Evening star., 1934-05-01
RULING IS REFUSED
IN PARK SAVINGS.
TAX WRONGLY
MeCar| Declines Appeal of
Depositors Claiming Re.
ports Were False.
CONTROLLER HOLDS LAW
REQUIREMENTS FILLED
Letter Indicates Earnings Were
Falsified to Mislead Public
as to Prosperity.

HbEk OdNillBS 0dIlk 10 Tie COLLECTOR
of taxes over a period of 9 years, start
ing in 1924, was made today when
Controller General McCarl in a letter
to the District Commissioners declined
to, decide If taxes. said to have been
enormously collected from the bank,
may be legally refunded.
The controller general said 1t was
not within his province to decide this
question, but he did give an advisory
opinion" in which he said, there ap-
pears no legal authority for refund.
The amount involved was not set forth
in the letter.
Hold Refund Is Due.
The reports in question, 1t was
brought out. represented the gross
earnings Of the bank less the interest
paid to depositors as being greater
than they actually were. This, 1t is
indicated In the letter from McCarl,
was for the purpose Of misleading the
public as to the prosperity of the
bank. Counsel for the institution con-
TENDS that as a result more taxes were
paid than should have been, and that
now a refund Is due for the benefit of
depositors. The first of these reports
was for the fiscal year 1924 and the
others were for the eight succeeding
years.
In his letter. McCarl recalls that
the law provides for the assessment
and collection of taxes upon savings
banks based upon a report made by
the bank through its president or
cashier, under oath, and for refunds
only when the payments are erroneous
and the collector certifies to this fact,
sets out the nature Of the error, and
any other particulars necessary to sat
lsfy accounting officers that the claim
for reimbursement is just.
Law Was Followed.
The report(s) required" McCarl
said, was made by the proper officer
Of the bank; The Board of Personal
Tax Appraisers made the assessment
based upon the report. and the tax
was collected accordingly. Ali that
IS required by law In such cases was
done, and the procedure followed in
making the Assessment and collecting
the taxes was strictly according to
law"
Pointing out that the claim now is
based on an audit by certified public
accountant, McCarl added: If the
reports toriginaD were not made in
good faith, but were false and fraudu-
lent and made tor the purpose of mis-
leading the public as to the prosperity
of the bank. it is altogether probable
that the records were so kept and
talsified that a correct audit, several
years later or any other time, would
be impossible.
"The accuracy of the audit is prac-
tically refuted by the auditor OF the
District of Columbia in his letter of
March 13, 1884, in which he pointed
out a number of irregularities and
discrepancies. The action of the
IL. 1888, in rejecting the claim clearly
discloses that the evidence furnished
was not conclusive.
No Authority in Law.
Even though reimbursement were
authorized by law under the alleged
circumstances, which is not the case,
for all practical pu poses, apparently
it would be impos sible under the cir
the amount to be refunded There
Is no authority of law for accepting
the report of the certified public ac-
countant as the facts in the case, but
the accounting officers Of the District
Of Columbia must be satisfied from
particulars in the case that the claim
is equitable and just"
McCarl holds against the theory
that the taxes were erroneously COL
lected. saying that this phrase "er-
roneously collected" implies some mis-
take by the collecting officers and mot
some fraud of false pretense prac-
ticed on them"
Where the property was taxable
and the proofs furnished by the tax
payers according to law showed the
tax due. and collection was made on
that basis, and it later develops that
the proofs upon which payments were
based were false and fraudulent. it
could not be held that the payment
was enormously made and in such
case refund would be unauthorized, :"
he said.
Hazard of Banking Business.
Concluding, the controller general
said:
"The contention that all refunds
obtained will benefit depositors, while
appesling to the sympathy of officials
charged with determining the legality
of the claim, does not strengthen the
case. The taxes were assessed and
collected according to law. If the de-
positors have suffered losses through
the false and fraudulent actions Of
the officers of the bank to which they
had intrusted their deposits and
thereby constituted their agent in so
far as their interest appears herein.
it must be considered nothing more
than one of the hazards Of the bank
ing business under the rules. regula-
tions and law in effect at that time
and cannot be accepted as legal rea-
son for refunding taxes otherwise