If there's a moral for last-minute filers trying to nickel-and-dime the Internal Revenue Service, it is that it really helps to be president of the United States.
Hard as it is to believe, the wealthy Franklin D. Roosevelt used the most outlandish argument to lower his tax bill when he filed on the deadline date of March 15, 1938, for tax year 1937. To wit, during his first term, FDR paid taxes that were in effect when he took office. Although tax rates increased substantially at the beginning of his second term in 1937, Roosevelt pointed to Article II, Section 1, Clause 6 of the Constitution, which stipulated that "The President shall, at stated times, receive for his services a compensation, which shall neither be increased nor diminished during the period for which he shall have been elected ."
In other words, his preposterous argument was that a tax increase in 1937 covering any part of his first term was unconstitutional, even though, in fact, his compensation had not been cut. Increased taxes had nothing to do with his $75,000 salary. No matter — he attached to his 1040 form a check for $15,000 and an I-am-confused letter to the commissioner of Internal Revenue:
"I am wholly unable to figure out the amount of tax for the following reason: The first twenty days of January 1937 [new date for inaugurations set by 20th Amendment] were part of my first term of office and to these twenty days the income rates as of March 4, 1933 [old date of inaugurations] apply. To the other 345 days of the year 1937, the income-tax rates as they existed on January 30, 1937, apply. As this is a problem in higher mathematics, may I ask that the Bureau let me know the amount of the balance due?
"The payment of $15,000 doubtless represents a good deal more than half of what the eventual tax will prove to be."
Of course, the amount of income involved was minuscule for the 20 days in 1937, so very little tax savings was involved. But paying only what he admitted was about half his intended tax bill on the deadline was a big deal, considering that for everyone else, full payment was the rule. For that era, Roosevelt had a sizable gross income of $93,601.79 and taxable income of $78,348.82.
The 1040 is filled out in his own scarcely readable hand (I know, because years ago I spent time at his presidential library in Hyde Park, N.Y., and made microfilm copies of many of his handwritten, often illegible records). The most detailed aspect of the tax form is a typed list of FDR's charitable contributions, which also reflect his penny-pinching resolve toward the government he led.
Of the $3,624.50 total contributions, only one was substantial: a $2,000 contribution to St. John the Divine Church in New York City. Most of the rest were conspicuous for their embarrassingly small amounts, as illustrated by the following examples:
Society of American Foresters: $4; Rhinebeck Fire Department Benefit Fund: $4; TB Association in D.C.: $5; and the Duchess County Historical Society, $2. In one case, there may have been duplication: a contribution to the M.E. Church in Warm Springs, Ga., where the president often visited is recorded as $50; several lines subsequently is found a $10 listing for an E.M. Church in Warm Springs.
Ironically, the Revenue Act of 1937 was designed to close loopholes for rich taxpayers, and it was well known by Washington tax bureaucrats that FDR used the IRS to go after his political enemies beginning in his first term, as illustrated by the book, "Tax Dodgers" (1942), written by longtime and retired Treasury official Elmer Lincoln Irey.
Of course, there's another moral to this sordid story: It gives Americans something more to think about the next time they visit the FDR Memorial.
Thomas V. DiBacco is professor emeritus at American University.