The news scimitar. (Memphis, Tenn.) 1907-1926, 1920-03-06

WASHINGTON. March 6.--Fully two
billions of dallarS that the congress or
the United states did not estimate
could be obtained from the tax paying
public may be recovered in the next IL
months from individuals and corpora
lions who since 1917 have failed to
pay the correct amounts of their taxes.
When it is considered that congress eN-
pected to raise six billions of dollars
from all kinds of taxes annually, two
billions is tidy sum saved.
Its collection is no easy matter and
may take three years to gather to-
gether. But if it is recovered, the pres
ent generation can expect its tax bur-
dens to be made lighter by just that
much. Nobody can be absolutely GER
tain that the government has disposed
Of his income tax return of 1917 unless
he is confident it has been honestly
made out. -Four millions of persons, 1t
is estimated, file income tax returns
annually. That means about 10000 600
returns for 1917. 1918 and 1919. But the
government has way of sitting them
so that the big fellows are examined
first. Persons with small incomes and
relatively small taxes cant be sure tor
another year or so that their 1917 tax
returns We're audited and filed. But If
they made a return that is on its face
honestly intentioned, they need not
worry. It's the big corporations and
concerns and persons who have tried
to eVade their taxes who need worry
And the experience of one big company
within the last fortnight tells a story
of how preaching and retroactive is
the effect of the income tax on modern
business,
The government Investigators dscov-
er9d that the 1917 return of a big cor
poration was improperly returned, ir
fact something like $25000,000 taxes
due the government were not included
The government had the goods or
the corporation and the latter paid the
sum without protest. But corporations
don't usually have. large sums in bank
available for emergencies like this. The
government demanded within 10 days a
part payment of $10,000,000. The firm
in question went to it's bank. The banl
wasn't in a position to make the loar
but stretched a point Yet the banl
wanted first to be assured that the
tax return of the same concern for 1915
was correct and that said firm Wouldn'
be in hot water over it's other income
tax returns later on. So the treasury
department co-operated to the exten
OF examining at once the 1918 return
The total amount of taxes for 1917 ant
1918 was estimated and a check fol
SlO,OOO,OO was handed over in part pay
ment.
But there have been some tragic case!
in which the firms have in the mean
time changed hands, the money ha
been spent or the dividends distrib
uted. People who buy out businesse,
need to be careful nowadays that tn,
income tax returns of the present own
ers are absolutely sound and it woult
not be surprising if modern business
made the question of past income take
vital factor in contracts of sale a.
an insurance against future liability
Banks will some day maintain bureau
in their credit departments to investi
gate the tax status of their clients.
The treasury department has a goot
deal Of discretion about accepting vol
untary payments on taxes not orig
irally returned. But that is true a
a rule of cases in which there hav
been technical errors, cases in whicl
subordinates have plainly erred an,
where collusion with principals coul,
not be proved Even In these aSes