of any return will be furnished to any other than the person or corporation making the return, or their duly constituted attorney, except as . . . . authorized. (Art. 1091.)'

PUBLICITY OF THE RETURNS OF INDIVIDUALS.—

REGULATION.

Returns of individuals shall not be open to the inspection of any person other than the proper officers and employees of the Treasury Department or person rendering the same, and are under no conditions to be made public, except where such publicity shall result through the use of such returns in any legal proceedings in which the United States is a party. . . . . (Art. 1091.)

CORPORATION RETURNS MAY BE EXAMINED BY THE PUBLIC UNDER CERTAIN CONDITIONS.

REGULATION. . The returns of the following corporations shall be open to the inspection of any person upon written application to the Secretary of the Treasury, which application shall set forth briefly and succinctly all facts necessary to enable the Secretary to act upon the request: (a) the returns of all companies whose stock is listed upon any duly organized and recognized stock exchange within the United States, for the purpose of having its shares dealt in by the public generally; (b) all corporations whose stock is advertised in the press or offered to the public by the corporation itself for sale. In case of doubt as to whether any company falls within the classification above, the person desiring to see such return should make application, supported by advertisements, prospectus, or such other evidence as he may deem proper to establish the fact that the stock of such corporation is offered for general public sale. Returns can be inspected only in the office of the Commissioner of Internal Revenue, in Washington, D. C. In no case shall any collector, or any other internal revenue officer outside of the Treasury Department in Washington, permit to be inspected any return or furnish any information whatsoever relative to any return or any information secured by him in his official capacity relating to such return, except in answer to a proper subpoena, in a case to which the United States is a party. (Art. 1091.)

"A duly authorized attorney for this purpose is one possessing a properly executed power of attorney, in writing by the corporation, which designation shall be signed by two officers of the corporation and bear the impress of the seal." (Reg. 33, 1918, Art. 226.)

The Income Tax Primer, 1918, states that an attorney can secure a copy of a client's return only in case "he submits an authorization, personally signed" by the client. (Question 143.)

The foregoing regulation was issued originally under the 1913 law. If in conflict in any way with the express provisions of the 1918 law it cannot be made effective.

CERTIFIED COPIES OF RETURNS FOR USE AS EVIDENCE.— REGULATION. . . . . All returns, whether of persons or of corporations, joint stock companies or associations, or insurance companies, may be furnished, upon approval of the Secretary of the Treasury, for use, either in the original or by certified copies thereof, in any legal proceedings before any United States grand jury or in the trial of any cause to which both the United States and the person or corporation or association rendering the return are parties either as plaintiff or defendant, and in the prosecution or defense or trial of which action, or proceedings before a grand jury, such return would constitute material evidence, but in any case arising in the collection of the income tax, the Commissioner of Internal Revenue may furnish for use to the proper officer either the original or certified copies of returns without the approval of the Secretary of the Treasury. .. (Art. 1091.)

INSPECTION OF CORPORATION RETURNS BY OFFICERS OF

STATES IMPOSING INCOME TAXES.

LAW. Section 257. . . . . Provided, That the proper officers of any State imposing an income tax may, upon the request of the governor thereof, have access to the returns of any corporation, or to an abstract thereof showing the name and income of the corporation, at such times and in such manner as the Secretary may prescribe: . . .

It will be noticed that this permission extends merely to corporation returns. Individual returns are not open to inspection by state officers, although efforts have been made at various times to change the law so as to make them so. The language of the 1918 law is broadened so that now the federal returns are apparently available to states which impose income taxes on corporations irrespective of whether they impose a similar tax on individuals as well.

The following regulations set forth the procedure to secure permission to examine such returns:

[Former Procedure] The 1916 law [section 14 (b)] permitted examination when the state imposed a "general income tax.'

REGULATION. Upon written application by the governor of a State as prescribed in paragraph 7 of article 1091, except that the application may be made directly to the Commissioner instead of to the Secretary, the Commissioner will set a convenient time for inspection of the returns (or an abstract thereof as he may determine) of corporations organized or doing business in such State. The authority to inspect returns granted to officers of a State includes authority to inspect lists furnished to supplement and become a part of the returns. (Art. 1092.)

Paragraph 7 of article 1091, mentioned above, reads as follows:

REGULATION.

Upon request of the governor of a State imposing a general income tax, the proper officer of such State to be designated by name and official position by the governor of such State in his application to the Secretary of the Treasury, may have access to the returns or to abstracts thereof showing the name and income of each corporation, joint stock company or association, or insurance company, at such times and in such manner as the Secretary of the Treasury may prescribe. Such application shall be made in writing, addressed to the Secretary of the Treasury, and shall show (first) that the State, whose governor makes the request, imposes a general income tax; (second) the name and address of each corporation, etc., to which access is desired; (third) why permission to inspect the returns of the corporations, etc., named in the request is desired, and (fourth) what officer or officers are designated to make the desired inspection, giving their names and official designations. Such request must be signed by the governor of the State and sealed with the seal thereof, and shall be transmitted to the Secretary of the Treasury for his consideration and action thereon. ... (Art. 1091.)

BENEFICIARY NOT PERMITTED TO INSPECT RETURNS OF

EXECUTOR.

REGULATION.

Beneficiaries of an estate or trust are not entitled as such to an inspection of returns of income filed by the fiduciary. . . . (Art. 1091.)

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INSPECTION OF CORPORATION RETURNS BY STOCKHOLDER. -The 1918 law sets forth, for the first time, the exact conditions which shall govern the inspection of a corporate return by a stockholder.

'[Former Procedure] Previously the Treasury regulations permitted inspection under certain conditions. (T. D. 2016, April 18.

LAW. Section 257. Provided further, That all bona fide stockholders 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 stockholder 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.

The privilege granted by the above section is an express exception to the law. It is personal to the stockholder and may not be delegated. It should not be inferred from the phrase "provided by law" that a stockholder could use the figures obtained from an examination of the corporation's return on file in the Commissioner's office in a lawsuit which he might bring against the corporation. A stockholder who has acquired shares merely for the purpose of inspecting the returns of the corporation is not a bona fide stockholder.

Article 1093 and 1091, the latter setting forth the President's proclamation of 1914, provide the procedure to be followed by a stockholder desiring to make an application to examine the returns of a corporation.

REGULATIONS. . . . . A stockholder desiring the privilege of inspection shall apply in writing to the Commissioner, specifying his address, the name of the corporation, its outstanding capital stock, the number of shares owned by him, the date of their acquisition and whether or not he has the beneficial as well as the record title to such shares, and in other respects complying with the requirements of paragraph 4 of article 1091. A stockholder who has acquired his shares for the purpose of inspection of the income returns of the corporation is not a bona fide stockholder. (Art. 1093.)

The Secretary of the Treasury, at his discretion, upon application to him made, setting forth what constitutes a proper showing of cause, may permit inspection of the return of any corporation, by any bona fide stockholder in such corporation. The person desiring to inspect such return shall make application in writing, to the Secretary of the Treasury, setting forth the reasons why he should be permitted to make such inspection, and shall attach to his application a

certificate, signed by the president, or other principal officer, of such corporation, countersigned by the secretary, under the corporate seal of the company, that he is a bona fide stockholder in said company. (Where this certificate can not be secured, other evidence will be considered by the Secretary of the Treasury to determine the fact whether or not the applicant is a bona fide stockholder and, therefore, entitled to inspect the return made by such company.) Upon receipt of such application the corporation whose return it is desired to inspect shall be notified of the facts and shall be given opportunity to state whether any legitimate reason exists for refusing permission to inspect its returns of annual net income by the stockholder applying for permission to make such inspection. The privilege of inspecting the return of any corporation is personal to the stockholders, and the permission granted by the Secretary to a stockholder to make such inspection can not be delegated to any other person. . . (Art. 1091.)

.

The foregoing article 1091 (based on the 1914 proclamation) differs in some respects from the 1918 law. In cases of conflict the law must be followed.

REGULATION. A stockholder who examines the return of a corporation and reveals without express authority of law any particulars of its income statement is guilty of a misdemeanor and liable to fine and imprisonment. . . . . (Art. 1094.)

Unofficial disclosure of information forbidden.

LAW. Section 1317. [Section 3167, Rev. Stat.] It shall be unlawful for any collector, deputy collector, agent, clerk, or other officer or employee of the United States to divulge or to make known in any manner whatever not provided by law to any person the operations, style of work, or apparatus of any manufacturer or producer visited by him in the discharge of his official duties, or the amount or source of income, profits, losses, expenditures, or any particular thereof, set forth or disclosed in any income return, or to permit any income return or copy thereof or any book containing any abstract or particulars thereof to be seen or examined by any person except as provided by law; and it shall be unlawful for any person to print or publish in any manner whatever not provided by law any income return, or any part thereof or source of income, profits, losses, or expenditures appearing in any income return; and any offense against the foregoing provision shall be a misdemeanor and be punished by a fine not exceeding $1,000 or by imprisonment. not exceeding one year, or both, at the discretion of the court; and if the offender be an officer or employee of the United States he shall be dismissed from office or discharged from employment.