Evening star., 1923-02-22

Take the case of ONO. Tor tN-
ample. which spent S216,0O0 in en-
forcement of prohibition and collected
S2.600,000 in fines. This item was di-
vided between the state and the
county treasures SO that the COM
munities which did the prosecuting
received about $l,360,00O last year
out of prohibition cases.
There is no way of telling exactly the
sums that have been recovered by the
Treasury in income tax cases. One
case is pending in which boot
Logger made out an income tax re-
turn for $4,000 when he had in reality
an income of 100000. Curiously
enough the Department of Justice in
e-inStanceS has been unable to
get the evidence to convict individuals
guilty of participating in illegal
liquor traffic but has managed to tip
off the Treasury Department so that
investigation could he made whether
fraudulent income tax returns were
made out.
Perjury Prosecutions.
Prosecutions have been instituted
for perjury in making out false in
come tax returns when in reality
there wasn't enough proof available
to get Il conviction under the Vol
stead law. Mrs. Mabel Walker WILLIE
brandt. assistant attorney general.
has direct supervision not only over
the prohibition cases. but the investi
y
two frequently go hand in hand.
Usually the 'boOtleggerS" are afraid
of the criminal features of the income
tax law. They may be able to escape
with fine or light sentence on a
Nolstead law viola ton. but an income
tax fraud is much more serious
matter. Many "bootleggers" fear that
if they deposit their money in the
banks the government will detect the
size of their incomes. Some keep their
cash in safety deposit vaults. but
what they DO not realize is that the
government has many ways of keep
ing track of purchases. Most states
require registration of ownership OF
automobiles. This information is ac-
cesSible to the federal government.
One clue leads to another. A suspect
who returns an income tax statement
showing he is engaged in some small
retail business, for instance. but who
has bought or sold large quantities of
securities or who has engaged in
aarge real estate transactions can
often be caught. as the government
has no difficulty in getting the neces-
sary information from business
houses. because it has the right to in
spect books under a variety of exist
ing statutes.
The "bootlegger" who boards his
cash gets little JOY out of life. Many
a violator of the law who has made
huge profits has put government
agents on the scent without knowing
it simply by eXtravagant purchases in
a city or town where he is well
known. There are many who are es-
Gaping detection. but as the govern
ment departments coordinate their
activities and one bureau helps out
the other the chances of getting at
the incomes of the "bootleggers" will
improve daily.
Must State Business.
Every man must state his business
and sources of income in his income
tax return and swear to it. Many
"bootleggerS' have an OStenSible
business and make regular returns to
the government, but they conceal
their true source of income. There is
no way to detect fraud simply by ex-
amining the income tax return itself.
Suspicion develops as rule out of
some circumstance which starts the
investigator on his trail and one of
the first things he checks up is the
type of business in which the suspect
is engaged.
It's a long and tedious process, but
the government is practicing patience
and getting results.
Yet if the amount expended to en-
force prohibition is offset by the total
of fines imposed and even if the gov
ernment does recover good bit of
money from ''bootleggers' through the
still remains that on the liquor ac-
tually bought and sold through Illicit
channels no internal revenue taxes
are collected and the $500,000,000 loss
in taxes has not been wiped out by
any taxes on soft drinks.
Prohibition might have had hard
time il the European war had not
come and gotten the American people
used to paying three and four bill
lion dollars annually in taxes. In
deed, the income tax laws came op-
portunely for the prohibitionist. An
item of $500,000,000 can be swallowed
up in the budget by manipulation
of other items and a change in tax
rates. And when the present system
OF taxation on specific items gets too
burdensome there is always the sales
tax idea whereby the experiment in
taxation can be continued until some
other substitute is offered.
Revenue Loss, Factor.
To the outcry that the drink bill
of the nation has not decreased, the
prohibitionists point to the increases
in saving bank deposits and the large
volume of transactions in the retail
stores of the nation. But to the COM
which used to be collected on wines
whiskies, beer and other alcoholic
beverages is not now forthcoming
there is no answer 1t is lost. And
tnefeln lies one OF the factors which
ultimately may have good deal to
do with the movement for legalizing
the sale of a beverage which is not
intoxicating. but which contains more
than the 1 y per cent of alcohol speci-
fed by the Volstead law as the upper
limit
Practically all the suggestions for
modification which have been intro
duced in Congress in the last two
years have had coupled with them
some plan for raising revenue The
idea that the soldier bonus could be
paid by a tax on some light beverage
has many more friends in Washing
ton than might appear on the sur