Perth Amboy evening news., 1920-04-26
PROBE RETURNS
of INCOME TAX
Government to Learn if Every
one Made Statement and if
it Was Correctly Made Out
BY w. S. MANN

ID W. =. MR.NN
Copyright, 1920, by The Washington
starr
WASHINGTON, April 26:-Proft-
ing by information gained during the
six months roundup of income tax
d~elinquents that ended last February,
1900 deputy collectors of internal
revenue have begun another investi-
cation to discover every person or
business firm that failed TO make a
return for the ear 1919, or mad a
false report.
A fruitful source of information on
this point are reports of 1000, 600
payments of $1,000 or more made
during the year. This includes pay
rolls. contracts, bonuses and a great
variety of disbursements which
should be figured in the income tax
returns of those receiving them. In
addition there are available 100000
ownership certificates showing pay
ments of interest on bonds, dividends
and items of foreign income received
during the last calendar year.
These three items-past perform
ances, income from service n in
come from investments-wnl give
the army of deputies the greater part
of the information they want, but
another string to their bow Is The list
containing the name and address or
every person who filed a return for
1919 under the income tax law. n
copy of the list will be posted for in
spection in the office of every collec-
tor of internal revenue, every branch
collection office, n in every post
office. They will not Indicate the
amount of the return made by each
person, put il will enable every citi-
zen TO inform himself as to whether
his neighbor has made a return for
the yea
These lists will give the taxpayer
an opportunity to help ferret out the
tax dodger, and complaints that one
person or another has failed to re-
port an income as required by law
will be Investigated.
Although the work of smoking out
tax delinquents requires time and CT
fort the bureau of internal revenue
has found it most profitable, for col
lection of $19,051,2 3S in delinquent
taxes and penalties has followed the
six months work of the first investi-
CATION This included only payments
of 1918 and previous years. A state
ment from the office of William NJ.
Williams, the new commissioner or
internal revenue, says that the drive
new in progress Is to be "the most
intensive and the most effective in
the bureaus history"
Delinquents for 1918 and previous
wears reached q total of 295,977, the
majority of whom had filed erron-
eoas returns. OF the remainder
1885 filed no return at all, and
that class of dellnquents yielded
more thar $500, 600 in back taxes
and penalties. To this might be add
ed $500, 0es collected from a list of
44,261 persons who failed to pay the
full amount of the tax due on in
comes of $1,000 per year or less. n
district alone furnished almost 10000
false returns on small incomes, ana
when these had been brought before
the collector the government was
richer by $500. 000.
The biggest group of delinquents
included individuals and corporations
who had not filed proper returns or
miscellaneous items such as luxury
taxes taxes on admissions to amuse.
ments, on soft drinks, ETC., TINS totai
being 164,591. Back X and pen
alties paid by this group fell only u
few dollars short of $4,000, OO0.
A peculiar feature of the investi-
cation in and around New York CITY
was the discovery of 10000 delln-
uuent nonresident aliens who were
returning to their native lands. Ihey
were not allowed to proceed untll
they had paid a total of $2,5Oo,oOo
due this government. No alien, resi-
dent or nonresident, is allowed 10
leave the country until he a met
all his income tax obligations up TO
The month preceding that of his de-
p~a~ture. If he fails to a the tax
in the district where he resides, he
finds himself In difficulty with the
collector at the port ef d~ebarkatlon;
and he is not allowed to depart untf
he has the proper certihcate from
The collector in n district or the
other.
Though taxes on personal Incomes
have been levied in this country I'M
der the present constitutional au-
tbority since 1914. 1t is only since the
entry of the United States into the
war that they "a been given al
most universal application, n ohi-
Gals of the internal revenue bureau
believe that some 100000 persons
having learned within the last few
months that they could not get
away" with false returns or no re-
turns at all. the next delinquent list
will not be 50 large.
The present system of federa! m
come taxes dates back to the act OF
August 5, 1909, which authorized an
excise tax in corporations measured
nv incomes. The income basis OF tax
alton was extended by the sixteenth
to the constitution. ratl-
fed in 1913, which delegated to CON
yress the power to levy and collect
taxes on incomes from Whatever
source derived. without regard to any
census or enumeration. IN
corporated in the revenue act OF 1919
both the corporate tax provisions OF
the 1908 statue and provisions Tor
ncrsonal income taxes which FIRST pc
came fully effective in 1914. Since
that time both sources OF revenue