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EXAMINATION OF EXCISE ACCOUNTS OF COUNTY TREAS
URERS AND SPECIAL DEPUTIES. The excise accounts of county treasurers and special deputies were all examined and checked by accountants of this Department as soon after the close of the fiscal year as possible. This examination included a careful inspection of all applications, bonds and other papers and vouchers relating to the issue of certificates and checking the same with the books of account and reports made to the Department.
These examinations, made (except in one instance) by Special Agents and other regular employes of this Department, were found to be of great advantage both to the treasurers and the Department, and will also tend to a more systematic and uniform practice in the future.
The aggregate result shows as follows:
CERTIFICATE STATEMENT. Certificates sent to treasurers and deputies...... $16,397,400 00
Certificates returned to Department, $424,300 00
57,250 00 Spoiled certificates on hand. ...... 8,815 00
CASH STATEMENT. From certificates issued....................... $10,938,104 76 From transfer fees.............. $9,470 00 From fines and penalties......... 175 00
$10,947,719 76 Paid State Treasurer...
$3,554,599 29 Paid towns and cities............. 7,023,254 63 Paid rebates .................... 172,360 34 Paid county treasurers' fees....... 56,425 27 Cash on hand and in bank. ....... 141,110 23
SPECIAL AGENTS AND THEIR DUTIES. The law directs the appointment of Special Agents, not exceeding sixty, and defines their duties. The general plan of the law contemplates important services from these officials; requiring them, under the direction of the Commissioner, to assist the deputy commissioners and county treasurers in the collection of the tax, to detect and prevent violations or evasions of the law which impair the revenue and to enforce and collect fines and penalties for its transgression, with such other service as they can and may properly render in assisting the proper peace officers and prosecuting officials in the general enforcement of the law.
Owing to the difficulties encountered in obtaining these officers and the incomplete organization of the special agent bureau which existed for several months, I have been unable, until very recently, to district the State or establish the order and system in the working of this Department which was desirable.
Occasional misconception of the proper scope of their duties,
on the part of Special Agents, and a more frequent misapprehension of what was to be expected from them on the part of the public and certificate-holders, has given the Department some annoyance, which is rapidly decreasing as the agents become educated in their duties and the public generally becomes better informed as to the provisions of the law and the duties of officials charged with its execution.
Thousands of communications from citizens of apparent intelligence and standing, and even from public officials, asking this Department to interfere in local affairs, to prevent or punish anticipated or alleged crimes and misdemeanors connected with or growing out of excise matters, or, as is more frequently the case, simple violations of the Penal Code, plainly indicate that there is a wide-spread impression that the enforcement of police and peace regulations, as well as tax collection, is a duty now solely resting on this Department. This mischievous impression has, in many localities, been confirmed and spread by officials and others unfriendly to the law and disinclined to its enforcement.
In view of this general misapprehension as to the duties and powers of this Department, and especially as to the Special Agent service, I deem it appropriate to state that, under the law, this Department holds that its sole province is purely executive and , almost wholly devoid of discretionary authority; and that its duties are chiefly of a fiscal character and in no way interfere with or supersede the obligation resting upon the duly constituted peace officers in the respective counties and cities of the State. It is, however, the duty and aim of this Department to render all proper assistance to local officials in the general enforcement of the law.
The duties of the Special Agents are so clearly defined in the law that the prevailing opinion as to the extent of their functions and
power is surprising. The law prescribes that “they shall, under the direction of the Commissioner, and as required by him, investigate all matters relating to the collection of liquor taxes and penal. ties under this act and in relation to the compliance with law by persons engaged in the traffic in liquors.”
Had the Legislature intended that these officials should be the sole conservators of the law and prosecute an efficient surveillance of the liquor traffic, with the thousands of daily infractions of law incident thereto, among 7,000,000 of people, instead of sixty, it would have been obliged to provide for hundreds of officers.
No reasonable person will for a moment entertain any such idea when it is remembered that the number of regular policemen, sheriffs, deputy sheriffs and constables who are now and have heretofore been charged with the execution of the excise, as well as other laws of this State, falls but little, if any, below fifteen thousand.
INTERNAL REVENUE LICENSES AND STATE CERTIFICATES
DISCREPANCY BETWEEN NUMBER OF.
Through the kindness of the United States Internal Revenue Department, this Department has obtained complete lists of the names of parties in this State retailing liquor under a United States Revenue License.
Comparison of these lists with the lists of those taking State certificates, up to the date of this report, discloses the fact that 6,379 licensees who have paid an Internal Revenue retail liquor dealers' tax have failed to pay the State tax for such privilege.
Of this number,
this number 1.829 are clubs or associations.
Inspection and comparison of the lists also show that those evad.
lug the State to core mostly in localities subject to the largest tax,
viz: Erie county, 769; Kings county, 1,468; New York county, 2,286; Queens county, 218; Monroe county, 171; and in all other counties of the State, 1,467, there being no county in the State but what has one or more cases of the kind.
Clubs or associations not paying the State tax, but paying United States retail liquor dealers' tax, are located as follows: Erie county, 89; Kings county, 670; New York county, 933; Queens county, 18; Westchester county, 14; Monroe county, 10; Oneida county, 10; Onondaga county, 10. Thirty other counties of the State have one or more each, aggregating 75.
This comparison has been a very difficult matter, and may not be absolutely correct as to the number, as the United States certificates are issued by revenue districts, of which there are six, while the State certificates are issued by counties. Further, the government certificate for the traffic in liquor at a given place is some. times issued in the name of a different person from the one who holds the State certificate for the traffic at the same place; the latter often being some other member of the family or firm. Lack of definite information as to streets, numbers and locality also causes some confusion and uncertainty in making the comparison; but the number given is approximately correct.
After a careful and exhaustive examination and comparison of the two lists, the Department is thoroughly convinced that the evasion of the excise law is, and has been for years, alarmingly extensive, and that the State's revenue is being seriously impaired by the practices of many who dare not take the chance of punishment by the United States Courts, but are willing to take the risk of conviction and punishment in local tribunals.
Immediate steps will be taken to examine and follow up the cases which, by this investigation of the Internal Revenue records,