Evening star., 1932-05-24

WALL AlOo C->SCCd pei CcllI VI tllc dUlOu
fore. that 1t has deducted Is per cent
s2,759,o0O under the House bill and S.
for debts ascertained to be worthless
within the tavable year. or, in the dis
cretion of the assessor, a reasonable ad-
dition to the reserve for bad debts. It
would also allow a charging of of part
of a debt found to be only partly re-
coverable
4. This suggests enumeration of items
not deductable. The bureau says the
House bill, for the most part, follows
the Federal and State laws in the
enumeration of items to be included in
gross income and items deductable
therefrom. but that no mention Is made
sonal expenses, capital investments, rent
and insurance on homes, and so forth.
The bureau declares that the average
taxpayer is inclined to claim all that is
not specifically denied, and for this rea-
son it recommends placing in the bill q
list of expenses not deductable.
5. This advocates time limit on
losses and points out that when the
price or value of property has decreased
sufficiently taxpayer might find it
advantageous to sell the property just
before the close of a taxable year and
buy it back again after the beginning
of the next year. thereby getting the
benefit of an allowable deduction. In
order to prevent the practice. the bureau
recommends a clause similar to one in
other than one in the business Of buy
ing and selling securities, from claiming
as deduction any loss from a sale Of
securities which is followed shortly or
has been recently preceded by pur-
chase Of substantially identical property.
Use Of Inventories.
g. This relates to use of inventories
in determining income, and points out
that the section Of the House bill deal
ing with the basis Of computing that
income makes no reference to inven-
tory. The bureau says that where pro-
duction. purchase or sale of goods are
involved, the increase or decrease in
without the use of inventories.
7. This relates to computation of
gains and losses and recalls that the
House bill disposes of this merely by a
general provision that gross income
shall include profits from dealings in
real and personal property. The bu-
reau believes that questions arising in
this connection are so important that
adequate provision should be made.
Pointing out that the Federal law con-
tains several pages on this subject, the
bureau advises that the District law
could be made concise by making the
Federal law applicable to computation
Of gains or losses except where other
wise specified in the local law.
8. This deals with filing of returns
according to business year and recon-
mends following the Federal practice
Of requiring fiscal year returns. The
House bill requires all returns to be
filed in March following the close Of the
taxable year. The bureau says this
would not be satisfactory for incomes
computed en- an annual basis other than
a calendar year, which Is permitted by
another section. Since March Is the
third month, the bureau suggests that
taxpayers keeping accounts on a fiscal
year basis should file returns during the
third month after the close OF their
particular business year.
8. Penalty for delinquent returns
The House bill contains no provision
fer penalties other than charging in
| terest to taxpayers who are delinquent
The personal property tax now in force
| provides a penalty Of 20 per cent and
the Federal law Is per cent for delin-
quent returns. In both cases these pen
alties are added and collected the same
rs the tax. The bureau recommends a
section to provide for this.
Exemption for Family Heads.
10. This is the recommendation that
the $4,000 exemption for married per-
sons be allowed also in the case of a
single person who is the head of a
I fo nd ha l.;
i person Is allowed only the 81 900 eX-
emption. The bureau also recon-
| mends that the credit for dependents,
fixed in the House bill at $500 each, be
determined by the situation on the last
| day Of the year, and that where. the
position as head of a family changes
| durin gthe year, the personal exemp-
tionS be prorated over the year.
II. Qualification of persons taxable
In this connection the bureau points
out that from reading Of section II
of the House bill lit Is clear that sal
aries Of persons working in the District
including employees In private enter
prises, persons in the military and nava
; forces, and Federal employees. would be
taxed, though they may reside else
where. A question has arisen whether
Congressman and cabinet officers, whose
compensation is not subject to State in.
come taxes, have occupations carried or
in the District Of Columbia, so as tt
| render them liable for the District In.
come taxes imposed upon non-residents
As the bill now stands, the language ir
this section might require judicial In.
depreciation. This uncertainty can bt
removed by adding either Of the fol-
lowing provisions to section 10, accord.
/ ing to the intent of Congress:
Provided. that compensation re.
| ceived from the Federal Government by
cabinet officers. judges of the courts OF