Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-05-03
THOUSANDS MUST
PAY BACK TAXES
Treasury Ruling Hits ProfeS
SorS and Employees of
States and Cities.

Professors at State universities and
employees of public utilities companies
owned by State, county and municipal
governments by a ruling by the Treas
ury Department are subject TO Federal
income tax collection, not only for the
past year but for six years back, plus
interest.
The ruling is expected to prove heavy
blow to thousands of instructors al
State colleges and State and municipal
employees, who have considered them
selves exempt from Federal income tax
alton. Not only has their exemption
been swept away at a single stroke but
they find themselves subject to taxa.
ton on their salaries for six years back
with a penalty in the form of interes'
payments on the taxes to be assessed
against them for those years.
Effect in Wide Scope.
Not only the professors, but street
car conductors, electricians, line men
mechanics and water works employees
Of governmentally owned companies
are believed affected.
The ruling, coming on the heels OF
the prediction of Secretary Mellon that
there will be large Treasury deficit
for the current fiscal year, is causing
storm Of protest. Many contests arr
being thrown into the Board of Ta2
Appeals and the courts of the country
The Government, however. is hewinR
sharply to the new line it has marked
out.
Professors of the University of Mary
land are among those who have car
ried their protests TO the Board OF
| Tax Appeals, where one decision has
already been rendered in favor Of the
Government collecting the tax from
| the professors. The case of one OF
the instructors at the University OF
Maryland, G. Ridgely Sappington, is
to come up for hearing before the
board tomorrow morning.
The Government has won its case
against the estate of the late Alfred
S. Niles, former professor of the Law
School of the University Of Maryland
The Government assessed a total tax
of 1924 against his estate for income
tax The eXecutriX Mary w Niles
protested and the Board of Tax Ap-
peals held that the income was taxable
Prof. Niles died November 2, 1926.
Sharp Distinction Drawn.
The Treasury Department is drawing
a sharp distinction between two groups
OF State or municipal employees for pur-
poses of the new tax. Governors, may
ors OF cities, councilmen, altermen, pub
lie school teachers, flremen and police
men and others whose services are con-
sidered essential governmental functions
are exempt.
The other group, whose salaries are
now being taxed under the new ruling
includes those whose duties are per-
formed for the State or political SUBJ
division of the State and are considered
OF a proprietary or private nature
Such employees are those of a munich
pally owned water works, light or power
plant. street railway, faculties of insti-
tutions of higher learning, such as
State universities where tuition is
charged, independent contractors, en-
ployes OF public parks and Fairgrounds
I and employees of State, county and
municipal hospitals.
Assessments are being made under
authority of the revenue act of 1926
and collections will be made where DOS
sible for all years back to and including
! 1928.