Evening star., 1937-07-28

ty. Robert Jackson, notD in Justice
but formerly in Treasury Depart
nlent, publicly disclosed that he
had adptsed Mrs. Roosevelt on her
tar liability.
BY the Associated Press.
Robert H. Jackson, Assistant Attor-
ney General said today the Treasury
merely had followed precedents in
ruling that radio contract did not
result in taxable income to Mrs
Franklin D. Roosevelt.
Mrs. Roosevelt, Jackson told a Joint
Congressional Tax Committee re
ceived no income for herself and was
no richer directly or indirectly for her
labors."
Because the contract provided that
Philadelphia charity should receive
$4,000 after each broadcast, Repre-
sentative Fish, Republican, Of New
York had accused the Presidents wife
OF using tax loophole. Jackson was
called at the insistence of Republican
Committee members to explain the
ruling.
Denies Discrimination.
He contended there was no discrim-
ination in favor Of Mrs. Roosevelt.
Never, under any administration. ;"
he said has the Bureau Of Internal
Revenue considered as income the
value or proceeds of services donated
in good faith to charity"
The Justice Department Official was
chief OF the Internal Revenue legal
unit when the ruling in Mrs. Roose-
velt's case was made in 1894.
Without formal rulings. Jackson as
serted, the Internal Revenue commits
sioner for years has permitted pro-
ceeds Of charity concerts, prize fights,
base ball games and similar entertain
mentS to be treated on the same basis
as Mrs. Roosevelt's lectures and not
be taxed except in so far as the per-
formers personally benefited from
them. Aside from 81 to make the
contract binding, Jackson said. the
Presidents wife received no benefit
measurable in terms Of money from
her broadcasts.
Cites Bureaus Attitude.
He added that the Internal Revenue
Bureau has been diligent to Sc that
its position on charitable performances
was not abused as cover for an
assignment of income, or an order
to pay income to third persons, which
was in substance an avoidance Of
taxes"
Roswell Masill, Treasury under
secretary, wrote Fish yesterday that
taxpayers frequently request and re-
ceive the opinion Of the Internal Reve-
nue. Bureau as to how a particular
transaction should be handled in tax
returns.
Says Few Published.
Few are published as rulings, he
said, and the decision in Mrs. Rooose-
velt's case was not one of those.
Il am further advised he said
that no reason has been presented
which leads the bureau to feel that the
position then taken Gn 193N should
be disturbed"
Denies Avoidance Scheme"
During his testimony the Assistant
Attorney General denied vigorously
that Mrs. Roosevelt had employed "a
clever little scheme to avoid tax pay
ments.
Doesn't the case of Mrs. Roosevelt
come in the category Of a clever little
scheme to use the Presidents own
words?" asked Representative Tread
way, Republican, of Massachusetts,.
There, you are questioning her mo-
tive" Jackson replied. Il think it does
not come in such category If Mrs.
Roosevelt had wanted to avoid her
taxes. she would not have come near
the bureau"
In executive session after jackson
had left, the committee considered
boosting the tax on income derived
from American sources by non-resi-
dent aliens.
The present levy, withheld at the
source, is 10 per cent. The Treasury
was understood to be desirous Of lift
ing the rate to upwards of IS per cent.
Chairman Doughton said the COM
mittee hoped to receive the last of
the Treasury's suggestions for closing
tax loopholes tomorrow.
More drastic treatment of personal
holding companies received the tenta-
tive approval yesterday OF the Tax
Investigating Committee. The Treas
ury contends use OF these "incorpor-
ated pocketbooks" by taxpayers has
cost the Government huge sums in
revenue.
Decision on Holding Companies.
Chairman Doughton said the COM
mittee had decided on increasing
personal holding company taxes and
considering restricting deductions
the present law allows them.