I personally take great pride in Mr. Maxwell's masterly accomplishment and herewith submit his letter for your information and consideration:
Dear Governor Gardner:
Replying to your request for a statement of the additional income taxes assessed and collected by the Department of Revenue, I beg to advise that since July 1, 1930, we have collected additional back tax assessments on incomes in the amount of $465,- 536.76, and that there remains on our books at this time additional assessments of back income taxes made but not finally adjusted and collected in the amount of $321,333.13.
This sum of $465,536.76 of additional income taxes collected since July 1, 1930, represents our collection of back taxes on returns filed for the years 1927, 1928, and 1929. This total was divided as follows: $57,661.86 represented collections from additional assessments on personal returns; $96,627.94 on domestic corporation returns; and $311,246.98 on foreign corporations doing business in this State. We are diligently checking all returns for the past three years and have left no stone unturned to secure every available dollar which had been escaping its tax liability. With the $260,131 collected in the last fiscal year ending last June 30, the $465,536 collected so far in this fiscal year, the $311,246 additional assessments now pending for collection, and our audits not yet complete, it is apparent that our collections of additional assessments of income for previous years will in this biennium exceed a million dollars.
These additional assessments and collections of back income taxes have enabled the department to maintain the total of income taxes collected within this fiscal year in excess of collections for the same period during the past fiscal year.
These collections are the result of the work of the additional auditors which were employed in the income tax division for the purpose of bringing the audit of income tax returns up to date. Our audit and analysis of income tax returns of foreign corporations has also developed a better understanding of this problem, and has resulted in proposed changes in the income and franchise tax sections of the revenue law. With respect to rules of allocation of the proportion of capital and income of such foreign corporations which are taxable in this State, classifications were adapted