Mr. PERLMAN. Well, this year so far I think I have argued nine. I have been up there nine times. I don't know how many cases that. involved. Sometimes there are several cases in one record. Those numbers are counted differently here. But I have been there nine times, and I am going to go there again on March the 26th. I am going to argue the color television case. Senator MCCARRAN. That is more than any one of your other attorneys in your Division has argued in the Supreme Court? Mr. PERLMAN. Oh, I think it is almost twice as many as anybody else. Senator MCCARRAN. All right, are there any other questions, Senators? Is there anything further you wish to say, Mr. Perlman? Mr. PERLMAN. That is all except this, Senator, that we really need the help we are requesting. We are overworked. I know that men of my office sometimes stay till 1, 2, and 3 o'clock in the morning, particularly if we have cases with long records, in an effort to meet the deadline on briefs, which is sometimes a very serious matter. We ought to have more time to consider recommendations and to consider everything that is in the briefs. We have been short-handed. We do not have as many people in this office today as they had 10 years ago. They had more then than we have now. We have had very important litigation in the past few years. The case involving the 11 Communists was a tremendous thing to handle. I think one of the things that helped us most was that I took somebody from my office and sent him to study this case while it was still in the trial court so that he was competent to take part in the writing of the brief for the circuit court of appeals. Well, I cannot take people from my office all of the time and put them in work of that kind because it leaves us too short-handed. We have to pass on every case from every agency in the Government going: to the Supreme Court. APPELLATE WORK Senator KILGORE. There is one question I wanted to ask. Normally you act as purely appellate lawyers in the Supreme Court for the other divisions? Mr. PERLMAN. That is right. Senator KILGORE. Which means that you have had nothing to do with the building up of the record, and your attorneys have to completely review the entire record made up by another lawyer? Mr. PERLMAN. That is right. Senator KILGORE. That has to be done before you are ready to argue the case in the Supreme Court and to be sure that your briefs. are in correct shape? Mr. PERLMAN. That is right. Senator, it is not only the other divisions of the Department of Justice. When matters get to the Supreme Court or where any agency of the Government wants to take a case to the Supreme Court, my office represents that agency of the Federal Government. Senator KILGORE. That is the point I am making. The cases are practically always tried by other lawyers, and then you have to review the case if it is sent to the Supreme Court? Mr. PERLMAN. That is right because each division of the Department of Justice and each agency of the Federal Government has its own law department. PERSONNEL Chairman MCKELLAR. How many employees do you have in your division, including yourself and down to the bottom, your entire Department? Mr. PERLMAN. Twenty-three. Chairman MCKELLAR. Does that include stenographers? Mr. PERLMAN. It includes everyone. Chairman MCKELLAR. And clerks? Mr. PERLMAN. It includes everyone. Chairman MCKELLAR. How many lawyers have you? Mr. PERLMAN. Eight practicing lawyers. Chairman McKELLAR. All right, sir. That is all, Mr. Chairman. APPEAL BRIEF OF NEW YORK COMMUNISTS CASE Senator MCCARRAN. You emphasized the case involving the 11 Communists. The Criminal Division tried that case, did they not? Mr. PERLMAN. Yes; it was tried by Well, a group from the United States attorney's office in New York handled it. I think Judge McGohey. Now, Judge McGohey was the principal trial lawyer, assisted by the other lawyers from that office. We sent somebody from the Department of Justice to help in that proceeding. Senator MCCARRAN. From your Division? Mr. PERLMAN. No; from the Criminal Division. He went up there and sat throughout the whole trial. Then, I had somebody from my office help in the argument of that case and in the preparation of the briefs. If you have seen that brief, Senator, it is an enormous thing. Senator MCCARRAN. In the Supreme Court? Mr. PERLMAN. In the court of appeals. We then all got together and were in shape to present it when the case reached the Supreme Court. Senator MCCARRAN. The argument in the Supreme Court was conducted by your Division, was it not? Mr. PERLMAN. By me. I argued the case in the Supreme Court. Senator MCCARRAN. Was the Criminal Division there also? Mr. PERLMAN. Yes. Irving Shapiro from the Criminal Division, who had been active in the trial of the case in the trial court, also argued in the court of appeals with Mr. Ginnane from my office. Irving Shapiro was from the Criminal Division, so that when it came to the Supreme Court I studied the case again and I argued it with Shapiro. Shapiro discussed the facts that he was familiar with in the record, and he argued part of the case and I argued the other part. Senator MCCARRAN. All right, sir. Thank you very much, Mr. Perlman. Mr. PERLMAN. Thank you, sir. TAX DIVISION STATEMENT OF T. L. CAUDLE, ASSISTANT ATTORNEY GENERAL, ACCOMPANIED BY ANDREW D. SHARPE, CHIEF, TRIAL SECTION, AND HOWARD P. LOCKE, CHIEF, ADMINISTRATIVE SECTION 1952 BUDGET ESTIMATES Senator MCCARRAN. We come now to the Tax Division which is requesting an appropriation of $1,167,380 which is an increase of $112,030. With this additional money, you expect to increase your employment by 16 to a total of 175 positions. You are asking for eight additional attorneys and eight additional stenographers. Will you justify that request, Mr. Caudle? SUMMARY OF REQUIREMENTS Before you proceed, however, Mr. Caudle, I will ask to have inserted in the record page 64 of the justifications. (The justification referred to is as follows:) Salaries and expenses, general legal activities, Tax Division Mr. CAUDLE. Senator, the civil case load of the Tax Division has so increased that the Trial Section, headed by Mr. Sharpe, the section chief who is here with me, is really in distress. We have believed over a period of time that a lawyer in that section and 35 attorneys are assigned to it-can perform at his best by an average assignment of about 38 tax cases. That was the number that was normally handled by an attorney, I think, in 1946. But today the civil case load in the Division and new cases brought by the taxpayers all over the nation are rapidly increasing in number. Those cases originate when assessments have been made, and the money has been paid into the Treasury, the taxpayer then bringing a suit against the Government for its refund. Over 80 percent of our work, I would say, is involuntary and involuntarily comes our way. Today the average number of cases handled by each of these attorneys is over 100. We find that that load demoralizes the men upon whom rests responsibility of preparing and trying these cases all over the country from the east coast to the west coast. We have a problem, sir, here that has caused Mr. Sharpe and me and the attorneys on that work a great deal of worry. About 3 or 4 months ago, after receiving several memoranda from Mr. Sharpe, and, of course, seeing him every day, I called in all of his men and talked to them personally. They told me that it was almost a physical impossibility to cope with the case load which was assigned to them under the requirements in which those cases had to be prepared and tried. For instance, there have been a good many new judges appointed over the country to pick up the slack of pending cases. Wherever you go you will find that the judges are very anxious to have their calendars cleared and have the cases tried and disposed of. But we will find an attorney here having a case, let's say, in Alabama, several pending in the district court there for trial, when the same lawyer has cases out on the west coast. The calendars in the different courts will arise and the cases will come up in their numerical or chronological order, and then they are ready for trial, while we have the man who was supposed to handle that case trying a case in another State. Senator MCCARRAN. Does not the United States district attorney in the respective State also participate in these cases? Mr. CAUDLE. Senator, they do; but, as a rule, we find that there are few offices in the country where the United States attorney's office is equipped to handle civil tax litigation. They assist us whenever they can. They are very cooperative. But at the same time their offices are simply not equipped to handle tax cases. Consequently, we have to try a tremendous percentage of the cases that come to us for handling. NUMBER OF CASES TRIED IN 1950 Senator MCCARRAN. How many cases did you try last year? Mr. CAUDLE. We have a breakdown of the cases from 1946 through 1950. Last year we tried 199. Mr. SHARPE. Twenty-two of those were jury cases. Senator MCCARRAN. You tried how many? Mr. SHARPE. We tried 199, Senator. Senator MCCARRAN. Were those tried in all courts? Mr. SHARPE. All over the country. May I say a word? Senator MCCARRAN. Surely. Mr. SHARPE. There were 199 trials; 22 of them were jury trials. There were a good many other cases disposed of by motions to dismiss or dismissals for other reasons. Those cases were disposed of in court. A total of 590 cases were disposed of in the trial courts during the year through motions and settlements, which sometimes involve as much work as a trial. There were 494 cases disposed of in the United States district courts, 41 cases in the Court of Claims, and 55 in the State courts. If I may proceed, we also closed out 720 lien foreclosure suits and suits to quit title which usually do not result in trials, although sometimes they do. Senator MCCARRAN. How many attorneys do you have? Mr. SHARPE. We have 35 in the Trial Section. NUMBER OF TAX LAWYERS Mr. CAUDLE. The total for the Division is 91. That is the total number of attorneys employed by the Division, but 35 are assigned to the Trial Section which handles civil cases in the trial courts. Senator MCCARRAN. What do the others do? Mr. CAUDLE. They are assigned to the Appellate Section, the Compromise Section, and the Criminal Section. We have four legal sections in the Division. Mr. SHARPE. There has been a tremendous increase of new civil cases in the Trial Section. Senator MCCARRAN. What gives rise to that? Mr. SHARPE. I will give you my opinion. I do not know whether I can account for all of it. During the war years litigation continued at a fairly even level. Of course, beginning with 1939 we have had new revenue acts every year-every single year. Then in the early forties we began to have greatly increased taxes. The number of returns filed by taxpayers, I understand, increased in those years from about 5 million to 75 million returns of all kinds. Fifty-two million were income tax returns. There was probably some holding back of tax controversies during the war years. I am just surmising about that. But beginning with the year 1946 this civil litigation began to increase. It has been increasing at an accelerated rate ever since. PENDING TAX CASES I have here a statement which I would like to put into the record which shows the pending cases at the end of the fiscal year 1946 as 1,609. That number has increased every year. On June 30, 1950, the cases pending numbered 3,390, a 110 percent increase. The new cases received during the year increased from 1,056 in 1946 to 2,383 in the fiscal year ending June 30, 1950. That is an increase of 125 percent. The acceleration has continued since June 30, 1950, to the present time. We have been getting an average of about 235 cases a month since last June. The total number of pending cases on June 30, 1950, was 3,390, and it is now over 3,700. Senator MCCARRAN. That is a backlog of cases; is that right? Senator KILGORE. May I ask a question at this point? Have you had cases on the carry-back-carry-over feature? Mr. SHARPE. Oh, yes; we have a good many of those. Senator KILGORE. Those have been since 1946, of course, because they could not have been before. Mr. SHARPE. That is true. Senator KILGORE. Have you had cases involving the refund of excess-profit taxes? Mr. SHARPE. Yes, Senator. |