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About Capital journal. (Salem, Or.) 1919-1980 | View Entire Issue (Nov. 28, 1956)
Salem, Oregon, Wednesday, November 28, 1956 . THE CAPITAL JOURNAL' Section 1 Page 11 AWT AVOID THAT $500,000 Auditors in Fraud Cases By JAMES D. OLSON Capital Journal Writer State tax commission auditors, acting as sleuths as well as ac- ountants, brought in close to $500,- Lo in tax fraud cases during the ast vear. Ray Smith, State tax ommissioner, revealed today. When we select auditors," Smith aid, "We seek a man who has a ood background in accounting. He nust also have some talent as a letective and lastly, must be good mblic relations man." ' Smith said it takes all these attri butes to run down the leads the ommission gets on unreported in omc by individuals and sometimes mall firms who try devious me- hods ol avoiding payment of state income taxes. Devious Methods Used Some of these methods. Smith aid, include failure to make tax feturns of any kind; some firms keep two sets of books, one with legitimate entries ana me otner fixed' for tax purposes; others nnceal income through reporting bnly a portion of a taxpayers in- ome. And to find out how these eva sions are uncovered, we went to rles Johnston, chief auditor of Volar Bears RadarHazard WHITE SANDS PROVING t ROUND, N.M. m An Army signal Corps officer says polar tears are getting Into the act at he guided missile installation at Ft. Churchill in northern Canada. Mai. C. R.' Cartwright has re- urned from the icy base with a ale that the huge white bears nave been roaming at will through She area where 30 men have been nstalling radar and commumca ions in support of the Internation al Geophysical Year. No one has been injured, Cart- kright said, but the men are tak- g no chances. , Rifles have been handed out and kl. Sgt. Casmir Tatowicz has been but in . charge of the polar bear defense platoon.' . Benjamin Franklin was once ap pointed by the court of France to nvestigate hypnotism. Kate, i Union Pacific's X ITY OF PORTLAND" LrfhJriP I Your careftee holiday starts the min SJrU2v ute you step aboard. A courteous crew f ffUm takes over and you have nothing to do I li but enjoy yourself. Just jor fun visit the y 3 11 I Dome Observation Lounge cars and dine ALi I Fvf under the stars in the exclusive Dome ' n "XI ' Diner. Your choice of luxurious Pull- 1 i II man or your oun reserved Coach-seat 1 JL J- I acccmmodations. mo UNOiNmota .Jf.NtJkyv1 "i 7S1 Pittocfc ll.ck Ftttl l .kWl Omenl PmtnfW AMt j K.ftQ&' i ,kWy if wl CHG GO OO ROOD Ui n il : Or :.- 3 C .- ' 1 TAX PAYMENT Yearly Saved By the tax department, who told us the leads came from many sources. Sometimes the report comes from an outraged spouse or a rejected lover, Johnston pointed out. Others come from disgruntled and dis charged employees and many come in anonymous letters. Inheritance Brings Leads "We frequently find our leads in news stories of some enterprise in volving a large outlay of money" Johnston said "and sometimes un reported income is revealed in pay ments of state inheritance tax". Johnston said the Oregon tax de partment has close relations with the Federal Bureau o Internal Re venue and evidence in many cases investigated by the federal investi gators is turned over to the state. There is no statute of limitations on tax evasion cases, Johnston ex plained, and as a result the state auditors can go as far back as 1930 to gather evidence. Use Net-Worth Method The most common method of setting up a tax fraud case is by use of the net-worth method, where in the value of a taxpayer's assets at the end of some late year is compared with the worth of the as sets at a subsequent time. Taking im aiiierence, less exemptions. wj Ittrliliit flt''l iiasniiejfHinTl Dial 4-2224 ...AMERICA'S FINEST TRAIN the investigators find what unre ported income is involved, , j This evidence is turned over to the chief auditor and the taxpayer is invited to a conference at which 1 commissioner Smith generally sits. If no settlement is reached at the .conference, the taxpayer is then ' granted a hearing before the entire 1 commission. I If the results of the hearing are .unsatisfactory to the taxpayer he has the right to appeal to the cir cuit court, but it is significant that only a few cases, out of hundreds heard, have gone to trial in the courts. Penalty May Be Reduced The commission is not empow ered to compromise on the tax it self, but if there are mitigating cir cumstances the commission may reduce the penalty, which under the law for unreported income tax, is 100 per cent. Because both the auditing and the legal staffs of the tax commission are understaffed, no criminal pro secutions have been Instituted. It would take far more evidence to in sure a conviction in court, and as Commissioner Smith put it "we're after the unreported income tax payment and if we get it, we're satisfied." FOR YOUR SHOPPING CONVENIENCE OPEN FRIDAY NIGHTS STORE HOURS 9:30 to 5:30 FRIDAYS 9:30 to 9 P.M. It costs no more to say: "CHARGE IT" . Stat at Liberty Driver Innocent In Car Accident ALBANY (Special) A Linn county circuit court jury Monday found Donald L. Boyanovsky, Sweet Home, innocent of negli gence in an accident involving a Sweet Home fire truck Oct. 11, 1951. , The Home Insurance Co., which . m irrwr-v W S 'V J7 L Xso" A. 101 sPeaal reasons XofVothlni "Pint Con" with loaf dotlgn. 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