Evening star., 1937-05-31
TAX EVASION QUIZ
|SPROM|SED SOON
Probe of Mi||ionaires' Cases
to Start as Soon as List is
Ready, Says Doughton.

Early investigation Of reported tax
evasions by millionaires was promised
today by Chairman Doughton of the
House Ways and Means Committee
Doughton said that as soon as list
Of tax-evasion cases prepared by the
Treasury Department is received by
the House arrangements would be
made to start the inquiry He eX-
planned 1t was not certain, but he
assumed the job would be assigned
his committee by Speaker Bankhead
Doughton denied he had seen the
Treasury list or knew how many
cases 1t contained, or the names of
the milliOnaires involved. He said
President Roosevelt, in discussing the
situation with him and Chairman
Harrison of the Senate Committee,
referred to the cases only as the case
against Mr.. X
The list is expected to be sent to the
House along with the Presidents tax
message, which is expected tomorrow,
but which may be delayed day, pend
ing the return of Mr.. Roosevelt from
New York.
Reported to List 1l9 Cases.
There were unconfirmed reports the
list contained ll9 cases involving an
alleged loss to the Government of
S225 100000 in tax revenue which
the mlllionaires are said to have
avoided paying, by various loopholes
IN existing law.
Doughton indicated there is a pos
stbility Of joint House-Senate study
OF the new legislation the President
will recommend to plug holes in the
income tax law, to prevent evasions,
which officials are said to regard as
technically legal but unethical
Joint hearings on the proposed legis-
latlon might serve to expedite Con-
gresslonal action on the program, but
ne pointed out such procedure prob
ably would not shorten the period
toward adjournment.
Meanwhile fiscal officials have about
abandoned hope of collecting this year
ebout S78O00,0O0 in so-called windfalI
taxes
These taxes aimed at professors
ers the A, A. A. processing taxes.
were authorized in 1886 at President
Roosevelt's request as a stop-gap to
Eecoup part of the revenue loss re-
sulting from invalidation of processing
taxes under the old Agricultural Ad-
justment Administration.
Before these taxes can Weld any
-
planned, the Supreme Court must val
idate the windfall levies. No case is
pending. however, and the court can
not rule before this fiscal period ends
June 30.
Challenged in Court.
Numerous suits have challenged the
legality Of the windfall taxes and off,
cials said it is improbable any ma
terlal collections will be received this
fiscal period. Listed as an s82 900 900
revenue item in Mr.. Roosevelt's jan
uary budget. the taxes thus far have
provided only S4,000,000.
The Supreme Court already has
validated a law banning claims for
processing taxes paid under the A. A.
A. unless it Is proven the levies were
not passed on to consumers. This
court decision did not improve the
Governments budgetary position,
however, because no provision had
been made for refunding the taxes.
Officials said today court approval
OF the windfall taxes would help mar
row the gap between income and
outgo during the next fiscal year,
because the S7s 100000 of delayed COL
lections would flow in then. This
would whittle the estimated Sab
100000 deficit for next year by a
corresponding amount.
Won't Increase Deficit.
Authorities added that loss Of the
collections this year probably will
not increase the s2,557.OOO 900 deficit
projected for June 80, because the
vindfall tax litigation was taken into
account in President Roosevelts re-
vised budget forecast last month.
1t is possible, officials reported, the
estimated deficit may even be scaled
down sl00,000,O00 or so by an upturn
In revenues over expectations and
drop in expenditures.
To shave the deficit in this amount,
IT WAS said, second-quarter income
tax collections during June must top
the 100000 10000 mark. Some rev.
snue authorities expressed confidence
these collections would go over $780,
100000.