The Secretary of State to the Consul General at London (Frazer)

Sir: Reference is made to the Department’s telegram dated October 12, 1933, 6 P.M., concerning the reciprocal arrangements between Great Britain and the United States under which it was agreed that American consular officers in Great Britain would furnish to the British taxing authorities information in regard to emoluments paid British subjects by American consulates in Great Britain and in return British consular officers in the United States would furnish information to the Treasury Department of the United States with respect to emoluments paid American citizens by British consulates in the United States. A copy of a letter dated October 20, 1933, received from the Treasury Department containing a further expression of its views on this subject is enclosed.29 You will note that this communication concludes with the following paragraphs:

“But it is not the understanding of this Department that the reciprocal agreement is intended to affect in any way the question of the liability for the tax. The tax liability is fixed by law, and in the absence of a treaty granting exemption therefrom cannot legally be made the subject of agreement, reciprocal or otherwise.

“While, therefore, as you were advised in the letter of October 11, 1933, it is not the intention of this Department to make any general request of British consular officers for information as to compensation paid to American employees in British consulates prior to the calendar year 1933, it should be understood that this Department is without authority to exempt or to agree to exempt American citizens employed in British consulates from liability for income taxes for which they are otherwise legally liable without regard to the period during which the income was received.”

Very truly yours,

For the Secretary of State:
Wilbur J. Carr
  1. Not printed.