The Richmond Virginian. (Richmond, Va.) 1910-1920, 1913-11-02
RICHMOND BANKERS
HAVE HAY IDEA OF
INCOME TAX RULES
Internal Revenue Office Just
AS Much in Confusion Re-
garding Collections AT the
Source
Interest on Railroad Bonds Due
and Banks at Loss AS to
How to Deduct Tax AS Re-
CURED By Law---Mortgages
and Rents Worry.

and Rents Worry.
Though yesterday was the first day
/ for collection of the income tax, pro-
vided by the recent tariff bill. there are
still so many persons, firms and cor
porations who as yet do not know what
II all means that the collections at the
local Internal revenue Offices amounted
to nothing. Collector NJ. X Lowry.
who probably Is as much puzzled as
any OF the other hundreds Of officials in
. charge OF the collections OF this tax, is
out of the city for few days.
Collections Of yesterday, the day be-
ting the short business day. banking
houses and internal revenue Offices the
. country over closing al noon, cannot
be taken as a criterion. Collections for
the firss day, because the day wos short,
throughout the country were small
Few collectors have anything to re-
port. Payment on n large portion Of
the interest due on railroad and other
bonds was deferred pending solution OF
problems presented.
1t was tha day for the be ginning Of
collection of the tax at the source
rather than for the beginning OF coll
lection at tho Offices of the internal
revenue collectors.
&biaEFSrFH sps NaEhFd.
The new Law provides ror the naming
Of income tax collectors 70 he recon
mended by the collectors Of internal
revenue aud appointed on such recon-
meneations by Commissioners Osborne.
OF the internal revenue bureau. at
Washington according to 81 ruling made
-tA.r- u. l.&-4.E.a- Ii2E4l1E4.A-
ruling WAS directed hy President VIII
son and endorsed by Secretary Of the
n - A
ieetors have yet been appointed Ia Viz
Stnia-
Virginia liz to have four collectors Of
the income tax. who will work under
the direction OF collectors of the In
ternai revenue Three OF the virginia
collectors will be under the direction
of Collector Lowry In the Eastern dts
trict Of Virginia. aud the fourth viii
be assigned TO the Second district.
Think Action Premature.
The government In its !naugara~
zion OF the collections Of the income
tax November LIST. in the opinion OF
the bankers oil the country, on whom
Ia placed much Of the responsibility
for the governments getting it's TAX
believe officials OF the treasury de-
partment are as much confused be
cause of the pUz2Iing provisions OF
the law. as are those who are sub
Ject to the lax.
That the government has acted too
quickly IN putting into operation this
Law Is the opinion OF the Association
of Investing Bankers, who, In their
last convention, adopted resolutions
which mean that numerous suits TO
test the validity Of the law Will be
Instituted in the courts, Some Of the
bankers are inclined to blame the
present administration with placing
upon the banking business or the
country such n bar den that the party
Will be injured.
Much Confusion Prevails.
Speaking OF the situation last night
President Oliver J. Sands. OF the First
National bank. Of this city, said much
confusion has resulted because OF the
frequent issuing Of orders and regu-
lauans governing the collection 81 the
Income tax,
From time TO time he pointed out,
regulations, changing previously is
sued regulations have been sent out
hy the treasury department SO many
decisions have been made aud orders
announced that even the bankers and
the heads of large corporations who
are expected under the law 70 make
collections by Withholding at the
source per cent OF incomes exceed
Ing $4,000.
Collections that will be difficult are
those on bonds that are not regis
tered. according to Mr.. Sands. owners
of coupon bonds he said. to receive
interest ON presentation OF coupons
must also present certificates Of own
ership OF such bonds. Unless they
present such certificate of ownership
banking houses Will be unable to
withhold the required l per cent for
the government. and rather than
make themselves liable 10 the penalty
imposed by the Income tax law they
Will refuse to pay bondholders.
Interest Due Yesterday.
In Richmond there are many hold
ers of RAILROAD bonds on which on
May Ist and November list thousands
of dollars interest is due.
Many thousand dollars interest on
railroad and other bonds due yester-
day. the first day % collections, were
subject to the provisions OF the in
come tax law. This fact, the fact that
there are many who are supposed to
withhold one per cent OF the income
OF owners of bonds, many of whom
are unknown where bonds are not
OF the registered variety. whose in
come is $4,000 or more. and that that
few are able to interpret the law IN
view of the numerous changes made
In the regulations are the causes of
much Of the confusion.
The law provides for the collection
Fat the source OF the tax on in /
come derived from interest on bonds, |
mortgages and certain other obliga- /
tons Banks and corporations are re- |
Quired to withhold this tax in making |
payments of interest due to holders
or securities
Must Establish Identity.
In cases in which bonds are not |
registered the names of their owners
often are not k9osviTS to the banks or
fiscal agents to whom coupons are |
presented for payment. The identity |
az the owners must be established to |
determine whether the tax is TO be |
Certain exemptions are al |
sowcd under the law,