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Show Duties of The Collector of Internal Revenue Respecting-The Respecting-The Social Security Act Lait Thursday there arrived1 at the Int:rnal Revenue Office a tax return from. Southern Utah fairly tilled with errors and mistakes. It had gone the wlule circuit of S-cial Security Agencies. It was a Form SS-1 return to the Federal Government, Govern-ment, although the envelope was addre. sed to the unemployment Division Di-vision of the State Industrial Commission Com-mission in ths Union Pacific Building, Build-ing, Salt Lake City; from there the letter went to the Branch Office ct the Social Security Board in the Kzra Thompson building; from there the letter finally arrived in the Internal Revenue Office In the Federal Fed-eral Building. This tax return shewed the payment of a tax for December 1936, which tax law did not become effective until January 1, 1937. This case is cited to emphasize the bewilderment on the part of the ger'eral public with regard to the S cial Security tax:", and the benefits arising from them, ana the various agencies set up by State? and the Federal Government to administer the Social Securily Laws. This widespread confusion reflect- no discredit on the intelligence intelli-gence of the taxpayer ard citizen it is rather a natural circumstance aiising fromi the inauguration of such a gigantic programi cf taxation and benefit pajments. With patience pa-tience and experience the fog will lift. There are two prime social defects de-fects these laws aim to cure. First, the distre's of unemployment; Second, the insecurity of oldl age. Students, experts, and legislators of tbrse two serial ills long since concluded that in cur peculiar American Governmental Systems of 48 State- and' cue National Government, Govern-ment, the unemployment problem could best be treated by the States and the Federal Government with its frr flung powers and agencie-c-i'.ld best deal with the problems cf unemployment in old age. Associate As-sociate then, unemployment compensation comp-ensation wiih the States both the taxation for that purpo e and the paynvnt of benefits and associate the taxation and benefit payment l r oM age with the Federal Government. Gov-ernment. To administer the Unemployment Compensation Law. the State of Utah has estzblished the Unem-yicyff.int Unem-yicyff.int Division cf the Industrial Ccmmis ion in the Union Pacific Bui'ding with Mr. Ray Adam; in h-Tg For the collection of the tax for this purpose, the Tax Cr.m-miesio:: Cr.m-miesio:: has located a branch in the same building. Citizens having ires' itns en rnitter- pertaining to Ursn-.plo' ment Compensation either to do with taxe.; therecf or benefit myments should go to the Union Pacific Bti'?nrs in Salt Lake City. The two Federal units are in sepal sep-al ate buildings. The taxing unit is part cf the Internal Revenue Office located in the Fed.ral Building, and the branch of the Social Security Secur-ity Boaid wfuse work will be to make payment and keep the rec-o.ds. rec-o.ds. is located in the Ezra Th.'mp-sc: Th.'mp-sc: Building. Mr. William Hay-j ward ha - .charge of this agency. Generally speaking, payments of b ncfits under the Act w;ill net cemm nee until 1942. j The real activities under the So- i cial Secu; ity Act commenced this January when 30.000 notices were e:t fiom the Collector's office to all potential employers in the State a Utah. Previous to this time there .va , but a casual interest in the law by the general public, many j having forgotten about it since it was passed back in August, 1933. 1 These notices of taxes brought to . the Collector's Office a veritable de- luge of inquiries from all parts of l the State. Because of this wide! interest, an explanation of these two Social Security Tax Laws is both im rtant ar.d timely. Title IX cf the Federal Social Security Se-curity Act levies an excise tax of 1 per cent on the payroll cf employers em-ployers of 8 or mora, not in the excepted classes. This tax went into in-to effect January 1, 1936. However, a taxpayer may receive credit against this tax up to 90 per cent of it by payments made to State Unemployment Compensation Fund; Generally both the State and the Federal tax amounts in total to 1 per cent on the payroll for 1936. The total for both taxes in 1937 is 2 per cent and in 1938 and there-pfter, there-pfter, 3 per cent. This tax is on the employer only. The other Fed.ral Tax known: asi Title VTII and this tax is entirely separate l'icmj the Title IX tax, it is a tax of 2 p r cent cn the payroll; 1 per cent cn the eir.iplcyee and 1 per cent on the employer. This tax went into effect January 1, 1937 and is payable monthly. The first return re-turn is due in February on January's Janu-ary's taxable wages and1 is payable to Ira N. Hinckley, Collector of Internal In-ternal Revenue, Federal Building, Salt Lake City, Utah. Under this tax law, Title VIII, wh'ch is an excise tax on the employer em-ployer with respect to employment, the taxpayer is allowed a deduction deduc-tion for Income Tax purposes; th? employee, however, is not permitted t- use tax payment her? as deductions deduc-tions agairst his Income Tax. The rate will remain 1 per cent on em-Dloyee em-Dloyee and 1 pr cent on employer for three years. Congress, in making this Title 7iIII lawi, excepted certain clashes of employment. These classes are: Agricultural labor which is defined as labor on the farm in connection with the cultivation cf the soil, harvesting of crops, or raising, feeding feed-ing or management cf live-tcck, bees and poultry Also employment employ-ment in connection w:ith the marketing mar-keting of products from the farm. (Recert rulings from the Bureau in Washington have excluded from farm labor nurseries, floral establishments, estab-lishments, chicken hatcheries and fur f arming) ... It reems, therefore, that the intent of the Bureau is to exclude from agriculunal labor all : activities that are in any sense commercial in nature; Second, Domestic labor, that is, employimen't in and around the home; Third, officers and crews of vessels documented docu-mented under the United State- or F. r.ign Nations; Fourth', all Government Gov-ernment employees, which includes those in regular Government function-, o- in the empl y of work of a proprietary nature where the Government Gov-ernment owns the business. . . This includes Federal, State, City and County worker'; Another class cf employment rot included within the Law are those working for re-Un.ic re-Un.ic us, charitable, tcientific, liter-! avy and educati nal organizations ! and Community Chests. (These are broadly referred to as "Non-Profit" , Organizations.; The Federal In- j come Tax excepts these rame in-1 stitutions; however, those interests I in this class of employment please note that the Social Security Laws are not nearly s;- liberal with this c'ass as the Income Tax Law. For in-tance, Chambers of Corr.me'ce, Political Organizations, cemetery associations are not within the cope of the incom tax law, but are within the Social Security taxes. tax-es. Employees cf cemmon carriers, that is. business regulated by the Interstate Commerce Commission are excluded from Title VIII tax This includee generally railroad, telephone, telegraph, pipeline workers work-ers engaged in interstate commerce. Any employee 65 years of age or over is excepted from this ta, and neither he nor his employer pays a tax on. his wages. Another clas of employment excepted is casual labor. la-bor. Cont'.ary to popular belief, this does not have the same mean ing p.j temporary or occasional la-l. la-l. r, wnen irseu m connection with mi. law. 'iiie w.rd as ued h.re l tiers to irregular, mudeiual oi ociiuioii.d tuipiu., nient ixt m the ..uise oi nit fn.p;oy-rs trade oi 1uaun.ss. Ca.uai iauor aoes not m-..Liae m-..Liae mat extra boy the givcery-u.an givcery-u.an employs cn Saturday because n i L-nipicyed. in tne regular course ot the feiooeryman's business. vu.wt'1', it he Uiuuld employ tne coy to assemble, clean and pr..pa.e his shotgun, decoy and equipment i. r a hu-.ting trip, that would be casual labor and thereiore not taxable. tax-able. Or .hould he employ a broth-Li'-m-law to paint his house, that would also be casual labor. In botn im.se in cances cited we have irregular, irreg-ular, occasional and incid.ntal empl.'. em-pl.'. ment. which is not promoting the grooei yman's busine.s. Under ihe la.iV there can be no casual labor icr a corporation. Three thousand dollars is the limit of taxable wage;, unde. title VIII. That is, when an employee has been taxed on the iiisc $3,000.00 earned from each employer em-ployer in any ne year, then the remainder of the wages paid by ouch employer in such y-ar is not taxable. tax-able. Many inquiiies have reached the office from employees regarding the protection of their payment. The monthly return of the employer wherein he pays t; the Collector ol Internal Revenue both his tax and the tax collected from his employees is in totals and doe; not indicate which individuals paid ths tax. The employee is safe-guarded in the payments by an information return re-turn which the employer will submit sub-mit in July fcr the first rix months erripKyment period. This return will h.w ths exact amount of tax paid ley, aiid for each employee, and also the amount of taxable wages paid tc each employee. All these ' records will be retained permanent-1;. permanent-1;. by the Government. These information in-formation returns will follow every quarter. Specifically, these taxes are on wages paid by an employer to an employee. The term ' wages" meanj any remuneration for employment, wisether paid in money or eome-thing eome-thing other than money. Payment in rent, board, food, produce, or anything constitutes wages under the law. The name or guise of the payment is immaterial; thus salaries salar-ies commissions, bonuses, fees, etc., are all wages and taxable if paid by an employer to an employee ae compensation lor services. Tnt.se payioll taxes, State and Federal, will cost the employer a total of 3 per cent of his total taxable tax-able payroll in 1937 and the employee em-ployee 1 per cent of his wages. In ma:.y ent rprise such as contracting, contract-ing, the larger part cf the expense ii wajes. Tii-ree percent constitutes a considerable item to them, and to a lesser degree, to every employer. Employers are frankly aware of thie. sizeable business expen.e, jet we hear little complaint from, the employer. em-ployer. He generally hails the Social So-cial Security Act a? a boon to the Country. The genuine cooperation of the payer cf the payrolls is indicative in-dicative of th? va t popularity of the law. The employee nas also responded to the conditions of the law enthusiastically. Nearly 70,000 workers have received account number, num-ber, tc date. The vast machine, created by the Social Security Act, is in motion. The heart lof the worker ;i buoyant, and it is to be hoped that the terror of the ages, the "Rainy Day", has been removed from the landscape. |
