The Washington herald., 1913-11-01

GnDhophons, pfd. 500
National 5ON
Washington L. T--.....-.-...-............. D.0oO
wsshington-virsinia Railway pfd............ DtDo
Washtngton-N irginia Railway cum.............- DS4
Total 81
This disbursement, will interest on
government 3s As, and Philippines, easily
exceeding 100000, should aid the appar-
entity tired security market, for investors
must do something with their cash.
Bankers' Committee.
The committee of the District Bankers
Association has not made extra progress
in unrayelling the miracles Of the in
come tax, despite the able personnel OF
the committee and the thorough manner
in which they have investigated.
1t is admitted that the regulations so
far given out by the Commissioner OF
Internal Revenue, with the approval Of
the Secretary OF the Treasury, are not
sufficient; that new points at issue are
coming up every hour. The intent at
present is to issue regulations on in
terest and rent, presuming interest in
this case represents payments on mort
cages, &c. Regulations in the case Of
rents are badly needed, for of the two
the real estate men are much more
backward in their information than the
bankers.
The Committees Letter.
Gentlemen: The committee appointed
TO analyze the income tax law, and rec
ommend to the Bankers Association
course to be followed with respect to
said law, has had two meetings at which
the law was carefully studied and dis
cussed by the members of the said COM
mittee, and other prominent bankers and
lawyers who were invited to confer with
them.
After careful consideration of the
matter your committee agrees unani-
mOusly that the language of the law
is so complex and ambiguous that it is
almost impossible to interpret its mean
ing and outline a course of action until
after the Treasury Department shall
Ea e promulgated the regulations which
arc low in the course of preparation
a copy of the regulations relating to
the collection Of coupons is inclosed, to-
Gether with a few of each of the six
official forms issued by the Treasury De.
partment. Additional copies of these
forms are obtainable at the office of the
Commissioner of Internal Revenue
Your committee is advised that regu-
lat.ons governing the collection of inter-
est and rents will be issued by the Treas
my Department - a few days. After
they shall have been received your COM
nittee will endeaTor to complete its
work and formulate recommendations for
the guidance of the members of the as
Sociation.
Attention is called to the fact that
forms of certificates now in possession
Of several banks and issued prior to
Thursday. October %. do not conform
to the latest FERNS which were issued by
the Treasury Department today, Octo-
her 60
1T is further suggested that each
IT.W.
Tons be cashed or entered for collec-
ton
An Income Tax Lesson.
Despite the first instalment of United
States Treasury regulations regarding
the collection of income tax "at the
source" which dealt only with the col
lection of interest on bonds, there re-
mains a vast uneXpioited field in the
nature OF commissions, salaries. reRs
&e., in connection with collection at the
source, which has not yet been touched
on.
The representatives of the railroads
for instance, have been considering what
their duty is in regard to employees sal
aries which exceed the 5000 or $4,000
exemption.
1t has been proposed, in their confer
ences, that in order not to be harsh on
such employees as may be liable for the
income tax, no deduction on account of
salaries paid since March /, 1913, shall
be withheld until after January /, 1914.
and that then the retroactive tax shall
be distributed over subsequent payments.
This view seems to have lost sight of
the clause of the law that ''the pro-
vision requiring the normal tax of in
dividuals to be withheld at the source
Of the income shall not be construed to
require any of such tax to be withheld
prior to the first day of November,
1913"
Under this clause of the law, and
under the Treasury regulations issued
October ., there can be no question that
the debtor corporation, whether 1t be
debtor for interest on bonds or for
salary, SO long as IL paid the amounts
due either for salary or interest prior
to November ], 1913, is not in any way
liable for the income tax as a deduc-
ton at the source
The entire responsibility for payment
of the tax on an employees liability,
where the employe has collected his sal
ary previous to November ], 1919 rests
with the eInDloye on his personal return
After November /, 1918, II would seem
70 be incumbent on the paying corpora
ton or individual to deduct the proper
tionate share of income tax due from
employees receiving more than 5000 or
1900 a year salary, for the corporation
held responsible for the income tax.
Yet the employer is not required to
pay such tax on behalf Of his employe