Evening star., 1933-06-10
.HELVER|NG PROBES
LOSS DEDUCTIONS
Many Taxpayers File Amend
ed Petitions After Taking
Out Stock Sales.
BY the Associated Press.

BY the Associated Press.
Guy T. Helvering, new commissioner
of internal revenue, has launched a
campaign to investigate and possibly
to prosecute persons making stock
transactions designed to "evade or re-
duce" income tax payments.
As a result of publicity given cases
now under consideration by public Of
f1cers relating to sales by taxpayers to
members of their families" Commis-
sioner Helvering said citizens in va
rious parts of the country we're filing
amended returns and reporting addi-
tional taxes.
"The bureau is now making and IN
tends to make exhaustive Investigations
where losses have been claimed due to
transactions of this type" statement
from Helvering's office said. I'm cases
where the facts are disclosed voluntarily
by taxpayers. the disposition of the
bureau will be to refrain from GRIM
inal prosecutions"
No Reference to Morgan.
Helvering did not name specifically
the eases now under consideration"
He apparently referred, in part, how
ever, to Charles E. Mitchell, New York
banker. who is now being prosecuted
on charges of making fictitious stock
sales to his wife in an effort to avoid
certain tax payments.
The statement made no reference to
disclosures before the Senate Banking
Committee that some of the partners
of j. p Morgen & Co. had sold stock
to their wives in transactions that had
the effect of reducing their taxable
income.
The bureaus statement declared all
cases investigated would stand in ex-
actly the same position" After point
ing out that there would be no prose-
cution of those disclosing such avoid
ance of taxes voluntarily, it added:
1T becomes important, therefore, for
individuals who have taken losses
based on stock transactions, the sole
purpose of which was to evade or re-
duce taxes. to understand that after the
bureau has begun an investigation there
can be no voluntary disclosures, and to
Uncle Sam all whose cases are investi-
gated stand in exactly the same po-
sition."
Prosecution Last Resort.
The commissioners stand was taken
as indicating that the bureaus agents
would make an exhaustive study of re-
turns filed in the last two years in
which stock losses have been deducted
and that where fictitious sales were
found prosecution would be started.
Prosecution. however, is expected to
be used only after persuasion has
failed. Both Secretary of the Treasury
Woodin and Helvering have announced
their policy Of tax collections as one of
making it as easy as possible for the
taxpayer and to make it an agreeable
transaction to him.
Helvering, in taking over the Internal
Revenue Bureau. asserted that he in
tended to operate 1t as partnership
with the taxpayer which would result
the Government.
The statement issued by the Internal
Revenue Bureau follows in full:
Commissioner of Internal Revenue
Helvering indicated today that he is re-
ceivine reports from various sections OF
the country that taxpayers are filing
amended returns and reporting addi-
tional taxes due by reason Of their
having taken deductions in filing their
original returns on account OF stop
losses based on stock sales which were
Fictitious in fact and not bona hde
transactions.
Mr.. Helver1ng expressed Jne pelleI
that many persons, in filing returns for
past years, have been incorrectly ad-
vised and have taken deductions upon
a misapprehension of the law.
"As a result of press reports cover
ing cases now under consideration by
public Offices relating to sales by tax
PAYERS to members of their families and
close associates, these taxpayers are
now better informed and seek to pay
their just taxes.
THE commissioner made 1t very clear
that the bureau Is now making and in
tends to continue to make exhaustive
investigations where losses have been
claimed due to transactions Of this
type. He indicated, however. that In
cases where the facts are disclosed vol
unfairly by taxpayers. the disposition
OF the bureau will be to refrain from
criminal prosecution.
"It becomes important, therefore, for
individuals who have taken losses based
upon stock transactions the sole pur-
poses OF which was to evade or reduce
taxes, to understand that after the
bureau has begun an investigation,
there can be no voluntary disclosures
and to Uncle Sam all whose cases are
investigated stand in exactly the same
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