internal revenue divisions with internal revenue agents in charge. These thirty-four divisions are divided into eight supervisory districts each also under a revenue agent in charge.

Procedure of the Bureau of Internal Revenue.-The steps in the procedure of the Bureau of Internal Revenue have been described as follows: 2

1. The taxpayer makes a return and pays to the collector, who receives the return, one-fourth or all the tax shown due on the face of the returns.

2. The collector lists the returns, shows the taxes due, makes a few obvious corrections in some cases, and forwards the returns to Washington.3

3. In Washington the returns are first checked against the collector's lists and the original tax verified.

4. The "audit" of the returns begins and supplemental amounts of taxes due [and the amounts of over payments] are determined; the taxpayer is notified and [after the procedure laid down in section 274 (a) and article 1232, has been complied with] the return is sent to a separate section of the Bureau for entry on a supplemental list.1

5. Supplemental lists are transmitted monthly to the collectors, the taxpayer is formally notified [of additional taxes] and the tax is due for payment within ten days after such notice.

The chart on page 195 shows the route of a tax return. While it is very complicated and will probably not be fully understood except by those who have had experience before the Bureau, this chart should prove useful to those who are in practice. All cases do not, of course, involve questions of valuation. These cases would pass from distribution center to audit.

Solicitor's Review Division.-Under the 1918 law 5 the Commissioner was empowered to appoint an Advisory Tax Board.

The

2 A. E. James, Bulletin of National Tax Association, Vol. VI, page 49. 3 Returns on form 1040A are not sent to Washington, but are audited in the collectors' offices.

If it is found that there has been an overpayment of tax, the taxpayer is sent a certificate of overassessment which enables an adjustment to be made by the local collector.

Section 1301 (d-1).

For a full discussion of its powers and procedure see Income Tax Procedure, 1920, pages 159-161.

Board was appointed March 14, 1919, and abolished October 1, 1919. This Board performed a difficult and thankless task in an energetic and equitable manner. It decided almost insoluble problems and retained the respect and earned the gratitude of taxpayers even though it did not always give them what they wanted.

In the place of the Advisory Tax Board, a Committee on Appeals and Review was established, the membership of which was principally recruited from within the Bureau. The Committee was entirely independent of the Income Tax Unit and in theory was responsible only to the Commissioner. When the U. S. Board of Tax Appeals was created, the Committee was abolished, and the Review Division was created in the Solicitor's Office.

In order to comply with the procedure provided for in Treasury Decision No. 3616 a division to be known as the Review Division is hereby created in the Office of the Solicitor of Internal Revenue. The members of the Committee on Appeals and Review, and the members of the Special Committee on Appeals and Review, together with their assistants and other employees connected with their respective offices, are hereby transferred to said division.

This order shall become effective July 16, 1924, immediately upon the organization of the Board of Tax Appeals and the qualification of its members. The above order is made necessary by the act of Congress creating the Board of Tax Appeals. (Bureau Memo. No. 289, dated July 15, 1924.)

The procedure before the Review Division is practically the same as that followed by the Committee on Appeals and Review. Taxpayers are not, however, furnished copies of the Division's

[Former Procedure] To expedite the disposition of cases, the Commissioner, during 1923, established an Appeals Division in the Solicitor's office. The division had concurrent jurisdiction with the Committee on Appeals and Review, and considered such cases as the Commissioner assigned to it from time to time. This committee was similar to the special committee which was created in 1922 to expedite the settlement of 1917 cases. During 1923 a Special Committee on Appeals was established. This Committee considered cases which involved an amount of tax not to exceed $2,500.

decisions. After a decision is made the case is sent back to the Unit for adjustments. The assessment letter sets forth generally what the Solicitor has decided.

This practice should be changed. The author knows of no reason why copies of decisions should not be furnished to taxpayers. In complicated cases, it is very easy to get an erroneous idea of the facts. Other errors can be made. If taxpayers were furnished with copies of decisions, these errors could be corrected at once. Aside from these administrative features, taxpayers are entitled, as a matter of right, to know in detail why a particular decision has been made.

The procedure to be followed in presenting a case before the Review Division is covered in Chapter XII.

8

Regulations governing practice before the Treasury.-The Commissioner has issued regulations (Department Circular No. 230, Revised August 15, 1923) governing the recognition of attorneys and agents and other persons representing taxpayers before the Treasury. The following extracts are of interest:

2. Application for enrollment.-Applicants for enrollment pursuant to these regulations shall submit to the Secretary of the Treasury an application, in duplicate, properly executed on Form 23 attached hereto. Applications in any other form will not be considered, and all statements contained in the application must be verified by the applicant. The application must be accompanied by an affidavit regarding contingent fees, in compliance with the order of the Secretary of the Treasury dated March 21, 1923, as amended April 7, 1923. The applicant must also take the oath of allegiance and to support the Constitution of the United States as required by section 3478, Revised Statutes. A person who cannot take the oath of allegiance and to support the Constitution of the United States cannot be enrolled. Members of the bar of a court of record will apply for enrollment as attorneys; all others will apply for enrollment as agents. Applicants will be notified of the approval or disapproval of their applications. All applications for enrollment must be individual, and individuals who practice as partners should apply for enrollment as individuals and not in the partnership name. An individual who has been enrolled may, however, represent claimants and others before the Treasury Department in the name of a partnership of which he is a member or with which he is otherwise regularly con

C. B. II-2, page 372; Dept. Cir. 230 (revised). This circular supersedes Treasury Department Circular No. 230 (C. B. 4, pages 408-414), dated February 15, 1921, as amended June 7, 1921, July 1, 1921, and December 23, 1921. It also supersedes Circular No. 230, Revised April 25, 1922, as amended March 21, 1923, March 31, 1923, and April 7, 1923. Further amendments were made to this Circular on January 4, 1924, February 15, 1924 and April

15, 1924.

nected. Except as hereinafter provided in paragraph 3, a corporation can not be enrolled and attorneys or agents will not be permitted to practice before the Treasury Department for account of a corporation which represents claimants and others in the prosecution of business before the Treasury Department. Persons applying for enrollment who propose to act for such a corporation in the prosecution of claims and other business before the Treasury Department will be subject to rejection, and enrolled attorneys or agents who act for a corporation in representing claimants and others in the prosecution of claims and other business will be subject to suspension from practice as to such claims or business.

4. List of Attorneys and Agents.-A list of all attorneys and agents who make application for enrollment or who are enrolled or whose applications have been rejected or who have been suspended or disbarred, will be kept in the office of the Chief Clerk of the Treasury Department, and a copy of such list will be furnished the bureaus, offices, and divisions of the Treasury Department. Information as to whether or not any person is enrolled as an attorney or agent may be had by application to the Chief Clerk. All bureaus, offices, and divisions of the Treasury Department are prohibited from recognizing or dealing with any attorney or agent unless enrolled, provided that an attorney or agent, by application to the Chief Clerk and at the discretion of the Committee on Enrollment and Disbarment, may be recognized temporarily, pending action upon his application for enrollment.

5. Former connection with the Treasury Department or personal knowledge of matter in controversy.-(a) No attorney or agent shall be permitted to appear before the Treasury Department in connection with any matter to which such attorney or agent gave personal consideration or as to the facts of which he had actual personal knowledge while in the service of the Treasury Department, and likewise no such attorney or agent shall aid or assist another in any such matter and no attorney or agent shall receive assistance from one formerly in the service of the Treasury Department and having such personal knowledge.

(b) No former officer, clerk, or employee of the Treasury Department shall act as attorney or agent in any matter or controversy pending in such Department during his employment therein within two years after he has ceased to be such officer, clerk, or employee without first having obtained the consent of the Secretary of the Treasury or his duly authorized representative, and no enrolled attorney or agent shall, without first having obtained the consent of the Secretary of the Treasury or his duly authorized representative employ or retain any such former officer, clerk, or employee directly or indirectly in any such matter or controversy, within such two-year period. Such consent may only be granted when it appears (1) that such employment is not prohibited by law or by the regulations of the Treasury Department, (2) that the matter or controversy, to handle which such consent is sought, was not pending in the particular office or division (departmental or field) in which the applicant was formerly employed. Applications for consent should be directed to the secretary of the Committee on Enrollment and Disbarment, stating the former connection of the employee and the matter or controversy in which the applicant desires to appear. The applicant shall thereupon be promptly advised as to his right to appear in the particular matter or controversy, and a copy of such advice shall be filed in the record of the case.