Arizona republican., 1909-12-13
CORPORATION
 TAX NOTICE 4 Statement Issued by Sec retary Of Treasury 100000 ARE LIABLE
They Are. Divided Into Six Glasses and Warned That Any Attempt to "Hold Out" Will Be Followed By Prosecution

Washington. D. c. Dec 12.-MOre than 400.000 corporations in the United States will have to make their returns in conformance with the new corpora tion tax. Secretary of the Treasury MacVeagh has issued a very compre- hensive statement for the government of those corporation officials. The statement is calculated to cover any questions of classification and dis tinction which might arise in the making of the reports. and it sets forth in terse language what the gov ernment expects.
 Secretary MacVeagh's statement plainly begins with the statement sthat the government expects returns to be made to conform with the in tent of the law and that the law had two intents-first that it should be a revenue producer for the government and second to levy a tax of one per cent on the net income, of corporal tions as provided by law. After a concise definition of what is con sidered net income with the law the statement says:
 Tt is clear that the purpose of the law was not to put tax on receipts. but a tax on profits. and that the terms met income" and gross in come are used because while they are practically identical with gross profits and net profits. they are yet more embrasive and conseduently per init a more comprehensive adminfs- tratioYl of the law
 For convenience and facility in clas sification. corporations have been di- vided into six classes. They are-in- surance companies. transportation com panies. manufacturing companies. mer~ cantile companies and miscellaneous corporations
 The statement makes detailed ex- plantations of what can be considered gross income. net income, and defines what other terms used in the state ments are held to be within the law Inaccuracy is expected in some of the returns. the statement says. and It IS expected they will be from two causes The first is honest error and the sec ond is intent to defraud the govern ment. Honest errors will be correct ed. but any attempts at fraud will be met with vigorous prosecution.
 The regulations do not call for spe- cific methods of keeping accounts or any other particular method of book keeping. The requirement is simply that the business transactions be so recorded that accurate returns can be made and verified when necessary.
 Great numbers of communications have been received relative to the publicity clause While there is ap- parently some inconsistency between the two paragraphs of the law re- Iating to making public the informa- ton received. the language of the law relating to filing returns for record and public inspection is so clear that the bureau of internal revenue has no discretion whatever in the matter.
 The forms and regulations will go to the collector of each district. who will send copies of the blanks and a copy of the regulations to every cor poration whose name. and address the collector has been able to secure. Fail ure to receive the blanks or any notice relative thereto will not excuse a cor poration from making the return re- quired by law. nor will it relieve it from penalties for failure so to do If copies of blanks and regulations are not received on or about January l, application should be made to the col Iector in whose district the princi- bal office of the corporation is To- cated. so that the return can be in the hands of the collector by the time re- quired in the statute.