Evening star., 1937-08-07


equitabl agencies in the world name
ly the Government Of the United
States, used to insist on its first
cut in the proceeds.
Now all this is changed tax
payer apparently may work one day
week for charity and assign his
income directly to such charity with
out having the total amount earned
counted in as gross income This
Is because the Treasury Department
has formally announced that it con-
ours in the informal ruling made in
1888 when Robert jackson was gen.
eral counsel of the Internal Revenue
Bureau.
There are. Of course. always people
such as tax experts who want to take
the Joy out of life and they are in
sisting that the Treasury Depart
nent doesn't mean that a taxpayer
can really do what Mrs. Roosevelt
did, and that if some one else tries
to assign his or her income to charity
there Will be a deficiency tax levied
against them.
Congressman Take 1t Literally.
Such suppoSit:on, of course would
few weeks ago have been promptly
accepted because all the rulings of
the Bureau of Internal Revenue and
the decisions Of the Supreme Court
of the United States have held that
the taxpayer could not avoid taxa
tion by assigning income, no matter
who the beneficiary happened to be
and no matter how fine or worthy
the motives or purpose. But now
the members Of Congress are tax
ing literally the pronouncement bv
the Treasury Department that a reg
ular weekly broadcast, extending
throughout a ma ior part Of the year.
Is just the same thing AS an occa-
siona benefit performance by an
actor or ball player.
One would have imagined that
the very occasional charity per-
formances Of this kind were not in
the same class with regular services.
performed by an individual along
side of other individuals in the COM
mercial world, but the Treasury says
they are alike. The taxpayer can
therefore rejoice over the new rulings
which permit him or her to work
one day week for charity.
1t may be. Of course. that this
hne OF reasoning is all wrong and
that the Treasury, caught in an
embarrassing situation by Representa-
tive Hamilton Fish's request for in
formation, preferred to stand by
the secret ruling given to Mrs. Roose-
velt, rather than to seem to be
proving the point so many critics
have made. This point was to the
effect that tax avoidance and evasion
ahould not De Jumped together as
President Roosevelt did in his mes
sage to Congress. Mr. Roosevelt called
them all clever little schemes" and
gave an impression of illegality or
tsint to what apparently were in some
eases legitimate transactions within
the law
Mistake Could Be Rectified.
advised and really did not con-
form to the law, 1t would be a simple
matter to have the mistake rectified.
The Internal Revenue Bureau could
levy an extra or deficiency assess
nent and the proceeds of one or two
weekly broadcasts would easily cover
The amount which, it might be
argued. was due the Treasury.
But Mrs. Roosevelt isn't to blame
II the Treasury officials gave her
poor advice. She was frank about
the transaction and disclosed it in
advance, telling the Government
exactly what she planned by the
contract. They gave her a special
privilege when they ruled on her
tax problem before the end of the
calendar year in which she earned
were careless or attempting TO curry
favor with the Presidents wife by
giving her secret ruling which hap
pens to be inconsistent with previous
rulings and precedents, there is not
the slightest blame attached to Mrs.
Roosevelt
But what of other citizens who
want the same treatment? This leads
Representative Fish of New York to
write to Secretary Of the Treasury
Morgenthau as follows:
MY only interest in this matter
Is to see that rich and poor. in
fuential and lowly men and women
are given the same consideration in
regard to advisory opinions on pro-
spective or consummated transactions
L would like to advise my
constituents that they may hereafter
devote one day week of their
regular earned income to a charitable
purpose, and that it would not be
necessary to report it as gross in
come. This would be highly bene-
f1cial to charitable organizations, but
] am afraid would serve as loophole
particularly for economic royalists to
evade payment OF so per cent in
taxes on gifts they desire to make
10 charity"
But 80 long as the charities get
the money, it apparently is con-
xidered proper. Then the Treasury'a
ruling in support OF what Mrs. Roose-
welt did is great break for the many
drives which will begin in the
Autumn months. Some day the Is
per cent deduction for charity will
be abolished and citizens will be
permitted to give 100 per cent OF
their incomes to charity. But until
that day comes the charity-minded
producers of wealth will have to be
content to use the roundabout de-
vice now sponsored by Government
oficials and sanctioned for use by
Mrs Roosevelt u 4