811.512394 Shipping/37
The Secretary of the Treasury (Morgenthau) to the Secretary of State29
Sir: Your letter dated August 3, 1934, (symbols FE), and the enclosed copy of a statement, read to an officer of your Department by the Japanese Chargé d’Affaires, relating to additional war profits tax asserted against three Japanese steamship companies, the Toyo Kisen Kaisha, the Nippon Yusen Kaisha, and the Osaka Shosen Kaisha, have been given careful consideration, especially with reference to the request that the ninety-day time limit specified in the statutory notices of deficiency issued under the provisions of section 274 of the Revenue Act of 1926,30 as amended by section 501 of the Revenue Act of 1934,31 and section 283 (a) of the Revenue Act of 1926,32 be extended until certain documents relating to the matter have been received and negotiations entered into with a view of settling the questions in dispute.
The determination of the income, excess profits and war profits taxes of the taxpayers named has already been the subject of many briefs of argument, statements of fact, and numerous conferences with officials of the Bureau of Internal Revenue and, after full consideration, it was decided that no settlement could be reached. Accordingly, notices of deficiency were issued by registered mail on June 11, 1934, to the Nippon Yusen Kaisha and the Osaka Shosen Kaisha, under the provisions of the acts mentioned above, granting them ninety days after such notices were mailed to file petitions with the [Page 830] United States Board of Tax Appeals for a redetermination of the deficiency.
The records of this office disclose that a petition has been filed with the Board by the Toyo Kisen Kaisha for a redetermination of the deficiency disclosed in a statutory notice dated February 12, 1934, but that no petitions have been filed by the other taxpayers, although the time limit within which they may be filed with the Board has not expired.
No assessment of the deficiency proposed against the Nippon Yusen Kaisha and the Osaka Shosen Kaisha will be made until the expiration of the ninety-day period, nor, if a petition has been filed with the Board within such filing period, until the decision of the Board has become final, with the exception, in these cases, that if the Commissioner believes that the assessment and collection of a deficiency in either or both will be jeopardized by delay, he shall immediately assess such deficiency, whether or not the taxpayer has theretofore filed a petition with the Board of Tax Appeals. There being no information on file at this time warranting a jeopardy assessment against either of the two last named taxpayers, the procedure for the litigation of the deficiencies proposed should progress in a normal manner, provided petitions are filed before the expiration of the ninety-day period.
There is no provision of law for the extension of the period for filing a petition with the Board of Tax Appeals. It is understood that representatives of the taxpayers, authorized to represent them before the Treasury Department by virtue of a power of attorney, are preparing petitions and expect to file them timely as to the two companies which have not as yet exercised such right.
When the petitions are filed with the Board and upon receipt of the documents which you have been advised will be filed with you in the near future, you may assure the Japanese Chargé d’Affaires, or other official representing the Japanese Government, that the Commissioner of Internal Revenue will be pleased to examine the statements contained in the documents and will give them serious consideration from the standpoint of a case in litigation before the Board. In such event, the taxpayers should file their written authorizations for a representative of the Japanese Government to appear before the Bureau in their behalf.
Respectfully,