Evening star., 1935-01-08
Al CAP0NE FACING
S391,5(6 TAX SUIT.
Government Prepares for
New Attack on Illicit In
come of Gangster.
BY REX COLLIER.

While Al Capone, one-time Public
Enemy No. !. languiShes in far-off
Alcatraz Island penitentiary. the Fed
eral Government is preparing to go
before the United States Board of Tax
Appeals in an attempt to collect from
the former Chicago gangster 1891 SOC
in back income taxes and penalties.
Witnesses in support of the Govern
ment's claim are being rounded up
quietly. with view to presenting to
the board at an early hearing evidence
to prove that Capone had Illicit in
come totaling more than million dol
lars for the years 1924 to 1929, in
elusive.
The board plans to set date for the
hearing shortly. The arguments will
be heard in Chicago because most of
the Governments witnesses are in that
area.
1t is not likely that Capone will
be released from prison to attend
the hearing. Officials here say it
will not be necessary for the prohibi-
tion-era underworld chieftain to ap-
pear in person. He will be repre-
sented by his attorney, Michael J.
Ahern of Chicago, it is indicated.
The present move Is the outgrowth
of the conviction of Capone in 1881
on charges of attempting to evade
and defeat" income taxes for 1925,
1926 and 1927. He was sentenced to
IL years in Federal prison and fined
s50000 After spending three years
in Leavenworth Penitentiary he was
transferred last Summer to Alcatraz,
the Governments new stronghold for
hardened criminals.
With Capone and q number of his
henchmen safely behind bars. the In
ternal Revenue Bureau, whose "un-
touchable" investigators had amaSSed
the Governments evidence, launched
an effort to collect income taxes it
alleged were due by reason Of Ca
pone's gambling and other opera
tions.
Assessments Made.
An assessment of $68,664 at first
was made by the bureau, covering
taxes and penalties on income from
1926 to 1929. inclusive.
Later Capone was notified that the
bureau proposed to make further as
sessments for the period from 1924 to
1929. totaling $322,S42.
Capone, through Attorney Ahern.
protested both assessments, denied he
had received the income charged to
him and asserted the Government had
no proof of its allegations.
Moreover, Capone made the claim
that to assess the penaltie- proposed
by the bureau would constitute "dou-
BILE punishment" and destroy his con-
stitutional rights, in view of the fact
that he now is being punished for
evasion of the questioned income taxes.
At the hearing the Internal Revenue
Bureau will seek to show that Capone
received Al per cent Of the profits OF
the Cicero Gambling Syndicate in
1924; So per cent of the profits OF
the syndicate in 1926 and 1927; de-
posits and checks cashed in the &C
count of Mae Capone, said to be the
gangster's wife, and certain other
funds listed in some detail.
Allegations Of Government.
The 1924 profits of the Cicero GAM
bling Syndicate. the Government Will
assert, were $300.250, of which Ca
pone's "cut" was $123.l03.
In 1925, it will be alleged, Capones
share of the syndicate's profits was
Sel.079. In addition, 1t will be stated,
he received a one-sixth share OF de-
posits and checks amounting to ST.
l62 2,56S, and proceeds Of s2,500 bank
account In the name Of Mae Capone.
Capone's share of the gambling
syndicates profits in 1925, 1t Is
charged, was $50, ,4O5, supplemented by
bank deposits totaling $l07,27l.
His total taxable income for 1927,
it Is claimed, was $2lS.057; for 1928,
s157,2O3, and for 1929, sl04,000.
In a petition for REORGANIZATION OF
the assessments, Capone denied any
interest in the Cicero gambling syn
dicate or its profits and disputed the
claim that he received any part of
the bank deposits claimed by the
Government.
Most of the evidence was collected
by special agents of the intelligence
unit of the Internal Revenue Bureau.
under direction Of Elmer L. Trey, its
chief,