Evening star., 1945-07-05
Letters to The Star
Secretary Morgenthau Discusses
Drive 10 Catch Tax Dodgers

Secretary Morgenthau Discusses
Drive 10 Catch Tax Dodgers
To the Editor OF The Star:
have been deeply gratified by the
attention that the newspapers of the
country have given to news relating to
the Treasury's drive against tax evaders.
This letter is to thank you for this at
tention and to urge continuing in
terest.
If law enforcement efforts are to be
effective, there should be clear con-
nection between the crime and Its pun
ishment. Income tax cases, by their very
nature. take much time to develop. An
attempted evasion Of income tax in any
year cannot be discovered until after
returns have been filed in the next year.
And in developing case for prosecu-
ton, 1t is necessary to trace income
substantially in excess of that reported.
This requires painstaking work and
much time, especially II operations are
in currency.
I mention this because some editors
may think an income tax case brought
this year, based upon evasions during
the early years of the war, is stale"
news. In the normal course of events,
the average income tax case, when it is
brought to trial, deals with evasions two
or three years previously. In some Of
the more important cases, several years
have been required to assemble evidence.
The situation which now confronts
the Treasury, moreover, is far from
normal During the course of few
years there have been radical increases
in the national income and in the
amount OF money In circulation, and
even greater increases in tax rates and
coverage. Before the war there were
100000 individual taxpayers and COL
lections of 5000, 900 900. Now there are
more than 100000 individual taxpay-
ers and collections of s45, ,000, ,o00,00
The great majority Of American citi-
zens recognize the necessity for heavier
taxes to meet war costs, make honest
returns and pay their tax bills without
protest.
War conditions, however, have been
accepted by too many persons as repre-
senting an opportunity to conceal in
come. This Is especially true as to black
market operators, whose dealings are
conducted largely in currency, and as
10 other racketeers and war profiteers.
The honest taxpayer inevitably pays,
directly or indirectly, the tax which the
crook lodges.
Since it Is obviously impossible to
police tax collections adequately with
forces of prewar size, have undertaken
to recruit 5000 additional investigators,
plus another 5000 to 5000 persons to
do the ofice work connected with our
expanded tax collecting program. Presi-
dent Truman has given his vigorous
approval to the program and has added
the helpful proposal that we pay partic-
ular attention to recruiting from among
discharged servicemen those who are
our stepped-up enforcement program.
The Treasury always has had author
ity to examine all books and records
pertinent to an income tax case and
has for many years required informa-
ton as to salary payments and other
data to facilitate the collection efforts.
Because the use of currency is SO fire.
quently o factor. especially in "black
market" cases, we are now requiring
monthly reports from banks and other
financial institutions of currency trans
actions which, in the judgment Of these
institutions, are Of unusual nature.
The Treasury welcomes information
from any source that can help stamp
out tax evasion. Our primary purpose,
however. is not to put people In Jail, but
to collect the taxes. No taxpayer who
has made an honest mistake has any
thing to fear. Moreover, the long g-estab-
lished policy of the Bureau of Internal
Revenue has been against undertaking
criminal prosecution in any case in
which the taxpayer corrects false or
erroneous returns and settles his bill
with the Government before investiga-
ton has begun.
Newspapers can help substantially in
publicizing our recruiting efforts, in
reporting adequately all phases of our
intensified enforcement drive, and in
making plain its primary purpose-to
prevent tax evasion. The more wide
spread the publicity, the greater will be
its deterrent effect.
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