The New York herald., 1921-10-14
TAX SLACKERS GIVE
UP S1,OOO,OOO DAILY
$500, 100000 Expected to Re
Collected i'm Current
Fiscal Year.
MANY FRAUDS EXPOSED
Returns Twice Audited by
Large Staff of Revenue
Bureau Experts.
MANY FRAUDS EXPOSED
Special Despatch to THE NEW YosK H1ALp,
New York Herald BuresQ,
XashfugtOu. ID. C.. Oct. ~.

Special Dsspatch to THE NEW YosK HmAIp
wSsSiasson. SsT aass hs's:a D. T.. Sets& oet. H.
Nearly s1,000,000 a day II being
forced from tax dodgers and individuals
taken returns of excess proflts and
| other business taxes. according to rec-
ords Of the Treasury Department
More than ss0O.OOo,oO0 will be col,
lected In this way during the current
fiscal year. according to estimates of
the Internal Revenue Bureau. That es-
innate is regarded as conservative. for
such collections I'm the last twenty
months have totalled nearly $500. 0o0.-
900.
Collection Of back taxes Is the dipio-
matte phrase under which the Govern
ment officials list such collections. A
very large percentage OF the returns on
which back taxes are paid are basod
on deliberate attempts to defraud the
Government, the records show. In some
cases, however, mistakes are made IN
fling returns because Of ignorance on
the part of the taxpayer.
Back taxes under the present revenue
law may be collected any time within
five years. Returns filed this year may
not be proved until 1926. under one In
depreciation or the law.
Collection of back taxes Is proceeding
under complicated system Of double
checks and audits of returns. The task
is tremendous More than 5.500,000 re-
turns were filed by individuals this year.
An additional 100000 returns were flied
by corporations. All returns must be
read and reread by officials and audi
tors Of the Revenue Bureau.
A force of more than 1000 trained
clerks and examiners Is checking the
returns. This force Is scattered through
the district offices in the big cities. A
part of it is at work in Washington. Two
audits are given to each return. sSome
returns are scrutinized several times.
The first audit Is made in the office in
which the return is filed. In some cases
the second audit takes place within q
month in other instances after sew
eral months. In a few cases the delay
has run more than a year. But In the
end the bureau has checked and double
checked every return filed according to
the present system.
Where deliberate fraud was intended
the practice Of the bureau is to mete
out the full penalty, which ranges from
payment of a double tax to a Jail SEN
tence. To obtain a jail sentence the
bureau offlcials. however, must take
their case into court In cases OF sev-
eral large corporations this has been
done. In the case Of one corporation
more than $10,000.000 Of additional
taxes was paid as a result Of criminal
action.
Internal Revenue Commissioner Blair
is waging continual warfare against
alleged Federal income tax experts who
attempt to advise corporations. individu-
ais and firms Illegally in making out
their returns. Mr.. Blair and his assist
ants for months have been investigating
agencies maintained by alleged tax ex.
perts willing to show clients how tc
cvade the law. To assist persons and
concerns In making up their returns the
Internal Revenue Bureau maintains q
force of officials in each district Office
These officials are instructed to give ths
individual the benefit of every reason
able doubt and are not. as some per-
sons believe, assigned there to see thai
the Government gets the best OF ever,
possible Interpretation of the law.
The bureau examiners have innumer>
able ways OF detecting false returns
Although these methods are generally
secret II Is known that one includes AZ
annual examination in each district each
year of all real estate transfers. That
gives a clue to the bureau as to who
made profits through sale of property.
When these profits do not show In the
individual income tax returns the tax
payer is called on to explain.