1949 - Internal Revenue Service

50 REPORT OF COMMISSIONER OF INTERNAL REVENUE
concurrence of the Council. (Paragraphs 3 and 11 of mimeograph,
R. A. No. 1529, T. S. No. 454, dated July 31, 1946.)
Field operations.—The operations of the Staff field divisions fall into
two main classifications: (1) contested income, profits, estate, and
gift tax cases not docketed by The Tax Court Of the United States,
including cases in the pre-90-day status, cases in the 90-day status, and
cases involving overassessments and claims; and (2) cases docketed
and pending before the Tax Court. The statistical data summarizing
the work accomplished by the Staff field divisions are contained in
tables 117-119 on pages 219-221.
With respect to contested cases not docketed before The Tax Court
of the United States, there were 7,214 on hand July 1, 1948, awaiting
Staff action, and 710 awaiting action by taxpayers on statutory
deficiency notices directed or sustained by the Staff, or a total of 7,924
nondocketed cases. Receipts and dispositions during the year were
as follows:
On hand July 1, 1948
Received
7,924
8,710
Total
16,634
Dispositions:
Settled by agreement
3,760
Defaulted after statutory notice
732
Petitions filed after statutory notice
1,267
Unagreed overassessments and claim rejections
349
Returned to internal revenue agents in charge, without action_
Transferred to other Bureau agencies (bankruptcy, etc.) 472
6, 782
On hand at the close of June 30, 1949 9, 852
Of the number on hand at the close of the year, 9,017 were awaiting
Staff action and 835 action by taxpayers on deficiency notices. In
addition to the above dispositions, 1,006 subsidiary cases were closed in
accordance with the action taken in the respective basic cases. Receipts
of nondocketed cases in 1949 exceeded those of 1948 by 960. Dispositions,
exclusive of transfers and cases returned to revenue agents in
charge without action, exceeded those of 1948 by 635.
During the fiscal year ended June 30, 1949, the Staff field divisions
directed the issuance of statutory deficiency notices in 1,961 cases. In
39.ff percent of these cases the taxpayer did not take an appeal to
the Tax Court. The comparable percentage for the preceding 8-year
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
considered to a conclusion by the field divisions of the Staff. The
revenue agent was sustained in 261 of these cases without an agreement
being received from the taxpayer and 252 were settled. With respect
to the 261 statutory notices which were sustained, the taxpayers filed
petitions with the Tax Court in 142 cases and defaulted in the,
remaining 119.
On July 1, 1948, there were 4,991 docketed cases on hand in the
Staff field divisions and 4,624 dockets were received during the year.
Of these docketed cases, 3,125 were settled by stipulated agreement,
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
51
of 5,131 on hand June 30, 1949. In addition to the dispositions
summarized above, action was taken on 476 subsidiary cases which
were closed in accordance with the closing of the respective basic cases.
Receipts of docketed cases during 1949 exceeded receipts of 1948
by 26. Dispositions, excluding cases submitted to the Tax Court,
exceeded those of 1948 by 608. More cases were disposed of by
stipulation in 1949 than in any year since 1940 and the cases dismissed
amounted to 413 as compared with 458 in 1948 which was the largest
number dismissed in any year since decentralization.
For the 10-year period (fiscal years 1940 to 1949, inclusive), Staff
reports show decisions handed down by the Tax Court, in 10,167
docketed cases. Analyses of these decisions, made currently as they
were received, show a total of 3,973, or 39 percent, in which the
Bureau's position was wholly sustained; 3,956, or 39 percent, in which
the Bureau's position was partly sustained and partly reversed; and
2,238, or 22 percent, in which the Bureau's position was wholly
reversed. The percentages for the fiscal year 1949, during which the
court handed down 828 decisions, were 39 percent wholly sustained,
42 percent partly sustained and partly reversed, and 19 percent
wholly reversed.
The following schedules reflect the case dispositions effected by the
Staff over the 10-year period ended with 1949:
Stipulated
Dismissed
Tried
Total
Settled by agreement
Defaulted by taxpayer after statutory notice
Petitions filed by taxpayer after statutory notice
Unagreed overassessments and claims rejections
Total
Cases
CASES BEFORE THE TAX COURT
9-year
Period 1940
to 1018,
inclusive
21, 573
2,001
9,703
CASES NOT BEFORE THE TAX COURT
34, 215
6, 404
13, 088
3, 151
56, 858
Percentage Fiscal year
1949
64.71
II 00
29.29
60.18
11.26
23.02
5.54
100. 00
Percentage
8, 125 69.69
413 9.21
946 21.10
33, 337 100.00 4, 484 100.00
I
3, 760 61. 56
732 11.98
1,267 20.74
349 5. 72
6, 108 100.00
In the Commissioner's annual report for 1948 it was stated that of
all the cases handled by the Technical Staff which were subject to
petition to the Tax Court, approximately seven out of eight cases were
closed without the necessity of trial, leaving but one in eight actually
tried before the court. During the fiscal year 1949 the percentage of
cases closed was somewhat greater and only one out of every nine
actually was tried before the court.
The field divisions of the Technical Staff ended the fiscal year 1949
with a conference personnel of 266 and an audit, clerical and stenographic
personnel of 343, or a total of 609.