A-11318, OCTOBER 27, 1925, 5 COMP. GEN. 296

A-11318: Oct 27, 1925

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WITNESSES - INTERNAL REVENUE HEARINGS WITNESSES NOT IN THE GOVERNMENT SERVICE AND LIVING OUTSIDE THE DISTRICT OF A COLLECTOR OF INTERNAL REVENUE MAY BE ENGAGED UNCER CONTRACT TO GIVE TESTIMONY WHEN THEIR PERSONAL PRESENCE AT A HEARING IS NECESSARY AND THE COST OF THEIR HIRE. DOES NOT EXCEED THE EXPENSE WHICH WOULD BE NECESSARY IF THE COLLECTOR WERE TO GO TO THE DISTRICT IN WHICH THE WITNESS RESIDES TO CONDUCT THE HEARING BY COMPULSORY SUMMONS. REQUESTING DECISION OF A QUESTION PRESENTED AS FOLLOWS: A RULING IS REQUESTED ON THE QUESTION WHETHER A WITNESS NOT IN GOVERNMENT SERVICE AND LIVING OUTSIDE THE JURISDICTION OF A COLLECTOR OF INTERNAL REVENUE CAN BE ALLOWED COMPENSATION. THE FACTS IN THE CASE ARE AS FOLLOWS: EVIDENCE WAS PROCURED BY SPECIAL AGENT JAMES W.

A-11318, OCTOBER 27, 1925, 5 COMP. GEN. 296

WITNESSES - INTERNAL REVENUE HEARINGS WITNESSES NOT IN THE GOVERNMENT SERVICE AND LIVING OUTSIDE THE DISTRICT OF A COLLECTOR OF INTERNAL REVENUE MAY BE ENGAGED UNCER CONTRACT TO GIVE TESTIMONY WHEN THEIR PERSONAL PRESENCE AT A HEARING IS NECESSARY AND THE COST OF THEIR HIRE, INCLUDING REIMBURSEMENT FOR TRANSPORTATION AND SUBSISTENCE CHARGES, DOES NOT EXCEED THE EXPENSE WHICH WOULD BE NECESSARY IF THE COLLECTOR WERE TO GO TO THE DISTRICT IN WHICH THE WITNESS RESIDES TO CONDUCT THE HEARING BY COMPULSORY SUMMONS.

COMPTROLLER GENERAL MCCARL TO THE SECRETARY OF THE TREASURY, OCTOBER 27, 1925:

THERE HAS BEEN RECEIVED YOUR LETTER OF SEPTEMBER 23, 1925, REQUESTING DECISION OF A QUESTION PRESENTED AS FOLLOWS:

A RULING IS REQUESTED ON THE QUESTION WHETHER A WITNESS NOT IN GOVERNMENT SERVICE AND LIVING OUTSIDE THE JURISDICTION OF A COLLECTOR OF INTERNAL REVENUE CAN BE ALLOWED COMPENSATION, IN ADDITION TO SUBSISTENCE CHARGES AND TRAVELING EXPENSES, FOR APPEARING AS A WITNESS FOR THE GOVERNMENT AT AN ASSESSMENT HEARING BEFORE THE COLLECTOR OF INTERNAL REVENUE.

THE FACTS IN THE CASE ARE AS FOLLOWS: EVIDENCE WAS PROCURED BY SPECIAL AGENT JAMES W. BROWN THAT A CARLOAD OF ALCOHOL FROM THE KENTUCKY DISTILLERIES AND WAREHOUSE COMPANY PLANT AT PEORIA, ILLINOIS, WAS DIVERTED TO BEVERAGE PURPOSES AT DES MOINES, IOWA. AN ASSESSMENT OF THE FOLLOWING ITEMS HAS BEEN PROPOSED AGAINST TWO CORPORATIONS AND ELEVEN INDIVIDUALS: TAX ON 7,315 PROOF GALLONS OF DISTILLED SPIRITS AT THE

RATE OF $6.40 PER PROOF GALLON IN CONFORMITY WITH

SECTION 600 (A) OF THE REVENUE ACT OF 1918 AND SECTION

600 OF THE REVENUE ACT OF 1921 ------------------------ $46,816.00 TAX UNDER SECTION 3244 S., AS WHOLESALE LIQUOR DEALER

FOR THE FOUR MONTHS' PERIOD ENDING JUNE 30, 1923,

$33.33, DOUBLED UNDER SECTION 35, TITLE II, OF THE

NATIONAL PROHIBITION ACT ------------------------------ 66.66 TAX UNDER SECTION 1001, TITLE X, R.A., OF 1921, AS

WHOLESALE LIQUOR DEALER IN THE STATE OF ILLINOIS, FOR

THE FOUR MONTHS' PERIOD ENDING JUNE 30, 1923, $333.33,

DOUBLED UNDER SECTION 35, TITLE II, OF THE NATIONAL

PROHIBITION ACT --------------------------------------- 666.66

TOTAL ------------------------------------------- 47,549.32

A HEARING IS TO BE HAD BEFORE THE COLLECTOR FOR IOWA. MR. BROWN HAS SINCE RESIGNED FROM THE SERVICE AND GONE INTO BUSINESS FOR HIMSELF IN ST. LOUIS, MISSOURI. HE HAS BEEN ADVISED THAT THE HEARING IS TO BE HAD BEFORE THE COLLECTOR IN IOWA, AND THAT HE WILL BE ALLOWED SUBSISTENCE NOT TO EXCEED $5.00 PER DAY AND REASONABLE AND NECESSARY TRAVELING EXPENSES. HAS REPLIED THAT HE CAN NOT COME ON THIS BASIS AND SUGGESTS THAT HE WILL COME IF ALLOWED AN ADDITIONAL $25.00 PER DAY, WHICH HE STATES IS THE ARRANGEMENT HE HAS WITH THE DEPARTMENT OF JUSTICE IN CONNECTION WITH THE CRIMINAL CASE. * * *

IF SUCH ARRANGEMENTS CAN NOT BE MADE, APPARENTLY THE ONLY ALTERNATIVE IS FOR THE COLLECTOR FOR IOWA, UNDER SECTION 3173 REVISED STATUTES, TO ARRANGE FOR A SESSION OF THE HEARING AT ST. LOUIS. THIS, OF COURSE, WILL INVOLVE THE NECESSITY OF THE COLLECTOR FOR IOWA, HIS REPORTER, AND THE GOVERNMENT ATTORNEY, AS WELL AS THE ATTORNEYS FOR THE THIRTEEN PARTIES AGAINST WHOM THE ASSESSMENT IS PROPOSED, PROCEEDING TO ST. LOUIS, WHICH WOULD BE MORE EXPENSIVE TO THE GOVERNMENT THAN TO ALLOW MR. BROWN $25.00 A DAY WHILE IN ATTENDANCE AT THE HEARING IN DES MOINES, IOWA.

IT IS ASSUMED THAT THE SPECIAL ASSESSMENTS ARE TO BE MADE UNDER THE PROVISIONS OF LAW:

SECTION 3244, REVISED STATUTES:

SPECIAL TAXES ARE IMPOSED AS FOLLOWS:

WHOLESALE LIQUOR DEALERS SHALL PAY ONE HUNDRED DOLLARS. * * *

SECTION 600, REVENUE ACT OF 1921, 42 STAT. 285:

THAT SUBDIVISION (A) OF SECTION 600 OF THE REVENUE ACT OF 1918 IS AMENDED BY STRIKING OUT THE PERIOD AT THE END THEREOF AND INSERTING A COLON AND THE FOLLOWING: "PROVIDED, THAT ON ALL DISTILLED SPIRITS ON WHICH TAX IS PAID AT THE NONBEVERAGE RATE OF $2.20 PER PROOF GALLON AND WHICH ARE DIVERTED TO BEVERAGE PURPOSES OR FOR USE IN THE MANUFACTURE OR PRODUCTION OF ANY ARTICLE USED OR INTENDED FOR USE AS A BEVERAGE, THERE SHALL BE LEVIED AND COLLECTED AN ADDITIONAL TAX OF $4.20 ON EACH PROOF GALLON, * *

SECTION 1001, REVENUE ACT OF 1921, 42 STAT. 295-6:

(12) EVERY PERSON CARRYING ON THE BUSINESS OF A BREWER, DISTILLER, WHOLESALE LIQUOR DEALER, RETAIL LIQUOR DEALER, * * * IN ANY STATE, TERRITORY, OR DISTRICT OF THE UNITED STATES CONTRARY TO THE LAWS OF SUCH STATE, TERRITORY, OR DISTRICT, * * * SHALL PAY, IN ADDITION TO ALL OTHER TAXES, SPECIAL OR OTHERWISE, IMPOSED BY EXISTING LAW OR BY THIS ACT, $1,000.

SECTION 35, NATIONAL PROHIBITION ACT, 41 STAT. 317:

* * * UPON EVIDENCE OF SUCH ILLEGAL MANUFACTURE OR SALE A TAX SHALL BE ASSESSED AGAINST, AND COLLECTED FROM, THE PERSON RESPONSIBLE FOR SUCH ILLEGAL MANUFACTURE OR SALE IN DOUBLE THE AMOUNT NOW PROVIDED BY LAW, WITH AN ADDITIONAL PENALTY OF $500 ON RETAIL DEALERS AND $1,000 ON MANUFACTURERS. * * *.

SECTION 3173, REVISED STATUTES, AS AMENDED BY THE ACT OF FEBRUARY 24, 1919, 40 STAT. 1146, UNDER WHICH THE HEARING IS TO BE HELD, PROVIDES:

* * * IT SHALL BE LAWFUL FOR THE COLLECTOR TO SUMMON SUCH PERSON, * * * OR ANY OTHER PERSON HE MAY DEEM PROPER, TO APPEAR BEFORE HIM AND PRODUCE SUCH BOOKS AT A TIME AND PLACE NAMED IN THE SUMMONS, AND TO GIVE TESTIMONY OR ANSWER INTERROGATORIES, UNDER OATH, RESPECTING ANY OBJECTS OR INCOME LIABLE TO TAX OR THE RETURNS THEREOF. THE COLLECTOR MAY SUMMON ANY PERSON RESIDING OR FOUND WITHIN THE STATE OR TERRITORY IN WHICH HIS DISTRICT LIES; AND WHEN THE PERSON INTENDED TO BE SUMMONED DOES NOT RESIDE AND CAN NOT BE FOUND WITHIN SUCH STATE OR TERRITORY, HE MAY ENTER ANY COLLECTION DISTRICT WHERE SUCH PERSON MAY BE FOUND AND THERE MAKE THE EXAMINATION HEREIN AUTHORIZED. * * *.

THIS SECTION PROVIDES FOR TWO METHODS BY WHICH THE COLLECTOR MAY COMPEL THE ATTENDANCE OF NECESSARY WITNESSES AT SUCH HEARINGS; I.E., HE MAY SUMMON ANY PERSON FOUND IN HIS COLLECTION DISTRICT, OR, IF THE PERSON IS NOT IN HIS DISTRICT, THE COLLECTOR MAY GO TO THE DISTRICT IN WHICH THE PERSON IS LOCATED AND THERE ISSUE HIS SUMMONS. THE EVIDENT PURPOSE OF THESE PROVISIONS IS TO EXTEND, RATHER THAN TO RESTRICT, THE AUTHORITY OF THE GOVERNMENT IN THE MATTER OF OBTAINING NECESSARY EVIDENCE OR TESTIMONY. THE PROVISIONS MAY BE ACCEPTED AS PRESCRIBING THE PROCEDURE TO BE FOLLOWED ORDINARILY; BUT IF CONDITIONS ARISE AND ARE MADE OF RECORD SHOWING SUCH ORDINARY PROCEDURE CAN NOT BE FOLLOWED AND THAT THE TESTIMONY OF THE PARTICULAR WITNESS IS ESSENTIAL TO THE INTERESTS OF THE GOVERNMENT AND THAT HIS DEPOSITION TAKEN BEFORE AN AUTHORIZED OFFICER WITHIN THE DISTRICT WHERE THE WITNESS IS FOUND WOULD NOT ANSWER THE GOVERNMENT'S PURPOSES, THE NEED OF THE GOVERNMENT WOULD THEN APPEAR SUCH AS TO JUSTIFY RESORTING TO OTHER MEANS OF OBTAINING THE PRESENCE OF THE WITNESS AT THE HEARING. UNDER SUCH CIRCUMSTANCES AN ARRANGEMENT FOR PAYING THE NECESSARY WITNESS FOR HIS TIME IN ADDITION TO REIMBURSING THE COST OF HIS TRANSPORTATION AND SUBSISTENCE EXPENSES WOULD BE AUTHORIZED ONLY UPON A SHOWING THAT THE ACTUAL ATTENDANCE OF SAID WITNESS AT THE HEARING WAS NECESSARY FOR THE GOVERNMENT'S PURPOSES AND THAT THE EXPENSES INCIDENT THERETO ARE LESS THAN THE EXPENSE WHICH WOULD HAVE BEEN NECESSARY IF THE COLLECTOR HAD GONE TO THE DISTRICT IN WHICH THE WITNESS RESIDES TO CONDUCT THE HEARING.