Evening star., 1936-09-25
-WARN|NGMUDDLES|
PUBLICITY ON TAXI
Revenue Bureau Acts on
Theory That Crime Lies
): In Misrepresentation.

Attorney General Cumming re-.
cent warning to Midwestern store
keepers against violation of q Federal
law restricting tax publicity In con-
nection with ssles is puzzling internal
revenue officials, who thought the
law applied only to gasoline, malt
products, matches and certain other
directly taxed commodities.
Cummings warning was the out
growth Of display by butchers. grocers
and other shop keepers, who have
posted signs in Illinois, Indiana and
Iowa stores advising customers how
much Of their money Is going for
taxes-the data having been supplied
by the Republican National Commit
tee.
Moreover, the Internal Revenue
Bureau has interpreted the somewhat
ambiguous language Of the llw IS
applying . penalty only to misrepre.
sentations regarding the tax-although
the first clause of the act seems to
make no such restriction
Interpretation Declined.
Cummings declined to attempt an
Interpretation Of the act to newspaper
men, who sought clarificstion Of the
wording of the statute. known as
section 1928 of the revenue act Of
1895. He explained that the act
'.speaks for itself"
Under the ruling of the Internal
Revenue Bureau, gasoline dealers who
display signs stating the amount Of
tax that must be paid by the con-
sumer are acting within the law.
Ofncials said there Is no requirement
that the amount Of tax be posted, but
there is ban on Misrepresentation
Of the amount.
Article SO of the bureaus regula-
tons a, relating to taxes on gasoline,
luhricating oil. brewers wort, malt
products, grape products and matches,
tnterprets the law IS follows:
TT a manufacturer or other vendor
Misrepresents the tax. he is guilty
OF misdemeanor and Is liable to
q fine of $1,000 and to Imprisonment
for . year. This provision is de-
signed. among other things, to pre-
vent vendor adding more than
the amount of the tax to the price
OF commodity and representing that
the increase is due to the tax"
Part Of Act Involved.
The bureaus ruling Is based on
the wording of the second section
OF the act. which states that whoever
IN connection with the sale or lease,
or offer for sale or lease, Of any article,
for the purpose Of making such sale
or lease, makes any statement, writ
ten or oral . +" ascribing q particu-
lar part of such price to . tax i'm
posed under the authority of the
United States, knowing that such
statement Is false or that the tax
Is not so great as the portion of
such price sscribed to such tax, shall
be guilty of misdemeanor and upon
conviction thereof shall be punished
by q fine of not more than 81 900 or
by Imprisonment not exceeding one
year, or both"
The first section bans making "any
statement. written or oral. intended
or calculsted to lead any person to
believe that any part Of the price
at which such article Is sold OF
leased, or offered for sale or lease
consists OF . tax imposed under the
authority of the United States
Misrepresentation Definitely Banned.
Careful reading of the two clauses,
In relation to each other, had con.
WINGED the Internal Revenue Bureau
the act outlaws false statements only,
and that it Is no crime to post the
correct amount Of tax
Bureau officials point out that
Regulations A." relating to excise
taxes on sales by the manufacturer,
state that the manufacturer may ad-
wise the purchaser of the amount of
tax in one Of three ways. /, by
separating the basic cost price from
the tax and stating the amount of
both; 2. by quoting the total price
after tax has been added and stating
that q certain amount of the price
! constitutes tax, and, 3, by quoting
q selling price which includes tax and
explaining that certain percentage
OF the total price Is q tax.
= These rulings, the bureau contends,
are intended to apply only to the
commodities specified in the tax law
not to bread and chops and other
articles on which there is no direct
Federal tax.
;. All Of which leaves the storekeepers
put West in a quandary about those
-eignS telling about New Deal taxes