The Washington herald. [volume] (Washington, D.C.) 1906-1939, 1920-01-14
Income Tax Facts
Worth Knowing
No. 10

No. 10
Tax returns are examined by the
Bureau Of Internal Revenue as soon as
Practicable after they are filed. lf
the amount found due proves to be
greater or less than shown in the re-
turn. the installments will be recon-
puted. If IT is shown that the amount
paid is in excess, such excess will be
credited against the subsequent in
stallments. whereas il the difference is
in favor of the government, the bal
ance Is to be paid upon notice and
demand by the collector.
When a return Is made In, good faith
and an understatement of the amount
is not due to any fault Of the tax
Tayer no penalty accrues. II the
understatement is due to negligence
but without intent to defraud, there
Is added per cent of-the total amount
or the deficiency, plus interest at the
late OF l per cent a month from the
time the tax was due. II the under
statement is false with intent to evade
the tax. the penalty is a fine OF not
mere than $4,000 or one years i'm
I.risonment, or both together with the
cost of prosecution with an added
assessment Of 50 per cent of the
amount of>the deficiency
Heavy Penalties Provided.
For failing to make return on
time the penalty is a fine of not more
than 1900 and an additional assess
ment Of % per cent Of the amount
due. "Willful refusal" to make a re-
turn and pay the tax on time Is
punishable by a fine Of not more than
$4,000. or one years Imprisonment, or
both. together with the cost Of
prosecution. If a collector of internal
revenue suspects that an amount of
income Is understated in a return. he
may. on his own initiative. take up
the matter with the taxpayer and, on
becoming convinced that the amount
was understated. may increase the
tax, subject to the right of the tax
payer to appeal to the Commissioner
of Internal Revenue. The commits
sioner. without the intervention of COL
lectors. may exercise original juris-
diction in cases of understatement.
The Bureau of Internal Revenue
has at its command innumerable ay-
enues Of information for checking up
delinquents. Under the "informa-
ton at the source" provision of the
act reports of payments to others
OF $1,000 or more during the year
1919 must be made by all individuals
trustees, guardians and other fdu-
Charles. and by partnerships and cor
porations.
A separate return OF each employee
whose salary for 1919 was 1900 or
more is required OF employers.
The bill provides that whenever
necessary the names and addresses
Of the recipient of the income shall
be furnished by the person, corpora
tion. or partnership paXing It. The
returns must show. whenever possi-
Bile, whether the recipient is single.
married, or the head Of a family.
Regardless of the amount, infer
nation returns may be required in the
case of payments of interest upon
bonds and mortgages. deeds of trust,
or other obligations of a corporation,
Infcrmation Returns.
Returns of information mist be
filed with the Commissioner of In
ternaI Revenue at Washington. Col
lectors OF internal revenue are not
authorized to receive such returns,
Forms on which the returns must be
made may be obtained fowsver; from
the Offices Of collectors.
Approximately 100000 returns of in
formation were received by the bureau
for the year 1918. In addition the BID
reau received 100000 ownership GER
tificates revealing the payment of
bond interest. dividends, and foreign
items of income. Informa tion returns,
this year, at last. will be placed in
the haslds OF deputy collectors of In
ternal revenue for use in rounding up
Ideiinquehts.
Revenue agents will visit every
county in the United States to as
sist taxpayers In making out their
income tax forms. for 1919. The
date of their arrival and the Ioca-
ton Of. their offices will be an
nouncedr through the press, or may
be obtained on inquiry at, Offices
OF collectors of internal revenue.
postti,ees or banks. The services
of these experts Is offered without
cost to the taxpayer.~ Failure 0
take advantage of them. however.
does not relieve the taxpayer from
his obligations Under the law. In
the payment of an income tax, the
taxpayer Is required to seek the
government. not the government
the taxpayer.