upr000265 134

F.C.N. 2-l6-%2 NECESSITY CERTIFICATES The tern "necessity Certificates* means a certification issued pursuant to Section 12% of the Internal Revenue Code, as amended, that the construction or acquisition of the emergency facilities referred to in the certificate is necessary in the Interest of national defense during this emergency period. The application for a necessity certificate is timely if filed before the expiration of six months after the beginning of construc­tion, reconstruction, erection or installation or the date of acquisition of the facilities sought to be certified. When the certificate of necessity has been obtained, the applicant Is in position to receive the benefit of amortization of the cost of said facilities during sixty consecutive months, with the privilege of obtaining time adjustments favorable to the appli­cant if the existing state of emergency is proclaimed by the President of the Unites States as having terminated prior to the expiration of the sixty months. When any facilities used in con­nection with the existing emergency may be amortized during such a short period, obviously, tax benefits accrue to the applicant. Applications for necessity certificates shall Ibe filed with the Office of the Under-secretary of War or the Office of Under-secretary of the Navy and application shall be made to only one department, ordinarily that one which receives directly or Indirectly the larger part of the products or services to be pro­duced or furnished with the facilities sought to be certified. So far a rather broad policy has been applied in granting these oertificatee if the applicant can show a reasonable Jor the additional facilities for defense work or for the pttx-pose of rendering service to the Am,. or any auxiliary development required to facilitate the activities of the Army, the Navy, or the Maritime Commission. As ^ * service facilities for a Federal Housing Project or a ^oinJ and State or City Housing Project necessary to furnish for enlisted men or civilian employees engaged in the prdduotion or War materials or facilities are proper subjects for application. _ In other words, if the tax payer or applicant camshow a reasonable need for the additional facilities In the interest of national defense activities and can prevail upon an Army or Commanding officer to recognize such, he probably will receive a certificate. Heretofore, it has been necessary to obtain other certificates as well as necessity certificates in order to assure recognition from the Bureau of Internal Revenue, if the benare sought in connection with taxes. However, w®e£ iJh'a® ve^ bb^eeSno tniotfiineeda that Seotion 12% of the Internal Revenue Code has been by rreepqeuailreidn g toS ecetsitoanb li(is)h tthhee retoafx paanyde rass' aright to amortization during 60 months is the Necessity Certificate.