 It's time for the Lawn Jean Chronoscope. A television journal of the important issues of the hour brought to you every Monday, Wednesday, and Friday. A presentation of the Lawn Jean Wettner Watch Company. Maker of Lawn Jean, the world's most honored watch, and Wettner. Distinguished companion to the world honored Lawn Jean. Good evening. This is Frank Knight. May I introduce our co-editors for this edition of the Lawn Jean Chronoscope? From the CBS television news staff, Larry Lesser, and Walter Cronkite. Our distinguished guest for this evening is T. Coleman Andrews, Commissioner of Internal Revenue. Mr. Andrews, you've been on this job of collecting our taxes for a little more than a year now, and you've been pretty quiet about it. Before I ask you about the work you've done so far, I'd like to ask, if I may, just what your qualifications were for this vitally important post. Maybe I should say first that a lot of people don't think I've been so quiet about it. But in any event, I'm basically, of course, an accountant. Management and organization has been my business for a long time, and I've taken several excursions from practice into public affairs. And in addition to that, I've had administrative responsibility in the military services and Marine Corps during the war. And I like to think, at least, that the President and the Secretary employed me because they think that we did the job that we did in the past pretty well. I hope that's the reason. We're also a Democrat, too, aren't you, sir? That's right, a conservative Democrat. Mr. Commissioner, in this year that you've been in the job, have you discovered any evidence that the American public is indulging in a widespread shirking of their duty and the evasion of taxes? No, we haven't. And I don't think they are, as a matter of fact, because we have a rather interesting situation in this country. We've found that the average American taxpayer has a pretty high respect for his government, is willing to carry his share of the load of the cost of it. And if it were not for that, then I'm afraid that we would have been in trouble a long time ago. We figure that about 97% of all the people in this country pay their taxes voluntarily. We call it voluntary compliance. They come up at tax pay and time and said, Mr. Tax Collector, is what I figure my income is, and I figure the tax is so much, and here it is. That's a mighty healthy thing for the economy of this country and for the stability of its tax system. Mr. Commissioner, I'm afraid that most of us feel that the other fellow is getting away with a little more than we are. Now, is there anything against listing every possible deduction and expense on your income tax? Not only nothing against it, we want people to do that. We want every taxpayer to get the benefit of every deduction that the law allows him and where there are optional ways of computing one's tax. We want him to have the way that is least expensive to him that will take the least amount of money out of his pocket. For instance, take them out of the standard deduction. Now, there may be, in most cases, a wage earner will take the standard deduction because it's simple. He doesn't have to worry about itemizing his deduction. But suppose somebody has a bad spell of illness during the year and his doctor's bills and hospital bills run up high, or maybe something disastrous occurs to him like Florida, something of that kind, or his house catches fire. That sort of person should sit down and make his deductions in detail so as to see whether or not it's to his advantage to take them that way or to claim the standard deduction of 10%. Whichever way is to his advantage, we want him to take it. Do you feel that there are many people in the United States overpaying their taxes by not completely understanding the tax laws? Well, there's no doubt about that. It's not a matter of feeling there are a great many people who overpay. In the taxpayer canvas that we've talked about and you've read a lot about, we found a great many people who had overpaid as well as a lot, of course, who hadn't paid enough or who hadn't paid anything at all. And we assure every year, great many refunds to all types of taxpayers. Individuals, corporations and partnerships, trusts and so on, indicating an excess payment of taxes. Can I just ask you about that house-to-house canvas that you just mentioned? Some newspapers called that Operation Snoop, called it Gestapo Methods, that you went around asking people at their homes whether or not they'd paid their taxes and demanded proof that they had and so forth. Now, what do these fellows actually do in your canvas and what do they accomplish, sir? Well, this Operation Snoop, of course, was a little bit of what I call a journalistic ingenuity. Of course, if I were a newspaper reporter, I'd be pretty proud of having invented that one, but actually, of course, that isn't what it is. All in the world we do is to go from door to door and check on whether or not the people at each residence have filed a return. It's not a Snoop in any sense. There's no barging into people's homes or anything of that kind. We don't even go in the home unless we're invited and then don't usually go. If a person declines to answer our questions or doesn't want to answer them, why, they don't have to and there's no hard feelings on anybody's part. We don't get mad at anybody about it. And the fact of the matter is, it has been a very pleasant experience. We've had, well, I remember in New England and the entire canvas up there in the first month when it first came to light that seemed to be something unusual, which it wasn't, of course, because the tax laws on that subject been on the books in its present form since 1926. We didn't have any difficulty. There was only one person in several thousand who even seemed to get beyond happy about it. It's not a Snoop. It's merely an effort to find out that everybody is on the tax rolls who should be on that, so that everybody will pay his fair share of the taxes as Congress intended. And our reaction, or rather, our experience is that the average person is glad to know that this examination is being made by us and that everybody is going to be paying just like he is. I might say that since we started it, or rather since we resumed it, that it's being done elsewhere. I know right now, for instance, of one state and one important city where exactly the same thing being done on the state level and the first instance and on the local level and the other. Mr. Commissioner, what exactly, what tax dodges are you cracking down on? Are there any outstanding forms of evasion? Well, of course, the people that we are particularly interested in apprehending on the tax dodging aspect of it are the people who deliberately set out to evade the payment of their taxes, either by not filing a return at all or else by understating their income or overstating their deductions. And I'm sure if we had time on this program to read just some of the cases to let people see what was happening there'd be no doubt about the wisdom and propriety of what we're doing to catch the evader. Is there any particular segment of the economy where there's more evasion than any other? Well, I think that question could probably be answered affirmatively. You usually find, of course, in the people engaged in illegal pursuits, for instance, they don't want to disclose their income, probably because they just don't operate on a legal basis in the first place and secondly, because perhaps they're afraid that if they're dead, then the illegal activities would become known and it would become subject or caught up with on their criminal pursuits. How about legitimate mistakes? You know, it's a pretty tricky form you make us fill out, Mr. Commissioner. Well, we don't think it's tricky. I don't want to challenge you on that too strong because I know what you're trying to get at, and I'd like to get at, but let me, let's get that cat out on the ridge pole, for instance. We try to bunch of high school students and we find that they make one-twelfth as many hours as the average taxpayer. So if high school students can make this out, I'm pretty sure that the average adult taxpayer can do it. Of course, they don't have to pay any taxes on that form, they just fill that out. Don't kid yourself. We had one classroom recently that 75% of those kids had to pay taxes. They had earned over $600 last year. Mr. Commissioner, one of the main criticisms I've heard against the income tax laws is that they seem to favor the businessman and not the wage earner. Most of us are salary makers and we just make our legitimate business deductions, but it seems rather unfair that the man in business can make more depreciation and that sort of thing. Well, of course, on its face, I suppose that's true, but you have to get down to the bedrock economy or economics of a question of that kind. Anything that is done to simplify the problem of business in complying with its tax obligation redowns ultimately to the credit of the individual. Why? Because all taxes that I know anything about except their state and gift taxes goes into the cost of product, which the individual has to buy. While he may not, he may think that the business enterprises are getting all the benefit because that's where the simplification occurs. Actually, what happens is that in the final analysis, he's getting an indirect benefit by a lower cost of the things he has to buy. So it's not correct to say that it'll be because you change a portion of the law that affects business that it's unfair to the individual. That's a very short-sighted narrow point of view. Well, what about people who say in show business where their talents do tend to depreciate? Well, take an actress whose beauty may be her chief talent. Now, isn't this rather unfair to her? Do you consider this unfairness? Well, I think that's a very unfortunate situation, but that brings up a rather interesting question. And that is as to just where do I fit into the tax picture. We are the enforcers of the tax law. It's up to us to collect the taxes that Congress says shall be levied and assessed and collected. A problem of that kind is a matter of tax policy. Congress determines tax policy in the final analysis. The administration, acting through the Secretary of the Treasury and the Undersecretary, determine who shall pay what taxes and at what rates. Therefore, a problem of that kind, even though it may be distressing, is not one that I have any power to correct. It has to be corrected by high authority. And of course, Congress has to accept any suggestion on that score. The final question, Mr. Andrews, what advice could you give to the average wage earner to make his deduction? How can he prove it to your collectors? Well, the average wage earner, of course, his taxes are withheld. So he doesn't have a particular problem of knowing how much taxes he ought to pay. I think every person ought to keep a pretty good record of what they spend so that if at the end of the year it's to that advantage to claim their deductions in detail, they would do that rather than claim the 10% overall deduction because they save money that way. I see. Well, thank you very much, Mr. Commissioner Andrews. It's been a privilege to have you here tonight. Thank you, sir. It's been a pleasure to meet you. The opinions that you've heard our speakers express tonight have been entirely their own. The editorial board for this edition of the Laun Jean Chronoscope was Larry Lissere and Walter Cronkite. Our distinguished guest was T. Colvin Andrews, Commissioner of Internal Revenue. A priceless attribute of every Laun Jean watch is pride of possession. It brings to its owner the satisfaction of knowing that he owns the watch of highest prestige among the finest watches of all the world. 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