Evening star., 1953-12-07
Revenue Service Hit
By House Unit on
taxpayers Records

taxpayers Records
A House subcommittee put
principal blame on the Internal
Revenue Service today for let
ting thousands of taxpayers file
returns without keeping records
or fully disclosing the sources of
income.
This was among criticisms or
suggestions in the final INSTALL
ment of a Ways and Means sub
committee report of its two-year
investigation of tax law admin
istration and tax collection
methods.
While urging some legislative
remedies, the report noted that
existing law requires the Internal
Revenue Commissioner. with ap-
proval of the Secretary of the
Treasury, to maintain adequate
records and also requires tax
payers to submit information
statements along with tax re-
turns.
Grunewald Case.
THE subcommittee does not
understand why this authority is
not sufficient for the commits
Sioner to require taxpayers like
Grunewald to give fuller infor-
nation as to sources of income
on their returns, to- maintain
records permitting certification
of such sources and amounts of
income, and to supply such sup
Elemental information as may
be required" the report de-
clared.
'The subcommittee's investi-
cations indicate a lax enforce
ment of information return re-
quirements and an even less ex-
cuSable failure to make proper
use of such information returns
as are received. A revamping of
the entire information return
program is in order"
Henry (The Du t C m NJ
Grunewald, canvicted several
months ago of contempt of Con-
greSs, figured prominently and
frequently in the Subcom-
mittee's investigation. In an
earlier installment of the cur
rent report the subcommittee
said it suspected him of getting
major sums for "tampering with
tax cases." His tax returns
showed large earnings from un-
identified sources which agents
were unable to trace, the re-
port added.
Lack of Publicity Hit.
The subcommittee complained
that the Internal Revenue Serv-
ice has failed to give sufficient
publicity to provision that tax
payers should file an informa-
ton return. concerning payments
of more than 5000 a year to
doctor, lawyer, domestic servant
or private landlord.
Besides suggesting "a particu-
lar effort to punish" failure to file
such information returns, the
subcommittee proposed re-
quirement for filing information
returns by anyone making pay
mentS in the form of gifts of
goods or services worth more
than specified sum in any year.
The subcommittee also recon-
mended:
Greater use of prison sentences
instead of merely fines in tax
fraud cases.
Equally severe punishment for
willful failure to file tax returns
as for filing of fraudulent re-
turns.
Wider publication of rulings in
tax cases.
Government authority to de-
duct amounts from salaries of
Federal employees delinquent in
tax payments. Other taxpayers
already are subject to salary or
wage garnishment under the In
ternal Revenue Code.
A requirement that any per-
son who receives pay for helping
another to prepare his tax re-
turn must sign his name and ad-
dress on the return. The SUBJ
committee said it found instances
where unScrupulous persons
posed as tax consultants and fall
sif1ied returns.
Refusal to Testify Scored.
A ban on any attorney, ac-
countant or other practitioner
who seek to represent taxpayers
before the Treasury but then,
as witnesses, refuse to testify on
grounds of possible self f-incrimi-
nation when asked about their
roles in conduct of tax cases.
Discontinuance of advance
ment of revenue service agents
on the basis of additional tax
revenue they collect. The sub
committee commented:
"At best the extra revenue
gathered by an employe is a poor
measure of his ability since it is
strongly affected by the type OF
case to which he happens to be
assigned. Worse, an ambitious
employe may be tempted to un-
due severity toward taxpayers to
better his production record" !