New-York tribune., 1920-12-19

. OF the forms. about which there has
been loud complaint, are due to the
numerous relief provisions and the ne
cessity for providing on the form
blanks opportunity for every taxpayer
to take advantage Of any of them to
which he is entitled.
These relief provisions fall naturally
irto two classes those authorizing spe-
oifc deductions or credits under certain
conditions and those of an administra-
tive nature.
Amortization of Cost
in the first class are the deductions
for amortization of cost of war plant
o. facilities; for inventory losses which
i was anticipated would occur in 1919;
for net losses sustained in 1919; for
limitation of the tax on profits made
through the sale of mines, oil and gas
wells by the discoverer; credits for
foreign income and profits taxes paid
against similar taxes due the United
States. and exemption of corporations
engaged IN the mining of gold from
the profits taxes on income from that
source.
Falling in the second class are the
provisions authorizing the crediting of
overpayments in previous years against
any income or profits taxes due the
Urited States; limiting the collection
Of additional taxes to a period within
five Years after they were originally
due, by forbidding suits after the eX
piration OF five years from the due date
of the return, except in case of fraud,
the previous rule. founded on the prin
ople that the statute of limitations
does not run against the government,
being that taxes could be collected at
any time by suit, even though the
period during which assessment might
be made had passed. the limitation of
the profits tax TO certain percentages
designed to benefit the snail corpora
ton; and most important of all per-
HIPS, the authority to determine the
amount of the profits tax under certain
conditions by comparison with repre-
sentative concerns. and the creation of
n advisory tax board 10 whom the
taxpayes might appeal for a reversal
Of decisions which he believed to be
erroneous CT Unjust.
More Important Provisions
o. The more important provisions of
the first class, such as amortization
end inventory losses, | will only say
tlat two at least which at the time
The act was passed were expected to
afford substantial relief in many cases
have oeen practically imperative be-
cause the conditions they were de-
signed 10 relieve did not materialize,
and since they were limited to the year
1919 they are not available for relief
IN 1920, when those conditions have
arisen in q number Of important in
dustries. refer TO the provisions for
throwing back or forward as deduc-
ton allowable in the previous or sue
cecllng year if necessary net losses
tr,m operations in 1919 and inventory
losses sustained in 1919 through
ahrinkage during that year in the value
Of closing inventories Of 1918
The anticipated shrinkage in values
and decline in profits appear to have
taken place in 1920 instead of 1919,
and consequently the claims for net
loss have been lew in number, and the
bureaus Interpretation Of the inven-
tory loss provision. holding that the
inventory must be considered as a
whole. practically eliminated that from
consideration, as there were few in
stances where it could be shown that
there had been in 1919 substantial
loss in dispcsing Of the closing inven-
tory Of 1913 taken as a whole.
Perhaps there was no one thing
which so exasperated the taxpayer and
grated on his sense Of fairness and
justice as that practice of the bureau
nccessltated under former laws, re-
curing him 70 pay at once the whole
amount Of am additional tax found
"ae for any given year upon the audit
Of has books. although the same audit
might disclose and the bureau concede
tnat for another year he had overpaid
ms taxes, for which overpayment he
= ! ,1,l,O 81
usually resulting in a wait of year
or more for his money.
Filing of Credit Claim
This was cured in the revenue act Of
lsl8. by authorizing the fling Of a
claim for credit Of any overpayment
cf tax against any TAX due from him,
resulting IN his paying in cash only
The net balance against him. There is
some mlsapprehension as 10 the effect
o. the acceptance Of such claim bv
ne collector, 50 Il may be well to state
mat tne tInE Of a claim FOR credit or
lts acceptance by the collector does NOT
IN itseh extlnguish any liability. 1t
mercy has the eject Of a claim for
%oa'efneni. Terving by forbcarance Of
e'Aee'or 10 delay payment until
'ea on oF The commissioner. II al
.v"eo. It ~ course wiped out an eoual
amount of liability; If disallowed. col
Fc-icn Is made Of the amount in sus-
1e1e aifh interest
Another important administrative
'"e' provision IS that which in cf
ffc' places Ehe taxpayer and the gov
eminent or an equal footing with &C.
'p''s - the bar o. limitations. bv
P''fidin@ that 10 assessment shall he
lt~ae o. 4plt instituted bv the govern
'f'hl after five Years from the duc
""if oi tne return, except In fraud
case and trat no CAIN fo~ rerrod
s7all Dr. considered unirss made ritS'
70 the same period
Ruling en- Statute
- VIII be noted that time bep;ns
- run from the same date avainet
DOM tne taxpayer and the government
@nd an a#1~ard citation rniph. arixe
Under literal Interpretation Of thit
statute standing alone, since II the
T7F"fnmeft waits until the laxt few
nafs of t0c period before making as-
RI +ment, lae taxpayers h.c rears
ma faye elapsed before ht il even
ea'led on for payment The pogsjb,l,
''y nas been *Terted bY the bureaus
RI isJ ruling taat fne atatutD var
ipt inler1er ~ abfvYato fhe fa4uaver'.
ffYHt Dndrf flr reV5sDa s'atntD4 to
""tr eia4m for refund ~ INV fio,o
"iteiH tNp years after payment.
ne ds,erm nation - tho proftx tay
~ frnpafison Nith reprcRontatlyn