Evening star., 1937-12-06


Now has come out of the Bureau
of Internal Revenue a request which
on its face is unexplained, but which
can be construed as expressing a fear
that the Government of the United
States is afraid of the future and is
getting ready to protect itself against
fight of capital to other countries
or is getting ready to make a capital
levy which amounts to a confiscation
of property.
The order issued by the Internal
Revenue Bureau which requires a
listing of assets and cost thereof ap
plies for the time being against persons
with net incomes of 100000 a year
or over, but if it is legal to issue such
an order, the administration can over
night promulgate the same sort of
decree against persons with net in
comes of $4,000 and over per year.
Why does the Democratic admins
tration want to get list of the per-
sonal assets of taxpayers together
wnth sworn statement of their cost
and true worth? The Constitution of
the United States gives the Federal
Government the power to levy taxes
on income-and the word income" is
used instead of assets" 1t is con-
ceivable that Congress can delegate
to the Treasury Department the power
to demand list of assets where fraud
as To reported income is suspected.
But in the absence of such situation,
Ie
to have no legal right to issue
blanket request for information con-
cernlng the personal affairs of the
citizens. There's a clause in the
Federal Constitution which is sup
posed to protect the citizen against
unreasonable searches and seizures
and the Democratic administration
has not disclosed why it considers its
request necessary or reasonab bic. Hence
citizens will probably consult counsel
ss to whether they should pay any
attention to the new decree.
Power of Treasury.
But what does the administration
want to find out? Some explanations
advanced is that it will assist the In
ternal Revenue Bureau agents in de-
termlnlng income as well as taxes on
estates and gifts from year to year.
But the Treasury has power under eX-
listing law to make the taxpayer come
across with any information deemed
essential to the auditing of an income
tax return if there is ground for suS-
picion that irregularity has occurred
or dishonesty has been practiced
1t may be that the administration is
getting ready to submit TO Congress
further details of taxpayers income
tax returns in plain violation of the
spirit of the relationship that should
exist between the taxpayer and his
government. The Social Security
Board is an example of an agency
which has refused all sorts of requests
for information about the cards or
numbers or identity of individuals
even though the information is sought
to aid criminal prosecutions. The So
cial Security Board insists the infor-
nation was given confidentially by
the citizen and should be so treated
But the Internal Revenue Bureau
has no such feeling about income tax
returns and has apparently made no
public protest against the misuse made
of taxpayers returns last spring when
data and names were submitted to a
congressional committee in connection
with the so-called inquiry into tax
avoidance.
General Counsel Quit.
1t will be recalled that Morrison
Ehafroth of Denver, Colo, resigned as
general counsel of the Internal Reve-
hue Bureau rather than acquiesce in
the hlghhanded procedure of the ad-
mlnlstratlon in revealing the names
of taxpayers who had complied with
the law but whose tax returns were
made the basis of political charges
concerning alleged avoidance
Under the existing Interpretation of
the law, the Internal Revenue Bureau
could transmit to Congress a list of
personal assets of individuals with in
comes of 100000 or over and could
open to inspection the cost of all such
assets. # the details of the assets
of persons with incomes of 100000