B-21347, OCTOBER 28, 1941, 21 COMP. GEN. 388

B-21347: Oct 28, 1941

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IS THE MOST ECONOMICAL AND EXPEDITIOUS MEANS OF EFFECTING THE COLLECTION OF SUCH TAX. ARE COMPLIED WITH. 1941: I HAVE YOUR LETTER OF OCTOBER 23. THE BUREAU OF INTERNAL REVENUE WILL UNDERTAKE THE COLLECTION OF THIS TAX IN ITS ENTIRETY. THE EFFECTIVENESS OF THE PROCEDURE WHICH HAS BEEN DEVISED IN THE BUREAU OF INTERNAL REVENUE TO ADMINISTER THE PROVISION OF LAW ABOVE CITED WILL DEPEND TO A GREAT EXTENT UPON THE PRESENCE IN EACH COLLECTOR'S OFFICE OF A COMPLETE AND ACCURATE RECORD OF MOTOR VEHICLE OWNERS OR REGISTRANTS THROUGHOUT THE UNITED STATES. CONSIDERABLE DIFFICULTY IS BEING ENCOUNTERED BY MANY OF THE COLLECTORS OF INTERNAL REVENUE. IN SOME STATES IT WOULD BE NECESSARY TO DETAIL A FORCE OF EMPLOYEES TO THE CITIES IN WHICH THE STATE RECORDS ARE MAINTAINED FOR THE PURPOSE OF ABSTRACTING THE NAMES AND ADDRESSES OF REGISTRANTS.

B-21347, OCTOBER 28, 1941, 21 COMP. GEN. 388

PERSONAL SERVICES - PRIVATE CONTRACT V. GOVERNMENT PERSONNEL - COLLECTION OF MOTOR VEHICLE USE TAX IF IT BE ADMINISTRATIVELY DETERMINED THAT THE PROCUREMENT BY CONTRACT--- RATHER THAN BY THE USE OF GOVERNMENT PERSONNEL--- OF A NATIONAL LIST OF AUTOMOBILE OWNERS AND CERTAIN SERVICES INCIDENT TO THE COLLECTION OF THE USE TAX OF $5 IMPOSED ON MOTOR VEHICLES UNDER SECTION 3540 OF THE INTERNAL REVENUE CODE, AS ADDED BY SECTION 557 OF THE REVENUE ACT OF 1941, IS THE MOST ECONOMICAL AND EXPEDITIOUS MEANS OF EFFECTING THE COLLECTION OF SUCH TAX, THE APPROPRIATION " COLLECTING THE INTERNAL REVENUE" MAY BE CONSIDERED AVAILABLE FOR SUCH PURCHASES, PROVIDED THE ADVERTISING FOR BIDS REQUIREMENTS OF SECTION 3709, REVISED STATUTES, ARE COMPLIED WITH.

COMPTROLLER GENERAL WARREN TO THE SECRETARY OF THE TREASURY, OCTOBER 28, 1941:

I HAVE YOUR LETTER OF OCTOBER 23, 1941, AS FOLLOWS:

SECTION 3540 OF THE INTERNAL REVENUE CODE, AS ADDED BY SECTION 557 OF THE REVENUE ACT OF 1941, PROVIDES AMONG OTHER THINGS THAT THERE SHALL BE IMPOSED UPON THE USE OF MOTOR VEHICLES A TAX WITH RESPECT TO EACH YEAR IN WHICH THE USE OCCURS AT THE RATE OF $5 FOR EACH FISCAL YEAR. HOWEVER, FOR THE CURRENT FISCAL YEAR THE TAX THUS IMPOSED DOES NOT APPLY TO ANY USE BEFORE FEBRUARY 1, 1942. WHILE THE ACT VESTS IN THE COMMISSIONER OF INTERNAL REVENUE THE DISCRETION OF CALLING UPON THE POST OFFICE DEPARTMENT FOR CERTAIN ASSISTANCE IN THE COLLECTION OF THIS TAX, IT HAS BEEN DECIDED THAT FOR THE PRESENT, AT LEAST, THE BUREAU OF INTERNAL REVENUE WILL UNDERTAKE THE COLLECTION OF THIS TAX IN ITS ENTIRETY.

THE EFFECTIVENESS OF THE PROCEDURE WHICH HAS BEEN DEVISED IN THE BUREAU OF INTERNAL REVENUE TO ADMINISTER THE PROVISION OF LAW ABOVE CITED WILL DEPEND TO A GREAT EXTENT UPON THE PRESENCE IN EACH COLLECTOR'S OFFICE OF A COMPLETE AND ACCURATE RECORD OF MOTOR VEHICLE OWNERS OR REGISTRANTS THROUGHOUT THE UNITED STATES. BECAUSE OF THE WIDELY VARYING METHODS EMPLOYED IN THE SEVERAL STATES FOR MAINTAINING RECORDS OF MOTOR-VEHICLE REGISTRATIONS, CONSIDERABLE DIFFICULTY IS BEING ENCOUNTERED BY MANY OF THE COLLECTORS OF INTERNAL REVENUE, IN OBTAINING INFORMATION UPON WHICH TO BASE THEIR RECORDS OF REGISTRANTS. IN SOME STATES IT WOULD BE NECESSARY TO DETAIL A FORCE OF EMPLOYEES TO THE CITIES IN WHICH THE STATE RECORDS ARE MAINTAINED FOR THE PURPOSE OF ABSTRACTING THE NAMES AND ADDRESSES OF REGISTRANTS. IN OTHER STATES LISTS OF NAMES AND ADDRESSES MAY BE PURCHASED AT VARYING COSTS.

THE PROCEDURE FOR COLLECTING THIS TAX CONTEMPLATES THAT AN APPLICATION FORM WILL BE ADDRESSED AND MAILED TO EACH AND EVERY INDIVIDUAL AND ESTABLISHMENT HAVING MOTOR VEHICLES REGISTERED IN THEIR NAMES. THERE ARE SOMETHING OVER THIRTY-TWO MILLION MOTOR VEHICLES IN USE AT THE PRESENT TIME REGISTERED IN THE NAMES OF APPROXIMATELY TWENTY EIGHT MILLION OWNERS. IT HAS BEEN ESTIMATED BY THE BUREAU OF INTERNAL REVENUE THAT THE COST OF OBTAINING THE LISTS, OF ADDRESSING AND MAILING APPLICATIONS AND IN SETTING UP THE MASTER RECORD IN CONNECTION WITH THE PAYMENTS OF TAX DUE FEBRUARY 1, 1942, WILL AMOUNT TO APPROXIMATELY $900,000.

IN VIEW OF THE DIFFICULTIES ENCOUNTERED IN SECURING LISTS OF REGISTRANTS FROM STATE RECORDS, INQUIRIES WERE MADE TO DETERMINE WHETHER SUCH LISTS COULD BE OBTAINED FROM OTHER SOURCES. IT HAS BEEN LEARNED THAT R. L. POLK AND COMPANY OF DETROIT AND THE RUEBEN H. DONNELLY CORPORATION OF CHICAGO ARE JOINTLY ASSOCIATED IN COMPILING RECORDS OF MOTOR-VEHICLE REGISTRANTS. IT IS UNDERSTOOD THAT THESE TWO CONCERNS TOGETHER HAVE THE ONLY NATIONAL LIST OF REGISTRANTS, ALTHOUGH THERE ARE A NUMBER OF CONCERNS IN VARIOUS STATES COMPILING SUCH LISTS WITH RESPECT TO PARTICULAR STATES. R. L. POLK AND COMPANY AND THE RUEBEN H. DONNELLY CORPORATION HAVE JOINTLY SUBMITTED A PROPOSAL FOR FURNISHING A 3 X 5 CARD INDEX OF MOTOR-VEHICLE REGISTRANTS. THEIR PROPOSITION CONTEMPLATES THAT, WHEN PREPARING THE CARDS THEY WOULD ALSO ADDRESS THE APPLICATION FORMS AS A BYPRODUCT OF THE PREPARATION OF THE 3 X 5 CARD INDEX. THEY ALSO PROPOSE TO INSERT THE ADDRESSED APPLICATIONS IN WINDOW ENVELOPES AND PLACE THE ENVELOPES IN THE UNITED STATES MAILS FOR DELIVERY TO THE MOTOR VEHICLE REGISTRANTS. THE CHARGE TO BE MADE FOR THIS LIST WITH ITS BYPRODUCTS OF ADDRESSING AND MAILING WOULD BE AT THE RATE OF $13 PER THOUSAND NAMES. ON THE BASIS OF TWENTY-EIGHT MILLION OWNERS, THE TOTAL COST WOULD AMOUNT TO APPROXIMATELY $364,000. THE MASTER 3 X 5 CARD INDEX WOULD BE ARRANGED BY INTERNAL REVENUE COLLECTION DISTRICTS AND IN ALPHABETICAL ORDER BY CITIES AND TOWNS. THIS WOULD BE A VERY DESIRABLE ARRANGEMENT FOR THE COLLECTORS' OFFICES INCIDENT TO DELINQUENCY PROCEDURE.

AS STATED HERETOFORE IN THIS LETTER, THE BUREAU OF INTERNAL REVENUE HAS ESTIMATED THAT IT WILL COST APPROXIMATELY $900,000 TO SECURE THE LISTS OF REGISTRANTS, FOR ITS PERSONNEL TO ADDRESS THE APPLICATION FORMS, INSERT THEM IN ENVELOPES, PREPARE THE 3 X 5 CARDS AND SORT THEM INTO ALPHABETICAL ORDER. THE PROPOSITION SUBMITTED BY THE POLK AND DONNELLY COMPANIES WOULD SAVE THE GOVERNMENT APPROXIMATELY $536,000. ASIDE FROM THE PURELY MONETARY SAVINGS, THE BUREAU OF INTERNAL REVENUE AND THE CIVIL SERVICE COMMISSION WOULD BE RELIEVED OF THE TASKS OF SECURING AND APPOINTING 3,200 TEMPORARY CLERKS. THERE WOULD BE A GREAT SAVING IN TIME AND EFFORT INCIDENT TO SECURING SPACE AND EQUIPMENT. AS A MATTER OF FACT, IT IS KNOWN THAT EQUIPMENT AND SPACE ARE AT A PREMIUM IN MANY LOCALITIES. THE PROCEDURE CONTEMPLATES THAT THE APPLICATION FORMS WILL BE MAILED TO THE MOTOR VEHICLE REGISTRANTS DURING THE EARLY PART OF JANUARY AND IN VIEW OF THE MAGNITUDE OF THE TASK AND THE TROUBLE WHICH IS BEING ENCOUNTERED IN OBTAINING LISTS OF REGISTRANTS IN SOME OF THE STATES, THE BUREAU OF INTERNAL REVENUE IS CONCERNED WHETHER A TIMELY COMPLETION OF THE WORK CAN BE ACCOMPLISHED.

THE PURPOSE OF THIS LETTER IS TO REQUEST AN OPINION AS TO WHETHER THE APPROPRIATION,"COLLECTING THE INTERNAL REVENUE," IS AVAILABLE FOR PURCHASING THE LIST OF MOTOR-VEHICLES REGISTRANTS UNDER THE CIRCUMSTANCES AND IN THE MANNER OUTLINED HEREINBEFORE. IT IS CONTEMPLATED, OF COURSE, THAT OTHER CONCERNS SIMILARLY EQUIPPED, NATIONALLY OR IN INDIVIDUAL STATES, WOULD BE SOLICITED BY ADVERTISEMENT. SINCE TIME IS A PRESSING FACTOR, THE DEPARTMENT WILL APPRECIATE A PROMPT CONSIDERATION AND DECISION IN THIS MATTER.

SECTION 557 OF OF THE REVENUE ACT OF 1941, PUBLIC LAW 250, 55 STAT. 723, PROVIDES, SO FAR AS HERE PERTINENT, AS FOLLOWS:

(A) IMPOSITION OF TAX.--- THERE SHALL BE IMPOSED UPON THE USE OF MOTOR VEHICLES AND BOATS A TAX, WITH RESPECT TO EACH YEAR IN WHICH SUCH USE OCCURS, AT THE FOLLOWING RATES:

(1) MOTOR VEHICLES--- $5. ( * * * * * * *

(E) EVIDENCE OF TAX PAYMENT.--- THE PAYMENT OF THE TAX IMPOSED BY THIS SECTION SHALL BE EVIDENCED BY SUCH SUITABLE STAMP, STICKER, OR TAG OF SUCH FORM WHICH SHALL BE AFFIXED TO THE MOTOR VEHICLE OR BOAT IN SUCH MANNER, AS THE COMMISSIONER, WITH THE APPROVAL OF THE SECRETARY, MAY BY REGULATIONS PRESCRIBE.

(F) MANNER OF COLLECTION.--- THE PLACE, TIME, AND MANNER OF MAKING PAYMENT OF THE TAX, AND OF FURNISHING SUCH STAMP, STICKER, OR TAG SHALL BE SUCH AS MAY BE PROVIDED IN REGULATIONS PRESCRIBED BY THE COMMISSIONER WITH THE APPROVAL OF THE SECRETARY.

(H) SALE OF STAMPS BY PRIVATE PERSONS.--- IF THE COMMISSIONER PROVIDES FOR THE SALE OF STAMPS, STICKERS, OR TAGS BY PERSONS NOT OFFICERS OR EMPLOYEES OF THE UNITED STATES HE MAY REQUIRE BOND, WITH SUFFICIENT SURETIES, IN A SUM TO BE FIXED BY THE COMMISSIONER, CONDITIONED FOR THE FAITHFUL RETURN, WHENEVER REQUIRED, OF ALL QUANTITIES OR AMOUNTS UNDISPOSED OF, AND FOR THE PAYMENT FOR, ALL QUANTITIES OR AMOUNTS SOLD OR NOT REMAINING ON HAND. THE COMMISSIONER, WITH THE APPROVAL OF THE SECRETARY, MAY FROM TIME TO TIME MAKE SUCH REGULATIONS AS HE MAY FIND NECESSARY TO INSURE THE SAFEKEEPING OR PREVENTION OF ILLEGAL USE OF ALL SUCH STAMPS, STICKERS, OR TAGS.

WHEN THIS LEGISLATION WAS ORIGINALLY INTRODUCED IN THE HOUSE OF REPRESENTATIVES, THE BILL ( H.R. 5417) CONTAINED THE ABOVE PROVISIONS IN THE SAME FORM AS THEY NOW APPEAR IN THE LAW. IN THE HOUSE REPORT ON SAID BILL (H. REP. NO. 1040, 77TH CONG.), IT IS STATED WITH RESPECT TO THIS TAX PROVISION, AMONG OTHER THINGS THAT:

IN THE ADMINISTRATIVE PROVISIONS MADE APPLICABLE TO THE TAX, WIDE LATITUDE IS GIVEN TO THE COMMISSIONER OF INTERNAL REVENUE WITH RESPECT TO THE METHOD OF COLLECTING THE TAX, AND FOR PRESCRIBING A FORM OF STAMP, STICKER, OR TAG TO BE AFFIXED TO THE MOTOR VEHICLE OR BOAT AS EVIDENCE THAT THE TAX HAS BEEN PAID. PROVISION IS MADE FOR ALLOWING THE COOPERATION OF THE POST OFFICE DEPARTMENT OR OF PRIVATE PERSONS TO ASSIST IN THE COLLECTION OF THE TAX.' (PAGE 61 OF THE REPORT.)

THUS IT WILL BE SEEN THAT THE CONGRESS IN ENACTING THE LAW APPARENTLY CONTEMPLATED THAT MATTERS RELATING TO THE METHOD AND MANNER OF ACCOMPLISHING THE ADMINISTRATIVE TASK OF COLLECTING THE TAX SHOULD BE LEFT LARGELY TO THE DISCRETION OF THE COMMISSIONER OF INTERNAL REVENUE AND THE SECRETARY OF THE TREASURY; AND THAT IT WAS EVEN ANTICIPATED THAT A NEED MIGHT EXIST FOR ENLISTING THE SERVICES OF PRIVATE PERSONS TO ASSIST IN THE PERFORMANCE OF SAID TASK. THERE IS NOTHING TO INDICATE AN INTENTION THAT THE TERM "PRIVATE PERSONS" WAS USED IN THE LAW OR IN THE COMMITTEE REPORT IN A RESTRICTED SENSE SO AS TO EXCLUDE CORPORATIONS OR PARTNERSHIPS, AND IN THE ABSENCE OF SUCH AN INDICATION IT WOULD SEEM REASONABLE TO ASSUME THAT THE TERM WAS USED IN ITS NORMAL AND COMPREHENSIVE SENSE SO AS TO INCLUDE SUCH FIRMS. SEE IN THIS CONNECTION SECTION 1 OF TITLE 1, U.S. CODE.

AS A GENERAL RULE PURELY PERSONAL SERVICES FOR THE GOVERNMENT ARE REQUIRED TO BE PERFORMED BY FEDERAL PERSONNEL UNDER GOVERNMENT SUPERVISION. SEE 13 COMP. GEN. 351, AND 17 COMP. GEN. 300. HOWEVER, IN THE PRESENT MATTER, IN ADDITION TO THE FACT THAT THE CONGRESS CONTEMPLATED THAT THE COMMISSIONER MIGHT UTILIZE THE SERVICES OF "PERSONS NOT OFFICERS OR EMPLOYEES OF THE UNITED STATES" IN CONNECTION WITH THE COLLECTION OF THIS TAX, IT IS UNDERSTOOD FROM YOUR LETTER THAN THE SERVICES WHICH IT IS DESIRED TO PROCURE ARE NOT ENTIRELY OF A PERSONAL NATURE. IT IS APPARENT THAT PERFORMANCE OF THE ADMINISTRATIVE TASK ASSIGNED TO THE COMMISSIONER OF INTERNAL REVENUE OF CARRYING INTO EFFECT THE PURPOSES OF THIS LAW REQUIRES ACCESS TO THE NAMES, ADDRESSES, ETC., OF ALL MOTOR-VEHICLE REGISTRANTS; AND YOUR PRIMARY PURPOSE IN CONNECTION WITH THIS MATTER APPEARS TO BE THE PROCUREMENT OF SUCH A LIST FROM A SOURCE, AND BY FOLLOWING A PROCEDURE, WHICH WILL PERMIT THE ACCOMPLISHMENT OF THE ADMINISTRATIVE TASK INVOLVED IN THE MOST EXPEDITIOUS MANNER AND AT THE LEAST EXPENSE TO THE UNITED STATES. MANIFESTLY, IF THE TASK OF PREPARING THE CARDS, TRANSFERRING THE DATA THEREON TO APPLICATION FORMS, AND INSERTING SUCH FORMS IN WINDOW ENVELOPES IS ACCOMPLISHED AT ONE TIME AND AS PART OF A CONTINUOUS OPERATION, THE COST WILL BE LESS THAN IF THE CARDS ARE PREPARED, DELIVERED TO THE UNITED STATES AND THE WORK OF PLACING THE NECESSARY DATA ON THE FORMS AND INSERTING THEM IN ENVELOPES IS PERFORMED BY FEDERAL EMPLOYEES. ALSO, IT IS APPARENT THAT A CONSIDERABLE SAVING IN TIME CAN BE EFFECTED BY THE PROPOSED PROCEDURE, AND IT IS STATED IN YOUR LETTER THAT:

* * * IN VIEW OF THE MAGNITUDE OF THE TASK AND THE TROUBLE WHICH IS BEING ENCOUNTERED IN OBTAINING LISTS OF REGISTRANTS IN SOME OF THE STATES, THE BUREAU OF INTERNAL REVENUE IS CONCERNED WHETHER A TIMELY COMPLETION OF THE WORK CAN BE ACCOMPLISHED.

CONSEQUENTLY, IN VIEW OF ALL THE FACTS AND CIRCUMSTANCES APPEARING, I HAVE TO ADVISE THAT IF IT BE ADMINISTRATIVELY DETERMINED THAT THE PROCUREMENT OF THE NECESSARY INFORMATION AND SERVICES BY CONTRACT IN THE MANNER PROPOSED IN YOUR LETTER IS THE MOST ECONOMICAL AND EXPEDITIOUS MEANS OF EFFECTING THE COLLECTION OF THE TAX HERE INVOLVED, IT WOULD APPEAR REASONABLE, AS PROPOSED IN YOUR LETTER, TO REGARD THE WORK OF ADDRESSING THE APPLICATIONS AND INSERTING THEM IN WINDOW ENVELOPES AS MERELY AN INCIDENT OR "BYPRODUCT" OF THE PROCUREMENT OF THE NECESSARY CARD INDEX, AND TO INCLUDE SUCH SERVICE IN THE TERMS OF ANY CONTRACT OR CONTRACTS THAT MAY BE AWARDED FOR SUCH PROCUREMENT.

ACCORDINGLY, THE QUESTION PRESENTED IN THE CONCLUDING PARAGRAPH OF YOUR LETTER IS ANSWERED IN THE AFFIRMATIVE, WITH THE UNDERSTANDING OF COURSE, THAT THE PROVISIONS OF SECTION 3709, REVISED STATUTES, WILL BE COMPLIED WITH.