Evening star., 1952-05-28
Congress Is Urged
To Set Up Tax Bureau
As Independent Unit
By Cecil HoIlond

BY Cecil Holland
Two lawyers and an accountant
today urged Congress to establish
the Revenue Bureau as an inde-
pendent agency separate from the
Treasury Department,
The plea was made by Mont
gomery Angel Of New York, VIII
liam Sutherland of Atlanta and
Mark E. Richardson, a Washing
ton accountant.
They testified before the House
Ways and Means Committee in
support of a bill by Representative
Curtis, Republican. of Nebraska.
The bill would create three-man
commission to direct independ-
entity the Governments tax col
lecting system.
Agree in Principle.
The witnesses agreed that the
bill by Mr.. Curtis carries out IN
principle their ideas about an In
dependent tax collecting agency.
Mr.. Angel emphasized that an in
dependent agency was needed to
insure proper administration and
enforcement of tax laws uninfiu-
enced by changing administra-
tionS.
The committee is considering
legislation to strengthen adminis-
tration of. and close loopholes in,
the revenue laws. It would not,
however, set up the bureau as an
independent agency.
The hearing came in the wake of
two new blasts at the Treasury
Departments past actions.
They were:
/. Representative Kean, Repub-
lican. of New Jersey, a committee
member, said he could see no
justification for a 1948 Treasury
ruling allowing Richard j. Reyn-
olds, Winston-Salem N.C0 busi-
neSsman, to charge OF more than
$4,000 in loans to the New York |
State Democratic committee as
bad debts.
Capone Figures Cited.
2. Senator Williams, Republican,
Of Delaware, renewing his dis
closures against the bureau, told
the Senate the Treasury let the
late gangster AL (Scarface) Ca
pone and some of his notorious
associates settle $1,011, $50 of tax
claims in 1912 for $130,0OO.
Mr.. Kean's comment was made
after Treasury officials were called
on to explain the details of
the ruling in favor of Mr.. Rey-
nolds.
Acting Secretary of the Treasury
Thomas j. Lynch, Deputy Revenue
Commissioner of Revenue Edward
McLarney and Assistant Commits
Soner Fred S. Martin told the
committee the ruling was given at
the request Of Mr.. Reynolds and
the New York Committee.
sMr. Lynch said he first heard
about the case on December ~,
1g48, when Welburn Mayock, then
general counsel of the Democratic
NATIONAL Committee, sought ad-
vice about it from him and Under
secretary Of the Treasury Edward
u. Foley.
Two Make Repayments.
He testified that he advised MIR.
Mayock the matter should be
taken up by the principles with
the bureau. This was done, he
explained, on the following day.
The ruling favorable to Mr..
Reynolds was issued December 80, i
1948. three days after the request
was first received. (
MIR. Lynch said the amount of
the unpaid loan at the time was
1910, 1000. The loans were made, ,
headed. in 1910 and 1914 to the
New York, New Jersey and Illinois h
State Democratic Committees and ,
repayments were made by the ]
New Jersey and Illinois organiza-
tionS. He insisted that the bu-
reau'S ruling came within the ap-
propriate statutes on the basis
that the loans were made in good
faith since some of them bore in
tereSt and in two instances re-
payments were made.
. Mr.. Kean raised questions
about some o fthe loans, since
they did not bear interest and, in
addition, owing to the fact that
one was made in 1914 after the s
others had been outstanding for |(
four years. He then added he O
could see no justification for the
bureaus ruling.
Meant 100000 Loss.
Mr.. Kean asked what the Gov
ernment's tax loss would have
been if Mr.. Reynolds had offset I
the $4,000 loss against capital c
gains. Mr.. Martin replied that
it would have meant loss of s
about 100000. +
Senator Williams. in his speech. Il
charged that the Federal Gov Is
ernment allowed Greasy Thumb" s
The Weather