Evening star., 1952-04-29
Senator Names
Marshall Field,
Reynolds, Schultz
By J. A. O'Lean


three wealthy citizens have been
allowed to charge off as losses on
their income taxes 80 per cent of
loans" made to Democratic COM
Mlttees in the years 1910 through
1948. The loans totaled $4,000.
He named the taxpayers as
Richard j. Reynolds of Winston
Salem, N. c.; David Schultz of
New York and Marshall Field.
Senator Williams present e d
copies of Internal Revenue Bureau
rulings issued about four years
ago, showing that in each case
the taxpayers made loans to the
Democratic State Committee of
New York. They then asked the
bureau how the losses would be
treated if they accepted 10 cents
on the dollar when the committee
was unable to repay them.
The Senator, who was one of
the first to dig into Internal Rev.
enue scandals, said that in these
three cases it was held that the
unpaid amounts would not be
subject to gift tax, but would be
recognized as legitimate tax de-
auctions.
Cites SchOeneman Ruling.
The Senator also charged that
in July, 1851, former Internal
Revenue Commissioner George J..
Schoeneman gave the Democratic
National Committee a ruling al
lowing contributions to Young
Democratic Clubs of America as
legitimate business deductions.
This ruling provided such con-
tributions must not have been
made on political basis, but
with reasonable expectation of a
financial return commensurate
with the amount of donations"
Senator Williams placed in the
record Mr.. Schoeneman's letter to
William Neale Roach, assistant
treasurer of the Democratic Ma
tional Committee. The letter said
that Wilson Gilmore, president of
the Young Democratic Clubs of
America. had asked for the ruling
as to whether corporations could
deduct contributions to the Young
Democrats for their convention in
st. Louis last October.
The letter explained that the
Young Democrats planned to Or
ganize a convention corporation to
receive all convention funds and
pay all expenses. The organiza-
ton had asked for a ruling
whether contributions from cos
porations would be deductible
from Federal income tax as busi-
ness expenses if given to the
Young Democratic Club Of Amer
lea or to the proposed convention
corporation.
Part of Reply.
Mr.. Schoenenman replied in
part as follows:
"On the basis of the informa-
ton submitted it is held that
contributions for the purposes of
the convention made either to
the Young Democratic Clubs of
America, or in the alternative to
the convention corporation when
organized, by corporations engaged
in a trade or business in the city
of st. Louis and its environS would
constitute allowable deductions as
ordinary and necessary business
expenses under the provisions of
Section % (a) of the Internal
Revenue Code in the Federal in
come returns, provided, that such
donations are made with reason
able expectation of a financial re-
turn commensurate with the
amount OF donations"
Williams Disputes Ruling.
II do not understand" said
Senator Williams, "just what they
mean by this-it was always nv
understanding that any contribu-
tion to either the Young Demo-
cratic Club or the Republican Club
would be political"
Senator Williams. charged that
In September, 1850, Mr.. Schoene-
man informed Republican State
chairman. John j. Dickerson of
New Jersey, that political con-
tributionS are not deductible. Mr..
Dickerson had inquired if buyers
of tickets to a dinner at Atlantic
City could deduct the cost from
their income tax.
The Senator quoted the former
commissioner as stating that if
tickets are bought to support "the
political aspects of the occasion in
question (as distinguished from
the business aspects attendant on
obtaining new money and Gus
(See WILLIAMS. Page A-4.)