It is too much to expect that a system so new, and one which has been expanded to such an extent within a short period of time, would possess a perfection which leaves nothing to be desired. While there has been no outstanding objection to the plan, and while it has been responsible for a substantial amount of the Federal resources, yet some defects have appeared which it will be well for Congress to heed when attempts are made to remodel the law.

1 See p. 465. For changes made in 1921 see p. 483.

One of the first defects to be noticed is the assessment procedure. Practically absolute reliance is placed upon the recipient of the income to turn in the proper amount to the internal revenue collector of his district. After examination the collector may increase the return but cannot lower it. The return is certified by the district collector to the Commissioner of Internal Revenue, who is given a maximum of five years in which to make an official assessment. This assessment occurs when the commissioner has reason to disagree with the assessment the taxpayer has imposed against himself. In the meantime the recipient of an income continues to pay the tax which he has assessed against himself, with little evidence of official procedure. Closer official scrutiny and procedure than that just indicated would much more nearly accord with American ideas of tax procedure.

The strict secrecy with which all returns of incomes are held is another feature of the Federal income tax procedure for which there can be little justification. There is nothing about an income which connects it so inseparably with the individual that it should be hidden from the knowledge of every other person. Access to the various returns by officials would give material aid in helping to solve the numerous problems which arise. Many other valuable uses of such information will readily occur to the reader, especially if he be interested in the economic condition of individuals of various groups and occupations.

Some of the conditions of the law necessarily inflict undesirable burdens. One of these is the failure to make provision for the recognition of any other tax year than the one provided by the law. This places an unnecessary

30G hardship on business units whose accounting year does not correspond with the tax year, in that it necessitates additional and difficult calculations. The taxation of the earnings of corporations, moreover, works an injustice upon some recipients of dividends. One individual whose total income may be below the exemption limit may secure a part of it in the form of dividends which have borne the tax, while another individual with the same income from other sources would not be burdened. Some plan of effective and accessible refunds would aid in establishing justice between different individual taxpayers.