The Income Tax Comes to Seattle: Men of Means Ordered to Report

Deputy Collector of Internal Revenue S. P. Gleason of Seattle is preparing to proceed at once with collection of the much-talked-of income tax. The instructions are concise and accurate and deal in detail with the methods to be pursued in arriving at the income of individuals and corporations. The method will be to send to each person and corporation in this district subject to the tax a copy of the regulation blank and request a statement of income. Probably 100 persons believed to have incomes exceeding $3,500 a year, and officers of corporations, will be called upon to make statements to the local office. Active work will begin within a few days. Another deputy will probably be assigned to the local office, as the business will be too heavy for Mr. Gleason to handle alone. The regulations provide that in estimating income there shall be included interest on notes, bonds, and other securities, except United States bonds exempt by law; profits from sales of real estate purchased within two years; interest received or accrued on notes, bonds, mortgages, or other indebtedness; premiums on bonds, notes, or coupons; profits from sales of live stock, sugar, cotton, wool, and the like; money and personal property acquired by gift or inheritance; and all other gains, profits, and income from any source except the salary of United States officers from which the tax has been deducted. Fees of United States officers exceeding $4,000 a year are also included. Deductions include necessary business expenses; interest due or paid; national, state, county, school, and municipal taxes; losses from fire, storm, and similar causes; and debts ascertained to be worthless. No deductions are allowed for new buildings, permanent improvements, or betterments. The $4,000 exemption allowed to individuals does not apply to corporations; their entire net profits are subject to the 2 per cent tax. False or fraudulent valuations draw a 100 per cent addition; refusal or neglect to make a return, except in case of sickness, draws a 50 per cent addition. All persons having incomes exceeding $3,500 per annum are required to make returns before March 1, verified by oath before the collector or a deputy. Persons with less than $3,500 annual income are not required to make returns, but if annual income exceeds $3,500, whether it reaches the taxable limit of $4,000 or not, a list or return must be made. The collector may increase any return he believes understated. Returns will be forwarded to the commissioner of internal revenue by April 15 and kept sealed. “There will probably be 100 persons and corporations called upon to make statements to this office,” Mr. Gleason said. “I will begin active work in a few days and will shortly have a deputy assigned to assist me in the work.”