as of June 30, 1949, or 15.4 percent. The stocks of whisky 4 years old or older amounted to 33,160,196 Fiscal year Fiscal year Amount Percent 1949 1948 tax gallons as of June 30, 1949, as compared with 55,506,519 tax gallons as of June 30, 1948, a decrease of 40.3 percent. Specially denatured rum.—During Whisky: 7,788,536 9, 130, 136 —1,341,600 —14.7 the year there were produced Bottled in bond —928.236 —1.7 Total 52,674,964 153, 603, 200 1,153,246 wine gallons of specially denatured rum, as compared with ,311348 1,395,887 +615, 481 +44. Brandy '{301301, 311 297,033 +4, 278 +1.4 1,066,574 wine gallons for 1948. Rum 3, 786,877 3,475, 525 +311, 352 +9.0 Fermented malt liquors.—Production Gin 42,146 483 49, 630, 289 —7,483,806 —15.1 of fermented malt liquors Spirits during the fiscal year amounted to 89,735,647 barrels, or 1.7 percent 100, 920, 983 108, 401, 934 —7, 480, 951 —6. 9 Total +2,087,317 +5.4 less than the preceding year (91,291,219 barrels). Tax-paid with- Alcohol 40, 845, 714 38, 758,397 147, 160,331 —5, 393,634 —3.7 drawals were 85,809,068 barrels, or 1.4 percent less than the preceding Grand total 141, 766, 697 year (86,992,795 barrels). Fermented malt liquors withdrawn by pipe line for bottling represented 69.9 percent of the total taxpaid Tax-free withdrawals of distilled spirits.—During the fiscal year 1949 withdrawals, as compared with 68.4 percent in the preceding year. a total of 38,568,036 tax gallons of distilled spirits were withdrawn Tax-free withdrawals for export were 731,527 barrels, an increase of tax-free, as compared with 27,421,266 tax gallons for 1948. 818 barrels as compared with the fiscal year 1948. Materials used in production of rectified products.—The total tax-paid Wines.—Production of still wines amounted to 139,879,738 wine domestic and imported distilled spirits and wines used in the produc- gallons, or 32.7 percent more than the preceding year (105,424,549 tion of rectified products during the fiscal year 1949 amounted to 118,- wine gallons). Tax-paid withdrawals of still wines amounted to 971,861 proof gallons, consisting of 38,117,617 proof gallons of whisky, 119,106,689 wine gallons, or 8.2 percent more than in the preceding 42,192,873 proof gallons of spirits, 35,824,521 proof gallons of alcohol, year (110,114,160 wine gallons). Tax-paid withdrawals of domestic and 2,836,850 proof gallons of other materials. (A break-down of sparkling wines amounted to 21,665,256 half-pint units, an increase domestic and imported distilled spirits and wines used in the produc- of 6.1 percent from the preceding year (20,413,746 half-pint units). tion of rectified products is included in the Appendix.) Tax-paid withdrawals of vermouth produced at wineries amounted to Production of rectified products.—The total production of rectified 2,126,544 wine gallons, an increase of 26.1 percent from the preceding products for the fiscal year 1949 amounted to 118,954,612 proof year (1,686,508 wine gallons). Tax-paid withdrawals of aperitif gallons, consisting of 107,781,521 proof gallons of whisky, 6,601,847 wines produced at wineries amounted to 203,876 wine gallons as com- proof gallons of gin, 2,817,735 proof gallons of cordials and liqueurs, pared with 308 wine gallons for the preceding year. Production of and 1,753,509 proof gallons of other products, as compared with the distilling materials at wineries (to be used at fruit distilleries) amount- total 1948 production of 125,732,822 proof gallons, consisting of ed to 286,045,119 wine gallons, as compared with 208,903,247 wine 114,916,903 proof gallons of whisky, 7,267,090 proof gallons of gin, gallons, for the prior fiscal year. 2,207,673 proof gallons of cordials and liqueurs, and 1,341,156 proof Production of ethyl alcohol.—The total ethyl alcohol production for gallons of other products. the year amounted to 351,015,364 proof gallons, as compared with Consumption of distilled spirits.—The total distilled spirits bottled 332,282,148 proof gallons for 1948, an increase of 5.6 percent. during the year (exclusive of distilled spirits bottled for exportation) Tax-free withdrawals of undenatured alcohol.—The total tax-free amounted to 160,931,244 wine gallons, of which 136,857,613 wine withdrawals of ethyl alcohol during the year, consisting of withdrawals gallons were rectified products, 16,247,519 wine gallons were unrecti- for denaturation, for use of the United States, for hospital, scientific, fied products (other than bottled-in-bond), and 7,826,112 wine gallons and educational use, for export, for transfer to customs manufactur- were bottled-in-bond products. This compares with a total, of 165,- ing bonded warehouses, and in Puerto Rico for medicinal, beverage, 888,683 wine gallons bottled during the fiscal year 1948, consisting of and other purposes, amounted to 324,565,106 proof gallons. 144,018,537 wine gallons of rectified products, 12,717,091 wine The total quantity of ethyl alcohol withdrawn for denaturation gallons of unrectified products (other than bottled-in-bond), and during the year amounted to 321,222,197 proof gallons. The total 9,153,055 wine gallons of bottled-in-bond products. The total quantity removed for use of the United States amounted to 644,889 whisky bottled amounted to 142,633,709 wine gallons for 1949 as com- proof gallons. There was withdrawn during the year for hospital, pared with 149,232,495 wine gallons during the prior fiscal year. scientific, and educational use a total of 2,545,837 proof gallons. The total rectified whisky bottled during the fiscal year 1949 con- REPORT OF COMMISSIONER OF INTERNAL REVENUE 45 44 REPORT OF COMMISSIONER OF INTERNAL REVENUE to $95,127 for drawback of tax on distilled spirits exported in distillers' Stocks of undenatured alcohol.-As of June 30, 1949, the stocks of ethyl alcohol amounted to 51,015,381 proof gallons, as compared with original packages, and 8 claims amounting to $286 on stills exported. the year, 38,273,358 proof gallons as of June 30, 1948, an increase of 33.3 Offers in compromise under internal revenue laws.-During 4,065 offers in compromise aggregating $356,391 were received, 3,996 percent. offers aggregating $339,150 were accepted, and 136 offers aggregating Production of denatured alcohol.-During the year there were pro- duced 164,273,211 wine gallons of specially denatured alcohol, as $25,615 were rejected; and 7 offers aggregating $2,391 were returned compared with 149,394,037 wine gallons for the fiscal year 1948; to the district supervisors for further investigation. 10,221,492 wine gallons of completely denatured alcohol, as compared Offers in compromise under Federal Alcohol Administration Act.- with 34,887,789 wine gallons for the fiscal year 1948. The total During the year, 248 offers in compromise aggregating $64,685 were production was 174,494,703 wine gallons, as compared with the total received, 226 offers aggregating $50,795 were accepted, 12 offers aggregating $11,665 were rejected, and no offers were returned to the production of 184,281,826 wine gallons for 1948. The quantity of specially denatured alcohol used in the manufac- district supervisors for further investigation. ture of synthetic rubber amounted to 1,427,787 wine gallons for the Laboratory activities.-During the year the laboratory in Washing- fiscal year 1949, as compared with 370,818 wine gallons for 1948. ton, D. C., received 5,276 samples for analysis, as compared with 5,403 for the fiscal year 1948. Production of vinegar.-The production of vinegar by the vaporizing process for the fiscal year 1949 amounted to 25,417,460 gallons (100- The branch laboratories received 45,386 samples, as compared with grain strength) as compared with 24,816,502 gallons (100-grain 39,074 for the fiscal year 1948. The field chemists spent 671 days in court and 556 days in inspections. More than 27 percent of the strength) for the fiscal year 1948. samples examined in the field were narcotics. Assessments.-There were received and reviewed for tax liability during the year 7,588 reports of inspection and investigation by field During the year three chemists were awarded the Treasury medal offices. The review disclosed that liability to taxes was incurred in for meritorious civilian service. The study of the effect of aging whisky in various types of cooperage 3,734 of such cases in the amount of $1,942,433. During the year, there were certified to the Commissioner 843 which. started in 1945, was continued. assessment lists totaling 101,684 items aggregating $519,836,167. A new denaturant for completely denatured alcohol was authorized Included in these were 3,858 items totaling $2,069,706 entered by the after experiments found it to be satisfactory. Methods were developed Alcohol Tax Unit, resulting from office audits and field investigations. and published covering the detection of cyanides and ferrocyanides in Claims for drawback of tax on distilled spirits used in nonbeverage wine, and the detection of cocaine in mixture with procaine. The laboratory collaborated with the Association of Official Agri- products.-During the year there were received 4,159 claims amount- mg to $29,061,348, compared with 4,333 claims amounting to cultural Chemists in developing and selecting methods of analysis for $30,005,864 during the preceding year. There were 4,102 claims official adoption. -Field examiners, operating directly from the amounting to $28,728,739 allowed, and 61 claims amounting to Field inspections $43,653 rejected. During the prior year there were allowed 4,366 Washington office, continued the inspection of field offices for the claims amounting to $30,840,199, and there were rejected 33 claims purpose of assisting and instructing field personnel, and improving efficiency in the determination and collection of liquor taxes. A new amounting to $10,047. Claims for remission of taxes on distilled spirits and wines.-During program of training for inspectors was started during the year. Many the year there were received 4,059 claims amounting to $5,474,677. time-saving procedures were recommended for adoption which were There were allowed 3,016 claims amounting to $4,688,995 for remis- investigated and developed as a result of the Treasury Department sion of tax on distilled spirits, and 244 claims amounting to $527,258 cash awards for suggestions and work simplification programs. for remission of tax on wines. There were rejected 699 claims During the fiscal year, a total of 319,758 inspections of plants and amounting to $171,102 for remission of tax on distilled spirits, and 74 permittees were made by field offices, of which 3,825 were made claims amounting to $16,452 for remission of tax on wines. pursuant to original applications filed by persons in the beverage Claims for redemption of stamps, abatement and refund of taxes.- liquor business or in the industrial alcohol industry. During the fiscal year 1949 there were allowed 13,270 claims for A total of 27,022 applications, notices, bonds, consents of surety, redemption of stamps, abatement and refund of taxes amounting to plats, plans, and other documents required by law and regulations to $9,442,446, compared with 10,138 claims amounting to $4,181,773 be filed in connection with new establishments, changes in premises and equipment, and discontinuances were administratively examined. during 1948. There were rejected 1,181 claims amounting to Other statistics.-Regular monthly and annual statistical reports $776,764 compared with 1,575 claims amounting to $720,817 the and releases concerning the activities of the Alcohol Tax Unit were previous year. the year there were allowed 857 claims issued. Considerable work was devoted to the preparation of statis- Export claims.-During tical reports for other governmental agencies. Statistical tables amounting to $838,981 for drawback of tax on alcohol used in flavor- giving detailed information covering plants and permittees, produc- ing extracts, toilet and medicinal preparations exported; 3,508 claims tion, withdrawals, and stocks of distilled spirits, alcohol, fermented amounting to $3,161,234 for drawback of tax on distilled spirits and wines bottled especially for export and exported; 4 claims amounting malt liquors, wines, and vinegar, claims, label activity under the 46 REPORT OF COMMISSIONER OF INTERNAL REVENUE REPORT OF COMMISSIONER OF INTERNAL REVENUE 47 Federal Alcohol Administration Act, and enforcement activities are Manufacture of Nonbeverage Products," were reprinted to incorpo- contained in the Appendix. rate amendments. Administrative procedure.—During the year continued improve- An Inspector's Manual prepared under the direction of the Field ments were made in administrative procedure relating to operations, Inspection Division was issued to inspectors throughout the Unit as transactions, and inspection of plants and permittees. an additional aid in conducting inspections of plants and permittees. The following Treasury decisions amending regulations were The chief of the Procedure Division, as chairman of the cash prepared by the Unit: awards program, directed the program for the Alcohol Tax Unit. Procedure pertaining to firearms, under the Federal Firearms Act. During the year a total of 1,156 suggestions were reviewed and closed, (T. D. 5646.) of which 189 were adopted. The Procedure Division was responsible Procedure for the tax-payment, stamping, etc., of imported fer- for putting adopted suggestions into effect, including the necessary mented malt liquor pursuant to the Act of June 30, 1948. (T. D. revision of regulations, forms, and administrative procedure. 5647.) Procedure for the refunding of tax on fermented malt liquors lost BASIC PERMIT AND TRADE PRACTICE ACTIVITIES in brewers' bottling houses pursuant to the Act of July 3, 1948 (Public Permits.—The Federal Alcohol Administration Act requires that all Law 899, 80th Cong.). (T. D. 5648.) producers (other than brewers), importers, and wholesalers of alcoholic Procedure for the removal for exportation of distilling apparatus beverages secure basic permits. The number of outstanding basic from the premises of manufacturers or vendors without payment of permits of all classes in effect June 30, 1949, totaled 18,858 as com- the commodity tax. (T. D. 5651.) pared with 18,912 in effect at the end of the previous year. There is Procedure to establish losses of tax-paid liquors in transit from included, in the Appendix, a table reflecting permit activity under Puerto Rico to the United States in order to effectuate proper the Federal Alcohol Administration Act during the year and the tax-payment, or proper refund of taxes if claim for refund is made. number of permits of each class in effect June 30, 1949. (T. D. 5652.) Simplification and improvement of the procedure relating .to the Labels.—The Federal Alcohol Administration Act provides that no production, removal, bottling, storage, and exportation of fermented person engaged in business as a bottler or importer shall bottle, or malt liquor. (T. D. 5654.) remove from customs custody for consumption, any distilled spirits, Requirements relating to the construction of containers for pack- wine, or malt beverages, unless he has obtained and has in his posses- aging bottled-in-bond spirits and spirits intended for export with slog a certificate of label approval or certificate of exemption from benefit of drawback. (T. Ds. 5655 and 5656.) label approval covering the labels affixed to the bottled products. Procedure relating to (1) the establishment and operations of During the year 32,191 applications were received, a slight decline distilleries, fruit distilleries, rectifying plants, tax-paid bottling from the previous year's total of 33,945 applications. A table is plants, and internal revenue bonded warehouses, (2) the bottling of included in the Appendix showing the volume of work handled in distilled spirits in bond, and (3) the gauging of distilled spirits. (T. Ds. this field during the fiscal year. 5663, 5664, 5668, 5669, 5671, 5681, 5700, 5701, 5702, and 5705.) As a result of hearings held in San Francisco and Washington, the Procedure relating to drawback of tax on distilled spirits and wines. distilled spirits labeling regulations were amended in several respects. (T. D. 5691.) The most important changes were with respect to the creation of higher Procedure concerning wholesale and retail dealers in liquors. standards for rye and bourbon liqueurs and domestically produced (T. D. 5693.) blended Scotch type whisky; the elimination of existing standards for Tax rates applicable to imported liqueurs, cordials, and similar blended Irish type whisky; the establishment of standards of identity compounds, flavored wines, and other compounds and preparations. for Vodka; and the requirement of a disclosure, on labels of domestic (T. D. 5694.) blends, of the presence of whiskies of foreign origin. Procedure concerning accounting of red strip stamps by proprietors Advertising.—For the purpose of determining compliance with the of tax-paid bottling plants and rectifying plants. (T. Ds. 5703 and advertising provisions of the Federal Alcohol Administration Act and 5704.) regulations issued thereunder, 146,611 alcoholic beverage advertise- Procedure for the tax-payment of alcoholic beverages in Puerto ments, appeasing in 29,559 publications were reviewed during the Rico after withdrawal for rectification or bottling, in order to make year. Regulatory action of a corrective nature was taken in 1,754 stocks available for shipment to the United States, under the Puerto cases where minor technical irregularities were observed. Radio Rican law, as amended. (T. D. 5706.) continuities numbering 12,100 and 2,610 pieces of point-of-sale adver- Procedure for labeling and advertising of distilled spirits with tising material were also reviewed. Seven cases involving more respect to the labeling of Scotch, Irish, and Canadian whiskies and serious irregularities were closed upon acceptance of substantial types thereof, and to other matters, and prescribing a standard of offers in compromise. As a service to the industry and to prevent the identity for Vodka and for other purposes. (T. D. 5707.) dissemination of improper advertisements, the Bureau reviewed and Regulations 20, "Wholesale and Retail Dealers in Liquors," and commented upon 1,796 advertisements or advertising campaigns prior Regulations 29, "Drawback of Tax on Distilled Spirits Used in the to publication: REPORT OF COMMISSIONER OF INTERNAL REVENUE 49 48 REPORT OF COr.rM]SSIONER OF INTERNAL REVENUE while engaged on official business and resulting in personal injary to Trade pracl'ice.-The pust year has witnessed the industrS"s return the employees or oth.ers and/or property daml1ge to Govermnent or to the highly compet,it-iYe buyer's mll.rket, in existence prior to the rivate p~opert;v. , . WI1l', with the at.tendant promotional se-hemes employed by the p '1'hese JUvestlgatlOlls were made III order thnt the BU'reau and De­ industry to induce so.les. Numerous investigations ,vere made where pllrtmcIit would be ill a position to pllSS propel'~Y on clll,~ms ll.ud d?fend it appell,red that, the promotional devices employed were contrary Ute Oove~·nment's,. as well I1S the emJ?loyees' mterest Ul. pny SUits or to t.he Trnde Pract.ic(~s Section of the F edeml }ucohol Administration ot,her fictIOn gl'OWUlg out of the aCCidents under the I'edeml Tort Act. Permit rcyocl1tion or suspension proceedings were t1uthorized Claims Act, and the United States Employees Compensation Act. or inst,itut.ed ill 60 cases, and offers in compromise were accepted in: Firearms program.-In September 1945 th.e Alcohol Tax Unit began 219 cases. Interlochnf! directorates.-In accordll,nce with section 8 of the an intensive. iuvestig.fltive. progmm to briu:f about the :egist~·11t.~on of Federul Alcohol Administra.tion Act, 60 appliclttioTls for I1pproval of machine guns, mac~lIle pI~tols, and other flrearms c,()mJJ~g Wlt.llll1 the N.ll.tlOn~,l thl~ interlocking directorRtes and ofHcers ~'ere received and acted upon by purview ofthe FI.rea,rms Act. As a. result of. program,. a. Bure~u's total of 100,249 mvestlgMlOlls were conducted, msultmg m the regls­ the 'Washington oflicc. trn.tion with tlH~ Commissioner of Internal Revl'nue of 1:3,204 firearms. ENFORCKMENT ACTIVITIES TECHNICAL STA.l!'F St'i2:ure.~.-DlUing th~ fiscal yen.r, 8,008 illicit stills, :~,661,432 gallons of mash, 131,538 gaUons of illicit liquors, 35,288 gallons of The Technical Staff is the appellate agency established within the tax-puid liquors, and 1,596 automobiles and trucks were seized, as­ Bureau of Internal Revenue for t.l.H~ determination of Federll,\ income, compared w1th the seizure of 6,757 illicit st.ills, 2,715;801 gallons of profits, estate, and gift t.a~ ~nbi)jty. It is an .indep(~nden.torganiz~1.~ion mash, 103,715 gallons of illicit. liquors, 14,519 gallons of tax-paid answet'ahle to the ComrnlsStOJler and operatmg under hIS supervlslOll. liquors, and 1,177 automobiles and trucks during 1948. Thcappmised In genera.!, its work concerns the classcs of taxation over which The value of the propert.y seized dnring the fiscal year 194.9 was $2,475,188,. Tax COUJ't of the United States has jurisdiotion. The Staff organiza­ as compared ''lith $1,710,83:3 for 1948. tion is made up of an l1.dministrntivc office in 'Washington and 12 field During the fiscl1,} ~rear 1949 violations of the internal revenue liquor- divisions comprising 30 local offices locn.ted thrQughout the United laws, llS reflected by enforcement statistics, continued to increase. States. The duties of the Staff personnel assigned to these field This upwn.rd trend WitS first observed in December 1947, following the­ divisions am (l) to determine on behalf of the Commissioner the aballdonment of sugur rationing in June ..of the same year. The­ liability of taxpayers who ha,ve protested the findings of the int.ernal increase in violations has been confined principo.lly to the southern revenue ltgent in charge prior to the filing of any petition with The Sto.t,es fLnd n, few metropolit.ltn ll,reu.s on the east COll.St. The demand Tax Court of tue United St.ates, and (2) to consider offers submitt,ed for non-tax-paid spirits ill these ar~as mll-.r be at.trihuted to low income­ by tl\XPI1YCl"S to settle CI1.5oS which hn.ve been docketed by the '!'ilX groups nnd the fact.or of uuemploylllcnt, which has increased during Court. In pedoJ'luing these tlut.ies the hell-ds of the Staff field divisions the lust 6 months of the fiscl1l year, part,iculltrly in the southern States. have ltllthority t.o act as the exclusive rC{l1'(:scntatives of the Com­ Arrests and l'n'm~ec1l.tions.-There were 8,91.5 persons llrl'est~~d for m~ssionel" in cast's within their tcrrit.orift jmisdiction, except tlHl.t vioIn-tions of the internal revenue liquor laws; reconunendll.tions were stlPUl:ited settlements in doc1wted cases must be conl;Ul'i'cd 1.n by IDtlde for t.he prosecut,ion of 8,092 persons in :B~ederal courts in Alcohol repn's(lntatives of t,he Chief CounseL for the Bureau, actillg as division Til.X Unit, cnses, ttU i.llcrcse of 1,189 or 17.2 percent as conlpo.red ,..;th C(}UlIS~'l. 1948; tUld 5,718 persons were indicted. There were 4,592 persons COIl· Wit'~l respect to excess profits tax determination.s in Hn~~ cuse, .the victed, and as of JunG 30, 1049,2,541 persons were 11wait,ing grnnd jury Techl1l.cn.1 ~tati"s _otherwise f~xclusiye jmisdiction is subject to the action, nnd J .l376 pe.rsons were awaiting trial action for inlernnl revenue- ft.Ut.~orlt.y of the Exce.ss Profits Tax Council over issues ari.si.ngo tmder liquor lll.w violntions. SCcttnt! 722 of the Intornal Hevenlle Code. Subject, to the t111thoritv Al)plu:at'wn,~for pardon (wd pa.ro!e.-During t.he year 11 l\.pplicl1tiollS ~ the CO':lJJni~sionf'rof Internal ReVeJllle, finnl jurisdiction within th"e renu for pardon a.nd 922 applications for pttrole were e..'i:ll.mined and reports- Th of n.U Issues nr!sil~g ~m~lcr section 722. il'> veste~ !n the COlllH~il C Couned hus no JunSdletlon ov(\r n.uy Issues t1rJi5t!lO' uJldor anv submitted. otI!('I' . . fl· . 0 J Transportation of liquor into dry territol'!I.-Jn eonncction with the- of . . prOYLSIOllS 0 t H~ mtel"lwl revonue laws. The consideration a. l~Slles arising HuLley seetiO!l 722 ullder a procedure scpu.rute and enforcement of the Liquor Enforeement. Act of 193() relating to the l vehic~es Oril ~. fl:OI~l that apphc~t~le to is';l1e8 l\ri~illg u~)d~r o.thor provisions introduet.ion of tn.x-pn.id liquors into dry States, 20 and 1,504. t~ W~ts gallons of tux-pu.id liquors valued. llt. $ti2,8:31 were seLl;ed. ~'here se \ concluded H,d'vlsnble because of the c!JstltlcLlVIj churaetf\r of fincd~on, ,2? In nt~ cas(-\s not beforo the Tux Cour~ the ~;()IU!,ciL's were :31 persons arresl,cd, 5 persons lIlchcted, l1nd 5 persons convIcted. IIl I~le c~m~T"O~hl~g. cnsE~~ C()ur~ tb~ S~nff Accidrfit investigat·i.ons.-Dming the fiscal yeltl' eudeel June 30, 1949, 8tiU .gs ILl before the ff'chlUcal Und I ctatI~s Jlll"!s(hetlOn, but WIll mfer all a.pphcntlons and ClilUllS the Enforeement Division of the ..\1eohol Tltx Unit initmted 318­ ~ectlOlJ t1n~1 it~ investigat.ions, completed ;)22, and submitted report,; on 327 accident l'e8 e,r 722 to tll? Conneil will not disturb findillgs \'V!th investigations involving personnel of t.be BureiLU of Internal Revenue Pllct thereto execpt III lIIlusunl Circumstunees, llud tuou only With

REPORT OF COMMISSIONER OF INTERNAL REVENUE 50 REPORT OF COMMISSIONER OF INTERNAL REVENUE 51 concurrence of the Council. (Paragraphs 3 and 11 of mimeograph, of 5,131 on hand June 30, 1949. In addition to the dispositions R. A. No. 1529, T. S. No. 454, dated July 31, 1946.) operations of the Staff field divisions fall into summarized above, action was taken on 476 subsidiary cases which Field operations.—The were closed in accordance with the closing of the respective basic cases. two main classifications: (1) contested income, profits, estate, and Receipts of docketed cases during 1949 exceeded receipts of 1948 gift tax cases not docketed by The Tax Court Of the United States, by 26. Dispositions, excluding cases submitted to the Tax Court, including cases in the pre-90-day status, cases in the 90-day status, and exceeded those of 1948 by 608. More cases were disposed of by cases involving overassessments and claims; and (2) cases docketed stipulation in 1949 than in any year since 1940 and the cases dismissed and pending before the Tax Court. The statistical data summarizing amounted to 413 as compared with 458 in 1948 which was the largest the work accomplished by the Staff field divisions are contained in number dismissed in any year since decentralization. tables 117-119 on pages 219-221. For the 10-year period (fiscal years 1940 to 1949, inclusive), Staff With respect to contested cases not docketed before The Tax Court reports show decisions handed down by the Tax Court, in 10,167 of the United States, there were 7,214 on hand July 1, 1948, awaiting docketed cases. Analyses of these decisions, made currently as they Staff action, and 710 awaiting action by taxpayers on statutory were received, show a total of 3,973, or 39 percent, in which the deficiency notices directed or sustained by the Staff, or a total of 7,924 Bureau's position was wholly sustained; 3,956, or 39 percent, in which nondocketed cases. Receipts and dispositions during the year were 2,238,the Bureau's position was partly sustained and partly reversed; and as follows: or 22 percent, in which the Bureau's position was wholly On hand July 1, 1948 7,924 reversed. The percentages for the fiscal year 1949, during which the Received 8,710 court handed down 828 decisions, were 39 percent wholly sustained, 42 percent partly sustained and partly reversed, and 19 percent Total 16,634 wholly reversed. Dispositions: Settled by agreement 3,760 The following schedules reflect the case dispositions effected by the Defaulted after statutory notice 732 Staff over the 10-year period ended with 1949: Petitions filed after statutory notice 1,267 Unagreed overassessments and claim rejections 349 Returned to internal revenue agents in charge, without action_ CASES BEFORE THE TAX COURT Transferred to other Bureau agencies (bankruptcy, etc.) 472 6, 782 9-year Cases Period 1940 9, 852 to 1018, Percentage Fiscal year Percent- On hand at the close of June 30, 1949 inclusive 1949 age Of the number on hand at the close of the year, 9,017 were awaiting Stipulated Dismissed 21, 573 64.71 Staff action and 835 action by taxpayers on deficiency notices. In Tried 8, 125 69.69 2,001 II 00 413 addition to the above dispositions, 1,006 subsidiary cases were closed in 9,703 29.29 9.21 Total 946 21.10 accordance with the action taken in the respective basic cases. Receipts 33, 337 100.00 of nondocketed cases in 1949 exceeded those of 1948 by 960. Disposi- 4, 484 100.00 tions, exclusive of transfers and cases returned to revenue agents in CASES NOT BEFORE THE TAX COURT charge without action, exceeded those of 1948 by 635. Settled by agreement During the fiscal year ended June 30, 1949, the Staff field divisions Defaulted by taxpayer after statutory notice 34, 215 60.18 6, 404 3, 760 61. 56 directed the issuance of statutory deficiency notices in 1,961 cases. In Petitions filed by taxpayer after statutory notice 11.26 732 11.98 Unagreed overassessments and claims rejections 13, 088 23.02 1,267 I 3, 151 5.54 20.74 39.ff percent of these cases the taxpayer did not take an appeal to Total 349 5. 72 the Tax Court. The comparable percentage for the preceding 8-year 56, 858 100. 00 6, 108 100.00 period, 1941 to 1948, inclusive, was 34.7. During the year 513 so-called 90-day cases in which the statutory notice was issued direct by the internal revenue agents in charge were In the Commissioner's annual report for 1948 it was stated that of considered to a conclusion by the field divisions of the Staff. The all the cases handled by the Technical Staff which were subject to revenue agent was sustained in 261 of these cases without an agreement petition to the Tax Court, approximately seven out of eight cases were being received from the taxpayer and 252 were settled. With respect closed without the necessity of trial, leaving but one in eight actually to the 261 statutory notices which were sustained, the taxpayers filed tried before the court. During the fiscal year 1949 the percentage of cases closed was somewhat greater and only one out of every nine petitions with the Tax Court in 142 cases and defaulted in the, actually was tried before the court. remaining 119. On July 1, 1948, there were 4,991 docketed cases on hand in the The field divisions of the Technical Staff ended the fiscal year 1949 Staff field divisions and 4,624 dockets were received during the year. with a conference personnel of 266 and an audit, clerical and steno- Of these docketed cases, 3,125 were settled by stipulated agreement, graphic personnel of 343, or a total of 609. 413 were dismissed for various reasons by the Tax Court, and 946 were submitted to the Tax Court on the merits, leaving a balance REPORT. OF COMMISSIONER OF INTERNAL REVENUE 53 52 REPORT OF COMMISSIONER OF INTERNAL REVENUE There were 1,197 compromise cases on hand July 1, 1948. During All case dispositions are based upon consideration of the merits of the year, 2,434 cases were received and 1,942 cases were disposed of, fact and law. A settlement upon the basis of nuisance value to either leaving 1,689 cases on hand June 30, 1949. There were 7 extension- party is prohibited by published rules of the Staff. There is not and of-time cases on hand at the beginning of the year. During the year never has been a Staff policy requiring taxpayers, regardless of merits, 108 were received and 111 were disposed of, leaving 4 cases on hand to concede some or any fixed percentage of the disputed deficiency in June 30, 1949. With respect to closing agreement cases, the number order to effect a settlement of a case. on hand for review July 1, 1948, was 27. During the year 183 were Under established policy, no case closed as the result of action by a received and 160 disposed of, leaving a balance of 50 on hand June 30, field division of the Staff will be reopened under post-review by the 1949. A summary of work done on compromise, extension of time, Washington headquarters office unless the disposition involves fraud, and final closing agreement cases is shown in table 119 on page 221. malfeasance, concealment, or misrepresentation of a material fact or an important mistake in mathematical calculation. There has been no OFFICE OF THE CHIEF COUNSEL breach of or departure from this policy by the Staff over the 10 years 1940 to 1949, inclusive, during which time 37,975 nondocketed cases The activities of the office of the Chief Counsel for the Bureau of have been closed by agreement as a result of Staff field division action. Internal Revenue include the defense of all Federal tax cases appealed to The Tax Court of the United States; the review of refunds, credits, Coordination of field activities. — A central group is maintained in the Washington headquarters office of the Staff to examine and analyze and abatements in excess of $75,000; consideration of various admin- the work of the 12 field divisions in order to maintain uniformity in istrative and internal revenue tax matters referred to that office by procedure and consistency in treatment of taxpayers by all field the Secretary of the Treasury, the Commissioner of Internal Revenue, divisions. This coordinating group, comprised of several coordinators, and other officials of the Treasury Department and the Bureau of each with one technical advisor as chief assistant and other technical Internal Revenue in Washington and in the field. They include also employees, operates under the direction of the Commissioner, through the preparation, at the request of the Department of Justice or of the the head of the Staff. The action taken by the field divisions in non- United States attorneys, of data for use in the prosecution or defense docketed and docketed cases is post-reviewed by the Washington of tax cases (civil and criminal) in suit, and compliance with requests headquarters office, including not only cases settled but also decisions for assistance in such cases; and the preparation, revision, and review in unagreed cases. In this way field operations are scrutinized and of regulations, Treasury decisions, mimeographs, and rulings for the changes and suggestions made for the future guidance of the field guidance of the officers and employees of the Bureau of Internal Revenue and others concerned. The office is made up of the Chief offices. The Washington headquarters office is responsible for establishing Counsel's Committee, the Engineers and Auditors Section, and eight and improving the procedure for the handling and control of cases in divisions, viz, Alcohol Tax, Appeals, Civil, Claims, Interpretative, the field in conformity with the procedure in effect in the other offices Legislation and Regulations, Penal, and Review. A detailed state- and units of the Bureau. In this manner general operating policies ment, in statistical form, of the work handled by certain of the are determined in Washington for the benefit of the field offices both divisions will be found in the statistical tables in the Appendix under as to technical matters of general interest and as to matters of admin- the heading "Office of Chief Counsel." CHIEF COUNSEL'S COMMITTEE.—The committee serves in an istrative practice. advisory capacity to the Chief Counsel and his principal assistants Records are maintained for reference purposes and quarterly reports who refer to it cases from all divisions of the office. The committee of the work of the field divisions are examined and consolidated in considers these cases and makes written recommendations as to their Washington. Details and transfers of personnel between divisions proper disposition. The committee is also charged with the final are arranged by the Staff headquarters office. review of cases involving compromises and closing agreements previous Compromise, extension of time, and closing agreements. — The field to their being sent to the Secretary of the Treasury for his approval, divisions of the Technical Staff consider offers in compromise of and from the beginning of the fiscal year until May 20, 1949, when liability in income and profits tax and certain other types of cases, that work was transferred to the Penal Division of the Chief Counsel's except where criminal prosecution, court proceedings, or delinquency office, the committee was charged with the consideration of claims penalties only may be involved. The head of each field division has for reward under section 3463 of the Revised Statutes and section final authority to reject any such offer or to recommend its accept- 3792 of the Internal Revenue Code. At the beginning of the fiscal ance by the Commissioner. These rejections are post-reviewed by a year 1949 the committee had on hand (exclusive of reward claims) central compromise group in the Staff headquarters office in Wash- 66 cases; during the year it received 2,032 and closed 1,980, leaving ington. This group also assists in the coordination of field procedure 118 pending at the close of the year. The report with respect to and in determining operating policy in compromise matters. The claims for reward for information relative to violations of the internal Washington office of the Staff also considers applications for extension revenue laws is included in the report from Penal Division. of time within which to pay income taxes, and reviews for the Com- ENGINEERS AND AUDITORS SECTION.—This section, consisting of s missioner final closing agreements executed under the provisions of grmrp- of engineers, accountants, and auditors operating directly section 3760 of the Internal Revenue Code. 860947-150-6 54 REPORT OF COMMISSIONER OF INTERNAL REM= IMPORT OF COMMISSIONER Or TWOBItcNAL REPENTER 5$ under the Chief Counsel, furnishes technical advice and assistance represent the Commissioner of Internal Revenue in the defense of all to the respective divisions, particularly in litigated cases, and to the cases set for hearing before the Tax Court. Department of Justice, in connection with cases involving engineering This division also has a general supervision of the preparation of and auditing problems, principally in the fields of accountancy, de- the contents of the records on review in all cases wherein are filed preciation, and valuation. During the year the section rendered petitions for review by the United States'circuit courts of appeals of such assistance in 178 cases, acted on re-reference of 11 cases previously final decisions of The Tax Court of the United States. In such pro- reported, and supplied expert testimony in 6 cases. ceedings where the Commissioner of Internal Revenue is petitioner, this duty is performed in the division, subject to approval by the ALCOHOL TAX DIVISION.—This division handles the legal work arising in connection with the administration and enforcement of Department of Justice; in cases where a taxpayer is petitioner, the the internal revenue liquor laws; the provisions (other than those division has sole charge of the preparation of the record. relating to taxes, licenses, and registration) of the internal revenue Own DrinsioN.—The work of the Civil Division includes the laws and other statutes, including the Federal Firearms Act, and the determination of the Bureau's legal position, and the preparation of Act of August 9, 1939, relating to certain firearms; the Federal. law and fact letters for the Department of Justice, in all actions Alcohol Administration Act; the Federal Tort Claims Act insofar as brought by taxpayers to recover taxes and for injunctions in the Fed- employees of the Bureau of Internal Revenue are involved (except eral courts, and also in actions brought by the Government against the final determination of claims for $500 or more or involving un- taxpayers, transferees, bonding companies, and others. The division usual or novel questions of law), and sections 1261-1265 and 3615 of also assembles the evidence, obtains witnesses, and assists at the trial title 18 of the United States Code. The work includes the prepara- of cases when requested by the Department of Justice. Stipulations tion of opinions and briefs relating to assessment, collection, abate- of fact for the use of the Department of Justice and for submission ment, and refund of liquor taxes and penalties; compromise of civil to the courts in actions in the district courts and in the Court of Claims and criminal liabilities; the remission or mitigation of forfeitures; and are examined and approved, modified, disapproved, or new stipula- the settlement of claims. The division prepares citations to revoke tions prepared. The Bureau's legal position is determined also for industrial and denatured alcohol permits, participates in permit purposes of institution of suits, appeals from adverse decisions, peti- hearings and in the review of revocation records, and performs tions for certiorari, and compromises of civil cases pending in the similar work in connection with the issuance, suspension and revoca- courts. The division also acts in an advisory capacity to the adminis- tion of permits under the Federal Alcohol Administration Act. It trative officers in the collection of taxes generally. assists the Department of Justice in civil and criminal cases under the It also handles all cases in which liens for taxes are involved in laws in connection with which its legal work arises; gives legal advice mortgage foreclosure actions pending in Federal and State courts, to the Deputy Commissioner of the Alcohol Tax Unit, district super- and considers all applications for the release of Federal tax liens and visors, and other officials on questions involving interpretation or the discharge of property from such liens which is permissible under construction of said laws; and reviews all correspondence prepared sections 3673 to 3677, inclusive, of the Internal Revenue Code. in the Alcohol Tax Unit involving legal questions. CLAIMS Division.—The Claims Division is comprised of four sections: Processing. Work performed by this division, in Washington and in the field, Tax, Reorganization, Bankruptcy and Receiver- 151 briefs, ship, and Compromise during the year included preparation of 3,859 memoranda, The Processing Tax Section has jurisdiction over all matters 6,674 opinions, 372 libels, and 8 indictments. In connection with involving processing, floor stocks, compensating, and custom proc- alcohol and Federal Alcohol Administration permits, the division denials of applications, 67 notices of contemplated de- essing taxes, as well as over unjust enrichment tax matters not within prepared 29 the jurisdiction of any decentralized office. nials of applications, 80 citations for revocation and suspension, and 112 orders in suspension and revocation proceedings, and partici- The Reorganization Section is charged with the duty of protecting the interests and claims of the United States in proceedings instituted pated in 71 formal and 16 informal hearings. Review work included under sections 77 and 77B, Chapters X and XV, of the National 2,267 case reports and 4,158 compromise cases. In addition, 145 Bankruptcy Act, as amended, and arrangement proceedings under petitions for remission or mitigation of forfeitures and 42 tort claims Chapters XI, XII, and XIII of the Act. In the 596 corporate cases were examined and finally passed upon. reorganization and arrangement cases closed during the year, claims APPEALS DivisioN.—This division has charge of all cases involving in the amount of $11,373,412 were filed. Of the afore-mentioned 596 income, excess profits, unjust enrichment, estate, and gift taxes pend- cases, 298 cases which involved the amount of $5,971,258 were arrange- ing before The Tax Court of the United States. Counsel assigned to ment proceedings of taxpayers who subsequently went into bank- the various field offices, which were created under the decentraliza- ruptcy. The remaining . 298 corporate reorganization and arrange- tion program of the Bureau of Internal Revenue, prepare answers to ment proceedings involved $5,402,154, of which the amount of petitions filed with the Tax Court and advise the various Staff divi- $4,648,465 was collected. sions upon legal questions arising in the determination of income, The Bankruptcy and Receivership Section handles all legal work profits, estate, and gift tax liability. All proposed settlements are incident to the protection of the interests and claims of the United concurred in by counsel. Counsel also have exclusive authority to States in bankruptcy and receivership proceedings. The 2,177 cases 56 REPORT OF COMMISSIONER OF INTERNAL REVENUE .4 REPORT OF COMMISSIONER OF INTERNAL REVENUE 57 closed during the year involved claims of $7,393,940, of which the internal revenue taxes where criminal liability is involved, comprising amount of $2,173,361 was collected. among others, income and profits tax cases, miscellaneous tax cases, The Compromise Section is charged with the prosecution of claims and employment tax cases. When it is decided that criminal proceed- filed by collectors against the estates of deceased taxpayers, against ings should be instituted, law and fact letters or criminal reference insolvent banks, and in liquidation proceedings, including assign- reports are prepared transmitting such cases to the Department of ments for the benefit of creditors. At the request of the Department Justice for criminal prosecution. This division also considers offers of Justice, the section assists in trials involving the afore-mentioned in compromise of liability where criminal proceedings have been types of claims. The 1,732 cases closed during the year involved instituted or recommendations for prosecution have been made to claims in the amount of $30,682,662, of which $6,425,150 was col- the Bureau or by the Bureau to the Department of Justice; pre- lected. pares opinions construing the criminal and percentage penalty INTERPRETATIVE DIVISION.—The functions of this division consist statutes, and handles miscellaneous law questions involving criminal of the preparation of letters and memoranda, for the signature of the cases. It also prepares opinions as to whether cases closed by agree- head of the division, the Chief Counsel, the Commissioner, or the ment under section 606 of the Revenue Act of 1928, and similar pro- Secretary, interpreting the internal revenue statutes (except such as visions of other Revenue Acts and the Internal Revenue Code, should relate to taxes on alcoholic beverages), the Federal Insurance Contri- be reopened because of "fraud or malfeasance, or misrepresentation butions Act, the Federal Unemployment Tax Act, and the Railroad of a material fact." Whenever requested by the Department of Retirement Tax Act; the review of all correspondence, for the signa- Justice or the United States attorney, an attorney from this division ture of the Commissioner or of the Secretary or of an official of his assists in the preparation and trial of criminal tax cases. office, containing a ruling or opinion of the Bureau and routed through At the beginning of the year, 2,119 cases were pending in the Penal the Chief Counsel's office for approval; assisting in the preparation Division. New cases totaling 1,240, involving 4,310 tax years and over and review of briefs to be filed with The Tax Court of the United $111,928,045 in tax liability, including penalties, were received, and States in key cases; reviewing actions on decisions in special cases; 1,135 cases were closed, leaving 2,224 cases pending on June 30, 1949, reviewing closing agreements covering proposed transactions; assist- a net increase of 105. Of the total number of cases received, 1,088 ing in the preparation of income tax and other forms; editing the were income tax cases, both corporate and individual, 53 were mis- material submitted for publication in the Internal Revenue Bulletin; cellaneous tax cases, 12 were of a mixed nature, and 87 involved and the preparation of opinions and rulings in special cases assigned miscellaneous law questions. The penal work has been performed in by the Chief Counsel. Members of this division hold conferences close cooperation with the Department of Justice. During the year, with taxpayers and also participate in conferences when so requested 819 cases, involving 907 defendants, were transmitted to the Depart- by the administrative branches and units of the Bureau of Internal ment of Justice. Of this number, prosecution was recommended in Revenue or by other divisions of the Chief Counsel's office. 751 cases, and in 68 prosecution was not recommended. The Depart- Included in this division is the Digest Section, the functions of ment of Justice referred 576 cases, involving 675 defendants, to various which are to preserve, digest, and make readily available to the United States attorneys with authorization to institute criminal pro- . members of the Chief Counsel's staff all opinions, rulings, and other ceedings as to certain defendants, while 191 cases were returned with- documents which have been prepared or reviewed by the Chief out prosecution. Indictments were returned involving 424 defendants Counsel's office. and grand juries refused to indict 2 defendants. Of the number This division began the year with 348 cases on hand, received 1,793, reaching the trial stage for the entire year, 45 defendants were con- and disposed of 1,841, leaving 300 on hand at the close of the year. victed, and 315 defendants, involving 285 cases, entered pleas of In addition to the formal consideration and action in the cases guilty or nolo contendere; indictments involving 18 defendants and above noted a vast amount of special and miscellaneous work was 11 cases were dismissed or nol pressed for various reasons, and there performed of such nature that a statistical summary thereof is not were 12 defendants, involving 12 cases, acquitted. In addition to possible. the cases referred to the Department of Justice for criminal prosecu- LEGISLATION AND REGULATIONS DIVISION. —The regulations issued tion, the Penal Division, upon review of the facts, law, and circum- under the internal revenue laws, and tax conventions with foreign stances involved, concluded against recommending prosecution in 407 countries, and the reports on legislation introduced in the Congress cases. Miscellaneous law questions,numbering 89,were also disposed of. affecting the internal revenue, except such as relate to taxes on alcoholic The Division is also charged with the consideration of claims for beverages, are prepared or reviewed in this division. The division reward under section 3463 of the Revised Statutes and section 3792 also considers suggestions for amendments of and additions to the of the Internal Revenue Code. Jurisdiction of the reward claims various internal revenue laws, and prepares reports thereon for the work and personnel was transferred from the Chief Counsel's Com- consideration of the Commissioner and the General Counsel. It mittee to the Penal Division during the year. participates in the preparation of income tax and other forms and m Claims for reward for information supplied the Bureau relative to the drafting of internal revenue laws and tax conventions. violations of the internal revenue laws were filed and disposed of PENAL DIVISION.—The work of the Penal Division, including. the during the year as follows: As of July 1, 1948, 1,975 claims were pend- offices of the regional counsel, deals with practically all classes of REPORT OF -COMMISSIONER OF INTERNAL REVENUE REPORT OF COMMISSIONER OF INTERNAL REVENUE 59 ing ; new claims totalingt 1,272 were received; 214 were disposed of INTELLIGENCE UNIT during the year, leaving 3,033 pending on June 30, 1949, an increase The Intelligence Unit is principally concerned with the investiga- of 1,058. Of the dolma disposed of, 93 were allowed and 4 partially tion, in cooperation with revenue agents and deputy collectors, of allowed in a total sum of $449,984 84 and paid during the fiscal year. cases involving alleged evasion of taxes, investigation of charges of a The claims pending at the end of the year are awaiting the closing of serious nature against employees of the Internal Revenue Service, and the tax cases to which they relate, the receipt of recommendations of investigation of applications of attorneys and agents to practice the field officers'of the Bureau, or administrative action in Washington. before the Treasury Department, as well as applications of individuals REVIEW Divisiow.—This division reviews overpayments (and in seeking employment within the Bureau. some cases overassessments of unpaid taxes) of income, excess profits, During the fiscal year 1949, 2,962 investigations were completed estate, gift, and miscellaneous taxes proposed for allowance, and allow- which involved alleged evasion of income and miscellaneous taxes, ances already made of tentative amortization and carry-back adjust- resulting in the recommendation for prosecution in 848 cases involving ments of income and excess profits taxes (also deficiencies when con- 1,208 individuals. There were 356 individuals tried, of whom 346 pled with tax reductions under review), where the net amount of the were convicted and 10 acquitted. The percentage of convictions tax reduction in a particular case, whether abatement, credit, or was 97. Investigation of these cases resulted in recommendation for refund, exceeds $75,000. It prepares the reports to the Joint Com- assessment of additional taxes and penalties totaling $271,831,308. mittee on Internal Revenue Taxation required by section 3777 of the There were 4,793 investigations of applications of attorneys and agents Internal Revenue Code, where the net overpayments of income, to practice before the Treasury Department, and 32 investigations of excess profits, estate, or gift taxes exceed $75,000. It also examines charges against enrolled agents and attorneys. Character investiga- and reviews special cases referred to it by the Chief Counsel for the tions were completed on 2,704 applicants for positions in the Bureau. Bureau. During the fiscal year 75 cases of charges against employees of the During the fiscal year 1949, there were reported to the Joint Com- Bureau of Internal Revenue were investigated, resulting in the separa- mittee on Internal Revenue Taxation 625 cases involving total over- tion from the Service of 40 employees and the prosecution and con- assessments in the amount of $286,499,597.58. Both of these figures viction of 3. Forty cases of a miscellaneous nature were investigated, represent large increases over previous years, the corresponding resulting in the prosecution of 10 and conviction of 9 individuals. figures for the fiscal year 1948 being 467 cases reported to the Joint Committee and $150,108,733.23 in total overassessments. CONCLUSION In addition to the above work performed by the respective divisions of the office, legal advice and assistance were rendered to the head of In submitting this report for the fiscal year ended June 30, 1949, I the Salary Stabilization Office, Income Tax Unit, and to other officials am pleased to state that every branch of the Internal Revenue Service on questions involving the interpretation and construction of the Act has given its full cooperation to the administration of the internal of October 2, 1942 (Public Law 729, 77th Cong., 2d sees.), as amended, revenue laws. the regulations and rulings of the Commissioner of Internal Revenue GEO. J. SCEOENEMAN, promulgated under the Act, and, since Executive Order 9809, dated Commissioner of Internal Revenue; December 12, 1946, the regulations, rulings, orders, and directives promulgated by the National Wage Stabilization Board. The legal work performed in connection with the enforcement of the Act of October 2, 1942, in the office of the legal advisor to the Salary Stabili- zation Office includes representing the Commissioner in formal hear- ings before a hearing officer appointed for the purpose of making findings of fact and recommendations with respect to contravention of the Act; preparation of briefs; preparation of memoranda and opinions relating to such Act and the regulations, rulings, orders, and directives promulgated thereunder; the review of letters involving • legal questions; and the preparation of letters for the signature of the Deputy Commissioner of the Income Tax Unit, the Commissioner of Internal Revenue, and the Chief Counsel. The year was begun with one case pending, 23 new cases were received, and 23 cases were disposed of, leaving a single case pending at the close of the year. The Chief Counsel maintains at several of the larger tax collection centers a small group of special attorneys who furnish legal advice and assistance to the internal revenue officials in the area as well as to the United States attorneys. A considerable volume of work, mostly of an advisory nature, was handled by this group during the year. APPENDIX

STATISTICAL TABLES

61 62 REPORT OF COMMISSIONER OF INTERNAL REVENUE =row - vegmEssioNa OF INTERNAL REVENUE 63 wait ' 2222%2 228.....82;g82a6ui,ax 70.,Ead...,. A802gasig 28918380 $28080208 Alaug4mag.>% 06O1:4A 61F30600 VE600/06k4A ggillg 1,10Z5VMMOgalrAWZOilni 0616004 s ea fits o r gaga .Jc 0546gAl MOM KgAgtitt 151UOKAU p 4444 4 ag ,.:g4a a or.4.46 m

s ess taxe Exc

its I9 f CT o r 228 11 828808ggg 8Ragg08 ra 208 08280;5288g2082 034103 0 itg2 AggiNg822284T4 1 008

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ECTION a

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ERRITORIES T D AN ES T TA S

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Corporation Income and profits taxes—Continued Employment taxes REPORT OFCOMMISSIONER Other than car- Employers of 8 or TotalFe deralIn- riers—Federal more—Federal sureties Contri- Districts Excess profits Total corporation Totalinc ome and 'nanny:me Con- Unemployment butions Act and ( Army an d in come a n d profits taxes tribunals* ACC ' Tex Act (3 per- FederalUne m- Navy contracts) profits tans (2 percent of the cent Of the tax- ployment Tax taxable wages) able pay roll) ct 1400AAWAMAIMOW4g510M04 EMSXSRIA.72g.17S=Ssmsv4. reance3cfsi4w11.1. MICCigg111140tOtAggIglIMOI 510'414Aa40MVgAgggacMOWA3 ... a 50gglaggillOVIMAXIIIMATIMA ICIAM000.410AgggglgastIgggggg SI;PSZRV.E.12=1St.tWaRSOMA$SM ggg$00505gIcgittgal4Itigg06161 eeeg iA05A0C4gWilagaigtOOAM501M 5wassssgssr,srassassgsssssssogsssvas 10 0111156AMW1406141ggailnigAil 104WAggiatAtMrigg4OliANWn 8eIR*S7A26SS3RRS1385 - tff o5441 Mik&Agigg50174 14 gl-R4W1MJA; 1 .eisszsssctr.ssgsisgssassgsssst;sspsi* 1 1 12310 .u. ee-rea-za $4gia# ,, 0 11 g i z rgeweaegeec ez4N0116 2 ,4 4 5400lgAgAg 01m 4 , % 2,m4am . 10.40440014 , Tae,:. 0.0 INTERNAL REVENVS i ! : 56AgglOtAtillggi f4egliggemffeeaeeee l 1 =M88A8SSAR , wrisesdag 7 x 111 ea ' .: A Mil 4 R Kmomam.pa... 9 v 1 ;e - OM - ignsiElpti Ka a 2 wiaXZZZ : 15 5 5 i ,21 4445 11 gRSP.SSR $ 13 01 S 1al 52 al 1 -te e o..--e. 0 gr 1 SS$ A s se, , 4 aiZ pe f1 4 4 l A

WINALEadi 05JfadPa ;P"z gaegMq5egligtigg5ficlAggas ilggiggraUtgifftkgalkaffi gatOggtaftM401565 aiaggaligglOgigggOgagiig0 xxxxxxxsxxxx8xxxxxxvixxxxxvxx mixr:gplaticn:itiligs4-0451.t giTtOtgOgill4600tgaffilif lOgiliggAggAPAggiVtagggiligal ;RRNOISSIRESRESSAZ5XORVISIMM tiw nillgOgriggalgti FARGAPAnSt8MNE .-ta CiatiiqgtgAllAgAtgggtggagig MEMEAVVittOgAMETWW5: 0.15,1MMWEFAM21Acitgg.10.5 sgsessgfassgssasssmr,ssssgss sgetfliaec.:::gniggi.1:4etig4-fstr4a igadgiggAMMANMIAAM tailgtagEIOUNAMAttag$5, 2R2S2tM=RMnSZARSV2R424PMFM a4eaee ..44,00.0.4.4 y t1 z co4A als z— P t ,, it REPORT OFCOMMISSIONER nieaceaaceticeaa of,6of l a a a a f t i4R z S - 4482P fi I - 76 As : M : aglalgit g.,, E82Vg2S4rgz 4 flaWN1 ts I aa nt ila.. 040 -74

OF ,

I

g 3 l 081 11' NZ ' 938 938 ' a 6L

11, 353, 509, 234. 17 29, 806, 491, 151. 40 1, 887, 150, ODA 01 I 1, 913, 370, 178. 12 INTERNAL z a 0 atillgg15 O OND ISTR 0 Ogaltall iAggatig ES2VNIU8SSSR essseissmgst; 400 "agkaagell lafigtAgOg 55414V1Wg w4E3mmsvass 6 FigralAtig NN 50;a1541 VFISPFSZMXR 4 N 88 REVENUE gig84ilA sg a 46W 4aNa S gggA 65 66 1 828R544228882881RV:84P88828R2 gagg0AgittiVUOMAMOLIO atts } REPORI

gg sMAgOggg4ggiEgURRM 47 e igggggPiagIKWqtri 4I5s

F 110111 4 P. n 1 od •:. 7g;Mg'2"4"gt-81EOLONAWWA RN loy- 5 g8886822284W;2222.122:;N8PR'4758 Railroad emp ensa- i

t comp

men tion, 654 percent of the taxable L compensation OF 2.g,...... ,....cg stemoutonsomgagovams a-R2a _ 28288228%8P2O48822R21:32228822R248R2 gaaggegaTsga g Witag giggg. 228822R8W628282R88283$2888282M81828 gaggaftgilthaflgOlgeriklgrA0 Tiegg:::8Rt41180.W:leR0'549fl64 ti5fgaitMOIWgiggaiarcli4ign tfagnalgeRVE40516grOggVginkgg§ 8288882128828R24222$82228885V468288 g rtigag ggigiggigrolgiagggriggb; t.gt81145gaWgMellEAggiltitgM R.RE:822288822R28282RSE5858WaR232 44:414g iWitgAIMIWAW*1g M CO SSIONEROP1311141N 4sruee,4a444.3144m't, N25xxzmwipzaz .:a ,-rasra0...7 gsra -ra 82 m a -el galta -re :1.:).1 0 .. tc2p4loma 14 a ogn„it, 2 El 2A5 (3.5e5mB ss g 22 82 0.°45:P g cowcre'reetg..ie,%44 4eg 10-qgigagg1660 a a ;24,-,. ggaale4g gag .H-eipeig gag - t ..,:aSt.mme.egm IIUMF§Els5 2 RS228 1 asV4 § 5sg.q-AggIAX 1 t I ATP utivIThrez a 451- 1 :7,11 _ a A 15 e__ -5 ... -00 A qc ■ 0 4 g 0. pA- V 4 4 0 4 t

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.; 5, 841, 278. 08 .. e mt 10Z : 6, 462, 614. 00

2, 503, 443. 28 EZZ gkA2 htral m a c 440. 160. 43

594, 036 91 _ 4 1, 365, 535. 49 REPORT, OFCOMMISSIONERINTERNALREVENUE 5(4 EM 1VniEltria.OStigg'

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TOTALS FORSTATES AND TERRITORIES COMPRISING P ON DISTRICT agVggiVaU er.neg2LlgAzm al§g0010 PaggWigger 2inhalitt S agOgriggn0 Azg*Agvag. gaMglOig sgsm:mgavga magsr:=2. IligU lg441 OiAlgggisIg 282888882R2 . 4 „..„ MitfaM s MOSFIg ggnMAng2 grilg4gggg ri:E415LIVS: 8888'822822 Walggsgs 4a E, 4 a .ege 7 a tori 4f I, 1CO c tee , , ggiAs e e gg , A. 11 g , z2g

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ia d Ne ty ty O Ten ty To 1 ZXZ d Texa Virg teen h d New h h bo on Texas lft b Ca h Da t t in t t t de hing t Sz t h t t omodt A r5 V3 SrigtX on htee om kla A h u :11j aszAn iNA)zzgizz, sec Thir Four Twen Twen Nor Nor Firs Ten Eleven Eig D Drag Firs Twe Twen Rho iou iou Tennessee Firs Secon Uta Vermon Virg Was Wes Wiscons Wy .4840 n.33 ZEB44Z0Ni 860947-50-6 70 REPORT OP COMMISSIONER. OF INTERNAL , REVENUE :REFORTiOrCOM2USSERVER/OFANTE RNAL,REVENUE 71 e8' Sti,E3ScidioSMN0454WN04cho4nco. 44...commt-amr.m suusigumiummguisssggssagAmem 90S ti!v"ag 3g 00 ilOgbagggg iilialtitgOgOggE4M§ E4EggE5RIAINEIEREEREAMECRE4 , ag411304E4E4 92 est44441W5444441144.4M444"141t “5144,14gW44g4144.144a1g4gig ,s' e9 EV.4144.‘64fg a4 a e.314 g a e 4 44 44 44 a a dUttga gdiria a a t' S gazifatz^ Ea ' t 888888888888888 8 888 888888 90 8888888888 88888888R 1981 8888888888 VA 8 ;;;;;M: ; MEER 44E34014ER EEENEEHE gggg igggggg 4.N4r54 I ZI it .:;.cr a 44..c4 4 4 4c44 a4 ..1-4.5.6-egot).s4 pg5 -za 6r9 Ed 2 P 8 8 88 2 5F N DIST Ed $ 54 8 O 9g!S 4.ari 8 ..: 4 Lill Mgt 4 g 4 g g gg P g es E A 4e ee CTI Ii448 4 I

as4.4 E gcs l tax LL ro F 42 488 2M SS S 88$ 2 R 8 84123 A 22 888 srael iona R8S 8 So

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d sp RE I RT ille ISTI6‘ t 88888 8 88 8 28 2 2 X 88 8 8 828 PA 2888888P Dis gg g 1 ggIgg g gg $ 1 3 'gER 919

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ogg z-.$ 2 TERRI 6' 88 88 888 4288 8 82 8 8 8 8 8 8 8 88 8 888 8848888888084 8888888 .0 4454 4444 4 44 g 013 eo. 044 1, ; R8 1 —4- ansgggp m smd ND

. 1 ig8aggg" 4- 4 moon°28 .0 S A Eg STATE S FOR 4-) 010 I 140 Mt>: 6^q 1G p. m 11:4 'cliegl" ii 4242 4 y5 q 4g 5 Sill Etnt 3 .„ 41..10., 2 .mig .w.. isuizzx bridafl ..... 0 g s gea hltr . 41111Fe ..li E 22 ?fis gOtttgp,g x 559-a,..,a 546§-51 ..10 as StIg Pli s l'fl - a4m4 1t.g., Rat .gaa00 ft.00.44 ,54amm *.mdzzzpoizr., IgaaA41401WfJog4bLiggg <02 22zz00. g.O4 REPORT OF. COMMISSIONER OF INTERNAL REVENUE REPORT OF COMMISSIONER OF INTERNAL REVENUE 73

72 94' ------.- 22222222288424222282 S*8 14244R 242%242 424212E24242,8222222 X SW MS A .4. 2" 7-1gg=bIA

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s s ICI 882

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ise 2492 4 sm 222 43 234 2 mess ' 2_ ms rnms m.m. m 8 ssms..;:as .1 TO Exc 1 tg"44 1 q gAt ilt g t g 6 ' agg

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888338A489e%P23.38828X4NR388330884K4 SST ' a5nng ggragggt7glaggggtglgOUggr4iggggggg lgg rtUgg811,1gnggizggggFAggg 450;551010 ap, 1:09 a 330. gaggt0g4050t566g4qAtIg60465A461P7 MglAgl5g55Wggatgligg 'G gAr4fi3g0400 E°. $8= : a emaace a g4g" 4.4 44Pig Fie': ^0. g 5.:!45 !:.6-=4 °547:g's a ^ "4: g oa g4

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8 2888888882088 88 8g8M 88888884 8 88088 8883888882 8888 88828 ao 'F.88R;148e888 919' Kr4A gg Oggg 4005045 A 1g60 g4a0407.1 .41$0 g0,50 AND gOgggIggg ....1..1.6- g 0500.;Anagg L9 .t1.441544 A 10101 40.0046640 5' g 10561IA1Aggi 54 AF GO !HUI. TES gigggOgggi tit g gg4.-es.: ..r gi.A. .,1y, Goan:rig g 99 .°.4.88 Ea--::: 4:"1 4T c6grlge -74' a .7=R g 9 v4gag.14,44. w TA S

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00. 505. . 918. 511. 04 032. 781. d, 850. 5 900. 115. 142. r 790. 261. 00 ;...,, 201. ss , g 887. gr; 1,

4 g e 2, 5, 1, 2, A 63, 2,

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78 REPORT : OP" COMMISSIONER OF INTERNAL REPENT)" REPORT Or COMEMISIONBRi Or INTERNAL REVENUE 79 6 .0., ....

4 48884848641=4R/a884)0 z 408686248484288 95 2441R84438 8888884824 00d c° 8484r242i8i848"8i8 §§E8 348811t cco 8 e,...- - agg# M #41n#MMOM

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ta :1: 321, To 1, I W 8 8 6• ,0 4sab#' OW . 4 06`1 e, ° C

8 .. I r g° F 2 ta4 14

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1 Dis ia LS FOR STATES AND TERRIT k n k lva r k Yor ia r n Yo ia nnsy Yo n lva New h New as gg 4si lva ta. d Pe t d New Ohio ta ia # lina. ht nnsy lina

Rg', 8- n L h io Ohio ko in ig gg hir ko t th lan Pe t

4 to e 4 ta Ars -e nnsy h - in n

5tr5t n t

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sienAz Pe 1111 Texas d Texas ing To tee

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n ] nnessee ;, -a t a '00- t u ho Four Twe Twen Nor Nor Firs

x! Te Ele Eig Okla Oreg Firs ZWE,M Twe Twe R Sou So Firs Te Seco Uta Vermo Was Wes (4401g1M1 '4 aAa5aa Virg Wisco Wy

REPORT OF 80 REPORT OF COMMISSIONER OF INTERNAL. REVENUE COMMISSIONER OF INTERNAL REVENUE 81 0 42222828422422

24 4%21822242

of a g$051gggggggal 470. ggIggggggg

PI 45 taiW1016 647, MUMS 3, trs.c'l li 50 -r 4881 ann 888 242 2288 8328222228 ues vg Pt4 Ong iRREMIE4

piva 21.5 ggT4 e gggg iFTWWW" yg Id g, 41 DISTRICT

4 3 9 0 0 222488582122128228384222224882 2 0 18 58 50 95 7 5 96 5 57 8 87 86

78 31 25 44 04 888242882248 95 31 0 03 65 81 38 91 35 10 7 54 01 36 3 52

9. 7. 2. 3. TION 8. 1. 1104 1. 6. 3. 0 83. 62. 3 54. 96. 90. 96. 06.

58 974. 279. 026. agdWg100440A85$0406r16$ 349. 824. 475. 15 087. 473. 0 033. 5 6 918. 87 3

43 909. 08 05 5 5 895. lAgn5EFREEI 566. 400. 601. 82 43 4 911. 5 3

, 567. 2, 7, 1, 7, 8, 9, 3, 7, 9 4, 2, 0, 8, 57, 46, 77, 86, 1 08 5 00, 97, 27, 48, 9 8

14 lagg5445g5g101

139, 181, 124, 0.01016 1 2 74 4 31 6 4 11 52 444, 54 005, 5f4ls 1 1 720, 88 594, 1 64 177, 18 227, 41, 6 'ce 750, LLEC magma 5 327 1, 1, 1, 1, 1, 5, 2,

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82 REPORT OF COMMIRSIONER CCP INTERNAL REVENLTR REPORT OF COMMISSIONER OF INTERNAL REVENUE 83 1

42225, 8 E2EGEG2RR5GE 2G EGGE2V224 SGSRANSE S ggggggggm; ci GR

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8 4 REPORT OF COMMISSIONER OF INTERNAL REVENUE. REPORT OF COMUSSIONER OF INFERNAL REVENUE 85 AG G A ANAmA -r.mtc.e 00 a a.. 0 222RM A AA gASSA 2 8222 g /01 222222gA22 040g gg g tgg i /06 1 11 gg 5 A Vtgg5 RIM g ER gE4E1 g 24&E 4 %

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REPORT OE COMMISSIONER. OF INTERNAL. REVENUE: REPORT'OF'00110AISSIONER OF INTERNAL REVENUE 87

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101111,1411A11 114411 t' ltAIINCM1,745.3aSinRR REPORT OF COMMISSIONER OF INTERNAL REVENUE REPORT OF COMMISSIONER OF INFERNAL REVENUE 89 662 881 it zn ;SSW: Z n 2 2228 g 02 .9 12

99 ' g2AS g g F-gr-' SRS auzasa m NANO sr

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90 REPORT OF COMMISSIONER OF INTERNAL REVENUE REPORT OP- COMMISSIONER OF INTERNAL REVENUE 91 6N NaW4 SF a ma Co sms Re O RS SR 10' RR2 42ii . 08 2 6 P03.0.3T .. P flog 0 0 ag ! t0 t tg 11 '088 V.g:E N1541. i ..z a egg a 4 " d R'es

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2 0.aggg55gtF. ur Tivg: ggg50g4gnIgglagigggiitaggialcilli agariggaggWaggE4Saggra6 Iltaggtall a 402i-4:-tra g.:•;-.4gea ae.4.rgeaeaee.:e:ftle-r..rera -re e wee 4.:ae4aaee.:a.:ee---7 eaae ns 4

12 Ni $STM..%AREREaSSRORAg2SOS.E.M.RARRSAS 2R5X*RRSMIE.568$28ER4R2AMEME2E: 19 0 I8o8SRP8M82

pad WagggWgglAgnaingiEki R.IMA 4giflalgtgiglagqi11401.4g 534. g515EMEME.!

if 11E16621t1W011.5064MOngg56 g.exViiiMg5aelitakIgqilig4 087, agaggflggi if ait1g et , -6 4'' N 21, O

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P0.2. ro

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12 4 a ti 1S Y

ICT Y P. O ei .tiltx i 41 P. 1 FP ig 8.-.g E (41 A ggti' ,„61 go 12 .3 0 :4 0 agj m 51 s 2 Nilf:A Hill2 8 4 ...... „4 - Pt R 11 up s40 4.45s gt, asp As imzZE ,;1 z.gbt.t.. 0a ...., ev sime> m , e 4Emigg ..agat'E atiigagol 14115 8ititIn piiilAi' rEltAgv IDIOM q.5.0.0oucta3 m4. X4RXXXX gRwAZEaa .,zE-41..zzft,g 00;74.4s2 1.›.>titaa t)ANzzoa4E-.0e 92 REPORT OF COMMISSIONER OF INTERNAL REVENUE REPORT OF COMMISSIONER OP INTERNAL REVENUE 93 8 6 .... 90' 8 0s, tat g 2 1 ... 21 P .A a : * . ! glg

4aat c so I t28g i an ' 210ern e

8 99 TN TN'

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main 0000 . SEMSMSMgretWiMant6g4g8ISS8M '10 2 R82 A328 23 A r

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Oleomargarine—Continued Narcotics (opium, coca leaves, or derivatives thereof)

REPORT OFCOMMISSIONERINTERNALREVENUE fl Issa i

Special taxes—Continued sem " iliW vAi2 Na I 1;411 t.:.. 4;gtt Saoaa gE.12° P 0.. 7 igl _ci L2 F9 .5.7i,vil mo 6.11. A Pg1 Districts Retaildea lers a l i 4 . .v lW . n ik .- , 4 --

2

Uncolored 05 4

Colored oleo- oleomar- , P margarine, garine, $48 per year $13 per year IHOURWM4R 88 d8 88 FR VR4FEFgEeliHRWalteERWR 88°2$988482224$28°€1488°$8888882488 ERgRi"gE5RNHO-Aggr.4g2WaaRFNU SRS2RAARRE8458228248R2SR324 a:13g224>4K NMEM.F.EtIBEAngffiFnERIF. 8858g3R24288828,2224222288248822t 8E8 82 vg Pi AEMIO .4-...p.m.00 INu gigs SkilrfaMas5566aasaeiape,000,50000000 Xi SS 88 0 8 '4 8 - L7 -.9)

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eM 28 . .. 1 R 2 "IP 4 57.P.IlakuRVP g3AERR 2382288 wix=z g' a c, qE0 88888 8882 A p. ..Ta §g 88

a 5 :§ il ..s.g%.4d 8 4 R 8 RCA RU 48R

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2 2

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Third New York 2

k gErivangumssgmggn.ssser;gskann°In Fourteenth New York a, .. Twenty-first New York Twent-eighth New York North Carolina 8 .'51 REPORT i North Dakota 4 a g 8

Tint Ohio 0.4a4V 88 84 laag 8888 Tenth Ohio iiiiiiiiiiPiiii :4.5 Eleventh Ohio aa Eighteenth Ohio Okla 888 homa gax 88 . Ag 88 OF COMMISSIONERINTERNALREVENUE .., rIllannsylvania a' k l elftb Pennsylvania 248

Pennsylvan g 8 TwentY-thirct ia a 8

Abode Wand '''" F PgIV

South Carolina 248228248E82 28 88 a 8 South Dakota ' A. R n Tenn 8 essee Ala Firs Texas 888 b.s ggg R28 .

SecondTexas. N

Utah

Vermont E lgkkg ;iiii V 4 gEV

Virginia 8888 Washing 4 8 ton a

West Virginia gg AS Wisconsin Wycanhm.. S 8 2 I It,: 1 1,1 IR Ir. I Ig I 18 I I le iti 12 i 1- 1; . S TOW E o ,

O A A ra 0 ca a 0 gfr4 0 0 2 A ;2, O I 4. Mang 4.7228482ESS 15VIIMV &M71 M; a ssaasaaas gagngag 2888E8822R a. 8:1 MMVO 88888888 iaMEE 8888 N 4 4 L - Lfaak: . ae 0:4 888828 8)29828 a . a 1 efoi 1511 ■ a I V, 97

▪

REPORT OF COMMISSIONER OF INTERNAL REVENUE 99 98 REPORT 0 COMMISSIONER OF INTERNAL REVENUE NS 888 8-S 84 88.% 88A 8 8 88 8 ed 4d 0 81.8. "4 V ;IS :1

. 1 r a 8 82 8 8 8 8 8 8 8 8 CZB F 0O 24 A S ro RICT

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ro CO SI

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SW-WA 88 8 88 8282889 R88 8881eR8 888888888 6' 8898888888 88 8 828 2 88 1.0.12 ..ggc .4c4...... glow c.p.c....m..., 091' ti .4144 to 44 dN 74 4 tialghlrec° sa .44 "A4L: MORE THA CS 1 St OR F 0 4•

4 T O 8t;g92.:,1S ro 42R88NARAgR2288SFARIt 28 ASA 822822 R 88 * 4888828888 * 8888888 " 8888888

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REPORT OF COMMISSIONER OF INTERNAL REVENUE 101 REPORT 0 COMMISSIONER OF INTERNAL REVENUE

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2 2 99 ' 980 ' 662 3, 679, 599, 432. 44 4, 231, 128, 031. 70 6, 430, 337, 542. 41 99' 2, 933, 439, 234. 588 3, 974, 961, 257. 68 117 118 REPORT OF COMMISSIONER OF INTERNAL REVENUE REPORT OF COMMISSIONER OF INTERNAL REVENUE 119 of internal revenue collections, years ended June 80, 1948 and TABLE 5. —Summary TABLE 5.—Summary 1949, by sources of internal revenue collections, years ended June 80, 1948 and 1949, by sources—Continued Increase or Sources of revenue 1948 1949 decrease (—) Sources of revenue 1948 1949 Increase or decrease (—) Income and profits taxes: Miscellaneous internal revenue—Continued Individual: Manufacturers' excise taxes: Withheld by employers $11, 533, 576, 972.05 $10, 055, 501, 785.41 —41,478,075,186.64 Lubricating oils 9, 464, 203, 726.97 7, 996, 320, 131. 82 —1,467, 883, 595.15 $80, 886, 921.61 $81, 759, 611. 97 Other Gasoline 478, 637, 625.15 $872 690.36 Tires and tubes 503,697, 970.24 35,008, 896.09 Total individual income taxes 20, 997, 780,699.02 18, 051, 891,917. 23 —Z 945, 958 781.79 Automobile trucks and 159, 284, 138. 65 150, 899, 047.96 —8, 385,090. 69 busses 91, 962,891. 20 136, 797, 379.13 Other automobiles and motorcycles_ 27% 958, 392 21 44, 834, 487.93 Corporation: Parts and accessories for automobiles_ 332812,34237 81, 853, 950.16 9, 951, 499, 538 20 11, 342, 843, 793.08 1, 491, 144, 256.88 122, 950, 708 28 120, 138, 240.14 Income tax i Electrical energy 69, 700, 529. 73 —2, 812, 468. 19 Excess profits taxes: Electric, gas, and oil appliances 79,397, 495.68 9, 846, 965. 93 17, 693, 249.10 16, 233, 474. 51 —1, 909, 774.59 87, 857, 612. 46 80, 934, 508 61 Declared value (repealed) —110, 758, 277.31 Electric light bulbs and tubes 29,935, 505. 39 —6,923,103. 85 Revenue Act of 1940 (repealed) _ _ _ 305, 251, 476.10 194,495, 198. 79 Radio sets, phonographs, components, 26, 172,16%87 1, 236, 661.48 15, 572.28 298, 767.79 281,195. 53 Army and Navy contracts etc 87,266,856 93 Phonograph records 99,159, 550.23 —18, 107, 306.70 Total corporation income and Musical instruments 7,531 905. 10 6, 482, 797.74 —1, 049, 107. 36 11, 553, 669, 234.17 1, 379, 259, 400. 51 10, 572, 882.91 profits taxes ' 10,174, 409, 833.66 Mechanical refrigerators, air-condi- 9, 292, 668.30 —1, 280, 014.61 tioners, etc Total income and profits taxes 31, 172, 190, 532. 68 29, 605, 491, 151. 40 —1, 566, 699, 381.28 Matches 58, 473, 372. 22 77, 833, 244. 87 19, 359, 872.65 10609, 657.69 8, 737, 618. 31 Business and store machines 32, 707,141. 16 —I, 872, 039.38 Employment taxes: Luggage—manufacturers' excise (sus- 33, 343, 900.01 636, 75885 Other than carriers (Federal Insurance 74, 430, 076.87 pended Apr. 1, 1944) 189.13 Contnbutions Act) 1,612, 720, 919.14 1, 687, 150,996. 01 Photographic apparatus 100. —88 73 43, 935, 373.05 43,139, 668.42 — Employers of 8 or more (Federal Unem- Sporting goods 18, 827, 947. 98 795, 705.53 ployment Tax Act) _ 208, 508, 299. 66 226, 228,180. 11 17, 719, 880. 95 Firearms, shells, and cartridges 19, 846, 484. 74 1, 018, 538.76 4, 276, 687.37 10, 378, 538.92 ' — Carriers' taxes (Railroad Retirement Tax 2, 620, 451. 98 Pistols and revolvers 857, 913.94 818,145.95 Act) 580, 113, 133. 96 562, 733, 585.44 806 888.11 —48, 025.33 Total manufacturers' excise taxes__ Total employment taxes 2, 381, 342, 352.76 2, 476,112, 761.56 94, 770, 408. 80 1,649,239 052 56 1, 771, 532, 722 50 122, 298, 86944 Retailers' excise taxes: Miscellaneous internal revenue: \ Furs 6,137, 507.57 4, 414,674. 21 79, 539, 152.90 61,946, MIL 55 Capital stock tax (repealed) 1, 722, 833.38 Jewelr y - 509, 905.85 822, 380. 121. 25 735, 780, 569.16 —86, 599, 552.09 Luggage 217, 899, 249.20 210,688, 165. 33 — Estate tax —16, 207, 977. 91 80, 632, 323. 81 7, 211, 083.87 Gift tax 76, 965, 322. 40 60, 757, 344. 49 Toilet preparations 82, 607, 133 49 1,979809.68 91, 852 012. 92 93, 969, 241.32 2,117, 228. 40 Alcohol taxes: Total retailers' excise taxes Distilled spirits (imported, excise)._ _ 109, 965, 294.82 121, 773, 303.11 11, 808, 008.29 480, 922, 738 33 449,210, 786.69 —20, 711,951.84 Distilled spirits (domestic, excise) 1, 326, 267, 593.75 1, 276,180, 994.76 —50, 086, 598.99 Miscellaneous taxes: 34, 983, 321.96 33, 793, 235, 90 —1,190, 086.06 Sugar Distilled spirits rectification tax —84, 789.24 71, 246,833. 78 Wines, cordials, etc. (imported, excise). 2, 532, 893.18 2, 448,103. 94 Telephone, telegraph, radio, cable, 76,179, 356.09 4, 927, 522.33 58, 428, 942.95 63, 333, 656. 89 4, 904, 713.94 Wines, cordials, etc. (domestic, excise). leased wires, etc 275, 255, 151. 59 Rectifiers; liquor dealers; manufactur- Local telephone service_ 311, 379, 682.00 36, 124, 530. 41 9, 499, 845. 57 9, 973, 076. 41 473, 230. 84 193, 520, 917. 11 229, 530, 630.85 ers of stills (special taxes) Transportation of oil by Pipe line . . 18,773,045.00 31, 009, 713. 74 Stamps for distilled spirits intended Transportation of persons, seats, 19, 329 552 99 551, 507.99 6, 714.16 5,.962.37 —751. 79 for export berths 246,323,047. 56 Case stamps for distilled spirits bot- Transportation of property 251,388, 581.94 5, 065, 533. 88 tled in bond 446, 948. 80 375, 323.11 —71, 625. 69 Leases of safe deposit boxes 317, 203, 134. 25 337, 039, 889.92 19, 826, 755.87 12, 035, 803.74 11, 906, 524.72 —129, 279.02 9, 081, 102. 94 9, 461, 317. 44 Container stamps —22, 992.03 Admissions to theaters, concerts, etc 00,699.12 380, 214.50 Floor taxes 42, 556.82 19, 564.79 Admissions to cabarets, roof gardens, 385, 1 385, 843, 793.10 743, 093.98 Fermented melt liquors 897, 097, 257. 83 686, 367, 516.09 —10, 729, 791.74 etc 53,145. 22 44 856 669.14 — Brewers; dealers in malt liquors (sPe- 410, 325.33 Club dues and initiation fees 25, 499, 192. 75 4,670, 478.08 oial taxes) 4, 019, 680.59 4, 429, 905. 02 Bowling alleys, pool tables, etc 27, 789, 911. 84 I, 290, 719.09 4, 085, 677.01 3,805,117. 85 — —44, 719, 586. 16 Com-operated devices 19, 270, OM 65 280, 559.16 Total alcohol taxes 2, 255, 326, 754. 17 2, 210, 607, 168. 01 Adulterated and process or reno- 21, 087, 539.19 1, 816, 593.54 vated butter, and filled cheese_ _ 19, 691.95 21, 037. 86 Tobacco taxes: —1, 155, 538. 31 Oleomargarine, including special taxes. 9, 806, 429.34 1, 445. 91 Cigars (large) 46,685, 966. 98 45, 530, 478. 87 Narcotics, including marihuana and 17, 641,080. 53 7, 734, 651.19 65, 536.14 59, 372. 68 —6,163.46 Cigars (small) 2, 513. 54 special taxes 888,84264 Cigarettes (large) 4,601.65 7, 115. 19 Coconut and other vegetable oils proc- 814, 544 87 —74, 097.77 1, 208,199, 005. 10 1, 232, 727, 657.03 24, 528, 551. 93 Cigarettes (small) —100, 081. 50 essed 25, 704,319. 58 Snuff 7, 372, 401.18 7, 272, 318.68 Firearms transfer and occupational 17, 459, 774.67 —8, 294, 544.91 37, 024, 391.73 35, 435, 187. 12 —1, 589, 209.61 Tobacco (chewing and smoking) —84, 747.96 taxes 9, 359.71 Cigarette papers and tubes 925, 594. 23 840, 776.27 All other, including repealed taxes not 11,007. 99 1, 848. 28 Leaf dealer penalties, etc 693. 94 457. 08 listed above Cigarette and cigar floor taxes 2, 032.97 1, 557. 23 — 475.74 396,289.15 272, 711.83 —123, 567.52 Total miscellaneous taxes Total tobacco taxes 1, 309, 280, 152. 92 1, 321, 874, 769.95 21, 594, 617. 03 1, 655, 711, 499.33 1, 752, 792, 194. 40 97, 080,695. 07 Total miscellaneous internal revenue 8,311, OM, 419.96 Stamp taxes: 8, 381, 521, 105. 65 70, 511, 695.88 Bonds, issues of capital stock, deeds of Grand total, all collections 41, 889 592, 295.40 conveyance, etc 50, 771, 302.94 46, 668.890. 86 —4.104, 412.19 40, 463, 124 016 61 —1, 401, 417, 278.79 Transfers of capital stock and similar interest sales 20, 373, 527.57 17, 909, 765. 91 —2, 463, 761.66 Playing cards 7, 867, 223.97 7, 563, 960.97 —303, 263.00 Silver bullion sales or transfers 453, 881.16 687, 425.15 233, 943.99 Total stamp taxes 79, 465, 936.64 72, 826 042.88 —6, 637, 892.76 Includes collections from Alaskan railways in the amounts of $6,097.61 for 1948, and $6,873.27 for 1949.

120 REPORT OF COMMISSIONER OF INTERNAL REVENUE REPORT OF COMMISSIONER OF INTERNAL REVENUE 121 TABLE 6.-Summary S FOR CREDIT TO TRUST ACCOUNTS (INCLUDED IN TABLE 5) of internal revenue receipts by principal sources, fiscal years - - 1918 through 1949-Continued Increase or 1940 Source of revenue 1948 decrease (-) Alcohol taxes Tobacco taxes Mas"fasfurefsi All other taxes 3 excise taxes revenueTotal infernal receipts 85, 782.94 -$694.08 $6, 477. 02 RA Distilled spirits (domestic) .72 -. 72 Distilled spirits rectification tax -24.40 3297,453,544 $88,063, 28 78 2.38 284,008, 513 99 $9, 218, 979 $48,040, 564 $512,728,288 Wines (domestic) 103,201, 5928 775,078 27, 949, 538 M 443, 839, 59.6 809,393, 840 Manufactured tobacco 156,188,660 36,636,607 162, 513,263 3, Coconut oil 983,050,854 206,003, 092 79, 400,286 698, 9M, 821 139,871,160 398,881,981 3, 860,160,079 -719,20 I 295,809,355 267, 968, 579 6, 509.52 5, 785.32 82, 823,929 693, 359,601 5,407, 580, 252 Total trust fund collections 255,219,385 229,397,837 695,935,477 E 45, 609,436 270, 759, 384 179,361,288 4,595,357,062

§R 980,383, 664 3,197,451,083 30,358,086 309,016,493 185,117,058 27, 585, 7757 08 279,459,849 2, 621, 795,228 ,638,9311921 , 7261 297, 308, 011 § 25,904 818 2, 798,179, 257 325,345 247, 21 140,877, 12 201, 512 M , 2, years 26,452,020 370,686,439 150, 220,488 584,190,268 of internal revenue receipts by principal sources, fiscal 21,195, 552 195,34R 420 2,835,990,892 TABLE 6.-Summary 376,170, 205 68,850,109 81,179,988 1918 through 1949 15,307, 796 398,450,041 61, 951,694 2,865, 883,130 § 12, 776, 728 92,165, 670 2, 790, 535, 638 939, 444, 593 5, 723, 791 92,937, 744 Rg 11, 805, 268 450,339,061 2, 676, 281 2, 939, 054,375 10,432,064 100,408, 249 3,040,196, 733 Income and profits taxes 444,276, 503 149,744 85,251,819 g 8,703, 963 2, 428, 228, 754 398, 678, 619 96,195 96, 171, 256 Estate and iar 43,174,317 1, 657, 729, 043 Employment 902, 739, 059 243,600,368 149, 224,352 Total income taxes gift taxes 258,911,333 425,168,897 1, 619,839, 224 Corporation 411,021,773 385,291, 219 670,073,932 2,672,239,195 Individual income and and profits 459,178, 625 342, 144, 686 769,187,665 gg 505, 964,037 3,299,435, 572 income taxes taxes E01, 165, 728 382, 716,142 profits taxes 5 594,215,086 324,527, 086 3, 520,208,381 552, 254,145 449,853,630 305, 707, 545 iR 567, 978, 602 568,181, 968 4,653,195,315 587, 799, 701 916, 753, 516 317, 287,205 5,658, 763, 319 358,993, 3129,937,253 680,159,208 396,891, 003 330,466,663 387,993, 595 658 86,076, 575 RU 624, 253,156 5, 181, 573, 953 1916 207,274,004 387,382,344 608, 518, 449 447,087, 632 337, 391, 685 1917 180,108.340 2,852,324,868 47,452,880 820,056,178 698,076,891 617, 373,372 5,340,452,347 82,029,983 1,048, 516, 707 430, 583, 800 7,370,108,378 1918 2, 600, 783. MG 780, 982, 218 771, 902, 269 821,681,660 103,635,563 NI 1, 423, 646,456 13,047, 868, 618 1919 3,956,936,004 923,857, 284 504, 746, 414 1,274,047, 519 1920 3,228, 137,679 154,043,260 1,18,6 775, 156 988,933, 237 22,371,386,997 139,418,848 2,3 603,461, 802 1, 733, 655,377 40,121, 760,233 1921 2,088,918,966 09,865, 790 932, 194,822 782, 510, 840 2, 128, 705,207 2, 526, 164,686 1,165, 519, 283 292, 107,635 43, 800,387, 576 1922 1,691,089, 535 922,670, 741 2,421,994,159 40, 1923 1,841,759,317 102,966, 762 2,474, 762,398 1,237,768,302 1,925, 260, 662 672,096,998 108,939,896 2, 255,326,754 2, 147, 133, 634 39, 108, 385,742 1924 845,428,352 916,232,697 1,761,659,049 1, 303, 281, 153 1,640, 234,053 2, 296, 823, 007 119,216,375 2, 210, 607.158 1.321_874 100 nen n .. no 41, 864, 642, 295 1925 879, 124,407 1,094,979,734 1,974,104,141 770 1 771 1926 2,219,952,444 100,339.862 5 ' ' ' ,, , 019 911,939,911 1,308,012, 533 60, 087, 234 For 1916 through 1932 Includes taxes on sales under Act of Oct. 22, 1914 manufacturers', consumers', and 1927 1, 291, 845,989 2,174,673,103 1928 882,727,114 61, 897, 141 dealers' excise taxes under the war revenue and subsequent acts (creep soft drink taxe ), and all taxes 1,095, 541, 172 1,235, 733, 256 2,331, 274,428 64,789, 625 paid by manufacturers of and dealers in adulterated and process or renovated butter, mixed dour, and filled 1929 1,148,844,764 1,263,914,486 2,410,259,230 cheese. 1930 1,860,040, 497 48,078,327 except softFor drinks. 1933 and subsequent years includes manufacturers' excise taxes (Act of 1932, as amended) 833,697, 798 1,026,392,699 47,422,313 1931 422, 190, 582 620,566,115 1,068,750,697 1932 746,791, 409 34,309, 724 352, 573,620 394, 217,784 113, 138, 364 TABLE 7.-Total internal revenue collections earsended 1933 400,196,487 819,655,955 . years „„, .,, ., °la 1934 919, 509,988 1,105,790, 865 212,111,959 627,112, 508 578, 678,359 378,839, 515 1935 674,416,074 763,031, 520 1,427,447, 594 UR 279 Year 1936 2,179, 841,835 285,745 ,308 305, 547, 766 Amount Year Amount 1,091, 790,798 1,088, 101,089 416, 874, C85 I Year Amount 1937 1,342,717,850 2,629,029,732 792,660,228 1938 1,286,311,882 2, 185,114, 305 740,428,865 360, 115,210 1,028,833,796 1,358,280,509 1863 1 P 360,071, 167 $91,003,192. 93 A 1939 1,147,591,931 2,129,809,307 833, 620,976 1893 $161,001,989. 67 982,017,376 925,868,460 407,057, 747 1864 116, 965, 678.28 1809 $2,621, 795, 257.06 1940 1, 417,655,127 2,053,961,804 3,471, 123, 930 1885 197, 168, 449.70 1941 8,066,883,544 1,185,361,844 432, 540, MS 210,865, 864. 53 1895 143, 246,077. 75 2, 798, 179, 257.06 4,744,083,154 P 2,282,800,390 498,705,034 447,495,678 1866_----____ 310, 120,448.13 1896 2,534, 140, 268. 29 1942 6,629,931,989 9,668,956,103 16, 298,888,092 1, 1867 196, 830, 616. 66 1943 33,027,801, 1,738,372,436 511, 210, 337 265,064, 938.43 1897 2, 835, 999, 892. 19 888 198, 619, 593. 47 PA 18, 261,005,411 14,766,796,477 12 643,055,077 1868 190,379, 925. 59 2, 885, 653, 129. 91 1944 4 16, 027,212,828 36,061,526,'200 1,779,177,4 1869 1898_ 170,8613,819. 36 1945 19,034,313,37 31, 268, 138, 152 1, 700, 827, 675 676,332, 302 159, 121, 128. 86 1899 2, 790, 65,537.3 68 12,553,601,987 1870 273,989,573. 44 PY 1946 18,799, 536, 165 29,019, 765,956 2,024,364,816 779, 291,074 189.302,828 39 1900 295, 318, 107. 2, 939,054,375. 43 19, 343,297,276 9,676,468,680 899, 345,944 1871 143, 198,322.10 57 3,040,,2195,733. 17 1947 10,174,409,834 31,172,190, 533 2, 181,342, 353 1872, 1901 306871, , 869 . 42 1998 20,997, 780, 699 23,005,491,151 2,978, 112, 762 796,537,914 130,890,096. 90 1902 1,567,78,2, 928 2 044.62 11,5148,669,239 1873 271,887,990. 25 15 18,051,821,917 113, 504,012. 80 1903 230, 740, 925. 22 29,042. 69 1874 102,191,016.98 1909 232, 903, 781. 06 1, 619, 819, MA. 30 1875 110,071,515.00 1905 11 2,672,239, 194. 52 Separate figures on corporation and individual income and excess profits tax collections not available 1876 116, 768,096. 22 1906 M4, 187,976.37 3, 299,935,672.18

1877 249,102, 738300 01 for the years 1918 to 1924. 118,549,230. M 1907 289, 669, 022.050.09 85 3,68 0,208,381.09 Includes munitions manufacturers' tax, excess profits on Army and Navy contracts. 1878 110, 654, 183. 37 190 261,686, 4,683, 195,315. 28 1879 ___ _ 3 113, 449, 621.38 1009 246, 212, 719. 22 5, 658, 765,314. 33 1880 123,981, 916 10 1910 H 5,181,573,952. 58 1881 135, 229, 912,30 1911____.___. 289,957,220. 16 5,390 ,952,34986.78

322, 526, 299. 73 R 1882 148,523, 273. 72 1912 321, 815, 894.69 7,370, 1 , 377. 66 1883 149, 653,349. 86 1913 344,424, 453.86 RA 13,047, 868,517. 72 1884 121, 590,039.83 1914 22,371, 386,996. 55 1885 112,421, 121.07 1915 380,008, 893. 96 I 43, 800,3760,121, 232. 77 415,881,023.88 512 713 287 77 672,096,997. 1888 881,023.86 M 1887 116, 902, 869.44 1916 , , . 87,1575. 908 88 118,837.301. 06 1917 809,393,690. 49 40, 1888 129,328, 475.32 1918 3,698, 955, 820.93 39,10 ,386,741.0483

I 1889 130,891,439. 20 1919 3, 850, 150,078.88 41, 864, 542, 295. 1890 142, 594, 696. 67 1920 5,907, 680,261. 81 40, 963, 125,018. 61 1891 148, 035, 416. 97 1921 9,595, 357,061.95 1892 „ 544. 35 1922 3, 197,451, 083. 00 379, 403, 228, 105. 91 1 Period of in manes,. 4...... 42.-. . „..... 4 Operation, to June 30, 1883. which the internal revenue laws went into pr flea/

122 REPORT OF COMMISSIONER OF INTERNAL REVENUE REPORT OF COMMISSIONER OF INTERNAL REVENUE 123 TABLE 9.-Additional TABLE 8.-Internal revenue tax on manufactured products from Puerto Rico, income and profits tax assessments made by the Income Tax fiscal years 1948 and 1949, by objects of taxation Unit, during the fiscal year 1949, by tax years-Continued (a) TOTAL REGULAR AND JEOPARDY ASSESSMENTS-Continu Increase or 1949 Articles taxed 1948 decrease (-) Number Tax year of Tax Interest Penalty Total $6,678, 576.00 $3, 822 377. 48 returns Distilled spirits, excise tax $2, 852 198. 54 Distilled spirits, floor tax 215,301.34 112, 585. 34 Distilled spirits, rectification tax 102, 716.00 Excess profits tax: 1940 F4O Wines $2, 138,373 $901,598 Fermented malt liquors 1941 $24,622 63,069,593 RY ...7 8, 319, 488 3, 643, 723 Cigars, large: 5.00 1942 179,131 12,142,342

7.75 c.i 64, 095, 136 2.75 1943 20,069, 005 1,395,976 85,560,117 Class A 293.65 - 142.95 436.50 e. 113, 748, 750 28, 423, 545 2, 528,314 Class B 9, 152. 02 1944 144, 698, 609 6, 932. 10 16,084. 12 g3 119, 798, 518 23,879, 915 2, 013, 089

..4 145, 691, 502

Class C -1,231.65 1945 -. 1,432. 20 WO. 55 c‹ 142, 226, 996 21, 769,894 1, 401, 721 Class D 10, 440.55 1946 165,398, 611 14, 375. 75 24, 816.30 4, 276, 204 524,401 324,488 5, 125, 093 Class E 2, 607.93 2, 741.25 133.32 Class F 6.00 Total 36.00 42.00 30,827 454,603, 465 99, 212, 081 7, 865,321 561,680,867 Class G 70.98 70.98 large Grand total Cigarett es, 598. 57 607.80 -90.77 333, 571 1,144, 537,855 220, 693,119 43,392, 754 Cigarettes, small 1, 408, 523, 728 2,982,042. 79 8, 938, 784. 69 3,996, 741.80 Total (8) TOTAL REGULAR ASSESSMENTS Novx.--Stamp sales for Puerto Rican tobacco and liquor manufacturers are deposited at San Juan to other collection statements Income and declared value excess- the credit of the treasurer of Puerto Rico and consequently are not shown in 8 profits tax:

herein except that liquor and tobacco taxes amounting to $6,504.52 in 1948 and $5,75.32 in 1949 were collected w at the ports of entry and were covered into the Treasury of the United States to the credit of the treasurer 1925 and prior $170,310 $244, 632 m $48, 818 $463, 760 1926 1,537 of Puerto Rico, under the act of Mar. 2, 1917 (sec. 3360, Internal Revenue Code). 1927 1,472 269 8,278 w 2, 450 3, 014 1, 200 6, 669 11, 995 19291925 2 14, 175 2,387 28, 567

INCOME TAX AUDIT A 136,873 1930 199,168 5E206 345, 247

vra 16, 120 1931 15, 809 4, 084 36, 013 7,487 7,275 4,337 19,099 income and profits tax assessments made by the Income Tax 1932 9,357 TABLE 9.-Additional 1933 8, 249 4, 586 22, 192

8 60,341 Unit, during the fiscal year 1949, by tax years 1934 45, 916 6, 193 112, 450

T 53,697 42, 359 1935 13, 970 110. 026 from collectors' investigations] n 59,248 42,912 21, 512 123,672 [Excludes additional assessments resulting 1936 6, 717, 746 1037 4, 583, 667 2, 783,113 13, 086 526

ii 633,382 EGULAR AND JEOPARDY ASSESSMENTS 1938 400,859 70, 881 1, 105, 122

i 576,857 1939 322, 910 78,745 978, 512

§OR 1, 191, 417 1940 508,476 103,421 1, 803,314

a4 5,383,334 1941 2, 315, 812 270,169 7, 969, 315 Number 16, 058, 293 4, 859, 559 of Tax Interest Penalty Total 1912 843,359 21, 561, 211 !?: Tax year RE 41,447, 652 9,852,025 1,858, 862 returns 1943 53,158, 630 g 94,841,84, 6888 21, 053,439 4, 895, 736 1944 I 120, 833, 778

gg 128, 7 1945 23, 560, 462 6, 295, 819 158, 597, 719 gn 189, 603, 999 28, 424, 745 5, 981, 092 221, 902, 786 Income and declared value excess- 1946 132, 085,984 1947 14, 282,401 2, 791, 897 149, 180, 282 profits tax: $463, 760 38, 382,148 2, 423, 974 43 $170,310 $244, 632 $48, 818 1948 807, 031 41, 613, 153

1925 and prior " 879, 192 1,537 1,472 269 3,278 1999 22, 833 13, 213 915, 238 1926 5 6,664 386 7 2,450 3,014 1,200 39 425 1927 11, 995 14, 175 2,387 28,557 1928 16 9, 410, 655 Total 301, 471 656, 015, 795 113, 188, 182 19 3, 730, 975 2, 924, 898 2,754,782 26, 739, 900 795, 941, 877 1929 111,163 83,508 75,366 270,037 22 ?areas profits tax: 1930 22 66,530 45,789 48,619 160.938 1940 1931 30,291 23,423 92,631 130 2,108, 813 887,507 14,992 3,011,312 23 38,917 1941 637 7, 942,605 1932 86,168 86,376 21,311 173,854 1942 3, 491,409 55, 613 11, 489, 627 1933 46 125,261 1, 816 58, 739, 590 18,417, 920 63 59,772 47,429 18,060 1943 801,260 77, 958, 710 1934 32,067 162,401 3,837 108, 245, 411 26,389, 281 1,877,377 134, 292, 069 73 75,149 65,185 1944 6,882 1035 4, 694, 157 2, 814, 119 13, 261,672 114, 238,353 22, 617,881 1, 783, 791 138,840,026 159 6,803,396 1945 14,852 126,370, 730 1936 677, 612 429,120 93,955 1, 200, 687 1946 19,040,125 860, 515 146, 271, 370 1937 181 1,042,772 2,447 3, 851, 881 474,319 244 607,895 340,821 94,056 21,892 4,348,092 1938 1, 213, 603 519, 979 120, 659 1, 854, 241 Total 1939 357 8, 071, 591 30,821 419,497,383 91, 298, 442 1,004 5,438,372 2,341,474 291,745 5, 215, 380 516,011, 205 1940 4,939,996 731,031 21, 928, 796 2,967 16,257, 769 Grand total 332, 092 1,075, 513,178 1941 44,030, 739 10, 685, 602 2, 238, 155 56, 954,496 204, 984, 624 31, 955, 280 1, 311,953,082 1942 4,369 126, 054, 296 16,399 98,387,359 22, 020,088 5,646,839 1943 132,692, 418 24, 406, 651 7,633, 339 164, 732, 408 1944 36,321 238,852,927 113, 739 199, 179, 189 30,041, 075 7,632, 663 1945 137, 148, 578 14, 824,928 3,836,634 155, 810, LW 1946 99,100 47,118, 234 28,079 43,122, 353 2,646,040 1,349, 841 1947 1, 019, 654 24,300 18,095 1,062, 049 1948 484 3 487 39 526 1949 689, 934,390 121,381,023 35, 527, 433 846, 842,861 TotaL 302, 744

REPORT OF COMMISSIONER OF INTERNAL REVENUE 125 124 REPORT OF COMMISSIONER OF INTERNAL REVENUE m assessmentsmade b Income Tax TABLE 9.-Additional income and profits tax assessments made by the Income Tax TABLE 9.-Additional income and profits tax the Unit, during the fiscal year 1949, by tax years- Continued Unit, during the fiscal year 1949, by tax years-Continued (e) ASSESSMENTS ON AGREEMENT WITHOUT 99DAY LETTER (d) ASSESSMENTS ON AGREEMENT AND DEFAULT AFTER ISSUANCE OF 90-DAY LETTER-Continued Number Interest Penalty Total year of Tax I Tax returns Number Tax year of Tax Interest Penalty Total returns Income and declared value excess- $15,139 2970,951 k profits tax: $23, 782 332,030 Excessiprofits tax: 39 1, 048 so 2, 297 1925 and prior 4 1, 219 6,301 1940 $55,007 $26,986 $844 $87,677 1926 2,330 2,861 1, 110 1941 441,323 154,567 4, 291 600, 181 6 1,881 26, 043 1927 13 11, 072 13, 089 01,128 1942 1, 989,198 582, 585 63,301 2,635,082 1928 38, 720 44,087 8,321 1943 4, 266, 556 1,199, 585 280,995 5,697, 136 15 13,107 2,717 29, 371 1949 1929 17 13, 547 12, 123 2, 578,876 801, 980 251,355 3, 432, 211 1930 5,008 4,823 2,292 1945 3,460, 641 696,634 140, 957 4,188, 232 18 4, 103 14 216 1931 18 8, 589 7, 524 105,009 1948 54, 971 7,376 1, 974 64, 321 1932 457 43,409 4,143 39 N, 9,953 91,402 1933 54 46,396 36,053 67, 977 Total 849 12,838, 570 3, 119,713 743,557 16, 699,840 1934 $ 33, 798 23, 520 10, 669 o 30,877 263,469 1936 118 142,346 90,296 Grand total 9,288 44, 930, 293 10, *9, 211 4, 104, 2138 59, 2A3, 792 1936 217,011 33,522 597,904 127 347,371 142 46,037 512 , 126 1937 173 299,947 L666:338 922 1938 82, 704 853, 260 524,880 218,579 6, 541, 222 (e) ASSESSMENTS BASED UPON STIPULATION BEFORE THE TAX COURT 1939 4, 392,179 1,930,464 750 3,640,343 505, 152 16, 942,183 1940 2, 352 12, 796,668 48, 467, 765 11441 38,209,954 8,814 356 1,441,456 3,742 3, 483,106 31.2: M740 Income and declared value excess- 1942 80, 569, 933 17, 101, 711 profits tax: 1943 13,894 20,319,754 6,125,4 29 31,721 113,968,961 210, 243, 508 1925 and prior $13, 930 $3, 269 $96 $17, 293 1044 178, 747,198 26. 591, 493 4,904,817 1926 109,938 2, 563, 917 145,297, 710 318 424 239 981 1945 97, 815 128, 827,901 13,905,892 41, 172, 794 1927 120 163 90 363 1996 2,399, 915 802, 986 27,801 37,969, 913 13, 096 912, 279 1928 923 1, 086 505 2, 514 1947 447 876, 413 22, 77319 425 1929 1,363 1,522 755 3,640 1948 2 386 1930 2, 554 2, 681 1, 353 1949 6, 588 95,670,026 19, 31% 104 712,897,098 1931 2,434 2,406 2, 011 6, 851 289,422 597,914,968 1932 491 457 275 I, 223 Total 1933 2,729 2, 367 1,934 7,030 13, 464 2,429,941 1934 7,426 4 943 3,667 17,036 Excess profits tax: 1,685,496 730,981 1935 10,851 5,446 93 8,425,856 CI 8,066 1940 7,643,694 45,569 24,363 5,736, 592 1938 485 16,621, 561 697,362 70, 146, 782 5,341, 874 4, 328, 077 2,671, 931 12, 341, 182 1941 1,645 52, 827,859 784 1937 85, 776 53, 934 5, 836 144 596 1942 24,042, 982 1, 332, 305 3,408 97,460,497 292 133,23 1 ,017 1938 107,233 58, 091 20, 359 185, 893 1943 6,528 110,064,839 21, 645, 836 1, 520, 122, 834 16 1939 1944 141,4, 26515,1, 119,516 60, 226 10, 188 189,930 72,E1 1940 Nth 080 123, 657 29,527 453, 264 1945 11, "1295 1211'108169 Thig1,1176 1941 1, 290, 230 505,390 38,619 1,834,239 1946 482,844 498 1942 1, 292, 246 400,684 111.690 393,995,928 84, 502, 377 4, 348,193 1, 804, 620 Total 29,033 1943 5, 538, 164 1, 497,133 533, 100 7, 418, 397 991,910, 896 180, 172,403 23, 680, 297 1,195, 743,696 1944 3,164, 657 694, 317 167, 405 4, 026, 379 Grand total 318,455 1945 1, 359, 310 222, 639 86, 330 1, 668, 279 1946 338,558 42,703 10,168 391,429 (d) ASSESSMENTS ON AGREEMENT AND DEFAULT AFTER ISSUANCE OF 90-Da 1947 147,579 8, 114 1,030 156, 723 LETTER 1948 1949 Total 2, 566 18, 978,162 8, 023, 339 3, 702, 059 Income and declared value excess- 30, 703, 555 $375, 614 profits tax: $132,598 3209,333 $33,583 Excess profits tax: 2 1 '2 1925 and prior 1940 309,474 r 101,985 784 411,743 1926 1941 -Ir 1, 045 745 395, 965 4 753 1,444 563 1927 1942 1, 635,186 541, 203 30, 483 2, 206, 872 1928 54 1943 Ag" 3, 225, 669 859, 896 50,126 4,135, 686 1929 21 14 1 19 34 125 1944 1, 213, 929 279, 451 10,140 1, 403, 015 1930 1 as 46 753 1945 435,188 82, 257 275 517, 720 1931 277 268 208 1 116 411 1946 18,821 3, 467 22,238 1932 1 165 140 1, 588 1933 363 350 2 875 1,968 15,851 Total 541 7, 883, 502 2, 268, VA 97, 561 10, 243,887 1934 4 7,722 4 961 5,651 1935 1, 631 664 16 3,356 1,362 11,777 Grand total 3,107 26, 861, 669 10, 286,163 3, 799,615 40, 947, 442 1936 18 7,183 3,232 29,941 1937 17,251 7, 248 4 442 23 4,231 3, 113 16,497 1938 28 9,163 220, 871 1939 56,237 9,495 118 156,139 70, 438 1,470, 178 1940 252 1,016, 740 383,000 1,563, 778 1941 320,783 213,924 277 1,029,071 844, 586 9,882,436 1942 1,311 7,096, 249 1,941,626 13,575, 507 1993 2,253,688 983,657 2, 345 10, 338, 162 978, 390 11, 634,019 1944 3,001 9, 101,651 1,553, 978 3,452, 586 1946 332,705 210, 234 918 2,909, 647 3,035 283,636 1946 115 264,666 15,945 959 1947 2,779 82 118 R 1948 1949 47, 513,952 32,093, 723 I 7,089,498 3, 360, 731 Total 8,439 I I

126 REPORT OF COMMISSIONER OF INTERNAL REVENUE REPORT OF COMMISSIONER OF INTERNAL REVENUE 127 9.-Additional income and profits tax assessments made by the Income Tax TABLE 9.-Additional income and profits tax assessments made by the Income Tax TABLE years-Continued Unit, during the fiscal year 1949, by tax Unit, during the fiscal year 1949, by tax years-Continued MADE AFTER DECISION BY THE TAX COURT (fl -- (4) TOTAL JEOPARDY ABSE ...... • _ -.. Number of Tax Interest Penalty Total Number Tax year Tax year returns of Tax Interest returns Penalty Total

Income and declared value excess- Excess profits tax: pr fits tax: 1990 5 926 and prior 1941 $29,560 $14,091 $9,630 $53,281 926 15 376,883 162,314 1942 27 123. 518 852,715 927 1943 5,365, 596 1. 651,095 594, 776 7.601, 407 928 $250,479 51 5,560,135 2 054,264 $96,790 $103,559 $50,130 1994 60 848,937 10. 406,540 929 1 1945 5. 560, 185 1,282, 039 541,208 7,051, 477 930 49 15. 856, 268 2, 72G, 769 541,206 1946 9 19.777,001 931 929,324 50,082 302.698 777,001 932 Total 206 933 35,108, 042 7, 913, 639 2, 649, 941 45, 669,662 934 5,365 3, 439 11 681 Grand total 935 1 6, 877 454,223 1, 479 69, 024.677 16, 108,495 8 230,369 163,713 00,141 11, 437,474 98, 570,646 936 193,052 126,682 30,161 349,895 10 250,762 937 15 152,426 91,429 6,907 938 197,681 7,416 742,965 EOPARDY ASSESSMENTS UNDER BANKRUPTCY AND DISSOLUTI 939 29 537,868 753,958 ------'' 59 534,936 .206, 954 12,568 40 330,828 29, 150 1,314, 631 941 121 954, 655 1, 322.376 Income and declared value excess- 78 918, 381 314, 202 91, 793 profits tax: 942 512,960 34,945 2,378,176 944 311 1, 830, 2132 1, 581, 589 1925 and prior 280 1, 269, 658 292, 703 19, 228 1926 944 295,790 56,035 11,555 363,980 1927 945 112 18, 557 19 9,878 1,101 7, 578 1928 48 1929 947 1930 998 1931 949 1932 9,797, 272 1, 044 7, 028, 942 2, 403,319 365, 011 1933 Total 1934 1935 Excess profits tax: —co= . 28, 055 60 86, 951 1936 58, 836 1, 017, 028 1940 .^ 718, 945 298, 083 1937 1941 2, 287, 399 672, 571 10,054 2, 989, 974 1938 8R $519 1942 1, 292, 694 316,818 13,951 1, 623, 963 1939 $319 $831 1993 90,619 2,004 473,782 1940

381,164 1944 42, 395 7,387 49,782 1941 1945 8 29,382 11, 497 1942 17 $3, 081 705,,43 9134 1946 1943 499,433 169,491 26, 546 47( 8, 220, 980 46 383,611 83, 591 198 4, 781, 383 1, 413, 528 26, 089 1944 68 46, 822 513,824 Total 1945 827, 184 1.22 753 178, 447 928, 389 16, 018, 252 127 1. 271 033 218,018 1, 242 11, 810, 325 3,816, 847 391, 080 152 288,607 L 780,826 Grand total 11946 997 1,784,086 202,153 231, 058 2, 217,297 1948 105 616.082 35,883 109,463 17 70,977 761,428 TOTAL JEOPARDY ASSESSMENTS 1949 1.039 1.323 73,338 Total 541 5, 285.477 844, 744 895,146 7, 025,887 Income and declared value excess- :mass profits tax: - profits tax: 1940 1 1925 and prior 1941 178 79 25 7 1926 5 108,127 93, 069 1942 12 2, 582 1/43, 778 1927 1943 689, 237 2211 8914 98,678 964,813 25 Z 986,363 1928 $3, 594, 102 $2, 776, 730 $2, 695,576 $9, 065, 408 1944 708,666 73,900 3,268,929 1929 1 71,282 234,024 28 3.161, 790 709, 448 36,954 1 95, 043 67,699 1945 32 3, 908,192 1930 38, 514 44, 282 141,839 1948_ I, 525, 288 817, 297 431, 951 2, 274.536 1 59,043 70,439 6 404, 416 47, 646 1931 2 29,560 22,042 18,837 301, 781 753,823 1932 20, 459 15,118 61, 404 Total 1933 2 25, 827 15, 235 109 8,375 399 2, 053. 103 2 6, 075 5.070 4 090 895, 826 11.324, 328 1934 12. 273 10,556 38.729 Grand total 4 15, 901 197.147 650 13,860,876 2 897, 847 1985 4 86,651 60,490 61,006 1, 790, 972 13, 349, 695 1936 28,261 23,074 95,565 5 44,230 64,280 1937 8 31,038 17.911 15,311 1938 11, 603 17, 238 50, 927 10 22,186 102,276 1939 13 55,038 25,662 21,576 1940 80,437 87,672 367,585 44 199,476 3. 795,957 1941 81 2, 543,097 838,577 379,293 1942 986,649 751,103 5. 220, 508 181 3, 502, 756 6.134,689 1943 199 3,950,980 846,189 1, 337, 520 1944 1, 616,330 1.651, 571 12. B43, 141 248 9, 675, 240 6.649, 858 1945 259 5,062, 594 542, 527 1, 044, 737 1948 222,068 542.810 5. Mb, 081 157 4,740,205 148,811 1947 32 140,462 1,467 4,382 1948 101 101 1949 1 8, 194,856 8,787, 533 50,900.984 Total 1, 273 33, 918, 595

REPORT OF COMMISSIONER OF INTERNAL REVENUE 128 REPORT OF 'COMMISSIONER OF INTERNAL REVENUE 129 tax assessments made by the Income Tax TABLE 9.-Addiionalt income and profits Unilduring file fiscal year 1949, by tax years-Continued (0 FRAUD JEOPARDY ASSESSMENTS

Number Tax Interest Penalty Total Tax year of returns

Income and declared value excess- profits tax: 1925 and prior 1926 1927 29,065, 408 1928 1 $3, 594,102 $2, 775, 730 $2, 695, 578 71,282 234,024 1929 1 95,093 67,899 141, 839 1930 59, 043 38, 514 49, 282 1 18,837 70,439 1931 29, 560 22,042 81, 404 1932 2 25,827 20, 459 15,118 5,070 4,090 15, 235 1933 2 6,075 38, 729 1934 15,901 12,273 10, 555 4 51,006 197,147 1935 4 85, 651 60, 490 28,261 23,074 95,585 1936 5 44,230 63, 422 1937 30, 510 17, 592 15, 311 7 11, 503 17, 238 50,927 1938 13o 22,188 102, 276 1939 55,038 25,682 21, 576 84, 591 323,625 1940 38 083,654 68,940 664,088 342,747 3,090,487 1941 64 2,083, 654 4, 708, 684 1942 3,119, 146 883,058 704,481 115 723,436 1,169,073 5,206,305 1943 131 3,323, 796 11,162, 313 1944 8, 401, 037 1, 308,312 1, 382,984 159 340,374 813,879 4, 432, RR 1945 107 3, 278, 508 4, 743, 653 1948 4, 124, 123 186,183 433,347 52 428 3,560 73,473 1947 15 69,485 101 1948 101 1049 7,892, 387 43, 875, 617 2 1$833,118 7, 350, 112 Total 53,024 Excess profits tax: 29,382 14,012 9,630 4 120,936 498,937 1940 10 288,756 109,245 1, 424,187 546, 098 8, 636, 504 1941 15 4, 666,309 7, 137,611 1942 5, 016, 976 1, 345, 598 775,037 28 553,586 192,324 3, 143, 285 1943 22 2,398,375 16,852, 705 1944 2, 412, 472 109, 255 17 14, 330, 978 835 23,178 1945 3 19,907 2,436 1946 1, 754,116 34,345,334 97 26, 730, 683 5, 860, 536 I Total 78, 220.951 829 55, 383, 801 13, 210,648 9,646,602 Grand total

year ended June $0, 1949 TABLE 1 0.-Tax items appealed to the Tax COW t, fiscal

Tax Penalty Total Tax year Items

82 $125,930 270,718 $196,646 16,318 8, 479 24, 797 1930 and prior 18 14, 640 1931 14 9, 640 4,900 11, 424 29, 539 1932 19 18,115 36,966 1933 21 24,869 12, 097 127, 721 78,783 206, 504 1934 26 374,693 1935 48 231, 231 143,462 1936 71 712, 659 222,371 935, 030 1937 85 719,330 249, 218 968,546 186,143 629, 535 1938 81 443,392 1, 392, 707 1939 160 1,063,368 329, 339 1940 372 5, 665, 882 897,364 6, 563, 246 1, 334, 767 23,186, 679 1941 818 21, 851,912 48, 578,991 1942 1, 561 44, 826, 327 3,752,664 3,324, 500 40,030,409 1943 1, 887 36, 705,009 46, 189, 124 1914 2, 239 43, 655, 262 2, 533,862 1945 11, 718,001 1, 545, 710 13, 263, 702 979 895, 114 3, 263, 752 1946 235 2,368, 638 97, 771 1947 3 97,772 1948. 13 Year and amount undetermined 185,983, 178 8, 520 170,382, 278 15, 600,902 Total fk 130 REPORT OF COMMISSIONER OF INTERNAL REVENUE REPORT OF COMMISSIONER OF INTERNAL REVENUE 131 1 egggfggilgraiRRERR1RiAgigraamE5R5i5REF1 Ig t RRE15U 15 RRIA MUM a 1 REIgggRggRi 5 0 61q51E-RWP 1531.4 1 AaaEg4eg 1 gg5 n2 EWIDA261 4 =E"1:44 2 E"Rg d ggE gERg':g1 A w R m 440 a VI g7.. t .s

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134 REPORT OF COMMISSIONER OF INTERNAL REVENUE REPORT OF COMMISSIONER OF INTERNAL REVENUE 135

eoe ro

EEME8MEE 364 ion 8 g0n§0 30WM 663 t TABLE 15.-Cigars weighing more than 8 pounds per thousand: Manufactured t ot qlg 106, lec talggEleig'n'iig and removed tax-paid for domestic consumption from customs bonded manufac- 505, s l --. . . .... tz 0 o 4 c:W-4 em turing warehouses, class 6, by classes, calendar year 1948 -c4 -N^1 .%,°. g 42 t 1 587,

Rt- . . . 460, . c 5, 5,

by Number of warehouses

888 1 I

d Tobacco used il x, 5 3 8, 20 ta ta nu- an

! 17

n Mg 78 z Year re 6 3,

ha In bust. In busi- 2 E

h)— ,F. 778, U hous f t 17 ness Opened 194 Closed ness Stemmed Scraps d to t arai Jan. 1

G (ma 77, BO, Dec. 31 stemmed ore eac er ear ts ture m n t 20 p Class y a fac ce $

17, Pound, r Pound, Pound* 1948 6 0 0 6 477, 598 1, 718, 794 75,623 il 151 8 d da 1947 6 0 d 0 6 793,088 1, 735, 953 96,522 15 20 ta tar,

n n §P.Mili pt

F-3 919 798 len

re Increase

1, 94' ha ha a h an cb,0 Decrease t h)—

t 315,490 housan 50 037, 17,159 20,899 8

d to .1

c ?- t o

eac f F (manu-

ore ^ ore IL-. eac er 116, 108, ts n m ture m t 5 p t nts

ce Removed tax-paid Class a Mann- fac $1 no ce lasses,

Year featured c 968' il d 18, 9

8 d Class A 15 Class B Class C Class D ta n nu- n tax, an n Upg HgEgEgggAggggg F.Vig 87 675 841 ' re ha ha h a

t t t h)— ggg gggriggrgigg 069, 249, Number hous Va MI Number Number Number

ac Number K d to

i'' 9, 1948 t ,f 142, 893, 534 750 ore e '5 IT 65,100 E (ma r dgi 0- sg g 2- g C. 0 9, 140, 297 eac e 955, 1947

ts 124, 055,188 05 94,800 26, 200 1, 800 5, 939,182 m ts more

ture :.71 2, 3, t -I t n 0 p a cen Class Increase 18, 838, 346 fac no ce $1 38,900 3, 281, 115 Decrease 44, 050

1, 800 689 514 ' il d x, 8 d 6 VIL n ta nu- n ta

n §A§§AUMPUELM ??.AE- 'co ' 620 ' han re ha h a

51 Removed tax-paid-Continued

t t - h)— t giit°6q 171 Ill 4Welgli housa 949 IL Year Val ue of d to R -mm -c4- 49 t eac Z D (ma

r - et.. - stamps used eac ts e Z " Class E Class F Class G Total ts n ture t more t more n 7 p a ce Class $ fac no ce

Number Number Number Number l i

d 1948

6 35, 687,381 43.629, 500 51, 350, 807 d 139, 873,835 $2,102, 511. 70 4 ta n

nu- n tiar 1947 n 30, 343, 117 41,383, 239 46,105, 812 123,849,150 1, 888,068. 07 ha re ha h a

t Increase h)— t 5,344, 264 2,246, 261 5, 244, 905 16, 029,685

housan 214,443,63

d to Decrease C (ma ore t eac

eac ts er m n ture t t more p nts

4 I a ce

Class Compiled from monthly returns filed with Wien ors of customs by the manufacturer operating the no $ fac ce warehouses. The above figures are not included in table 13, which shows operations of factories registered

il under the Internal revenue laws only. These bonded manufacturing warehouses are operated exclusively d x, 4 d .under customs supervision. ta n nu- 21/2 ta 3 n Average quantity of leaf tobacco used per 1,000 cigars, 20.09 pounds. ha re h an ha t h)— housan t d to ac ore t eac B (ma e ore ts er m ts n ture t m n 3 p t ce Class $ no fac a ce

il 0 0 0 0 0

00 ta 15 0 400 150 00 300 300 han nu- er 45 000 750 h)— 55 000 40

d t 1, 3, 1, 6, re n 29, 3 30, 40, 21, 25, ber 151, 336, 50 p eac 68 ore m 2. 4, 2, ts d to m A (ma n $ t housa Nu t ce ture no tax, t Class fac 21/2 a t ic tr Dis REPORT OF COMMSSIONER OF INTERNAL REVENUE REPORT OF COMMISSIONER OF INTERNAL REVENUE 137 992 po Oct 2 t %t 21 d 4 2 aRiUg 6 2E2 '882' ■ 041 2121gg ■ 338 s gg3611 3,2 4 4 064 919 $ an s, s, 4 ing lg 6 g6g .cl 6 g 6 29 21 ' ee ligElgg606

ggi 274, g a .-r g a a 809

1t' 90, Scrap lipp 0. g 0 tting "gra 6 g c e g- e a g 922 cu 13, 452 200 Hei pen 913MIUD ' 91

A; 9V.-4 2 4 4 029 L0 183 M .e, 2666631 g 1 072 0 t 9 coax I

16 g 6666 6 6 g 4 4 429

199 fg 148, 6 6506616 846,

6» 994, IS 4.zr ti, , Fr ia ® ■ 77, .:

C4 RIV64 400, 5 t 6 277, l 4, 6L 38, a -7 34, PO ■ ■ 772 980 URIM F-1 RUHR 222 4 92E

814, 427,

16 g 666i ' g 4 01 M ■ UO at 130, 120, f tax t o sse 65 61 men o wn 4 ay 1 ' p q M t tr t y

ithou 'PO .0 07.0000000000-00 1.. 17.

le d d w e b e ies ta tor Clos c in

fa Remov f

o 4 .I.N 07 poued 00000000..-400000.-.- r shown be O Num

n"...cl..mc,c,,N,-...... 9 2 8 t- ess in 1948 1, bus

n. In Ia

2 6 30 340 85 400 900 9 887 80 070 330 500 750 290 270 320 278 680 r 9, 3, 8, 66, 2 69, 35, be 241, 200, 983, 20 858, 00 787, 308, 411, 834, 529, 393,

3, 8, 14, 96, 80 234, 162, 182, 261, 481, 005, 35 228, Num 5, 1, 9, 2, 42, 216, 109, 6 2 1 2 1S KI

1 5 1 1 4 2 91

k ia n a Yor ia k

lv r k ey w 48 47 k ia r ia i Yo lvan 19 19 n nsy

n Yor Ne tts lina

Jers Yo l, l, w

h ro sour t Pen ta ta w lifor w lifor nnsy n is rease Ne ky huse Ohio a Ca h New c crease ia To Ca To Ne d Pe Ca M Ne teen h h d lft in ida tu t Dec hig t t t t In t h h t n con hir lor ix Ke Massac Fift Firs Se T Four Nor Ten Firs Twe Virg Firs S F Mic Firs •

REPORT OF COMMISSIONER 138 REPORT OF COMMISSIONER OF INTERNAL REVENUE OF INTERNAL REVENUE 139 weighing snore than 3 pounds per thousand: Quantity of TABLE VT-Cigarettes tobacco used, number of cigarettes manufactured and removed, calendar year 1948, by collection districts O Cigarettes weighing more than t:4 Tobacco used 3 pounds per thousand 0 Removed O Scraps, Nd gg District cuttings, Manufac- Without Un- Stemmed tured O / stemmed and clip- payment Tar-paid pings of tar for export -et- n cr' Number Number Number +ft. Pounds Pounds Pounds 146, 500 469 146,500 First New York 192 204,500 408,320 ) ee.- 203 1, 284 385,700 Oa Second New York 71 60,150 611,150 E3 Third New York 179 48, 400 101 190 48,406 500 RUM North Carolina 3 a a a Twelfth Pennsylvania .4 B1 6 RUM 204 641,250 204, 500 663,870 erg 574 1, 753 536,590 a Total, 1948 1, 333 307 536,870 73 0" Total, 1947 598 ‘4 0 re :g. 203,806 127,260 re. 420 104, 380 l; 7d gg Increase 43 Decrease 24 Jct. ijcf ci t 0 PP Average quantity of leaf tobacco used per 1,000 large cigarettes, 5.09 pounds. E. a Nunn-The number of factories in business is included in table 16. o Z X tobacco used in manufacturing cigars, cigarettes, and tobacco and o d TABLE 18.-Leaf gg snuff, also quantities of such articles manufactured, calendar years 1944-481 R . (42

Cigars Cigarettes Tobacco and Total 0 i2;11= tai 0 Year snuff Large Small Large Small E .4);4 Pounds Pounds g11 Pounds Pounds Pounds 0 47 ri err Pounds 920, 145, 057 204, 241, 196 1,254, 541, 355 0 129, 399, 386 482,602 273,114 1, 291, 175, 570 4 P0 1944 783,507 943, 502,267 218, 499,433 • 0 E, 128,011,949 378,414 168, 190, 329 1,306,668,985 1945 372,885 8, 662 1,000,929,225 n 0 it92c.c `Eltz 137, 165,884 1, 355, 116, 546 5 00 1946 309,472 2,785 1,055,591,192 164, 184,731 • E, Er 1947 135,028,368 161,092,053 1,400, 091,309 139, 465, 561 357, 340 3,263 1,099, 173,092 1948 togfr• 4p4 TOBACCO AND SNUFF se, ..oo cy..4 Scrap Smoking Snuff Total Year Plug Twist Fine cut chewing • Fz Pounds Pounds Pounds Pounds g Pounds Pounds Pounds 41,961,777 306,934,840 C4 4,092,238 52,858,763 139,861, 057 R. 1944 61,654,569 6,498,436 168, 522,865 43,833,974 330, 501,801 o 59, 703, 982 6, 722, 913 3,069, 724 47, 748, 343 39,361, 114 253, 230, 681 m 1945 3,755,813 46, 117,134 106,414, 119 en 0 1946 51,809,873 5,772,628 104, 680,032 39,163, 514 242, 283,072 • 0 0 47, 305, 808 5, 151, 735 3,793, 349 42, 188, 634 40,808,952 244, 680,922 1947 3,206,919 42,083,146 107, 599, 262 1948 45, 345,920 5,631,713 8 m CIGARS AND CIGARETTES 80 • Jg P. PO 0 E . Cigars Cigarettes &I gI. a Weighing not Weighing not - Year Weighing more Weighing more more than 3 - more than 3 than 3 pounds than 3 pounds pounds per pounds per 2 per thousand per thousand thousand z':' thousand ... Number Epi X A Number Number Number 0 123,339, 710 26,870, 442 323, 583, 887,771 0 5,198,679,049 332,164,669,733 0 1944 5, 274, 674, 590 98, 167, 030 82, 415, 955 1945 1,657,900 350,038,092, 948 O 0 5, 617,690, 668 92, 261,850 eee 1946 79, 689, 570 536,870 369, 682,768,875 5,487, 656, 171 641,250 386,825,746.052 1947 6, 645, 104,476 89,134, 180 O 1948 E. The quantities given are unstemmed equivalent of all kinds of tobacco used. Stemmed leaf and scraps, la 5 g etc., used in manufacturing have been converted to unstemmed equivalent at the ratio of 3 pounds stemmed, O 5§. §g g§g - etc., to 4 pounds unstemmed. SIP Does not include tobeceo used In bonded manufacturing warehouses. a;a2.2§ a, Cisssi Nose.-Compiled from statements of aecoimts 'Prepared from manufacturers' inventories and monthly returns filed under the United States internal revenue laws. For cigars produced in bonded manufacturing Si§§gif 1-1 Wgg " warehouses and removed for domestic consumption, see table 15. X ggggg i'agN18

140 REPORT OF COMMISSIONER OF INTERNAL REVENUE REPORT OF COMMISSIONER OF INTERNAL REVENUE 00' 141 MU.7,2ag 8 csisas,asamisgss 2561 00 c; • •-.337; l .4 . •.4 " • .4 el r-2 4.4 zj TABLE

1 ta O 20.-Exportation in bond of manufactured tobacco, snuff , cigars, and cigarettes, ion f to t etc., year ended June 30, 1949, by collection districts 1 t o 00'

0 duc

1 588:e4E.3EPRAVs cen ,161 ro 001 r

FiE2S22?-' 8 p 44,4 ',-;c1 ' •-444cif.3.4 Manufactured tobaccp and snuff Cigarettes weighing not more than 3

sd Pe pounds per thousand 2 District

con Removed z (—) Delivered .10 0131 • ililMikiCiRI for ex- Exported to export Removed for Delivered 0 flic portation warehouses exportation Exported to export eseata .ngt.IiglaEn1 warehouse t.1 3 to 38

.1011 EP°..,nnn - el ...

t ounds a Pounds z 1 First California Pounds Number p 11 12rI 42 "1 lifornia 10,012 10,254 Number Number ef ion 1, 677, 641,800 t First Illinois 1, 757,131,800 41 -31 19,880 20,110 tucky 140,815 149,531 duc KeFirnt M issouri 1,398, 919,360 1, 424, 122, 360 o 1, 681,524 1, 970, 867 40,00 r ERZ151:72 .1g5P. 476 Fifth New Jersey 358, 690, 640 377, 221,440 8 p L44464NoWgv. c:ict First New York 419,034, 920 427, 003,920 361 7, 200 4,176 ar 104, Second New York 364, 294, 300 369, 131,300 a 143 K 643 478, 00 0 ig .far Third New York 5, 537,860 5, 476, 290

c 400 O 645, Fourteenth New York 106, 537,860 112, 787, 860 te

5, North 33, 562,600 a ri• rth Carolina 33, 662, 600 275, 293 273, 695 11, 891, 595, 300 L First Ohio 02 79, 164 75,979 11, 718, 527, 300 48, 630, WI reg ILT W Tenth Ohio -4 135 135 ,giElln E§Win-ggAE First Pennsylvania 96, 685 Agg 97,995 •ag4.... Virginia 4 1,856,573,600 1, 731, 243, 800 4 2,657,819 2, 744, 769 15, 591, 028, 260 45503gangi West Virginia 7,950 7,370 16, 717, 280, 220 34, 810,00( Incint4 o an na yaiii:114 Total co 4,976, 849 5,383,924 4 33, 502, 174, 840 e.; 34, 673,488, 600 83, 756,0E 6. g g - ▪ (—)

U 2 egg ST n I I I 10 01110 .. 001 0m,con Cigars weighing more gin Perique tobacco, scraps, - than 3 pounds es III 5 per pri P4 cuttings, clippings, Cigarette paper books o aame thousand siftings, etc.

4 District gg 014 11 turers c 1 p Removed 0 Rd fa Removed .20.00.04 20 g for ex- Exported 4 Removed for co for ex- Exported portation exportation Exported MIR portation z r.E tt

a f manu N ▪ p o Number Number Pounds ! First California 30,000 Pounds Number Number

ber 30,000 g ° ow% Sixth California 5, 400 8, 400

ie tiF. P.2 2 061 AFJ.EA.E.127RRS Donneeticut Florida 510, 400 z 0 0 Num 2,857,228 2, 572, 228 56 530, 240 ig in a. •ndiana 1, 512, 000 56 .ouislana 1, 338, 000 76,000 55,000 12,584

in ilassachusetts 31,500 12, 584 Pew Hamps hire 131300, 31,300 140,300 470,430 1, 484, 1919 0 0 First New Jersey 344, 100 297, 700 Nth New Jersey 1,020,350 E 1,027,050 11,052 7,157 First New York 2,000 2, 000 91 a Iecond New York 25, 500 37,500 88, 872 93,307 hird New York 66,000 72, 000 10,800 10, 800 O 'ourteenth New York at torth Carolina 'enth Ohio 29, 482, 240 1,657,400 1,260,400 44, 060 27, 316, 240 O Rat Pennsylvania 15, 849,350 44, 060 'welfth Pennsylvania_ 14,493,250 812, 018 812, 016 5, 603, 800 5, 894, 300 10, 871 -4 outh Carolina 868,550 10,1371 1ennessee 892,550 62,000 50,000 171,880 171,880

irginia I 3,005, 450 2, 941, 950 ars Total 33,145, 923 ig 31, 144, 128 1,151, 191 1,151,731 30,473,870 29,341,470 0 f c t o u tobacco and snuff, 63,001,280 smallory, cigarettes, or destroyed and after 93,000 removal large cigars.and prior to exportation: 2,365 pounds of tp Cigarettes weighing more than 3 pounds per 3 Cigarette thousand: 201,500 removed for exportation, 201,5

Ou 00 ighing not more than 3 pounds per thousand, 43,000 removed for exportation. exported. 1,067,050;Exported: class Class 0, 1,391,325 A, 700; classcigars. B, 24,503; class C, 3,473,650; class D, 2,064,050; class E, 23,122,853; class F, R 0 000 000 000 IGA 000 000 000 000 000 0, 000 000, 000, 000, F C 000 500, 000, 000, 00 000, 20, 40, 000

000, 2, 4, 10, 3, 5, 7, l 000 1, to

500, to to ta 000, 250, 000 to 000 To 40, r 000 to 000 to 000 000 to 000 to 000

00 to MBER O 000 to 0, 0, 0 de 000, 000, 500, 000, 000, 000, 00 00 Un 250, 500, 1, 2, 3, 4, 5, 7, 10, 20, Over NU

142 REPORT OF COMMISSIONER OF INTERNAL REVENUE REPORT OF COMMISSIONER OF INTERNAL REVENUE 143 TABLE 21.-Withdrawals of manufactured tobacco, snuff, cigars, and cigarettes from bonded internal revenue tobacco export warehouses I for export, year ended June 30, 1 949

Withdrawn Tax-paid or Class of product from ware- houses during Exported returned to year factory

Tobacco and snuff pounds 24 24 Large cigars number Small cigarettes 80, 621, 300 90,009. 900 150,000

There were 7 such warehouses in operation at the close of the year. TABLE 22.-Withdrawals of manufactured obacco, snuff, cigars, and cigarettes from factory in bond, for shipment or delivery as sea stores, year ended June 30, 1949

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

Tobacco and snuff pounds 173, 750 173.380 2, 426 128 Small cigars number 6.000 6,000 Large cigars' do__ 8, 901, 050 8, 671, 050 10,200 Small cigarettes do _ 4, 685, 415, 500 4, 965, 058, 540 41, 572, 000 3, 874, 840

Class C, 457,500, class D, 78,700; class E, 8,193,600; class F, 129,750; class G, 41,500 cigars. TABLE 23.-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 SO, 1949 ro Delivered Withdrawn Tax-paid or Class of product from ware- during returned to houses To vessels for factory' yare I sea stores For export

Tobacco and snuff pounds 192.928 190, 052 15, 839 644 0 Small cigars number__ 16.000 16, 000 Large cigars do._ 8, 805, 025 9, 403. 673 45,050 53,588 Small cigarettes do __ . 4, 839, 350, 800 4.674, 564, 600 362, 279.040 2, 889, 840

W. 2 There were 41 bonded internal revenue, 4 Army, and 12 Navy warehouses in operation at the close of the year. V In addition, 5,340,000 cigarettes were withdrawn for tax-exempt purposes other than sea stores use. Figures include tobacco, cigars, and cigarettes destroyed at the warehouses. ti TABLE 24.-Domestic and imported cigarette papers and tubes withdrawn tax-free and tax-paid, fiscal years 1948 and 1 949 5..

Cigarette papers

Tax-freeTaka packages, books, or sets Taa-paid packages, books, or a Fiscal year bk r t set s I rt3 Domestic Imported Domestic Imported es es Number Number Number Number 1949 569, 789, 472 59, 421, 496 235, 000 4 1948 530, 674, 424 64,834, 734 80,224

Cigarette tubes 14 Fiscal year Tax free Tax-paid 10 a. 1949 9, 419,300 5, 699, 900 1948 3, 898, 500 8, &21, 650 144 REPORT OF COMMISSIONER OF INTERNAL REVENUE REPORT OF COMMISSIONER OF INTERNAL REVENUE i 55 "ERE5 HE F1 5111EE 0 MIRE - - 145 TABLE 27.- I 4 44 44464 WI AI 415gg 4 00144 Quasi tobacco manufacturers classified: Number of factories operated 4 g gg t: g.s- es ,-,ss ilt„; and tobacco material handled, calendar year 1948 ''' $$ Number of facto- On baud Jan. 1, 1948 Class I ries in 8 SE 1 R business IV.' e Jan. 1, Dip stem Stemmed Scraps E°l Erg.. cZ 1948 med In process Stems Sittings 4 a R E i ilg, Pounds Pounds Pounds 1 7 Pounds Pounds Pounds ge8 . 2 155,010 , rig 4 so 16, 957 12,276 528,172 24 688, 591 37,983 4 38 2,312, 880 1, 491 34, 268 2,599,429 4,847,503 416, 121 a 5 55 5E E5 55E FR 5515E 5 155N5i 2 1,934 161, 523 10 10, 156 107, 118 9, 762 641 7 24 249,494 738.338 2,915, 518 6,926,313 E 54 7,81 61 VI g4 666gg 4 14g444 8 443,315 318,493 1,996, 176 2,905,634 g s: g, , rzet gt-: i 7:T5 tea 19 37,316 236,754 14,177 1, 900 n .E: ,E, 9 3 20 277 52 760 4, 739 Total 177 2,820, 644 602, 068 5 1AR F RE E E5R 50 MEE 5 4 6, 116, 858 8,599,353 3, 360,317 7,129, 751 i :44 4g5a g 4,V 44 l'g66 6 $ Opened Received , e es; ss- N -, .. ., g g 1 2 76,867 221,608 56,136 16, 028 1 1 3 1,840, 092 149, 260 170,193 E 5 4 12,231 1, 302 1,897, 995 .5. g 24, 572, 640 128,529 11, 126,898 29,068 5 651 2,819,984 15, 018, 148 473,933 I 6 129, 449 1, 717, 984 743, 368 58, 370 4, 570, 910 13, 766 7 3, 254, 856 221, 905, 737 25,689, 812 8 726,325 3, 930, N2 2, 268, 265 os e. 169, 830 233,390 202,405 a 1 a § g i 1 9 3 19,872 226, 313 , 5,020 i 4 . 6,836 12,046 1,000 Total 16 28, 736, 511 1,326, 757 23,721,864 5,095,085 239,036, 565 26,580, 177 4e8 c' 0 .■ 4 RE 00 2 •t, Closed ^ gft -, Removed ' i 0 H. to I. 1. fl■ 2 268, 011 10 12, 279 3 2J 168 1,965,397 111,417 2 2, 119,496 316, 952 4 2r 5R E R1 i HE EE EIFM1 R R 4 3 259,697 32,401 5 100 22, 665, 824 15, 26, 325 8,374, 026 793, 924 g ?A - - g 0 246, 483 4 1 ri a 5- 0.0 g gegl% 4 g 6 1 280,415 1,432, 102 87, 911 a , e 144, 677 25, 423 n .. : 27'''' gg F.,- 7 290,042 4, 616 1, 572, 482 4 2, 124, 590 828,165 223, 150,539 26, 423,084 8 4 4, 680,348 2,203, 900 214,317 148,181 • a 10"°%-"ASHZF°2".?"'RH^ e12'2"Sri'n 3 24,094 -0 3 306, 167 1 20 4 1ggI g 277 1,447 7,087 15, 528 Total ■ 27 2,686, 628 1, 190, 593 0 t...floogroorsoo0002....or (0.0 02..rE0ca Iv .0 33,664, 165 17, 727, 727 233, 297, 923 27, 827, 876 1 .-r!:■ 5 In busi- ness Ian. On band Jan. 1, 1949 . 10.00.4§00NO20000000r.0100-■ 00.-poRR0§0.. 1, 1949

I i 1 a 76,867 108,425 2 45 6, 815 'O^g34ZUr"''''''riro"0"1 5,E -ra 3 388, 783 30,150 'W-4 23 354,350 1, 121 4 35 2,594,759 igg. 5 9,145 1, 207, 559 3, 955, 003 1, 23, 542 .._ 3 260 153,494 6 10 6,194 3,341 77, 538 6, 800 7 163, 654 3, 878, 328 10,293, 945 24 1, 566, 706 217,856 1, 215, 185 5,849, 179 8 19 2, 969, 999 30, 712 50, 294 9 363,056 2 3, 269 1, 321 '. 1 851 1,000 V Total 166 4,251,340 590,057 3, 441, 485 10,807,992 11, 706, 738 6,061, 888 Loss 24, 619,187 AI Gain 148,175 ... - 4 7, 266, 928 14, 841, 281 2, 607, 779 179,836 , =ATON n 4 '52.4..A i'6 Description of c assification: Class 1, dealers In scrap tobacco; class 3, dealers In imported and domesticimported scrap scrap tobacco; tobacco; class class 2, dealers in domestic 1 tobacco; class 4, producers of scrap filler :=.1 .1 310113 dre,VgNi 11421,4 1.All 5, reclaiming scraps (ram stems; class 6, manufacturers of fertilizer, nsecticide, nicotine, etc.; 00' . 2 1, .6ga„t2„fl .a 2 z zv,flac g slp.., End 4 .elass 7, stora ge, scraps, etc.; class 8, growers of, and dealers in perique tobacco; class 9, miscellaneous. z Grown. I g1 g 1 gi"HingSr 2 getIP;g 1 ratrUlodigH 4 Transferred to regbtries. Used fn production of nicotine, extract, and fertilizer. r.E5CZ 024W4XX2c.alwEr2E.Z2E.550r.IFFoSE44fl lExpute d. 146 REPORT OF COMMISSIONER OF INTERNAL REVENUE REPORT OF COMMISSIONER OF INTERNAL REVENUE 147 in.... - .. an 1 g§.2-- z 9L8 989 399 PBER'niEP 0r13 g(arrpe JO .020q) von RE i V,j--4'ggE 41=-1 EPg E -b0 ts &Kew .2.nuodruai, .71 ...... vs 'anus mu ml rs 401 11010 01 2201,90 1091011 uo 89 me 6 I liq

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me 1 t- I0 33 OT ZO

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" II c I-- wag Islimbu 910a e0 I 4§a " RS?. Mm min& M1smilml, DIM a .. .. 99 twat co . 1 488 'saws. UT sionlaP pima

. . orn tionbn 4191= 1002 n. . . . c..00 NMN 01 9009013 oMNINIM . c „ MIS CI I SOUtat lli SIOMP eiggOINAt IAL TAXES 004 'alma 20 x, N og wn 38 31 MOMS MYspnpoad 029 WCVI''.eq:r og g gg,tasmniEl- 44R g

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UBJECT TO S S its n cc &" R IR" g I 4 4 ir 02'Zi3 salol . = .92- 41 19 9.001201) 401 01 119$21 9L d sp ZL 889 ' gAMEI Lut ONS Z ' I HAULM . -It§ ille R ARRAIEE EIS Man

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REPORT OF COMMISSIONER OF INTERNAL REVENUE

149 REPORT OF COMMISSIONER OF INTERNAL REVENUE . .... TI 148 . VI IS ST 01 151rA"1 :,2.1°.891 9 69 00 OC SE Ott 191 TT

Ot 61 IS ....n; 7 III °T132:1 3 g e - 6 2za 'Mug& 2 am 0

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,WiYA Arkansas 104,076 47,588 If 8 First California 2,976 203,880 163,858 5,640 gmgdar at ' 091 Georgia 164,618 11,392,619 11,281,846 6,570 bib SZ WiEStp First Illinois 427,607 37, 075,673 35,186,842 1,481,347 11,084 ifilA 0

1 Indiana 119,138 9,216, 128 8,953, 688 266,512 giiIV Kansas 95,362 5,084, 582 4,071,323 741,544 23 , Louisiana ..___ ...... 600,336 7,752 2 0 49 819 9L1 Maryland 74,250 7,241,037 6,720,148 405,263 9' First Missouri 13,838 2,140, 820 2, 143, 956 HEIM u MAg 1 Sixth Missouri 20, 563 3,003,423 2, 977,854 14 4 Nebraska 48,612 1,816, 740 738, 600 1,094,352 Fifth-New jersey 166,924 6,418,846 5, 239, 161 949,988 pygas mlaa 4 First Ohio 135,684 7,446,488 3, 677, 816 3,528,082 Tenth Ohio 70,290 3,628,658 2,483, 760 1,125,774 South Carolina 17,400 7,890.341 7,762,164 83,213 ir Tennessee. 157,944 149, 748 24 p 0 402 First Tens 7,705 192,181 189,162 287 l Oh Second Tema 51,561 21,999,614 20,883,988 265,400 Total 1,457,230 126,678,639 114,832,789 9,938,115 1,374,844 17,948 1,970,173

ms Me ao ear so TABLE qz* 30.-Production and withdrawals of uncolored oleomargarine, year ended ir ELIO f SJO l June 30, 1949, by collection districts

JU VOd IOO iona

t JIMO ti With- n Na With- On hand drawn Lost or On hand N 1 District Withdrawn drawn hue of tax r July 1, Produced tax-paid for for use of ordyedde- luneiffe 3q 1948 export U nited ... i Stesta

i Ott Pounds Pounds Pounds Pounds Pounds Pounds Pounds l e Alabama 19,955 1,423, 728 1,929,314 14,369 Arkansas 163,524 83,976 79,548 5 First California 389,928 65,885,384 85,939, 856 24 315, 432 e Sixth California 831,168 65,647,706 85,841, 894 836,980 uen eig Georgia 109,712 18, 966,884 18,816,088 48,858 13,808 658 199,588 0.4 First Illinois_ 2,310.198 160,073,814 100, 370, 201 fa 980 12,888 109,767 L835, 178 diM Indiana 1,921,614 66, 159, 934 87, 714.032 6,060 362,466 S a Kansas 350, 772 39, 289, 706 39,418,566 328 221, 584 PI Maryland 113,388 25, 420 720 25,268,378 34,600 93,080 213,150 Michigan_ 1,023, 232 26,358,824 27,194, 768 66.278 121,012 12 First Missouri 44,440 10,860,674 10,892.844 12,270 n Sixth Missouri 16,639 3,221, 820 8,202,027 36,332 Nebraska 118, 048 15, 985,254 15,915,694 30,000 5,376 152,232 Fifth New Jersey 448, 712 89,082, 539 88,991,635 29,058 15,600 83,989 430,984 Wia First Ohio 1, 084, 676 54,620,627 65,362,637 5,916 346,750 a 2 Tenth Ohio 307,854 13,841, 940 14,105, 378 600 43,818 Eleventh Ohio 519,310 27,107,332 27,074,522 1, OM 551,112

South Carolina 21,216 5,407, 008 5,383,908 44,318 Tennessee 488,920 19,503,306 19, 912, 793 98 57,338 First Texas 979 125,894 121,098 1,391 4,384 Second Texas 188,210 92, 809,345 42,650,932 944,623 tes Total 10, 284,871 731,985,937 735,370,539 196,794 141,602 188,531 6,323,442 Sta

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REPORT OF COMMISSIONER OF INTERNAL REVENUE 157 156 REPORT OF COMMISSIONER OF INTERNAL REVENUE TABLE 33. - Materials. used in the manufacture of oleomargarine (colored and TABLE 31, - Production and withdrawals of oleomargarine (colored and uncolored), uncolored), year ended June 30, 1949 year ended June 30, 1949, by months Pounds Pounds Butter flavor 58,014 Oleo stearine 3, 057, 775 Coconut oil 890, 314 Oleo stock 496,115 Colored Color 86,658 Peanut oil 4,008,747 Corn oil 1, 539, 264 Salt 26, 298, 921 Cottonseed oil 135, 250, 470 Soda (benzoate of) 596,176 Withdrawn Month Derivative of glycerine 1, 269,657 Sodium sulpho acetate 53, 970 Withdrawn Withdrawn free of tax Lost'or Dlacetyl 3,477 Soya bean oil 241, 543.635 Produced tax-paid for export for use of destroyed Lecithin 1,457,951 Soya bean flakes 20, 297 United Milk 144,400,995 Vitamin concentrate 167,889 States Monostearine 724,945 Neutral lard 4,118, 804 TotaL 872, &40,1>S5 Oleo oil 3.507, 368 1948 Pounds Pounds Pounds Pound July 8,487,305 7,414,759 999,650 104,224 TABLE 34.- Production and withdrawals of renovated butter, year ended June 30; August 7,780,204 6,640,029 1,071, 536 93,292 1949, by collection districts September 9,3(12,616 7,693, 585 1,105,216 104, 470 October 9,349,681 8,640,078 905, 519 120,202 November 10,264,900 9,399,449 912,972 137,274 December 10,358,331 9,304,930 627,706 105,108 On band District July 1, Produced Withdrawn Lost or On band tax-paid destroyed 1949 1948 June 20, 1949 January 11,775, 768 10, 973,987 886, 252 February 12,813,011 11,295,510 936, 738 March 12,750, 611 11,863,316 876, 490 Pounds Pounds Pounds Pounds Pounds April 11,095,055 10,409,087 447,656 Alabama 25, 745 944, 075 950,144 19, 676 May 10,480, 674 10,061,823 632,296 Georgia 1,017 383,134 366,121 19030 June 12,158,483 11,136, 736 536,084 Total 26,762 1,327, 209 1,316,266 37,706 Total 126,676,639 114,832, 789 9,938,115 1,374, 844 17,903 TABLE 35.-Summary of production and tax-paid withdrawals of renovated butter, Uncolored years ended June 30, 1940 to 1949 1948 July 44,083,874 48,458,917 AtIgaSt 65, 558,479 66,220, 70 9 . With- 68,163,374 Year Withdrawn September 71,086, 981 Produced tax- Year Produced drawn October 70,376, 615 69, 924, 545 tax-paid November 62,148,042 63, a 626 December 63,117,436 62, 893,026 Pounds Pounds Parade Pound( 1949 1940 2,706,852 2,735,433 1945 3, 173, 629 3, 169, 298 January 69,680, 503 69,749,910 1941 2,783, 509 2,781,345 1946 1, 751, 116 1, 737, 289 FebrclarY 69,248,131 63,736,665 1942 3,480, 555 3,466,709 1947 1, 017,115 1,068, 777 March 67, 369, 350 67, 120,617 1943 3, 442, 368 3,433,385 1948 1, 246, 525 1,252,693 April 54, 570,097 54,313,235 1944 3,144,299 3, 121, 526 1949 1,327, 209 1,316,265 May 19,214,823 50,357, 648 June 51, 451, 606 50, 833,267 731, 935, 937 735,370, 539 196,794 141,502 IAA an TABLE 36.-Production, importation and withdrawals of playing cards, by months, Total year ended June 30, 1949

TABLE 32.-Summary of production and withdrawals of oleomargarine (colored and With- With- With- uncolored), years ended June 30, 1940 to 1949 Month drawn free o f ta x Produced drawn for us e of or de- Imported tax-paid for export United strayed Colored Uncolored States

With- On hand July 1, 1948 19,885,569 Withdrawn With- drawn Year tax-free 1948 Withdrawn Produced Withdrawn drawn tax-free Produced tax-paid drawn for use of ced tax-paid for ex- for use of July 3,005,510 3,214,385 108,882 21,492 for export United port United August 5,067,498 4,631, 762 575,379 22, 752 States States September 5,125,979 6,170,144 454,648 17,100 10 October 5, 042, 043 5.915,591 714, 790

6,621 '' November 6,112, 622 5,464,871 604, 763 46,656 10 S

Pounds Pounds Pounds Pounds Pounds Pounds Pounds Pounds December 6,021, 731 5,655, 471 590,048 28,784 649,489 896,387 301,857, 570 301, 593, 496 1,830 1,859, 731 302,149 1949 4,489,410 426,866 1, 864, 674 2,075, 586 339,445, 528 340, 550, 313 1,320 7,808 X 14,827,836 668,864 2,938,898 10,954,725 353,976, 883 353,648,493 January 5,182, 782 4,842, 494 476,560 9,320 116,969, 840 2,103,669 1,558,097 110,301, 641 431, 498, 452 429, 468, 704 10,020 86,914 February 5,194,164 5,363, 099 639,876 33,984 135,002,918 10,397,872 826,376 125,902,258 474,022,820 473, 441, 857 114,304 March 6,319,175 5,893, 724 607,194 18,794 72,686,114 21,242, 752 2,023, 418 48,439,797 540,313,361 533,73, 648 7,174, 464 1, 645,190 April 5,841, 332 4,059,998 766,609 16, 704 66, 410,333 17,918,205 8,221, 755 41, 895,774 484,792,191 481,492,985 3,285,362 699, 930 May 5,552, 767 3, 523, 405 609, 914 20,952 65, 959, 752 21,126,381 8,080,008 36,757,858 576, 446,011 571,082, 948 572,970 547,200 June 5, 237 , 883 3, 954,818 441,578 23,472

: 75, 242, 607 50,713, 532 19,766,635 3,784, 869 815,090, 586 810,464,083 37,118 126, 676,639 111, 832,789 9,938,115 1,374,844 731, 935, 937 735,370,539 196,791 141, 502 Total 63, 703, 489 57, 719, 765 6,590,241 275, 634 20 128 680,125,080 239,731,079 55, 867,465 382,383,738 5,019,379,345 5,030,863,066 11,242, 760 3, 279,966 On hand June 30, 1949 19, 033,398 158 REPORT OF COMMISSIONER OF INTERNAL REVENUE REPORT OF COMMISSIONER OF INTERNAL REVENUE 159 ALCOHOL, DISTILLED SPIRITS, BEER, WINES, ETC. DEFINITIONS OP REPORTING UNITS I. PLANTS AND PERMITTEES, AND BASIC PERMITS UNDER THE FEDERAL ALCOHOL The reporting units are proof gallons, wine gallons, tax gallons, barrels, half ADMINISTRATION ACT pints, and 100-grain gallons. TABLE 37.-Plants and permittees qualified to engage in the production, distribution, The tax on distilled spirits is levied and collected at the prescribed legal rate on or use of alcohol and alcoholic liquors as of June 30, 1949 each proof gallon, or wine gallon when below proof, and a proportionate tax at • a like rate on all fractional parts of such proof or wine gallon. (Sec. 2800, I. R. C.) Hind of establishment Number In all sales of distilled spirits a proof gallon is held to be a gallon of proof spirits. Fruit distilleries 135 Proof spirits are held to be that alcoholic liquor which contains one-half of its Registered distilleries 132 volume of alcohol of a specific gravity of seven thousand nine hundred and thirty- Internal revenue bonded warehouses 248 nine ten-thousandths (0.7939) at 60° F. (Sec. 2809, I. R. C.) Distillery denaturing bonded warehouses 2 Proof gallon: A standard proof gallon is a wine gallon of an alcoholic mixture Tax-paid bottling houses 61 containing 50 percent of ethyl alcohol by volume. In a wine gallon containing Rectifying plants 199 more or less than 50 percent of ethyl alcohol by volume, the number of proof Industrial alcohol plants 55 gallons is proportionately greater or smaller than 1 proof gallon. (Theproof Industrial alcohol bonded warehouses 76 of spirits is twice the percent of the content, by volume, of ethyl alcohol. Accord- Industrial alcohol denaturing plants 43 ingly the standard proof gallon is 100 proof.) Dealers in specially denatured alcohol and rum 33 Standard United States gallon: A standard United States gallon contains Users of specially denatured alcohol and rum 4, 310 231 cubic inches. Reprocessors, rebottlers, etc., of specially denatured alcohol articles 2, 088 Wine gallon: A wine gallon is a standard United States gallon. Users of tax-free alcohol 7, 307 Tax gallon: A tax gallon for spirits of 100 proof or over is equivalent to the Breweries 412 proof gallon. For spirits of less than 100 proof the tax gallon is equivalent to Bonded wineries 763 the wine gallon. Bonded wine storerooms sa Barrel: A barrel represents 31 wine gallons. Bonded field warehouses 36 Half pint: The half-pint reporting unit is the taxable unit for reporting spar- Vinegar factories using vaporizing process 9 kling wines and certain cordials and liqueurs. The tax is payable on each one- Importers 1,329 half pint or fraction thereof in each bottle or other container. Wholesale liquor dealers 7,669 100-grain gallon: A wine gallon of vinegar which contains 10 percent acetic Wholesale malt liquor dealers 18,360 acid by weight is equivalent to one 100-grain gallon. In a wine gallon of vinegar Retail liquor dealers 294,147 which contains more or less than 10 percent acetic acid by weight, the number of Retail malt liquor dealers 163,331 100-grain gallons is proportionately greater or smaller than one. The 100-grain Manufacturers of nonbeverage products (drawback) 1, 121 gallon is equivalent to the 10 percent gallon. Bottle manufacturers 72 Carriers 430 II. ETHYL ALCOHOL (Relates to ethyl alcohol produced by industrial alcohol plants] TABLE 38.-Basic perm is under the Federal Alcohol Administration Ad, fiscal year 1949 TABLE 39.-Materials: I Used at industrial alcohol plants in production of untie- natured ethyl alcohol, by kinds and by months, fiscal year 1949 Wine

Ware- Pro' Wine 41 Grain and grain products DR- hoes- Bee- ducers build Whole- Month tillers hag and lifters and - ., - salers Potatoell bottling blend. cr" Corn Malt Sorghum ere Wheat grain Rye Total

I

Ineflect JulY 1. 1948- 422 77 18,912 Pounds Pounds Pounds Pounds Pounds July Pounds Pounds Issued 45 21 3,529 410,153 2,152, 200 791 3,053,325 7,616, 469 93, 724,298 Terminated 73 15 3,574 August 6, 170, 139 2, 789, 569 2,471 8,056, 890 17,014,069 September 4,420,038 4,669,083 132,613,112 Revoked m 17 11,480 10, 289,876 19, 390,477 October 6, 468,423 4,375,847 280, 956, 997 Annulled F1N a 10,728 11,389, 159 22, 243, 957 250,014, 128 8 November 6,822,556 3,814,286 11,120 Voluntarily surrendered 56 .0 10 CV 2,078 7,007, 524 17,196 17,672, 722 December 2,165, 721 1,651, 008 215,542,023 Automatically terminated 17 7 Ui 1,474 9, 705 6,995,350 10, 812, 284 188,502,187 In effect June 30. 1949 894 83 18, 858 January 1,802, 564 513,414 5,328, 375 7,644,353 February 1, 660,799 178, 224 1,441,691 Amended 32 11 m 2, 074 1,300, 070 March 7,824,172 3,136,093 4,024,486 Suspended 7 691,005 36,040 1,339, 700 9,890, 917 12,819,525

6,673, 376 Reinstated after ruspenslon_ 7 e 720,180 382,910 1,327,940 9,103, 908 17,312,875 may 5,998, 974 539, 325 924,398 57,470 In suspension Jane 30, 1999 June 7, 520,167 6,348, 571 500,659 82,804 6,932,034 Total B6,756,986 22, 536,600 1 1, 472, 447 58,145, 679 17, 236 138, 977,448 1, 126, 1151, GIS

See footnotes at end of table.

160 REPORT OF COMMISSIONER OF INTERNAL REVENUE REPORT OF COMMISSIONER OF INTERNAL REVENUE 161 TABLE 39.-Materials: I Used at industrial alcohol plants in production of unde- TABLE 411 - Materials: natured ethyl alcohol, by kinds and by months, fiscal year 1949-Continued 1 Used at industrial alcohol plants in production of natured ethyl alcohol, by kinds and by States, fiscal uncle- year 1949-Continued Products Ethylene molasses Ethyl sul- Sulphite... used in re- Other materials Month gas phate Products liqUrn° distillation State Ethylene Ethyl gas Molasses Sulphite used in sulphate liquors redistilla- Other materials, Proof tion Pounds Gallons Gallons Gallons gallons Gallons Pounds 10, 288, 043 19,885,600 1, 473,390 1,931, 096 358,133 July 10, 830,160 Proof August 10,875, 685 10, 071,470 23, 422, 000 2, 582,898 2, 578, 622 344, 539 Pounds Golan, Gallons 19, 512, 500 2, 517,961 2, 000, 449 438, 555 California Gallons gallons Gallons September 9,324,162 10, 761, 943 Florida 8, 451, NO Pounds 12,082, 891 23, 460, 600 2, 319, 945 1, 331, 765 418, 843 2 480, 421 October 1, 919, 672 10, 736, 568 Hawaii November 4,174, 601 10, 131, 638 12, 533, 273 21, 835, 800 1, 998, 674 1, 303, 592 308, 289 682,975 18, 240, 700 I, 557,738 1,378,493 238, 340 Idaho 6 2, 566, 254 December 4,082, 338 7, 754,632 14, 077,332 Illinois January 4, 560, 811 13,042,684 10, 639, 756 22, 513, 800 1,075, 170 1, 858,939 175, 300 5,405 +10,250 2, 559, 397 1, 848, 683 152, 540 Indiana 46,150 1 218, 262 FebillarY 3, 819. 690 12, 599,280 7,764, 073 18, 950.000 Iowa 16, 717,290 13, 150, 196 10,328,670 20,640,900 3,105, 664 1, 943, 818 156, 910 3,027, 604 March 4,395, 730 Kansas 1,119,202 April 4, 715. 103 22, 889, 218 11,309. 836 15, 816, 800 2, 264,147 2.058, 004 206,150 1 16, 720 ° 250,138 1, 650, 152 2, 367, 280 191,120 Kentucky 14,231 May 4,647,829 18, 634, 815 10, 516,901 14, 248,400 Louisiana 11, 454, 598 11, 222,100 I, 878, 546 1, 818, 841 232,120 43, 587, 500 s 1, 284, 851 June 4,581,664 16, 762, 786 Maine 31, 567, 696 2,076,324 Maryland 93, 542 Total 38, 697, 438 156, 731, 884 131, 818,786 229, 549, 200 24,983, 682 a 22, 219, 382 8 3, 220, 839 10, 834, 303 188,440 Massachusetts 7, 200, 216 3,314,282 Michigan 32, 264 I For those plants in which ethyl alcoho is a byproduct of the butyl process, on y the estimated amounts Missouri 584, 891 8 7, 575, 739 New Jersey 24,292,103 6,648,953 of material allocable to ethyl alcohol have been included. New York 2,369,411 +2,772,013 Includes 1,916,992 pounds of wheat flour and 48,295 pounds of wheat bran. Ohio 1,449,100 ga, 817 Represents 15,139,890 gallons of whey, 2,566,254 gallons of pineapple juice, 1,269,885 gallons of cellulose 27,898 II 953 Pennsylvania 3,764,691 pulp and chemical mixtures, 920,913 gallons of crude alcohols mixtures, 919,216 gallons of apple pectin residue, Puerto Rico 57,317, 982 794,559 gallons of citrus waste concentrate, 156,204 gallons of a mixture of molasses and citrus waste concen- 3, 208, 734 4, 182, 218 893 Texas 36,897,428 58,824 trate, 232,982 gallons of hydrol, 8,523 gallons of fruit sirup, 5,893 gallons of alcoholic blending material, 4,110 Virginia 40,861,000 48, 005 gallons of grape wine, and 953 gallons of wheat sirup. Washington 17, 650 + 1,269,885 Represents 2,772,013 pounds of whey and 448,826 pounds of malt sirup. West Virginia 226 599,200 42, 672,930 Nora.-In addition to the materials reported above, the following were used at industrial alcohol plants Wisconsin 4,901,356 " 834,096 in the production of products other than ethyl alcohol: 56,351,136 pounds of corn, 154,749 pounds of malt, a 651, 563 1,384,618 pounds of sorghum grain, 94,764 pounds of rye (a total of 57,995,285 pounds of grain and grain prod- Total 36,897,438 156, 731,884 131,818,786 ucts), 1,389,854,663 pounds of potatoes, 170,368 pounds of soy bean meal and distiller's solubles, 13,652,330 229, 549, 200 24, 983, 682 22, 219, 382 3,220,839 gallons of molasses, 3,198,355 gallons of whey, 1,216,071 gallons of hydrol, and 1,163,786 gallons of other liquids. See footnote I, table 38 Used at industrial alcohol plants in production of unde- s Includes 1,416,992 pounds of wheat flour and 46,295 pounds of wheat bran. TABLE 40.-Materials: I Represents 356,204 gallons of a mixture of molasses natured ethyl alcohol, by kinds and by States, fiscal year 1949 waste concentrate 8,523 gallons of fruit sirup, and 4,110and citrus waste concentrate, I ,589 gallons of citrus I Citrus waste concentrate. gallons of grape wine, 5 Pineapple juice. Malt sirup. Grain and grain products Rydrol. Whey. State Potatoes Represents 6,727,737 gallons of whey and 919,216 gallons of apple pectin residue, Corn Malt Wheat Emthum Rye Total 77 Crude alcohols mixtures. grain II Wheat sirup, " Alcoholic blending material. Pounds Pounds Pounds Pounds Pounds Pounds Pounds " Cellulose pulp and chemical mixtures. California None-See note, table 39. Florida 968 968 1,663,500 o cis 9,887,307 26726 9,180 17,236 3, 934,429 ffnndd 28,038, 379 45, 864,955 0 a 19, 506,147 2, 564,134 5, 966, 098 27,049, 650 7,135, 690 1, 416,992 51,967, 295 87, 569, 627 tdan 476,835 63, 372, 300 isiana 426,835 Maine 32, 993,269 Maryland • 9, 583,762 Massachusetts Michigan Missouri New Jersey 84, 022, 200 New York 399,865 46,295 446, 160 Ohio 909, 451, 029 Pennsylvania.... 312 382 12, 038, 382 212, 286 12, 563, 050 Puerto Rico Texas Virginia Washington West Virginia_ Wisconsin 138, 977,448 1,128, 951, 015 Total 56, 755, 486 22, 586, 600 2 1, 472, 447 58,145, 679 17, 236

See footnotes at end of table.

REPORT OF COMMISSIONER OF INTERNAL REVENUE 163 162 REPORT OF COMMISSIONER OF INTERNAL REVENUE TABLE 42.-Summary: Production, withdrawals, and stocks of undenatured ethyl TABLE al.-Materials: Used at industrial alcohol plants in the production of alcohol,' by months, fiscal year 1949 undenatured ethyl alcohol, by kinds, and quantities of undenatured ethyl alcohol produced therefrom, fiscal year 1949 !Proof gallons]

Quantity used Ethyl alcohol produced Withdrawals

Kind of material Percent Month Production Tax-free Amount Unit Proof gallons of Tax-paid For dons- For use of the RMSVS . ilog 12i • turation United States 131,818.786 164, 769,128 Ethyl sulphate 127,390,161 Molasses 155, 282, 784 29,654,380 c` n Products used in redistillation 24,983,682 SSS2 July 23,833,354 2, 968, 986 22, 696,310 3 21,630, Ill SSISS Potatoes I 1,062,928,815 August 25, 746, 217 3, 431,889 26, 262, 873 ■ 36,697,938 15, 638.696 SSS SSSSS Ethylene gas 11,470,894 September 27,964, 702 3,808,604 28. 715, 780 Grain and grain products 1 138, 631, 288 a October 29, 820, il1.3 4, 701, 588 30,075,037 li

4,945,558 Sulphite liquors 229,549,200 November 33,603,279 5,114,050 29, 134, 170 Cellulose pulp, chemical and crude alcohols December 30, 795, 451 3,158, 649 29,338, 751 ai gn 00 mixtures: a2m January 26, 567, 028 2,943, 101 23, 660, 526 Crude alcohols mixtures 920, 913 } 1, an, 282 February 22, 376,111 3,183, 990 20,165, 292 gi Cellulose pulp and chemical mixtures 1, 269,886 0 March a 425, 789 2,944,017 27,834,377 dds r .em f 15,139,890 Noa } 713,797 April 36, 232, 294 2, 541,494

27, 026, 628 a Whey 1 2, 772,013 May 33,864,754 794,559 490,611 3,021,621 25, 769,940 Citrus waste concentrate ppgg June 31, 796,362 2, 566, 259 203, 480 3,039, 766 30, 692, 613 Pineapplejuice 110,707

232,982 c Hydro' 106,018 Total 851, 016, 361 90, 845, 719 3 321, 222, 197 644,889 Apple in residue 919,216 co 8,523 823 Fruit p 819 Grape wine 4,110 ««

woa Withdrawals-Continued Other mixtures: lags Potatoes 69, 022,2W Molasses and citrus waste concentrate 1,806,304 Malt sirup 948, 826 2, 651, M6 Tax-free-Cont.:mod

946,160 c i Grain and grain productsat to R Stocks end Alcoholic blending 5,893 i Month 953 For hohot of month Wheat sirup pital, scion Grand total '375,999,046 100.00 tide, and Other Total Total educational use I Additional amounts used in combination with other materials Included under "other mixtures. Produced from mashes consisting principally of potatoes, but including small quantities of grains and July 211,848 8,399 72 other material. 875,827 25, 832,912 38,487,093 a Less than 0.01 percent. August 208, 020 17,862 26, 556, 482 23, 988, 351 36, 097, 561 production-that is, the gross production minus products used in September 208,345 16, 770 28, 966, 678 32, 775,182 31 133.049 4 Represents gross production. Net -was 351,015,364 proof gallons. October 205,236 11,325 30,339, 578 35, 036,146 29, 591, 833 gedisaation November 203, 731 9, 699 29,379,810 34, 493, 860 31,998.745 December 211, 827 11,499 29. 892,600 '32 750, 658 34, 047, 339 January 225147 3,948 23, 987, 693 26,930, 799 37,153, 843 February 199,630 13,325 20,481, 527 23,665, 617 37, 727,443 March 209,211 27, 825 28, 135,392 31,079, 409 37, 791,102 April 211,045 6,050 27,365,585 29, 907,079 93,842,483 May 212,010 13,836 26,029, 562 29, 051,183 49,942,370 June 239, 787 18, 295 30,8601063 33,809,829 51,015, 381 Total 2, 545,837 4 152,183 329, 565,106 365, 410,820 51,015,381

I Represents production at industrial alcohol plants, withdrawals from industrial &who plants and industrial alcohol bonded warehouses, and stocks a industrial alcohol bonded warehouses and denaturing plants. Withdrawals and stocks include imported alcohol mingled with domestic alcohol. For with- drawals of imported alcoho l, see tableta 95. I In addition to tho domestic ethyl alcohol shown, 1,712,786 proof gallons of rum (table 84) were used for denaturation st distillery denaturing bonded warehouses and 1,596,125 proof gallons of imported ethyl alcohol (table 45) were withdrawn for denaturation. , 3 Represents 35,531 proof gallons withdrawn for export and 54.815 proof gallons for beverage PurPO Sac 59,170 proof gallons tor medicinal use, and 2,669 proof gallons for industrial use in Puerto Rico. 164 REPORT OF COMMISSIONER OF INTERNAL REVENUE REPORT OF COMMISSIONER OF INTERNAL REVENUE 165

TABLE 43.-Summary: Production, withdrawals, losses, and stocks on hand June TABLE 43.-Summary: Production, withdrawals, losses, and stocks on hand June 30, of undenatured ethyl alcohol,' and premises operated, by States, fiscal year 1948 30, of undenatured ethyl alcohol,' and premises operated, by States, fiscal year 1949-Continued [Proof gallons] [Proof gallons]

Withdrawals Withdrawals-Continued Number of premises operated / Tax-free Losses in State TTax-free- industrial State Production Continued alcohol Stocks June 30 Industrial Tax-paid For hospital, Grand total bonded Industrial alcohol For de- For use of the scientific, Ti----w warehouses alcohol bonded maturation United States and educa- Other, Total plants ware- tional use houses

California 1-

A 309, 854 6, 911, 143 . 21,468 985,907 5 .. California 6, 154, 066 601, 289 6,112, 710 19,798 177, 337 9 Colorado 3,013 4, 067 4 3,009 7,080 3 3,780 Colorado Florida .- Florida 370, 654 617 82,268 1 1. Hawaii 197, 712 198,105 1, 286 345, 986 Hawaii 203, 980 393 194,163 3, 549 Idaho 20,324 1 20,324 20,324 20,324 1 Idaho Illinois 10, 685,341 12,407, 831 b 1, 727,490 10, 331, 600 53.060 2,82A, 691 2 . Illinois 746, 092 11, 770 339, 887 2, 084 Indiana 29, 026, 702 35, 150, 121 1- 22, 520, 350 6, 123, 419 28, 951, 369 112, 231 10,163, 260 2 . Indiana 1,893 73,490 61 Iowa 836,963 4, 276,161 17, 756 2- 31, 132, 481 2 Iowa 3, 239, 639 3, 439,198 867, 968 210 205 Kansas 7, 588, 203 ... Kansas 7, 912,178 7,588,203 Kentucky 317, 467 1 5, 919, 279 18,871 8, 184 27, 465 5,946, 744 6, 548 627,172 1 Kentucky 18, 871 410 Louisiana v 60, 798, 163 61, 582,657 110,970 1, 846, 910 5 Louisiana 78, 359, 707 834, 494 60, 921, 742 63, 076 263, 395 Maine 658, 326 685, 487 .- 8, 760 1 IN Maine 567,193 27, 161 658,326 Maryland 10, 757, 675 11, 671, 679 26, 866 313, 066 1 )

Maryland 9, 690, 608 914, 004 10, 374,451 122, 608 260, 616 Ned Massachusetts 6, 073,166 6, 516, 352 12,447 Massachusetts 5,958, 023 443,186 5, 876, 006 1, 906 195,254 Michigan 312, 579 1 473,244 744,528 36 22,347 1 g Michigan 357,848 271,284 357,847 115, 397 Missouri cy 917, 067 1,062, 664 7 13, 914 2

145,597 1, 528 •no... Missouri 780,455 780,453 135,086 Nebraska 5,062 27,311 11,394 Nebraska 13, 203 22, 299 5, 062 New Jersey 29,310 I 37, 700, 225 39, 021, 395 95, 429 2, 297, 503 New Jersey 20, 012, 458 1, 324,170 37, 203, 321 47, 587 434, 294 15, 073 New York 5,199, 202 New York 2, 942, 993 117,188 5, 088, 200 22, 386 74, 457 14,159 Dhio 5, 316, 390 17, 570 512, 711 1 212, 654 5, 068, 992 22, 586 2,122, 755 1 Ohio 56,871 4, 856, 338 19, 511 I, 414 191, 729 Pennsylvania Co 99, 224, 792 55, 709, 289 234,136 25, 571, 915 3 Pennsylvania 65, 336, 623 6, 484, 492 98, 593, 738 381, 647 245, 203 4, 206 Puerto Rico 1,145, 611 m,-, Puerto Rico 1, 347, 110 1, 027, 992 1,145, 611 11, 319 924,523 3 1,017 116, 652 lout's Dakota 194 South Dakota l'exas 48, 645, 402 98, 645, 902 N Texas 64, 227, 513 48, 645, 392 10 Virginia 45, 671 955,186 2 996,313 098, 313 1 Virginia 978, 663 996, 313 Washington <1 284, 918 291, 545 17,845 250,770 1 Washington 4, 995, 558 6,627 263,785 72 21,061 West Virginia 7-t 54, 399, 225 54, 399, 811 190, 576 1, 059, 880 2 West Virginia 54, 738, 747 586 54, 398, 418 2, 807 Wisconsin 16, 687 Wisconsha 16, 687 16, 687 16, 687 1 Total 324, 565,106 365, 910.820 3 1, 018, 776 Total 351,015, 364 40, 845, 714 3 321, 222,197 644, 889 2, 545, 837 I 152, 183 51, 015, 381 96 76

1 Represents production at industrial alcohol plants withdrawals from iudustria alcohol plantslind See footnotes at end of table. industrial alcohol bonded warehouses, and stocks at industrial alcohol bonded warehouses and denaturing plants. Withdrawals and stocks include imported alcohol mingled with domestic alcohol. For withdraw- als of imported alcohol see table 46. 2 Represents an excess of returns over withdrawals. 3 In addition to the domestic ethyl alcohol shown, 1,712,786 proof gallons of rum (table 85) were used for denaturation at distillery denaturing bonded warehouses and 1,596,125 proof gallons of imported ethyl Alcohol (table 46) were withdrawn for denaturation. I See footnote 3, table 42. 6 Represents number operated during any part of the year. / In addition, losses in denaturing plants amounted to 67,256 proof gallons.

860947-60-12 166 REPORT OF COMMISSIONER OF INTERNAL REVENUE REPORT OF COMMISSIONER OF INTERNAL REVENUE

TABLE 44.-Summary: Production, withdrawals, tones, and stocks on hand June 30, id IMPORTED ETHYL ALCOHOL of undenatured ethyl alcohol, and premises operated, fiscal years 1934 to 1949, (Relates to ethyl alcohol imported tar-free for industrial purposes] inclusive [Proof gallons) -TABLE 45.-Summary: Importations, withdrawals, and stocks at industrial alcohol bonded warehouses, of imported undenatured ethyl alcohol, by months, fiscal year Withdrawals 1949 Proof gallons] Tar-free Fiscal year ended Ione 30 Production

' Tax-free T

Tax-paid t

fl withdrawals For dens- For use of the wc g Other ' from Indus- Stocks and of ow turation 1 United States E trial alcohol month at s" Month s; hPolaursiteas,anfodr warehousesIndustrial 2 s

e bonded ware- 165, 103 582 16,154, 614 137, 416, 765 793, 803 .0. bonded 180, 645, 920 18, 990, 972 163.009, 786 852, 615 196, 126,236 24, 052, 532 172, 478, 748 993, 734 denatura- 223, 181, 228 32, 289,650 179,324, 373 1,041,828 tion 1 2 201, 033, 858 28, 976, 609 164, 263, 210 950, 760 201,017, 596 22,150, 969 175, 694,641 I, 057, 712 July iegg IM 223, 321, 704 1, 224, 504 289,104 243, 727, 756 24, 344, 306 August 276, 591 298,845, 417 27, 866, 523 274, 887, 261 3, 696, 008 •.5 September 69,543 2 424, 804,091 24, 93%340 374, 760, 259 43, 319, 325 - October i1 1447, 786, 568 5, 675, 341 408, 303, 779 103, 124, 789 ira November cc 1 636, 575, 216 8,178,898 973, 439, 556 122,397,846 December t, I 683, 431, 544 27, 836, 579 971, 496, 910 111, 210, 119 January 01 329, 386, 962 47, 203,159 393, 458,5W 12, 751, 367

February

248, 798, 639 47, 144,066 338, 029,989 2, 939, 908 March 332, 282,148 38, 758, 397 301, 101, 168 284,447 Sail 351, 015, 364 40, 845, 714 321,222, 197 644,889 May June Total Withdrawals-Continued Number of premises 635,238 960,887 Losses in operated industrial 1 Imported alcohol received at denaturing plants either directly from customs custody or by transfer from Fiscal year ended alcohol Stocks June Tax-free-- 30 & Industrial an alcohol plant or bonded warehouse is not separately reported after receipt June 30 Continued bonded Industrial alcohol Represents imported alcohol not mingled with domestic alcohol. Imported alcohol which has been Grand total were- alcohol bonded .mingled with domestic alcohol is included in table 42. houses 1 plants ware- Total houses ' TABLE 46.-Summary: Importations, withdrawals, and losses at industrial alcohol

3MAOSAMMOSO bonded warehouses, of imported undenatured ethyl alcohol, by States, fiscal year 139,997,908 156, 152, 522 490,854 27, 970, 640 70 166, 104, 787 183, 095,759 491,228 25,252, 756 74 1949 175,888, 268 199,938, 800 438,851 21, 300, 340 72 • [Proof gallon/4 18% 931,173 215, 220.823 528,194 28, 464, 541 73 167, 901,959 198, 878, 568 524,879 8%096, 632 88 179, 580, 529 201, 731, 498 996,086 80, 860, 361 83 Tax-free 227,476, 472 251, 820, 7M 496,294 21, 798,559 65 withdrawals 281, 638, 572 309, 505, 095 897,140 10, 392,352 82 from In- 421, 143, 548 446, 075,886 824,264 28,014,266 88 wiTtharrawals duherrielai 519,222, 997 2,007, 404 21% 923,266923, 111 plants industrial 513, 547, 658 1 1,098, 177, 833 1,104, 356, 531 1,688,624 127,919,667 III State fm,ranial8rtornpnis and Indus- alcohol I •••••-•-, • for trial alcohol bonded

1,084, 8622,167 1, 112,698, 741 1, 378, 624 143, 639,009 4 90 1 denationturi a-

1 bonded ware- warehouses 3

456,093, 168 1,133, 305 110, 538, 987 44 40%830, 009 90 • 343, 581, 274 - 390, 725, 340 1, 045,462 27,016, 284 74 houses, for 1 denature,-

304,825,389 343, 5 83, 788 897, 7 38 , 273, 358 $ n 324, 565,108 365, 4 10, 820 1, 018, 77575 51 , 015,381 76 tion 1 1

1 Represents withdrawals for denaturation 1934 through 1941, and 1948 and 1949. For 1092 through 1997 -Louisiana 953, 518 7, 628 representsproducts used or denaturation, that is, domestic ethyl alcoho , imported ethyl alcohol, and spirits New Jersey . 7,371 1 produced by registered distilleries &redesignated upon receipt at denaturing plants as alcohol . During West Virginia. 636,238 such years denaturing plants were permitted to store ethyl alcohol for purposes other than for denaturation. Accordingly, the quanti y of ethyl alcohol used for denaturation is reported for such years in lieu of with- Total 635, 238 980,887 7, 629 drawals for denaturation 2 Represents withdrawals for hospital, scientific, and educational use, for export, and in Puerto Rico for medicinal, beverage, and industrial use. Beginning with 1947, includes transfers to customs manufacturing 'Bee footnote 1, table 45. *Represents imported alcohol not mingled with domestic alcohol. Imported alcohol which hasbeen bonded warehouses. Mingled with domestic alcohol 3 Represents gross production. Net production for such years-that is, the gross production minus prod- is included in table 43. ucts used in redistillation-was 419,566,596 proof gallons for 1942, 364,698,976 proof gallons for 1943, 590,92%00 proof gallons for 1944, and 650,089,874 proof gallons for 1946. Exclusive of losses in denaturing plants. Represents stooks in industrial alcohol bonded warehouses and for 1942 through 1949 includes stocks at denaturing plants. nEPORT OF COMMISSIONF;R OF INTERNAL REVENUE 168 REPORT OF COMMISSIONER OF INTERNAL REVENUE 169 TAJ11,E 47.-Smnmari/: Importations, 1IJt'thdr(p{ials, los,~ell and stock,~ a/ in'ill', T.,IlJ,f; _!fl.-Withdrawals: Completely denatured alcohol, by formulas and by mon(.h.~, alcohol bonded wareho11sell, of im'porled )l;ll,hmatw'ed ethyl a.lcohol, fiscal year, 1 jL,cal year 19.',9 to 191,.9, incl1(sive [Proof ;.:"lIon5) [Wine IlllUons) c===- ~'orml1ltll Tax·(ree wilbdrawfl.ls (rom customs custody :v!ontb. Total 12 13 14 For trans(or Fiscal yc'lr ended to induStrial June 30 "!cohoI 1II1r------c -··..·...... !.Ut>l.~ll) ~1.216 I,~~~ !,.O~~.~~1 phml.suucl Ford,·n"· 'I'ota1im­ .For (lena· -A~st - ..- -- ..- _..... 2,33(1.~(l8 00,389 1.306 .. ·'__•.)il:l indu;;trinl turation' port aLions turation 2 SePt~rDi.,r - _. -•.,- --..--..... 2,OO~, Uil5 ~97. 827 3. 512 ~. !lOS, m "Jco!lQI OCIoller - --.·-··--·-·- • ...- ••-· 2.112.653 2<'2,791 4J.174 _,·1Co6,GIS lll>uded S \'ll101"'r- · -_ · ..··..·...... 714, IUS 175.058 11.821 001.077 wnrohollses ~tI1lJcr.-_ --..- ..·...... 118,329 67.043 8.6.".16 If~I.028 JI/!uar)· -- -· ····--··..·...... 114.979 36. 28~ 18.923 JG9.2S6 16~.6-'l6 19.13 •..••••..••... ._ 3, :l,>S, r.31i 4.5!,9.sM ,~. 291, 33:­ "brUUn • ·.·-·,.-- --· · 144.629 H.103 6.004 HI14_ _.._ 2.~. 072 30.48.;.007 3~. 5SS; 679 )1_-: -.------...... 116,730 JOt. 000 2,322 :m.012 ..prtJ _ ••_ _ .. __ . 29.-1-\3 3).649 1,406 62.51S l\H5 __ ._ •• ~_ •• _...... 45.80-1.100 31, 7801.1'18 77, &lS.3H .... 9~86i~ii7o., , .. 1fJ.16'.. _ _._... 31.800.\HC 15.541,252 17.312.222 lI.,. -..--- -··· ;.-...... ~.m .1,~ 4?1, 3~,1~8 19-17 ' _...... 20.318.2·12 ll. 005. 310 3I,053,5D2 22,174,31S JUDI -- · I (",899 1.19. 8,636 7/.6.7 HilS _...... 30.4~1.\l(;.~ 2. :lC,q, tlSl 32,844,749 34, llf'J5, \Y.14 1,:~5,SIH 1[»9 · .-- . 1J.35,238­ fi35,23S 960, SS7 1-.--. --.....1 To!al..-- • • ..•..•..-·--·.. g,SSIJ.H7 105,5271 , 10,321,778

I JI1(,lrmntlt>n relnli"c to too compc'Si.!,19n 01 thesc lormtllllS will ho (Ollnd jn tbe Appendix to HegllhUons Imported alco· No.3, "Formulae (or Completely and SpeCl,lly Denatured ,Ucol.lo)" (rc\·i>ed llH2). 'l'rellSury Dopnrtltlont, min~Jr;d ~t hol Losscs Janau 01 lnt~rllul RO\·CDUO. dome~(ic with industrial IIDeludc3 6.8\/,1 wine g:,Umls witltllmwn lor U9() o( the Ulliwtl Sttl!<'S. }~Iscnl l'car euded June 30 ,Ic(,ho] fit in· alcohol dustrif\.l alco· bonded hoI bClI1ded Wtlfehollscs I TARLE 50.-Witha-rawals: S1lecially denatured alcohol, by formulas, fiscal year 1949 'W;lfchouses !Wino I;nllolls) 11).13 ' _•• __ __ ._•• 61. Q·:O 3, ~02 :m~~~t Ig:L::~:~~::::::::::::::::::::::::: ::::::::.::::::::::::: ....-~~~ Si;i~ iw' .._.... ~~,.O~:l I·..··· --- ...._.' Formll),), I II I·orm,,\.. I Amount ,Formula I Amount 194n ' , __ _ _ _ H.g·r:. :1Q;J 49.·1~,' :~K·.·.:: ::::::~::: :::::::::::::::::::::::::::::::-:~::::~:: ~~: ~~ :~: ~~~ L...... 23,3,_.831, 23-11...__ 2,557.155 llS-.D _ 631.022 t ..A...... 5 I 2~...... 1I.~78 38-0 __ 37.382 llH9 _ _ 7,629 ...... _. 2.1.-167.236 25-A...._...... 21,S7g 3.'l-D...... H.794

I Reproscuts imported olcohol not rnlTlj,lcd with domestic alcohol. Imported alcohol "bleb bu 1D1[l~lc(l with (JoUJcstic alcohol Is Included in t"ble H. f~~~:~~~~:::~~ 'l':~;m ~[~~~~~~~~~~~ J:~' ~Er~~~~~~~~:~~ d~;~ ~(;, • Sec footnote J• table 11-.\.... 24V. -lfjl 29_ _ _ 79, 38fJ, 33. 31}-D 2. III I He[>rcscnts wlthdrnwnls for bo,pitt>l, srJcotlOc. and o(lucal.t,,,,,l me. '!ld for cxport. • The ltnportntion of alcohol free o[ tl\X lor industria.! purposes was Iluthorlwd. Clfceth'c Oc the f(eycnue ACI, of l1H2. J Ill(:lul1.,s \,~92,S(Klllroo( ~£lnons witbdrtlwn (or use of tl,e United St"t"s. wareh~ []o-:-:-::~ l:~m ~t~E~m~:~ ~:im ~~:~+:::~:: .~~ • Tml'ortod alcohol was trunsfcrrc.llrIll1l denaturing plnnts to ill'.!wmlal nlcolwl bouded (allOWS: 2,\OS.30111rrlof ~.ll()ns in 11146 "nd 7,6M,no pwol gallons inllH7. IV. DENATURED ALCOHOL r~: ~r~:::::::::::::: ~i: ~~ ~L:::::::::::~: l~; ~ tf:::::::::::: 5, !Rcl~WS to dOna1.llflld alcohol produt-.::d by denaruring planls] -.0 -. 121 37-A_ _... 2,025 'rota!.. , '156,389.2\14 T.\Bl,E 4S.-Prodw;liQn: Bthyl ILlc,{)hol a.sed for denaturation n.nd completely .....-...... IQ3 38...... 2.1,.';~ .specially denatured alcohol produced, by months, fis(;al YelLr 191,9 ~ormntfun relative to the eorupos!llon and :luthorl.(,d uses o( tbp.'iC '(omlUlas wUl be (ound tn tbe Production \Id)~-dl~ ro l'lC\:ulaUons No.3. ")i'ormulue for Completel)' "nd Spl)Cl~nl' Denatured ,o\lcohol" (re\'ised E t/ryl alcobol I •Re Ttro!;l1ry Dopnruncnt. Burc.'lu or Tnt-t'rual RovenuG. Month uS(!d for dc' Completely Speci"lly • =!'eUts an Glees! o( fllturns O"cr witbdr>lwnls. ruotllr:\lion I douull1,,'

Proof gallon, lVin' gallOlI' Win, gaUon, JII\)' _ __ __ 2.3. 2'J1'o, 916 1,14:1,922 11.3\1$.611 AlIgnS! __ 2fo.817,849 2.408,850 12.120.22') September _ _ 28, DIll. 712 2, -171. 810 13.188.128 ()ctooor -...... 29.5:l5.231 2.468, 217 l:l.-19J.OC'~ No\'ctlll>cr __ _.. 29. 876.()1~ St.6. tSI 15,1(,6.33-1 Vct'Cmhcr _ __ 29:414.-157 2tH.472 I.). 560.4M Jalluar~ - - --...... 2:1,878,:122 148.25.1 12.7I17.0r03 f'l,l"uary __ .. __ .. __ _ 20. ,,59, 865 179,237 10. llil. 9aJ March _ _. __ .. __ 28.074. 271 1711.1>30 14, P,~,3S0 Aprll _...... 2fo.91l;,3?l 51.359 14,416.928 l\1n~ - _...... 25.l'-l5.02li 42.IlS.q 1:1.S.1O,lklO June :{(I:fi9S.893 75.(;<;9 16.400.6.."6 _ 1 ---­ 1ll.221.-1.92 164.27:l.2U .•ft' Tot:>!._ 3:r.J.9'J;, 9:lO

J n,ll'rf:s~nts domestIc cth~'l n)cobo1. imported ethyl ul(~()hf)l, and spirits prQduC(!d hy J\!gistt~ (rcd~sjg(IfUC!d 11I)OB rcooJpt Ht donu.turing })lunt~ as ulcnhol).

170 REPORT OF COMMISSIONER OF INTERNAL REVENUE REPORT OF COMMISSIONER OF INTERNAL REVENUE 171 TABLE 51.-Withdrawals: Specially denatured alcohol, by leading' formulas and TABLE 52.-Summary: Ethyl alcohol used for denaturation, and production, with- by months, fiscal year 1949 drawals, stocks on hand June 30, and losses of denatured alcohol, and denaturing plants operated, by States, fiscal year 1949 [Wine gallons]

July August September October November December Completely denatured alcohol Formula Ethyl alto- State hol used for 4-Al 9,678,790 9,387,388 6,152,170 6,286,502 7,080, 685 6, 987, 610 denaturation Production Stocks 1,814,120 1,726,338 1,806,947 1,901,679 1,954,471 1,986,448 drawalsW"11" Tune 30 1,489,874 1,707,923 1,889,312 1,806,887 1,627,470 1,541,168 .

5 534,511 432,752 303,692 500,627 558,024 436,812 257,693 271, 734 366,180 358,643 292,442 309,650 Wine it 295,417 311, 547 333,611 310,012 315,406 216,759 California Proof gallant Wine gallons Wine gallons ma gallons 6,330 62,866 63,532 69,782 67,283 126,905 lifiWaii 6,369,377 264, 549 259, 696 DI 10,975. 147,904 199,776 207,990 245,749 159,047 158,406 Idaho 19, 743 si 210, 158 221,834 226,864 161,340 195,478 156,218 40,324 11.410 11, 410 0 Illinois 81,933 119,520 118,011 152,888 151,947 107,575 Indiana 10, 177, 387 549, 874 558, 593 2,996 zg 79, 526 71, 592 80, 259 111, 764 112 867 111, 374 Iowa 29,087, 710 210,948 219,751 282 104,403 110,407 115,511 97,840 86,918 103,061 652,120 91,956 91, 956 .sthhAaA 54,916 Kentuc ky 43,230 66,212 68,823 61,322 72,299 Louisiana 18,871 1,026 24,205 24,159 81,749 61, 487,326 1, 675, 032 1, 795, 536 39, 702 59,634 54,459 Maine =.4.00, 27,339 38,941 26, 237 50,317 487, 326 61, 425 81, 425 33,346 56,524 Maryland 27,067 35,139 42,004 51,906 Massachusetts 9.795,101 177,980 127.176 29,571 33,647 27,145 57,689 46,263 53,579 84,445 Michigan 5, 876.006 77,989 88, 449 29, 571 22,417 12,528 36,465 28,948 23,333 13,340 Missouri 780,454 154,115 191,983 8,899 11,674 27,748 12,092 24,145 26,676 21,336 780, 453

k Nebraska 4 7,781 17,118 9,532 11, 503 6,833 6,601 110,003 61, 994 o New Jersey 70, 236 86 36,317 29,235 34,639 37,530 W, 764 35,287 New York 38,015,969 37,154 89,500 Pennsylvania 5,088, 200 137, 154 136, 978 64 11, 388,050 11,770,917 13,110,794 12,973,085 15,274,384 15,063,238 Puerto Rico 48, 221, 971 8, 693, 795 6,700, 427 1,880 Texas 939, 517 13,908 13,837 270. Virginia 48, 645, 392 1,090, 653 531 Formula January February March April May June Total Washington 531 West Virginia 97,65 55, 979, 852 6, 45 1 8.499

,cf LINREaRi Wisconsin 5,183,702 79,885,834 16, 687 9, 742 3,980,767 5,184,445 6,024,188 igg

m 6,459,289 1,989,028 1,944,575 23,467, 236 Total 1,921, 444 2,084,997 2,685,984 323,925. 930 1, 724, 478 2,815,665 1,941,482 3,540,191 23,379, 831 10, 221, 492 1 10, 321, 778 105, 382 1, 658, 329 497,939 6,581,449 538,621 886,434 587,746 479,096 gge 347, 87A 377,092 388,410 491,789 632,357 4,433,557 284,517 363,441 278,231 379,886 8,637,636 Special y denatured alcohol 283,016 667,749 3,451,899 68,109 530,988 661,512 qgg c 857,704 Number o 819,099 178,774 832,475 2,557,156 State Total 228,072 204,711 2,151.012 losses of plants 178.377 128,023 162,035 Rg 111,888 With- Stocks 0 139,292 Production operated 4 99,840 179,455 1,464,800 drawals 109,244 161,238 June 30 4 75,701 195,945 1,379,315 115,057 101, 705 118,848 144,503 ei iR MEW 156, 514 1,859,622 154,124 113,090 115,912 108,001 g 48,915 66,246 68,107 55,106 90,457 751,978 Wine Wine 58,002 154,284 73,618 115,079 678,916 Wine gallons Wine gallons gallons 146,794 California gallons rti 64, 231 56,762 68,552 81,712 93,077 675,987 3,445,062 3, 432, 221 28, 591 4,027 p;<-1emA Hawaii 37,865 51,540 49,420 71,254 631,022 10,910 13,700 1,173 25,767 Idaho 49 wN 89,216 37,676 86,437 45,480 69,117 606,699 IMnois 19,682 6, 391 19,004 33,077 255,394 5,055,222 5,056,567 28,969 2,736 22,416 Indiana N 24,253 15,764 46,987 14,908 11,312 249,481 Iowa 15, 568, 339 15, 573,067 28, 205 20,122 ti

10%449 264, 498 tib 5,607 7,972 5,783 9,330 12,832 Kentucky 284,40 7 95 23,868 32,468 28,719 28,672 83,458 883,722 Louisiana 10, 427 5 10, 574 31, 064, 348 26, 722, 951 4,481,860 33, 880 Maine ntitiNN O 12,759,640 9,945,958 13,866,579 12,933,709 13,941,603 14,352,839 156, 308, 204 207, 997 207, 985 11 Maryland 5,155,2385,158, Meetachusetts_ 5,186,886 30,511 11,164 3, 180, 247 8,177,5463,177, 5,228 1,407 Withdrawals for the yea eweeding 100,000 wine gallons ranked in order of total withdrawals. Michigan 313, 771 232, 380 82,289 3, 405 r Michigan 612, 844 5 See footnote 8, table 50. Nebraska 694458 38,996 3,018 tib New Jersey 20, 483,113 20, 494, 014 72, 468 24, WA tiN New York 2, 646, 707 Pennsylvania 2, 650,147 7, 591 4, 475 19, 582, 231 19,586, 420 33, 903 9,869 Puerto Rico KH 490, 954 500,152 17,823 1,692 25, 694, 970 22,774,716 2,927,787 8,300 ti ternsVirginia 578,154 578,154 Washington 135,903 138, 903 nM West Virginia a 763, 276 20,174, 817 844,598 Wonansin 2, 543 N Total 164, 273,211 1 156,389, 294 8,640,666 131,721

Includes 6,894 wine gallons withdrawn for use of the United States. In addition to these stocks at dena using plants, stocks held by bonded dealers are shown in table:53 and stocks held by bonded manufacturers are shown in table 54. 3 Represents number operated during any part of the year. 4 Includes 836,064 wine gallons withdrawn for use of the United States.

172 REPORT OF COMMISSIONER OF INTERNAL REVENUE REPORT OF COMMISSIONER OF INTERNAL REVENUE 173 TABLE 53.-Operations in specially denatured alcohol: By bonded dealers, by States, fiscal year 1949 TABLE 54. - Operations in specially denatured alcohol: By manufacturers, by States, fiscal year 1949-Continued [Wine gallons] [Wine gallons] Number _ of Used In State Received 1 Removed 1 Lossess° Tune 30 dealers manufac- Number operat- of 17128.1211- State Received Recovered turtzi Losses stocks ing 2 after user °nein g June 30 lecturers recovered or:4 titiN alcohol) 2 California 3 -1, 986 48 Connecticut 76, 315 71, 782 7,109 ZX Illinois 113, 315 119, 979 688 22, 356 tiNbNNb Oklahoma 37, 597 36, 533 1 7,623 Kentucky 28, 519 29, 661 2, 283 Oregon 154,318 162,186 11, 684 Maryland 31, 227 30, 387 15 4, 194 Pennsylvania 12, 322, 776 16, 005,188 26, KO, 542 1, 802 1, 659, 235 V Massachusetts 99,002 95,092 2 11,267 Puerto Rico 502, 926 501, 709 5 2,182 .MR` Michigan 57,167 58, 579 5 4, 756 Rhode Island 22,575 20, 884 3, 460 Minnesota 53, 681 55, 013 10 5,363 South Carolina 1,567 1, 529 357 I' Missouri 169,185 168, 595 48 14, 056 bNWN South Dakota 39 84

9 P New Jersey 17, 418, 897 17, 442, 846 1,805 48, 297 Tennessee 22, 451, 019 130 22, 464, 705

3, 711 3, 30% 923 rI• New York 5, 005 5,599 216 Texas. 12, 831, 978 17, 297 12, 454, 936 11,466 561,316 Ohio 217, 352 215, 208 132 17, 580 Utah 4,138 4, 361 240 Texas 10, 514, 525 9, 786, 824 23, 834 736, 570 ti Vermont 499 982 3 36 S Utah 4, 522 4,155 2 1,168 titi Virginia 689,257 1,88%023 2, 387,139 17 76, 537 Washington 1,569 1,427 1,765 Washington 3,100 3,404 8 397 Z Wisconsin 62 West Virginia 44,173, 860 30, 592,181 71, 788,828 24 4,562, 704 Fi Wisconsin 560, 457 7, 919 534,174 127 54, 091 R"

Total- 28,783, 315 28, 084, 704 26,541 877,028 37 Wyoming 30 ' 42 12 Total 154, 299,797 117, 893,693 266, 179, 133 83,940 13, 979,713 1 Excludes interdealer shipments. 4,153 2 Represents number operating during any part of the year. 3 Represents an excess of returns over receipts. lIn some industries where the denatured alcohol does not become a part of the product, a portion Is re- covered and reused. TABLE 54.-Operations in specially denatured alcohol: By manufacturers, by States' Represents number operating during any part of the year. fiscal year 1949 s Includes 165,523 wine gallons recovered from solutions received containing specially denatured alcohol. [Wine gallons]

Used in Number manufac- of menu- tilting Stocks State Received Reeovered Losses facturers after use 1 (including Maw June 30 °mat- recovered alcohol) kg 2 gc Alabama 73, 497 6, 372 79,101 10 7, 759

Arizona_ 149 130 22 1 ,2

Arkansas 296, 909 288, 1/89 21, 297 1Mg4r" California. 2, 758, 838 1,184, 758 3, 944, 725 2,155 25%540 Colorado 32,699 39, 235 2 14, 868 Connecticut 820, 735 765, 571 779 93,099 Delaware 105,623 861,594 947,146 23 32,767 District of Columbia 57, 293 53, 785 9 5, 335 Florida 47, 099 49, 728 99, 089 11. 9, 286 Georgia 183,403 170,995 8 16,900 Hawaii 6,475 6,520 199

Idaho 70 71 12 Up Illinois 4,975,143 1,798,332 6, 689 419 5,104 353,569 Indiana 4, 506,196 8, 781, 359 13, 141, 062 1,411 299, 036

Iowa 153, 603 139, 562 41 10, 905 RW Kansas 59,471 59,334 4,615 Kentucky 128, 210 128,694 8,787 .'

Louisiana. 4, 960, 702 12,869, 741 17, 876, 412 17 41,901 =J Maine 47, 868 97, 859 80

Maryland 3,154, 271 280, 679 3, 349, 867 300 158, 280 M

Massachusetts 3, 362, 528 3, 428, 286 6, 706, 921 13, 606 193,746 NgM Michigan 2, 267, 526 1,005, 879 3,140, 720 3,487 238,405 Minnesota_ 18%985 191, 874 29 20,155

Mississippi 185, 921 8, 009,158 8,172, 722 32, 582 rr Missouri 2,378, 687 3,699, 707 5, 994, 832 2, 297 242,191 Montana 25 25 8 Nebraska 2,344 5 2,160 3 481 Nevada 449, 073 422, 322 31, 251

New Hampshire 16,106 16,138 129 g

New Jersey 20, 978, 094 19, 609,263 40, 352,183 30, 310 1, 037, 065 -

New Mexico 388 375 49 p New York 1 6, 978,255 7,321, 835 14, 248, 568 3, 755 44%672

North Carolina 595,151 595,880 6 37,338 -

North Dakota 43 35 13 A Ohio 781.291 476.263 1.261.186 3,413 135,601 See footnotes at end of table.

174 REPORT OF COMMISSIONER OF INTERNAL REVENUE REPORT OF COMMISSIONER OF INTERNAL REVENUE 175 Ethyl alcohol used for denaturation, and production, with- V. DISTILLED SPIRITS: UNREC nano TABLE 55.-Summary: drama's, and stocks on hand June 30, of denatured alcohol, and premises operated, [Produced by registered and fruit distilleries] fiscal years 1934 to 1949, inclusive TABLE 56.-Materials: Used at registered distilleries in production of distilled spirits,' by kinds and by months, fiscal year 1 Denaturing plants 949

Ethyl alco- Grain and grain products hol used Fiscal year Month ended June 30 for dena- turation I Stocks With- Stocks Corn Rye Malt Wheat Sorghum Produc- With- Production drawals June 30 vain Total tion drawals June 30

igi Pounds Pounds Pounds Wine Wine Wine Bins Pounds Pounds Pounds Roof Wine Wine gallons gallons 11 131,937, 378 29, 425,938 22, 806,041 4, 632, 304 11, 2 194, gallons gallons gallons 107, 147,490 24,199, 772 04, 740 706, 801 gallons gallons 55,067,092 54, 739,827 777,674 19,473,258 2,686,829 15,889, 924 169, 196,073 aW 139,681, 129 27,174, 311 28, 443,067 748,967 358748, 1 111, 955,781 32, 700, 473 24,752,828 5,045,853 33, 760, 311 1934 38,050, 525 1,433,844 58, 284,395 58, 653,468 131, 417,107 208, 205,244 165,233,606 38,76,6794 465,724 1 38,070,464 28, 995,080 769, 930 27, 235, 545 225,988,128 1935 35, 700,192 4 250,899 64,955,485 84, 819,485 174997, 394 1936 174,357, 295 36, 522,358 80,084, 281 79,681, 878 799,468 4 41,049,336 34, 757, 995 4,431,980 16, 572, 848 272,758,951 181,034, 322 22,118,378 23,484,104 857,663 491,852 k 192, 219, 355 46,681,391 35,173, 936 2,045,620 11,071,030 287, 221, 252 1937 25, 727,946 699,772 69,009,024 69, 688253, 258 181,175, 969 25,598, 717 2 33, 788,650 29, 709, 629 2,878,212 12,489, 272 1938 165,848, 296 83, 561, 077 82, , 014 1,325,583 .1 240,121, 732 17, 204,615 455,998 l 129,930, 531 31, 220165 1939 177,336, 688 17, 179,433 111, 409,797 111, 509,432 1,163,490 26, 405,978 6,284, 610 8,458,498 202, 299, 780 t 225, 160,792 15,352,033 15,495,290 498,982 630, 474 4 192, 506,953 31,618, 322 24, 462,930 5, 715, 680 2, 086,921 206,390,806 19401 17, 720,882 438,835 185,834, 261 136,319, 810 143, 516,339 27,233,679 17,676,172 14 23,861,265 1941 276, 766,363 94, 442 179, 217,153 177,058,630 2,721,991 393, 220 194, 506,993 28, 958,998 4 130,107,167 26,630,789 21,171, 653 364,917 1942 376, 624,912 28, 628,181 198, 524 193, 977, 658 7,161,328 178, 274,996 408,303, 779 21,369, 788 24,320,681 143,208 , 631 18,154,806 101,830, 610 18, 317,658 15,290,095 342, 720 136, 581,084 1993 62, 210,817 224,133 471, 781, 825 465,909, 511 1944 973,439,556 52,331, 761 194,008,001 991,446,833 20,629, 245 33,087, 533 32,288,945 1, 013, 288 3 1,659,522,064 375, 918,617 806,860,876 3 85,489,975 1945 971, 446,910 46, 595 186, 657,673 197, 554,311 8,919,656 138,669,105 2,515,250,427 1946 393,458, 500 28,144,437 27,118,835 159,927, 752 1, 878, 777 36,395, 715 36,324,125 102, 261 147,348,371 1947 338,029,989 226,077 149, 394, 037 160,359,372 846, 582 1948 339, 651,746 34,887,789 34, 748,659 156,389,294 8,640, 566 Potatoes 10,221,492 10,321,778 105,882 164,273, 211 Products 1949 323,925,930 Month and potato Molasses used in re- Other materials products distillation Specially denatured al- gcla ho glg cohol . Gallons Proof gallons RU

.4 Gallons Number of Number of 195,876 1,359, 327

manufao- ci denaturing 209,880 508, 353 4 8,120

Stocks June 30 turers ed plants g ng 247,414 7E8,922 Fiscal year ended June 30 Figg M 2, 724

operating P2 operated g 838,911 383,449

4- 232,811 58 2,163

Bonded Manufac- 14 243,888 378, 434 dealers turers iWC4 B§ t 282,433 297,367

MS3 1,987, 646 254, 292 223, 980 349, 288 Wix Wine gallons Wine gallons 242,858 2, 637, 211 41 70 4,686 282,379 cl 1934 492,381 39 71 9,279 180,464 410,841 391,240 2,760,602 196 751 118, 684 1935 2, 771, 921 37 67 3,869 1936 333, 542 45 67 4,323 349, 789 3,369,088 4 156, 473,978 3 5, 057, 738 5, 713, 487 4 1,942,218 1937 2,708, 739 43 64 4,321 '6844 1938 283,206 38 55 1,905 378,009 3,162, 641 4, 233 1939 381,655 5,974,138 40 52 1940 43 51 9,200 Whisky, rum, gin, brandy, and spirits. For materials used at fruit distilleries in production of brandy 279,383 6,217,459 4, 213 and spirits-(Slit, see table 58. 1941 5,801, 635 7,927,692 62 53 z Includes 63,585,799 pounds of corn oil residue and 14,070,740 pounds of corn meal. 1942 76 50 4, 031 9,080,979 13,874,162 1,019 Includes 90,442,284 pounds of a wheat byproduct and 377,494 pounds of wheat bran. 1943 12, 118,670 66 42 Includes 103,018,478 pounds of potato slurry. 3, 841, 166 38 9,061 1944 164, 153 10,975,875 65 Iglitinnesents 2,622,888 gallons used in the production of rum and 2,434,850 1945 50 36 4,239 44f gallons used in the production 190,055 9,097, 977 9, 236 ts. 1946 295, 487 8, 361, 845 49 39 e Represents 1,148,800 pounds of grape lees, 386,200 pounds of grapes, 296407 pounds of Mama% 84,000 1947 8,347,893 48 39 4,277 180,057 37 9, 166 pounds of enzyme extract, 14,711 pounds of malt simp, and 12,000 pounds of flgs. 1948 877,028 13,979, 713 47 7 Represents 3,120 gallons of enzyme extract and 2,724 gallons of blackberry wine. 1949

For 1939 through 1941 represents withdrawals of at products for denaturation that is, domestic ethyl alcohol,1 spirits produced by registered distilleries ( edesignated upon receipt at denaturing plants as used for denaturation, that is, domestic ethyl alcohol), and rum. For 1942 represents all products used for denatur- alcohol, spirits, and rum. For 1943 through 1949 represents all products (memo rum) ation, that is domestic ethyl alcohol imported ethyl alcohol, and spirits. Rum is included for 1934 t specially denatured alcohol for those years. through 1942 bemuse denatured rum is included wi h 4 Prior to fiscal year 1943, includes denatured rum.

REPORT OF COMMISSIONER OF INTERNAL REVENUE 176 REPORT OF COMMISSIONER OF INTERNAL REVENUE 177 TABLE 58. - Materials: Used at fruit distilleries in production of brandy and spirits, Materials: Used at registered distilleries in production of distilled TABLE 57. - by kinds and months, fiscal year 1 spirits,' by kinds and by States, fiscal year 1949 949

Fruit' Fruit wine, cider, and juice' Grain and grain products Month State Grapes Raisins Total Grape Raisin Sorghum Total Corn Rye Malt Wheat grain Pounds Pounds July Pounds Gallons Gallons _ 329,067 529,067 874 514 691,687 Pounds Pounds Pounds Pounds Pounds August 345, 223 943, 429 1,288, 649 Pounds 9,907,410 September 200, 660 54 231 7a1ifornia 4,147,623 1,089,914 1,190,410 3,479,463 1,849,040 849,327 2,698,367 24 902,686 16,629 1,836 18,390 2,037 188,831 October 3,406,710 2,103, 803 4 Georgia 166,568 477,635,881 November 504, 513 63, 944 601 61,940 Illinois 278,402, 240 73,092,802 49,760,937 76, 379, 902 4, 692, 2E0 1, 779, 169 6, 471,449 33, 460, 344 76,241 43,700, 426 43, 542,143 12, 580, 721 370,134,334 December 1, 398, 572 Indiana Z70, 311,044 69,005,850 January 1, 394 572 6, 429,899 177, 935 Iowa 58,849,053 5,909,619 318,300 3,928,878 865, 067 865, 067 1,507,332 135,539 144,514,999 125,745,178 4,668,160 546,050 961,376,197 February 1, 836, 284 1,836, 284 Kentucky 685,900,810 192,799,365 March 1,088,710 72,067, Maryland 94, 543, 636 68,650,519 25,311,189 4,294,011 1, 358, 354 1, 358,354 1,109, 024 194,063 757,450 993,328 10,248,168 Apri 484 058 488,058 !Massachusetts 8,497,440 47,094,925 May 494 262 25,111 Michigan 10,852,415 5,741,032 30,501,478 808, 725 808, 725 24, 586 129, 570 70,056 2,539,746 12, 573,061 22, 740,584 June 588,928 Missouri 7,558, 77A 71, 620,454 588,928 737,818 153,585 Nebraska 56, 591, 514 6,747,114 8,181,826 2, 572,143 8,572,877 25,654,227 Total 11, 685, 822 12,150, 211 23, 836,033 New York 14, 509,207 109,770,744 136.780,426 1, 791. 518 Ohio 85,345,520 8,213,566 11,855,126 4,326,532 34,456,207 21,754,097 3,694,264 130,485,325 Pennsylvania._ 70,680,757 8,736,000 Tennessee 6,988,800 698,880 1,048,320 549,202 411,974 2,745,140 Fruit wine, c der, and juice -Continued Virginia 1,783,964 5,208,012 Month Wisconsin 4,492,752 92,810 520,930 101,520 138,659,105 2,515,740,437 Fig Apple Plum Other Total Total a 1, 6E9, 522, 064 375,918, 617 305,660,676 3 35,489, 976 Gallons Gallons Yuly Gallon. Gallons Gallons Potatoes Products 5, 827 204,186 79, 077 1,859,291 Molasses used in re- Other materials August 11, 641 State and potato September 2,456 270, 987 39,820 57,834 October 59, 761 27, 016,969 November 24 772 64,093, 074 Gallons December 76, 295 5, 700 33,618, 580 Pounds Gallons Proof gallons Pounds 237, 724 90,689 4934 237 107,198 281,952 7 1, 547,000 January 374,689 24,205 2 ,724 February 9,795 2, 051, 560 3 29 0 4,450 4,935 1.171.087 25,177 7 296, 507 March April 4,390 1,307,477 5 039,415 3 108 4,017 '13,350 5 3,120 May 524,390 1,869,600 2, 200 154 358 c. 1,385,024 1,962,670 Tun 7.000 oz 2,545 900, 948 18,270,300 785,057 1 1,224 II 1, 201,209 4, 762 Total 612, 413 321,888 204,186 I 196, 520 139, 906, 951 q 3,450 1 84,000

33, 320, 60 1) 22,525 In addition the following amounts of fruit residua were used: 8,781,328 gallons of grape lees, 6,881,874 140,637 gallons of grape pomace, and 126 586.844 gallons of grape material, and 21,007,631 gallons of grape residue 166,586 consisting of wine, lees, pomace, and wash for which no break-down is avai able; 192,888 gallons of apple II 103,013,478 2,364,217 281,266 pomace, 33 gallons of apple lees, 22,813 gallons of citrus waste concentrate, 1,045 gallons of blackberry pom-

S ace, and I,OCO gallons of peach lees. 7 In addition 2,506,120 gallons of grape wash and 124,138 gallons of raisin wash were used; 63,373 proof 4 gallons of brandy were used in redistillation. Represents the following fruit, wine, cider, and juice: 51,057 gallons of orange, 48,309 gallons of Mack- § 1 156,473,978 10 5,057,7U 5,713,487 1,942,218 5.841 berry, 33,230 gains of peach, 27,809 gallons of cherry, 21,745 gallons of currant, 10,082 gallons of 3,857 gallons of gooseberry, and 440 gallons of loganberry. elderberry,

1 Whisky, rum, gin, brandy, and spirits. For materials used at fruit distilleries in production of brandy and spirits-trult, see table 59. Includes 53,585,799 pounds of corn oil residue and 14,070,740 pounds of corn meal. Includes 30,442,234 pounds of a wheat byproduct and 377,404 pounds of wheat bran. Represents 1,148,800 pounds of grape lees, 386,200 pounds of grapes, and 12,000 pounds of figs. Malt sirup. Blackberry wine. 7 Diamalt. Enzyme extract. 1 Includes 103,013,478 pounds of potato slurry. 10 Represents 2,622,588gallons used in the production of rum and 2,434,850 gallons used in the production of spirits.

178 REPORT OF COMMISSIONER OF INTERNAL REVENUE REPORT OF COMMISSIONER OF INTERNAL REVENUE 179 TABLE TABLE 59.-Materials: Used at fruit distilleries in production of brandy and spirits, 60.-Production: I Distilled spirits, by kinds and by months, fiscal year 1949 by kinds and by States, fiscal year 194.9 [Tax gallons]

Fruit wine, cider, and juice Month Fruit $ Whisky Brandy . Rum Gin 2 Other spirits Total %Ind Connecticut July California Arkansas California Colorado 10,959, 909 238, 040 138,961 286, 589 August 9, 530,637 248,196 7,186, 412 18, 789,911 153,842 278,262 5, 715, 419 15, 935,276 1 September as 11, 429,196 1, 579, 448 182, 059 268, 809

7,694, 343 21, 153,855 Gallons Gallons g October 12, 211, 558 Pounds Gallons 8, 363,859 192, 410 245, 363 13, 762, 237 3,718 November 34,815,427 Grape 11, 685,822 3,909 133,075,092 14, 036,491 4,431,341 180, 951 218, 429 18, 385, 923 12,150, 211 1, 791, 518 December 17, 571, 780 1,780,882 37, 253,135 Raisin. January 188, 528 289, 946 9, 560, 181 29,391,317 Fig 612,413 14,877, 949 212, 698 154,073 196, 295 11, 158 February 6, 422, 235 21,863, 250 Apple 26, 242 14,148,229 170,616 140,353 215, 285 214,186 March 14,461, 606 233,096 4,956,940 19, 631,423 Plum 144, 283 349, 244 5, 040,389 20, 231,618 51,057 April 11, 536, 214 58,434 173, 821 Orange 24,648 750 May 453, 028 4, 700, 637 16,922,134 Blackberry______ 10, 970, 953 44, 711 170, 469 562, 693 5, 074, 718 June 7,851,817 93, 244 16,823,444 Peach 1,071 178, 996 553, 627 5, 054, 025 13, 731, 709 Cherry Total 149, 595, 239 1 17, 457, 565 1 Currant 1,998, 746 3,937,490 1 93, 553, 459 236, 542,499 Elderberry Gooseberry Loganberry Represents product on of whisky, brandy, rum, g n, and spirits by registered distilleries, and brandy and spirits by fruit distilleries. For purposes of withdrawal, see tables 64 and N. Total 23, 836, 033 33, 151 138, 758, 914 16,697 2,548 For production of gin at rectifying plants, see table 79. $ Includes 30,531 tax gallons produced at registered distilleries. For kinds of brandy and spirits-fruit produced, see table 62. Represents production for beverage and industrial purposes. Includes 1,757,078 tax gallons removed for Fruit wine, cider, and juice 2-Continued denaturation. Represents production for beverage and industrial purposes. Represents 18,522,361 tax gallons of spirits- Kind fruit produced United States at fruit distilleries, 75,031,098 tax gallons of spirits-grain, spirits-cane, etc., at registered Georgia Ohio Washington total distilleries. Includes 713,830 tax gallons removed for denaturation and 28,400,821 tax gallons transferred to industrial alcohol bonded warehouses which could be withdrawn as alcohol purposes. for either industrial or beverage Gallons Gallons Gallons Gallons 8, 305 684, 712 136, 780,426 TABLE 61.- Grape 1, 791,518 Production: I Distilled spirits, by kinds and preMises operated, by Raisin 612,413 Sea es, fiscal year 1949 Fig 1 321,888 Apple 6,615 10, 940 Plum 264,186 [Tax gallons] Orange 51,057 2,294 16,600 4,017 48, 309 Blackberry 33, 230 Peach 33,230 State Whisky Brandy Rum Other 24, 624 27,800 Gin 1 Total Cherry 2,105 spirits 21,746 21,745 Currant 10, 082 10, 082 Elderberry 3, 857 3, 857 Arkansas 5,902 Gooseberry California 495, 562 17,254, 737 5, 90 2 Loganberry 440 440 Colorado 2,022 34,008 19,048,026 36,832,355 832,355 1, 533 1,533 35, 524 34, 065 759, 977 139,906,951 Connecticut 1, 703 Total Georgia 15,618 7,436 1, 703 tilinois 26,653,661 23,053 Indiana 1,324,050 16,094,229 44, 074,940 1 In addition the following amounts of fruit residua were used: 8,772,903 gallons of grape lees, 6,879,491 17, 829, 915 1,345, 237 Iowa 13, 574 13,496, 189 32, 671,341 gallons of grape pomace, and 124,586, 844 gallon of grape material and 21,007,631 gallons o grape residue Kentucky 6,168, 275 6,181, 849 consisting of wine, lees, pomace, and wash In California, for which no breakdown is available; 2,383 gallons 79, 764, 970 1, 021, 718 99,192 4,106, 200 Maryland 13,381,629 84,992,050 of rape pomace and 33 gallons of apple lees in Connecticut; 192,888 gallons of apple pomace in Missouri; 72,328 3, 639, 684 17, 093,641 Massachusett 457, 714 975,096 8,425 gallons of grape lees in Ohio; 22,813 gallons of citrus waste concentrate In Pennsylvania; 1,045 gallons Michiga n 411, 472 1, 844,192 of blackberry pomace and 1,000 gallons of peach lees in Washington. Missouri 5, 359, 543 5,359, 548 $ In addition 2,508,120 gallons of grape wash and 124,138 gallons of raisin wash were used in California. Nebraska 2,009,136 2,019,136 Brandy was used in redistillation as follows: 62,864 proof gallons in California and 709 proof gallons in 6, 184,392 New Jersey 1, 160 6, 184,392 Colorado. New York 614 1, 160 Includes 12,450 gallons in New Jersey, 6,650 gallons in New York, and 246,975 gallons in Virginia. Ohio 1,015, 801 1,307, 883 2,324, 294 3, 234, 520 8,524 6,604, 458 P 6, 753, 836 12,331 9, 847,502 South Dakota 46,874 8,663,871 15,476,912 Tennessee 747,278 2,500 2, 500 Virginia 243, 962 747. 278 30, 682 274,544 Wash ington 133, 044 Wisconsin 133,044 9,601 . 459, 601 Total 149, 595, 239 1 17,457, 565 4 1,998, 746 3, 937,490 $ 93,553, 459 288, 542,499

1 Represents production of whisky, brandy, rum, gin and spirits by registered distilleries, and brandy and spirits by fruit distilleries. For purposes of withdrawal, see tables 65 and 69. For production of gin at rectifying plants, see table 80. Includes 30,531 tax gallons produced at registered distilleries as fo lows: 29,826 tax gallons in California and 705 tax gallons in Georgia. For kinds of brandy and spirits-fruit produced, see table 63. 1 See footnote 4, table 60. See footnote 5, table 60. •

180 REPORT OF COMMISSIONER OF INTERNAL REVENUE REPORT OF COMMISSIONER OF INTERNAL REVENUE 181

TABLE 62.-Production: Brandy and spirits by fruit distilleries, by kinds and by TABLE 64.-Withdrawals: Distilled spirits, total tax-paid,' by kinds and by months, months, fiscal year 1949 fiscal year 1949 [Tax gallons] [Tax gallons]

Black- Total Month Grape Raisin Apple Fig berry Other Other Grand Month Whisky Brandy Rum Gin spirits. Total Alcohol total 425 5,374 292,054 245,090 40,762 403 3,231, 587 101,321 24,645 249,286 3,127, 566 6,733,405 2, 956, 985 9,690,390 July 152, 083 116,120 12,685 174 8, 922 289,984 July August 307 6,399 3, 215,046 August 3,977, 571 98,044 17,966 349,442 3,089,876 7,532,899 3, 431, 869 10,964,768 September 3, 169,043 43,473 5, 82A September 4,736,406 195, 544 26,718 309,473 4,036, 789 9, 304, 930 3, 808, 604 13,113, 534 14, 681, 614 103,932 7, 696 16 5, 222 14, 798,479 October 7, 607 1, 316 12, 059,616 October 6,091,110 249,665 47,709 271, 857 4, 795, 549 11,455, 890 4, 701, 668 16,157,458 November 12, 402, 977 114, 963 3, 059,616 November 6,601,672 247,357 33,411 230,706 5,040, 980 12,154, 126 5,114,050 17, 268, 176 December 2, 968, 132 49,998 11,524 12, 662 166,508 49,993 4,348 21,674 1,123 170 413,455 December 3,964,969 52,781 22,652 240,202 2,998,409 7,379,012 3,158, 649 10, 537, 681 January 1, 123 234,648 January 3, 969,929 99,968 18,391 130,743 2, 229,975 6,549,006 2,943, 101 9, 492, 107 February 166,508 43,415 1,908 21,604 289, 921 94, 212 890 385, 023 February 4, 228, 582 74,869 23,225 146,750 2, 690, 593 7,264,019 3,183, 990 10, 448,009 March 691 3,033 283,500 March 4, 718, 906 94,792 22,874 336,124 4,060, 797 9,334,493 2,944,017 12, 278, 510 April 27,962 37,091 4,835 217, 962 37, 091 193 3, 615 258, 861 April 3, 884, 088 59,863 21,343 419,391 3, 270,436 7,755,121 2, 541, 494 10, 296, 615 May 757 6,227 191, 867 May 3,732,233 97,856 21,113 531,319 3,443,677 7,826,198 3,021, 621 10, 847, 819 June 144,306 90,577 June 3,536,911 39,289 22,264 571, 584 3,361,836 7,631,884 3, 039, 766 10, 671,650 3 1 54,526 3 6,060 3 38,962 35,949,395 Total 1 34,985, 465 ' 806, 603 57, 779 Total 52, 674,964 2, 11,348 301,311 3, 786, 877 42, 146, 483 ' 100,920,983 40, 845, 714 141 766, 697

Represents 16,565,512 tax gallons of brandy and 8,419,953 tax gallons of spirits-fruit. 1 Represents withdrawal upon tax-payment of whisky ruin, and gin from real, tared distil cries and in. 1 Represents 724,917 tax gallons of brandy and 81,686 tax gal ons of spur ts-fruit. ternal revenue bonded warehouses; brandy from fruit dig Merles and internal revenue bonded warehouses; Represents 40,709 tax gallons of brandy and 17,070 tax gallons of spirt s-fruit. other spirits from registered distilleries, fruit distilleries, and intern, revenue bonded warehouses; and al- 4 Represents 51,834 tax gallons of brandy and 2,692 tax gallons of spirits-fruit. cohol from industrial alcohol bonded warehouses. Withdrawals of whisky, brandy, rum, gin, and spirits RepresentsBrandy. the following quantities of brandy: 12,331 tax gallons of citrus, 6,875 tax gallons of plum, from internal revenue bonded warehouses include bottled-in-bond tax-paid withdrawals as reported in 6,626 tax gallons of peach, 3,572 tax gallons of cherry, 3,192 tax gallons of currant, 1,863 tax gallons of logan- table 66. Tax rate, 39 per tax gallon. berry, 1554 tax gallons of elderberry, 1,537 tax gallons of orange, and 452 tax gallons of gooseberry; and the 2 For tax-free withdrawals, see table 68. following quantities of spirits-fruit: 510 tax gallons of plum and 450 tax gallons of orange. TABLE 65.-Withdrawals: Distilled spirits, total tax-paid,' by kinds and by States, TABLE 63.-Production: Brandy and spirits by fruit distilleries, by kinds and by fiscal year 1949 States, fiscal year 1949 [Tax gallons] [Tax gallops] Whisky Brandy Rum Gin Other Total Alcohol Grand Wash- United State spirits total Kind Arkansas California Colorado Ohio Virginia ington States total California 2, 239, 358 789,806 1,693 55, 966 1, 909, 062 4,996, 885 601, 289 5, 597,174

01 3,531 3, 531 4,067 7,598 eA0m ai 3,294 119,906 1 34,985,465 Colorado 1,603 34,858, 582 621 1,335 3,955 21,770 298,255 353,719 353,719 5- 806,603 806,603 Connecticut._ _ 28,404 i 30,206 2,572 ' 57,779 Georgia 25,236 1, 190 6,143 32, 669 32 569 4NUNNMWO 4,283 574 1,056 54, 526 54,526 Hawaii 393 393 ,

0_ 8, 019, 937 142, 283 3, 085 1,259,105 9, 340, 814 18, 765, 224 1, 722, 490 20, 487, 714 E '12,331 Illinois 7,386 Indiana 10, 019, 334 219, 731 43, 172 1,039, 326 8,674, 086 20, 015, 648 6,123,419 26,139, 067 giP 7,385 203 4 6,626 Iowa 26,823 1, 901, 072 1, 927, 895 3, 439,198 5,367, 093 588, 203 16 1,119 124 3,630 173 691 a 6,0130 Kansas )) 7, 588, 203 0 214 465 2, 893 5, 572 Kentucky 19.292,476 20,060 8, ll 107, 031 7, 280, 231 26, 708, 004 5, 919, 279 32,627, 283

Jkg 834,494 834,494 lf 3,192 3,192 Louisiana 2,180 27,161 1,987 1,987 Maine 2,180 29, 341 NO pl 79 1,784 1,863 Maryland 4,872, 269 20,845 10,996 143,709 4, 960, 288 10,008,107 914,604 10, 922,111

— 1,534 1,554 Massachusetts.. 464, 935 108, 362 214, 073 2, 242 706, 554 1,496,166 443,186 1, 939, 362 452 452 Michigan 12, 661 170, 958 5, 967 64,363 253, 949 271, 284 525,233

1 Minnesota 6,939 21,194' 1, 645 83,808 113,586 113,586 4 4 133,044 35,949,395 Missouri 52, 222 280 346 59, 050 111,898 145, 697 257, 495 3 5,902 r 36,730,202 3 1, 533 3 8,524 30, 582 Nebraska 87, 672 87, 672 22, 249 109, 921 New Jersey... 17,328 131,471 7, 235 193, 582 349, 616 1, 324,170 1, 673, 786 New York 108,497 49, 446 3,181 1,015, 801 1, 489, 959 2,666,884 117, 188 2, 784, 072 Includes 1,459 tax gallons of brandy in Connecticut. 1 Includes 244 tax gallons of brandy in Connecticut, 17,070 tax gallons of spirits-fruit in ssouri, 1,180 Ohio 1,482,476 83,871 535,417 2,101, 764 4,856, 338 6, 958,102 3 Pennsylvania. 5, 735, 418 246,909 6, 983 106, 559 4, 556, 535 10,652, 404 6, 484, 492 17, 136, 896 tax gallons of brandy in New Jersey, and 614 tax gallons of brandy in New York. Tennessee 162,630 1,376 164,006 164,006 3 Represents brandy in Pennsylvania. Virginia 104,490 51 104,541 ______104,541 Includes 6,423 tax gallons of brandy in Georgia. Washington 6,623 6,627 Inciudea.307 tax gallons o !brandy in Georgia. West Virginia 586 586 'Brandy.Represents 17,224,911 tax gallons of brandy and 18,505,291 tax gallons of spirits-fruit. Wisconsin 5,735 5,735 5,735 TotaL___ 52, 674, 964 2, 011, 348 301,311 3, 786, 877 42, 146,483 2 100, 920, 983 40, 845, 714 141, 766,697

1 Represents withdrawals upon tax-paymen of whisky, rum, and gin from regis ered distilleries and in- ternal revenue bonded warehouses; brandy from fruit dis illeries and internal revenue bonded warehouses; other spirits from registered distilleries, fruit distilleries and internal revenue bonded warehouses; and alcohol from industrial bonded warehouses. Withdrawals of whisky, brandy, rum, gin, and spirits from internal revenue bonded warehouses include bottled-in-bond tax-paid withdrawals as reported in table 67. Tax rate, $9 per tax gallon. For tax-free withdrawals, see table 69,

8 6 09 47-5 0-13 182 REPORT OF COMMISSIONER OF INTERNAL REVENUE REPORT OF COMMISSIONER OF INTERNAL REVENUE 183 TABLE 66.-Withdrawals: Bottled-in-bond distilled spirits; tax-paid, by kinds and TABLE 68.-- by months, fiscal year Withdrawals: Distilled spirits, total tax-free,' by kinds and by months, 1 949 fiscal year 1949 [Tax gallons] [Tax gallons] Month Whisky Brandy Rum Spirits Total For hospi- July 426, 198 3,021 735 429,954 tal, sob For For fortification of August 671,167 349 757 572, 273 For denaturation For use of the entitle, vessels September 636, 851 1, 752 472 639,075 wine 3 United States and and October 999,883 3,283 586 1,003,752 Month educe- aircraft November 1,181,385 7,372 1,435 1, 190, 192 tional December 599,467 1,611 725 117 601,820 use January 637,622 2,560 339 660,521 February 688,309 2,113 1.940 692.362 Sp irits- March 666,291 292 951 867,634 Brandy Rumum Spirits Wis-W,is- BrBrandy April 637,622 610 510 638,742 fruit Spirits May 421,466 2,117 192 426,775 June 302,275 1,428 232 303,935 52,531 101 134,617 42,585 Total 7,788, 536 26, 408 8, 874 117 7,823,935 August 113,120 50,407 150,652 290,485 September 2,305,641 1,719,702 179,029 12,276 October 9,072, 722 6,268,338 166,406 78,463 I Represents withdrawals of bottled-In-bond distilled spirits from internal revenue bonded warehouses. November 3, 717, 276 7,704,384 156,989 82,030 The withdrawals in this table are included in total tax-pa d withdrawals reported in table 64. These distilled December 989,381 1,172,106 153,486 spirits were bottled in bond prior to the payment of tax, with the exception of 1,600,054 tax gallons of whisky January 96,415 178,987 161,100 10,404 509 10 and 2,065 tax gallons of brandy bottled m bond after payment of tax. February 81,821 53,502 110,093 22,171 March 98,112 158,204 130, 744 112,899 April 76,056 136,043 137,720 44,872 1,531 TABLE 67.-Withdrawals: Bottled-in-bond distilled spirits,' tax-paid, by kinds and May 50,360 46,206 166,501 17,178 3,428 by States, ficca year 1949 June 103,551 159,182 139, 761 14,468 Total [Tax gallons] 16, 754,986 17,647,162 1,757, 078 713,836 2,040 3,428 10 2,504

State Whisky Brandy. Rum Spirits Total For 691)051 To customs menu acturing • bondedwarehouses Month Total California 322,607 10,583 242 333,432 Connecticut 2,844 2,122 4,966 Whisky Spirits Rum Whisky Spirits Other

Illinois 162,138 1,808 163,946 I Indiana 432,470 432,470 Kentucky 6,000,042 10,056 6,010,098 July 8,709 70,647 8,666 9,048 .4- ER 827,118 Maryland 96,301 21 96,322 August 12, 631 9,736 13,736 ch 848,306 Massachusetts 4,440 2,092 6,532 September 8,406 10,771 44,815 8,769 WE 4, 295, 763 Missouri 15,685 • 15,685 October 65,938 13,840 18,458 14,399 .f .ide 16, 691, 150 New Jersey 331 331 November 119,317 35,402 9,752 5,530 11,812, 290 New York 19,386 1, 125 3,181 117 23,809 December 41,187 68,611 866 20, 566 10,683 January IM 2,458,548 Ohio 181, 768 810 182, 578 110,888 172, 548 23,876 2,808 752 201 Pennsylvania 533,025 2,005 1,237 536,287 February 163,856 18,185 32,645 8,815 ' ' 493, 294 Virgima 17,499 17,499 March 151,603 35,953 19,894 15,540 Aprll 722,546 43,870 3,564 26,819 4,091 476,392 Total 7,788,536 98,408 8,874 117 7, 823, 93.5 May 21,263 18,137 9,698 E 328, 875 June 94,763 12,861 19, 376 10,968 562,058 Represents withdrawals of bottled-in-bond distilled spirits from internal revenue bonded warehouses. Total 842,230 442,382 800 252, 539 114,045 8 34, 962 The withdrawals in this table are included in total tax-paid withdrawals reported in table 85. These distilled 38, 568, 038 spirits were bottled in bond prior to the pa ant of tax, with the exception of 1,600,054 tax gallons of whisky and 2,065 tax gallons of brandy bottled in nd after payment of tax. Represents withdrawals of whisky, rum, and gin from registered distilleries and internal warehouses,' brandy from Mil distilleries and internal revenue bonded warehouses and otherrevenue spirits bonded from registered distilleries, fruit distilleries, and intense revenue bonded warehouses. In addition, 28,400,821 tax gallons of spirits were withdrawn for transfer to industrial alcohol bonded warehouses. Represents 13,999,177 tax gallons of brandy and 16,870,346 tax tallons of spirits-fruit withdrawn from fruit distilleries and 2,755,800 tax gallons of brandy and 776,816 tax gallons of spirits-fruit from internal revenue bonded warehouses. (Under the Act of June 24, 1940 (Public No. 655, 76th Cong.), effective July 1, 1940, the tax on brandy and spirits-fruit used In fortification is included in the wine tax.) Represents 22,115 tax gallons of gin, 7,607 tax gallons of rum, and 5,240 tax gallons of brandy.

184 REPORT OF COMMISSIONER OF INTERNAL REVENUE REPORT OF COMMISSIONER OF INTERNAL REVENUE 185 TABLE 70.-Losses: Distilled spirits TABLE 69.-Withdrawals: Distilled spirits, total tax-free,' by kinds and by States, in internal revenue bonded warehouses due to fiscal year 1949 leakage and evaporation, by kinds and by States, and losses due to other causes, by kinds, fiscal year 1949 [Tax gallons) [Tax gallons]

For State hospi- Whisky Brandy Rum Gin Other tal, sal- For spirits Total For fortification of For use of the entific, vessels wines For denaturation United States and and Losses (allowed) from leakage and educa- aircraft evaporation: 2 California State tional 616, 123 use Colorado 143, 292 195 60 91,999 Connecticut 771 4 851,669 6, 663 775 Georgia 118 782 126 1, 253 Illinois 1, 761 503 8,932 Spirits-- kyle- Whis- 2, 59 2,826 Brandy Rum Spirits Brandy Spirits Indiana 012, 629 25,639 643 50 fruit ky ky 3, 218,117 32, 679 323,783 2,362, 749 Iowa 9,119 35,363 212,045 3,507,323 Kentucky 3, 260 5,462, 526 6,642 1, 795 5,055 Arkansas 6,902 Maine 2, 321 39 202,871 5, 673, 399 Maryland 212 California 16,378,375 17,634,827 75, 570 3, 428 182 1, 517, 489 2,470 212 1, 229 Massachusetts 1,849 65 74, 425 1, 596, 298 Colorado Michigan 79, 435 8, 574 34, 664 Connecticut 1,460 1, 278 2 2,827 125,902 Georgia 9, 678 Minnesota 8,632 227 746 5,883 Missouri 1, 933 1,321 1 Illinois 44,169 12,944 27 668 3, 923 Indiana 10 New Jersey 3, 460 25 12, 996 New York 26,100 7 743 Iowa 42, 585 20, 956 1,101 30, 310 Kentucky 1, 021, 715 184 Ohio 715 22, 772 Pennsylvania 320,888 3,117 Maryland 17, 516 1,810 1,849, 565 36,463 6, 747 330, 752 735,363 24 Tennessee 4,931 869 262,161 2,153, B89 Massachusetts Virginia 26, 232 290 Michigan 11,228 490,734 30,046 146 28, 472 Missouri 4,945 10,741 Wisconsin 30,192 Nebraska 104, 941 231 231 New Jersey 40,797 1,594 62 Total 15,186, 066 Losses from other causes 291,280 54, 631 36, 641 1, 183, 037 New York 73,476 226 61, 217 22, 723 16, 751, 655 Ohio 15,599 128 2, 674 235,699 322,441 Total losses Pennsylvania 2,033 2,040 15, 247, 283 314,003 Virginia 34,904 54, 759 39,315 1,418, 736 17,074,096 Washington 113,675 Total 16, 754, 986 17, 647, 162 1,757,078 713,830 2, 040 3,428 10 2,504 'DifferenceRepresents spirits produced by registered and fruit distilleries. Losses disallowedbetween are included entry and in tax-paid withdrawal withdrawals. gauge of all spirits withdrawn from bonded warehouses. : Losses from fire, theft, casualty, etc. To customs menu acturing For export bonded warehouses TABLE ate Total 71.-Stocks: Distilled spirits in internal revenue bonded warehouses, by kinds Whisky Spirits Rum Whisky Spirits Other and by months, fiscal year 1949 [Tax gallons) Arkansas 5,902 California 24,361 26,056 171 34,193,006 Month Whisky Colorado 1,229 Brandy Rum Gin Other Connecticut 2,547 2,512 6,519 spirits Total Georgia 9,878 July 99,717 169,380 9,865 87 327,218 528, 919, 016 15,322, 964 Illinois August 2, 579, 340 1, 041, 589 55, 005, 378 602,868, 287 Indiana 222,222 142,924 365, 156 September 533, 277, 640 15, 289,104 2, 660, 600 Iowa 42, 585 538, 050, 939 14, 315, 216 2, 536,176 952, 214 55, 596, 818 607, 676,378 732 1, 439, 624 October 542, 262, 875,129 55, 835, 787 611, 613, 247 Kentucky 400,113 16,900 November no 13, 211, 289 2, 520,948 Maryland 70,929 60,198 41,732 50,589 345 243,119 547, 533, 941 14, 296,201 885,129 56, 521, 087 615, 401,183 December 2, 504,991 869,641 56,471, 798 821, 677.122 Massachusetts 13,337 800 241 718 750,483 January 559, 822, 363 14, 584, 071 2, 511, 939 Michigan 501,982 569, 734,161 14,194 178 2,991,462 900, 604 57,869,259 635,688,196 February 971,192 58,880, 814 896, 271, 705 Missouri 15,686 March 578,341,576 13, 984,856 2,492,522 1,000,416 58, 769,362 854, 598, 732 Nebraska 104, 941 586, 591, 731 13, 959,121 April 2,479,478 925, 071 57, 772,625 661, 728,026 New Jersey 711 43,164 May 593,093, 700 13, 524, 966 2, 990, 012 1,029,229 58, 282,830 668, 420,737 348 74,050 699, 561, 051 13, 519,934 New York June 2, 478, 063 974,194 58, l28, 331 874, Ohio 5,886 21,4845 602, 925,8431 13,417,613 2, CA 720 66I, 073 Pennsylvania 2,059 24,412 195,969 62, 778 34,359 323,656 948,596 57 , 540,929 677, 393,819 Virginia 34,909 Washington 113,676 I Represents original entry tax gallons except for distilled spirits in cases, been determined. Stocks of distilled spirits in cases as of June 30 were as follows:for which 1,339,201 losses tax have gallons already of Total 842,230 442,382 800 252,539 114,085 834,962 38, 568, 036 whisky, 9,645 tax gallons of brandy, 3,855 tax gallons of rum, and 70 tax gallons of gin. 4 Represents spirits produced by registered and fruit distilleries.

1 Bee footnote I, table 68. 3 See footnote 2, table 68. 3 See footnote 3, table 68.

REPORT OF COMMISSIONER OF INTERNAL REVENUE 187 186 REPORT OF COMMISSIONER OF INTERNAL REVENUE TABLE 74.-Summary: Production, withdrawals, and stocks of distilled spirits, spirits in internal revenue bonded warehouses, by kinds by months, fiscal year 1949 TABLE 72.-Stocks: Distilled 1 and premises operated, by States, June 30, 1949 [Tax gallons] [Tax gallons] Tax-paid withdrawals Other Total Rum Gin State Whisky Brandy spirits I Tax-free Stocks Month Produc- Bottled- with- end of in-bond Other drawals I month s 13, 693, 302 tion I distilled Alcohol Total 8, 334, 810 44,064 51,536 2,978,186 distilled California 2, 184, 726 121, 651 spirits 120,566 1, 086 254,604 spirits Colorado 19,902 3,960 45,001 Connecticut 184,199 176, 743 176,743 9,532 165,6600 Florida 39, 005 1,334 July 18, 789, 911 429, 954 6, 303, 451 2,956,985 9, 690, 390 327,118 602, 868, 287 Georgia 115, 789 16, 888 12,232,628 89,339, 569 August._ ___ 15, 935, 276 572,273 6, 960, 626 3, 431, 869 10, 964, 768 648,306 607,676,376 76, 558, 705 516,978 19, 282 88, 849, 932 Illinois 1, 091, 151 224, 254 641,146 14, 732, 448 September 21, 153, 855 639,075 8, 665, 855 3, 808, 604 13, 113, 539 4, 296, 763 611,613, 247 Indiana 72, 160, 936 2,082 2,082 October 34, 815, 427 1,003, 762 10, 452,138 4, 701, 668 16,167, 958 15, 691,150 615, 901,183 14, 687 7, 278, 632 291, 919, 328 November 37, 253,135 1,190,102 10, 963, 934 5,114, 050 17, 268,176 11,812, 290 621, 677,122 Iowa 131,973 291,039 206, 828 Kentucky 284 292,997 208,828 December a 391, 317 601, 820 6, 777,102 3,158,649 10, 637, 661 2,458, 548 635, 688,196 Louisiana 9,405 January 21, 863, 250 660, 521 5, 888, 985 2 943,101 9, 492,107 752, 201 646, 271, 795 9, 405 53, 861,212 Maine 76,203 1,840 26,003 3,214,'200 February 19,631, 423 692, 362 6, 571, 657 3,183, 990 10, 448, 009 993, 294 654, 588, 732 Maryland 50, 543, 166 Z 509 155, 225 3, 438, 405 March 20, 231, 618 667, 534 8, 666, 959 Z 944, 017 12, 578, 510 722, 546 661, 728, 026 1, 825, 837 149,207 1,305, 827 289,897 476, 392 668, 420, 737 Massachusetts 70,478 5,343 205,109 April 16, 922,134 638, 742 7, 116, 379 2, 591, 494 10, 296, 615 Michigan 2, 969 9, 412 58,988 165,108 May 16, 823, 444 423, 775 7, 402, 423 1,021, 821 10,847,819 328,375 674, 661, 073 72, 216 29, 512 1, 362,499 2, 358,126 June 13, 731, 709 303, 935 7, 327, 949 3, 039, 766 10, 671,650 682 053 677,343, 619 Minnesota 976,139 19,402 86 Missouri 9,927 91,498 781,139 149,528 530,183 589, 255 40, 845, 714 141, 766,697 38, 564, 036 677, 343,619 New Jersey 471,687 20,269 Total 266, 542 499 7, 823, 935 93, 097, 048 New York 97, 299 1,369,056 20,982 885 18, 850,191 752,830 10,808 109,340 Ohio 94, 819 14, 521 I Represents production of whisky, rum, gin, brandy, and spirits by registered distilleries and brandy Oregon 178,111 13, 782,942 107, 695, 620 92, 484, 198 777, 128 475,293 1,263,857 and spirits by fruit distilleries. Pennsylvania 12, 088 I I Represents tax-paid withdrawals of brandy and spirt a from fruit distilleries and internal revenue bonded Tennessee 1,251,769 1, 045,210 979, 099 66,127 41,037 warehouses, whisky, rum, gin, and spirits from registered distilleries and internal revenue bonded ware- Virginia 232 houses, and alcohol from industrial alcohol bonded warehouses. 40, 805 7,925 83, 420 Washington 75,495 Represents tax-free withdrawals for fortification of wine, for denaturation, for use of the United States. Wisconsin for hospital, scientific, and educational use, for vessels and aircraft, and for export, and transfers to customs 948, 596 57, 580,929 677, 843, 619 602, 925, 861 13,417,513 2,490, 720 manufacturing bonded warehouses. In addition 28,400,821 tax gallons of spirits were withdrawn for trans- Total fer to industrial alcohol bonded warehouses. k • Represents stocks of whisky, rum, gin, brandy, and spirits in internal revenue bonded warehouses. I See footnote 1, table 7L r See footnote 2, table 71. 73.-Stocks: Distilled spirits in internal revenue bonded warehouses, by TABLE 75.-Summary: Production, withdrawals, and stocks on hand June 30, of TABLE kinds, and by years and seasons of production, June 30, 1949 distilled spirits, and premises operated, fiscal year 1949 [Tax gallons] [Tax gallons]

Other Tax-paid withdrawals I Ruin Gin Total Year Season Whisky Brandy spirits Production I Bottled- 30 State Other 30 in-bond distilled Alcohol Total 1911 Spring 135 distilled Fall 135 140 spirits 140 spirits 1912 Spring 123 Fall 9 114 315 315 315 1913 315 Arkansas 5, 902 Fallll 772 California 36, 832, 355 333, 432 9, 662, 453 601, 289 5, 597,174 Prhig 772 168 1914 Sing 168 Colorado 1, 533 3, 531 4,067 7, 598 Fall 146 Connecticut 1, 703 4, 966 348, 753 353, 719 146 264 1915 Spring 24 Florida Fall 240 8,183 Georgia 23, 053 32 569 32 669 3,183 4, 950 1916 Spring 132 117 Hawaii 393 393 Fall 4, 701 1,320 Illinois 44, 074, 940 163,946 18, 601, 27b 1,722, 490 20, 487, 714 1, 248 24 45 2, 116 1917 SprMg 6 105 87 Indiana 32, 671, 241 432, 470 19, 583, 178 6,123, 919 26,139, 067 Fall 1,938 195 'Ora 6, 181, 849 1, 927, 895 3, 439,198 5, 367,093 195 576 1921 Spring 578 Kansas 7, 588, 203 7, 588, 203 Pall 18,332 Kentucky 84, 992, 080 6, 010, 098 20, 697, 906 5, 919, 279 32, 627, 283 Spring 13,332 2 84 4,433,164 Louisiana 834, 494 834, 494 1941 4, 294,088 118,230 20, 752 8, 444,996 Fall 2074 17, 067 Maine 2,180 27,161 29,341 8,425,865 3,956 91 3,310,8588_ Maryland 17, 093, 691 96, 322 9, 911, 785 914, 004 10,922, Ill 1949 3, 137, 963 188,848 41,114 all 32,973 4, 521 3, 620 Massachusetts 1, 899, 192 6,532 1, 489,624 443,186 1,939, 352 1943 Spring 7,254 3,689 399,334 Michigan 5, 359, 543 253,949 271,284 525,233 388,491 228, 938 Fall 198, 499 30,420 14 Minnesota 113, 586 113, 686 Spring 22,199 6,632, 561 Missouri Z 009, 126 15,686 96,213 145,597 257,495 1944 6,631,484 797,068 181, 810 12 421, 240 Fall 498,827 171,852 108,46'6 Nebraska 6,184, 392 87, 672 22, 249 109, 921 1946 Spring 11, 044,109 208,474 1, 191 503, 987 84, 934, 808 New Jersey 1, 160 331 349, 285 1, 324,170 1, 673, 786 62750, 202 1, 471, 954 66, 363, 216 Fall 826, 044 404,125 40,143 386, 215 New York 2, 324, 298 23, 809 2, €43, 075 117, 188 2, 784, 072 Spring 84, 698,689 59, 919 3, 885, 996 65, 670, 646 Ohio 9, 847, 502 182, 578 1, 919, 186 4, 856, 338 6, 958,102 1946 58, 859, 483 2, 690, 591 375, 157 110, 720, 211 Fall 2,519,840 399, 645 59, 343 2, 752, 358 Oregon 1947 Spring 104, 989,025 9, 216 4, 932 981 40, 348, 209 Pennsylvania 15, 476,912 536, 267 10, 116, 137 6, 484, 492 17,136, 896 34, 500,096 1, 060, 207 345,709 107, 087, 926 Fall 179,308 79, 598 12,479 12, 184,951 South Dakota 2,500 1948 Spring 94, 631, 690 44,613 18, 272, 692 96, 161,012 Tennessee 747, 278 164, 006 184 006 75, 738,188 2,001,217 104,322 89, 627, 321 Fall 464, 298 135,788 721,623 14,505,290 Virginia 274, 544 17,499 87, 042 104, 541 1949 Spring 73, 803,912 Washington 132,044 6,627 6,627 677,343, 619 13,417,513 2,490, 720 948,596 57, 580,929 West Virginia 586 586 Total _ - 602 925,861 Wisconsin 459, 601 5, 735 5, 735 I See footnote 2, table 71. 5 Corrected figure. Total 266, 542, 499 7,823,935 93, 097, 048 40, 845, 714 141, 766,697 I See footnote 1, table 71. See footnotes at end of table. 188 REPORT OF COMMISSIONER OF INTERNAL REVENUE REPORT OF COMMISSIONER OF INTERNAL REVENUE 189 TABLE ?5.-Summary: Production, withdrawals, and stocks on hand June 30, of TABLE distilled spirits, and premises operated, fiscal year 1949-Continued 76.-Summary: Production, tax-paid withdrawals, and stocks on hand [Tax gallons] June 30, of whisky and of total distilled spirits, and premises operated, fiscal year 1934 to 1949, inclusive-Continued

Premises operated 9 [Tax gallons]

Tax-free Stocks State with- Internal June 30 3 Stocks June 30 dramas 2 Registered Fruit revenue 1 Number of premises operated distilleries distilleries bonded warehouses Fiscal year ended Tune 30- Internal Whisky Total distilled Registered Fruit dis- revenue Arkansas 5, 902 spirits distIDeries tilleries bonded California 34, 143, 006 13, 593, 302 I...N N warehouses Colorado 1,229 121,651 Connecticut 6, 519 254, 604 1934 57, 717,662 Florida 176,743 1935 63,065,017 51 85 117 152,807, 235 160, 755,394 88 140 Georgia 9, 678 166, 660 1936 300,658, 508 192 Hawaii 1937 310,801,839 121 148 263 Illinois 327, 218 89, 339, 569 445, 285, 663 462, 607, 980 137 136 277

OON 1938 Indiana 365,156 88, 849,932 471,159, 539 497, 527, 755 118 138 265 1939 978,899, 618 522, 058,134 Iowa 42, 585 2, 082 1940 112 129 303 Kansas 480,937, 609 526, 394,924 101 120 g 1941 296 Kentucky 1, 439, 624 291, 919, 328 504,080,691 551, 424,175 105 127 1942 516, 918,887 288 Louisiana 206, 828 1943 587, 751, 374 116 120 275 Maine 9, 405 1944 424,824, 966 476,345, 030 130 116 269 Maryland 243,119 53, 861, 212 1945 348,646,381 376, 277,860 122 137 268 Massachusetts 750,983 3, 438, 405 307,587,545 338, 172,677 138 111 249 1946 374,072, 055 Michigan 501,962 289,897 1947 420, 262, 363 144 141 278 Minnesota 165, 108 464,825,305 525,827, 726 147 148 1948 522, 260, 756 267 Missouri 15, 686 2, 358,126 1949 594, 733, 085 130 123 262 Nebraska 104, 941 602, 925,861 677,343, 619 99 118 244 New Jersey 43, 164 781, 134 New York 74, 050 589, 255 I Exclusive of ethyl alcohol. Ohio 21, 485 23, 982, 885 2 Includes ethyl alcohol. Oregon 109, 340 Pennsylvania 323, 650 107, 696, 620 Represents gross production. Net production for such years-that is, the gross production minus South Dakota products used in redistillation-was 255,915,204 tax gallons for 1942, 407,568,226 tax gallons for 1943, Tennessee 1, 263, 857 420,833,502 tax gallons for 1944, and 524,301,407 tax gallons for 1945. Virginia 34, 904 1, 045, 219 Washington 113,675 41,037 West Virginia VI. DISTILLED SPIRITS AND WINES: RECTIFIED Wisconsin 83, 420 [Produced by rectifying plants] Total 38, 568, 036 677, 343, 619 99 118 244 TABLE 77.-Materials: I Used in production of rectified spirits and wines, by kinds ' See footnote 1, table 74. and by months, fiscal year 1 949 I See footnote 2, table 74. See footnote 3, table 74. Proof gallons] See footnote 4, table 74. 5 Represents number operated during any part of the year. Month Alcohol Spirits 2 Whisky Brandy Wines Other Total TABLE 76.-Summary: Production, tax-paid withdrawals, and stocks on hand July June 30, of whisky and of total distilled spirits, and premises operated, fiscal 2, 537,459 2, 952, 562 2, 563, 234 63,189 21,473 August 2, 954, 950 50,868 8,188, 785 years 1934 to 1949, inclusive 3, 343. 359 3,051, 580 85, 129 27, 212 52, 821 9, 515,051 [Tax gallons] September 3,211,062 4, 063,141 3,511.390 October 156, 795 33,954 67,076 11,045,308 4, 249, 936 4, 782, 836 4, 594, 583 210, 223 37, 638 November 4,399, 220 73,259 13,948, 475 5, 082, 153 4, 708,086 172, 138 46, 453 69, 655 19, 472, 705 Production I Tax-paid withdrawals December 3, 005, 589 3, 103,035 2, 879,650 138, 200 41,057 January 2, 665, 311 81, 529 9, 249, 060 2, 249, 727 2.524, 708 138, 262 25,120 74, 587 7, 672, 715 Fiscal year ended June 30- February 2,898, 820 2, 560, 062 2, 757, 381 143, 398 39, 700 March 2, 584, 238 64, 173 8, 413, 534 Whisky Total distilled Whisky Total distilled 4, 096, 120 3. 285,3% 150,986 66,966 66,456 10, 250,094 spirits spirits April 2, 170. 595 3, 150, 279 2, 723, 331 May 110,953 55, 734 48,118 8, 258, 510 2, 534, 060 3, 910, 1 24 2, 764, 333 85, 336 5 6,309 June 2, 666, 281 59, 760 8, 909, 922 3,904, 475 2, 754, 123 106, 251 61, 795 54,777 9,047, 702 1934 62,352, 666 76, 506, 388 18, 875,964 38,601,236 Total 35,824, 521 1935 149, 112, 923 169,126,472 50, 780,940 75,073,993 42, 192, 873 38, 117, 617 1, 560,360 513,411 2 753,079 118, 971, 861 1936 223,659,539 253, 867,925 67,299,166 100,383,056 1937 223,457, 850 258,956,886 72,616,195 120,011,294 1938 102, 895, 872 150, 155,92A 68,611,650 114,926,395 Includes import d liquors as follows: 370 929 proof ga Ions of whi ky, 24,198 proof gallons of brandy, 1939 93,003,917 145,326,176 72,059, 023 114, 578,069 21,834 proof gallons of wines, 72,546 proof gallons of other iquors cons! MI6 of 59 1389 proof gallons of 1940 98, 993,303 143, 455,192 81, 267, 368 128,325,941 1,803 proof gallons o gin, 2,180 proof gallons of vermouth, 1,027 proof gallons of cordials and 1 quoin's, rum,and 1941 121,851,983 175, 208,746 80, 541,974 130,552,148 7,852 proof gallons o products for exportation 1942 120, 257, 424 + 256, 392 400 84,709,171 144,207,510 Represents high-proof spirits produced at egistered and fruit distilleries. 3 1993 19, 520, 698 3 426,474, 062 87,913, 792 136,836,551 Represents 108,320 proof gallons of rum, 145,314 proof gallons of gin, 69,297 proof gallons of vermouth, 1944 429,069, 171 58,832,992 90,463,887 165,933 proof gallons of cordials and liqueurs, 20,281 proof gallons of unclassified spirits, and 254,934 proof 1945 41, 562,303 535,439, 513 63,891, 224 142,330, 770 gallons of products for exportation. 1946 197,964, 516 306,066, 637 63, 226, 912 178, 131,350 1947 167,994,805 316, 157, 700 58,822, 676 173, 605,111 1948 129, 597, 067 244,127,343 53, 603, 200 147,160, 331 1949 149, 695, 239 266, 642, 499 62, 674,964 141,766,697 See footnotes at end of table. 190 REPORT OF COMMISSIONER OF INTERNAL REVENUE REPORT OF COMMISSIONER OF. INTERNAL REVENUE 191

TABLE 78. Materials: I Used in production of rectified spirits and wines, by kinds TABLE SO.-Production; 3 Rectified spirits and wines, by kinds and by States, and and by States, fiscal year 1949 premises operated, fiscal year 1949 [Proof gallons] [Proof gallons]

State Alcohol Spirits ] Whisky Brandy Wines Other Total Cordials Number State Whisky Gin and Brandy Other Total of plants liqueurs oer California 345,303 1, 875,906 1, 295, 750 612, 532 93,032 44,954 4, 217, 477 ated * Colorado 613 278 42 833 Connecticut__.__.__ 110,403 451,753 92,244 5, 160 696 43,532 703,848 Illinois 1,112, 946 9,028, 053 4, 993, 269 34, 864 120, 825 109, 289 15,396, 248 California 3,260,310 235, 499 46,122 806,139 63,009 4, 210,079 Rif Indiana 8, 058, 568 9, 217, 575 9,434, 082 228, 583 96, 295 209,861 27, 244, 964 Colorado 732 23 755 Iowa 2,154 311 704 1, 239 4, 408 Connecticut 186,882 137,754 217,544 162,926 704,606 -1 Kentucky 8.330, 929 7, 771, 909 8, 970, 861 9,873 76, 010 18, 206 25,177, 788 Georgia 21 21 4`

Louisiana 2,878 108 777 1,080 4,844 Illinois 14,935,961 ' 121 404,036 8, 323 23,889 15,372,325 fl Maine 10,876 2,560 206 728 14,369 Indiana 26,792,933 49,161 191,537 166,109 50,821 27,249,056 4- Maryland 4,150, 740 5,159, 609 4, 901, 810 16, 908 49,760 37, 431 14,318, 268 Iowa 2,111 1,023 1,218 4,352 Massachusetts 343,955 678,496 268,582 83,831 7,893 911,485 1, 473, 242 Kentucky... 25, 142,111 19,496 16,780 4,'605 25, 181,972 Michigan 153, 901 61, 189 15,218 173,662 32,251 30,037 466,258 Louisiana 518 4,588 816 5,422 Minnesota 23, 299 81, 694 6,124 21, 647 627 377 133, 768 Maine 4,344 5,738 3,955 14,037 Missouri 164, 957 180 444 165, 681 Maryland 14, 298, 501' 17, 428 96, 859 23,288 14, 376, 076 inc"' New Jersey 1,906, 961 913,140 54, 634 32, 482 6, 913 26, 710 2, 940,840 Massachusetts... 566,323 400,675 430,330 24,799 93139 1, 465, 866 New Mexico 678 339 4 272 88 1,381 Michigan 403, 944 22, 412 37,195 463, 551 New York 768, 443 1, 989,073 1, 428, 242 4,383 6, 593 45, 284 3, 742,018 Minnesota 19,889 105, 543 7, 490 132, 932 Ohio 4, 798, 029 638, 980 1, 278, 891 55, 761 13, 564 42,020 6, 777, 245 Missouri 181 163,082 307 163,570 ; - Oregon 8, 367 8,367 New Jersey 119, 039 2, 590,328 212, 835 5, 423 10, 109 2, 932,134 ."" Pennsylvania 5, 754, 911 4, 690, M1 5,359,803 277,864 47,598 62,420 16,193 477 New Mexico 785 - MO 299 1,234 Wisconsin 10, 527 7, 686 7, 902 2, 600 9, 801 133 38, 649 New York 3,611,123 27,333 60,636 °'

3, 287 18,691 3,721,070 W" Ohio 4,116,401 2,288,876 234,790 145,269 6,785,336 Total 35,824, 521 42,192, 873 38,117, 617 1,500,360 513, 411 J 763,079 118, 971, 861 Oregon 8,380 8,380 Pennsylvania.... 14, 706, 944 827,649 274,396 198,901 115,054 16, 122,884 W° Wisconsin_ 15,040 248 12,688 867 10,111 38,954 I See footnote I, table 77. See footnote 2, tbe 77. Total 107, 781, 521 6, 601, M7 2,817, 736 1,042, 745 I 710, 764 118,954, 612 204 See footnote 3 , 77. I For production of distilled spirits at registered distilleries, see table 61. TABLE 79.-Production:' Rectified spirits and wines, by kinds and by months, Represents number operated during any past of the year. fiscal year 1949 See footnote 2, table 79.

[Proof gallons] TABLE 81.-Summary: Materials used for rectification and production of rectified spirits and wines, and premises operated, fiscal years 1936 to 1949, inclusive Cordials Month Whisky Gin and Brandy Other Total [Proof gallons] liqueurs Materials used for rectification July 7,354,284 596,193 146, 592 52,386 37,886 8, 186,321 Fiscal year ended August 8, 513, 145 633,348 177,733 46,461 55,058 9,325, 745 June 30 September 10, 271, 202 414, 770 238, 173 98, 051 63, 531 11,085, 727 Alcohol Spirits Whisky Brandy Other Total October 12, 751, 960 464, 517 352, 652 119, 294 62, 342 13, 740, 765 November 13,377, 649 533, 637 376, 832 110, 174 57, 328 14, 455, 620 December 8, 797, 533 515, 733 289, 224 90, 902 64, 738 9, 758,130 1036 18,002,394 (113 14,072, 689 172,408 689,348 32,816,739 January 6, 627, 167 418,336 232,788 80,529 81,698 7,420, 516 1937 29, 268, 533 15,123,437 208,962 658,041 95, 248,973 Febr uary 7, 739, 220 397, 479 190, 721 98,817 47,727 8,473, 964 1938 20, 626,395 13, 573,665 248, 598 539, 288 43,987, 848 March 9,206,184 193,645 219,643 114, 002 68,319 10, 202,168 1939 17, 522, 484 11,898,021 18, 554, 212 250, 514 507, 411 43, 682, 642 April 7,345, 301 632, 290 183, 244 86, 870 57,812 8,305, 517 1940 17, 475,958 13, 901,129 15, 295, 513 321, 911 588, 877 47,581,388 May 7, 908, 209 688, 620 201, 224 6E 922 67,477 8, 931, 452 1991 22,844, 540 13, 391, 833 17,021, 767 563,257 687, 775 54,509,172 June 7,889,287 823, 279 209, 911 79,337 66, 873 9,068, 687 1942 19,675,212 25, 690,096 20,650, 946 904,227 897, 793 68, 021, 165 1943 1,734,604 35, 690,096 28,037,012 2, 901,863 1,657,855' 71,021,430 Total 107, 781, 621 6, 601,897 2,817, 735 1,042, 745 1710, 764 118, 954, 612 1944 2,331,970 25, 160, 722 32,111, 417 2,772,289 5, 557,375 67, 933,773 1945 21,135,331 44,366,831 40,848, 886 3, 417, 792 9, 766, 036 119, 584,876 1946 92 301,841 54,399, 168 45, 822, 758 3, 939, 793 5,003,234 151, 473, 794 I For production of distilled spirits at registered distilleries, see tab e 60. 1947 a 285, 350 57, 106,092 43, 692,046 2,475,048 3,070, 329 148, 628, 865 I Represents 4,328 proof gallons of alcohol, 245,161 proo gallons of high-proof spirits, 46,052 proof gallons of 1948 33, 674,979 49,916,952 39, 596,883 1,067,098 1, 319, 083 125, 575, 845 rum, 1,872 Proof gallons of vermouth, 69,814 proof gallons of wine, 207,666 proof gallons of unclassified spirits, 1949 35, 829, 521 42, 192,873 38, 117,617 1,1560, 360 1, 276, 490 118,971,861 and 135,871 proof gallons of products for exportation. I Included with alcohol. REPORT OF COMMISSIONER OF INTERNAL REVENUE 192 REPORT OF COMMISSIONER OF INTERNAL REVENUE 193 TABLE 83.-Summary: Distilled spirits (rectified and unrectified) bottled for con- TABLE 81.-Summary: Materials used for rectification and production of rectified sumption,' fiscal years 1941 to 1949, inclusive spirits and wines, and premises operated, fiscal years 1936 to 1949, inclusive- Continued [W ine gallonsl [Proof gallons] Fiscalesr Cordials Y- Whisky Other Production ended June 30 Brandy Rum Gin and Alcohol Total liqueurs spirits Number Fiscal year of plants ended lone 30 Cordials operated 119, 548, 126 2, 010, 021 1,378,192 13,316, 856 3, 754, 858 341,125 151, 872 140, 501,650 Whisky Gin and Brandy Other Total 136,038, 633 liqueurs 2, 340, 879 1, 813,449 14,396, 909 4, 755, 808 232,187 170, 735 159,748, 580 135, 273, 247 4, 493,152 2, 917, 579 6, 323,482 6, 994,371 45, 265 255, 642 155, 302, 738 96, 430,899 4, 538,048 12,994,456 7,461, 770 5, 949, 531 35, 916 2, 791, 290 130, 201, 920 143, 171, 432 4, 053, 886 2,024, 582 10,009,224 1938 21,726,685 6,767,295 3,117,552 93,435 743,969 32, 448,806 379 9.166, 562 31, 502 1, 285,811 169, 742, 999 163, 796, 884 3,612,167 951,314 19, 912, 035 13,985,185 132, 697 1,176, 418 203, 586, 700 1937 81, 586, 870 8,147,844 3,812,852 79, 321 684,085 44,310,972 340 166,218, 217 2, 336, 939 1938 32, 675,622 7,663, 36.3 2, 721,758 33, 824 464,883 43,569,950 304 688,880 18,645,18,645,945 6,702, 954 114, 614 324, 906 195, 531,435 325, 769 43,401,295 284 149, 232 495 1, 242,393 400, 298 11,409,038 3, 380, 369 77, 901 146,199 165,888,683 1939 33, 593,409 7,231,584 2,192,964 67, 589 142, 633, 709 1, 888, 904 389, 038 11, 355, 715 1940 37,977,224 8,968,097 2,437,706 74,372 301,171 47,656, 570 256 4, 315, 258 62, 342 286, 778 160,931, 244 1941 44, 317,166 6,764, 707 2,542,178 184, 835 348, 742 54,157, 628 245 1942 55, 961,730 7,597, 941 3,228,135 366,321 616, 776 67,770, 903 232 1 Prior to 1941 consumption was represented by tax-paid withdrawals. See table 76. 1943 60.794,623 2,965. 280 3,965,502 1, 361, 541 1,037, 875 70, 124, 821 215 1944 57,982,477 898,304 3,985,429 1,515,052 3, 425,143 67,686, 405 229 VIM DENATURED RUM 1945 101, 64.5,006 7,057,837 6, 686, 947 1,677, 186 1, 796, 413 118, 863, 389 259 1948 124,727, 150 11, 497,751 11,308,864 1,942,309 1,902, 734 150, 878,888 261 1947 130,700, 615 10, 547,373 4,545,503 1,677,869 1,088,993 198, 560,353 261 [Relates to denatured rum produced by distillery denaturing bonded warehouses] 1948 114,916,903 7,267,090 2, 207,73 654, 478 686, 678 125, 732, 822 237 1949 107,781, 521 6, 601,847 2,817,736 1,042, 745 710,764 118,954,612 204 TABLE 84.-Summary- Rum used for denaturation, and production, removals, and stocks of specially denatured rum at distillery denaturing bonded warehouses, by months, fiscal year VU. CONSUMPTION OF DISTILLED SPIRITS 1949 [Distilled spirits bottled by rectifying plants, arehousetaxaid-p bottling houses, and internal revenue bonded w s] Specially denatured rum Rum used Month for dens- TABLE 82.-Bottling: Distilled spirits (rectified and unrectified) bottled for consump- turation Stocks tion,1 fiscal year 1949 Production Removal s end of month [Wine gallons] Proof Wine Wine Wine goaone Rectified products 2 Unrectified products July gallons gallons gallons 140, 943 94, 899 89, 011 97,181 August 161, 141 108, 499 September 110, 674 44,571 Bottled Bottled- Grand 171,398 115, 406 114, 011 45, 115 Rind Bottled in-bond October 160,105 107, 801 Bottled at at tax- Bottled at at tax- total November 108, 858 43,388 paid Total products 145, 266 97, 810 96, 211 44,462 rectifying paid Total rectifying December 123, 752 83, 324 plants bottling plants 4 bottling January 94, 837 32, 377 137, 407 92, 518 72, 939 51, 484 houses 1 houses 4 February 132, 327 89, 098 March 99, 816 40,189 April 148,126 99, 735 94, 721 44, 787 8, 532, 378 2, 553, 956 11,086, 334 7, 790, 736 142, 633, 709 148,348 99, 885 114,238 39, 752 Whisky 122, 231, 018 1, 525,621 I 123,756, 639 May 136,728 92, 061 Brandy 1, 250, 730 2, 682 1, 253, 412 465, 013 153, 594 608, 607 26, 385 1, 888,409 June 87,111 44, 092 Rum 57, 310 564 57, 874 262, 076 60, 214 322, 290 8, 874 389,088 107, 245 72,210 74, 217 41, 783 4,122, 551 11, 355, 715 Gin 7, 232, 671 493 7, 233, 164 2. 989, 758 1,132 795 Total 1, 712, 786 Cordials and I, 153, 246 1,146, 841 41,783 liqueurs._ 4, 292, 018 23,240 4,315, 258 4, 315, 258 Alcohol 55,848 6,494 62,342 62,342 1 Formula 4 is used in all denaturation of rum. Other spirits 239, 254 2,012 241, 266 44, 988 427 45,395 117 286, 778 Total_ 135, 303, 001 1, 651, 612 136,857,613 12, 340,039 3, 907, 480 16, 247, 519 7, 826,112 160, MI, 244 TABLE 85.-Summary: Rum used for denaturation, and production, removals, and stocks on hand June 30, of specially denatured rum at distillery denaturing bonded I Represents distilled sp rits bottled at rectifying plants and tax-paid bottling houses, and the following warehouses, by States, fiscal year 1949 1 bottled-in-bond products: tax-paid withdrawals o distilled spirits bottled in bond prior to tax-payment and withdrawals of bottled distilled spirits which were bottled in bond after tax-payment. Includes im- ported distilled spirits bot led after withdrawals from customs custody. Exclusive of 163,930 wine gallons Specially denatured rum Number of of rectified distilled spirits and 92,219 wine gallons of unrectified distilled spirits bottled for exportation and Rum used distillery 98 414 proof gallons of whisky bottled in bond for export. State for dens- denaturing I Includes imported dist Iled spirits used for rectification as follows: 370,429 proof gallons of whisky, 24,198 turation stocks bonded proof gallons of brandy, 59,684 proof gallons of rum, 1,803 proof gallons of gin, and 1,027 proof gallons of cordials Production Removals Losses 30 June warehousee and liqueurs. operated * 3 Includes imported rectEed distilled spirits used in bottling as follows: 331 proof gallons of rum and 2,303 proof gallons of cordials and liqueurs. 4 Includes imported unrectified distilled spirits used in bottling as follows: 148,448 proof gallons of whisky, Proof Wine Wine Wine Wine 75,323 proof gallons of brandy, 195,966 proof gallons of rum, 4,481 proof gallons of gin, and 3,911 proof gallons gallons gallons gallons gallons gallons of unclassified spirits. Kentucky 977,390 658,077 659,746 3,247 16, 291 I Includes Imported unrectified distilled spirits used in bottling as follows: 28,972 proof gallons of whisky, Massachusetts 735, 396 495,169 486, 898 3, 330 25,492 r4 9,803 proof gallons of brandy, and 27,409 proof gallons of rum. Represents 861,388 wine gallons of blends of whisky 4 years old or older, 730,628 wine gallons of other Total I, 712, 786 1, 153, 246 1,146, 644 6, 577 41, 783 blended whisky, 122,162,056 wine gallons of spirit whisky, and 2,567 wine gallons of other whisky. 2 I See footnote I, table 84. Represents number operated during any part of the year.

194 REPORT• OF COMMISSIONER OF INTERNAL REVENUE REPORT OF COMMISSIONER OF INTERNAL REVENUE 195

TABLE 86.-Operations in specially denatured rum: By manufacturers, by States, TABLE 88. -Materials: Used in production of fermented malt liquors and cereal fiscal year 1949 beverages, by kinds and by States, fiscal year 1949 [Wine gallons] [Patinas]

Number of Grain and grain products Used in Stocks manufac- State Received manillas- June 30 turers State turing Sorghum - operating I Malt Corn Rice Wheat Barley grain Total mm Florida 5,644 5,444 266 1 16 Arizona 6,018,810 962,700 212,000 6, 193, MO Illinois California 141,826,520' Kentucky 132, 870 130,865 5,094 44, 205,020 13,926 730 4, 500 10,000 199, 971, 770 2,918 2,725 393 Colorado 20, 281,814 1,898,000 7,449,450 29, 629, 264 I Michigan Connecticut 5,753,980 I Missouri 46, 900 44,963 7,165 1,928, 100 155, 700 68,000 7,403,780 542 35 Delaware 5, 064, 345 1, 558, 200 7, 600 6, 630,145 New Jersey 526 District of Cobra. New York 5, 613 5, 671 294 472, 277 477, 206 31, 878 bia 2, 912, 625 1, 621,600 4, 534, 225 North Carolina Florida 11.454, 718 Ohio 82, 768 84, 854 1, 267 3, 804, 935 404,600 393, 200 451, 700 16, 509,153 28, 212 763 Georgia 1,840, 300 935, 500 2,746 800 Pennsylvania 29, 506 1, N 203 56 Hawaii 4, 265,066 1,090,250 660,011 6,015, 327 Tenneswe 200 2. 368,054 368,754 23,335 Idaho 2, 340, 640 809,550 3,166, 190 Virginia Illinois 153, 861,873 78,012, 423 West Virginia 2, 400 2, 311 194 3,977,807 40,700 895,882 236, 288, 485 Indiana 91, 021,371 37, 518, 720 780,500 18, 400 111,000 129, 497, 991 Iowa 3, 645,571 Total 1, 149, 592 1, 151,535 71, 756 50 9(14, 385 4, 639,956 Kentucky 59, 362, 231 18,497, 270 8, 036, 500 85, 895,001 Louisiana 55, 780, 514 10, 534, 23(1 10,866,900 83,560 77, 265,114

;-Represents number operating during any part of the year. Maryland 68,519,768 19,633,340 9,200 102, 600 97,000 88,361, 908 Massachusetts 56,361, 866 5, 217, 200 4, 354, 800 49,100 921, 200 66, 904,166 Michigan 141, 214,421 53, 114,005 15, 603,820 100 209, 832,346 IX. FERMENTED MALT LIQUORS AND CEREAL BEVERAGth Minnesota 89, 676,467 28, 735,988 7,484, 500 159,800 125, 956,755 [Produced by breweries] Missouri 236, 690, 837 22,829, 521 90,999, 785 350,415,143 Montana 6,696,175 1,790, 175 1, 275 86,800 54,000 8. 628, 425 Nebraska TABLE 87.---Materials: Used in production of fermented malt liquors and cereal 29,817, 742 4, 526, 714 7, 501, 137 136,080 41,981, 673 Nevada 1, 045,000 356,050 1, 401,050 beverages, by kinds and by months, fiscal year 1949 New Hampshire 938,400 187,680 1,126,080 [Pounds] New Jersey 239, 922, 079 80, 289,898 740, 359 28, 600 320, 980,938 New York 323,032. 225 107, 998, 584 17,414, 700 3, 690,060 1, 429, 400 450, 064,969 North Carolina_ 1,883, 025 921,900 2, 804, 925 Grain and grain products Ohio 165, 559, 652 48,048, 540 19,369,423 362,000 463,525 186,913 233, 980, 053 Oklahoma 1,732,037 629,485 2,361, 522 Month Oregon 13, 062, 995 2, 857, 700 2, 132,900 79, 750 18, 133, 345 Sorghum Total Pennsylvania 301, 901,308 77, 471, 545 Corn Rice Wheat Barley 9, 646, 522 2, 252, 600 2,947,700 2.756,900 396, 976, 575 Malt n grai Rhode Island 27, 041, 546 9, 549,990 65, 700 76, 640 36, 733, 776 Tennessee 7, 400, 200 339,300 2, 276, WO 10, 016, 200 Texas 48, 898,767 11, 452, 665 3, 257, 920 2, 382, 350 65, 991,702 July 275, 174, 532 75, 974, 997 30, 431, 929 247, 700 806, 042 2, 017, 533 384, 652, 733 Utah 6, 095,210 951, 750 700, 400 7, 747, 360 August 265, 632, 457 76,146, 307 29, 280 082 571, 500 650,623 1, 577, 701 373, 858,670 Virginia 5, 154, 330 1, 8&3, 900 7,038, 230 September 242, 960, 784 71, 076,185 26, 432,585 523, WO 543, 320 1,114, 013 342, 650, 737 Washington 53, 095, 611 19,371, 135 4, 130, 202 177,500 76, 774,448 October 204,490, 330 58, 769, 776 24,368,506 443,900 519,819 1, 056, 043 289, 648,374 West Virginia 1, 924, 200 621,801 2,696,000 November 189, 730, 737 53, 831, 200 22, 249 362 519, 000 488, 714 810, 077 267, 629,090 Wisconsin 360,429, 836 116,353, 955 67, 983,355 443,150 645, 210, 296 December 208, 642, 646 63,642, 065 22, 660 252 681, 000 461, 000 460, 873 296, 527,836 Wyoming 1, 969,880 278,300 224,800 2, 472, 980 January 186, 940, 727 55, 678, 988 21,261 229 519,900 349,470 215,555 264, 965,869 February 175,645, 463 54. 234, 650 19,072 650 497,300 420,060 137,030 250,007, 143 Total 2 751, 293,964 818, 113, 488 299,961, 581 6, 927, 460 6, 464,395 7, 999, 696 3,890, 760, 573 March 237, 163, 009 74, 036184 25,146 035 674, 900 518,811 133, 048 337, 671,987 April 224, 406, 392 68, 585 586 24, 226 700 530,300 550,315 165,186 318, 464, 429 May 256, 264, 556 77,186 738 26, 815 701 810, 900 571, 763 172, 764 361, 822, 422 June 284, 242,381 88,958 812 28, 016, 550 927,160 584, 458 139, 872 402, 861, 233 Total 2, 751, 293, 954 818,113 488 299, 961, 581 6 927, 460 6, 464, 395 7, 999,695 3, 890, 760, 573

Soy beans Hops and Cassava Potatoes and soy Sugar and Month hop and cassava and potato bean siruPs products Products extracts products Fleggi4 §5H§§§§§U§ July 398,462 18, 826, 592 4,016, 504 3,960, 801 August 375,050 17, 970,388 3,888, 624 3,388, 399 September 347, 032 16,341, 214 3, 540,989 3, 198, 192 October 321, 548 13, 667, 585 2, 976, 500 2, 339, 218 November 260,116 12, 759, 334 2, 732,008 1, 811, 225 December 298, 025 13, 410, 574 3, 027, 522 1, 371, 222

241, 896 12,130, 417 2, 703, 307 334, 785 .`

January i 103, 220 February 221, 171 11, 258, 413 2, 527, 546 vig March 305, 910 14, 601, 022 3, 391, 345 113, 210 141, 505 April 348, 390 14, 260, 633 3,185, 949 4if May 361,950 16, 749,177 3, 823, 062 101,053

June 441, 420 18, 055, 733 4, 016,365 57, 900 Total 3, 920, 970 180, 631,082 1 39,629,621 16,920, 730 715,040

I Represents 39,543,133 pounds of hops and 88488 pounds of hop extracts. REPORT OF COMMISSIONER OF INTERNAL REVENUE 197 196 REPORT OF COMMISSIONER OF INTERNAL REVENUE EUREWIWO Mt ' i5 B RIVOOW LS ' TABLE 88. - Materials: Used in production of fermented malt liquors and cereal 16.1 6 13 's 4444444446ososs54604arol beverages, by kinds and by States, fiscal year 1949-Continued m

[Pounds] 03

MEIEWan 145I z-• Soybeans Cassava Potatoes Hops and ] atiallgU 883,

and soy- Sugar and and and 2, State hop os bean strops extracts cassava potato products products products a RPRE,WNag gt9 ' ■ XIS ' tke 4 ../. -ei..t: cr5 4 Arizona 76,950 661,320 53,931 22,400 84EggZgEGgM 313, 586 3, 241, 520 2,093,637 2, 314,669 9 California S cectotiecierluir:eeprc6 8 Colorado 4,880 262,469 Connecticut 49,928 1,314,871 73,203 Delaware 9,975 50,414 62,470 92 ,9 ' District of Columbia 24,200 46,490 !O

W gRUEgOgan Florida 40,379 1,674, 461 185, 341 87,458 20 L Georgia 342, 650 21, 037 EigtisT8psgemigi4 0 ' Hawaii 43,945 928,596 58,878 1 Idaho 15,660 27,832 LZ 3,310, 322 t Illinois 318,409 4, 546, 187 2, 277,621 ls Indiana 15,775 3,682, 762 1,224,950 753,964 or 2 Iowa 6, 205 318,107 52,055 0i5MMEI-f. 'ISL

802,127 awa Kentucky 211,350 885,500 exp ggiggd4 aswi Louisiana 117, 910 4,680, 929 733,779 .41 hdr Maryland 4,379, 828 898,792 For it

247,800 15, 645,309 886,011 E pa saX

Massachusetts 29f w lmoo Michigan 7, 885 4, 606, 551 2,013, 567 1, 923,050 e ines Minnesota 55, 361 7, 470,368 1, 237, 971 nnalltEi ' fre 19 11,543 4,833,429 3, 811, 966 B - p-ne lid et.4 ..7c..■57.91;7

Missouri l o 10, 873 514,509 88,329 e

Montana af g Nebraska 713 1, 304. 594 429,437 Tax Nevada- 531 16,332 18

New Hampshire 330,800 20,701 ti d New Jersey 113,415 19,364, 003 3,350, 031 1, 178, 550 9 EigrUgiPla ises 011

New York 232,925 24,273, 707 4,827,697 132, 416 715,040 n North Carolina 376,330 27,338 m o ifria6F-;::4:2::::Elt:g rem

Ohio 185,299 8,309, 113 2,260,413 512,252 t p Oklahoma 2, 717 24, 771 rs Consume Oregon 23,653 184,647 162, 091 890 ' 1,561,429 sti Pennsylvania 107,394 48, 180, 383 4,480,393 li

no HPIMEIR:i Rhode Island 177,300 4,182, 092 467,109 8 609

Tennessee 71,820 887,505 96,155 L Olggitaggi 'se

15,265 962,059 581,930 Texas is10 E Utah 78,009 ls Virginia 6, 170 440, 156 71, 639 en g 704,325 Washington 67, 584 2,180,878 s West Virginia 3,960 335,676 29,150 ls

hdrawa unilium Wisconsin 1,343, 507 9, 079,372 5,057,348 6, 124, 220 ira it 22,900 428,660 32,297 keg barre Wyoming d Eltilitte650 cs d w z an i 1 39, 629,621 16, 920,730 715,040 In 3,920,970 180,631,082 "cs a Total pc

ow ine ing Tax-p I See footnote I, table 87. l PringaMEg 'LO e ttl S ' ip

bo WiltaggtiO 69 p cruzite.:4.:ricy7.8./.5•6

for By re REEMintiig as ' 1.1; see

Wilgagga4 '69 I, mr.,r,,,,„,„,„5„..,a,

E B ct ai oo WO A W 4 l ta ber her ber t To m h m ber ary uary em us il te r to br ly ne anu lu Aug Sep Oc Nov Dece J Fe Marc Ap May lu 860947-50-14 198 REPORT OF COl\'lMlSSlOKER OF INTERNAL REVF.NUE ..­ ··_·_····-_·····=··_-··-·-·······=-··1 REPonT OF COl\Il'.llSSrOl\ER OF lKTERN.-\.L REVEKUE ]09 ~ T st-ldll.-Summarll: Prodllrlion, Icill~rlralCall, lO$8C8, (lmI8, op~rutcd, ;,., "'of It,,?wll{t:d malt liquor8, Ilnd brell'eriu Jiscai ~ . ll/slL't ]­ IlJe lll!l"..l~ or SI I!lJllonJ) <:j 1:; ~ <:: 1f",1 y";lr [ ProdOC'j Tlu'I",fd ';: ended lion Jun~ T$);· .,9 30 Ity r,11le Itn hnr· I I In! .... 11n~ lOr n.'1ls Ilntl ToW ~ botUwlf kl·lt$ ";! ~ 1;:1 "...... k'" ~ g :: ~ ~., ~ ~ '0' g .. ~ s: C) 2 ~cr ,g ~- i1. 1'oloaLh ~~\:e'" ­ .~ .~_~ ~,~~~. .~M ProducLlon i II : Oa !_u_.__ .__ __ M_ .. __ __.-;i i~tbL ~=: ;. r.l .:::-::::::::::::::::..::::::::::::::::::::::::::::::: 4.1l27 ~ ~ ~ ~1Ju,Dlbcr . __ _••••••_•••__ •••••_••• _••••••_•.. _. OrIO!'" .... •••_•••••••_.._••••__•••••. __ ._._....._ __ .• 6, 1115 ~'':; ­ 2. no .s: So'emb.:r.. __ •• __ ••__ ••. _...... •••••• . •••...••_ __ 1.502 lIecember. _ _••••••• _._ ••••• 813 ~'" 1, 403 ~):::::::::: 2,746 ::::::::::'::::::::::::::::::::::::::::::::::::: 4.318 '"v, 2,6(j/j '" ~~ 4,083 '" .:::::::::::::=:::':::::::::::::::::::::::::C:::::::::::::::, 9,400 ] I ,,; Totlll. .."'" '" •••••"'_'__ '" .•_..••••_.•••_•••_ _ 4», \J3~ l '".... ,01 ~ .~

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Tax·paid withdrnwals I . Tax·!roo withdrawals

For usc in pro-­ ],ionth O"er H Oyer 21 For USP1 mber__ 2.273. [)fill 3J~ 10, 233,2'J7 70,78; HO,H2 630 (l(J,333 5,064 1 4,,2 128 29.579.952 31,310, 1 ~57 :~~¥:Jl~ Oolo!l<:r ._ 2, 6tO, 139 1I.294.0:1'i 57,6·10 174,987 66,700 3\1,001 00,388 ~m 3: 121i: 869 132, 538, 568 13C" 0 18,640 Nove.ml.er_. 3, 2Ic., 2'16 9.0UO,lgo J32 12, J06, 762 00, 2 Hi, 792 9,020 ro,6fXl 0.363 I, ,j'lI 3.589,0:15 99,814,03'1 103, i09, 136 D{'C('mheT •• 3,116.024 8,047,629 7(H II. IV·', 357 Coll,678 143,8:11 56.i36 43,OH 44,078 4,1 9 ...... -_ .....-- 1,857,3.,,9 11,7:l0.;I;,l7 16. O'lIl, J52 January ..._. ., 95 182.908 3,5111 9,b01 2:487 ]";7,45.j 700,:H6 Juna..____ CoG,23·' 1,330,3:36 2,033,393 6.781,644 310 8,815,3H IS-I,237 145,674 692 73,251 12,6-13 {;. 17(~ ---····79· 408,7\'4 70:1,120 1,53". r,lJ6 ------__~ot31.12'~,O();j.OS9 I 90,031,727 11.87:( 11\1.106.61.9 1,21:1.824 1,979.528 I 2'\5,4M 633.160 261,79S 20.071 674 13.037.437 I 286,692,2,.5 3m. 009, 212

J TI1= figures repra! t \'itl"lrawals suljcct to ta. nt tJlC lollowh.l(.! mtes: 16 cents per winc gi,lllon all will, 1I0t owr 14 percent olcohol, r,o cent. on wines OWl" 14 ami not over 21 per<:'<'nt alCOhol. llnd $2 on wine.' oveor 21 lid not o"er 21 I rc nl nloohol.

TABL. 99.-WiUldra-u.: sua wi_. &y StaIa, ji_cal yw," 1949 [W Ino ~Uonsl

Tax.pald wJthcll"dw,.b I Tax-freo wilhelmwnl.

For usc In TJroduc­ Over H Over 21 For tiS(' in .F'or 1I!'e )<-or usc 'Vllles rc­ Not o,er For lise in tion 01 Ino\lcd 10r DbUUillg alld not fmd not produc· produc­ npel'itif in pro· }·orex· For lam­ ofrbe 14 perce,,! ()Vrf 2·1 'l'otal usc. ns lunterials Total oV"r 21 tion of tion o! wines duction port Uymc Unih'd alcohol pc"(""1 IX'recllt 'llllrkling of ,·juc· distillillc rClllO\·('d okobol llkohol wines vermouth olher Stlltes Jll:lt(lrials Ihflll I:ttr vcnnontb -----1----1----1----1----1---1---1---1---1--­ ------.------­ AI, "'lm3 ••••••••••• ._. . __... .. • .______200 . __ ..__ .. ._ .._. . 200 Mk .'18••••_... Zl.930 151,673 3.771 nO,3,,0 ._•••••._. •._•. • __...... __ .. 2, n~ __ .•.... 33,1;80 •._ ••••_... 36, ~95 C"HfoTflia. •• 12.951.313 5.',:lSi. 610 8,102 68, ~1;: ~t~ ._ .~~:~:.~. ~~~~~~_ ~::::::::: ..~:~~ ~~ __ :~~~~:. ~~~~~~. _ :~~~ 12, 57~:\~ 28.'i, ~J: ~~ m.:m. m ~::~~~11(.;;(~~~~~~ I~~: m ~;¥: ~~~ ::=:=-::~: &08, S'O 140.•3, 800 ••• ... •. __._. __ ••__ ... _. __ 2.092 4.06-1 1':~: 6~~ Florida.. __ .._.. 2~, !f19 n. 82~ ••••• __ 49. ;74 ••••••••_. __ _•••• __ 1\17 _.... lV7 a Ol'l!i?- .. 308,2'lO 215,~! ;23,821 . .. 1. 5-10 _•••__ " • __•.•• 348 __ .. __ .._.. • 3'1. !!UC, 30.88·1 ~~~~J~:~~~~~~:~: .....----. 1,3~; :~:::::::: 1,3;; _:::::::::: =-::=::~: ==--=::::: ::::=-::::: ~-=:=--=: ------..g. ::::::_::: :::::::::.__ =::::::~: .. --- 9 Pnt~~~~::~:~:~:: ~ _::~~:.;,~;. ~~::::::: ~~:~ ::::~:::: :~:::::::: ::::~:~: ~:::::::: :::::~~: :~:::~:~ :::::::::~~ ~~: 1'1: 4, ::::::::::: :::::::::: ..._ f;l~i~I~~=:=: ~: ~~t J, ~:~~ :::::::::=-: 1, ~~U~ =::::::::: =:::::::: -::==:::: ::::~-=::: ... i(378' ····_·65· =:::::::: ::::::::::: :::::::::::: "···-i4:"43.1 ~f~J.:~~~~~~~~:::: ...~~- d~?: ~ ::~::::::= i'~: Th1 ::::: ::::~ -.... ;,- ~- ::::~:::~ .... ~: ~r :::: ~': ~~~ ::~:::~: ::::::::: ~~::::::~ :=::::: ::~ -.-- --~: j~ Miel1ignD 6!13,702 9&5.958 ::::::::::: 1: 079:000 15, 3M 7,500 _.... ,460 ._•.••••••__•. - __ . 29.314 Ui~~i:~:=~~ 1.9!:~ '2;~~~~:' ~~~~~~~~~~ 4,:1~~ :::}~~~;: :::i~:~~~ ;~~~n; ~:~:~t~ ::~~':;: :::~~~: ~~::::~~ J~~~~m ;~~;S;~~ =:::~i.~ ~~\\:~!e~oo__ ..... --S:;: 10',,:"985" ----- ....-- 1,70'7,673 543,294 7w.on U.368 H6,312 11,;21 81:j 79 ._.. ._._._.... 1,·173.1~? l\~~lb ~~ri)iiii:;::: ":00: 699 '~r.: 0.% =--=::::::: 3:>2, 3M 5'ii _. _ • _._._..... ii(~ ubio.. __ . •••••• 628,(;71 1,623,G:H ._ ....__ ._ 2,15230." "·-;8;299' --"-6'-482' ::::::::::: --T(ii~- --6:rm- 4.r,;;o·· - --.. "--'12:490 __..._.... HI,318 Orc~on••••• 198,040 _•••••_••_ 108:040 __ ._._. .. • .. .. •••_ "4 .._ _. • .._. •••••_.. 77-1 l'l'fillS)'lvlUlia _. I.OS2.OG2 4.20S,oW6 ••••••••••• 5,2f1Q,968 __ 2..'>3,297 3,1,3 • __ .•••••••••••• •••_._ .._, ••••••_ ••••_ •••~_. 2!J(i.470 South Carolina... 2't,iO'J i.---.-_.-.- __. 22,.09 _ •••• __ •••••••••••_ ._•••_ _. 2 ", ,,__.._ _ • __ _..__ 2 Te>::u.______28,708 1,000,202 • ••••••• l,OSS,070 • ·--63· ...... _ 60 • __ .,••, •• __•••••• _.. 113 1 Virgiuin.. .__ 082,12311.188,680 ••__•• 1,~i1.103 •••••_ •••• _ ••••••••••__••_.... 32,500 •• __ •••••• "'7 •••••••••• 1,,10\ 2,' 9 193,530 Washill~I()It._.__ 138,205 855,076 99~,281 ...... • 745 ...... __ ._ 11>3.026 -480.137 6&1,608 ~n~~~~~J~i:..-=:: -----6.(;6:1 1~~:~ ::::::::::: I~~:~ "'---564' -----i:oi,~ ::==:::: :::::::::: :::~:::::-=:::::~: ::::::::: :::::~:::: ::::~~::::: '--'-i:579 TOl:!!. •• 29,003,089\00,031.727 ll,8731119,106.£89 1,213,824 1,000.528 205,~(l5 633,100 26l:7;S~ 074 1:I,Q:l7.·j;j( 285,:092,265 303~

I &c lootnote I, toblo !lll, 206 REPORT OF COMMISSIONER OF INTERNAL REVENUE REPORT OF COMMISSIONER OF INTERNAL REVENUE 207 - MT '

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208 REPORT OF COMMISSIONER OF INTERNAL REVENUE REPORT OF COMMISSIONER OF INTERNAL REVENUE 209 TABLE 102.-Summary: Production, withdrawals, losses, and stocks of sparkling wines,' by months, fiscal year 1949 TABLE 104.-Summary: Production, withdrawals, losses, and stocks of vermouth, by months, fiscal year 1949 [Hali-pint units] [Wine gallons] Withdrawals . Stocks end Withdrawals Month Production Losse' of month Tax-paid s Tax-free Total Tax-paid 1 Month Stocks July 1, 278, 778 1, 133, 989 51,291 1, 185, 280 50,997 36, 516, 803 Production Losses end of 1, 380, 963 63,949 1, 444, 912 76.593 37, 429, 803 Over 14 Over 21 Tax-free month August 2, 436, 116 and not Total September 1, 352, 400 2, 358.144 119,038 2, 477,182 58, 633 36, 247,646 and not for export October 1. 088, 840 2, 546, 049 103. 877 2.649, 926 60,597 34, 587, 415 over 21 over 24 Total November 1, 610, 139 3, 242, 836 93, 330 3, 336,166 88,868 32, 802, 693 percent percent December 1, 423, 798 3, 366, 164 142,306 3, 608, 970 222,736 30, 505, 306 alcohol alcohol January 2, 008,616 1, 354, 274 210, 004 1, 564, 278 50, 577 30, 897,183 1, 142, 156 302.149 1, 444, 305 42,787 30, 599, 487 February 1, 201, 390 July 101,734 March 1, 473, 716 1, 303, 712 372,175 1, 675, 887 45,899 30, 305.503 87,287 87,287 914 88,201 634 1, 465, 941 1, 051,024 136, 687 1,187, 711 39, 297 32, 941, 298 August 124,270 122,667 122, 567 1, 016 123,583 1, 615 1, 467, 419 April 3, 757, 816 September 149,105 165, 554 1, 240. 712 106,052 1, 396, 764 47,468 33, 453, 611 Nn 165, 554 36 165, 590 6, 547 1, 946, 598 May 1, 951, 013 October 191, 082 June 3. 253,150 1, 545, 233 109,872 1,655,105 186.858 34, 859, 413 240,845 240, 847 808 241, 655 2,024 1, 388, 530 November 167,313 234, 718 234,720 874 235,594 792 1, 321, 376 December 200,734 212,065 Total 22, 836, 772 21, 665, 256 3 1, 810, 730 23,475, 986 971,310 34,859, 413 212,065 8,444 220,509 28,497 1,275,945 January 190,029 177,958 i77, 958 4,414 182, 372 3, 441 1, 288, 274 February 228,383 163,836 163,836 1,433 165,269 2,615 1, 353, 247 Includes artificially carbonated wines as follows: P oduction, 4 7,046; tax-paid withdrawals, 480,345; March 269,816 195,223 136,223 1,674 196,897 1, 169 1, 425, 719 tax-free withdrawals, 3,375; Iowa, 2,847; and stocks June 30, 149,881 half-pint s. April 145,954 177, 910 177, 910 659 178,569 3,840 1, 386, 024 'These figures represent withdrawals subject to tax a the following rates: 15 cents per hall-pint unit on May 184,392 194,869 194,869 1,796 196,665 2,840 1, 374, &31 naturally carbonated wines and 10 cents on artificially carbonated wines. June 185,633 153,705 153,708 556 154,264 21,348 1, 353, 258 s Represents 1,299,942 half-pint units removed for conversion to still wines and 510,788 removed for export. Total 2,138,445 2, 126, 537 7 2, 126, 544 22,624 2, 149, 168 75,262 1, 383, 268 TABLE 103.-Summary: Production, withdrawals, losses, and stocks on hand June 1 These figures represent withdrawals subject to tax at the following rates: 60 een s per wine gallon on 30, of sparkling wines,' and number of premises operated, by States, fiscal year 1949 vermouth over 14 and not over 21 percent alcohol and $2 on vermouth over 21 and not over 24 percent alcohol [Hall-pint units] • TABLE 105.-Summary: Production, withdrawals, losses, and stocks on hand June 30, of vermouth, and number of premises operated, by States, fiscal year Withdrawal Number 1949 Stocks of gresem- State Production Losses June 30 Mine gallons] Tax-paid 3 Tax-free Total operated 3 Withdrawals Number. Stocks of California 8, 087, 584 6, 614, 963 1, 061, 444 7,676, 407 169,565 9, 894, 765 State Production 2,456 2,456 332 4,316 Losses June 30 premises Florida Tax-paid I Tax-free Total operated s Illinois 162, 820 162, 820 916 130, 208 .1. for export Louisiana 1,392 1,392 2,880 . Maryland 2,016 2,016 1,296 CI

2,952 32 5, 688 sr Massachusetts 2,952 California______662, 131 680,602 17,659 698,261 45,870 842,294

5,927 481. 444 C4 Michigan 308,028 323,616 7,369 330, 985 Colorado 456 456 76 1,790

32, 229 1, 646, 451 66,343 4, 761, 38.5 I: Missouri 1, 297, 778 1, 614, 222 Connecticut 149,570 173,637 173, 637 1,338 33,958 201, 200 1, 160, 162 38, 055 1, 338, 915 ... New Jersey 1, 095, 067 998,962 Florida in 171 14 68 New York 10, 528, 517 10, 954, MO 471,330 11, 425, 679 596, 325 13, 863, 688 71 Georgia 2, 057 ; 96 2, 153 628 1, 918

92,659 4,372,168 •-• Ohio 1, 496, 640 1, 016, 728 37, 158 1,063, 886 Illinois 22, 530 22, 530 61 5, 252 Pennsylvania 1,720 1,720 4 624 Kentucky .. 772 1,313 1, 313 230 6, 468 Texas 1,078 460 460 48 Louisiana 406 18,600 1,104 51,264 405 1, 212 Wisconsin 21,080 18.600 Maryland 541 1,745 189 1,934 116 969 Massachusetts 1,613 4,913 23, 475, 986 971,310 34,859,413 Ile 4, 913 107 608 Total 22, 836, 772 21,665, 256 4 1,810, 730 Michigan 7,500 2,707 2, 707 13,204 Missouri 12 12 New Jersey 409, 465 386, 852 666 387, 518 7,190 84, 663 f . I See footnote 1, tab e 102. New York 900,135 826, 286 4,014 830,300 18, 967 376, 380 3a I See footnote 2, table 102. Ohio 7, 684 7, 684 520 5, 988 Represents wineries, bonded storerooms, and field warehouses that operated during any part of the year. C. Pennsylvania 6,482 14,341 14,341 109 3, 836 , CI 4 Represents 1,299,942 half-pint units removed for conversion to still wines and 510,788 removed for export Wisconsin 1,008 833 833 from California, Missouri, New Jersey, New York, and Ohio. 36 1,650 Total 2, 138,445 2,126, 544 22,624 2, 140, 168 75, 262 1,383, 258 181

I Represents over 14 and not over 21 percent alcohol with the exception of New York which includes 7 wine gallons of vermouth over 21 and not over 24 pereen alcohol. These withdrawals were subject to tax at the following rates: 60 cents per wine gallon on vermouth over 14 and not over 21 percent alcohol and $2 on vermouth over 21 and not over 29 percent alcohol. Represents wineries, bonded storerooms, and field warehouses that operated during any part of the year. 210 REPORT OF COMMISSIONER OF INTERNAL REVENUE REPORT OF COMMISSIONER OF INTERNAL REVENUE 211 8 S8 gO OS8 31130213: 8 31.3 TABLE I06.—Summary: Production, withdrawals, losses, and stocks of aperitif wines other than vermouth, by months, fiscal year 1 949 13, [Wine gallons]

Withdrawals 7.ERIn§ggl 11E0 Produc- Stocks end Month Lime8 of month don Tax-free Total Tax-paid I for export ro

seegna ggVigl NMUUMWERR Iuly 20,350 3, 894 August 28, 423 9,096 900 m gfMingtilgagf September 19, 981 18,528 r October 20, 062 19, 413 ggecomlargggs:4 411 November 34,845 36,882 i111112 December 58, 795 69,865 January 18,152 1Z 612 180

c IMEHRTORgin February 22, 067 4, 312 72 "E G

cq# WO March_ 29,762 4,109 60 E APril 17,835 6,586 OL. g W65,5,Cialgig7:§ May 21,114 13, 693 zgtimitiouggitm , June 20,418 4,918 *la Total 307, 394 203, 876 1, 212 205, 088 1, 824 143, 043 ! 3 WinniaFgURR Represents wines over 14 and not over 21 percent alcohol, subject to tax at 80 oents per wine gallon. Pigariaggiaff 1 51.WOOICIM TABLE 107.—Summary: Production, withdrawals, losses, and stocks on hand June 5 30, of aperitif wines other than vermouth, and number of premises operated, by States, fiscal year 1949 MEM! [Wine gallons] hPo .51a6iggi

Withdrawals t MUM' Number a l 8 Frothier Stocks of prem- State Losses June 30 Lies oper- 8 tion Tax- Tax-hte MIME paid 1 for ex- Total sled s 1.1 port e) W4Vagg Connecticut 275 275 275 1 8, 040 Z 483 12 Z 495 412 7, 222 7 .33 New York 1 !„0 Pennsylvania 299,079 201,118 1,200 202,318 1,412 135,821 ti vecbat.,a Total 307, S94 203,876 1,212 205,088 1,824 143,043 9 `4, 5116gal 3 -8 See footnote 1 table 108. 2 Representa wineries, bonded)3toreroom , and field warehouses that operated during any Dart of the year. 430., gligg5 n:3 0 gflgig15 6

ag

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o6 1 tes O tno ra a foo edggaRiggiisk12 See REPORT OF COMMISSIONER OF INTERNAL REVENUE REPORT OF COMMISSIONER OF INTERNAL REVENUE 213 TABLE 109.-Summary: Materials used for the production of ethyl alcohol, distilled 21 spirits, fermented malt liquors, and vinegar, by kinds, fiscal year 1949 1 2 4 . glx Vinegar z " Industrial Registered Kind alcohol Breweries using the Total a! Eg plants distilleries vaporizing g process Grain and grain products: M alt Pounds Pounds Pounds Pounds Pounds Corn 22, 586, 600 305, 660, 676 2, 751, 293, 954 1, 026, 640 3, 080, 567, 870 Rye 66, 755, 486 1, 659, 522, 064 818, 113, 488 8, 396, 560 2, 542, 787, 598 lel Ric e 17, 236 375, 918, 617 950, 634 376, 886, 487 Sorghum gram 58, 145, 679 299, 961, 581 299, 961, 581 T Wheat 138, 659, 105 7, 999, 695 204, 804, 479 Barley 1, 972, 447 35, 489, 975 6, 927, 460 43, 889, 882 55 6, 464, 395 6, 464, 395 Total 138, 977, 448 2, 515, 250, 437 3, 890, 760, 573 10, 373, 834 6, 555, 362, 292 hyu Potatoes and potato products 1,126,951,015 156, 473, 978 725, 040 I, 284, 140, 033 Sugar and elrups 948, 826 14, 711 180,631, 082 152, 440 181, 247, 059 3% ;.1_,FFEMTr.2ai gro Flops and hop extracts 39, 629, 621 39, 629, 621 Ethylene gas 36, 697, 438 36,697, 438 cassava and cassava products 16,920,730 16, 920, 730 Soy beans and soy bean products 3, 920, 970

3, 920.970 ) )ther materials 2, 772, 013 1, 927, 507 93, 467 4, 742, 987 Gallons llons EREEEIROOM Gallons Gallons Gallons Gallons a Sulphite liquors 229, 549, 200 229, 549, 200 g golasses IA gOXIVE:RRE5R :thy] sulphate 156, 731, 884 5, 057, 738 6, 877 , 515 167,667, 137 ine 131, 818, 786 131, 818, 786 )ther materials 22, 219, 382 5, 844 5, 233, 507 27, 458,733 (w 4 MgREMIRRE h Proof t Pray gallons Prey gallons Proof gallons gallons Proof gallons aVIWRIEEEE Products used in red istillation. _ . . 24, 983, 602 5, 713, 487 30, 697,160 mou r

Ve c4Irs,EFIEIRERVA ' Exclusive of materials used at fruit distilleries for the production of brandy and spirit -fruit and at roo k- wineries for the production of wine. .t IggElgOREERR .-7,-181‘4814941499 211 ovCli S ;IS SS A g3 n E'S g ig 832 ggea z--

iRRiFigirOgnEn.:4; in cs VEgggEtiEgin1 lf-p sc‘g.7.".n7ggIgg ha a (

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ar RiglaMERRFRFE Sp eo ----"tr=gREEFX -inRIEE ay c”eacerc'anaR4 423 N

s 00R so 1 yid ff .1S. ;V4,4Pc4 860947-50-15 53EgEgginigEHE

214 REPORT OF COMMISSIONER OF INTERNAL REVENUE REPORT OF COMMISSIONER OF INTERNAL REVENUE 215

XI. VINEGAR TABLE 1 11.-Summary: Materials used at vinegar plants, production and stocks of [Produced by vinegar plants using the vaporising process] vinegar, and premises operated, fiscal years 1943 to 1949, inclusive vinegar plants, and production and stocks TABLE 110. - Summary: Materials used at of vinegar, by months, fiscal year 194 9 Materials used

Fiscal year ended June 30- Grain and grain products Materials used Molasses Corn Rye Malt Wheat Other Grain and grain products Month Yeast mash Molasses beer Pounds Pounds Pounds Pounds Pounds Gallons Rye Malt 1943 13, 70,3,436 952,050 Corn 2944 2,149,426 65, 374 5 96,000 4,048, 706 4,064,120 933,920 1,378,186 5, 767, 682 5 10,865 5,438,244 1915 7,587,069 892,104 1,370,059 Gallons Gallons 1946 1,401, 731 5,178,148 Pounds Pounds Pounds 3,826,424 872,292 1,172,4771,172, 3,795,255 1 346, 851 54,762 59,040 465,836 496,000 1947 8, 441, 974 5,331,935 July 495,000 1948 981,826 1, 334, 799 735,445 5, 483, 64.1 240,000 27,320 29,420 606,164 407,000 8,472,182 951, 180 1,053,847 August 63,770 489,315 401,150 1919 8,396, 560 5, 770, 950 September 525,000 68,913 950,634 1,026, 640 5,877, 515 670,000 75,260 81,370 522,298 427,680 October 91,670 477,912 396,560 755,000 84,680 November 870,000 97,560 105,280 451,332 443,510 December 113,680 471,804 426,076 Materials used-Continued Vinegar 930,400 104,960 January 940,000 105,760 114,210 487,283 366,948 Fiscal year ended Number February 1,036,480 118,720 128,240 623,950 396,476 June 30- of plants March 97,590 537,965 390,966 Yeast mash Chemi- Produc- Stocks 769,720 90,520 beer eels Other materials operated April 619,960 70, 209 75,650 518,599 394,460 lion June 30 May 61,970 66,830 425,057 283,208 June 545,000 5,877, 615 4,829,034 100-grain 100-grain 8,396,560 950,634 1,026, 640 Gallons Pounds Total 1943 Pounds Gallons ga llons gallons 10, 287,191 17,559 4 CO i 1944 80,000 1, 210, 916 22, 126, 578 3,065,621 14, 045,890 16,271 24, 616, 355 t

3,521 233

Vin gar 1945 nM Materials used-Continued 19, 907,360 20, 914 24, 755,614 4,264, 553 1946 22,036,550 24,759 1947 25, 235, 255 3, 014, 634 ti 21,187,375 38,073 5 23, 933 Month Stocks end 1948 6, 790, 401 26,855, 444 3, 588,247 ti Citrus waste Chemkals Other Production 46,662 7 7, 356 I 254, 861 24.816, 502 4,428,397 of month 1949 - concentrate materials 4,829,034 42,467 5 153, 440 8 404, 473 25, 417, 460 2,877,138

100-grain 100-grain Barley. Gallons Pounds Pounds gallons gallons Oats. 69, 900 3,359 2, 155,071 4, 199, 561 I Represents 273,556 pounds of barley and 73,295 pounds of oats. July 66,036 4, 158 2,227,306 3, 288, 374 Corn sugar. August 2, 238, 878 2,251,882 I Corn situp. 56, 505 6, 768 September 62,809 2, 716 4,975 2, 329, 351 2, 613, 216 Citrus sirup. October 10,650 2,093,211 3, 225, 207 A molasses product. November 55,850 3,069 47,300 1,130 9,265 2, 104, 197 3, 854, 176 Represents 254,311 gallons of citrus waste concentrate and 550 gallons of cane sirup. December 1, 660 2,131, 142 4,182, 297 29, 500 1,786 le Represents 125,890 pounds of corn sirup, 26,650 pounds of raw sugar, and 1,000 pounds of hydrol. January 3,293 10, 726 1,930,329 4,403,827 Citrus waste concentrate. February 5,041 66,844 2, 139, 577 4, 678, 867 March 3,868 41, 718 2,049,033 4,681, 610 April 2,102, 538 4,853,381 XIT. CLAIMS May 4, 181 7,602 16, 573 4,098 1,916, 827 2,877,138 June TABLE 112. - Claims for redemption of stamps, remission, refund, and abatement of 153,440 25,417,460 2, 877, 138 Total 404,473 42,467 1 taxes, fiscal year 1949 of corn sirup, 26,550 pounds of raw sugar, and 1,000 pounds of hydrol. I Represents 125,890 pounds Redemp- Remis- „,,„,..., Abate- Unoollec- tion of lion of Refund Total of taxes ment of tible Total stamps taxes taxes taxes number amount

On hand July 1, 1948 264 467 335 Received during year 40 62 1,166 $1, 615, 672 2,060 4,059 10, 03 1,846 Reopened during year 28 18,570 15, 778,387 37 8 73 138,800 Total 2,352 4.526 10,401 624 1 , 908 19,811 17, 532, 859 Allowed 1, 969 3, 260 Rejected 8,984 491 1, 826 16, 530 14, 658, 699 203 773 886 78 14 1,954 On hand June 30, 1949 180 493 964,318 531 55 68 1,327 1908, , 842 Total 2,352 4,626 10,401 624 1,908 19,811 17, 532, 859 REPORT OF COMMISSIONER OF INTERNAL REVENUE 217 216 REPORT OF COMMISSIONER OF INTERNAL REVENUE MTh LABEL ACTIVITY year 1949 TABLE 113. - Claims for drawback, fiscal TABLE 114.-Label activity under Federal Alcohol Administation Act, fiscal year 1949

Products exported Applications received Certificates issued Applica- Distilled spirits used in nonbeverage products Distilled spirits and Distilled spirits ex- tions dis- Total wines bottled espe- ported in original For ap- For ex- Total Approvals Exemp- approved daily for export packages proval emption tons

Number Amount Number Amount Number Amount DISTILLED SPIRITS Domestic 8, 863 160 9, 023 8, 341 165 320 8, 826 $193,078 1 $45,150 Imported 1, 405 1, 405 1, 168 51 1, 219 On hand July 1, 1948 52 $418,755 52 29, 061, 348 3, 644 3, 270, 340 6 131, 608 Received during year 4,159 Total 10, 268 160 10, 428 9, 509 165 371 10,095 29, 480,103 3, 696 3, 463, 918 7 176,758 Total 4, 211 WINES 3, 508 3,161, 234 4 95, 127 Allowed 4, 102 28, 728, 739 61 43,653 23 13,643 178 Domestic 15, 796 243 16,039 14, 835 158 366 15,359 Rejected 288, 541 3 81, 953 Imported 4, 161 9,161 3, 759 80 3, 839 On hand June 30, 1949 48 707, 711 165 3, 463, 418 7 176, 758 Total 19, 957 243 20, 200 18, 594 158 446 19,198 Total 4, 211 29, 481,103 3, 696 MALT BEVERAGES Products exported- Domestic 1, 433 1, 933 1, 223 51 1, 274 Continued imported 130 130 104 10 114 Stills exported Total Total 1, 563 1, 563 1, 327 61 I, 388 Alcohol used in flavor- ing extracts, toilet Grand total 31, 788 403 32,191 29, 430 323 878 30, 631 and medicinal prep- arations

Number Amount Number Amount Number Amount XIV. ENFORCEMENT, ALCOHOL TAX UNIT

$695, 817 TABLE 115. - Enforcement, Alcohol Tax Unit: 1 Seizures and persons arrested, by 6 $38, 812 1 $22 112 On hand July 1, 1948 9 748 8,703 33, 313, 285 months, fiscal year 1949 Received during year 885 899,241 10 770 8, 815 34, 009,102 Total 891 888, 053 32, 824, 367 Seizures 857 838, 981 8 286 8, 479 Allowed 2 484 86 57,958 Rejected 250 1, 126, 777 34 . 49,072 Non-tax- On hand June 30, 1999 Month paid dis- Non-tax- Persons 10 770 8,815 39, 009, 102 paid Mash Property arrested Total 891 888,053 tilled Auto- Stills spirits wines (wine mobiles Trucks. (appraised (wine gallons) value) ' (wine gallons) gallons)

July 620 9, 208 889 280,484 103 37 $219, 480 700 August 641 10,124 921 294,748 84 36 263,763 702 September 568 9, 424 17 229, 267 108 45 193, 451 701 October 619 10, 995 208 320, 154 98 31 192, 994 723 November 561 8,383 548 281, 895 107 34 195, 113 722 December 875 8, 786 9,182 452,176 91 28 170, 948 795 January 739 10, 745 1, 177 371, 092 83 30 160, 283 730 February 666 8, 507 279 299,144 110 26 329, 211 716 March 738 10, 253 2, 800 337,824 93 28 237, 182 879 April 708 11,116 1, 146 339, 395 110 42 219,727 776 May 631 9,836 466 273, 658 97 32 150, 614 738 June 642 11, 978 550 231,645 114 29 145,422 733 Total 8,008 118, 855 12, 683 3, 661, 932 1, 198 398 2, 475, 188 8, 915

' Includes seizures and arrests in cases adopted, as well as originated by the Alcohol Tax Unit. 2 Includes $62,831, represen ing the appraised value of 19 au °mobiles, 1 truck, and 1,504 win gallons of tax-paid liquors, seized for violations of the Liquor Enforcement Act of 1936, and the value of 33,784 wine gallons of tax-paid liquors seized for violations of other internal revenue laws. 218 REPORT OF COMMISSIONER OF INTERNAL REVENUE REPORT OF COMMISSIONER OF INTERNAL REVENUE 219

TECHNICAL STAFF TABLE 116.-Enforcement, Alcohol Tax Unit: I Seizures and persons arrested, by States, fiscal year 1949 TABLE 117. - Analysis of the work of the Technical Staff during the fiscal year 1949-Income, profits, estate, and gift tax cases Seizures FIELD OPERATIONS-ALL DIVISIONS, CONSOLIDATED

PART I- CASES Non-tax- Non-tae- Persons NOT BEFORE THE TAX COURT StateS paid dis- n arrested yard Mash,.„;,.., Automo- Property Stills tilled (wine Trucks (appraised (A) PROGRESS OF WORK spirits wines(wine gallons) biles value) s gallons)(wine gallons) Revenue agent's finding or statutory notice

acq Number Alabama 1,263 10,086 4M,468 104 30 *239,605 of cases Arizona 4 1 75 w= Deficiency Overuses,- Arkansas 85 711 21,241 17 9 19, 183 in tas Penalty meat California 22 230 5,841 4,612 6 3,160

Colorado 1 636 r Connecticut 5 60 180 3 8,313 4c Pending at beginning of year: Delaware 5 7 25 212 Awaiting Staff action 7,214 8271, 953, 256 $6, 211, 578 $74, 467, 834

District of Colum- !. .wr gr Awaiting taxpayer's action on statutory notice di- bia 1 46 2 300 1 400 rected or sustained 710 20,030,819 1, 144, 312 3, 746, 673 Florida 286 8,708 201,696 51 27 93,375 Received during year (net-transfers, etc., deducted) 8,036 267, 105,926 8, 624, 059 61,931, 942 Georgia 1,571 34,437 776,165 191 90 303,902 Hawaii 300 Total 15,961 559,090,001 15, 979, 949 140, 146,349 Idaho 1 Illinois 6 407 751 230 I 2 85,354 Disposed of: Indiana 14 166 590 1 2 2,130 Closed 4, 841 105,433, 750 1,83287,3 31, 697, 492

Iowa 1 850 A Petition to Tax Court 60,925 1, 267 42, 956, 119 2, 884,365 6,743, 311 Kansas 3 104 523 19 1 ug Kentucky 311 9 121 45, 512 54 12 105, 937 Total disposed of 6, 108 148,389,889 4, 521, 693 38, 440, 803 Louisiana 12 9 7 645 3 1 20, 515

Maine 5 sgm9 Pending at end of year: Maryland 45 796 11,243 8 2 6,852 Awaiting Staff action 9, 017 385, 580,103 10, 681,777 95, 60D, 889 Massachusetts 8 158 455 6 4,086 Awaiting taxpayer's action on statutory notice di- Michigan 14 75 3,148 1 2,033 700 rected or sustained 835 25,120, 029 876,479 6,104,657 Minnesota 2 6 1 Itec Mississippi 496 3,658 170,531 87 34 176,159 Total 9,852 410, 700, 132 11, 458, 256 101,705, 546 Missouri 6 3 45 300 2 1 10,023

Montana 13 an Nebraska 1 2 316 10 3 1 8,915 ; For Cases 0 ly received in pre-90-day status, amount of finding of internal revenue agent in charge; Nevada 10 1,873 foetuses originally received in 90-day status, amount of statutory notice; for estate tax cases, net amount New Hampshire__ 1 :w after deducting additional State tax credit allowable if substantiated. New Jersey 22 1,367 51,445 7 9 57,042

New Mexico 1 6 104 7 2 20, 899 i rg- New York 26 3,008 4, 276 76, 825 ao 11 64,397 (B) RESULTS OBTAINED IN CASES CLOSED North Carolina 1, 119 17,849 611,135 197 55 232,349 North Dakota 96 Ohio 43 198 5,330 4 12 3,917 Staff decision Oklahoma 194 1,314 44,723 22 64,000 Number

Oregon 1 1,241 16 100 prri of _Pennsylvania 87 3,591 133,810 34 140,823 cases Overassess. -Puerto Rico 23 meat :South Carolina 1,118 7,342 312,398 117 177,658 South Dakota 1 8 50 1 150 • Tennessee 603 7,100 282,340 73 17 330,686 Agreements before statutory notice (including agreed Texas 61 208 9,175 28 3 32, 955 overassessments and agreed claim rejections) 3,457 $22, 513, 656 Utah 1 4 3 25 Agreements on agents' statutory notices during 90-day period 252 101,812 Vermont g- 486 14,966 402,809 101 36 135,536 Agreements on reconsideration after Staff's statutory

Washington 2 2 4,319 s- notices 51 407, 207 West Virginia 86 103 100 5, 518 3 6, 774 Defaults on Staff's statutory notices (no petition filed) _ _ 613 2, 115,371 Wisconsin 1 1 45,383 Defaults on agents' statutory notices sustained by Staff Wyoming 6 1 15,662 (no petition filed) 119 18,123 Unagreed overassessments and claim rejections 349 820,646 Total 8,008 118,855 12, 683 3, 661, 432 1,198 398 2,475, 188 8,911 Total 4,841 25, 976,816 1 See footnote 1, table 115. See footnote 2, table 115. NOTE -Percent of deficiency in tax sustained, 62.6; percent of ne deficiency and penalty sustained, 64.3. 220 REPORT OF COMMISSIONER OF INTERNAL REVENUE REPORT OF COMMISSIONER OF INTERNAL REVENUE 221

TABLE TABLE 117.-Analysis of the work of the Technical Staff during the fiscal year 118.-Summary: Income, profits, estate, and gift tax appeals docketed, 1949-Income, profits, estate, and gift tax cases-Continued stipulated, defaulted, and defended on the merits before the Tax Court (formerly Board of Tax Appeals), fiscal years 1940 to 1949, inclusive PART II-CASES DOCKETED BY THE TAX COURT

(A) PROGRESS OF WORK Number Number Number Defended docketed stipulated on the Fiscal year per Tax per Tax defaulted merits per Amount stated in statutory notice 1 per Bureau Court corn- Court com - statistics Bureau Number pilations pilations statistics of eases Deficiency penalty Ovemssess- in tax ment 1940 4,240 3,383 267 1,301 1941 4, 366 3, 064 239 1, 522 1942 3,676 2,517 175 1,269 Pending at beginning of year 4,991 $316, 521, 893 $40, 178, 287 $33, 751, 427 1943 3,380 2,754 163 1,138 1944 3, 178 1,964 180 927 Received during year (net-transfers, etc., deducted): 1945 3, 185 1, 787 160 993 Cases considered before petition 1, 203 1946 2,777 1,787 142 873 Cases not considered before petition 3,368 1947 3,652 1,913 217 791 Cases reopened after trial 53 1948 4, 402 2,526 458 949 1949 4,537 3,065 413 946 Total receipts 4,624 158,152, 762 13, 358,288 16, 373, 169 Total 37, 393 24, 760 2, 414 10, 709 Total to be accounted for 9, 615 474, 674, 655 53, 536, 575 50,124, 596 Disposed of during year: NOTE.-Excess of total dispogals, 37,883 docketed cases over filing of 37,393 represents a reduction of 490 Closed by stipulation-agreed settlement 3,125 95, 301,836 10, 346, 522 8, 296, 525 cases in previously existing case inventories. Closed by dismissal or default 413 1, 787, 237 173, 203 85,141 Tried before the Tax Court on merits 946 30, 837, 272 1, 235, 517 2, 787, 986 TABLE 119.-Analysis of work on compromise, extension of time, and final closing Total disposed of 4, 484 127, 926, 345 11, 745, 242 11,169, 652 agreement cases, fiscal year 1949 Pending at end of year In hands of technical advisors 3, 093 222, 729,170 35, 404, 063 12, 226,159 2, 038 124, 019,140 6,387, 270 26, 728, 785 Extension Final clos- In hands of division connspl miseCompro- of time ing agree- cases cases ment eases Total 5, 131 346, 748, 310 41, 791, 3M 38, 954, 944

On hand July 1, 1948 1, 197 7 27 1 Includes amount of overassessments stated in statutory notice, and, in addition, overassessments in certain associated cases in the amount of prior findings of the internal raven agent in charge or of the Received (net) 2, 434 108 183 Staff. For estate tax eases net amounts are used after deducting additional S ate tax credits allowable if Total to be disposed of 3, 631 115 210 substantiated. (B) RESULTS OBTAINED IN STIPULATED CASES Accepted, granted, or approved 881 13 135 Rejected 681 98 25 Stipulations Percentage Withdrawn 245 filed sustained Transferred 135 Total disposed of I, 942 111 160 3, 125 Number of oases On hand June 30, 1949 1, 689 4 60 Deficiency in tax $44, 598, 868 46.8 Penalty 6,945,845 67.1 Overassessment 6, 084, 038 Net deficiency and penalty 45, 460, 675 46.7

222 REPORT OF COMMISSIONER OF INTERNAL REVENUE REPORT OF COMMISSIONER OF INTERNAL REVENUE 223 OFFICE OF THE CHIEF COUNSEL TABLE 124.-Progress of cases in appella e courts on appeals from decisions of The Tax Court of the United States for the fiscal year ended June 30, 1949 APPEALS DIVISION-WASHINGTON OFFICE In air- In Su- In dr- In Su- TABLE 120.-Cases appealed from Tax Court decisions to appellate courts, fiscal year 1949 Cases cult promo Cases cult promo 332 courts Court courts Court Pending beginning of fiscal year 297 Received from field for appeal to circuit courts of appeals Pending beginning of fiscal Closed during fiscal year year:

Favorable to Commis- CO 629 Appealed by Commis- !loner 144 Total sioner 81 Favorable to taxpayers- 67 Closed: 215 Appealed by aYerS 219 Modified 10 By decision on merits 5 Appealed by both 20 Transferred to field-remanded for further hearing te Total 211 Total 320 Pending end of fiscal year: Appealed during fiscal year: Appealed by Commis- 220 By Commissioner 98 YO .0 , 'loner 104

Total O 409 By taxpayers 180 Appealed by taxpayers__ 267 Pending end of fiscal year By both 7 Appealed by both 12 TABLE 121.-Number and amounts of cases shown in table 120 for the fiscal year 1949, Total 283 Total 383 9 by class of tax and amounts involved

TABLE 125.-Disposition of Supreme Court, Circuit Court, and Tax Court cases Filed, reopened, Closed and trans- and received `"'" Pending June 30, closed during the fiscal year 1949 to field, 1949 PendinPendingg Sub' 1, 1948 fiscal fiscal year 1949 year 1949 Class of tax Amount in dispute Amount approved Num- Amount in Number Percent. Num- Amount in Num- Amount in Num- Amount in Character of closing Net result age of re- dispute ber dispute ber dispute of cases ber dispute ber Deficiency Ovmeraly- Deficiency Ovmerr- covery

271 $21, 863, 275 194 $7, 736, 806 365 $32, 772, 880 Income 288 $18.646, 411 30 2,860,902 34 4,987, 269 16 2, 251, 562 20 4, 377, 929 Decision on merits.-- 215 $11,043,470 $1, 023, 840 85, $36,245 $8, 971, 129 57.76 Estate 6 115, 421 14 204,021 983, EH Gift 10 148, 064 10 171, 378 220 12, 230,156 409 35, 837, 803 Total 332 23, 781, 744 297 24, 286, 215 TABLE 126.-Disposition of cases closed by The Tax Court of the United States during the fiscal year 1949 TABLE 122.-Circuit and Supreme Court cases pending June 30, 1949 Amount in dispute Amount approved New appeals to Percent- circuit courts of Closed during fts- Pending Tune 30, Number 1948n 1949 Character of closing ei c e Net result age of Pending InIP 1, appeals and re- cal year 1949 paOver-m t paOyver- t recovery opened Deficiency Deficiency Class of tax Num- Amount in Num- Amount in Num- Amount in Num- Amount in ber dispute Decision on merits__ 6 $972, 824 $303,346 $400,535 $1,826 $702,055 55.01 ber dispute ber dispute ber dispute I Pc gia $6, 460, 636 348 $24, 670,151 $16, 372,117 256 $14, 758, 670 , Income 334 301 4,377,929 30 2, 860,1:02 Estate 4, 908, 530 17 2,, 204, 021 116, 421 14 Gift 148,064 10 171, 378 214 10, 953,986 392 27, 735, 074 Total 323 21,424, 711 283 17, 264, 349

123.-Status of cases pending before The Tax Court of the Uni ed States, TABLE June 80, 1949 2 On reserve calendar the Tax Court of the United States: Awaiting expiration of appeal Tried by 11 period 13 Total

224 REPORT OF COMMISSIONER OF INTERNAL REVENUE REPORT OF COMMISSIONER OF INTERNAL REVENUE 225

FIELD OFFICES TABLE 130 -Results obtained in cases closed during the fiscal year 1 949 APPEALS DIVISION-FIELD OFFICES Number Amount Recovered from Amount TABLE 127.-Number and amounts of cases pending in filed divisions, by class of of cases claimed taxpayers refunded tax and amounts involved Suits instituted by taxpayers 411 $11, 889,331.44 $7, 134, 126. 48 Pending June 30, Filed and reopened, Closed, fiscal year Pending June 30, Suits and claims by the United States 127 4, 604, 620.42 6941, 833. 66 fiscal year 1949 1949 1949 1948 Total 538 16, 493,951.86 941,833. 66 7,134, 126. 48 Class of tax Amount in Num- Amount in Num- Amount in Num- Amount in Num- ber dispute 1 Excludes bankruptcy, receivership, insolvency, compromise, lien, and liquor cases. ber dispute ber dispute ber dispute

TABLE $434, 931, 738 4,191 8157, 931,004 4,001 $122,561, 824 5, 574 8470,300,918 131.-Results obtained in lien cases closed during the fiscal year 1949 1 Incom and profits__ 5, 384 29,363,610 526 109, 406,377 Estates and gift 477 96, 762, 825 381 42,007,162 332 1n, 925, 434 6,100 579, 707, 295 Total 5, 861 531, 694, 563 4, 572 199, 938,166 4,333 Number Amount of cases collected 128.-Disposition of cases by The Tax Court of the United States during the TABLE Lien cases pending in court 753 $252,558.35 fiscal year 1949 Lien cases not pending in court 346 1,139,695.61

Amount approved Total 1,099 1, 392, 253.96 Amount in dispute Percent- Number Net result age of Character of closing of cases Over- recovery 1 Excludes bankruptcy, receivership, insolvency, compromise, and liquor cases. Deficiency - Deficiency paymente payment TABLE 132.-Civil cases pending at the beginning and end of the fiscal year 1949 1 99.3 $1,960,440 $56,592 $1,951,027 $4,661 $2,002,958 Default 413 125, 680 17,003, 717 50.6 Decision on merits _ 795 30, 868,105 2, 718,046 14,434,863 10, 675,893 51, 544, 713 • 62,443, 540 53.7 Pending Pending Agreed settlement 3,125 105, 648, 358 July 1, 1948 June 30, 1949 130,341 81, 450, 215 53.6 Total 4,333 138, 476, 903 13, 448, 531 67,930,603 For suit by the United States 148 195 Pending in district courts 1,197 1,390 CIVIL Divis on Involving liens 631 690 1 Pending in circuit courts of appeals 47 46 TABLE 129.-Cases received and disposed of during the fiscal year 1949 Pending in Court of Claims 134 171 Number Pending in Supreme Court 0 2 Pending July 1, 1948: 1, 425 Pending payment of judgment claims 47 61 In court (exclusive of lien cases) State courts and miscellaneous 0 0 148 Not pending in court (exclusive of lien cases) Total 2, 204 582 2, 561 Cases in court involving liens 49 Cases not in court involving liens 1 Excludes bankruptcy, receivership, insolvency, compromise, and liquor cases. Total TABLE 133.-Number of Civil Division cases tried by the Department of Justice and Received during the year: 664 number decided by the courts during the fiscal year 1949 Suits by taxpayers 796 Suits involving liens 172 Cases for suit by the United States 362 Cases decided Lien cases not in court 1, 994 Total Cases Partly for Courts tried For the Against and partly Govern- Govern- against Total Total to be disposed of ment ment Govern- ment Closed during the year: 538 Cases (exclusive of lien cases) 1, 099 District courts 88 88 82 9 179 Cases involving liens Circuit courts of appeals 47 42 28 69 1, 637 Court of Claims 5 6 8 0 14 Total Supreme Court 2 0 0 2 2, 561 Total 141 138 116 Pending June 30, 1949 10 264 Amount $92, 950, 825. 16 Pending July 1, 1948 31, 657, 014. 95 Received during fiscal year 124, 607, 840. 11 Total 16, 493, 951. 86 Closed during fiscal year 108, 113, 888. 25 Pending June 30, 1949

1 Excludes bankruptcy, receivership, insolvency, compromise, and liquor cases. 226 REPORT OF COMMISSIONER OF INTERNAL REVENUE REPORT OF COMMISSIONER OF INTERNAL REVENUE 227

CLAIMS DIVISION TABLE 138.—Civil cases received and disposed of by Processing Tax Section, Claims Division, and number decided by courts during the fiscal year 1949 TABLE 134.— Processing tax cases appealed to the United States Processing Tax Board of Review l and The Tax Court of he United States, including those appealed to appellate courts, fiscal years 1989 to 1949, inclusive Circuit of Court of Supreme Total suit courts appeals Claims Court 11439 1940 1941 1942 1943 1944 1945 1940 1947 1948 1949 I Pending beginning of fiscal year as 2 28 2 g Received during fiscal year

Pending beginning of fiscal year- 52 93 103 60 54 39 28 13 10 Filed during year 107 103 38 5 2 Total 26 2 28 Disposed of during fiscal year 13 1 Total 159 203 196 141 92 65 54 41 28 13 10 14 II ' Pending end of fiscal year 13 1 14 - -

Closed: 0 .4 ..

By dismissal 76 89 20 By agreed settlement 9 22 3 12

By decision on merits 12 29 12 1 3 TABLE 139.— Civil cases received and disposed of by Processing Tax Section, Claims Total. 76 110 93 71 32 11 16 13 15 3 7 Division, during the fiscal year 1949, by number of cases and amounts involved

United States Processing Tax Board of Review was aboii bed December 31,1942, and its jurisdiction and functions were transferred to The Tax Court of the United States (sec. 510, Revenue Act of 1942). Number Amount in- of eases volved TABLE 135.— Number and amounts, of cases shown in table 134 for the fiscal year 1949 only, by class of tax and amounts involved Pending beginning of fiscal year 28 $1, 636, 607. 74 Received during fiscal year Total Pending June 30, Filed during fiscal Closed during Pendmg June 30, 28 1, 636, 617.74 1948 year 1949 fiscal year 1949 1949 Disposed of during fiscal year 14 100, 170. 32 Class of tax Pending end of fiscal year 14 1, 536, 437.42 Num- Amount in Num- Amount in Num- Amount in Num Amount in ber dispute ber dispute bar dispute ber dispute TABLE 140.—Cases received and disposed of by Reorganization Section, Claims Processing 10 $8, 789, 624 7 $636, 766 3 $8,152, 858 Division, during fiscal year 1949 Pending beginning of fiscal year 665 Received during fiscal year 937 TABLE 136.— Status of processing tax cases pending before The Tax Court of the United States, including those appealed to appellate courts, June 30, 1949 Total 1, 602 Disposed of during fiscal year 596 In process of preparation: Number Field calendar 2 Pending end of fiscal year 1, 006 In circuit courts of appeals: Awaiting decision 1 TABLE 141.—Results obtained in cases closed in Reorganization Section, Claims Division, during fiscal year 1949 Total 3

Character of closing Number Amount in- Amount col- TABLE 137.—Results obtained in processing tax cases closed before The Tax Court of of cases volved lected the United States, including those appealed to appellate courts, fiscal year 1949 Payment 189 $5, 352, 044.74 $4, 648, 465.00 Percentage Uncollectible 1 239.31 • —um. r Amount of Amount of of claims Abatement 4 2, 718. 54 Character of closing No f cares claims in claims re- recovered Transferred from section 298 5,971, 257. 59 covered by No tax due 65 dispute taxpayers by tax- payers: Other 39 47,152.16 Total 596 11,373,412.34 4, 648,465. 00 Agreed settlement 5 $70,180 $9, 660 13.76 Decision on merits 2 566, 586 0 Total 7 636.766 9,660 1.52 TABLE 142.—Liability involved in cases of Reorganization Section, Claims Division, pending June 30, 1949 Taxes $103, 827, 568. 00 Interest 11, 174, 865. 33 Penalties I, 677, 883. 50

Total 116, 680, 316. 83 228 REPORT OF COMMISSIONER OF INTERNAL REVENUE REPORT OF COMMISSIONER' OF INTERNAL REVENUE 229 2:.; 55fliMMKSX flVW474ng;areare :=;1=MArci asiz TABLE 143.—Cases received and disposed of by Bankruptcy and Receivership Section, Claims Division, during the fiscal year 1949 Mik 444 44444064 545446441i,444 F44544 4g: i

s gi.l. 014141441 4g444 0:464:44g 141.1q 444 Pending beginning of fiscal year 3, 009 a .f, a ,, aaaa..t.4- aaaa -;..r .4-- a Received during fiscal year 4, 137 . " Total 7, 146 OrM 88888&823 8:M288238288 88g88S 885

2, itaag Disposed of during fiscal year 177 890 004 g5644064 6444004444g 44.J454 ggg of 4F4--: ir g.'4K cji gae mr4eict gmedwa44agEgote ocpsakr Pending end of fiscal year 4, 969 i

TABLE received and disposed of by Compromise Section, Claims d

144.—Cases Division, during fiscal year 1949 t 88:1 P23418888.1 glitr.2:28:3.148N8 848888 282 an

men 440 4440016 0004600404 654gggshil t 2, 591 lies Pending beginning of fiscal year ip tr..: 0,140k-r;leria facsKcjird4e4gg744 ce..a 4!:1'4 Received during fiscal year 2, 382 u eq Supp 4, 973 Total N88 Fa$618:;683 888218298Maa 288848 S8?4 Disposed of during fiscal year 1, 732 ggg F;gilagggg grag Xgggggg 4544:31 044 Pending end of fiscal year 3, 241 ve Itg.os adaa gaaaaaaa r aa *Saari a 4!:.7

TABLE 145.—Liability involved in cases of Compromise Section, Claims Division, pending June 30, 1949 EX2 8 68 2888 888'4$88g86- 282 W338 88 c;p4o x4 d4 gga- w ;iaa.,1 6'44 44 Taxes $38, 158, 509. 71 . 4aga,4,1 Interest assessed 2, 514, 199. 98 Interest accrued 549, 899. 55 1, 556, 404. 98 Penalties 8 8 X88,S1 888:: 88e88 888388 2 8888 8 88 Lien fees 352. 95 g g gggg 4460 44465 04554 6 4548 g; gg Total 42, 779, 367. 17 Ei &g•tie' g.: it:4w&. girsinf a aa 4 4 g

TABLE 146.—Results obtained in cases closed in Compromise Section, Claims Division, fiscal year 1949 RAX 88888ET.'82 8828858882852 8856a 888

Number Amount in- Amount col- glg 50656460 06g6405645651 1.140U gn Character of closing of cases volved leeted pg gg,g4anaa glggggilmlgtAig gwlgtim . ;;r4g

Payment 1,281 $8,045,115.07 $4,892,724.82 Compromise 81 21,037,183.02 1, 532, 425.27 - l-

Abatement 61 801, 589.22 u 846 8288GSUSt?, PP:M*888488R I271882 888

565, 846.35 ks, Uncollectible 264 f co

1 2, 457.17 o Barred by limitations dep ggS 06566614g 6404fl1605 A5444 546 ler 17 132, 647.96 tc. c Transferred from section e ies Other 27 97, 823.21 rs, igi M444545 t445445“Tigg. 4004 g4:4 to lar c ac,.., a 44 4aaaaaa aaa-r a. a le Total 1,732 30, 682, 662.00 6,425,150.09 Sa

, ' ties,

a

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RTMENTAL SERVI x

1 1. DEPA DISBURSEMENTS 013

1J1 E. . FOR

U. 4 4 TS I SEMEN t

ic ISBUR tr D Dis

F. I

t l ia ns isco a h ta k 71.11 83 dR 1 atd2 O nc le City le r l lp 6.

il o ayew>. k s u To

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hicag .4ouPrizzz4Pa hila 400mZZZZagn De Sa Sea Ka St. C New Lou De Ba At Bos P New Ne 234 "REPORT OF COMMISSIONER OF INTERNAL REVENUE REPORT OF COMMISSIONER OF INTERNAL REVENUE 235 82 TABLE 148.-Summary of internal revenue stamps issued to collectors of internal C 5 revenue and the Postmaster General during the fiscal years 1948 and 1949 E. 1 2 3 S Quantity Value Kind 1948 1949 1948 1949

d: ;g aS te Liquors: Distilled spirits cask stamps______1,986,800 1, 882, 800 $870, 509, 880. (X) $844, 530, 480. 00 oi dica Certificate of tax payment, dis

in tilled spirits for shipment in

ts tankca rs 2, 930 s, 200 (0 (0 Export (sees. 2878 and 2885, mRRR :a un '122 I. R. C ) 44, 400 42 600 4,440. 00 4, 560.00

mo Bottled-in-bond, export (blue

gflt a 10 strips) 1, 008, 000 1,060, 000 10,080.00 10, 500.00 N eq he Bottled-in-bond, domestic (green GUS t a" strips) 36,626, 000 34,548, 000 328, 760.00 289, 230. Oa TIO

in Container or bottle stamps (red s A strip) 1, 194,383, 550 1, 236, 474.000 11, 657, 635.50 12, 138, 165.00 RI ion Rectified, class B 255,940 248,500 22,453,829.00 18, 408, 170.00 t E.5- Rectified, Puerto Rico 230.003 124, 000.00 ia r Rectified, class A 4, 900 4,000 6 Alcohol warehousing 7, 250 18, COO rop 5)

p Wholesale liquor dealer's packages_ 4,000 2,000 (2 P Wine 30,953,900 34, 280,100 60, 731, 630.85 62, 256,041.75 ap Fermented malt liquor 54, 704, 760 49, 869, 620 702, 649, 000. 00 687, 5424 800.00 Tobacco: ing NG APPROP Manufactured tobacco 1,395, 676, 890 1, 363, 206,340 37, 680, 815.92

w 36,040,972. 21 scriP..1 Snuff 438, 766, 248 375.071, 170 7, 886,425. 71 7.310, 817.44

llo s;

ngs- NDI Cigars, large 151, 872,620 146, 460, 800 49,388,342. 61 46,478,489. 30 ' n

fo . a er E U Cigars, small 10, 221,000 7, 915, 000 77,381.25 59, 700.00

he fi Cigarettes, class A 17, 293,474.400 17,309, 210, 000 1, 210, 487, 402.95 1, 211, 888, 154.40 t Cigarettes, class B 125,600 122 900 31,192. 56 24, 475. 92 REF N

om Cigarette tubes O

fr Oleomargarine: R R Domestic, colored 3, 690, 025 8, 806,400 5, 836, 555.00 TI 13, 827, 520.00 de Domestic, uncolored 36, 775,150 29,124, 000 2,139, 446.50 1, 752, 447.50 THE LA Process or renovated butter 285,000 120, OW 3, 125. 00 3, 500 .00 O ma Ci ^ Playing cards 63,381, 300 65, 954,600 8, 239, 569.00 8,574,098.0( TU S lso Documentary 34, 426, 612 27, 962,248 61,332, 959.00 51,367, 381.0(

4 a

Stock transfer 4, 938, 396 4,163, 516 22,421, 728.00 16, 781, 207.0( FROM re Silver transfer 8,052 8, 164 362, 562. 00 176, 788. 0( ion

t Narcotic 8, 754, 775 6, 771,625 we 567,309. 50 231, 960. 21 ECAPI

ga ia Order forms for opium 1, 442 500 1, 585, 503 14, 485.00 15,852 0( r ENT R ss Marihuana 100 100 100.0( of 100.00 rop Order forms for marihuana 30 .6( 0. ditures oil National Firearms Act (sec. 2720, n

e L R. C.):

6 I App is Machine guns, silencers, etc 40 8, 000.00

R PAYM Certain short guns 1,150 150

f exp 1, 150. 00 150.0(

o Special or occupational stamps 1,997, 510 1,970,110 660, 664, 009. 00 611, 294, 091.04 ts Total 20, 765, 825, 668 20, 707,066, 479 3, 735,387, 804.35 3, 631, 121, 654.31

(00 ED FO ct tmen 3 44 ma Value inserted when purchased. djus ROV Have no money value. d a n

a TABLE 149.-Cost

s of printing and binding for Internal Revenue Service, fiscal years S APP

re 1948 and 1949 ditu n e

CLAIM 1948 1949 p Class of work ex

ts, Cost Quantity Cost t! Quantity r o lec

O l o

rep Tax return forms 650, 890, 003 $1, 671, 188 773, 142, 000 $1, 730, 258 c

e Instructions for tax returns 118, 187,000 263, 975 56, 415, ODO 272, 760 sa

nu Administrative forms 152, 357, 000 494, 991 272, 778,000 656,378

bove p Reports, regulations, etc 2,062,000 157,927 1,545, 000 171,775 a Letterheads, miscellaneous binding, etc: 43, 255.000 81,919 42,100, 000 79,329 he l reve t a Total 966, 760, 000 2,670,000 1,145, 980, 000 2, 910, 500 to

n tern in

ditio

d O ding a In fun Re