The Richmond Virginian. (Richmond, Va.) 1910-1920, 1919-02-22
Ruling Of Commissioner
of Internal Revenue
Will Add Millions to
Federal Golfers
Dividends of Domestic
Corporations on Earn
ings Accumulated Since
February %, 1913, Liza
BILE to New Surtaxes.

Washington, Feb. 2l-~A ruling
which will bring many additional
millions into the governments cof-
fers was made today by Commissioner
of Internal Revenue Roper. The rul-
ing is based on the new revenue bill,
now in the hands of Private Score
tary Tumulty, in Boston, awaiting
signature of President Wilson upon
his arrival at that port. 1t holds that
all dividends of domestic corporations
on earnings accumulated since Feb
ruary 28, 1913, as well as those ac-
cumulated during 1918. are liable to
the new surtaxes provided in the
revenue bill
ALLEGATION OF dividends declared
in 1918 to the years in which the
earnings on which they were based
were made is held Illegal by Mr..
Roper. His ruling was made in reply
to a food of kilograms from the high
income area making inquiries as to
the meaning of the new revenue law
on this point Fear was evident in
the kilograms that some such action
as was taken today might be possible
on the part of the government.
MIR. Roper. in his ruling. holds that
only dividends in the form of stock
OF the paying corporation are ex-
cepted. Dividends paid in the form
OF stock in some other corporation or
subsidiary company are not excepted
When the war brought on large
taxes on incomes il became favorite
system with persons who received
large sums in dividends from their
holdings to allocate back to the year
in which 1t was earned the cash divi-
dend on their stock. thereby avoiding
payment of large surtaxes under war
revenue measures. Loopholes In the
former revenue law permitted this
practice Todays ruling on the new
law makes it plain that the rich man
has TO bear his share OF the tax bur-
den and that the larger the income
the greater the tax.
TREASURY ISSUES STATEMENT.
In a carefully worded statement.
which makes clear the exact position
OF the government. the treasury de-
partment tonight says:
Dividends OF domestic corpora
tons received In 1915 by stockhold
ers are subject to the surtax rates for
1918 established by the new revenue
law. II the earnings distributed by
the corporations were accumulated
since February rs. 1919, the new sur
tax rates will apply to all such earn
ings.
The ALLEGATION OF dividends to the
years when earned by the corpora
lion, for the purpose of the applica-
fiOr OF the SurtAS rates W men were
in force during such respective years,
have been eliminated by the new law.
except in cases where the dividends
were in the form of the stock of the
paying corporation.
Comm issioner Roper today an
nounced This decision OF the internal
revenue, bureau as TO whether irdi-
viduai stockholders would be allowed
to use the prior enrtax rates in figur
ing the turtax on dividends received
in 1918 from accommodations of prior
years He sent the following tele-
gram In answer to an inquiry on this
point;
"*Under the 1918 revenue act. divi-
dends other than those paid in the
stock OF the corporation are the in
come for the year which WAS paid
and are taxable at the rates for such
year.
ALLEGATION OF such dividends has
no significance in this connection ex-
cept in asccrtaining whether paid
from profits accumulated before or
after March l. 1918, and in detcrmin-
ing the invested capital of the cor
poration.'