Evening star., 1951-10-03
Tax Employees
Income Returns
Under Scrutinv
Commissioner Dunlop
Tells House Group
Of Wide Inquiry
By Cecil HoIIond

John B. Dunlap, Commissioner
of Internal Revenue, said today
he has ordered close examination
of the income tax returns for the
last three years of everybody
working for the Bureau of Internal
Revenue from the Commissioner
on down."
He disclosed this in testifying
as the first witness as a House
Ways and Means investigating
subcommittee began public hear
ings here on reports of widespread
scandals in the bureau.
Mr.. Dunlap. who has been COM
missioner for only two months,
was questioned about a subcom-
mittee proposal that each internal
revenue employe dealing with the
public should be required to file
a financial QUESTIONABLE covering
his sources of income and similar
matters.
Fears Personnel Loss.
The commissioner said he be-
lieves officials should attempt to
learn about the financial status of
their employees, but in this con-
nection he cited problems facing
the bureau in obtaining qualified
officials.
Il would hate to run the risk
of a lot of retirementS at this
time of people who just wouldn t
like the idea" he said.
Mr.. Dunlap emphasized, how
ever, that if the subcommittee de-
sired circulation of the question
naire his Office would be 100 per
cent behind the idea"
He added that he has been in
clined to rely on an examination
of tax returns and pointed out
that many bureau employees are
highly qualified accountants. He
added:
If they are inclined to be
crooked. you are going to get back
crooked answers.
Cost Exceeds Returns.
Mr.. Dunlap headed the bureaus
recently established tax fraud
squad dealing with the returns of
racketeers and gamblers before he
was named commissioner. He
told the subcommittee that 1900
cases involving gamblers and
racketeers had been closed and
that $13 million had been assessed
against the persons involved. But
he pointed out that the cost of
this work would be about SIS
million, adding that it was not a
productive field from a financial
standpoint "but very productive
for the good of the people of the
United States"
He said the shortage of per-
sonnel in the bureau made it
necessary to pass over thousands
of returns which should be
examined.
The subcommittee delayed any
specific recommendation on the
questionnaire proposal pending
further study and testimony from
Secretary of the Treasury Snyder
Representative King. Democrat. Of
California, the subcommittee
chairman, said he had been in
formed that Mr.. Snyder was op-
posed to such a questionnaire.
However, Mr.. Dunlap said the Sec
retary is supporting it.
Blames Outside Activity.
Earlier in his testimony Mr..
Dunlap said that in cases of cor
ruption and improperly among
collectors and employees of the
bureau outside business activity
had been involved.
Representative King asked if
Mr.. Dunlap believed collectors
should be prohibited from en-
gaging in outside business activi-
ties while holding Office.
Mr.. Dunlap replied he believed
the most important question con-
cerned the propriety of the out
side business, and that if such
activities should be prohibited the
bureau might be limited to men
who were not successful in the
business world.
IF collectors were appointed
for a definite period of time, I'd
say definitely yes" Mr.. Dunlap
explained. "If they were given
different salaries. yes. But under
present circumstances, I'd say no."
Representative King said in an
opening statement that reports of
corruption and ineficiency" have
shaken public confidence in the
bureau. He added that the initial
part of the hearings would deal
with the 81 collectors offices in
relation to the criticisms and re-
ports of improprieties that have
been leveled at the bureau in re-
cent months.
The chairman added that a study
by the subcommittee's staff had
indicated that the overwhelming
majority of cases of misconduct
(See INTERNAL REVENUE. AL