Evening star., 1926-03-13
BEATING THE INCOME TAX
Uncle Sam Says 1t Can't Be Done.
BY WALTER Fl. ATKINS

him. With the full knowledge OF the
Internal Revenue Bureaus intelh-
gence unit, he permitted the self
styled tax experts to go ahead. They
concealed his true income by CON
structing an entirely new set OF books.
and destroyed the old ones.
The correct amount of his tax was
approximately 100000. His income
tax liability, according to the Juggled
books. would have been only $4,000.
To hasten the crooks nearer the point
Of exposure. he paid them $4,000,
part of their retainer, for their serV-
ices. BY that time the intelligence
unit, through its "under-cover' sys-
tenn, had built up enough evidence
practically to close in on the CROOKS
The accountants were paid their nnal
$4,000, but il was in marked bills.
received from the hands of A revenue
intelligence agent. posing as repre-
sentative of the manufacturer. Their
reward was a sentence of fine and i'm
prlsUnment.
Offered Aid in 600 Cases.
Soon after. Government agents
searched their Office flies and found
goo eases in which they had offered
aid to taxpayers to defraud the Gov
ernment through fling of falsiffed tax
returns. More than $1.000,000 add
tionaI taxes were assessed and col
lected by the Government in such
cases.
The revenue service plays no favor
ties The big idea of the revenue
force is to protect the Government.
II is this same motive that governs
them in the thousands of cases that
confront them each year.
.,t1s.1y Ill saVo fYsayt IN fhafY
admission that some of the worst
cases they have handled have resulted
from sollusion with Government en-
ployes too weak to withstand the
temptation of bribe money. But
such disclosures have invariably been
followed up by rigid tightening up of
the revenue machinery. and proper
preventive measures invoked as an
assurance against repetitons of simi-
lar occurrences by others.
Some of The schemes tried without
success by Government employees are
somewhat like the one of the Treasury
auditor. caught attempting to Connive
with wealthy taxpayers, through an
outside coufedera to" a trusted friend
and associate. The auditor, on the
inside, would know the liability OF
taxpayers In tho larger income tax
brackets.
Cnmiiyauce Is Disclosed.
rha auditor sent his friend to
wealthy taxpa yer whose income tan
amounted to more than $500. 900. In
YeStjgation revealed, however, thai
the taxpayer actually owed consider
abi@ more than this SURF, So, the
auditors friend cont1ded to the tax
payer that for consideration OF SIS,
600 the dishonest auditor would turn
over to the taNnaper the original re
turns and that all related papers
would he destroyed in order that the
Government would have no evidence
of additional taxes due.
This was another case in which the
conspirators failed to realize that they
were dealing with an honest man. TIL"
taxpayer promptly acquainted the
Government with the proposals made
TO him. and correspondence between
the conspirators and taxpayer ensued.
Here was the weak spot in the scheme
Letters embodying confidential plans
of the ConSpira tors came into the pos
session of intelligence agents. Later
they appeared at conferences betwee y
the conspiratorS and the taxpayer, and
at the proper moment, revealing them
selves in their true light. apprehended
the guilty ones.
whatever his status. or method, y
shown by actual experience in the
Government intelligence system to
leave, somehow unsupported to the
guilty person, the missing link tina.
connects up with fraud He always
leaves some definite mark somewhere
showing up evasion. II may he the
most minute circumstance. 1t may ho
some ill-advised word Of boa sting. II
may arise in the taxpayers misplaced
confidence in a confederate. 1t may he
clumsy accumulation Of frauduler;
operations, that some day will reves !
on their very face the full scope o.
the fraud attempted or accomplished.
Violations Decreasing.
Exposure of frauds has had a strone
deterrent effect against continued
abuses under tax laws. and from year
to year actual violations have been
decreasing. This is particularly true
of attempts of the unscrupulouS ("
use Government employees as aids III
lswIess ventures. The systenlatic
elimination from the Federal pay rolls
of such conspirators and their swift
punishment have had "a wholesome ef
| feet in reducing this type of fraud.
| The intelligence system maintains
remarkably efficient check upon the
honesty Of Government employees in
trusted with handling income tax mat
ters. There are checks and double
checks to insure faithful performance
of duty At no time since the income
| tax law was enacted has the Govern
meT1t service been 50 free of the ele-
ment of dishonesty, and SO little
susceptible to- the influence of dis
honest interests seeking to set up un-
lawful plots or conspiracies to cheat
the Government.
Lcoryyishs 1n:ak .-.