Evening star. [volume] (Washington, D.C.) 1854-1972, 1929-03-31

Secretary Mellon, photographed in
he delivered an address over network
be that they would be obliged to go into
the courts to determine tax liabilities.
True simplicity can be attained not by
emitting vitality necessary statements
and definitions, but by making them as
clear and brief as possible. If such
statements are omitted in the name Of
simplicity, we may perhaps secure brew
ity. but 1t will not be true simplicity.
Now for the second question. An at
tempt Is made each year to simplify the
tax return, and 1t might be possible to
shorten 1t still further and to make It
seem less formidable If it were not nee
esSary for one form to cover such va
riety of cases. The real opportunity
for improvement lies in simplifying the
administration of the tax laws, and this
the Treasury is making a determined
effort to do. The Government is trying
to settle each tax case promptly and
finally and with due regarrt to the in
terestS Of both the Government and the
taxpayer. The progress which has been
made In this direction is encouraging.
1T was the general rule in both State
and Federal taxation that If dispute
arose over the amount to be paid, the
dispute was not allowed to postpone
payments. This rule has been relaxed
by the creation of the Board of Tax
Appeals, where the taxpayer can liti-
gate all claims for additional taxes be-
fore payment is required in the ordi-
nary case. If, however, the taxpayer
prefers to have recourse to the Federal
courts. then he must pay before bring
ing suit.
Tax Refunds Are Upheld.
But this does not mean that the
Government should keep money to
which it Is not entitled If the taxpayer
is dissatisfied with the amount he has
paid, either upon his original return or
as determined by the Commissioner of
Internal Revenue, responsible and
conscientious official of the Treasury,
who has the assistance of expert techni-
cal and legal advice, then the taxpayer
may claim a refund and eventually go
to the courts If necessary. It is worthy
Of note, however, in administering this
difficult law, and particularly the excess
profits taxes levied during the war
period, that so small part of the taxes
paid have had to be refunded.
Since 1917 the Bureau of Internal
Revenue has collected almost 39,000,-
000. 900. and has assessed more than
$4,000, 100000 of back taxes. During
this time it has refunded less than
1000, 900 900, or approximately IA per
cent of the amount collected, notwitf1-
standing the large amounts refunded
under interpretative court decisions or
because of retroactive legislation or I'M
der provisions of the law which can be
administered only through refunds.
Even the credits and attachments al
lowed since 1922 have amounted to less
than $4,000, 100000. 1t is a record Of
efficiency that would be hard to equal
And yet responsible public officials,
while not charging dishonesty, have at
tempted to diScredit this record because
occasionally refund Of several million
dollars has been made to single tax
payer They neglect to state that the
taxes paid by such individuals or cor
porations often run into the hundreds
Of millions, Of which only small part
is ever refunded.
Honest criticism, of course, is de-
sirable and makes for efficiency in gov
eminent. But it should be constructive
criticism and not made in such way
as to increase the difficulties of admin
istering law as to which large respon-
sibilities for administration must be
vested in and assumed by the officials
charged with its enforcement. Respop-
sibility must be placed somewhere.
am convinced that the enforcement OF
an administrative problem, not a legal
istic one and that any policy of admin
istration which ShunS such RESPONSE
bility by transferring the problem to
the courts for solution endangers not
only the law but the very existence OF
the income tax.
Secrecy Is Defended.
1.-THE Treasury has not, and will not
evade its responsibilities in this respect.
It is in furtherance of its policy never
to endanger the integrity Of the income
tax that it has maintained consistent
attitude with respect to the so-called
tax publicity question. The Treasury
policy has always been that tax returns
and the information disclosed therein
should under no circumstances be open
to public inspection. This policy Is
based upon the principle that taxpayers
should be permitted to contribute their
share of the revenue necessities OF the
Government without subjecting their
business affairs to the scrutiny of their
competitors, the idly curious, the So
licitors of contributions and unscrupu-
lous practitioners seeking out possible
future clients. y
This policy Is not affected by the
regulations recently issued by the
Treasury providing for the publication
of refund decisions. What will be pub
lisl1ed will be q brief summary Of the
statutory and applicable judicial au-
thorities. It is believed that the pub
LEGATION Of such decisions will remove
any possible grounds for nisunder-
standing or for loose and unfounded
charges that the decisions of the Com
missioner of Internal Revenue are not
made IN accordance. with law.
Nov as regards the public credit:
It has been the aim of the Government
to carry on its own financial operations
with the least possible disturbance
either to business or to the individuals
of the country. Fortunately, in recent
years, we have evolved the machinery
to do this. And yet there was time,
not so very long ago, during the
Spanish War, when, in order
to float a bond issue of only 5000, 900, GOO,
the market had to be prepared and the
operation carried through with the
greatest care.
Compare the difficulty Of that rela-
lively small undertaking with the ease
with which the Governments vast
financial operations can be carried on
today. Last year these operations in
volved more than $10,000,000. Within
a 12-month period the Government coll
lected over $4,000, 100000 chiefly from
customs duties and income taxes. It
paid out a like amount; and. in addition
to this, made provision for the third Lib
erty loan, which came due in September
and amounted, at the time refunding
operations commenced, to over $4,000
100000. The Treasury was obliged to
produce funds with which to pay off this
loan, or else exchange part of it for
other obligations bearing lower rates of