The Washington times. [volume] (Washington [D.C.]) 1902-1939, 1934-09-20
INCOME DATA
STUDIED FOR
EMISSIONS
Collectors Throughout U. S.
Eye Returns; 1870 Millions
Seen As Certain
BY CARROLL PEEKE

By CARROLL PEEKE
The Treasury Department is
out to collect the tremendous sum
of 200 million dollars in back
Federal income taxes this year, it
was admitted by officials today.
This means that the returns
Of business firms and individuals
in all parts of the country are
being carefully scanned for er-
rorS, deliberate omissions, and
deductions caused by depreciation
in an effort to raise this sum.
$50 Millions in Sight
So exhaustive is the campaign
that there already are indications
that at least 1870 million dollars
of the amount set will be gained,
with the possibility that the en-
tire amount will be taken from
the pockets of American business
men.
Collectors of Internal Revenue
all over the country have been
Informed of the drive and are
being urged to get every dollar
possible.
Score sheets are being kept at
the Treasury Department, show
ing just what the collector Of each
district is doing, and reports OF
their activities in the drive are
being constantly received and
carefully scanned.
Actively Admitted
Asked concerning the drive at
his press conference today, Secre-
tary Morgenthau's only remark
was:
"WeIl, it shows that some one
Is on the job"
Further than this he did not
comment.
A high official of the Treasury
Department said:
eve are making a very def
mite effort to collect all back
taxes, and are making an inten-
sive examination of all returns
filed back over a period Of years.
"Last year the Bureau of the
Budget estimated that $50 mil
lion dollars in back taxes would
be collected. We surpassed that
figure, taking in 40 millions.
Because of that the Secre-
tary set the quota at 200 mill
lions, and we are bending every
effort to reach that sum.
Certain classes of returns are
being very carefully examined.
SURPRISES STUDIED
"In particular we are going
after family corporations and
similar organizations where the
method of transferring income
into corporation surplus has
been practiced.
"That method has been used
to q great extent to avoid the
payment of income tax, and a
drastic penalty has been set to
curb this
"AnOther matter that is be-
ing investigated, particularly in
incomes in the larger brackets,
is that of Interpretation between
capital gain, subject to surtax,
and current income, subject only
to the tax.
1--WE are not overlooking the
question of deliberate fraud,
and in many cases the returns
as far back as the palmy years
are being checked over"
Under the income tax of 1928,
the Government was given three
years to reopen a tax case after
the return was filed. The act of
1882 cut this down to two years.
March Is Deadline
This means that the Govern
ment has until next March to re-
open cases for taxes paid for the
year 1882 and collected in 1885.
In event of fraud. however,
there is no limitation. A case
may be opened at any time for
any year where fraud is alleged.
A number of test cases in regard
to the transfer of income to sur
plus are now being prepared and
will be presented to the Board of
Tax Appeals for decision, it was
learned.