Albuquerque morning journal., 1913-11-14
COST To COLLECT
TAX ON INCOMES
TO Be SMALL
Treasury Officials Say That
Expense VIII Not Exceed
Two Per Cent Annually
Vast Revenue Expected,

N
cent year. to collect S100,0O0.0OO,
estimated as the annual revenues OF
the income tax Il Will not cost more
than that, probably will be much less,
In the opinion 0f officials OF the
treasury department This h In reply
I Go the assertions in certain financial
circles that the tax viii be collected
al such an extroyagant expense that
not more than so per cent VIII De
available for public needs.
THE government has no eXpecta-
ton that Il will cost such an cxtraVa-
giant amount 10 collect the tax said
Assistant Secretary Williams OF the
treasury department who is In charge
OF the internal revenue service and
lalding In drawing up the Income tax
regulations Mr. Williams would
make no more definite statement say-
ing that the cost Of collection could
only be asoertained in practice. ana
was now only matter OF speculation.
For the collection Of the tax during
what was left OF the current fiscal
year from November I 10 June 30,
1914, $500. 600 has been appropriated
by congress While II may be difficult
10 make this sum 30 all the way. the
income tax division Will eypend ID
with care, and II is hoped that II VIII
meet the necessities Of the situation.
one Of the questions involved In
the Interpretation Of the income tax
law Is the status Of "a man who mar
ries during the course Of any year.
The problem presented Is whether
II he is entitled To- exemption Of $4,000
as "a single man. or $4,000 as "a mar
ried man whether his exemption VIII
be prornted according TO his status
when single or when married. While
this question has not yet come up for
consideration by the income tax di-
vision. Il appears likely that the ex-
.emption OF $4,000 for the entire year
win be granted 70 a married man,
whether his marriage took place dur
ing the year or before To differen-
tiate would be likely 10 complicate
the task of collection, and possibly
add TO the expense The simplest
method It IL indicated, VIII appeal 20
the interpreters OF the law
AAt lAWWAtNlN az lNiAA NMA VI AAi' a."
come tax law are bothering stock
brokers as well as bankers, and, in
fact, an who have anything to do with
the current business in stocks and
bonds The daily transactions in bonds
az the stock exchange as well as the
business done over the counters, in
lvolve questions about which there Is
still a good deal of uncertainty.
As an instance one broker pointed
out the case Of man who buys q
bond, the coupon on which becomes
payable a few Gays later In accord
lance with the rules regulating such
a sale, the seller is allowed the ac-
Icrued interest up TO the day of the
sale. But then few days later when
the buyer presents the coupon to be
cashed, he rs called upon, unless he
is exempt under the law. to pay the
tax on the interest which he has not
received.
How such an injustice Is TO be cor
rected is believed to be for the buyer,
especially of large blocks OF the bonds,
TO require Of the seller as n preliml-
mary TO the transfer the payment of
the tax Il is thought that In the
case Of the small buyer the amount
of The tax would be such a trifling
sum that 1t viii not be considered.
There Is another practical phase Of
the matter which relates TO the pay
lment Of the tax on coupons contain
ing the guarantee Of the company is
Suing the bonds that there will be no
deduction from the interest payment
The gas company of this city--and Il
is said the Capital Traction company
Twill take the same position holds
that the income tax is not such a
deduction as comes within the mean
ing Of the guarantee given by the
company; hence it refuses to pay the
tax on the coupons which became due
the first of the month.
The only way IN which this con
Istrucuon Of the terms Of the agree
ment of the company with the pur-
lehasers of the bonds can be tested is
10y some bondholder bringing case
into court The United states Steer
company bas decided to pay the tax
but as far as the government is con
Icerned Il is said at the treasury that
lit does not make any difference who
pays the tax, as long as the payment
is made from some source.
IN these and in other ways the
practical workings of the law are
gradually being developed. but It is
quite evident 60 trust companies and
others who act as fiscal agents, or
corporations that the cost Of making
the interest payments win be much
greater under this law than ever be-
fore, because Of the additional work
that Will be required each interest
period in seeing that each coupon is
accompanied with a certificate of ex-
lemptlon, or the tax money is secured.
Interest upon obligations of the
+ United States or its possessions. or of
Iany state, county city or any other
political subdivision thereof, Is not
subject to income tax"
This is the text of brief treasury
decision announce g days ago,
interpreting the income tax provisions
/ OF the tariff law. IN view of this de-
cision the following instructions 60 coll
/ lectors OF internal revenue have been
issued by the internal revenue
bureau;
1T has been called to the attention
OF this office that banks in certain
sections are refusing to pay coupons
for interest on bonds Of state, cour-
ties, cities or other political suh-divi-
sions OF the United states. when such
coupons are not accumpanied by oer-
tlfieates OF ownership. without de-