B-130287, MAR. 10, 1961

B-130287: Mar 10, 1961

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TREASURY DEPARTMENT: REFERENCE IS MADE TO LETTER OF MARCH 2. INFORMING US THAT INFORMAL ADVICE HAS BEEN RECEIVED THAT THERE ARE ON RECORD IN THE DISTRICT DIRECTOR'S OFFICE AT GREENSBORO. THIS LETTER WAS IN RESPONSE TO OUR INFORMAL REQUEST FOR A REPORT OF TAX INDEBTEDNESS OF RECORD AGAINST THIS CORPORATION. IT IS STATED THAT YOUR DISTRICT DIRECTORS AT JACKSONVILLE. IT WAS UNDERSTOOD AT THAT TIME THAT THIS AMOUNT WOULD COVER ALL TAX ASSESSMENTS THEN OUTSTANDING. WHEN IT WAS DISCOVERED THAT THE ASSESSMENTS WOULD EXCEED $17. - IT WAS FURTHER AGREED THAT THE BALANCE OF THE SETTLEMENT AMOUNT. A COPY OF THE JUDGMENT IS ENCLOSED FOR YOUR INFORMATION. A SETTLEMENT CERTIFICATE WILL BE ISSUED HERE AUTHORIZING THE TREASURY DEPARTMENT TO ISSUE THE CHECKS SPECIFIED IN THE JUDGMENT ORDER WITH INSTRUCTIONS THAT THE CHECKS BE FORWARDED TO THE UNITED STATES ATTORNEY.

B-130287, MAR. 10, 1961

TO COMMISSIONER, INTERNAL REVENUE SERVICE, TREASURY DEPARTMENT:

REFERENCE IS MADE TO LETTER OF MARCH 2, 1961, FILE O:C:OP, FROM CHIEF, OPERATIONS BRANCH, COLLECTION DIVISION, INFORMING US THAT INFORMAL ADVICE HAS BEEN RECEIVED THAT THERE ARE ON RECORD IN THE DISTRICT DIRECTOR'S OFFICE AT GREENSBORO, NORTH CAROLINA, OUTSTANDING TAX ASSESSMENTS FOR APPROXIMATELY $65,000, AGAINST MIAMI AIRLINES, INC. THIS LETTER WAS IN RESPONSE TO OUR INFORMAL REQUEST FOR A REPORT OF TAX INDEBTEDNESS OF RECORD AGAINST THIS CORPORATION. IN A LETTER OF FEBRUARY 28, 1961, FROM YOUR COLLECTIONS DIVISION, IT IS STATED THAT YOUR DISTRICT DIRECTORS AT JACKSONVILLE, FLORIDA, AND AUSTIN, TEXAS, ADVISED YOU BY WIRE THAT THEIR RECORDS DISCLOSED NO OUTSTANDING TAXES AGAINST THE CORPORATION.

THIS AIRLINE SUED THE UNITED STATES FOR APPROXIMATELY $231,000 IN THE CASE OF ASSOCIATED AIR TRANSPORT, INC. V. UNITED STATES, MIAMI AIRLINES, INC., PLAINTIFF-INTERVENOR, NO. 6817-M-CIVIL, IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF FLORIDA, MIAMI DIVISION. DISTRICT COURT FOR THE SOUTHERN DISTRICT OF FLORIDA, MIAMI DIVISION. THE AIRLINE OFFERED TO SETTLE THE CASE FOR $95,000 AND THE OFFER HAS BEEN ACCEPTED. DURING THE SETTLEMENT NEGOTIATIONS, ATTORNEYS FOR THE AIRLINE AGREED TO APPLICATION OF $17,000 OF THE SETTLEMENT AMOUNT IN SATISFACTION OF FEDERAL TAX LIABILITIES OF THE CORPORATION. IT WAS UNDERSTOOD AT THAT TIME THAT THIS AMOUNT WOULD COVER ALL TAX ASSESSMENTS THEN OUTSTANDING.

WHEN IT WAS DISCOVERED THAT THE ASSESSMENTS WOULD EXCEED $17,000--- THE PARTIES THEN UNDERSTOOD THAT THE TAX LIABILITY MIGHT BE AS HIGH AS $24,000 --- IT WAS FURTHER AGREED THAT THE BALANCE OF THE SETTLEMENT AMOUNT, AFTER PAYMENT TO INTERNAL REVENUE SERVICE OF $17,000, AND PAYMENT TO ATTORNEYS OF RECORD OF $50,386.35 (COVERING ATTORNEYS' FEES, COMMISSIONER'S FEES, REPORTER'S CHARGES AND COURT COSTS), WOULD BE PAID INTO THE REGISTRY OF THE COURT TO BE HELD UNTIL A DEFINITE DETERMINATION OF THE CORPORATION'S TOTAL TAX LIABILITY COULD BE REACHED. THE JUDGMENT ENTERED IN THE CASE GIVES EFFECT TO THESE ARRANGEMENTS. A COPY OF THE JUDGMENT IS ENCLOSED FOR YOUR INFORMATION.

A SETTLEMENT CERTIFICATE WILL BE ISSUED HERE AUTHORIZING THE TREASURY DEPARTMENT TO ISSUE THE CHECKS SPECIFIED IN THE JUDGMENT ORDER WITH INSTRUCTIONS THAT THE CHECKS BE FORWARDED TO THE UNITED STATES ATTORNEY, MIAMI, FLORIDA. THIS IS THE BEST ARRANGEMENT THAT COULD BE MADE COMMENSURATE WITH SETTLEMENT OF THIS CASE WITHOUT TRIAL PROCEEDINGS AND AFFORDS, IN OUR JUDGMENT, THE MAXIMUM PROTECTION OF THE GOVERNMENT'S INTERESTS POSSIBLE IN THE CIRCUMSTANCES. WE SUGGEST THAT FURTHER COMMUNICATION REGARDING THIS MATTER, AS THE INTEREST OF THE SERVICE MAY REQUIRE, BE ADDRESSED TO THE UNITED STATES ATTORNEY, MIAMI, FLORIDA.