THE NOME NUGGET
Published Monday, Wednesday and Friday by the
NOME PUBLISHING CO.
Nome, Alaska
Telephone 443-2381 Si.30 Per Month
P.O. Box 66 $16.00 a Year
James F. O'Sullivan, Publisher & Editor
Ed Jocius, Foreman
Entered at second class matter October 14, 1943. at the
post office at Nome. Alaska, under Act of March 3. 1879.
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WATCH IT, ANDREI —
REMEMBER PINNOCHIO!
The Role of Profit in American Life
The role of profit in American life is frequently, even com
monly, misunderstood. A good many people regard it as an unfair
charge against the consumers of goods and services — an imposed
tithe, in effect, by which the few benefit at the expense of the many.
The fact is that, if it weren't for profit, the many, as well as
the few, would find themselves in a sorry condition indeed. For it
is profit, fairly earned, that keeps the economy of this country
running, precisely as gasoline runs your car.
R. G. Follis, Chairman of the Board of the Standard Oil
Company of California, tells the story well in these words: "By any
name (and it has been given many) profit is a margin of economic
growth. It is the seed corn of growth the energizing agent for con
tinuously building, directing and automatically regulating produc
tvity with a single beneficial end point — the most for everyone.
Profit, in our free economy, provides for research . . . and pays
the bulk of all taxes.”
Mr. Follis makes another significant point — that . . the
profit motive alone is consistent and interdependent with the doc
trine of individual freedom." For all the basic freedoms are insep
arably related. Economic freedom is a vital essential if political
freedom is to live — and profit is its lifeblood.
TAX COLLECTORS IRON Ol!T AUTOMATION BUGS
By ARDEN COOPER
WASHINGTON «.T* — The fan
tastic new machinery tested by
Uncle Sam's tax colletors was re
ported today to have whipped some
long-standing problems with pre
ision and promptness.
This machinery — in a com
puter center at Atlanta — is part
of a national program to: (D Keep
tabs on whether everybody pays
the taxes he owes, and (2) Make
sure the collector-checkers don’t
drown in a sea of paper work.
At the same time, the new elec
tronic equipment has generated
some problems for the Internal
Revenue Service <IRS).
Despite odd side effects, the
IRS reports that the center met
its major test successfully this year
in processing seven million indi
vidual income tax returns in a
pilot program.
Last year the machnery success
fully scanned business — as con
trasted with individual — returns
as a prelude to full-size operation.
“We are very pleased with the
(over-alb operation,” said Clinton
Walsh, Director of Computer Op
erations for the IRS.
The Atlanta center, serving sev
en states, is the first of eight re
gional offices which will be tied
electronically to a master national
processing enter at Martinsburg,
W. Va.
When in full operation in 1966,
the system will eliminate a tre
mendous amount of paper shuf
fling. The IRS now handles 500
million pieces of paper a year, and
the information they contain can
now be stored on magnetic tape
for easier handling and automa
tic checking.
However, in some cases the ma
hines magnify rather than smooth
over errors made by taxpayers.
The machine in Atlanta turned
up 4,000 returns which carried
the same identification number as
returns filed earlier in the year.
In general, a taxpayer’s Social
Security number is his identifica
tion number. It was found that at
least 7,000 taxpayers simply erred
Insurance of All Types
NOME
INSURANCE AGENCY
•
PETE HAHN. Agenl
Phone 2498 P.O. Box 392
in putting down their Social Se
curity number and put down one
that turned out to be someone
else's.
Another 10,000 taxpayers were
submitting a second return for a
legitimate reason. ,
Agents still are checking the
other 7,000 and they believe most
of these will turn out to be me
chanical errors on the part of tax
payers.
There has been only one case in
which the machines detected a case
of fraud on their own — and the
IRS eventually reeived a tip in
the same case.
In this case, a machine rang
bells when it processed several re
turns filed by William J. Deskin,
a truck driver. Deskin had tried
to collect refunds on 125 returns.
He was sentenced to eight years
in prison.
The IRS said it picked up an
extra $5.6 million last year in
the seven states of the Southeast
ern region — Florida, Georgia,
Alabama, Mississippi, Tennessee,
North and South Carolina — be
cause the computors found 22,000
businesses which had failed to file
income, exise or other tax re
turns. The failures to file were
attributed generally to oversight.
Some Southeast taxpayers may
have felt that the service had giv
en up on its machines when they
received a notice — along with
1 a tax bill — whih read something
like this:
‘‘This bill has been prepared by
I machine. If this does not agree
with your return, please use your
own figure.”
5
Docs this mean the machines
make errors in arithmetic?
Lawrence Doss, assstant direc
tor of computer operations, said:
' We sent that notice out with
some of the bills for payments on
estimated taxes due in June of
this year. We had to send out the
bills well in advance of the due
date, and we knew that some of
the refunds due from 1962 tax
returns had not been processed.
“Since some people had re
quested that their refund be de
ducted from their estimated tax
payment — and this had not been
processed — then the figure owed
would be w'rong. This bottleneck
has been straightened out and it
won’t occur next year.”
Many of the taxpayers in the
Southeast obviously are aware that
their returns are being processed
by machine, and the Atlanta of
fice sometimes receives requests
for annual check-ups.
While the computers can add and
subtract and compare certain in
formation, they cannot audit, in
vestigate and make judgments.
However, they can give agents
quick clues on where to look. The
revenue officials prepare “pull
lists” of returns with certain char
acteristis. For instance one such
i list to bo pulled out for checking
might show all returns in a certain
income category which had de
dutions above a certain figure.
First details on how pull lists
are prepared are cataloged as
secret.
Agents are still digging into a
wealth of material provided by the
machines.
i
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NOME