The Calumet news. [volume] (Calumet, Mich.) 1907-1938, 1911-08-12
EXTRA TAX DUE
. FROM DELINQUtNTS
HUNDREDS or CORPORATIONS
WILL BE FORCED TO PAY
THE FIFTY PER CENT
ADDITIONAL.

Washington. Aug FIFTY per cent
additional tax must be paid by hum
dreds of corporation in every internal
revenue district in the country for fall
ure 20 file reports or pay promptly
the money due the government under
the corporation tax law. This law
specifically prescribes that when cor
poratiOn neglects 10 make it's return
On March 1. fifty per cent is added au-
dramatically 10 the amount of the tax
and cannot be RENTED by the COM
missioner OF Internal revenue. In add
ton a corporation may be fined for It's
neglect from 500 10 $4,000, in the
discretion OF the commissioner. Cases
OF fraud are punished more severe
~. The tax is doubled and in addi-
ton the officer Of the corporation who
makes a false return may be fined
$1,000 and sent to jail for one year.
II is hard to understand why there
should be so many delinquents, as the
law has been in operation two years
and the government officials believe
that corporation officers should be
familiar with its provisions by this
time. Several bills have been intro
duced into congress for the purpose Of
relieving delinquent corporations Of the
penalties of the law. The department
is flooded with letters begging for
leniency, but Commissioner Cahsll can
give little encoura cement to the
writer's, as the statute is stringent and
he cannot modify IT. They may be re-
Heved of the fines, but only an act Of
congress could abate the nifty per cent
additional tax. Most OF the offending
operations are small, the larger ones
having seen the wisdom Of obeying the
law.
The corporation tax Is provided for
In section 80 Of the Payne-Aldrich tar
In law. II is levied at the rate of one
per cent on the net income OF corpora
tons over and above $4,000. The law
provides the method for determining
net income and even gives collectors of
iAAA'AAitAi ANNtiAANs NtifAN NAANa 1ha RhNA
attempts at fraud, the power to exam
inc all books and papers Of the corpOr-
alton. Il is provided that statements
showing the net income for the pre-
vious year must be fled by corpora
lions by March /, and before June /
the government notifies them of the
amount Of their tax. This is payable
until June 30 without penalty
Is the Law Too Stringent
The general cry Of the letter writer's
is that the corporation tax law is alto
lgether too stringent and that the Unit
ed States treats the corporations as II
they were criminals. II Is declared
that the penalties in the old internal
revenue laws. which were directed al
acts approaching the criminal in whis-
key and tobacco matters. have been
copied verbatim and made 10 apply tC
a delay Of even one day in filing a re-
port. Many Of the states which tar
corporations are not nearly so rigid
New York. as a case in point, exacts
no penalty for a delay OF even ST,
months. II has even been suggested
that the fifty per cent penalty Is a VIC.
lation uf the eighth amendment 10 tn,
Constitution. which prohibits excessiv,
fines.
In answer TO all complaints Commits
sioner of Internal Revenue Royal Il
Cabell IS sending out a letter explain
ing the attitude Of the treasury de-
partment. With regard to the fines
which may run from $1,000 20 $4,000
he says: The general internal rcvenu,
statute u.s. however applicable to tn,
penalties announced In this paragraph
and the Treasury Department Is as lib
eral as IL believes 10 be consistent II
such cases. Where there is clearly n,
intent TO defraud the government or T.
hinder or obstruct the collection of an.
tax as small a sum as s25 has beet
accepted In compromise. and the ofTic
Is considering. in those cases wher
there was no income whatever o
practically none, the acceptance O
less than $25. II is the opinion Of tn
office that no offer less than 80 /
worthy Of consideration. You will not
however. that the fifty per cent add
tional tax Is required to be assesse,
and collected in the same manner an,
at the same time that the original Ia,
Is assessed and collected"
Trying to Evade the Penalty.
Regarding attempts to evade the mr.
ty per cent penalty. COMMISSIONS
Cabell says
where the statute itself specifcall,
fixes the amount and prcscribes Tn
events upon the occurrence of whic
the liability shall be incurred, am
where there Is no dispute as to fail
ure to file a return as prescribed b.
statute, IL Is not believed that an
claimant can duality under this Ian
lguage so as TO be entitled TO relief
IL Is the general policy OF the treasur
department To compromise no assesse,
tax where both the amount and tn
event on which the liability is to b
incurred are definitely fixed by tn
statute. unless the taxpayer is insol
vent or there Is doubt as to the facts
or under exceptional circumstance
III =