In 1960, the Internal Revenue Service (IRS) destroyed 17,000 Thompson submachine guns rather than collect $3.4 million in tax stamp revenue. The only reason given was to keep them out of the hands of “undesirables”.
After WWII, machine guns started showing up in the United States from the war overseas. There are many ways this could happen. Most commonly, a US GI would bring back a war souvenir. In the annual reports published by the Commissioner of the Internal Revenue Service (IRS), it was recorded that action was taken to ensure these firearms were registered as required by the National Firearms Act of 1934. In 1952, John B. Dunlap was Commissioner of the IRS. From the Annual Report of the Commissioner of Internal Revenue, 1952, p. 18:
Firearms program.—In September 1945 an intensive investigative program was started for the purpose of bringing about the registration of machine guns, machine pistols, and other firearms coming within the purview of the National Firearms Act. This program was necessitated by the fact that a large number of these firearms brought or sent to this country by members of the armed services were finding their way into the hands of criminals, by either illegal sale or theft, and were being utilized in the commission of violent crimes.
As of June 30, 1952, a total of 107,321 investigations had been conducted, resulting in the registration with the Commissioner of Internal Revenue of 16,285 firearms. During the fiscal year 1952, 175 cases involving violations of the Firearms Act were submitted to the Department of Justice for prosecution.
The thrust was to get the NFA firearms registered in the proper hands. Over sixteen thousand were registered. Only 175 cases were prosecuted.
Skip forward a few years to 1960. A different Commissioner of the IRS, Dana Latham, was in office. He was the eighth Commissioner of the IRS under President Eisenhower. He had a different view of the NFA. When this correspondent stumbled upon the paragraph describing the events of interest to the IRS, the assumption was that Latham would brag about bringing in 3.4 million dollars of tax stamp revenue. It was the wrong assumption. From the Report of the Commissioner, 1960, page 55:
Firearms Program
There were only 3,654 firearms registered during the fiscal year 1960, as compared with 52,156 firearms registered during 1959, due primarily to a substantial reduction in the number of firearms imported. As a result of investigational work under the National and Federal Firearms Acts, and the Act of August 9, 1939 (49 U.S.C. 781), 590 persons were arrested, 157 vehicles seized, 1,115 firearms seized, and 587 criminal prosecution cases completed. A signal example of the effectiveness of the program in limiting the availability of firearms to undesirables occurred during this fiscal year. On the basis of information that the prospective purchaser of some 17,000 scrapped surplus Thompson submachineguns intended to reassemble them, the Service interceded with the Department of Defense, which then determined that the interests of the general public required the complete destruction of the weapons and amended its regulations accordingly. The prospective purchaser failed in its attempt to prevent destruction of the weapons through an injunction suit, carried twice to the Circuit Court of Appeals.
The main purpose of the IRS is to collect revenue. Most people would assume an IRS Commissioner would be glad to accept 3.4 million dollars in tax stamp revenue for the sale to the public of 17,000 reassembled Thompson submachineguns. Latham thought differently.
Not only did Latham reject the tax revenue, but he also directly interfered with the Department of Defense’s (DOD) business and pressured them to renege on their contract to sell the scrapped Thompsons. The DOD had to retroactively change its regulations to do so. The federal government had to defend the action in court. The case went to the Circuit Court of Appeals twice. The government won.
This was not an underhanded, under-the-table deal that Latham wanted to keep quiet. He showcased it in his Annual Report. It appears, on the surface, as a prosecutable offense, a severe and deliberate wastage of government assets. It shows quite a contrast to Commissioner Dunlap, who was able to have over 16,000 “bringbacks” registered into the system.
Today, Dunlap is forgotten. Dana Latham is not. In 1976, an award was named after him by the Los Angeles County Bar:
In 1976, the Los Angeles County Bar Taxation Section decided to honor the memory of Dana Latham by establishing the Dana Latham Memorial Award.
This correspondent was only nine years old when Dana Latham reveled in his wastage of tax dollars and destruction of federal property. This correspondent has been unable to find published articles form the period which expose the actions of the IRS in this case.
Three years later, in 1963, 240,000 surplus M1 Carbines were decommissioned and sold to NRA members for $20 each, without magazines. Dana Latham was no longer the Commissioner of the IRS.
About Dean Weingarten:
Dean Weingarten has been a peace officer, a military officer, was on the University of Wisconsin Pistol Team for four years, and was first certified to teach firearms safety in 1973. He taught the Arizona concealed carry course for fifteen years until the goal of Constitutional Carry was attained. He has degrees in meteorology and mining engineering, and retired from the Department of Defense after a 30 year career in Army Research, Development, Testing, and Evaluation.
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