The Richmond Virginian. (Richmond, Va.) 1910-1920, 1917-11-21
CORPORATIONS TOTO
Of TAX IATR|CACIES
Collector Edwards Explains Super
profits and Other Imposts
BY New Law.
ALL MUST MAKE REPORT
Names OF Those Receiving Dividends
Also TO BE Returned 70 Revenue
Bureau.

New York. Nov. 20.--william H
Edwards. collector of internal revenue
for the downtown district and owner
of the biggest tax collecting Job the
city ever saw, has found 1t necessary
to be sort OF tax pedagogue. There
Is nothing in the world that tangles
up the ordinary human brain more
than contemplating the intricacies OF
the income tax, especially now that
there are supertaxes and taxes on
taxes and goodness knows wat all.
The collector takes his typewriter In
hand ever SO often to help clear away
tax cobwebs. Not long ago he ex-
planned patiently to distressed indi-
viduAls how they could square them
selves with Uncle Sam. He has at
tempted the same on behalf of cor
porations.
This corporation income tax differs
In lot of ways from the individual
corporation tax. as Schoolmaster Big
Bill Edwards points out. All corpora
tions with the exception of those spe-
officially exempt. are required to Ale
returns on blanks prescribed by the
government regardless of the fact
whether the return shows a net in
come or not. That Is Lesson / that
the collector drives home. Make your
return, he says to corporations, even
IL you are losing money.
Series OF Taxes Imposed.
The tax under the law OF 1916 is 2
per cent on net income, but the war
income tax added a per cent ex-
action to that. There is also a pi-
tai stock tax and a war excess profits
tax imposed under the federal stat
utes: and moreover. In addition to all
other taxes. there will be levied a
tax of 10 per cent on undistributed
income, beginning with the year 1917,
received by corporations during each
year and remaining undistributed six
months after the end OF each calen-
dar or fiscal year.
The collector offers the hint, also,
that the law relating TO general de
auctions Is changed with respect to
the deduction on account of interest.
Under the act OF September s, 1916.
corporations invariably charged of
the full amount OF the interest paid
within the year. whereas the amount
allowed by law was that paid within
the year on an amount OF bonded or
other Indebtedness not In excess Of the
paid up capital stock outstanding at
the close OF the year. plus one-hslf
OF the interest bearing Indebtedness
also then outstanding
Provisions OF New Law.
The new law provides; That in the
case Of Indebtedness wholly secured
by property collateral, tangihis or in
tangible, the subject OF sale or by
pothecation In the ordinary business
Of such corporation. Joint stock COM
pany or association as dealer only
In the property constituting such col
lateral or in loantng the funds there's
by procured. the total interest paid
by such corporation, joint stock COM
pany or association within the year
or any such indebtedness may be de-
Quoted a. a part of lis expense of
doing business. but interest on such
indebtedness shall only be deductible
on an amount OF such Indebtedness
not In excess OF the actual value OF
such property collateral"
Interest on indebtedness. incurred
In tho purchase of Obligations or Sc
curttiss. the interest OF which is ex-
emptsd from income tax. may not
be deducted in determining net in
come. For tho purpose of the as
sessnent- OF the additional 4 per cent
tax she net incomes shall be credtteA
with the amount received as tndivid
ual upon the stock or from the net
earnings of any other corporation
which is taxable upon Its net income
for the additional tax. Information
at the source has been substituted FOR
tax withheld at the source. and cor
porations and others that have with
held tax since January /, 1917, shall
release the same to those from whom
the tax has been withheld. with the
exception OF that withheld on interest
paid on tax free bonds and on income
paid to nonresident alien individuals
and corporations.
Dividend Recipients Reported.
Every corporation, when required
by the commissioner of internal reve-
nue.. must render a correct return OF
its payments of dividends. including
names and addresses of stock holder
The same requirement in made OF
brokers as regards their customers
Corporations desiring to Ale returns
on a fiscal year basis for the year 1917
will DO required To notify the coliec-
tor thirty days prior to March /, 1918,
Every corporation in this district, the
Second. Will receive by mail during
the nrst week in January blanks In
duplicate. Corporations that have
filed returns on fiscal year basis dur
ing 1917 are subject to the war IN
come tax and the war profits tax. Will
have until January /. 1918. for the
fling of returns for the additional
per cent and the war profits tax.
The penalty imposed by law for
failure to comply with any OF the re-
quiremen will be SO per cont ad-
ditionai tax, and specific penalties are
provided OF from $40 to $1,000.