B-51088, MAY 28, 1957

B-51088: May 28, 1957

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TO THE ATTORNEY GENERAL: REFERENCE IS MADE TO LETTER OF APRIL 30. WERE SET FORTH IN CERTIFICATE OF INDEBTEDNESS DATED MARCH 19. LESS AN AMOUNT EQUAL TO THE FEDERAL INCOME TAX ALLEGED BY THE DEBTOR TO HAVE BEEN PAID ON THE $12. IT IS STATED THAT THE INTERNAL REVENUE SERVICE HAS BEEN REQUESTED BY YOUR DEPARTMENT TO VERIFY THE CONTENTIONS OF MR. AT THE TIME THE ROYALTIES WERE RECEIVED AND TREATED AS INCOME. IT IS OUR RECOMMENDATION THAT THE COMPROMISE OFFER.

B-51088, MAY 28, 1957

TO THE ATTORNEY GENERAL:

REFERENCE IS MADE TO LETTER OF APRIL 30, 1957, FILE GCD:MWW 77-37 226, AND ENCLOSURE, FROM THE ASSISTANT ATTORNEY GENERAL, CIVIL DIVISION, REQUESTING OUR COMMENTS WITH RESPECT TO A COMPROMISE SETTLEMENT OF $7,000 OFFERED BY HAROLD W. EVANS, 906 HEATHER AVENUE, TAKOMA PARK 12, MARYLAND, IN COMPLETE SATISFACTION OF HIS INDEBTEDNESS TO THE UNITED STATES IN THE SUM OF $12,000.

THE FACTS AND CIRCUMSTANCES CONCERNING THE BASIC DEBT, WHICH REPRESENT ROYALTIES PAID TO THE DEBTOR BY A GOVERNMENT CONTRACTOR IN APPARENT CONTRAVENTION OF LAW, WERE SET FORTH IN CERTIFICATE OF INDEBTEDNESS DATED MARCH 19, 1957. THE SAID OFFER CONTEMPLATES REFUND OF THOSE PAYMENTS, LESS AN AMOUNT EQUAL TO THE FEDERAL INCOME TAX ALLEGED BY THE DEBTOR TO HAVE BEEN PAID ON THE $12,000 RECEIVED. IT IS STATED THAT THE INTERNAL REVENUE SERVICE HAS BEEN REQUESTED BY YOUR DEPARTMENT TO VERIFY THE CONTENTIONS OF MR. EVANS.

IF THE TAX OBLIGATION ACTUALLY PAID BY MR. EVANS, AT THE TIME THE ROYALTIES WERE RECEIVED AND TREATED AS INCOME, APPROXIMATES THE FIGURE OF $5,000 QUOTED BY THE DEBTOR, THE SETTLEMENT PROPOSED APPEARS TO BE FAIR AND REASONABLE.

THEREFORE, IT IS OUR RECOMMENDATION THAT THE COMPROMISE OFFER, BASED ON AN AMOUNT EQUAL TO THE DIFFERENCE BETWEEN THE DEBT AND THE ACTUAL TAXES PAID THEREON BE ACCEPTED AS BEING IN THE BEST INTERESTS OF THE UNITED STATES.