ReferenceTM HEARINGS BEFORE THE SELECT COMMITTEE ON INVESTIGATION OF THE SIXTY-EIGHTH CONGRESS SECOND SESSION PURSUANT TO S. Res. 168 AUTHORIZING THE APPOINTMENT OF A SPECIAL COMMITTEE DECEMBER 15 AND 16, 1924, AND PART 7 Printed for the use of the Select Committee on Investigation SELECT COMMITTEE ON INVESTIGATION OF THE BUREAU OF INTERNAL REVENUE JAMES COUZENS, Michigan, Chairman JAMES E. WATSON, Indiana. ANDRIEUS A. JONES, New Mexico. INVESTIGATION OF BUREAU OF INTERNAL REVENUE MONDAY, DECEMBER 15, 1924 UNITED STATES SENATE, SELECT COMMITTEE TO INVESTIGATE THE BUREAU OF INTERNAL REVENUE. Washington, D. C. The committee met, pursuant to the call of the chairman, at 10 o'clock a. m., in room 410 Senate Office Building, Senator James Couzens presiding. Present: Senators Couzens (chairman), Watson, and Ernst. Present also: Earl J. Davis, Esq., and L. C. Manson, Esq., of counsel for the committee. Present on behalf of the Bureau of Internal Revenue: Mr. C. R. Nash, assistant to the Commissioner of Internal Revenue; Mr. Nelson T. Hartson, Solicitor Bureau of Internal Revenue; Mr. S. M. Greenidge, head engineering division. The CHAIRMAN. Mr. Davis, do you want to finish any of the other cases before we start the consideration of this case? Mr. DAVIS. Those other matters, Mr. Chairman, have not yet been completed, and I thought we would complete them all before we took them up further; therefore, I think we had better go on with this case and then go back to the other cases on the record when we have them completed. The CHAIRMAN. All right. Mr. MANSON. The matter that we desire to call to the attention of the committee this morning is the amortization claim of the United States Steel Corporation. The amount of amortization claimed is $83,482,961.18. The amortization allowed by the unit was $55,063,312.60. The amortization considered proper by your counsel and engineers, is $27,136,987.89. The overallowance is $27,926,014.01. The difference in the tax is $21,438,513.69. Counsel for the committee in this matter take no exception to the allowances which have been made in the case of property entirely discarded from use, nor to the allowances which have been made representing the difference between the war cost and the cost of reproduction since the war. The difference arises entirely with respect to the determination of value in use of property which is in use by the steel corporation. There were two engineering investigations made of this claim by the engineers of the Income Tax Unit. The first investigation was made in May and June, 1920. The first engineers isolated the particular property upon which amortization was claimed, and determined the use to which it was actually |