Evening star., 1926-03-09
ARTICLE III.


The Governments trail to the in
come tax dodgers door frequently be-
Gins in a clue that seems trivial. A
clue that appears to be insignlncant
in itself may uncover wholesale tax
frauds. Every clue is run down, even
IL some seem futile.
Large cases of tax evasion are de-
tected in Investigations which had
their origin in mysterious tips
reaching the Internal Revenue Bureau
from anonymous sources. some or
them have brought millions or dollars
into the Treasury from defiant tax
pa yers. Highly important tips nave
led intelligence agents into zunder-
ground workings Of amazing conspira-
cies between large taxpayers and con-
niving- Government employees.
Honest taxpayers have come 10 the
Treasury Department with lnforma'
ton that certain individuals sought TO
involve them in conspiracies to NIX
Government employees. and alter GOV
eminent records as method OF eScaP-
ing income tax liability.
Offers to Juggie.
New York taxpayer of large
means and important banking connec-
| tions came to Washington not long
ago and told the Treasury OF an at
tempt 20 involve him in conspirac!
10 cheat the Government out OF the
amount Of income tax he owed "A
member Of A tax-accountlng hrnl
previously visited the New Yorker and
told him that. for large fee. he would
iusgie the account of the taxpayer,
and moreover that he could bribe an
emuloye OF the revenue service VINO
had charge Of the New York return.
Agents Of the Intelligence Unit broke
nm the conspiracy. Had the Ne"
Yorker accepted the proffered ald, ne
might by this illegal conspiracy have
sa we'd a substantial part OF the very
large sum he actually paid IN income
tax. but the odds were against MIN.
The Bureau OF Internal Revenue
received tip one day tnat Ger
tain eroup of New York manufac-
turers. acting in concert WIN a rev
enue inspector, were robbing the Gov
ernment out of a million of dollars or
more in taxes. The manufacturers
were required to file monthly returns
nd paw tax on total monthly sales.
The revenue auditors noticed there
was a sharp falling off in the income
taxes paid by the manufacturers.
Fifty officers were concentrated upon
this Job. They found that the revenue
inspector made use of special rub
her stamp and blank forms stolen
from revenue headquarters. BY agree
ment with the manufacturers ne
would be paid half of the taxes &C.
tually due. and then stamp the tax
returns to show the full amount had
been paid. Intelligence agents found
the ma manufacturers had thousa nds Of
bogus receipts. The revenue inspec-
tor who engineered the plot was liv.
ing In luxury and getting rich. He
and the manufacturers in the con.
spiracy were rounded up. and the Gov
ernment collected $4,000 900 In back
taxes and penalties.
Changing Dates Fail.
A group of men. high In the social
and business life Of large Western
city, were caught recently by the
Intelligence Unit in a scheme that
many unscrupulous business concerns
have vainly sought to use to deceive
the Government. These men directed
the affairs Of large manufacturing
concern. Their scheme involved the
changing of dates Of old invoices,
the charging Of fake purchases on the
company books, the issuance OF
checks in favor of the firms whose
invoices were used, the forging OF
their Endorsements, and deposits OF
the checks in the company's bank.
The invoices used covered purcha ses
made in earlier years of goods osten.
sibly obtained for use in the manu-.
facture of the company's product.
The old invoices had been inserted
in the company's records to show an
increase in expenditures OF the bust
ness in the years in which taxes were
payable. Undetected, this would have
reduced the net income on which the
Government tax would be computed.
Government agents charged the com.
pany's officers with falsif1cation Of
their accounts. The suspects admitted
their books were jammed with fraud.
ulent entries. They produced all of
their books, and described fully the
scheme they concocted. The firm de-
frauded the Government out of $156..
600 over q period OF four years. A
disgfuntled workman, who ina agined
he had been given raw deal by that
firm, gave the tip that put the Gov.
ernment on their trail.
Women furnish many tips" on tax
dodgers. One such tip recently In
voived the head Of a family socially
prominent in a large Middle Western
city. His wife, attended society At.
fair. 1t brougkA out all the towns
notabies. The a%sfe, proud Of her rat.