(T. D. 4944) Shipment of distilled spirits, free of tax, to Guam and American Samoa TREASURY Department, OFFICE OF COMMISSIONER OF INTERNAL Revenue, To District Supervisors and Others Concerned: Section 408 of the Revenue Act of 1939 (Public No. 155, 76th Section 3361 (b) of the Internal Revenue Code is amended by adding a comma By virtue of the foregoing provision of law, and pursuant to author- GUY T. HELVERING, Approved September 20, 1939: JOHN W. HANES, Acting Secretary of the Treasury. [Filed with the Division of the Federal Register September 22, 1939, 12:53 p. m.] Use of original returns open to inspection in accordance with T. D. 4929; fur- nishing of copies of returns; and inspection of returns of corporations by 1 Sections 463D.0 to 463D.9 are issued under authority contained in secs. 55, 62, 508, 603, 702 (a), 1204, The source of sections 463D.0 to 463D.9 is T. D. 4945, approved September 20, 1929. SEC. 463 D.9. Prior regulations under Code superseded. SEC. 463D.0. Introductory.-By Executive Order dated August 28, 1939, the President ordered that returns made under chapter 1, subchapters A, B, and D of chapter 2, chapters 3, 4, and 6, and subchapter C of chapter 9 of the Internal Revenue Code, shall be open to inspection in accordance and upon compliance with the rules and regulations promulgated in T. D. 4929 approved by the President on the same date. That Treasury decision deals with the inspection of returns insofar as inspection is permissible only upon order of the President and under regulations approved by the President. Under authority of law, and without action by the President, returns of corporations under chapter 1 (income tax), subchapters A (surtax on personal holding companies), B (excess-profits tax), and D (unjust enrichment tax), of chapter 2, chapter 6 (capital stock tax), and subchapter C of chapter 9 (employment tax on employers), of the Internal Revenue Code, are open to inspection by the proper officers of any State; all returns under chapter 1, and subchapters A, B, and D of chapter 2 of the Internal Revenue Code (or copies thereof) are open to inspection by any official, body, or commission, lawfully charged with the administration of any State tax law, if the inspection is for the purpose of such administration or for the purpose of obtaining information to be furnished to local taxing authorities; and all returns of corporations are open to inspection by bona fide shareholders of record owning one percent or more of the outstanding stock. Pursuant to sections 55, 62, 508, 603, 702 (a), 1204, 1207, 1604 (c), and 3791 of the Internal Revenue Code, the following rules and regulations are hereby prescribed with respect to the use of original, and the furnishing of copies of, returns open to inspection in accordance with T. D. 4929, or otherwise; with respect to examinations by shareholders of the returns of corporations; with respect to inspection of returns of corporations under chapter 1, subchapters, A, B, and D of chapter 2, chapter 6, and subchapter C of chapter 9 of the Internal Revenue Code, by the proper officers of any State; and with respect to the inspection of returns under chapter 1, and subchapters B and D of chapter 2 of the Internal Revenue Code by any official, body, or commission, lawfully charged with the administration of any State tax law. For inspection by State taxing officials of income returns other than returns under subchapters B and D of chapter 2 of the Internal Revenue Code, see section 55 (b) of the Internal Revenue Code and the regulations with respect thereto. Special provisions SEC. 463D.1. Access to returns by State officers.-(1) The proper officers of a State are entitled as of right upon the request of its governor to have access to the following returns of a corporation (or abstracts thereof): Income returns (including personal holding company and unjust enrichment returns), and excess-profits and capital stock tax returns, and returns of employment tax by employers under subchapter C of chapter 9 of the Internal Revenue Code. (2) The request or application of the governor must be in writing, signed by him under the seal of his State, and must show why access is desired, and the names and official positions of the officers designated to have the access. The request or application should be addressed to the commissioner, who will set a convenient time and place for the access to the returns (or to an abstract thereof as he may determine). (3) Access shall be given only in the office of the commissioner, unless such returns are in the custody of a collector of internal revenue or an internal revenue agent in charge or the head of a field division of the Technical Staff, in which event the return may be inspected in the office of such collector or agent or head of division, but only in the presence of an internal revenue officer designated by such collector or agent or head of division for that purpose.' SEC. 463D.2. Inspection of returns by State taxing officials.—Original returns of taxes imposed by subchapters B and D of chapter 2 of the Internal Revenue Code shall be open to inspection, at convenient times and places, by any official, body, or commission lawfully charged with the administration of any State tax law, or by the representatives of such official, body, or commission designated in writing by the governor of the State, for the purpose of such administration, or for the purpose of obtaining information to be furnished to local taxing authorities, as provided in section 55 (b) (2) of the Internal Revenue Code. Requests for permission to inspect the returns must be in writing signed by the governor under the seal of his State, and must be addressed to the Commissioner of Internal Revenue, Records Division, Washington, D. C. The request shall state (a) the kind of returns it is desired to inspect, (b) the taxable year or years covered by the returns it is desired to inspect, (c) the name of the official, body, or commission by whom or which the inspection is to be made, (d) the name of the representative of such official, body, or commission, designated to make the inspection, (e) by specific references, the State tax law which such official, body, or commission is charged with administering and the law under which he, she, or it is so charged, (f) the purpose for which the inspection is to be made, and (g) if the 1 See footnotes on p. 222. inspection is for the purpose of obtaining information to be furnished to local taxing authorities, (1) the name of the official, body, or commission of any political subdivision of the State, lawfully charged with the administration of the tax laws of such political subdivision, if any, to whom or to which the information secured by the inspection is to be furnished, and (2) the purpose for which the information is to be used by such official, body, or commission.1 SEC. 463D.3. Examination of returns by shareholder.-A bona fide shareholder of record owning one percent or more of the outstanding stock of a corporation shall be entitled as of right, upon making request of the commissioner, to examine the returns of such corporation and of its subsidiaries. His request for permission to examine such returns shall be made in writing, verified by affidavit, and shall show his address, the name of the corporation, the period of time covered by the return he desires to inspect, the amount of the corporation's outstanding capital stock, the number of shares owned by him, the date when he acquired them, and whether he has the beneficial as well as the record title to such shares. It shall also show that he has not acquired his shares for the purpose of the examination of the returns of the corporation. If he has acquired them for such purpose, he is not a bona fide shareholder within the meaning of the statute. The application shall be supported by satisfactory evidence showing that the applicant is a bona fide shareholder of record of the required amount of stock of the corporation. The supporting evidence may be in the form of a certificate signed by the president or vice president of the corporation and countersigned by the secretary under the corporate seal. Upon being satisfied from the evidence presented that the applicant has fully met these conditions, the commissioner will grant the permission to examine the returns and set a convenient time and place for the examination. This privilege is personal and will be granted only to the shareholder, who cannot delegate it to another. In the case of a corporation which has been dissolved, the returns may be examined by any person who would have been entitled to examine them at the date of dissolution.1 General Provisions SEC. 463D.4. Use of returns in litigation.-The return of an individual, partnership, corporation, or fiduciary, or a copy thereof, may be furnished to a United States attorney for official use in proceedings before a United States grand jury or in litigation in any court, if the United States is interested in the result, or for use in preparation for such proceedings or litigation; or to an attorney of the Department of Justice, for like use, upon written request of the Attorney General, 1 See footnotes on p. 222. the Assistant to the Attorney General, or an Assistant Attorney General. If a return or copy is thus furnished, it shall be limited in use to the purpose for which it is furnished and is under no condition to be made public except to the extent that publicity necessarily results from such use. The original return will be furnished only in exceptional cases, and then only if it is made to appear that the ends of justice may otherwise be defeated. Neither the original nor a copy of a return desired for use in litigation in court will be furnished if the United States Government is not interested in the result, but this provision is not a limitation on the use of copies of returns by the persons entitled thereto.1 SEC. 463D.5. Furnishing of copies of returns.-A copy of a return may be furnished to any person who is entitled to inspect such return upon written application therefor and the submission of evidence satisfactory to the commissioner of his right to receive the same, except that if a return is in the custody of a collector or an internal revenue agent in charge or the head of a field division of the Technical Staff, such collector or agent in charge or head of division may furnish copy of such return to a United States attorney or an attorney of the Department of Justice, or to the taxpayer or his duly authorized attorney in fact, in accordance with these regulations. Certified copies will be furnished only upon specific request therefor sent to the commissioner at Washington. The commissioner may prescribe a reasonable fee for furnishing copies of returns.1 SEC. 463D.6. Supplemental documents, records, and reports.—Persons entitled to inspect returns may have access to information returns, schedules, lists, and other statements designed to be supplemental to, or to become a part of, the returns to which they are given access, and the commissioner may, in his discretion, permit such persons to inspect other records and reports which contain information included or required by statute to be included in the return.1 SEC. 463D.7. Penalties for disclosure of returns.-Section 55 (f) (1) of the Internal Revenue Code makes it a misdemeanor punishable by a fine not exceeding $1,000 or by imprisonment not exceeding one year, or both, at the discretion of the court, for any person to print or publish in any manner whatever not provided by law information contained in any income return, and further provides that if the offender be an officer or employee of the United States he shall be dismissed from office or discharged from employment. The penalties provided in section 55 (f) (1) of the Internal Revenue Code are applicable also to disclosure of information contained in excess-profits, unjust enrichment and capital stock tax returns, and returns made under subchapter C of chapter 9 of the Internal Revenue Code.1 1 See footnotes on p. 222. |