Returns were carefully guarded until the passage of the 1924 law permitting Congress to inspect them under certain conditions. Section 257 provides that they may be inspected by certain parties under closely prescribed conditions. Inspection must be made under rules and regulations prescribed by the Secretary of the Treasury and approved by the President.1

LAW. Section 257. (a) Returns upon which the tax has been determined by the Commissioner shall constitute public records; but they shall be open to inspection only upon order of the President and under rules and regulations prescribed by the Secretary and approved by the President: . . .

Requirements for inspection of returns.-The regulation, quoted in part below, has been promulgated with reference to inspection of returns filed under all the income tax laws since 1913.2 It should be noted that a written application must be made to inspect

a return.

REGULATION.

1. These regulations deal only with inspection of returns in so far as the statutes expressly require the approval of the President of regulations on this subject. Other uses to which returns

'Under executive order dated September 27, 1924, the President approved rules for the inspection of returns which have been incorporated in Art. 1090 of Reg. 65 and which are so quoted herein.

2

A similar provision of the 1909 law was declared constitutional. (Flint v. Stone Tracy Co., 220 U. S. 107, 55 L. Ed. 389, 31 Sup. Ct.. 342.) For the regulations under the 1913 and subsequent laws, see T. D. 2961 and 2962.

may be lawfully put, without action by the President, are not covered by these regulations.

2. The word "corporation" when used alone herein shall, unless otherwise indicated, include corporations, associations, joint-stock companies, and insurance companies. The word "return" when so used shall, unless otherwise indicated, include income and profits tax returns, and also special excise tax returns of corporations filed pursuant to section 1000, Title X, of each of the Revenue Acts of 1918 and 1921, and pursuant to section 700 of Title VII of the Revenue Act of 1924.

3. Written statements filed with the Commissioner of Internal Revenue designed to be supplemental to and to become a part of tax returns shall be subject to the same rules and regulations as to inspection as are the tax returns themselves.

4. Except as hereinafter specifically provided, the Commissioner of Internal Revenue may, in his discretion, upon written application setting forth fully the reasons for the request, grant permission for the inspection of returns in accordance with these regulations. The officers and employees of the Treasury Department whose official duties require inspection of returns, and the Solicitor of Internal Revenue, may inspect any such returns, without making such written application.

13. Except as provided in paragraph 12 returns may be inspected only in the Office of the Commissioner of Internal Revenue, Washington, D. C. 14. A person who under these regulations is permitted to inspect a return may make and take a copy thereof or a memorandum of data contained therein. (Art. 1090.)

Pending the outcome of review by the courts of the right of newspapers to publish lists of taxpayers, the Bureau has published office regulations concerning the publicity of income tax lists, which have been summarized as follows:

Publicity of tax returns: The tax lists were originally thrown open to the public in order to obviate the necessity for the preparation by the Bureau of typewritten lists, the Bureau says. Supervision of the publicity section must be made, the Bureau says, in order that the work of local tax offices may not be delayed. Collectors are, therefore, requested by the Bureau to open the lists for public inspection not more than three days per week for not more than three hours a day. This period may be either increased or decreased, and the work necessary for each office to perform should be the governing factor. Each collector should give publicity through the press as to the hours and days of the week when the lists will be available for inspection. Blanket requests will be disregarded. For instance, requests from applicants who desire information as to amounts paid by competitors or persons engaged in similar industries without specifying the names of the persons or concerns can not be complied with unless the names of the taxpayers are given. The attention of each applicant will be invited to the provisions of section 3167 of the Revised Statutes prohibiting the publication of any part of an income tax return. Section 3240 of the Revised Statutes, which requires each collector to furnish a list of

special taxpayers to a state, county, or municipality is not applicable to the income tax lists.

Publication of tax returns will, in the opinion of the author, tend to destroy the income tax as the prime revenue producer of the government. It will make the administration of the law more difficult than heretofore.

Publicity of personal income tax returns is repugnant to the spirit of our institutions. No man's private affairs should be needlessly exposed to the public gaze and the idle scrutiny of those who have no legitimate interest therein. There could be but one good ground for publicity of returns, that is, to insure the payment of the tax by those on whom it is imposed by law. The examination of returns by the Commissioner adequately insures this being the case, more so in fact, than the needless disclosure of private affairs.

The publication of the amounts paid by many of the richest men of the country occasioned surprise to those who are ignorant of what has been going on during the last few years. Due to highly technical and needlessly complicated laws it has been relatively easy to shift and reduce the taxes of the rich. The ones who have suffered are the professional and active business men, such as inventors, writers, surgeons, artists, lawyers and others who may in one year realize fees or compensation which represent the fruits of many years of intense labor. It is to be hoped that the curiosity-craving half-wits in Congress who were responsible for this feature of the tax law will be content with the publication of the taxes paid for one year and repeal the provision as of January 1, 1925.

Inspection of individual returns.

REGULATION.

5. The return of an individual shall be open to inspection (a) by the person who made the return, or by his duly constituted attorney in fact; (b) if the maker of the return has died, by the administrator, executor, or trustee of his estate, or by the duly constituted attorney in fact of such administrator, executor, or trustee; and (c) in the discretion of the Commissioner of Internal Revenue, by any heir at law or next of kin of such deceased person, upon a showing that such heir at law or next of kin has a material interest which will be affected by information contained in the return, or by the duly constituted attorney in fact of such heir at law or next of kin.

6. A joint return of a husband and wife shall be open to inspection (a) by either spouse for whom the return was made, upon satisfactory evidence of such relationship being furnished, or by his or her duly constituted attorney in fact; (b) if either spouse has died, by the administrator, executor, or trustee of his or her estate, or by the duly consti

tuted attorney in fact of such administrator, executor, or trustee; and (c) in the discretion of the Commissioner of Internal Revenue, by any heir at law or next of kin of such deceased spouse, upon a showing that such heir at law or next of kin has a material interest which will be affected by information contained in the return, or by the duly constituted attorney in fact of such heir at law or next of kin. . . . (Art. 1090.)

It is well to note that not even the officers of a state imposing an income tax have been granted the right of access to individual

returns.

RULING. There is no authority under the law or regulations for furnishing copies of returns of a deceased taxpayer to his children as such. However, inspection of such returns may be had by one of the children as heir at law or next of kin upon a showing of a material interest which will be affected by information contained in the returns. (III-36-1774; S. M. 1992.)

Inspection of partnership returns.

REGULATION. 7. The return of a partnership shall be open to inspection (a) by any individual who was a member of such partnership during any part of the time covered by the return, upon satisfactory evidence of such fact being furnished, or by his duly constituted attorney in fact; (b) if a member of such partnership during any part of the time covered by the return has died, by the administrator, executor, or trustee of his estate, or by the duly constituted attorney in fact of such administrator, executor, or trustee; and (c) in the discretion of the Commissioner of Internal Revenue, by any heir at law or next of kin of such deceased person, upon a showing that such heir at law or next of kin has a material interest which will be affected by information contained in the return, or by the duly constituted attorney in fact of such heir at law or next of kin. (Art. 1090.)

....

Inspection of returns of estates and trusts.

REGULATION. 8. The return of an estate shall be open to inspection (a) by the administrator, executor, or trustee of such estate, or by his duly constituted attorney in fact; and (b) in the discretion of the Commissioner of Internal Revenue by any heir at law or next of kin of the deceased person whose estate is being administered, upon a showing of a material interest which will be affected by information contained in the return, or by the duly constituted attorney in fact of such heir at law or next of kin.

9. The return of a trust shall be open to inspection (a) by the trustee or trustees, or the duly constituted attorney in fact of such trustee or trustees; (b) by any individual who was a beneficiary under such trust during any part of the time covered by the return, upon satisfactory evidence of such fact being furnished, or by his duly constituted attorney in fact; (c) if any individual who was a beneficiary of such trust during any part of the time covered by the return has died, by the administrator, executor, or trustee of his estate, or by the duly constituted attorney in fact of such administrator, executor, or trustee; and (d) in the discretion of the Commissioner of Internal Revenue by any heir at law or next

of kin of such deceased person upon a showing that such heir at law or next of kin has a material interest which will be affected by information contained in the return, or by the duly constituted attorney in fact of such heir at law or next of kin. . . . . (Art. 1090.)

RULINGS. An original letter with regard to his return written by a decedent to the collector may not be furnished to the attorneys for the estate. A certified or photostatic copy may, however, be given to them provided the executors submit a copy of the letters testamentary issued to them by the court, together with a letter signed by them authorizing the attorneys to receive a copy of the letter in question. (C. B. 3, page 313; O. D. 576.)

The executor of an estate may secure copies of income tax returns filed by the decedent upon submission to the Commissioner of a certified copy of letters testamentary evidencing his appointment as executor. (C. B. 1, page 265; O. D. 355.)

Inspection of corporation returns by corporate officers.REGULATION. 10. The return of a corporation shall be open to inspection by the president, vice president, secretary, or treasurer of such corporation, or, if none, by any of its principal officers, upon satisfactory evidence of identity, and official position. (Art. 1090.)

Inspection of corporation returns by stockholders.-The law sets forth the exact conditions which shall govern the inspection of corporate returns by stockholders.3

LAW. Section 257. (a) .... Provided further, That all bona fide shareholders of record owning 1 per centum or more of the outstanding stock of any corporation shall, upon making request of the Commissioner, be allowed to examine the annual income returns of such corporation and of its subsidiaries. Any shareholder who pursuant to the provisions of this section is allowed to examine the return of any corporation, and who makes known in any manner whatever not provided by law the amount or source of income, profits, losses, expenditures, or any particular thereof, set forth or disclosed in any such return, shall be guilty of a misdemeanor and be punished by a fine not exceeding $1,000 or by imprisonment not exceeding one year, or both.

REGULATION. A bona fide shareholder of record owning I per cent or more of the outstanding stock of a corporation shall be entitled as of right, upon making request of the Commissioner of Internal Revenue, to examine the annual income returns of such corporation and of its subsidiaries, and all returns of such corporations and subsidiaries filed for purposes of the tax imposed by section 1000 of the Revenue Acts of 1918 and 1921, or by section 700 of the Revenue Act of 1924. His request for permission to examine such returns must be made in writing, and must be in the form of an affidavit showing his address, the name of the corporation, the period of time covered by the return he desires

[Former Procedure] Before the passage of the 1918 law, the Treasury regulations permitted inspection under certain conditions. (T. D. 2016, April 18, 1914.)