PREFACE One of the most important changes made by the Revenue Act of 1924, with respect to the administration of Federal tax laws, was the creation of a quasijudicial body designated as the Board of Tax Appeals. It was originally contemplated that such a Board should be an independent agency within the Treasury Department, but separate from the Bureau of Internal Revenue. The Act of Congress provided otherwise. The purpose in the creation of the Board, however, was undoubtedly remedial, and the taxpayer was to be given the benefit of a review of his tax liability by a body not in a position to act both as advocate and judge, as was necessarily possible where the tax was determined within the Bureau. The United States Board of Tax Appeals, since its inception, has functioned with a promptness and a judicial fairness meriting commendation. Any arguments which may be directed against the advantages accruing to the taxpayer by the creation of the Board of Tax Appeals, arise primarily from its somewhat anomalous position in acting as a buffer between the Bureau of Internal Revenue and the Federal Courts, and as a quasi-judicial body compelled, by reason of the volume of its work, to function in a manner somewhat administrative. It is to be expected that while the Courts remain open to the Treasury Department and the taxpayer, that interpretation of the taxing statutes which may result in considerable loss of revenue to the Government, or additional burden to the taxpayer, will be contested through all the available channels, to the Supreme Court of the United States. The taxpayer, however, is no longer confronted with the practice prevailing under prior Revenue Acts, of paying first and litigating afterwards. It was to be assumed that the Board of Tax Appeals would be confronted, in the first year of its existence, with numerous cases which would serve to test the limits of its jurisdiction. Decisions have been made by the Board from time to time, in which it has attempted to define the extent of its jurisdiction and powers. A number of these difficult problems have been courageously met by the Board. The general tendency has been, quite properly, to assume that since the creation of the Board was remedial in nature, its jurisdiction should not be too narrowly circumscribed. It must, of course, be appreciated that numerous similar issues will arise in the future. It is believed, however, that sufficiently important questions of jurisdiction have been determined to justify a discussion of such principles at the present time. In addition to problems of jurisdiction, the Board of Tax Appeals was faced with the necessity of formulating Rules of Procedure. The 1924 Revenue law vested in the Board authority to create its own rules. Fortunately, the Board had the advantage of the ex perience of the Interstate Commerce Commission and the Federal Trade Commission, upon which it was able to draw. The rules so promulgated have been explained and amplified by the Board in many of its decisions. The Board has indicated an increasing tendency to insist upon its rules being properly observed in the trial of cases before it and in the submission of evidence. It is believed that a treatment of these subjects at this time, in book form, while necessarily incomplete, will materially assist the practitioner in the presentation of cases before the Board. All decisions of the Board of Tax Appeals made prior to the date of publication have been examined for authority bearing upon the subject-matter of this volume. Decisions of the Board of Tax Appeals are referred to by name and cited by decision and docket numbers (i. e., Decision No. 31, Docket No. 194). In addition, where the decision has been published in the official reports of the Board the citation is given by volume and page (i. e., 1 B. T. A. 54). Decisions formally approved by the Commissioner are followed by the letter (A). Those disapproved are followed by the letter (D). Rulings published in the bulletins of the Bureau of Internal Revenue have also been included not infrequently. The authors desire to express their appreciation to members of the Board of Tax Appeals for helpful suggestions, to those who have assisted in the preparation of this manuscript and especially to Mr. O. R. Folsom-Jones, of the Bar of the District of Columbia, and Mr. Jacob Mertens, Jr., of the New York Bar. Any criticisms of this first edition of the book, and suggestions for its improvement, will be thankfully received. 815 Fifteenth Street, N. W., Washington, D. C. July 1, 1925. GEORGE E. HOLMES, KINGMAN BREWSTER. |