The coastland times with which is combined the pilot and herald of Belhaven and Swan Quarter. [volume] (Manteo, N.C.) 1959-1973, 1961-10-06
INTERNAL REVENUE
WANTS JONES FAY
AN EXTRA 1902, 900
Government Goes Behind Years
For Which lndussriaIisf Was
Imprisoned For Evasion

Although Samuel G. Jones, the
celebrated industrialist of Berkley,
Va, and Ocracoke Island is now do
ing stretch in the Federal prison
at Lewisburg, Pa. for evading pay
ment of $277,00O in income taxes
for the Years 1852 to 1854, the
Internal Revenue Service is still
digging in his records and have
now come up with a claim for an
additional 100000 alleged to be
due for the years 1850 and 1851.
Jones, who began serving two
year sentence in April, is presi-
dent of the Berkeley Machine Works
and had built three large homes on
Ocracoke Island, which he had
charged in income tax returns as a
necessary expense for his business.
Recently, the second Mrs. Jones
has completed a large mansion on
Ocracoke Island overlooking the
harbor, and which is similar in ar
chitectural appearance to the homes
previously built by Mr.. Jones.
In its latest action, the Internal
Revenue Service claims defcien-
cy of $30,S63.S1 and so per cent
fraud penalty of $15.1S1.66 from
Berkeley for 1850 and a deficiency
of $4S,O80.80 and fraud penalty
of $24,040.40 for 1861. Total $117,-
666.17.
Jones charged IRIS erred in dis
allowing $56,556 in business ex-
penses for 1860 and $63,650.24 in
1851 business expenses.
He charged that IRIS further err
ed in not allowing all depreciation
to which the company was entitled
for 1860 and 1851 and in disallow-
ing s7,6oa.5o in payroll expenses
for 1851.
He said the IRIS wrongly impos-
ed fraud penalties on the alleged
deficiencies, and he denied any in
tent to defraud the government.
IRIS Alleges Intent To Evade
In an answer fled Aug. II, the
IRIS countercharged that Jones's
company, buying through agents
and officers, fraudulently and with
intent to evade taxes overstated its
expenses and thereby understated
its tax liabilities for 1850 and 1851.
AT least part Of the deficiency
for the said years is attributable
to fraud to evade and defeat tax"
IRIS said.
In another petition bearing the
names of Jones and his deceased
wife Mary Ruth Jones. the indus
trialist stated the IRIS wrongly de-
termined that he had tax deficien-
cies of $26,759 in 1850 and $780,
1856 in 1851 personal income.
(The alleged deficiencies, with so
per cent penalties, total $S4,71S.-
O9.)
Jones Says IRIS Made Errors
Jones complained the IRIS erred
IN including $56, $3.50 as dividends
received from Berkeley in 1850 and
So, 1893 for 191. He said the tax
men should not have disallowed o
casualty loss Of STATS in 1860 and
medical expenses Of 81, 200 in 1850
and s2.602.lS in 1851.
Further errors were made by the
IRIS when he was not allowed all
depreciation to which he was en-
titled in 1850 and 1851 and was
assessed so per cent fraud penal.
ties, Jones alleged.
On Nov. 1, attorneys for the gov
|ernment and for Jones will argue
Ia motionsto set aside court order
eliminating the late Mrs. Jones a
. party to The personal income ac'
ton. Jones contends she should BE-
IL party since he is administrator
of her estate.