Evening star., 1940-05-21
District 10 Ask
High Court Rule
On Income Tax
Plans for Test Made
After Sweeney Case
Review Is Refused

With at least $4,000 in taxes in
volved in future rulings as to who
is "domiciled" here, District Gov
ernment attorneys today planned to
carry to the United States Supreme
Court a case testing the scope of
the city's income tax levies.
Determination to seek a direct
test of the income tax law was
voiced by Corporation Counsel FL
wood H. Seal and his assistants as
result of yesterdays refusal by the
high court to review the Court of
Appeals ruling in the Sweeney case,
which was adverse to the District.
The Sweeney case involved the Dis
trict's old and now repealed intan-
gible personal property tax law.
The District had petitioned the
high court for a writ of certiorari,
fearing the language used by the ap-
pellate court was so broad on the
question of "domicile" that it might
limit the scope of the new income
tax law.
Meanwhile, 10 v. Morgan, sole
member of the District Board of
Tax Appeals, indicated today he
would rule against the District in
the first case to 60 to his board in
an appeal from the income levy
The impending ruling by Mr.. Nor
gan possibly may set the stage for
a test in the Court of Appeals and
the Supreme Court of the applica-
ton of the "domicile" clause in the
income tax law.
Involved Henning Claim.
The case awaiting Mr.. Morgans
ruling involved a claim by Eugene
S. Henning of $50 Randolph street
NV, an electrical engineer en-
ployed by the Navy Department, for
a refund of a $1379 income tax
payment he made earlier this year
to the District. While Mr.. Henning
has resided here since June. 1887,
he claims he is legal resident Of
Worcester, Mass, where he said he
has paid income taxes. He claimed
he, therefore, was not ''domiciled"
in the District.
Mr.. Morgan has been withholding
his decision in the Henning case to
await the action of the high court
on the Districts appeal for review
of the Sweeney case. 1t was said
today Mr.. Morgan would rule that
Mr.. Henning was entitled to a re-
fund of his taxes paid the District,
in the light of the refusal of the
high court to review the Sweeney
case, since this leaves, for the time
being at least, the appellate court
ruling in the Sweeney case as what
he is said to regard as the leading
precedent.
The Sweeney case involved claim
by James j. Sweeney, an attorney
in the Justice Department, for a re-
fund of taxes under the old intan-
gihle personal property levy, on the
ground he was not domiciled here,
but was a resident of Massachusetts,
although he had lived and worked
here for 20 years.
1914 File for Refunds.
To date, according to report
made today by Allan F. Brooke of
the income tax division of the Dis
trict, 1914 persons have filed claims
for refunds of the taxes they paid
to the District under the income
levy. These claims are said to ap-
proximate $4,000. Some District
officials anticipate the amount
ultimately involved in refund claims
will run to $100, 600. or perhaps more,
since taxpayers have two years from
the time of their returns to perfect
claims for refunds. However, the
3,814 claims so far filed amounted
to only 81 per cent of the $4,000
taxable personal income returns filed
with the District earlier this year.
In addition to these, however, claims
for refunds also were filed by about
200 persons whose returns showed
no taxable incomes and on which.
so far, they have paid no taxes. One
explanation was that these persons
may fear their returns may be
changed by the District to show that
they owe taxes and that by filing
claim for refund they were making
sure their rights to refunds were
being preserved.
The District has collected in per-
sonal income taxes $1,645,174, as
against the estimates made nearly a
year ago of $l,000,000. However,
taxes paid by corporations, under
the per cent fiat rate corporate
levy, totaled $1,433,375, or $766, 6,625
less than the amount anticipated
last summer. Thus, instead of the
District having received 5000 900
from the personal and corporate
levies, the revenue has failed by
$121 ,451 to reach that goal.
Debate Scheduled.
Mr. Morgan announced today the
whole subject of District taxation
would be debated at 4:30 pm. Sum-
day in the boardroom of the Dis
trict Building in a panel discus
sion sponsored by the Public Rela-
tions Committee of the District Bar
Association. of which he is chair
man. The first half hour of the de-
bate is to be broadcast by Station
WJSV.
The panel will be under the direc-
tion Of William E. Hayes, chairman
of the bar association Tax Commit
tee, and members of the panel will
be Herbert S. Wood, senior technical
adviser to the commissioner of in
ternal revenue; Seton Darr, former
president of the District Bar Asso-
ciation; John E. Mcclure, tax attor-
ney, and E. Barrett Prettyman, for
mer corporation counsel and former
general counsel of the Bureau of
{ Internal Revenue.