The watchman and southron. [volume] (Sumter, S.C.) 1881-1930, 1917-06-20
BIG TAX DODGERS.
ATTEMPT TO EVADE PAYMENT
OF TAN ON MUNITIONS UN-
COVERED.
Mahutacturcrs Who are Making Nil.
lions IN Profits Filed False Re.
turns With Government.

washington. June 1S.-Widespread d
at'empts on the part Of munitions
makers to evade the payment of
profits taxes imposed by congress last
september have been reported by in
ternai revenue agents, who have been
working quietly for the past two
months checking up the manufac-
turers' returns.
The extent of the ATTEMPTED
evasion thus far brought to the at
tention of the treasury totals more
than $1o,OoO.OOo. or approximately
40 per cent. of the returns voluntarily
made. Indications are that the fig-
ure will go as high as $4,000, 900 or
$4,000, 900.
Scores Of manufacturers of muni.
tons are said to have attempted TO
defeat the full operation of the law
by making only partial returns O.
their profits. Some of the largest
concerns in the industry failed to
make complete returns of profits, II
is charged.
Under the law. munitions makers
are required to report to the com.
missioner of internal revenue their
profits each year and to pay the gov
ernment tax of IL 1-2 per cent
Virtually all the 600 to 700 manu-.
facturers made their returns, an
ps.rently in conformity with the law
showing profits which netted the gov
eminent approximately $26,5OO, OOt
in taxes.
IT was assumed, apparently, that tn,
bureau would check the returns leis
urely as 1t had been checking the re
turns upon the income tax reports
Commissioner Osborne, however in
stead Of waiting a year or more set a
held force of investigators to work al.
most Immediately after the munition.
returns had been received.
Investigators reported profits largel,
in excess of those reported to the gov
ernment in many instances. Not al
the manufacturers made incorrect re
turns, but the percentage of those who
did is said to have been remarkably
high. One of the methods frequentl,
adopted to bring down the total profits
was to charge off as expenses pro-
portions of the cost of special mum
tions plants.
A number of plants charged off the
entire cost Of such plants deductine
the amount from the net profits. JUS.
.iication Of this was attempted by the
olea that the plants would be worth
less when the war ended and that il
was apparent that the war could not
last much longer.
AS a result Of the Investigations re.
turns to the government have been
revised in many instances and will
be in others. so that the total which
he government will obtain in taxes
will be at least $36,5OO,0OO.
Activity Of the governments agents
became known at plants which were
,bout to be investigated and a NUM-.
Der Of requests were received by the
oureau asking that the returns be sent
pack for revision. One firm which
'eported originally that it had made
10 profit altered it's report upon re-
consideration. while the investigators.
we're at work in other plants and be-
ore it's own had been reached, and
sent the government check for ap-
c.roximately $150,OOO in payment o.!
taxes.
The penalty for making false re
turns is fine or Imprisonment. or both
officials have not yet decided what
course they will take.