Evening star., 1926-03-11
Went for F'inery.

went 1OF ElHtIs'
AS it was, the money actually had
been spent for silk dresses, diamonds
and other finery for the style loving
wife. He was promptly caught. as
a result of one of those mysterious
underground tips, that may have
their origin either i'll professional. or
social jealousy. Anyway, the Gov
ernment stepped in and investigated.
Strangely enough. the taxpayer,
though realizing the Government had
caught him in the act, retained law
yers and made frantic appeals to in
fiuential friends, whose intercesslon
for him went for naught, in the light
of the undeniable liability of the tax
payer, Before he gets out, it will cost
him the price of lot more auto ac-
cessories. and in real money.
a hard nut for the Government
auditors to crack is the question of
allowable deductions for taxpayers
owning and operating automobiles in
connection with their business. More
than half Of the taxpayers of
the country include automobile eX-
pense in their returns as a deduc-
ton from net income.
Many automobile owners attempt TO
cut down their income tax slightly py
claiming business use of their pleasure
Messenger cars. Such claims are dlf1l-
cult to refute, but the trained eyes OF
the revenue auditors can detect them
usually, for the nature of mans
business determines the question nine
times out of ten. For example, ply
sician can legitimately make a maxi
mum claim for cost of upkeep and de-
for his car. Some others can
do the same thing. But the average
business man who merely drives to
the door of his business and makes
little other purely commercial use OF
his automobile cannot legally claim de-
ductions that are permissible Tor
others.
BUSINESS men often charge off too
much for travelling and hotel eX-
penses. to reduce their net income to-
tai. One Washington business man OF
prominence itemiZed more than $1,000
for each month in the year. or about
$50 a day, on the score of railroad and
hotel expense. Revenue accountants,
Of course. questioned the legitimacy
of the taxpayer's claims, and 1t was
not allowed, because it was admittedly
larger than the average expense for
that purpose On this score, some tax
payers are caught attaching fake re-
ceipts, but there is a way by which
they are detected and called to ac-
count. Invariably they are glad to pay
up and escape further trouble or
notoriety.
One Man Reverses Game.
Perhaps one of the oldest cases in
the revenue records is that Of a young
man. new in business, but we'll fixed
financially, in falsifying his income
tax return, to show a higher net in
come than he really had, as a means
of obtaining larger credit at national
banks. He paid double the income tax
he owed the Government, and display
ed his Cancelled checks, showing large
tax payments. These would appear on
their face to indicate a very pros
perous financial status. and strong
talking point in dealing with banks
for large loans. The man, of course,
was following the path of deception,
which has only one ending. His credi-
tors discovered his tactics, and put
stop to that phase of his operations.
Taxpayers are frequently nabbed in
attempts to cut down their income to-
tai, through claims for bad debts.
Many instances are uncovered that
follow a scheme by the taxpayer to
arrange a series of fake promissory
notes or fake bills for services with
certain individuals in his confidence,
who wink at the scheme, and then to-
tai them up as an allowable deduction
from his income Invariably such at
tempts fail Auditors are quick to see