Evening star. [volume] (Washington, D.C.) 1854-1972, 1913-10-28
Trouble for Years to Come.

from time TO time. only the most
obvious difficulties have SO lar been
dealt with.
Trouble for Years to Come.
Construction of the income tax pro-
vision of the tariff law is bound to
make trouble for years to come. Prob
| lens will be before the courts that may
| take generation to decide. 1t may be
| u generation-should the law stand so
| long-before the last problem for
| analysis will be presented In court.
| Lawyers who have been studying the
| law do not find 1t all clear.
| "A1l persons. firms, copartnerships.
companies, corporations, joint-stock
| companies or associations, and inSur-
ance companies, in whatever capacity
acting, reads the law regarding col
lection at the source" Including les
| sees or mortgagors Of real or personal
| property, trustees acting in any trust
capacity, executors, administrators,
agents. receivers, conServatOrs, en-
| ployers and all officers and employees
| OF the United States having the con-
troll. receipt, custody, disposal of pay
ment of interest, rent. salaries. wages,
premiums, annuities, compensation. re-
Enumeration. emoluments or other fixed
or determinable annual gains, profits
and income of another person, exceed
ing $4,000 year for any taxable year,
other than dividends on capital stock,
or from the net earnings Of corporations
and Joint-stock companies or associa-
tions subject to like tax. who are re-
quired to make and render a return in
behalf of another. as provided herein,
to the collector of his. her or its dis
trict. are hereby authorized and re-
CURED to deduct and withhold from
such annual gains, profits and income
such sums as will be sufficient to pay
the normal tax imposed thereon by this
section. and shall pay to the officer Of
the United States government author
| lied to receive the same. and they are
each hereby made personally liable for
such tax
| In all cases where the income tax of
a person is withheld and deducted and
paid or to be paid at the source. as
| the benefit of the deduction and exemr-
| ton allowed in paragraph C of this
section except by an application for re-
| fund of the tax unless he shall. not less
| than thirty days prior to the day on
which the return of his income is due
| file with the person who Is required to
withhold and pay tax for him. signed
notice in writing claiming the benefit OF
such exemption and thereupon no tax
shall be withheld upon the amount Of
each exemption
Put UP to Tenant.
a tenant is surely person under the
law. He certainly should pay his rent
| IL he agrees to do SO. The question
arises whether the phrase exceeding
5000 for any taxable year." is a qualif1-
cation of the phrase Immediately proceed
| ing it; income of another person." or
refers to the amount payable to such
person passing through the hands of an
other person. If it refers to the income
of the individual. it would seem that the
tenant should keep back the per cent of
the rent unless the landlord claims ex-
emption.
That is only one instance of the difa-
culties presented by the law that will
enmesh its administration. informant On
at the source. In the opinion of expert
accountants. would have been a most
desirable feature of the income tax law
COLLECTION at the source appears IT, open
to vast criticism, and to entail too :nuc:l
Interpretation for any body of sane men,
treasury officials have been comforting
! regarding the regulations which are to
De adopted to govern the collection Of
the new income tax. from individuals
Secretary McAdoo, Assistant Secretary
| Williams and the internal revenue Off
Gals are working on a code which is in
tended to instruct both the government
| collectors of the new tax and the large
number of persons who will be subject to
the new revenue law. The regulations
will be issued as quickly as possible
! Ihey Will govern the individuals. while
| those announced Saturday relate only TO
| the so-called collections at the source
Treasury Will Interpret Provision.
The income tax provision Of the tariff
law will be interpreted by the Secre-
tary Of the Treasury in two other sets
of regulations. supplementing that is-
| sued Saturday. on the subject Of de-
duction Of income tax at the source
on Understanding bonds, notes and
other similar obligations. The deduc-
ton of the income tax from salaries
| and miscellaneous sources Of income
| will be the concern OF the regulations
now being prepared. Regulations re-
garding the collection OF the tax from
individuals will complete the regula-
i tions.
| The internal revenue service is now
preparing blank forms of certificates to
show whether exemption is or is not
claimed by the owners of various forms
| OF securities covered in the regulations
issued. There are a number of such
forms outlined in the regulation.
AS temporary provision, the regula-
tons described an acceptable FORM both
as to language and material and size OF
paper. which can be prepared, where
necessary. before the regular forms are
in print.