THE two or three per cent of the American people who pay all the income taxes to the Federal Government have a new worry. When will Uncle Sam descend on the taxpayer who may have thought he was making an longest but who now must prove its count that it was no fraudulent intent or go to jail?

Prosecention by the Department of Justice of prominent men on the ground that they violated the law opens up a new procedure. Heretofore if you made a mistake in your return, the Government would write you a letter giving you thirty days in which to show cause why you should no pay more taxes. After the protest was filed, the Internal Revenue Bureau might or might not agree with the taxpayer. If he were over-ruled, then sixty days were given to submit an appeal to the Board of Tax Appeals and the case could go all the way to the Supreme Court of the United States for final decision.

Facts Put Before Grand Jury

But in the latest examples, the Department of Justice did not write any letters or levy an assessment but decided to put the facts before the Federal Grand Jury so as to get indictments and bring to trial those whose tax returns are believed to have deviated from the law.

Andrew Mellon, former Secretary of the Treasury, who had charge of the Internal Revenue Bureau and knows the procedure, insists he was not given the customary treatment. There is nothing in the law, of course, which requires the Government to discuss with a taxpayer whether his return was right or wrong. Prosecution can begin at once if there is the slightest warrant for the belief that fraud has been committed.

The Administration has taken upon itself the burden of proving that fraud was committed. It was not successful in the case of Charles E. Mitchell, who was acquitted by a jury. He took the position that he was following the letter of the law in selling securities and then buying them back, as has been the case with hundreds of thousands of taxpayers.

Conspiracy Must be Shown

The new cases involve for the most part a difference of opinion as to what constitutes lawful deductions. They raise an interesting issue. If, on the best advice obtained from lawyers and tax experts, deductions are claimed, is this fraud? The courts have held that fraudulent intent must be proved. This means that a conspiracy will virtually have to be demonstrated something that rarely happened in income tax cases.

The Treasury has recently recognized that a taxpayer who acts on a lawyer's advice may be making what is in his judgment an honest return, so this year taxpayers are asked to file an affidavit stating who gave them the advice. The theory is that the Treasury will disbar prom practice before it all those lawyers who habitually advise taxpayers whose returns are found in error.