JUNE 9 (legislative day, MAY 13), 1954.-Ordered to be printed Mr. LANGER, from the Committee on the Judiciary, submitted the following REPORT [To accompany S. 1795] The Committee on the Judiciary, to which was referred the bill (S. 1795) for the relief of Fred and Bernice Ehlers, having considered the same, reports favorably thereon, without amendment, and recommends that the bill do pass. PURPOSE The purpose of the proposed legislation is to authorize the acceptance of the claim for refund of income tax for the taxable year 1948 filed by Fred and Bernice Ehlers, of Hettinger, N. Dak., notwithstanding the provisions of section 322 of the Internal Revenue Code. STATEMENT Information before the committee discloses that this claim for refund was mailed by Fred and Bernice Ehlers on March 15, 1952, and was received in the Office of the Director of Internal Revenue, Fargo, N. Dak., on March 19, 1952. The 3-year period referred to in section 322 (b) (1) of the Internal Revenue Code, within which such claims for refund may be timely filed, expired for the taxable year 1948 on March 15, 1952. If this bill is enacted, the aforesaid claim for refund would be considered as having been timely filed within the 3-year period. Fred and Bernice Ehlers filed their original return for the year 1948 under date of March 15, 1949, reporting an income tax liability of $4,979.12 which was assessed and paid in full. On March 19, 1952, the collector of internal revenue in Fargo received an amended return for the year 1948 together with a claim for refund for such year filed by the taxpayers. The amount of the claim was $902.08 which was supported by the amended return filed. Its substance was entirely confined to section 117 (j) of the Internal Revenue Code and involved the question of taxable income from the sale of livestock. Upon investigation, the internal revenue agent to whom the claim for refund was assigned prepared a report recommending an overassessment for the year 1948 in the amount of $444.36, instead of the $902.08 claimed by the taxpayers. However, the taxpayers were notified that the claim for refund was rejected in its entirety on the grounds that their claim was not timely filed under section 322 (b) (1) of the code. Section 322 (b) (1) requires that a claim for refund must be filed by the taxpayer within 3 years from the time the return was filed. In this case, the claim for refund had to be filed in the collector's office on Saturday, March 15, 1952, (a workday). Although the taxpayers posted their claim on this date, it was not received by the collector until March 19, 1952. Accordingly, their claim was not timely filed under the law, and the Commissioner of Internal Revenue had no alternative but to reject it. The Treasury Department, in reporting adversely on the instant bill, states that it would appear undesirable to grant the requested private relief because it would be discriminatory against numerous other taxpayers similarly situated. That Department further advises this committee that they are currently giving consideration to the type of legislation which will solve the situation such as herein presented and yet avoid undue administrative burdens on the local internal revenue offices. The committee is of the opinion that this claim should be favorably considered because it appears that the claimants herein felt that they were complying with the letter of the law by posting their return on the last day of the filing date and feeling that having it postmarked on the last day would be sufficient, rather than physically taking their turn to the collector's office. Further, inasmuch as the Treasury Department concedes that there is a need for general legislation to provide a rule which operates more equitably, the committee believes that it would be inequitable to deprive these claimants of the sum which they overpaid on their taxes and which they believed they were entitled to because their claim for refund was not actually received in the collector's office on the last day of the filing time. In view of the facts as set out above, the committee believes that this bill, S. 1795, should be favorably considered. Attached hereto is the report of the Treasury Department submitted in connection with the instant claim. Hon. WILLIAM LANGER, TREASURY DEPARTMENT, Washington 25, D. C., November 2, 1953. Chairman, Committee on the Judiciary, United States Senate, Washington, D. C. MY DEAR MR. CHAIRMAN: Reference is made to your request for the views of this Department with respect to S. 1795, a bill for the relief of Fred and Bernice Ehlers. This bill, if enacted, would authorize acceptance of the claim for refund of income tax for the taxable year 1948 filed by Fred and Bernice Ehlers, Hettinger, N. Dak., notwithstanding the provisions of section 322 of the Internal Revenue Code. This claim for refund was mailed by Fred and Bernice Ehlers on March 15, 1952, and was received in the Office of the Director of Internal Revenue, Fargo, N. Dak. on March 19, 1952. The 3-year period referred to in section 322 (b) (1) of the Internal Revenue Code, within which such claims for refund may be timely filed, expired for the taxable year 1948 on March 15, 1952. If this bill is enacted, the aforesaid claim for refund would be considered as having been timely filed within the 3-year period. Fred and Bernice Ehlers filed their original return for the year 1948 under date of March 15, 1949, reporting an income tax liability of $4,979.12 which was assessed and paid in full. On March 19, 1952, the collector of internal revenue in Fargo received an amended return for the year 1948 together with a claim for refund for such year filed by the taxpayers. The amount of the claim was $902.08 which was supported by the amended return filed. Its substance was entirely confined to section 117 (j) of the Internal Revenue Code and involved the question of taxable income from the sale of livestock. Upon investigation, the internal revenue agent to whom the claim for refund was assigned prepared a report recommending an overassessment for the year 1948 in the amount of $444.36, instead of the $902.08 claimed by the taxpayers. However, the taxpayers were notified that the claim for refund was rejected in its entirety on the grounds that their claim was not timely filed under section 322 (b) (1) of the Code. Section 322 (b) (1) requires that a claim for refund must be filed by the taxpayer within 3 years from the time the return was filed. In this case, the claim for refund had to be filed in the collector's office on Saturday, March 15, 1952 (a workday). Although the taxpayers posted their claim on this date, it was not received by the collector until March 19, 1952. Accordingly, their claim was not timely filed under the law, and the Commissioner of Internal Revenue had no alternative but to reject it. The problem presented by Fred and Bernice Ehlers' case-namely, that of taxpayers who post claims for refund within the 3-year period but which claims do not arrive in the Director's office within that period-is one that has involved many taxpayers in identical or almost identical situations. While general legislation may be desirable to provide a rule which operates more equitably than does the present statute (and this Department is currently giving consideration to the type of legislation which will solve the problem yet avoid undue administrative burdens on the local internal revenue offices) it would appear undesirable to grant the requested private relief as being discriminatory against numerous other taxpayers similarly situated. The Director, Bureau of the Budget, has advised the Treasury Department that there is no objection to the presentation of this report. Very truly yours, M. B. FOLSOM, Acting Secretary of the Treasury. O JUNE 9 (legislative day, MAY 13), 1954.-Ordered to be printed Mr. LANGER, from the Committee on the Judiciary, submitted the following REPORT [To accompany S. 2135] The Committee on the Judiciary, to which was referred the bill (S. 2135) for the relief of Fernando A. Rubio, Jr., having considered the same, reports favorably thereon without amendment and recommends that the bill do pass. PURPOSE OF THE BILL The purpose of the bill is to enable Fernando A. Rubio, Jr., to apply for United States citizenship notwithstanding the fact that he filed a claim of exemption from training or service in our Armed Forces during World War II. STATEMENT OF FACTS The beneficiary of the bill was born in Barcelona, Spain, on December 29, 1926, and last entered the United States on January 2, 1942, for permanent residence as a quota immigrant. In 1944, when he was 18 years of age, he signed a selective service form 301 requesting relief from military service on the ground that he was a neutral alien. The filing of such a form automatically disqualifies an alien from becoming a United States citizen. He states that such form was signed because of his father's threats of removing him from the United States. The evidence discloses that he received his medical degree in 1950, and has actually served in the United States Army from October 1950 to June 1953, when he received an honorable discharge as a captain. He is married to a United States citizen and they have one minor citizen child. He is presently attending the graduate school of medicine at the University of Pennsylvania. Although not condoning |