CONFERENCE REPORT The hearing BROWNING ARMS CO. was in Office held the of M. &. Hoyt, Head of the Sales Tax Division, Bureau of Internal Revenue. It commenced at 2:30 P.M. and was concluded about 5:00 P.H. The Bureau of Internal Revenue was represented by Messrs. Hoyt, Gkstrand and Clark. Mr. Zimmerman represented the Department of Justice and Messrs. I appeared in behalf of the taxpayer. and At the conference one copy of our we submitted letter dated with two complete sets of the Because of the limited number made, we are not able to send I gave Mr. Baxter to the December and Wanlass Bureau the 11, 1940, Baxter copies of our eetian’’ exhibits. of letter of December The question hearing, of basis by previous arrangement, was for all taxable gales during iod the suit and post original together exhibits which were attached. of copies of exhibits that were you a complete set at this time. transmittal stand he will make some additional will then be in a position to give our and period. letter and under- copies of the exhibits. He you and Mr. Browning 4 comlith, It was 1940 with attached limited to the the suit per- impossible to keep the discussion strictly limited to the precise question involved since the Bureau represen’atives maintained that the tax basis depended, Company Mr. Hoyt in part,on d. M. or said the and the M. Bureau determination &. Browning had whether Company a ruling from was its Browning the Chief thet Browning Arms Company was the taxpayer for the iod and not the parent company. Mr. Hoyt said that sales price of as to the suit the impression were to out the of Browning period. that e11 the parent Counsel suit perthe actual arms constituted its proper tax basis At this point he was apperently under of the sales during the suit period inventory company. Arms taxpayer. stock The transferred Chief Counsel's June 18, 1932 ruling on held that the sale on June 18, 1932 was not bona fide for tex purposes and thet all sales thereafter were to bs treated as having been made by Browning Arms Company. Mr. Hoyt did not read this memorandum but implied that it covered all sales and was not limited to those mede from the transferred inventory. Apparently the ruling wes general in character and failed to distinguish between the inventory sales and sales made of subsequently imported guns. After we explained that approxi- mately one-third of the guns sold during the suit period was