Evening star., 1951-10-26
By Cecil HolIond and
GEORGE Beveridoe

A House Ways and Means sub
committee prepared today for a
new phase of inquiries into scan
dals in the Bureau of Internal
Revenue. after testimony that Jo-
seph P. Marceile was eusted as
Brooklyn collector for irregulari-
ties in his own income tax returns.
Hard-hitting John B. Dunlap,
new commissioner of Internal
Revenue, told the subcommittee
late yesterday why he demanded
and received the Marcelle resigna-
tion earlier this week.
He said an investigation indi-
Gated that Mr.. Marcelle, the
Brooklyn collector of Internal Rev.
enue since 1914. had understated
his 1948 income by $11,4l9 and
claimed deductions totaling $2l,-
4l5 that were largely unsupported
for total possible tax liability of
$32,S34.
Claim Might Be Increased.
Adrian w. DeWind, the subcom-
mlttee counsel. indicated the claim
might be increased by about S30.-
600, pending decision on whether
M. Marcelle is allowed a capital
gains tax on other income.
After a day-long hearing de-
voted to the Marcelle case. Chair
man King, Democrat, of Califor-
mia. recessed the public hearings
subject to his call.
Hlghlights of the days hearing
included:
!. Mr.. Dunlap said emphati-
cally he would take immediate
action against any collectors or
bureau agents "the minute I get
evidence corrective action is
needed"
2. The commissioner said the
tax returns of every collector
including mine"-for the last
three years have been ordered
audited and from now on for
every year"
Named Despite Fitness Report.
8. Undersecretary of the Treas
ury Foley told the subcommittee
that Mr.. Marcelle was named
Brooklyn collector despite reports
which questioned his fitness and
the statement of at least two
prominent persons, whose names
were not disclosed, that "a better
person" could have been chosen.
Mr.. Foley, who was not in the
Treasury at the time but was on
military leave. said that on the
basis of the investigators reports
Il would be very reluctant to rec
ommend the appointment"
4. Mr.. Foley said he was not
prepared to say whether collectors
should be placed under civil serv-,
ice, but that if the subcommittee
wanted to recommend that action
he was sure the Treasury would
agree.
The subcommittee was told that
Mr.. Marcelle's 1948 return report.
ing $135,000 in gross income, be-
fore adjustments. unaccountably
was left in the collectors Office
for audit. rather than being sent
to the field revenue agent as re-
quifed for returns showing large
incomes.
Couldn't Explain How.
Mr.. Marcelle said he couldn't
explain how that happened. He
contended it happened "in thou
sands of cases" but revenue
agent. Thomas E. Scanlon, said
1t was most unusual and should
have been caught in the recheck-
ing Of returns.
Mr.. Marcelle told the subcom-
mittee that he, in 1945, put $4,000
Anto a cigarette vending machine
company which. during the next
three years. gave him and his
wife a return of more than
Sl50,000.
The witness said he owned a
half interest in the sales firm, the
Eastern Electrical Vending Ma
chine Co.
Between late 1945 and June l,
1948, he testified, he received
100000 in commissions, plus $780,
All paid to the couple in salaries
during 1867. The half interest
was sold in 1948 for an additional
100000. he said.
Mr.. Marcelle said he became
associated with the firm through
Mario Caruso, a New Jersey resi-