Evening star., 1926-11-19
TREASURY PLANS
TAX AUDIT NOTICE
Would Inform Income Levy
Payers as Soon as Possible
of Status of Return.
BY DAVID LAWRENCE.

Plans are being considered by the
Treasury Department whereby II
| may be possible to notify taxpayers
| just when their income tax returns
shall have been audited.
/ Many business institutions. for
example, have been seriously incon-
| venienced because they have as
sumed that their returns were COR
rectly made, only to have them sud
IDENTITY reopened two or three years
| later, when they had felt confident
the matter was closed.
, Under the present system tax.
payer files his return and that is
the last he hears Of 1T unless there
is some mistake made. With the
average taxpayer 1t makes little diff
ference when his return is audited,
but to large business institutions it
Is important to know whether the
books can be closed for each year.
Sometimes a mistake in income tax
auditing on the part of company
means an extra assessment. which
works hardship because it may he
asked for during year when busi-
ness is not So good as in the year
1t should have been paid originally
The whole problem of the Treasury
ia to expedite the auditing of the re-
turns so as to minimize this kind of
Inconvenience. 1t lately has been
called to the attention of officials
however, that there is no reason why
the business institutions which have
made correct returns should not have
this information as quickly as posi-.
BILE.
Cost Relatively Small.
The cost of sending communica
tion to every taxpayer is considered
by Secretary Mellon to he rela
lively small matter IT, indeed. there
is no other obstacle to the process
One of the difficulties. of course. will
he that the Trea siry does not always
finish auditing the returns and re
serves the right to reopen considera
tion IL a new line Of thought develops
with respect to the income tax re
turns of particular type Of business
or industry. This. however. Is dimin
ishing as the internal revenue admin
!stration grows each year more ia
miliar with the intricacies of modern
business. Sometimes the delay in
auditing is due to antiquities in the
new laws and sometimes to the haZi
ness of the returns themselves. thus
requiring consultations with the tax.
payer or his representative.
Generally speaking. the number OF
returns which seek to evade the law
are small minority. Up to now the
Treasury has had to make a quick
examination Of many returns and II
In foo of @< hA
something wrong. the Government
has asked the taxpayer to waive his
rights under the statute of limitations
so that the time for further considera
ion would not he limited.
| Seek to Aid Taxpayers.
The problem now being considered
| however. is how to aid the taxpayers
| who do not have anything wrong with
| their returns and who would like to
know at the earliest possible moment
| that their returns have been audited
| In some instances this will he of as
sistance, because If the Governmen mt
| approves Of a certain method of ac
I, counting in q particular case, the
| same taxpayer will be able to carry
| forward the same system from year
| to year.
| Final decision on the plan will not
| he made until every advantage and
| disadvantage is carefully weighed
The information concerning the audit
| ing of each return is. of course. to he
kept confidential and will not be made
public by the Treasury. Sealed en-
velopes instead of post cards would
have to he employed for the purpose
Officials are hoping A practical plar
can he evolved to keep the taxpayers
constantly advised from year to year
as to the status Of their respective
| returns in the income tax units.