The Brattleboro daily reformer. (Brattleboro, Vt.) 1913-1955, 1920-03-06
By DAVID LAWRENCE.


!.
This is the third and last of series
of articles telling what vast sums of
money the government had recovered
from persons who in past years didn I
pay enough income taxcs)
WASHINGTON, March Gully
two billion of dollars that the congress
of the United States ddn t estimate
could be obtained from the axpaying1
public may be recovered III the next
Is months from individuals and corp
orations who since 1917 have failed TO
pay the correct amounts of their taxes.
When it is considered that congress ex-
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
make 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,
| it is estimated file income tax .,turfs
| annually That means about 10000
| 0G0 returns for 1917, 1918 and 1919.
1 But the government has way of sift-
ing them so that the big fellows are
examined first. Persons with small in
comes and relatively small taxes can t
be sure for another year or so that
| their 1917 tax returns were 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 cvade their taxes
who need worry And the experience
of one big company within the last
| fortnight tells story of how far
reaching and retroactive is the effect
of the income tax on modern business
The government investigators discov-
cred that the 1917 return of big corp
Grafton was improperly returned, in
fact something like 25,000.000 taxes
due the government were not included
i The government had the goods or
the corporation and the latter paid tbs
stun without protest. But corporation,
don't usually have large sums in bank
available for emergencies like this The
government demanded within 10 day,
Y L
! firm in question went to its bank The
bank WASH t III a position to make the
| loan but stretched a point Yet the
bank wanted frst to be assured that
the tax return of the same concern
| for 1918 was correct and that the said
! firm wouldn't be in hot water over it-
! other income tax returns later on 81
| the treasury department co-operated tC
/ the extent of examining at once the
Fl91S return. The total amount of taxes
for 1917 and 1918 was estimated and
a check for $l0,O00,000 was handed
over in part payment.
But there have been some tragic
cases in which the firms have in thu
meantime changed hands. the money
has been spent or the dividends dis
tributed People who buy ont bust
nesSes need to be careful nowadav,
that the income tax returns of the pres
ent owners are absolutely sound ana il
would not be surprising if modern bust
ness made the question of past incom,
taxes q vital factor in contracts Of sal,
a. an insurance against future liability
Banks viii some day maintain bureaus
III their credit departments to investi
gate the tax status of their clients
The treasury department has a gooC
deal of discretion about accepting vol
untary payments on taxes not origi
nally returned. But that is true as ;
{ rule of cases in which there have beer
technical errors. cases in which subordi
mates have plainly erred and where col
. fusion with principals could not bs
proved. Even in these cases. the gov
eminent collects not merely the take
but the interest that the government
might have had if the money were il
its vaults during the period Of the dc
] linquencv.
Of course, there is plenty Of room
for fraud even among employees Of tn
government. But Il special division o
government agents is busy checking II,
on personnel And in one conspicuou
instance recently. a firm which offere,
bride to government agent discov
cred 30 minutes later that the latte
had turned in evidence of the attempt
ed bribery to the United States at
torney and prosecutions ensued.
The staff Of tho government is q
the whole efficient 1t is composed o
s men who are ambitious to make rec
ord for themselves and make the mos
of the experience they get in the gov
! eminent service SO that they can pur
sue successfully their own vocations q
! law. accounting. investigation, ETC.. i
{ later life Statisticians galore are o
the income tax rolls They are con