Carrizozo outlook. [volume] (Carrizozo, N.M.) 1910-1945, 1915-05-28
CRUDITIES OF The
INCOME TAXLAW
Several Amendments Will be
Recommended TO the Next
Congress due to Impertec-
tions in the Income Tax Law
COURTS MUST CORRECT AD-
MlNlSTRATlON'S MISTAKES


Because Of imperfections In the
income tax law, numerous amend
ments will be recommended to the
next Congress by the Treasury
Department
Official experts are quietly at
work on this statute, preparing a
report on the crudities II contains
and outlining proper legislative
action to correct them. The law
is honeycombed with errors.
A striking Illustration Of this
thread of weakness that runs
through the whole gamut of Demo
cratic legislation occurs IN one of
the most vital pro, lsiuns OF the
income tax law 1t relates To de
ductions that shall be allowed IN
computing gross income, a basic
element in THE system of taxation
Paragraph B of the law states
"in computing income for the pur
pose of the normal tax there shall
be allowed as deductions" among
other things "losses actually sus
tanned during the year incurred in
trade" etc. What is the meaning
of the words ain trader" The
courts must decide.
The phrase is capable Of an in
finite variety of interpretations
As construed by the Treasury De
partment. deductions from gross
Income for losses in trade can be
made only in connection with that
which occupies and engages The
time, attention and labor Of aDy-
one for the purpose OF livelihood,
profit or improvement; that which
is his personal concern or interest
employment, occupation, but il is
not necessary that it should be his
sole occupation or employment" "
For instance, it is said that II n
grocer has invested ia real estate,
in making his income tax return
any real estate profit must be ad
ded to gross income; but losses from
real esl tate investment must be de
Quoted from gross income
From every part Of the country
bitter complaints have been made
against this ruling, and the question
is IN he taken to the courts FOR
final adjudication. Whether the
rulirg is right or wrong. it is the
uncertainty OF the statute that
reflects upon the intelligence of the
political party responsible for IL.
Nothing but heedlessness could
have PERMITTED it. The tax mayer
bears the burden of the blunder,
il is a maxim in governmental
affairs that every doubt in law
Is resolved In favor OF the govern
ment administrative officers. Er.
rors in the income tax law are too
numerous to mention in detail
Witness the fact that in the first
few weeks Of its operation thousand'
Of applications for refunds were
made. One Of these has just beer
allowed, and II line example o
the laws uncertainty.
The department refunded to one
man who had paid $500 as incom,
tax all but Sl2 of that amount
He had had the help OF a revenu,
officer in making his return, vel
so indefinite WAS the law that fol
fear Of violation he paid the govern.
ment $500 instead OF Sl2.
Examination Of the Departmenl
} decision on the income lax Law
shows a mass of contradictory rul
ings. Over aud over again opin
ions were reversed, because tn,
terms of the law did not admit o
clear Interpretation.
Every day additional evidence Il
found that adds to The long list o.
] legislative blunders committed b,