The sun., 1913-10-24
INCOME TAX ERRORS
MAY COST $14,OOO,O0O
Depnt, commissioner speer Has
Blundcred. Says Law
YER Walker.
Slips CALLED SERIOUS :
H:rA Accrued" Wrongfully
>cd for "Derived" In
come. He Charges.
SLIPS CALLED SERIOUS

r...-.- y Speer Deputy Comnissionsr
r. .r.O revenue IN charge OF the in
,, ..N law administration. made seri-
e-.u.. .n his Interpretation OF the law
.... ,.ad and sold as pamphlet thie"
...saft.. IS passage. according IL Albert
. U.,... lawyer. VINO has made
.,,l study and has written extensively
- Tn. l.yd aspect OF many forms or
.,.ro-,t, enterprise.
.r,.ft,.n errors Of Mr. Speer will cost
c,rpo,.t.uns and people OF the United
k.es more than $l+,0o0,o00 every year
.Iy,,o-rectod by him or his superior
Mo- said Mr. Walker yesterday.
rss seriousness OF the errors alleged.
,.. N- walker. lies In the fact that Mr..
s,,.r a tne Goyernnent official In charge
, ~. administration OF the law. One or
. mos, dangerous errors alleged by MI
.,.,,t.f D.. the contention by Mr.. Speer
..,, ~. ir,i.ns. in the value OF the prop
..., II A person o. corporation during
year Constitutes taxable income for that
ar as being "acorued' income
W Walker riddles this reasoning on
,-. ground that derived income or re
.,ived' income, note accrued income. ls
N A
other specific ErrOrs.
NJ walker holds that A number or
,.o.iae errors in the Speer Interpretation
=. based unon Nj Speers wrongful use
,",.,-ued for derived or received y
-,,. IA. Snao- pamphlet holds that doc
=, l,wyfrs and others receiving fees
,,,,uld retuin as income the amount thay
ave earned though unpaid. Mr. walker
hints ont that the statute specincai'N
oyldss that only such income as the
,a-s,r. has derived" meaning received
: ,s.>rnah.e The same thing applies.
s VI Walker. to the income OF cor
aoratlors.
81, aruoars that Mr.. Speer has deter
-,,-ad 'o create authority for himself TO
o., an income tax upon money which a
...~r.~a...l was entitled 10 receive but
5a no, receive during the year covered
t, the tax" SAYS Mr.. Walker To that
- whom purporting to quote the statute
orally ne altered the language by sub
..ryi,ng the words arising or accruing
~ tho word received in two places in
h,l paragraph.
There Was no more accuracy Wa'n-
ltred In making that alteration than
very would he II the presiaent OF
national bank included bills re-
.'vab'e' among the items OF cash on
and IN making up report 10 the Comp
.oller NJ the Currency.
~. Sprer contention that dents can
charged of against income As n de-
...ctlou only after legal proceedings pE
30 coalition 70 recover have proved tn.
ish.s worthless is without foundation In
.tA law. saws Mr.. Walker. as the law
specifically provides that the taxpayers
..,.sftction Of the debts worthiessness
Sufficient
u. LAWYER takes dlrec. issue with Mr..
ytsr on the contention that corpora
Ns have TO pay the tax on interest re-
svod from Government. state and mu-
..ip7l bonds which are tax free IN the
srds ~ individuals. Corporations are
k-o.se freed from the tax, he holds
Multiple Taxation.
..Mi',lp,c taxation OF income OF corpora
NJ which are holding companies. MI
Walker holds to be intentionally directed
gains, such conpa though no sucn
,-,os. IS stated in the bill. He shows
4s, me income OF the Union Pacific
..-iyei from its New York Central stock
,lV H.. taxed five times, or per cent,
'h's way.
-. ruited states Steel Corporation
. ..-sd as the largest holding company,
VII uye- TOO subsidiaries The corpora
m 'rsclr. with net yearly income
,sYued TO reach sl00.0o0.o0o Will pay
,aN u 81 600. 200 on that. though the
,o-.v viii already have borne taxation
Al. ea.h step up through the subsidiary
,mpa,ts Mr.. Walker says that there
., more than ZOO holding companies.
z0i;s more than 5000 subsidiaries.
Tho eNacting nature OF the legal ia
-, nut upon corporations deduc'ing
.,,r . ai the source is thus described
"a vlcarious party (the deductor
'scome payable at the source) overs
Mich he or it will be burdenend win
legal liability TO also pay the excess
, 40 beneficiary. after having paid "
the collector OF Internal revenue. IL
-. uartv diyerts too little. he or VIII
>. bp,lrnend with the legal liability To
ss, nav the difference to the collector
'ir,crnal revenue after having paid II
.1 'he hcnonciary" Mr., Walker holds
"a iva scheme OF collection AZ the
.0u-re is perhaps violative or the rhth
tt.....t..a,, ~ ,ha Constitution.