The Monmouth inquirer. [volume] (Freehold, N.J.) 1865-1933, 1924-09-11
MUST FIGHT TO
Get REFUNDS
Those on Whose Incomes Par
Was Paid at Source Must
Push Claims.
U. S. BOOKKEEPING BLAMED
Millions Involved, With Records Faii-
ing to Show Credits to Players
Treasury Estimate Is s16,14os
ooo-Mitchel Upheld.

OQS"fUtLCHSAi ORi~s
New York.-Thousands OF taxpay-
ers on whose income part of the tax
was paid at the source will have to
file claims against the government,
it was learned the other day, to OBJ
tain credit or refund of the full rs
per cent reduction in taxes to which
they are entitled.
1t was admitted at the office of the
Collector of Internal Revenue that tina
only records kept in his Office of
amounts owed by taxpayers were
those OF the total taxes due after de-
ductions- had been made for taxes
pand at the source or for income and
profits taxes paid to foreign countries
or possessions OF the United States.
Thus, although it has been held
that the 25 per cent reduction was
applicable to the tax as computed
before these deductions had been
made, the local records in the case
of the individual taxpayer show only
the amount due after such deductions
have been made
A taxpayers return might show
that $500 was the amuont due the
government prior to deducting 5000
for tax paid at the source and income
and profits paid to foreign govern
ments or possessions Of the United
States, but the records in the col
lector's office would show him en-
titled to refudn of only $780, or 25
per cent of 5000, instead of $500, or
rs per cent of $500.
A representative of one of the lead
ing banking institutions of the city
declared that if it was necessary to
file claims to recover the difference
due taxpayers or obtain credit, as a
result of government bookkeeping
methods, his institution would have to
prepare more than 900 such claims
for clients fro whome tax reutnrs had
been compiled by the institution,
1t was his estaimate that hundreds
of thousands of such claims would
have to be prepared throughout the
country Refunds running into mil
lions of dollars would be held up, he
said, in the case Of taxpayers who
had paid their taxes in full in adj
vance without deducting rs per cent.
of the tax paid at the source and to
foreign countries and possessions OF
the United States. The Income Tax
Department, he pointed out, would
have to audit the whole vast number
of claims.
The estimate of the Treasury De
partment as to the amount due to
individual taxpayers in refunds on
account of the % per cent. reduction
was $16.140,000. The Budget Bureau
made request for an appropriation
Of that amount June 5, three days
after President Coolidge signed the
revenue act embodying the reduction
in taxes on 1928 income due in 1924.
The decision that individuals are
entitled to rs per cent. reduction on
tax paid at the source and to foreign
United States will, it is thought, add
another million dollars to the total
sum of the refund.
Joseph ]. Mitchell, tax expert, who
is editor of the Income Tax Review,
first pointed out in The New York
Herald Tribune that the taxpayer was
entitled to this additional refund The
opiIsion OF Mr.. Mitchell was confirmed
by the Deputy Commissioner Of In
ternal Revenue June 8. The Deputy
Commissioner informed Mr. Mitchell
by telegraph that the rs per cent.
reduction should be computed on the
total tax shown by Item Qine) 81,
In spite Of the rulings made by the
Internal Revenue Department, how
ever, the collectors of internal rev.
snue are sending bills to taxpayers
for instal1ments now due, in which
the taxpayer gets credit only for rs
per cent. of the balance of the tax
as shown by line "a of the return
instead of credit being allowed for
Is per cent, of the total tax as shown
In line 81. The rs per cent. reduction
IN the tax paid at the source and
taxes paid to foreign countries is ig-
nored.