New-York tribune., 1909-07-10
CANNOT BE COLLECTED?
-4ccOuntants Point ont Defects an
COrDOrdtiOn Tar MeaSure.

letter was sent 10 all members of Congress
yesterday by a number Of firms of accountants in
this city obiecting the proposed corporation tax
sgners say that il will be impossible TO collect
the tax. The letter follows:
On reading the text Of the proposed corporation
tax law, reported in The Commercial and
Financial Chronicle Of July 3, 1902 We nave
formed the opinion that some OF IT'S provisions are
absolutely impossible Of application ana others
violate all the accepted principles of sound ac~
Tnder the third clause it is provided that there
come OF each of such corporations. ascer-
tanned provided in the foregoing paragraphS p OF OF
computed upon the remainder Of said net income
Of such 20 9a d for zach YEAR f bereafr anS
on before the first day of March 1910, ana the
first day of March of each year thereafter, a true
and accurate return under oath or affirmation of
its president etc. etc
In connection with this clause we would cal cal
attention to The fact that, as You are no DOUBT
aware the fiscal year OF number OF corporations on,
is not. and for business reasons cannon De ins
calendar year, and consequently. having IN nnlna
the beginning OF the calendar year IssS II ls anu
will quite Impossible for any business corpora
inmate with the calendar year to make trIe
return OF its profits as required hy the proposed
Under clause l the tax is % be charged upon the
entire net income and the net income is TO be
-ascerrained by deducting from the gross amount
penses actually paid" - Losses actually sus-
tsned' 90 interest actually paid" in each case
within the year The words actually paid con
vey and II is to be presumed are intended 10 con-
deductions
% Expenses actually incurred. because the pay
uent is not necessarily made in the year In which
the expense Is incurred:
"a losses actually ascertained because losses
may be incurred and the amount not be ascertained
81 Interest actually accrued. because interest is
never paid until the end OF the period q duTins TINS which
charge against income
in clause the bill refers TO net income
cefved': in clause . ii refers ''grd~s income, q"
without the addition Of the word received; in
received - There is here a complete confusion he
tween income and income received. which can only
lead 10 endless complication
Two methods may be adopted for taxation pur-
(D TO tax the difference between actual cash
receipts revenue account and actual cash pay
seldom il represent the profits Of a manu-
featuring concern, or
rnercial way-namey. to ascertain the gross in
come earned whether received or not. and TO de-
], Expenses actually incurred during the year.
, Losses actually ascertained and written off
during the year whenever incurred,
3 Interest accrued during the year. whether paid
not;
pIoPTT55y les and
As accountants actively engaged in the audit and
examination OF number OF Fafeo businesses ana
enterprise. unhestatingly say that the law as
would suggest that in the said clauses l. ? and 3
OF paragraph the words actually paid and
actually sustained" be changed to read actually
tfd I,,s he changed TO read so that the return
viii be based on the last completed fiscal year prior
TO December 81 i'm cases where the fiscal year of
a corporation is not the calendar year.
Yours very truly,
DELOTTTE. PLENDER. GRIFFITIIS & co,
No. 20 Wall street.
PRICE. WATERHOUsE & co,
No Il William street.
HASKINS & SELLS No. 30 Broad street.
LYBRAND. ROSS BROS & MoNTG0oMERY.
WARWICK. MITCHELL < co.
No 70 Wall street
GUNN. CUM RIGHARDs Co So. as wall street
EDWARD z. MoXI2Y & co. No l65 Broadway.
WILKINSON. RECkITT. WILLIAMS & co.
No % Broadway.
GEORGE II. CHURCH, No. 80 Wall street
BARROW, WADE. GUTHRIE & CO.
No. - Broad street.
LOOMS. CoNANT & CO. No. 30 Broad street