The watchman and southron. [volume] (Sumter, S.C.) 1881-1930, 1922-03-04
Taxable Interest on Government
Obligations.

ness in the 1921 tax forms Will VIZ
tuallv necessitare s,lesswork returns,
on rhe part OF many taxpayers who
have bought On sold goNerhhleut
oblieations in the past year. the
National Bank Of Commerce IN
New York says. The bank in the
March number Of its magazine,
Commerce Monthly, declares that
| the new tax forms Go not explain
I TO such taxpayers how to deter
mine their tax liability, and 1t
! shows. how the labor CT preparing.
their returns may in CERTAIN cases
/ he .rninimiZcd.
Taxpayers who have boushe
and sold government obhganons
during 1921 will find the new TAX
forms quite troublesome, It says.
+; .9rhcse forms require persons who
have bought or. sold such securl-
ties during the year TO at;ach a
schedule showing their holdings by
/ periods. In this respect the new
forms fall far short OF the desired
| simplicity, and even. fail TO make
clear the prescribed method OF de-
tcrmining taxable interest on GOV
crnment obligations.
| The bank points out that the
: elaborate schedule Of varying nold-
! ;ngs of taxable issues Of war ohH-
:, cations required on the 1918 tax
forms proved SO difficult TO admin
ister that the revenue bureau
abandoned it during 1919 and 1920
! and based the computation OF
/ taxes directly on the amount OF
! interest received.
The resulting simplifcation
was hailed as q godsend by thou
sands OF distressed taxpayers. II
SAYS. The reversion in the forms
{ for 1921 TO the schedule OF hold
! ings by periods appears to be due
to the bureaus belief that its inter-
pretation OF the law in the 1919
and 1929 forms was unwarranted,
| although that Interpretation alone
is Enthusiastically practicable.
I ..Moreover--and most unfortu-
/ nately-the instructions on forms
I 1910 and 30 fail to eElighten the
! taxpayer as TO the required meth
j Cd of determining taxable interest
on. government obligations. The
! bureau contents itself with the di-
rec,ion: If you have, bought or SOLD.
during the year, attach statement
! showing holdings by periods Ir-
evitably many taxpayers must seek
expert advice or leave the determi-
nation OF their tax liability in the
t .irst- instance TO the revenue au-
thori1ics.
The bureaus Interpretation OF
the statute does not, however. ne
ccssltate the preparation of 4
| schedule in al cases in which gov
ernment war obligations have been
bought or sold. II the taxpayers
I! holdings We're at no time during
; the taxable year in excess OF the
principal amounts the interest on
, which is exempted, it IS obVIoas;
:: that there is no taxable interest.
! And on the other hand. If the hold
ings were not at any time during
the year less than the exempted
amounts. then the interest recelv-
ed on such exempted amounts
may be deducted from the total re-
ceived. and only the remainder will
be taxable. The bureau has let ii
he known that in such eases il Will
accept i'm lieu OF the detailed
schedule. Of holdings by periods, 4
statement that holdings We're con-
ripuouslv below. or in excess Of, The
exempted amounts as the case may
he: but il has unfortunately nor
made its requirements clear on the
form itself.
Not a few investors found the
determinations OF taxable Liberty
bond interest ON the 1918 forms TOO
troublesome 70 warrant tn riec-no
troublesome TO warrant their con-
tinicd holding of war obligations.
The forms for 1919 and 1920 in
large measure obviated this diff
Guilty. Bur the lack Of simplicity
and driinitencss in the 1921 forms
III lnfS respect VIII 'nHoS taAP"S-
crs. will virtually necessirate guess
work returns in many cases. and
viii tend to Increase dissatisfaction
with the administration Of the in
come tax law IL is 10 be hoped
that in the interests OF Sinpliiica-
lion some modification may be ac-
eomplishcd
Look prosperous ANYWAY, ad
vcrtises Il pressing shop. Yes. the