The daily banner. (Cambridge, Md.) 1897-2008, 1921-01-11

the following article, WHICH Is
the first one of a series Of articles
issued by the Bureau of Internal
Revenue, will readily make it plain
to all persons whether or not they
are required to file an Income Tax
Report for the year 1920. Endeavor
has been made to point out clearly
and cincisely the principal points OF
the income tax law.
1921 Income Tax Facts You Should
Know
What was your income for 1920?
An answer to this question is re-
Quired by the Government of every
single person oman, woman, OF
child) in the United States whose
net income for last year was $1,000
or more, and of every married per-
son whose net income was $4,000 or
more. Heavy penalties are provided
by the revenue act for those who fail
or "willfully refuse" to comply
The period for filing returns for
the calendar year 1920 is from Jan.
l to March Is, 1921. The Bureau
of Internal Revenue estimates that
within this period there will be filed
1000 600 individual income tax re-
turns. It is certain percentage
of these returns will be incorrect
not because of dishonest intent on
the part of the taxpayer but because
of error in making out the forms
Erroneous Interpretation of the law
and regulations governing the col
lection Of the income tax and care
lessness cause numerous mistakes
an dresult in the initial assessment
and collection of considerably great
er or lesser amounts than are actu'
ally due. Frequently these mis-
takes result in overpayment. return
of which is made upon a claim fol
refund. Where upon verificatior
and audit, underpayments are shown
taxpayers as rule are prepared
b. -, to amend LueIr returns and
pay the additional tax due. In
either event, there is trouble fol
both the taxpayer and the Govern
ment.
Bureau Aids Taxpayers
To the end that this year such
errors may be reduced to a minimum
the Bureau of Internal Revenue is
making special effort TO inform tax
payers of their rights aud duties I'M.
dsFff1s seet rs iEs+ef 5f
rulings and regulations or tht
Treasury Department.
There has been prepared with the
official approval of the bureau a
series of short articles. of Rhich this
Is the first, telling the taxpayer how
to make out his 1920 return, wher
and where to file it, and what to dc
in the event he meets with unusual
difficulties. Errors most frequently
noted in the audit of previous re
turns have been divided into classes
each of which will be treated in ar
Informative way. While there is nj
actual change in the law, there have
been rulings and decisions bearing
on its various sections. all OF winch
are of benefit to the taxpayer in the
making of correct return.
1920 Exemptions
The exemptions for 1920 are
$1,000 for single persons, $4,000 lol
married persons and heads Of fam
lilies, plus 5000 for each dependen
if under l 8 years of age or incapable
of self-support. The normal rate Il
per cent on the first 81 600 Of ne
income above the exemption and
per cent on the remaining net in
come. This aplies to every citizel
and resident of the United States
Alien nonresidents receiving incom
from sources within the Unlte'
States are taxed to the full pc
c9nt in net income from such source
The surtax rates range from pc