Evening star., 1920-03-04
GOVERNMENT HAS
f. EYE ON THOSE WHO
EvADE INCOME TAX
Large Force Is Kept Busy
Checking Up-DifficuIt to
Escape Payment.
BY DAVID LAWRENCE.

BY DAVID LAWRENCE.
~ n,s h,' Is The first Of series of three articles
| come tax return is correct
People have often wondered whether
the United States government would
ever nave the time or the staff to ex-
| anime the millions Of income tax
| Sheets which have been filed in the
last Two years or will be filed in the
| future. Who does the checking up?
ana now carefully is it done? What
nappens II you make an honest mis-
.ake! what happens II the govern
| ment catches tax evader?
inese questions no doubt are being
| asked everywhere. as the people of
me United states prepare their in
come tax returns, which must be in
J the hands of collectors of internal
I revenue by March Is. 1nasmuch as
! every unmarried man in the United
states who earns $50 week and
every married man or woman or indi-
Vidual who is the head of family
| earning $40 week must file a state
meht or income regardless of whether
| mere Is any tax due. plenty of trou-
pie ana embarrassment can be avoid
ed by wage earners. merchants. farm
ers. professional men, landlords, bust
ness partners and corporations by
knowing in advance Just what Uncle
Sam has on you"
In the first place. every factory.
store. wholesale or retail business-in
| fact-every employer must make out
list OF his employees and the wages
! or salaries they get, provided the
| sum in each case is above SIS
| a week. That means the United States
government gathers together separate
sheets OF paper on which Information
IL given concerning everybody's in
come above SIS. These statements are
carefully filed and thousands Of gov
ernment employees are at work daily
looking to see whether John Smith,
whose employer sent in a statement
saying the employe had received
more than SIS week throughout the
preceding year. actually filed return
of his own to the government and
paid the taxes due.
But, you will say, the employer
need not file a return for his en-
ployes. II he doesn't. he will have to
pay taxes himself for that sum of
money. because when the income tax
experts look over his books-and
they can do SO at any time-they will
regard the amount OF money elimi-
mated by him as so much profits. And
employers wouldn't like that. So the
employer is a check on the employe
cerned
But it goes farther than that. If
you received more than SIS a week
or $500 a year from any business
transaction, whether from the sale
Of land or securities or property Of
any kind. or any class of services.
from teaching nights to working on
the side after business hours. the man
who paid you more than $500 must
tell the government about 1T. And a
staff of experts works all the time
m a nf yvh
file returns. Some day a representa-
tive of the government will call on
a few hundred thousands of our peo-
pie and hand them a tax return al
ready made out, which they neglected
to do themselves, only the taxes will
be much larger because there will be
a penalty for non-payment of taxes
long overdue.
work Of Special Division.
There is a special division OF the
income tax bureau which does moth
| ing else but think up penalties on
persons who don't file the correct
kind Of return. OF course, allowance
! is made for error and for reasonable
excuses in case of delayed returns.
People who are sick or absent from
| the country and can make sworn
statements TO that effect which are
I convincing to the collectors of inter-
nal revenue in their respective dis
] y.
| But the government has staff of
| experts who can sometimes tell at a
glance whether case looks suspi-
| cious, and the return sheet Is turned
over to special investigators. who
make a careful examination Of the
case in question.
The governments aim Is to get cor
rect tax returns. If you have paid
| more than you should the govern
ment will call your attention to IT
| just as quickly as if you have paid
| too little. The Sc :retary OF the Treas
ury and the commissioner of internal
I revenue are authorized to accept com
promise settlements. Where there is
plajnlv no intention to defraud the
| government. and where the mistake
| is simply one of computation. com
promises are daily being accepted.
| Hundreds Of millions of dollars are
| collected in that way. And the i'm
| portance of it is this: So long as the
( government doesn't get all the money
| it has estimated would be given to II
| by taxpayers. just so long must take:
| be kept at high levels in order to pay
his taxes, therefore, imposes burder
on his neighbor. 1t prolongs both thu
! period Of taxation and the era Of high
cost of living.
| Make Intensive study.
| Fully $4,000 people are employed b.
the United States government tc
| check up income tax returns. Three
thousand are in Washington and tive
thousand in the field. OF the 1900
| others, the majority are engaged
/ throughout the year in the task o
getting information about taxpayers
II is an intensive study Of each geo
| graphical unit of population in tn
| United States by the most elaborate
| statistical system ever devised-evel
1 IN,
| census.
1 have just completed a first-han'
study Of the income tax machinery
Really, taxdodgers have very little
| chance.
! Income tax inspectors have access t.
! state and county records, where bust
ness transactions or transfers of al
kinds are filed. They have available
! If they wish. all brokerage accounts
They can tell by investigation, ant
| they are doing it all the time, jus
J how much money a man made on tn
| stock market and whether he CAV
| the government the proper share.
The process is not merely to investi
c,,,o aach man That wp,,1d toLa N.