The New York herald., 1922-12-17
Beating the $40 Tax by
Being Head of Family

That head of the family proposition
IL probably our worst bugbear. There
isn't any way OF checking up except
by sending out thousands of investiga-
tors. We never had any appropriation
to employ enough Investigators even
for the work that will pay well. The
taxpayer gets a $1,000 exemption he
is not entitled to. n reduction in his
tax of SO. 1t would probably cost us
much more than SO TO check up: that
is, if we attempted to check all the
heads of families for every Improperly
claimed exemption discovered il would
probably cost us more than the addi-
tional SO we would collect, and the
taxpayers are trading on that very
fact.
II had to interview young lady
tho other day whose return showed
that she was the head of a family
Her 1919 return showed that she had
dependent on her father apd sister;
her 1920 return showed that she had
two aunts and two uncles. and her 1921
return showed that she had three sis
ters. | asked her IL she could explain
II and she said no, she could not ex-
plain II, her attorneys had done it,
She said the first time when she first
made out an income tax return her at
torney had said: Now you have some
body that you support in some way
haven't You. so that you can claim TO
be the head of a family and she said
that when her father and sister were
out of work she helped them out. so
the attorneys had put her down as the
head OF family with father and sister
dependent. The next year she hadn't
seen her income tax return at all
The attorneys made it out for her, they
signed il for her. In her name not as
agents; they verified it for her in New
York county when she was in Phila-
dclphia. and they sent il in for her
with their check. She said that she
couldn't explain any OF the items on il
because she had never seen il. She
admitted that she only had one aunt
and no uncles. so that the one aunt
and two uncles were a matter oc imag-
ination on the part OF the attorney
who prepared the return, but she
seemed to think that was quite all
right. She said They knew had some
dependents and put down what they
thought reasonable. She had only ono
sister, but the next year they put
three sisters on the return.
II had long argument one day with
a young man who estimated that he
had $50 in luxury tax and he wanted
to deduct that $50 not from his gross
income. but from his tax. He had a
g. nI In
the luxury taxes amounted to $50 and
wiped out the income tax.
You'd be surprised how many Sc
curities are playing Dr. Jekyll and MIR.
Hyde. Securities which for the pur-
pose OF the inheritance tax woro worth
nothing In the fall OF 1918. when II
comes TO the income tax were worth
par on January 1, 1919. and consti-
tuted a heavy loss TO the holder when
he sold them during 1919 or 1920 for
small figure.
"As YOU know, the New York state
income tax law, like the Federal.
allows the deduction OF bad debts 4
good many taxpayers there are who
seem TO make a practice OF lending
money 10 people who have already
demonstrated their worthlessness. IN
1919 a lends money TO y. and being
satisfied that it will never be repaid,
he charges 1t off as bad debt But
he lends him some more in 1920 and
charges that off as a bad debt, ara
then he lends him some more in 1921
Usually y is related to = in some way
by blood or marriage.
"T'here are n lot of men who used to
be in the habit OF supporting their
mothers or their unmarried sisters,
giving them an allowance. but since
the income tax law came along they
don't give them an allowance; they
lend them some money to live on. and
when It is not paid back they write It
off as bed debts and take a deduction
for It on their income tax returns.
"Then there are the determinations
Oh the part Of the mails at the Post
Office. IL you believed the taxpayers
Tow absolutely negligent they are in
og the Tax Commissions let
to- NV careful they arc IN de-
lvct Attorney Generals let.