Evening star. [volume] (Washington, D.C.) 1854-1972, 1909-10-09
FIXING TO LEVY TAX
Commissioner c. bell Working
on PreIiminaries.
GOES TO SEE MACVEAGH
Preparation of Regulations to Guide
Corporations.
LEARNING WHO ARE LIABLE
Test Case to Be Made-Attorney
General Considers Accountants
Objections Are Biased.
EARNING WHO ARE LIABLE

Royal E. Cabell, commissioner Of in
ternal revenue, has gone to Dublin. N.
H., to confer with Secretary MacVeagh
on important matters before the internal
revenue bureau, and especially in regard
to preparing regulations under which the
corporation tax law will be enforced.
The collection Of this. tax is placed in
the hands Of the commissioner of internal
revenue. He has before him work of big
proportions in arranging for this collec-
ton.
His first step will be to prepare the
regulations under which the officials Of
the bureau will work. These regulations
will interpret the provisions Of the law
as to what part of the income of the cor
porations shall be assessed for taxation.
In this work Mr.. Cabeil will confer with
Attorney General Wickersham and Sec
rotary MacVeagh. These cabinet officers
will discuss the matter with the Presi-
dent.
After regulations are drafted there will
be prepared blanks upon which all COR
porations must make their returns
Regulations to Be Hurried.
Corporations and accountants are both
seeking early interpretations and rulings
nue. as to what will be required, SO that
the reconstruction Of accounts. and COM
pilation Of data desired. may be COM
pleted in time to avoid the penalty Of the
law as to returns. It Is in recognition
Of this just demand OF the corporations
that Mr.. Cabell is Fastening to see the
Secretary Of the Treasury so that his
regulations may be promulgated at the
earliest possible date.
Attorney General Wickersham contends
that the law is perfectly plain as to the
manner Of ascertaining the net income.
ants do not wish to change their methods
to suit the law. He is Of the opinion that
1t Is desired to make the law unpopular
as far as possible, and thinks that the
public will understand the close relations
between public accountants and the cor
porations from which they derive their
incomes.
What Corporations Must Tell.
The information that corporations will
be compelled to give under the law is the
following:
The total paid-up capital stock or share
capital outstanding at the close. of the
year:
The total bonded and other Indebted
ness at the close Of the year;
The gross income derived from all
sources curing the year;
AL uISiOCIIOo IcCGlteQ W1Iulu Tic year
on stock corporations. ETC.:
The total amount of all ordinary and
necessary expenses actually paid within
the year out of the earnings. in the main
tenance and operation Of the business.
stating separately all rent. franchise,
ETC.:
All losses actually sustained during the
year and not compensated by insurance
or otherwise;
Also amounts allowed for depreciation.
and. In cases Of insurance companies. the
sums paid on policy and annuity contracts
and the net addition to the reserve funds
required by law;
Interest paid during the year on bonded
or other indebtedness not exceeding the
paid-up capital stock or share capital.
All taxes paid within the year
The law provides that after all these
items are set aside for the expense ac-
count the remaining amount is net income,
all of which is taxable except $1,000 At
torney General W1ckersham says it is per-
fectly plain that any corporation can
easily ascertain the items of expense, fol-
lowing the wording of the law.
The commissioner of internal revenue Is
required to add 100 per cent to the tax in
case of false or fraudulent returns and SO
per cent in case of refusal or neglect to
make a return.