https://egrove.olemiss.edu/aicpa_guides/2617/thumbnail.jp

Cooper, Walter A.

Lasser, J. K.

Thurston, Troy G.

English

eGrove (Univ. of Mississippi)

University of Mississippi eGrove Guides, Handbooks and Manuals American Institute of Certified Public Accountants (AICPA) Historical Collection 1945 Letters Re: Section 126 Problem Walter A. Cooper J. K. Lasser Troy G. Thurston Follow this and additional works at: https://egrove.olemiss.edu/aicpa_guides  Part of the Accounting Commons, and the Taxation Commons American Institute of AccountantsINCORPORATED UNDER THE LAWS OF THE DISTRICT OF COLUMBIATHE NATIONAL ORGANIZATION OF CERTIFIED PUBLIC ACCOUNTANTS13 EAST 41st STREET. NEW YORK 17. N. Y.February 26, 1945To the Members of theCommittee on Federal TaxationGentlemen:Enclosed please find copies of the following replies:(1) Mr. Walter Cooper’s reply of February 23rd, regarding section 126 problem raised in Mr. Brown’s correspondence to George Ellis.(2) Mr. J. K. Lasser’s reply of February 22nd, regarding the section 126 problem.(3) Mr. J. K. Lasser’s reply of February 22nd, regarding (a) approaching the President on the creation of a non-partisan tax commission and (b) expediting post­war tax credits and refunds, and(4) Mr. Troy Thurston’s reply of February 16th, regarding expediting postwar tax credits and refunds.Very truly yours.Rebecca Newman Golub, Technical AssistantRNG:TSEnc. (4)PEAT, MARWICK, MITCHELL & CO.ACCOUNTANTS AND AUDITORS SEVENTY PINE STREET NEW YORK, 5, NEW YORKFebruary 23, 1945Mrs. Rebecca N. Golub, Technical Assistant, American Institute of Accountants, 13 East 41st StreetNew York 17, New YorkDear Mrs. Golub:This refers to your communication of February 15 and its enclosures, the correspondence between Mr. Brown and Mr. Ellis.I am not satisfied that the question involved is of sufficient importance to warrant our Committee taking action in the matter, nor is it altogether clear that in most cases contracts cannot be adequately drawn so as to make the transaction nothing more than a sale by the estate on which the basis would be the estate tax values.Yours very truly,WAC-MEA(signed) WALTER A. COOPERJ. K. LASSER & CO.ACCOUNTANTS & AUDITORS 1440 BROADWAY NEW YORK, NEW YORKFebruary 22, 1945Mrs. Rebecca N. GolubAmerican Institute of Accountants13 East 41st StreetNew York, New YorkDear Mrs. GolubsI can’t seem to get highly aroused on approaching the President on the creation of a nonpartisan tax commission. I just don't know anything about that kind of activity. On the other hand, I think it would be most advisable for the Institute to maintain the type of publicity recently issued describing its tax thinking.I cannot get too excited about the proposal to make the postwar credit available quickly. Besides, I take it that the Con­gress is thoroughly apprised of that problem. I doubt that any­thing further need to be done. It has even been referred to in recent reports of the Office of Contract Settlement to the Congress. There are a great many other things that ought to be directed to the Congress, particularly -The quantity of inequities to the small taxpayer in the present ActThe extent of the controversies between the Treasury and tax practitioners in the laws affecting corporations — especially the Excess Profits TaxOn the other hand, I suppose the Congress, via Mr. Stam, is thoroughly acquainted with all that stuff.Somewhere there ought to be a decision on whether it is the function of the Institute to collect material for transmission to Mr. Wales’ office or to Mr. Stam’s office, or whether it should, in addition, seek to acquaint the American public with the problems un­covered by the tax community. If the former is having no effect, I suppose the latter is a necessary evil. It might be the best way of securing results.Very truly yours,(signed) J. K. LASSERjkl-mJ. K. LASSER & CO.ACCOUNTANTS & AUDITORS 1440 BROADWAYNEW YORK 18, NEW YORKFebruary 22, 1945Mrs. Rebecca N. GolubAmerican Institute of Accountants13 East 41st StreetNew York, New YorkDear Mrs. Golub;Reference is made to your letter of February 15th in connection with the Section 126 problem.This problem has been discussed a great deal. See, for example, the last Insurance Research & Review Service. I gather that there are conflicting letters issued by the Treas­ury Department and apparently those people are taking the matter up at this time. Certainly the problem ought to be cleared up by amendment if the Bureau persists in its position.Very truly yours,(signed) J. K. LASSERjkl-mGEO. S. OLIVE & CO.CERTIFIED PUBLIC ACCOUNTANTS CHAMBER OF COMMERCE BUILDING INDIANAPOLIS, INDIANAFebruary 16, 1945Mrs. Rebecca N. Golub, Technical Assistant Committee on Federal Taxation American Institute of Accountants 13 East 41st Street New York, New YorkDear Mrs. Golub:I favor some provision for expediting the recovery of carryback refunds. I think it would be unsound to permit complete recovery of such claims as originally filed, since it is to be expected that the average claim will be in excess of the final allowance. It is suggested that a procedure somewhat similar to that which is provided for deferr­ing part of the tax under section 710 (a)(5) in cases of relief claims should be satisfactory. Under this theory it is suggested that a feasible plan in the case of claims based upon a carryback of an excess profits credit would be to allow the taxpayer to take an immediate credit up to 50 per cent of the claim against normal and surtaxes of subsequent taxable years. Any excess of such credit over the amount determined to be allowable should be subject to interest at the rate of 6 per cent per year.In case of a refund claim based upon a net operating loss carry­back, the problem would be less simple, because of the absence of a current tax liability to be applied as a tentative set-off. But the corporation presumably would be in more serious need of refund because of having suffered an operating loss. For such claims it might be feasible to provide for immediate payment of one-third to one-half of the amount claimed.An important factor to be considered in advocating any provision affecting carrybacks is the risk that it might precipitate legislative activity toward elimination of the carryback provisions. However, I under­stand it to be the Committee’s position that the carryback features should be eliminated after the war in favor of an unlimited carryover provision for net operating losses.Yours very truly, (signed) TROY G. THURSTONTGT:dtw

Letters Re: Section 126 Problem

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Letters Re: Section 126 Problem

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