Evening star. [volume] (Washington, D.C.) 1854-1972, 1929-06-23
TAXPAYER rs HONEST
In DEALING WITH u. S.
Commissioners of Internal Revenue Has
Many Ways of Detecting Fraud in
Dealings With Government.

taxes amount to s2.174,000.o02 He
heads a force of 10000 people gather
ing Federal taxes on the basis of more
than 100000 tax returns.
A noteworthy achievement, of great
benefit both to taxpayer and Govern
ment. has been the perfection of
program of decentralization for the
handling and auditing of income tax
returns. In former years many func-
tions in connection with the handling of
returns were performed in Washing
ton. Broadly, decentralization means
sending the revenue man to the job"
Through decentralization, however,
the taxpayer today comes into direct
contact. in his home district, with the
internal revenue agent. The taxpayer
thereby is enabled to clear up at home
doubtful questions relating to his re-
turn. This method facilitates correct
and prompt adjustment of tax obliga-
. tions, without delay and possible en-
barraSSment and saves the taxpayer the
time and expense of at least one and
possibly several trips to Washington.
Under new procedure practically all re-
turns, except the consolidated corpora
revenue field offices.
A revenue field force, under the de-
Capitalization program, is fact-find>
ing group, operating with reviewers
and conferees, much in the same man.
ner as the latter class of technical
personnel functions in Washington. All
recommendations submitted by revenue
agents are carefully reviewed. During
the last year the conferees closed by
agreement more than so per cent of
the cases referred to them.
Keeping Up With Work.
New methods of procedure introduced
by Commissioner Blair made 1t posi-
BILE to clear up an accumulation of
100000 cases which piled up in the
bureau files during the period of post
war readjustment. Besides, the Gov
ernments tax work has been brought
practically to current basis. This
means that millions of tax returns
filed annually will undergo audit and
adjustment in the year in which they
are filed.
Matters of Federal taxation are fun
damentally matters of administration
rather than litigation. Mr.. Blair con-
tends. There has been a concerted
drive to clear up all tax cases where
the issues are susceptible of friendly
and satisfactory adjustment and to eff
feet settlements wherever possible in
the cases pending before the Board
of Tax Appeals and the courts. Despite
the rapid progress made there still re-
mains pending $4,000 cases, involving
$675, 000. 900 on the boards calendar.
The Treasury Department is con-
vinced that 1t is mutually advantageous
to the Government and to taxpayers
to take many of these appealed cases
out of the realm of litigation and to
settle the matters in dispute by ad-
justment. BY procedure designed
more to follow along the methods ordi-
narily employed in business. rather
than the technicalities Of a legal pro-
ceeding, endeavor is made to determine
the actual facts relevant to the dis
pute. Where a conclusive determine
ton cannot be found, mutual conces-
sions are made in favor of the strong
er presumption, or as the greater
weight of proof may justify. Upon
a finding of facts SO determined the
bureau and the. taxpayer then agree, II
possible, upon the proper. law. rulings
and regulation applicable. This policy
has and will continue to result in the
payment to the Treasury of many
might very possibly be held up several
years awaiting adjudication by the
Board of Tax Appeals or by the courts.
VIII Clean Up Cases.
The drive to wipe out congestion in
the Board of Tax Appeals, which, aft
er all, is merely q fact-flnding body,
will result in the settlement of prob
ably not less than ZOO of the cases
now pending. The prompt and f1na!
closing of cases, upon the basis of
sound tax principles and without liti-
CATION, where no serious legal question
is involved. Is the objective. Pursuant
to this policy, the Government is meet
ing the taxpayer in spirit of fairness
and frankness. Taxpayers have learn
ed that this policy is best for them.
After all. the Government wants from
the taxpayer only what he owes the
Government in taxes. The reason for
so much litigation Is partly due to
the facts upon which the Government
can make final decision.
The value Of more business like
method of settling tax disputes, inaugu-
rated by Commissioner Blair two years
ago, by the creation Of the special adj
visory committee, to settle appealed
cases as well as those in which ap-
peals were imminent has been fully
demonstrated. During that period
ed for settlement with additional tax
assessments totaling $53.000,000. tn.
committee consists of IA members, and
number of conferees, both in Wash
ington and in the regional revenue
fields. Their job is to settle cases
where facts are predominantly in dis
pute by direct conference with the tax
payer. This method of forestalling ap-
pealed cases. or of adjustment of cases
even after they have been appealed to
the Board of Tax Appeals, has served
as a life-saver for the board, which
was in serious danger of breaking down
beneath the heavy load of docketed
cases.
Interest in Recent Refund.
Public interest in the Treasury's
policy regarding tax refunds was
aroused recently by a decision of the
revenue commissioner to allow a refund
OF several million dollars to large
corporation.
There would have been no question
or criticism If the Treasury had dealt
in thousands instead of millions of dol
lars with small corporation, and yet
the principle was the same. The I'M
deniable fact remained that the cor
poration was clearly entitled to the re-
fund as matter of law and fairness.
The fact was that the corporation, at
the time of making its tax payment,
had actually paid the Government more
than 1t believed 1t owed, but left for
future adjustment the question: IF fact
which were raised.
Why does the Government make tax
refunds?
The answer is simple enough when
We know the facts. The Government
needs money to run the Government,
levieS taxes and insists upon immediate
payment. Payment cannot be post
| poned by any question as to the amount
to be paid. That question must be set
tied later. However, after the Govern
ment finds the taxpayer has paid too
much and rightfully claimed certain
oil &c