The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1934-01-12
S5O,OOO,OOO IN
ARREAR TAXES
PAID TO U, S.
Frightened Income Evaders
Pay Off as Intensive
Drive Continues.
Copyright. 1894. by United Press

ANSPS 44Silt. 1901, ny OLllLBQ FT6SSl
WASHINGTON, Jan. 12.- Up
ward of $5O,000,00O of back tax pay
ments has been paid into the treas
ury by frightened evaders, internal
revenue officials estimated today as
the government intensified a drive
to obtain the last penny legitimate
ly due in long pending income tax
cases.
Some estimates Of the sum fright
ened into the treasury were as high
as $100000,00O. These payments
were ascribed largely to a cam
paign begun last summer by Guy
T. Helvering, commissioner of in
ternaI revenue, to dispose of pend
ing cases.
Belief that prosecutions would
eventuate from the income tax
drive was expressed in high official
quarters. There was suspicion that
inexcuSable laxity in handling tax
cases would be revealed in some in
stances.
First Offenders Warned
Treasury policy was understood in
general to be to warn first offenders
and permit them to make a settle
ment with the government. But
second offenders against the tax
law are more likely to be prose-
cuted than to be let off, the United
Press was informed
Whether tax assessments are
compromised below the sums actu-
ally due the government will de-
pend principally upon the ability
of the tax payer to raise the money
due. III any event, all compromises
must pass across the desk of Treas
ury Secretary Henry Morgenthau.
Appointment yesterday of John
Clark, Cheyenne, Wyo., attorney,
to a position in the treasury was
in preparation for increased income
tax work expected to develop as
the drive for back payments con-
tinues. He will handle extra diff
cult tax matters.
OOO,OOO,OOO Overdue
Commissioner HeIvering estimated
four months ago that there were
approximately $1,0OO,OO00OO of back
taxes to be collected. The attitude
of the treasury apparently was that
in the current fiscal crisis, every
cent to which the government is
entitled must be obtained and
quickly. Cases numbering 10000
and involving S772, 100000 are pend
ing before the board of tax ap-
peals.
Most of the $1,000, 100000 re-
ferred to by Mr.. Helvering repre-
sentS taxes allegedly due for years
prior to 1881. Deliberate warnings
repeatedly have been issued in the
hope of reaching such taxpayers
as may be suffering from bad con-
science.
Typical of these was an an
nouncement on Oct. 16, 1888, that
field officers of the bureau of in
ternal revenue had been instructed
to Cooperate with brokers and
other agents of taxpayers in hunt
for sums due the government.
Leniency Is Considered
The bureau felt then that Ger
tain individuals have taken ad-
vantage Of the opportunity through
sales that have a fictitious char
acter, as between husband and wife,
or between tax payer and an in
dividual in close relationship to
him, to distort taxable income
through claims of losses that have
no basis in fact"
The bureau of internal reve-
nue." it was announced, would be
inclined, where voluntary disclosures
on claimed losses which had no
basis in fact were made, to be
lenient in its attitude in the impo-
sition of penalties, and in appropri-
ate cases while, strictly speaking
the facts in the matter might juSti-
fly recommendation for criminal
prosecution, to refrain from such
recommendation where such action
appeared justified"