Evening star., 1951-05-06

Harris Ewing Photo.
Charles Oliphant
evasion. There's nothing like q
nice. legitimate business with lots
Of turnover to befuddle prying tax
collectors. Possession of wealth
has enabled racketeers-the COM
mittee found-to exercise inf1u-
ence with Federal. State and local
officials. So it wants the Govern
ment to be apprised of the net
assets Of suspected tax evaders
Most shocking to the committee
were the revelations of the extent
of official corruption and conniv-
ance with organized crime.
Revenue Official Answers
Citing these and other charges
OF the crime committee, the writer
sought the reaction of the Interna.
Revenue Service. Officials there
headed by Commissioner George
j. Schoeneman, pointed out that
the Kefauver committees report
also had some good things to say
about the collection of the income
tax. The service, they added, has
been doing the best it can with the
staff available. has convicted many
crooks and other similar tax
evaders and is working on some
$500 additional cases. Not all tax
evasion, they emphasize, is by
|gangsters and the service has to
collect taxes, regardless of who is
trying to evade them. Recently
the service has created a number
of ''rackets squads" in its field Of
fees, thus carrying out one of the
Crime Committees reconlmenda- :
tions.
In an interview with Charles
Oliphant, chief counsel, Internal
Revenue Service. answers were
obtained to some of the questions
raised by the Committees report
The interview is presented in
question -and-ansWer form.
@. Is it true that gamblers and
racketeers can evade their in.
come taxes by hiring exper.
lawyers and accountants, ana
what means are at the disposal
Of the Treasury to combat this
problem?
A. 1t is not uncommon for gam
blerS and racketeers to retain the
services of tax accountants or ta2
lawyers to prepare their income
tax returns. 1t should be noted
however, that the tax accountant
or tax lawyer who willfully and
knowingly aids and assists in the
preparation of a false and fraudu-
lent return can be prosecuted fol
a felony and it is the policy OF
the Bureau of Internal Revenue
to recommend prosecution if the
facts are established to make q
case.
In addition to recommending
criminal prosecution against taa
practitioners guilty of such con-
duct, the bureau recommends
their disbarment to preclude them
from representing taxpayers OF
defending income tax returns
which they have prepared. Eac1
year a number of tax practitioners
are disbarred from practice before
the Treasury Department.
No Mass Reflection
AS to the question of whether
the hiring of tax accountants anc
lawyers permits racketeers tc
evade their income taxes, I car
point to the record of convictions
Iof many racketeers, regardless o1
who represented them. Crimina.
prosecution cases are made only
on the basis of evidence of COM
mission of the offense of will.
fully attempting to evade or de-
feat the tax and in no case does
the bureaus decision to recon-
mend prosecution depend upon thu
person representing the taxpayer
Anything have said is no re.
Election upon the great body oil
tax practitioners, whether lawyer.
or accountants. I am referring
only to those very few who woulc
help cheat all of us.
@. What means are at the dis.
posal of the Treasury to bloch
tax evasion? What does the
Treasury Department do in case.
where income tax returns arr
filed showing round figures o1
income without information as tt
source and how successful is ths
department in collecting take.
from that group?
A. Tax evaders fall into two
general classes: Cd Those WHIT
tailor their books and records tx
present a perfect and detailed
record of the income and deduc.
tions which they plan to report
and CD those whose books ant
records are inadequate to support
the income tax returns which
they file.
If the books and records are tai
lored to fit a false return or ar,
not adequate. the bureau can ans
does establish the true facts b,
going to the records of others t,
show omitted income or false de
lductions of specific items. If tha
cannot be done the details of tn,
taxpayers annual increases in ne
worth are worked out from rea
estate acquisitions, single-premiun
life insurance purchases, bank bal
ances, stock and bond purchase
(Cna TAY ATXY na~~ ~ 0N