established for the year 1917, the work of auditing the returns of subsequent years will be greatly facilitated. Generally speaking, the audit of a 1917 return and the audits of the returns of the same taxpayer for later years are made concurrently. When the difficult, but. temporary, problems arising under former revenue acts have been, disposed of, there is every reason to believe that the bureau can keep practically current with the audit of returns and the decision of claims. This is a consummation devoutly to be wished and earnestly. to be sought.

With the object of expediting this work, various recommendations; have been made by the board and carried out by the Commissioner of Internal Revenue. We shall refer to only the more important ones.

PRODUCTION MANAGER.

The mechanical operation of the Income Tax Unit has been placed in charge of a "production manager." This officer has been given authority to make transfers of employees from place to place in the Income Tax Unit as he may find their services are needed and can most usefully be employed. He has also been given power to make such temporary transfers as may be required for the efficient workingof the unit, not, however, involving change of salary or rank. All office orders respecting duties of employees and procedure are now subject to the approval of the production manager. Since the creation of this office the statistics show a decided acceleration in the work of completing audits.

COMMITTEE OF APPEALS AND REVIEW.

Under section 250 (d) of the revenue act of 1921, if, upon examination of a return, a tax or a deficiency in tax is discovered, the taxpayer shall be notified thereof and given a period of not less than 30 days in which to file an appeal and show cause why the tax or deficiency should not be paid. This appeal must be disposed of before any assessment is made, except where the commissioner believes that the amount found due will be jeopardized by awaiting the decision on the appeal. These appeals are heard by a committee on appeals and review. A survey showed a considerable accumulation of undecided appeals before this committee. In order to relieve this congestion and at the same time preserve the careful consideration that was given to these important cases, the personnel of this committee was enlarged. The committee now functions in four groups of three each and the former practice of writing opinions has been discontinued, except in cases where the commissioner deems that the facts of the case and the reasons for the decision should be set forth at some length for the guidance of the Income Tax Unit or for some other reason. As a result of these changes the committee on appeals: and review is now disposing of appeals with far greater facility than under the procedure heretofore followed.

PRODUCTION COMMITTEES.

In view of the infinite variety in the situations of taxpayers, it is but natural that difficult and involved problems are encountered in the audit of returns. Their just solution frequently requires careful examinations of the facts and interpretations of the law

applicable to the facts. The progress of these cases through the unit is, from time to time, held up, awaiting the report of the examination of the facts or an opinion as to the law. It often happens that the completion of numerous audits depends on the decision of a controlling case. This character of cases seriously impedes the auditing machinery. To relieve this situation a "production committee" was organized and put to work in each of the four audit divisions, namely, personal, corporation, special, and natural resource audit divisions. These committees are charged with the duty of ascertaining the causes of delay in these cases, particularly in the larger and more complicated cases, and supplying any data necessary to the completion of the audit, whether it be a report on the facts or an opinion on the law. Where the situation seems to require it, the production committee is to take up the case itself and complete the audit. These production committees have only recently been appointed and it is too soon to draw conclusions as to their efficacy.

DECENTRALIZATION.

Suggestions have come from various sources regarding decentralization of the administration of the revenue acts. After a careful consideration of these suggestions and of the proposition generally, the board is of the opinion that any general plan of decentralization is open to serious objections which makes the adoption of such a plan of doubtful expediency. Upon the recommendation of the board, however, the bureau is about to adopt the experiment of transferring a committee to some central point at a distance from Washington to hear and determine cases arising in that locality and now pending or which would come before the committee on appeals and review. Many taxpayers find it necessary or desirable to come to Washington or send their representatives here to attend the hearings on their appeals. If these hearings were conducted at or near the residence of the taxpayer, this necessity would be eliminated. If the experiment is successful, the plan will be gradually enlarged. The board takes satisfaction in reporting that the spirit of the bureau is admirable. There is an evident desire on the part of all concerned that the accumulation of work be disposed of at the earliest possible date and that the bureau be so conducted as to win and maintain the confidence of the taxpayers. All suggestions of the board have been cheerfully received, duly considered and made operative sympathetically by the Bureau of Internal Revenue.

Respectfully submitted.

Wм. S. MOORHEAD,
J. E. STERRETT,
HENRY H. HILTON,
Representing the Public.

CHARLES P. SMITH,
E. W. CHATTERTON,
CARL A. MAPES,

Representing the Bureau

JUDGMENTS OF THE COURT OF CLAIMS.

LETTER FROM THE CHIEF CLERK OF THE COURT OF CLAIMS TRANSMITTING, PURSUANT TO LAW, A STATEMENT OF ALL JUDGMENTS RENDERED BY THE COURT FOR THE YEAR ENDED DECEMBER 2, 1922, WITH A BRIEF SYNOPSIS OF THEIR NATURE.

DECEMBER 5, 1922.-Referred to the Committee on Claims and ordered to be

printed.

OFFICE OF THE CLERK,

COURT OF CLAIMS OF THE UNITED STATES,

Washington, D. C., December 4, 1922. SIR: In compliance with the provisions of section 143 of the act of Congress approved March 3, 1911 (36 Stat. L. p. 1135), I transmit herewith statement of all judgments rendered by the Court of Claims for the year ended December 2, 1922, the amount thereof, the parties in whose favor rendered, and a brief synopsis of the nature of the claims.