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Page:United States Statutes at Large Volume 45 Part 1.djvu/890

 SEVENTIETH CONGRESS. SESS. I. Ca. 852. 1928. 839 distributed as the court may direct, but the amount so allowed as a TNCOME TAX deduct ion sh all be inclu ded in compu ting th e net income of th e bene - ficiaries whether distributed to them or not. Any amount allowed Limi tatio n. as a deduct ion un der th is par agraph shall not be allow ed as a dedu c- tion under subsection (c) of this section in the same or any succeed- ing taxable year ; c In the case of income received b estates of deceased arsons Addi tiona l dma e- y pe rsons t, for payment de during the period of administration or settlement of the estate, and or, credited to bene- in the case of income which, in the discretion of the fiduciary, may fic' ' es ' be eit her di stribu ted to the b enefic iary or accum ulated, ther e shal l be allowed as an additional deduction in computing the net income of the estate or trust the amount of the income of the estate or trust for its taxable year which is properly paid or credited during such year t o any legate e, hei r, or benefi ciary, but th e amou nt so allowe d Included in income of as a deduction shall be included in computing the net income of beneficiary. the legatee, heir, or beneficiary. SEC. 163 . CREDIT S AGAIN ST NET INCOME. Credits against net income. a Credits of estate or trust .-For the purpose of the normal Normal tax personal ( ~ exemptions allowed to tax th e esta te or trust shall be all owed th e same perso nal ex emptio n heirs, etc . as is allowed to a single person under section 25(c), and, if no Aate, p. sco . part of the income of the estate or trust is included in computing the net income of any legatee, heir, or beneficiary, then in addition the same credits against net income for dividends and interest as Ant,, p. soy. are allowed by section 25(a) and (b) . Creditsallowedbene- (b) Credits of beneficiary.-If any part of the income of an ficiaries in computing estate or trust is included in computing the net income of any income . legatee, heir, or benefici ary, such legatee, heir, o r benefic iary shal l, for the purpose of the normal tax, be allowed as credits against net income, in addition to the credits allowed to him under section 25, his proportionate share of such amounts of dividends and interest specified in section 25(a) and (b) as are, under this Supplement, Credits allowed es- required to be included in computing his net income. Any re- tate or trust. maining portion of such amounts specified in section 25(a) and (b) shall, for the purpose of the normal tax, be allowed as credits to the estate or trust. Different taxable SEC. 164. DIF FERE NT T AXAB LE YEARS. years. Computation, if tax- If the taxable year of a beneficiary is different from that of the able year of estate or trust and beneficiary estate or trust, the amount which he is required, under section differ. 162 (b) , to include in computing his net income, shall be based upon the income of the estate or trust for any taxable year of the estate or trust ending within his taxable year. Emplo yees ' tru sts . SEC. 165. EMPLOYEES' TRUSTS. Profit-sharing trusts, A trust created by an employer as a part of a stock bonus, pension, ett c xedfor employees not or profit-sharing plan for the exclusive benefit of some or all of his emplo yees, to w hich cont ribut ions are made by s uch e mploy er, or employees, or both, for the purpose of distributing to such employees the earnings and principal of the fund accumulated by the trust in accordance with such plan, shall not be taxable under section 161, but the amount contributed to such fund by the employer Distributees taxed on and all earnings of such fund shall be taxed to the distributee in Fount received . the year in which distributed or made available to him. Such distributees shall for the purpose of the normal tax be allowed Ciedi a llowed. a s credits against net income such part of the amount so distributed or ma de ava ilable as re presen ts the items of div idends and i nteres t Ante, pp. 805, 806. specified in section 25(a) and (b).

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Page:United States Statutes at Large Volume 45 Part 1.djvu/891

 840 SEVENTIETH CONGRESS. Sxss. I. Ci$. 852. 1928 . INCOME TAX SEC. 166. REV OCAB LE TR USTS. Revocable trusts . Inco me din that of fro m, grant- - eluded Where the grantor of a trust has, at an time during the taxable or. year, either alone or in conjunction with any person not a beneficiary of the trust, the power to revest in himself title to any part of the corpus of the trust, then the income of such part of the trust for such taxable year shall be included in computing the net income of the grantor. Income for benefit of grantor. SEC. 167. INCOME FOR BENEFIT OF GRANTOR. . Dist ribu tion of, from trust, included in his Where any part of the income of a trust may, in the discretion of income. the grantor of the trust, either alone or in conjunction with any pers on not a benefic iary of the trust, be dis tributed to the grantor or be held or accumulated for future distribution to him, or where any part of the income of a trust isormaybe applied to the pay- ment of premiums u pon policies of insurance on the life of the rantor (except policies of insurance irrevocably payable for the Ante, p .801 . purposes and in the manner specified in section 23(n), relating to the so-called "charitable contribution" deduction), suc h par t of the income of the trust shall be included in computing the net income of the grantor. Capital net gains and SE losses. 'a. 16 8. CAPITAL NET GAINS AND LOSSES. . Determina tion of, and to be separately In the case of an estate or trust, or of a beneficiary of an estate shown in returns. or trust, the proper part of ea ch share of the net income which consists, respectively, of ordinary net income, capital net gain, or cap ital net loss, s hall be determin ed under rules a nd regul ations to be p resc ribe d by the Com miss ione r wi th the a ppro val of the Secret ary, and shall b e separa tely sho wn in th e return of the estate or trust, and shall be taxed to the beneficiary or to the estate or trust as provided in this Supplement, but at the rates and in the Ante, p.811. manner pro vi ded in section 101(a) and (b), relating to capital net gains and losses. Net losses. SEC. 169. NET LOSSES. Allowance of special The be nefit of the special deduc tion f or ne t los ses al lowed by de Ante, p. 825'. section 117 shall be allowed to an estate or trust under regulations prescribed by the Commissioner with the approval of the Secretary. Taxes of foreign coun- SEC 1 70. TAXE S OF FORE IGN COUN TRIES AND POSS ESSI ONS OF tries. UNITED STATES. Acv ae ag ain st tax of beneficiary. The amoun t of inc ome, wa r-pr ofit s, and e xces s-pr ofit s ta xes imposed by foreign countries or poss essio ns of the U nited State s Ante, p. 829. shall be allowed as credit against the tax of the beneficiary of an estate or trust to the extent provided in section 131. Partnerships. Supplement F-Partnerships Not t axab le. SEC. 181. PAR TNER SHI P NOT TAXABLE. Partners taxed as in- div idu als. Individuals carrying on business in partnership shall be liable for income tax only in their individual capacity. Tax of partners. SEC. 182. TAX OF PARTNERS. Die d i in n eluded net income. (a) General rule .-There shall be included in computing the net income of each partner his distributive share, whether distributed or not, of the net income of the partnership for the taxable year. If the tax able yea r of a p artner i s differ ent from that of the par tner- ship, the amount so included shall be based upon the income of the partnership for any taxable year of the partnership ending within] his taxable year.

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Page:United States Statutes at Large Volume 45 Part 1.djvu/892

 SEVENTIETH CONGRESS. SESS. I. Cii. 852. 1928 . (b) Partnership year embracing calendar y ears with different laws .-If a fisc al year of a partnership begins in one calendar year and ends in another calendar year, and the law applicable to the second calendar year is differe nt from the law applicab le to th e first calendar year, then (1) the rates for the calendar year during which such fiscal year begins shall apply to an amount of each partner's share of such p artne rship net i ncome (dete rmine d und er th e law appli - cable to such calendar year) equal to the proportion which the part of such fiscal year falling within such calendar year bears to the full fiscal year, and (2) the rates for the calendar year during which such fiscal year ends shall apply to an amount of each partner's share of such p artne rship net i ncome (dete rmine d und er th e law appli - cable to such calendar year) equal to the proportion which the part of such fiscal year falling within such calendar year bears to the full fiscal year. In such cases the part of such income subject to the rates in effect for the mos t recent calenda r year s hall be added to the oth er incom e of the taxp ayer sub ject to such rat es and t he resul ting amo unt shal l be placed in the lower brackets of the rate schedule applicable to such year, and the part of such income subject to the rates in effect for the next preceding calendar year shall be placed in the next higher brackets of the rate schedule applicable to such year. SEC. 183. COMPUTATION OF PARTNERSHIP INCOME. The net income of the partnership shall be computed in the same mann er and o n the sa me basis as in t he case of an ind ividual, except that the so-called " charitable contribution " de ductio n pro vided in section 23(n) shall not be allowed. SEC. 184. CR EDITS AGA INST NET INCO ME. The partner shall, for the purpose of the normal tax, be allowed as a credit against his net income, in addition to the credits allowed to him under section 25, his proportionate share of such amounts of dividends and interest specified in section 25 (a) and (b) as are received by the partnership. SEC. 185. EARNED INCOME. In the case of the members ofa partn ershi p the proper part of each share of the net income which consists of earned income shall be determined under rules and regulations to be prescribed by the Commissioner with the approval of the Secretary and shall be sepa- rately shown in the return of the partnership and shall be taxed to the member as provided in this Suppl ement. SEC. 186. CAPITAL NET GAINS AND LOSSES. In the case of the members of a p artne rship the proper part of each share of the net income which consists, respectively, of ordinary net income, capital net gain, or capital net loss, shall be determined unde r rul es and regu latio ns to be pr escri bed by the Commi ssione r with t he appro val of t he Secre tary, an d shall be separ ately sh own in the return of the partnership and shall be taxed to the member as provided in this Supplement, but at the rates and in the manner provided in section 101 (a) and (b), relating to capital net gains and loss es. 841 INCOME TAX Partnership year em- bracing calendar with different laws. Rate s for year in which fiscal year be- gins. In which fiscal year ends . Computation of rates. Partn ership incom e. Computed same as individual. Charitable deduction not allowed. Ante, p. 801. Credits against net income. Additi onal, from partnership exemp- ti ons . Ante, pp. 805, 800 . Earned income. Determ ination of partner's. Cap ital net gain s and losses. Application of, to income of partners. Ante, p. 811.

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 842 SEVENTIETH CONGRESS. SESS. I. CH. 852. 1928 . INC OME TAX SEC. 187. NET LOSSES. Net los ses . Ded ucti on f or, al- The benefit of the special deduction for net losses allowed by sec- lowad p artners. Ante,82s. tion 117 shall be allowed to the members of a partnership under regu- lations prescribed by the Commissioner with the approval of the Secretary. Foreign taxes, etc. SEC. 188 . TAX ES OF F OREIGN COUNTR IES AND POSSE SSIONS OF UNITED STATES. Credit for, allowed The amount of income war-profits, and excess-profits taxes partners. imposed by foreign countries or ossesions of the United States Ante, p . 829. shall be allowed as a credit against the tax of the member of a part- nership to the extent provided in section 131. Partnership returns. SEC. 189 . PARTNERSHIP RETURNS. of Every partnership shall make a return for each taxable year, stating specifically the items of its gross income and the deductions allo wed by this title, and s hall i nclude in the retur n the names and addresses of the individuals who would be entitled to share in the net income if distributed and the amount of the distributive share of each individual. The return shall be sworn to by any one of the part ners. Supplement G-Insurance Companies companies'fe insurance SEC. 201 . TAX ON LIFE INSURANCE COMPANIES. Meaning of term. (a) Definition .-When used in this title the term "life insur- anc e co mpan y " means an insurance company engaged in the busi- ness of iss uing l ife in suranc e and annuity contr acts ( includ ing co n- tracts of combined life, health, and accident insurance), the reserve funds of which held for the fulfillment of such contracts comprise Tax on net incomes; more than 50 per centum of its total reserve funds. Ante, p. 797. (b) Rate of tax.-In lieu of the tax imposed by section 13, there shall be levied, collected, and paid for each taxable year upon Domestic life, the net income of every life insurance company a tax as follows : (1) In the case of a domestic life insurance company, 12 Foreign life. per centum of its net income ; (2) In the case of a foreign life insurance company, 12 per centum of its net income from sources within the United States. Gross income . SEC. 202. GROSS INCOME OF LIFE INSURANCE COMPANIES. Sources of. (a) In the case of a life insurance company the term " gross income " means the gross amount of income received during the Application of "re- taxable year from interest, dividends, and rents . serve fund required by law ", to asses smen t (b) The term " reserve funds required by law " includes, in the companies, case of assessment insurance, sums actually deposited by any com- pany or association with State or Territorial officers pursuant to law as guaranty or reserve funds, and any funds maintained under the charter or articles of incorporation of the company or associa- tion exclusively for the payment of claims arising under certificates of membership or policies issued upon the assessment plan and not subject to any other use. Ne t income. SEC. 203 . NET INCOME OF LIFE INSURANCE COMPANIES. Deductions fr om (a) General rule .-In the case of a life insurance company the gross income. term " net income " means the gross income less- Exempt interest . (1) TAX-FREE INTEREST .-The amount of interest received dur- ing the taxable year which under section 22(b) is exempt from taxation under this title ; Sw orn statement gross income, etc. Insurance companies.

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Page:United States Statutes at Large Volume 45 Part 1.djvu/894

 SEV ENTIE TH CONGRESS. SEss. I. C$. 852. 1928 . 843 (2) R ESER VE FUNDS .-An amount equal to the excess, if any, Reserves fTAX s for over the deduction specified in paragraph (1) of this subsection, weekly payment as- of 4 per centum of the mean of the reserve funds required by sessments . law and held at the beginning and end of the taxable year, plus (in case of life insurance companies issuing policies covering life, health, and accident insurance combined in one policy issued on the weekly premium payment plan, continuing for li fe and n ot su bject to ca ncell ation) 4 per centum of the mean of such reserve funds (not required by law) held at the beginning and end of the taxable year, as the C ommis sioner find s to be necessary for the protection of the holders of such policies only (3) DIVIDENDS .-The amount received as dividends (A) from Dividends from do - a domestic corporation other than a corporation entitled to the mestic corporations . benefits of section 251, and other than a corporation organized und er the Chi na Trade Act, 1922, or (B) fro m any foreign From foreign . corporation when it is shown to the satisfaction of the Commis- sioner that more than 50 per centum of the gross income of such foreign corporation for the three-year period ending with the close of its taxable year preceding the declaration of such divi- dends (or for such part of such period as the foreign corpora- tion has been in existence) was derived from sources within the United States as determined under section 119 ; Ante, p. s2'' (4) RESERVE FOR DIVIDEN DS .-A n amount equal t o 2 per centum P ercentageofreser ves of any sums held at the end of the taxable year as a reserve for for deferred dividends . divid ends (other than divi dends payable during the year fol- lowing the taxable year) the payment of which is deferred for a period of not less than five years from the date of the policy contrac t ; Investment expenses. (5) INVESTMENT EXPENSES. -I nve st men t exp en ses p aid during proviso. the taxable year : Provided, That if any general expenses are in Limitation. part assigned to or included in the investment expenses, the total deduction under this paragraph shall not exceed one-fourth of 1 per centum of the book value of the mean of the invested assets held at the beginning and end of the taxable year ; Real estate taxes. (6) REAL EST ATE EXPE NSES .-Tax es and other expenses paid during the taxable year exclusively upon or with respect to Exceptions . the rea l estate owned by the company, not including taxes assessed against local benefits of a kind tending to increase the val ue of th e proper ty asses sed, and not inc luding a ny amoun t pa id out for new buildings, or for permanent improvements or betterments mad e to increase the value of any property . If tales paid on inter- The deduction allowed by this paragraph shall be allowed in est of shareholder. the case of taxe s im pose d up on a sha reho lder of a co mpan y upon his interest as shareholder, which are paid by the company without reimbursement from the shareholder, but in such cases no deduction shall be allowed the shareholder for the amou nt of such taxes ; Exhaust ion of pr op- (7) DEPR ECIA TION .- A reasonable allowance for the exhauS- erty. Lion, wear and tear of property, including a reasonable allowance for obsolescence ; In terest on debts. (8) I N TE R E S T .--All interest paid or accrued within the taxabl e Exception . yea r on its indebtedness, except on indebtedness incurred or continued to purchase or carry obligations or securities (other tha n obligations of the United States issued aft er September 24, 1917, and originally sub sc rib ed for by the taxpayer) the interest upon which is wholly exempt from taxation under this title ; and mo ney (9) S PE CIF IC EXEMPTION .-I n the case of a domestic life insur- cre el ttss. ance company, the net income of which (computed without the benefit of this paragraph) is $25,000 or less, the sum of $3,000 ; 54835°-29-r'r 1-57

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text: Index:Title 3 CFR 2002 Compilation.djvu

title: Index:Title 3 CFR 2002 Compilation.djvu


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Page:United States Statutes at Large Volume 45 Part 1.djvu/895

 844 INCOME TAX Rental value of real estate. Deductions limited. Foreign life insurance companies. Compu tatio n of n et income on business in United States. Insurance companies other than life or mu- tual. Tax imposed. Ante, p. 797. Domestic companies. Foreign companies. Meaning of terms. "Gross income ." "Net income ." "Investment in- Come . ,, Sources of. "Underwriting in- come ." "Premiums earned .' SEVENTIETH CONGRESS. SEss. I. CH. 852 .' 1928 . but if the net income is more than $25,000 the tax imposed by section 201 shall not exceed the tax which would be payable if the $3,000 credit were allowed, plus the amount of the net income in excess of $25,000. (b) Rental value of real estate .-No deduction shall be made under subsection (a) (6) and (7) of this section on account of any real estate owned and occupied in whole or in part by a life insurance company unless there is included in the return of gross income the rental value of the space so occupied. Such rental value shall be not less than a sum which in addition to any rents received from othe r ten ants shall pro vide a net inc ome ( after ded uctin g tax es, depreciation, and all other expenses) at the rate of 4 per centum per annum of the book value at the end of the taxable year of the real estate so own ed or occupi ed. V (c) Foreign life insurance companies.-In the case of a foreign life insurance company the amount of its net income for any taxable year from sources within the United States shall be the same propor- tion of its net income for the taxable year from sources within and -without the United States, which the reserve funds required by law and held by it at the end of the taxable year upon business transacted within the United States is of the reserve funds held by it at the end of the taxable year upon all business transacted. SEC. 204. INSURANCE COMPANIES OTHER THAN LIFE OR MUT UAL. (a) Imposition of tax .-In lieu of the tax imposed by section 13 of this title, there shall be levied, collected, and paid for each taxable year upon the net income of every insurance company (other than a life or mutual insurance company) a tax as follows : (1) In the case of such a domestic insurance company, 12 per centum of its net income ; (2) In the case of such a foreign insurance company, 12 per centum of its net income from sources within the United States. (b) Definition of income, etc.-In the case of an insurance com- pany subject to the tax imposed by this section- (1) Guess INCOME .-" Gross income " means the sum of (A) the combined gross amount earned during the taxable year, from investment income and from underwriting income as provided in this subsection, computed on the basis of the underwriting and investment exhibit of the annual statement approved by the National Convention of Insurance Commis- sioners, and (B) gain during the taxable year from the sale or o ther dispo sitio n of prop erty ; (2) NET INCOME. -" Net income" means the gross income as defin ed in paragr aph (1 ) of t his su bsectio n less the d educti ons allowed by subsection (c) of this section. (3) INVESTMENT INCOME ." Investment income " means the gross amount of income earned during the taxable year from intere st, di vidend s, and rents, comp uted as follo ws : To all interest, dividends and rents received during the taxabl e year, add intere st, di vidend s and r ents d ue and accru ed at the end of the taxable year, and deduct all interest, dividends and rents due and accrued at the end of the preceding taxable year ; (4) U NDERW RITING INCO ME. -- " Unde rwriting income" mea ns the premiums earned on insurance contracts during the taxable year le ss los ses in curred and e xpense s incur red ; (5) PREMIUMS EARNED .-" Premiums earned on insurance con- tracts during the taxable year" means an amount computed as fol lo ws

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text: Index:Title 3 CFR 2005 Compilation.djvu

title: Index:Title 3 CFR 2005 Compilation.djvu


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Page:United States Statutes at Large Volume 45 Part 1.djvu/896

 SEVENTIETH CONGRESS. SEss. I. CH. 852 . 1928 . 845 From the amount of gross premiums written on insurance con • INCOME TAX tract s during the taxable year, deduct return premiums and Computation of. premiums pa id for reinsurance. To the result so obtained add unearned premiums on outstanding business at the end of the preceding taxable year and deduct unearned premiums on out- standing business at the end of the taxable year ; (6) LOSSES INcuRRED.-" Losses incurred " means losses "Lasses incurred ." incurred during the taxable year on insurance contracts, com- puted as follows To losses paid during the taxable year, add salvage and rein- s urance Computation of. recoverable outstanding at the end of the preceding taxa- ble year, and deduct salvage and reinsurance recoverable out- s tand ing at the end of the ta xabl e year. To the result so obtain ed ad d all unpai d los ses ou tstan ding at the end of the t axable year and deduct unpa id lo sses o utsta nding at the end of the preceding taxable year ; "Exp enses incurr ed . ." (7) ExPE NSES iNcunRED." Expenses in cur red" me ans all expenses shown on the annual statement approved by the National Convention of Insurance Commissioners, and shall be c ompute d as follo ws : Comp utation of. To all expenses paid during the taxable year add expenses un paid at the end of the t axable y ear and deduct e xpenses unpaid at the end of the preceding taxable year. For the purpose of computing the net income subject to the tax imposed by this section there shall be deducted from expenses incurred as defined in this paragraph all expenses incurred which are not allowed as deductions by subsection (c) of this section. Net income. (c) Deductions allowed .-In computing the net income of an Deductions allowed. insurance company subject to the tax imposed by this section there shall be allowed as deductions : Business expenses. (1) All ordinary and nec essary e xpenses incurred, as prov ided Ante, pp. 799, 800. in section 23 (a) ; (2) All interest as provided in section 23(b) ; Interest. (3) Taxes as provided in section 23(c) ; Taxes. (4) Losses incurred as defined in subsection (b) (6) of this Losses, section ; (5) Loss es susta ined dur ing the taxable year from the sal e or Lo sses from sales. other disposition of property ; (6) Bad debts in the nature of agency balances and bills worthless debts. receivable ascertained to be worthless and charged off within the taxable year ; Dividends from car- (7) The amount received as dividends from corporations as porations. provided in section 23 (p) (8) The amount of interest earned during the taxable year E xempt intere st. which un der sect ion 22(b ) (4) is exempt from taxa tion und er this title, and the amount of interest allowed as a credit under section 26; Exhaustion, etc., of (9) A reasonable allowance for the exhaustion, wear and tear property. of property, as provided in section 23 (k) S pecif ic mo ney c redit (10) In the case of such a domestic insurance company, the to domestic c ompany. net inco me of wh ich (com pute d wi thou t the be nefi t of thi s paragraph) is $25,000 or less, the sum of $3,000 ; but if the net income is more than $25,000 the tax imposed by this section shall not exceed the tax which would be payable if the $3,000 credit were allowed, plus the amount of the net i ncome in ex cess of $25,000. Foreign corporations. (d) Deducti ons of f oreign c orporati ons .- I n the case of a for- Deductions for e ign co rpora tion the de ducti ons a llowed in t his s ection shal l be u> osa -,at49 business. allowed to the extent provided in Supplement I.

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text: Index:Title 3 CFR 2006 Compilation.djvu

title: Index:Title 3 CFR 2006 Compilation.djvu


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Page:United States Statutes at Large Volume 45 Part 1.djvu/897

 846 SEVENTIETH CONGRESS. SEss. I. Cg. 852. 1928 . (e) Double deductions .-Nothing in this section shall be con- strued to permit the same item to be twice deducted. Net losse s. SEC. 205. NET LOS SES. Allowance of special deduction for. The benef it of the s pecia l dedu ction for net lo sses allow ed b Avate, pp. 825,842, 844, y section 117 shall be allowed to insurance companies subject to the tax imposed by section 201 or 204, under regulations prescribed by the Commission er with the approval of the Secretary. INC OME TAX No duplication. Foreign taxes, etc . Credit for, allowed domestic insurance comp anie s. Ante, pp. 842, 844 . SEC. 206. TAX ES OF FOR EIGN COUN TRIE S AND POS SESS IONS OF UNITED STATES. The amou nt of in come , wa r-pr ofit s, and e xces s-pr ofit s ta xes imposed by foreign countries or possessions of the United States shall be allowed as a credit against the tax of a domestic insurance com- pany subject to the tax imposed by section 201 or 204, to the' extent provided in the case ofa domestic corporation in section 131, and in such cases " net income " as used in that section means the net income as defined in this Supplement. SEC. 207. COMPUTATION OF GROSS INCOME. The gros s income of insu rance com panies s ubject t o the ta x impose d by sec tion 201 or 204 shall no t be det ermined in the m anner pr ovided Ante, p. 826. in section 119. Gross income . Determination of, re- stricted. Mutual insurance compa nies other than life. Taxable, as cor por ati ons. o her Gross income in- cludes premi ums less r einsu ranc e. Add iti on al de- ductions. Addition to reserve funds. Policy and annuity contracts. M utual mar ine com- pan ies. R epaym ents to pol- icyholders, etc. Co mpanies o ther than life or marine. Pre mium deposit s re- tur ned, ete. SEC. 208. MUTUAL INSURANCE COMPANIES OTHER THAN LIFE. (a) Application of title. 'Mutual insurance companies, other than life insurance companiees, shall be taxable in the same manner as other corporations, except as hereinafter provided in this section. (b) Gross income .-Mutual marine insurance companies shall include in gross income the gross premiums collected and received by them less amounts paid for reinsurance. (c) Deductions .-In addi tion to the deductions allo wed to cor- porations by section 23 the following deductions to insurance com- panies shall al so be al lowed, u nless ot herwise allowed- (1) MUT UAL INSU RANCE COMP ANIES OTHE R THAN LIFE INSUR- ANcE.-In the case of mutual insurance companies other than life insu rance compa nies- (A) the net a dditi on req uired by law to be made within the taxable year to reserve funds (including in the case of assessment insurance companies the actual deposit of sums with State or Territorial officers pursuant to law as addi- tions to guarantee or reserve funds) ; and (B) the sums other than dividends paid .within the taxable year on policy and annuity contracts. (2) MUTUAL MARINE INSURANCE COMPANIES .-In the case of mutual marine insurance companies, in addition to the deduc- tions allowed in parag raph (1) of this subsect ion, unl ess othe r- wise allowed, amounts repaid to policyholders on account of premiums previously paid by them, and interest paid upon such amounts between the ascertainment and the pay ment thereof ; (3) MU TUAL I NSURAN CE COM PANIES OTH ER THAN LI FE AND MARINE.-In the case of mutual insurance companies (including interinsurers and reciprocal underwriters, but not including mutual life or mutual marine insurance companies) requiring the ir me mb ers to make premium dep os its to provide for losses and expenses, the amount of premium deposits returned to their policyholders and the amount of premium deposits retained for the payment of losses, expenses, and reinsurance reserves.

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text: Index:Title 3 CFR 2007 Compilation.djvu

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Page:United States Statutes at Large Volume 45 Part 1.djvu/898

 SEVENTIETH CONGRESS. SEss. I. CH. 852 . 1928 . 847 Supplement H-Nonresident Alien Individuals INCOME TAX Nonresident alien in- dividuals. SEC. 211. NORMAL TAX. Normal tax. (a) General rule.-In the case of a nonresident alien individual Ante, p. 795. who is no t a re sident of a contig uous c ountry, the n ormal tax sh all be 5 per centum of the amount of the net income in excess of the credits against net income allowed to such individual. (b) Aliens resident in contiguous countries .-In the case of an Residents in contig- n alien individual resident in a contiguous country, the normal tax uous countries. shall be an amount equal to the sum of the following : 11 .per centum of the amount by which the art of the net Co mpen satio n f or (1) /L 1> pers onal service s in income at tributabl e to wage s, salari es, profe ssional f ees, or o ther United States. amounts recei ved as compe nsatio n for persona l serv ices a ctuall y performed in the United States, exceeds the personal exemption and credit for dependents ; but the amount taxable at such 11/2 Maximum. per centum rate shall not exceed $4,000 ; (2) 3 per centum of the amount by which such part of the net ceedingAdditional, if ex- (2) eding family cred its income exceeds the sum of (A) the personal exemption and and $4,000. credit for dependents, plus (B) $4,000 ; but the amount taxable at such 3 per centum rate shall not exceed $4,000 ; and (3) 5 per centum of the amount of the net income in excess of If in excess thereof. the s um of (A) the amoun t tax ed u nder parag raphs (1) and (2) of this subsection plus (B) the total credits against net income allowed to such individual. In lieu of other tax. (c) In lieu of normal tax under section 11 .-The tax imposed Ante, p. 795. by this section shall be in lieu of the normal tax imposed by section 11. SEC. 212 . GROSS INCOME. Gross income. Inclu des only Uni ted (a) General rule .-In the case of a nonresident alien individual States sources. gross income includes only the gross income from sources within the United States. Earnin gs fr om fo r- (b) Ships under foreign flag .-The income of a nonresident alien eign ships, etc ., exempt individual which consists exclusively of earnings derived from from taxation . the operation of a ship or ships documented under the laws of a foreign country which grants an equivalent exemption to citizens of the United States and to corporations organized in the United States, shall not be included in gross income and shall be exempt from ta xation un der this title. SEC. 213 . DEDUCTIONS. De ductions. (a) General rule .-In the case of a nonresident alien individual nectd A llowe d with ly income the ded uction s shal l be a llowed only if and to the exten t that they sources. from States are connected with income from sources within the United States ; and the proper apportionment and allocation of the deductions with respect to sources of income within and without the United States shall be determined as provided in section 119, under rules and regulations prescribed by the Commissioner with the approval of the Sec retary. (b) Losses ; Los ses. (1) The deduction for losses not connected with the trade or Not c onne cted with trade or business. business if incurred in transactions entered into for profit, allowed by section 23(e) (2) shall be allowed whether or not conn ecte d wit h inc ome from sourc es wi thin the Unite d St ates, but only if the profit, if such transaction had resulted in a profit, would be taxable under this title. (2) The deduction for losses of property not connected with conectenetedy losses not d with busi- the trade or business if arising from certain casualties or theft, ness. allowed by section 23(e) (3), shall be allowed whether or not

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Page:United States Statutes at Large Volume 45 Part 1.djvu/899

 848 SEVENTIETH CONG RESS. SESS. I. CH. 852. 1928 . connected with income from sources within the United States, but only if the loss is of property within the United States. ( c ) C h a ri t a bl e, et c ., cont ributions .-The so-called "charitable con- tribution " deduction allowed by section 23(n) shall be allowed whether or not connected with income from sources within the United States, but only as to contributions or gifts made to domestic cor- po rations, or to c ommunity chests, funds, or found ations, created in the United States, or to the vocational rehabilitation fund. SEC. 214. CREDI TS AGAINST NET INCOME. In the case of a nonresident alien individual the personal exemp- tion al lowed by section 25(c) of this title sha ll be only $1,500. The credit for dependents allowed by section 25(d) shall not be allowed in the case of a nonresident alien individual unless he is a resid ent of a contiguous country. These credits shall be deter- mined by the status of the taxpayer on the last day of the taxable year, except that in case of death the rule provided in sec tion 25(e) (3) shall be applied. Allowance of deduc- tions and credits. By filing return of his total income from (a) Return to contain information .-A nonresident alien indi- United States sources, etc. vidual shall receive the benefit of the deductions and credits allowed to him in this title only by filing or causing to be filed with the collector a tr ue and accurate return of his total inco me received from all sources in the United States, in the manner prescribed in this title ; including therein all the information which the Commis- si oner may dee m ne cess ary for the calc ulat ion of s uch dedu ctio ns Personal exemption, and credits. credits, etc ., by filing (b) Tax withheld at source .-The benefit of the personal exemp- algae D wit h wit hhol ding tion and credit for dependents, and of the reduced rate of tax Ante, p .847 provided for in section 211(b), may, in the discretion of the Com- missioner and under regulations prescribed by him with the approval of the Secretary, be received by a nonresident alien individual entitled thereto, by filing a claim therefor with the withhol ding agent. Credits a gainst tax . SEC. 216. CREDITS AGAINST TAX. No allowa nce for, of A nonresident alien individual sha ll not be allowed the credits foreign g overnments. against the tax for taxes of foreign countries and possession s of Ante, p. 829. the United States allowed by section 131. Returns. SEC. 217. RETURNS. In the case of a nonresident alien individual the return, in lieu of the time prescribed in section 53 (a) (1), shall be made on or before the fifteenth day of the sixth month following the close of the fiscal year, or, if the return is made on the basis of the calendar year, then on or before the fifteenth day of June. INCOME TAX Ch arita ble, etc ., con- tribution allowed only to d omestic corp ora- ti ons, etc. Credits against net income . Personal exemption. Ante, p. 803. For dependents, if of conti guous countr y. Time for filing. Ante, p.808. Payment of tax. Time designated. Ante, p.809. With hol ding sou rce. Ante, p. 833. SEC. 215. A LLOWA NCE OF DED UCTIO NS AND CRE DITS. SEC. 218. PAY MENT OF TAX. (a) Time of payment .-In the case of a nonresident alien ind i- vidual the total amount of tax imposed by this title shall be paid, in lieu of the time prescribed in section 56(a), on the fifteenth day of June following the close of the calendar year, or, if the return should be made on the basis of a fiscal year, then on the fifteenth at day of the sixth month following the close of the fiscal year. (b) Withholding at source .-For withholding at source of tax on income of nonresident aliens, see section 144.

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Page:United States Statutes at Large Volume 45 Part 1.djvu/900

 SEVENTIETH CONGRESS. SESS. I. CH. 852. 1928 . 849 Supplement I-Foreign Corporations INC OME ax Forei gn corporations. SEC. 231. GR OSS IN COME. Gross income. Onl y from Unite d (a) General rule .-In the case of a foreign corporation gr o s s States sources. incom e in clud es o nly the gros s in come fro m so urc es within the United Stat es. b Ships und er foreign Ra g .-The i ncome of a f oreign cor- Exemption of ships b under foreign flag. poration, which consists exclusively of earnings derived from the operation of a ship or ships documented under the laws of a foreign Condit ions. country which grants an equivalent exemption to citizens of the United States and to corporations organized in the United States, shall not be included in gross income and shall be exempt from taxation under t his titl e. SEC. 232. DE DUCTIO NS. De duction s. Allowed only on in- In the ca se of a foreign corporation the deductions shall be come from United allowed only if and to the extent that they are connected with States port sources. . income fr om sources within the United States ; and the proper apportionment and allocation of the deductions with respect to source s wit hin a nd wit hout the Un ited State s sha ll be deter mined as provided in section 119, under rules and regulations prescribed Ante, p. 826. by the Commissioner with the approval of the Secretary. SEC. 233. ALLOW ANCE OF DEDUC TIONS AND CRED ITS. tionsandredits deduo A foreign corporation shall receive the benefit of the deductions filing return Ben ef it only by all in- and credits allowed to it in this title only by filing or causing to be come from United b States sources. filed with the collector a true and accurate return of its total income received from all sources in the United States, in the manner pre- scribed in this title ; including therein all the information which the Commissioner may deem necessary for the calculation of such deduc- tions and credits. SEC. 234. CREDITS AGAINST TAX. Credits against tax. No allowance for, of Foreign corporations shall not be allowed the credits against the foreign governments. tax for taxes of forei gn co untrie s and poss essio ns of the U nited States allowed by section 131. Ante, p. 829. SEC. 235. RETURNS. Re turns. In the case of a foreign corporation not having any office or place Tie f rao $mg. of business in the United States the return, in lieu of the time pre- scribed in section 53(a) (1), shall be made on or before the fifteenth day of the sixth month following the close of the fiscal year, or, if the return is made on the basis of the calendar year then on or before the fifteenth day of June. If any foreign corporation has no office or place of business in the United States but has an agent in the United States, the return shall be made by the agent. SEC. 236. PAYM ENT OF TAX. Payment of tax. (a) Time of payment.-In the ca se of a fo rei gn corporation the Time designated. total amount of tax imposed by this title shall be paid, in lieu of Ante, p. 809. the time prescribed in section 56(a), on the fifteenth day of June following the close of the calendar year, or, if the return should be made on the basis of a fiscal year, then on the fifteenth day of the sixth month following the close of the fiscal year. (b) Withholding at source .-For withholding at source of tax sou,cehholding tax at on income of foreign corporations, see section 144. fnte, p. 833. SEC. 237. FOREIGN INSURANCE COMPANIES. companies insurance For special provisions relating to foreign insurance companies , A Spe n Special provis ions. te, p. s42. see Supplement G.

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Page:United States Statutes at Large Volume 45 Part 1.djvu/901

 850' SEVENTIETH CONGRESS. Snss. I. Cx. 852. 1928. INCOME TAX SEC. 238 . AFFILIATION. Affiliation. Not app licable to A foreign corporation shall not be deemed to be affiliated with any foreign corporations. other corporation within the meaning of section 141 or 142. Po sses sions of the United States . Supplement J-Possessions of the United States Income from sources SEC. 251. INC OME FROM SOU RCES WIT HIN POSS ESSI ONS OF within . UNITED STATES. Gross income of citi- zens,etc.,deemed a General rule .-In the case of citizens of the United States sources within United or domes tic co rporat ions, satisf ying t he foll owing condit ions, gross starts. income means only gross income from sources within the United States- (1) If 80 per centum or more of the gross income of such citizen or domestic corporation (computed without the benefit of this section), for the three-year period immediately preceding the close of the taxable year (or for such part of such period immediately preceding the close of such taxable year as may be applicable) was derived from sources within a possession of the United States ; and (2) If, in the case of such corporation, 50 per centum or more of its gross income (computed without the benefit of this section) for such period or such part thereof was derived from the active conduct of a trade or business within a possession of the United States ; or (3) If, in case of such citizen, 50 per centum or more of his gross income (computed without the benefit of this section) for such period or such part thereof was derived from the active conduct of a trade or business within a possession of the United States either on his own account or as an employee or agent of another. (b) Amounts received in United States .-Nothwithstanding the prov isions of su bsecti on (a) there shall be inc luded in gro ss inc ome all amounts received by such citizens or corporations within the United States, whether derived from sources within or without the United States. (c) Definition .-As used in this section the term " pos sessio n of the United States" does not include the Virgin Islands of the United States. (d) Deductions .- (1) Citiz ens of the U nited States entit led to the be nefits of this section shall have the same deductions as are allowed by Supplement H in the case of a nonresident alien individual. (2) Domestic corporations entitled to the benefits of this sec- tion shall have the same deductions as are allowed by Supple- ment I in the case of a foreign corporation. (e) Credits against net income .- (1) CITIZENS .-A citizen of the United States entitled to the benefits of this section shall be allowed a personal exemption of only $1,500 and shall not be allowed the credit for dependents provided in section 25(d). The personal exemption shall be determined by the status of the taxpayer on the last day of the taxable year, except that in case of death the rule provided in section 25(e)(3) shall be applied. (2) A domestic corporation entitled to the benefits of this secti on shall not be al lowed the specific credit of $3,000 provided in section 26. (f) Allowance of deductions and credits .-Citizens of the United States and domestic corporations entitled to the benefits of this section shall receive the benefit of the deductions and credits If SO per cent derived from United States pos- sessions sources. If corporation de- rived 50 per cent from busi ness ther ein. If citizen derived 50 per cent from active busi ness ther ein. All amounts received in Unite d States in- cluded in gross income. Virgin Islands not included . Deductions. Cit iz ens a llo wed same benefits as non. resident aliens. Ante, p. 847. Dom est ic corpora- tion. Ante, p. 849. Credits against net income. Pers onal exem ptio n to citizens limited. Ante, p. 803. Domestic corpora- tions not allowed spe- cific credit. Ante, p. 803. Allowance of deduc- tions by filing return of tot al inc ome .

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Page:United States Statutes at Large Volume 45 Part 1.djvu/902

 SEVENTIETH CONGRESS. Suss. I. CH. 852. 1928. allowed to them in this title only by filing or causing to be filed with the co llector a true and accurate return o f their t otal inco me receiv ed from all sources in the United States, in the manner prescribed in this title ; including therein all the information which the Commis- sioner may deem necessary for the calculation of such deductions and c redits. (g) Credits against tax .-Persons entitled to the benefits of this section shall not be allowed the credits against the tax for taxes of foreign countries and possessions of the United States allowed by section 131. (h) Affiliation .-A corporation entitled to the benefits of this secti on shall not be de emed to b e affili ated with any othe r corpora tion within the meaning of section 141 or 142. SEC. 252 . CITIZENS OF POSSESSIONS OF UNITED STA TES. (a) Any individual who is a citizen of any possession of the United States (but not otherwise a citizen of the United States) and who is not a resident of the United States, shall be subject to taxation under this title only as to income derived from sources within the United States, and in such case the tax shall be computed and paid in th e same manne r and subjec t to th e same condi tions as in the case of other persons who are taxable only as to income derived from such sources. (b) Nothing in this section shall be construed to alter or amend the prov isio ns of the Act entit led " An A ct ma king appro pria tions for the naval service for the fiscal year ending June 30, 1922, and for other purpo ses," approv ed Jul y 12, 1921, r elatin g to t he imp osi- tion of income taxes in the Virgin Islands of the United States. Supplement K-China Trade Act Corporations SEC. 261 . CREDIT AGAINST NET INCOME. (a) Allowance of credit .-For the purpose only of the tax imposed by section 13 there shall be allowed, in the case of a cor- poration organized under the China Trade Act, 1922, in addition to the credits provided in section 26, a credit against the net income of an amount equal to the proportion of the net income derived from sources within China (determined in a similar manner to that pro- vided in section 119) which the par value of the shares of stock of the corporation owned on the last day of the taxable year by (1) persons resident in China, the United States or possessions of the United States, and (2) individual citizens o>t the United States or China wherever resident, bears to the par value of the whole number of shares of stock of the corporation outstanding on such date Provided, That in no case shall the' amount by which the tax imposed by section 13 is diminished by reason of such credit exceed the amount of the special dividend certified under subsection (b) of this section. (b) Special dividend .-Such credit shall not be allowed unless the Secretary of Commerce has certified to the Commissioner- (1) The amount which, during the year ending on the date fixed by law for f iling the return, the corpo ration ha s distrib uted as a special dividend to or for the benefit of such persons as on the last day of the taxable year were resident in China, the United States, or possessions of the United States, or were indi- vidual citiz ens of the U nited States or Chi na, an d owne d shar es of stock of the corporation ; (2) That such special dividend was in addition to all other amounts, payable or to be payable to such persons or for their benefit, by reason of their interest in the corporation ; and 851 INCO ME TAX Credits against tax. No allow ance for, of foreign g overnments. Ante,p. 829. Affiliation. Not applicable to cor- porations hereof. Ante, pp. 831, 832. Citizens of posses- sions of United States. Nonre sidents of United States taxable only on income from United States sources. Virgi n Islands. Payment of taxes in, not aff ected. Vol.42,p. 123. China Trade Act cor- porations. Credit against net in- come. Al lowa nce o nly for prop ortion of in come from China sources bears to shares of resi- dents in China. Ante, p. 803. Ante, p. 826. Precise. Li mita tion. Ante, p. 797. Condition. Credit subject to spe- cial dividend to resi- dents of China, etc. Additional to all other payments.

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Page:United States Statutes at Large Volume 45 Part 1.djvu/903

 852 INCOME TAX Dividends in pr o- portion to stock owned. Ownership of stock defined. Meaning of" China." Vol .42,p . 856 . Cr edits aga inst tax. No al lowance for, of forei gn governmen ts. Ante, p. 829. Affiliation. Not app licable to co rpora tion s her eof. Ante, pp. 831, 832 . Income of sharehold- ers . Exclusion from gross income. Ante, p. 824. Assessment and col- lec tion of d efici encie s. De fin it ion of defi- ciency. Meaning of term . The amount the tax imposed exceeds return by taxp ayer. Amount of tax ex- ceeding previous assess- ment. Procedure In general. Notice of deficiency to taxpayer. Petition to Board of Tax Appeals for rede- ter minat ion. SEVENTIETH CONGRESS. SEss. I. Cu. 852.' 1928 . (3) That such distribution has been made to or for the benefit of such persons in proportion to the par value of the shares of stock of the corporation owned by each ; except that if the cor- poration has more than one class of stock, the certificates shall contain a statement that the articles of incorporation provide a method for the apportionment of such special dividend among such persons, and that the amount certified has been distributed in accordance with the method so provided. (o) Ownership of stock .-For the purposes of this section shares of stock of a corporation shall be considered to be owned by the person in whom the equitable right to the income from such shares is in good faith vested. (d) Definition of China,As used in this section the term "China" shall have the same meaning as when used in the China Trade Act, 1922. SEC. 262. CREDITS AGAINST THE TAX. A corporation organized under the China Trade Act, 1922, shall not be allowed the credits against the tax for taxes of foreign coun- tries and possessions of the United States allowed by section 131. SEC. 263. AFFILIATION. A corporation organized under the China Trade Act, 1922, shall no t be d eemed to be affili ated w ith an y other corpo ration withi n the meaning of section 141 or 142. SEC. 264 . INCOME OF SHAREHOLDERS. For exclusion of dividends from gross income, see section 116. Supplement 1,-Assessment and Collection of Deficiencies SEC. 271. DEFINITION OF DEFICIENCY. As used in this title in respect of a tax imposed by this .title " defi- ciency " means- (a) The amount by which the tax imposed by this title exceeds the amount shown as the tax by the taxpayer upon his return ; but the amount so shown on the return shall first be increased by the amounts previously assessed (or collected without assessment) as a deficiency, and decreased by the amounts previously abated, credited, refunded, or otherwise repaid in respect of such tax ; or (b) If no amount is shown as the tax by the taxpayer upon his return, or if no return is made by the taxpayer, then the amount by which the tax exceeds the amounts previously assessed (or collected without assessment) as a deficiency ; but such amounts previously as sessed, or c ollect ed wit hout a ssessm ent, sh all fi rst be decre ased by the amounts previously abated, credited, refunded, or otherwise repaid in respect of such tax. SEC. 272 . PROCEDURE IN GENERAL. (a) Petition to Board of Tax Appeals .-If in the case of any tax- pa yer, the Commi ssion er de term ines that ther e is a def icien cy i n respect of the tax imposed by this title, the Commissioner is author- ize d to s end no tice o f such defic iency to the taxpay er by regist ered mail. Within 60 days after such notice is mailed (not counting Sunday as the sixtieth day), the taxpayer may file a petition with the Board of Tax Appeals for a redetermination of the deficiency.

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Page:United States Statutes at Large Volume 45 Part 1.djvu/904

 SEVENTIETH CONGRESS. SEss. I. Cu. 852. 1928. 853 No assessment of a deficiency in respect of the tax imposed by this KoINs sess men etc., title and no distraint or proceeding in court for its collection shall be until notice has been made, begun, or prosecuted until such notice has been mailed to the mailed or appeal filed, taxpayer, nor until the expiration of such 60-day period, nor, if a petition has been filed with the Board, until the decision of the Board has become final. Notwithstanding the provisions of section Injunction by court 3224 of the Revised Statutes the making of such assessment or the procedure allowed. beginning of such proceeding or distraint during the time such prohibition is in force may be enjoined by a proceeding in the proper court. Exceptions t o restrio. For exceptions to the restrictions imposed by this subsection, tions. see- Waiv ers . Subsection (d) of this section, relating to waivers by the I f . taxpayer ; Subsection (f) of this section, relating to notifications of Errors. mathematical errors appearing upon the face of the return ; Jeo pa rdy a sse ss- - (3) Section 213, relating to jeopardy assessments ; ments, p. 854. (4) Section 274, relating to bankruptcy and receiverships ; and Bankruptcy, p. 856. (5) Section 1001 of the Revenue Act of 1926, as amended, def ici en cy. etc ., of rel ating to ass essmen t or c ollect ion of the am ount o f the defi- Vol. 44,p .109. ciency determined by the Board pending court review. Collection of defi- (b) Collection of deficiency found by Board .-If the taxpayer files ciency fo und by Board. a petition with the Board, the entire amount redetermined as the deficiency by the decision of the Board which has become final shall be assessed and shall be paid upon notice and Disallow ed amount demand from the collector. No part of the amount determined as not collectible. a deficiency by the Commissioner but disallowed as such by the decision of the Board which has become final shall be assessed 'or be collected by distraint or by proceeding in court with or with- out assessment. Payment on demand (c) Failure to file petition .-If the taxpayer does not file a peti- if Petition not filed. tion with the Board within the time prescribed in subsection (a) of this section, the deficiency, notice of which has been mailed to the taxpayer, shall be assessed, and shall be paid upon notice and demand from the collector. Waiver of restrictions (d) Waiver of restrictions .-The taxpayer shall at any time by taxp ayer. have the right, by a signed notice in writing filed with the Commis- sioner, to waive the restrictions provided in subsection (a) of this section on the assessment and collection of the whole or any part of the defic iency. Increase of deficiency (e) Increase of deficiency after notice mailed .-The Board shall after notice mailed. hav e jur isdi ction to r edet ermin e the cor rect amoun t of the defi- ciency even if the amount so redetermined is greater than the amount of the deficiency, notice of which has been mailed to the taxpayer, and to determine whether any penalty, additional amount Condition . or addition to the tax should be assessed-if claim therefor is asserted by the Commissioner at or before the hearing or a rehearing. Restriction hereafter (f) Further deficiency letters restricted .-If the Commissioner has on determining defi- mailed to the taxpayer notice of a deficiency as provided in ciency after notice by Co mmis sione r, e tc. subsection (a) of this section, and the taxpayer files a petition with the Board within the time prescribed in such subsection, the Commissioner shall have no right to determine any additional defi- ciency in respect of the same taxable year, except in the case of Exceptions. fraud, and except as provided in subsection (e) of this section, relating to assertion of greater deficiencies before the Board, or in Post, p .854. section 273(c), relating to the making of jeopardy assessments. Ma them atica l er ror If the taxpayer is notified that, on account of a mathematical error not considered a notice appearing upon the face of the return, an amount of tax in excess of deficiency. of that shown upon the return is due, and that an assessment of the tax has been or will be made on the basis of what would have
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Page:United States Statutes at Large Volume 45 Part 1.djvu/905

 854 SEVENTIETH CONGRESS. SESS. I. Cx. 852 . 1928 . INCOME TAX been the correct amount of tax but for the mathematical error, such notice shall n ot be co nsidered (for th e purpos es of th is subse ction, Effect oft or of subsection (a) of this section, prohibiting as ses sm ent and collec tion unt il notic e of def iciency has been mailed, or of s ection rose, p. ssz. 322 (c), prohibiting credits or refunds after petition to the Board of Tax Appeals) as a notice of a deficiency, and the taxpayer shall hav e no rig ht to fi le a pet itio n wi th the B oard bas ed on su ch notice, nor sha ll such assessme nt or co llection be proh ibited b y the provisions of subsection (a) of this section. Jurisdiction over other taxable years. (g) Jur isdictio n over o ther tax able yea rs .-The B oard in rede - termining a def ic ien cy in respect of any taxable year shall co n- sider such facts with relation to the taxes for other taxable years as may be necessary correctly to redetermine the amount of such Lmutatlon, deficiency, but in so doing shall have no jurisdiction to determine whether or not the tax for any other taxable year has been overpaid or underpaid. Date of final decision of Board. (h) Fi nal d ecisi ons of Board .-For the purposes of this title . the date on whi ch a decision of the Board bec om es fi nal shall be vol . 44, p. 110. determined according to the provisions of section 1005 of the Reve- nue Act of 1926. Prorating of defi- cie ncy (1) Prorating of deficiency to installments .-If the taxpayer has to installments . ele cted to pay the tax in installments and a deficiency has be en Infra. assessed, the deficiency shall be prorated to the four installments. Except as provided in section 273 (relating to jeopardy assessments), that part of the deficiency so prorated to any installment the date for pa yment of which h as not a rrived, shall be collect ed at th e same time as and as part of such installment. That part of the deficiency so prorated to any installment the dat e for payment of whi ch has arrived, shall be paid upon notice and demand from the collector. Extension ment allowed, for to avoid (j) Extension of time for payment of deficiencies .-Where it is undue hardship to tax- s payer. howshown to the satisfaction of the Commissioner that the payment of a deficiency upon the date prescribed for the payment thereof will result in undue hardship to the taxpayer the Commissioner, with the approval of the Secretary (except where the deficiency is due to neglig ence, to intenti onal dis regard o f rules and regu lations, or to fraud wi th intent to evade tax), may grant an extension for the payment of such deficiency or any part thereof for a period not in Bon dre qu ire d, excess of eighteen months, and, in exceptional cases, for a further period not in excess of twelve months. If an extension is granted, the Commissioner may require the taxpayer to furnish a bond in such amount, not exceeding double the amount of the deficiency, and with su ch suret ies, as the Comm issioner deems n ecessary, condit ioned upon the payment of the deficiency in accordance with the terms Address for notice of of the extension. deficiency. (k) Add ress for notice of defic iency .- In the absence of notice to the Commissione r under section 312(a) of the existence of a fiduciary relationship, notice of a deficiency in respect of a tax imposed by this title, if mailed to the taxpayer at his last known address, sh all be sufficien t for the purpos es of this title even if such taxpayer is deceased, or is under a legal disability, or, in the case of a corporation, has terminated its existence. Jeo par dy as se ss- ments. SEC. 273. JEOPARDY ASS ESSMENTS. Deficiency te ., if immedi- ately assessed, delay . (a) Authority for making.-If the Commissioner believes that the jeopardized by delay. assessment or collection of a deficiency will be jeopardized by delay, he shall immediately assess such deficiency (together with all interest, additional amounts, or additions to the tax provided for by law) and notice and demand shall be made by the collector for the payment thereof.

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Page:United States Statutes at Large Volume 45 Part 1.djvu/906

 SEVENTIETH CONGRESS. SESS. I. CH. 852. 1928. 855 (b) Deficiency letters .-If the jeopardy assessment is made be- 'iceO M E to TAX fore any notice in respect of the tax to which the jeopardy assess- ment relates has been mailed under section 272(a), then the Com- missioner shall mail a notice under such subsection within 60 days after the making of the assessment. Amount assessable (c) Amount assessable before decision of Board .-The jeopardy before decision of assessment may be made in respect of a deficiency greater or less Board. than that notice of which has been mailed to the taxpayer, despite the provisions of section 272(f) prohibiting the determination of additional deficiencies, and whether or not the taxpayer has there- tofore filed a petition with the Board of Tax Appeals. The mine, on d to notice . shall notify the Board of the amount of such assess- ment, if the petition is filed with the Board before the making of the assessment or is subsequently filed, and the Board shall have juris- diction to redetermine the entire amount of the deficiency and of all amounts assessed at the same time in connection therewith. Amo unt assessable (d) Amount assessable after decision of Board .-If the jeopardy after decision of Board. assessment is made after the decision of the Board is rendered such assessment may be made only in respect of the deficiency deter- mined by the Board in its decision. Not allowed after (e) Expiration of right to assess .-A jeopardy assessment may final decision of Board, not be made after the decision of the Board has become final or after etc. the taxpayer has filed a petition for review of the decision of the Board. (f) Bond to stay collection .-When a jeopardy assessment has upoS Of n Sling bond collection been made the taxpayer, within 10 days after notice and demand from the collector for the payment of the amount of the assessment, may obtain a stay of collection of the whole or any part of the amount of the assessment by filing with the collector a bond in such amount, not exceeding double the amount as to which the stay is desired, and with such sureties, as the collector deems necessary, conditioned upon the Conditions. payment of so much of the amount, the collection of which is stayed by the bond, as is not abated by a decision of the Board which has become final, together with interest thereon as provided in section 297 . Further conditions, (g) Same-Further conditions .-If the bond is given before the if bond give n before taxpayer has filed his petition with the Board under section 272(a), filing petition. the bond shall contain a further condition that if a petition is not filed within the period provided in such subsection, then the amount the collection of which is stayed by the bond will be paid on notice and demand at any time after the expiration of such period, together with interest thereon at the rate of 6 per centum per annum from the date of the jeopardy notice and de mand to the date of notice and demand under this subsection. h Waiver of stay .-Upon Stay of collection of y .-Upon the filing of the bond the collection part covered by bond . of so much of the amount assessed as is covered by the bond shall Effect of waiver of be stayed . The taxpayer shall have the right to waive such stay at stay, etc. any time in respect of the whole or any part of the amount covered by the bond, and if as a result of such waiver any part of the amount covered by the bond is paid, then the bond shall, at the request of the t axpa yer, be prop orti onat ely redu ced. If the Board determines that the amount assessed is greater than the amount which should have been assessed, then when the decision of the Board is rendered the bond shall, at the request of the taxpayer, be proportionately reduced . Collection of unpaid (i) Collection of unpaid amounts .-When the petition has been of Buns when deci sion filed with the Board and when the amount which should have been assessed has been determined by a decision of the Board which has become final, then any unpaid portion, the collection of which has been stayed by the bond, shall be collected as part of the tax upon notice and demand from the collector, and any remaining portion of the assessment sha ll be abated, If the amount already collected

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Page:United States Statutes at Large Volume 45 Part 1.djvu/907

 856 SEVENTIETH CONGRESS. "SEss . I. CH. 852. 1928. INCOME TAX exceeds the amount determined as the amount which should have Credit or refund . been assessed, such excess shall be credited or refunded to the tax- Pest, p. s61 . payer as provided in section 322, without the filing of claim therefor . Colle ction of great er If the amount determined as the amount which should have been a ssess ment . assessed is greater than the amount actually assessed, then the differ- ence shall be assessed and shall be collected as part of the tax upon notice and demand from the collector. No other abatement claim to be filed. (j) Claims in abatement.-No claim in abatement shall be filed in respect of any assessment in respect of any tax imposed by this title . B ankru ptcy and re- cei verships . SEC . 274. BANKRUPTCY AND RECEIVERSHIPS . Immediate deficienc y . (a) Immediate assessment .-Upon the adjudication of bankruptcy ment of tax defiiy in bankruptcy and of any taxpayer in any bankruptcy proceeding or the appoint- receivership cases. ment of a receiver for any taxpayer in any receivership proceeding before any court of the United States or of any State or Territory or of the District of Columbia, any deficiency (together with all interest, additional amounts, or additions to the tax provided for by law) determined by the Commissioner in respect of a tax imposed by th is tit le upo n such taxpa yer sha ll, de spite the re stric- tions imposed by section 272(a) upon assessments be immediately assessed if such deficiency has not theretofore been assessed in accordance with law. Claims for the deficiency and such interest, additional amounts and additions to the tax may be presented, for adjudication in accordance with law, to the court before which the bankruptcy or receivership proceeding is pending, despite the pendency of proceedings for the redetermination of the deficiency in pursuance of a petition to the Board ; but no petition for any such re determ inatio n shal l be f iled w ith th e Board after the a djudic ation of bankruptcy or the appointment of the receiver. (b) Unpaid claims .-Any portion of the claim allowed in such bankruptcy or receivership proceeding which is unpaid shall be paid by the taxpayer upon notice and demand from the collector after the te rminat ion of such procee ding, and ma y be co llecte d by d istrai nt or proceeding in court within six years after termination of such pro- cee di ng. Extensions of time for such payment may be had in the same manner and subject to the same provisions and limitations as are provided in section 272 (j) and section 297 in the case of a deficienc y in a ta x imposed by this title. SEC. 275 . PERIOD OF LIMITATION UPON ASSESSMENT AND COL- LECTION. Except as provided in section 276- (a) General rule.-The amount of income taxes imposed by this title s hall b e asse ssed w ithin two ye ars aft er the retur n was filed, and no proceeding in court without assessment for the collection of such taxes shall be begun after the expiration of such period. (b) Request for prompt assessment .-In the case of income received during the lifetime of a decedent, or by his estate during the period of administration, or by a corporation, the tax shall be assessed, and any proceeding in court without assessment for the collection of such tax shall be begun, within one year after written request therefor (filed after the return is made) by the executor, administrator, or other fiduciary representing the estate of such decedent, or by the corporation, but not after the expiration of two years after the return was filed. This subsection shall not apply in Application to re- th e case of a corpor ation unless - quest by a corporation . (1) Such written request notifies the Commissioner that the corporation contemplates dissolution at or before the expiration of such year ; and Adjudication of claim by court. Collection of claims allowed in court pro- ceedings. Time extension may be bad. Period of limitation on assessment and col- le ction. Post, p. 857. Periods designated. Income tax to be ass esse d in two years. Income received dur - ing life of decedent, in one year on request of executor, etc.

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Page:United States Statutes at Large Volume 45 Part 1.djvu/908

 SEVENTIETH CONGRESS. SEss. I. CH. 852. 1928. 857 (2) The disso lution is in good faith begun b efore the ex pira- INC OME TAX tion of such year ; and (3) The dissolution is completed. C orpor atio n ma king (c) Corporation and shareholder .-If a corporation makes no n o ret urn, tax asses sed return of the tax imposed b y this title, r etu rns but e ach of the s hareho lders in r years, after ofshareholders. includes in his return his distributive share of the net income of the corporation, then the tax of the corporation shall be assessed within four years after the last date on which any such shareholder's return was filed. SEC. 276 . SAME-EXCEPTIONS. E xcept ions. Assessment, etc ., in (a) False return or no return .-In the case of a false or fraudu- case of fraud, or of no lent return with intent to evade tax or of a failure to file a retur n. return the tax may be assessed, or a proceeding in court for the col- lection of such tax may be begun without assessment, at any time. 7 At any time with (b) Waivers .-Where before the expiration of the time prescribed written consent of in section 275 for the assessment of the tax, both the Commissioner commissioner and tax ° and the taxpayer have consented in writing to its assessment after payer, such time, the tax may be assessed at any time prior to the expiration of the period agreed upon. The period so agreed upon may be extended by subsequent agreements in writing made before the expiration of the period previously agreed upon. c Collection after assessment-Where the assessment of any collection of income tax by distraint, etc . income tax imposed by this title has been made within the period of limit ation proper ly app licabl e ther eto, su ch tax may b e coll ected Time l imit. b y distraint or by a proceeding in court, but only if begun (1) within six years after the assessment of the tax, or (2) prior to the expiration of any period for collection agreed upon in writing by the Commissioner and the taxpayer before the expiration of such six- year period. The period so agreed upon may be extended by subse- Extension. qu ent ag reemen ts in writin g made befor e the e xpirat ion of the p eriod previously agreed upon. statute of limits- SEC. 277 . SUSPENSION OF RUNNING OF STATUTE. tions. Suspension of ru n- The runni ng of the st atute of lim itatio ns prov ided i n sect ion 27 5 ning of, during period or 276 on the making of assessments and the beginning of distraint sessmnt,etc~ of as- or a proceeding in court for collection, in respect of any deficiency, Ante, p. 852. shall (after the maifing of a notice under section 272(a)) be sus- pended for the period during which the Commissioner is prohibited from making the assessment or beginning distraint or a proceeding U ntil decision of in court (and in any event, if a proceeding in respect of the defi- Board, etc . ciency is placed on the docket of the Board, until the decision of the Bo ard be comes final), and for 60 days thereaf ter. Supplement M-Interest and Additions to the Tax t ion Interest and to the tax . addi- SEC. 291 . FAILURE TO FILE RETURN. Failure to file re- turn. In case of any failure to make and file a return required by po sed A dditi onal on . tax im- this title, within the time prescribed by law or prescribed by the Commissioner in pursuance of law, 25 per centum of the tax shall be added to the tax, except that when a return is filed after such Excep tion, if failu re not willful neglect. time and it is shown that the failure to file it was due to reasonable cause and not due to willful neglect no such addition shall be made to the tax. The amount so added to any tax shall be collected Collection, etc. at the same time and in the same manner and as a part of the tax unless the tax has been paid before the discovery of the neglect, in which case the amount so added shall be collected in the same manner as the tax. The amount added to the tax under this section In lieu of former ad- dition. shall be in lieu of the 25 per centum addition to the tax provided Vol.44, p .112. in section 3176 of the Revised Statutes, as amended.

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Page:United States Statutes at Large Volume 45 Part 1.djvu/909

 858 SEVENTIETH CONGRESS. SESS. I. CH. 852. 1928 . INCOME TAX SEC. 292. INTEREST ON DEFICIENCIES. Interest in deficien- cies. Interest upon the amount determined as a deficiency shall be Assessment and rate. assessed at the same time as the deficiency, shall be paid uon notice and demand from the collector, and shall be collected asapartof the tax, at the rate of 6 per centum per annum from the date pre- scribed for the payment of the tax (or, if the tax is paid in install- ments, from the date prescribed for the payment of the first install- ment) to the date the deficiency is assessed, or, in the case ofa waiver under section 272(d), to the thirtieth day after the filing of such waiver or to the date the deficiency is assessed whichever is the earlier. Additions to tax in case of deficiency. SEC. 293. ADDITIONS TO THE TAX IN CASE OF DEFICIENCY. If due to negligence . Rate. (a) Negligence .-If any p art of any deficiency is due to negli- gence, or intentional disregard of rules and regulations but with- out intent to defraud, 5 per centum of the total amount of the deficiency (in addition to such deficiency) shall be assessed, collected, and paid in the same manner as if it were a deficiency, except that the provisions of sec ti on 27 2(i ), relating to the prorating of a deficiency, and of section 292, relating to interest on deficiencies, If due to fraud, etc. shall not be applicable. Rate. (b) Fraud .-If any part of any deficiency is due to fraud with intent to evade tax, then 50 per centum of the total amount of the deficiency (in addition to such deficiency) shall be so assessed, collected, and paid, in lieu of the 50 per centum addition to the tax Vol. 44, p. 112. provid ed in sect ion 31 76 of the Revised Statutes, as amended. Add itions in ca se of nonpayment. SEC. 294. ADDITIONS TO THE TAX IN CASE OF NONPAYMENT. (a) Tax shown on return.- In teres t pr escri bed e. (1) GE NERA L RULE .-Where the amount determined by the tax not paid wh en due . taxpayer as the tax imposed by this title, or any installment thereof, or any part of such amount or installment, is not paid on or before t he date prescrib ed for i ts payme nt, ther e shall be collected as a part of the tax, interest upon such unpaid amount at the rate of 1 per centum a month from the da te pr escri bed Iftax and interest not for its payment until it is paid. paid in full, when (2) Ir EXTENSION GRANTE D .-W here an •ex tensi on of time for extension granted. payment of the amount so determined as the tax by the taxpayer, or any installment thereof, has been granted, and the amount the time for payment of which has been extended, and the inter- est thereon determined under section 295, is not paid in full prior t o the ex piration of the period o f the ex tension, then, i n lieu of the interest provided for in paragraph (1) of this sub- section, interest at the rate of 1 per centum a month shall be collected on such unpaid amount from the date of the expiration of the period of the extension until it is pai d. etc., not , Interest, U deficiency, not ice defnotice (b) Deficiency.-Where a deficiency, or any interest or additional and dem and. amounts assessed in connection therewith under section 292, or un der sect ion 293, or any addition to the tax in c ase of d elinquen cy p rovide d for in s ection 291, is not paid in full within ten days from the date of notice and demand from the collector, there shall be collected as part of the tax, interest upon the unpaid amount at Nonpa y ment of pro. the rate of 1 per centum a month from the date of such notice and ratedf,p st$s rents. demand until it is paid. If any par t of a def ic ien cy prorated to any unpaid installment under section 272(i) is not pa id in full on or before the date prescribed for the payment of such install- ment, there shall be collected as part of the tax interest upon the unpaid amount at the ra te of 1 per centum a month from such date until it is paid.

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Page:United States Statutes at Large Volume 45 Part 1.djvu/910

 SEVENTIETH CONGRESS. Sxss. I. Ca. 852. 1928 . 859 (c) Fiduciaries .-For any p eriod an es tate is held by a fid uciar y INCO ME TAX appointed by order of any court of competent jurisdiction or by by fiduciaies . payable will, there shall be collected interest at the rate of 6 per centum per annum in lieu of the interest provided in subsections (a) and (b) of this section. C111 Not applicable to (d) Filing of jeopardy bond .-If a bond is filed, as provid ed in amount covered by section 273, the provisions of subsections (b) and (c) of this section jeopardy b ond. Ante, p. 855. shall not apply to the amount covered by the bond. Ti me ex ten ded for SEC. 29 95. TIME EXTENDED FOR PAYMENT OF TAX SHOWN ON pa rm nt of tax shown RETURN. Interest to be col- If the time for pa yme nt of the amount det er min ed as the tax by lected. the taxpayer, or any installment thereof, is extended under the authority of section 56(c), there shall be collected as a part of such amount, interest thereon at the rate of 6 per centum per annum from the date when such payment should have been made if no extension had been granted, until the expiration of the period of the extension. SEC. 296. T IME EXTENDED FOR PAYMENT OF DEFICIENCY. Ti me ex ten ded for Pay ment of d efici ency . If the time for the payment of any part of a deficiency is extended, Interest for period of there shall be collected, as a part of the tax, interest on the part of extension , the deficiency the time for payment of which is so extended, at the rate of 6 per centum per annum for the period of the extension, and no other interest shall be collected on such part of the deficiency for such period. If the part of the deficiency the time for payment of Additional, if not which is so ex tended i s not pa id in ac cordance with th e terms of the pad. extension, there shall be collected, as a part of the tax, interest on such unpaid amount at the rate of 1 per centum a month for the period from the time fixed by the t erms of the exte nsion for its payment until it is paid, and no other interest shall be collected on suc h unp aid am ount for such period. SEC. 297. INTE REST IN C ASE OF J EOPAR DY ASSESSMENTS. assessments . jeopardy In the case of the amount collected under section 273 (i) there shall Ra te , on amount be collected at the same time as such amount, and as a part of the Ante, p. 855. tax, i nterest at the r ate of 6 per cen tum per annum up on such amount from the date of the jeopardy notice and demand to the date of notice and demand under section 273(i), or, in the case of the amount collect ed in ex cess of the amou nt of th e jeopar dy asses sment, interest as provided in section 292. If the amount included in the Additional, If amount of deficiency notice and demand from the collector unde r sect ion 2 73(i) is not not paid in full. paid in full within ten days after such notice and demand, then there shall be collected, as part of the tax, interest upon the unpaid amount at the rate of 1 per centum a month (or, for any period the estate of the tax paye r is hel d by a f iduc iary app oint ed by any co urt of competent jurisdiction or by will, at the rate of 6 per centum per annum) fro m the d ate of such notice and demand unt il it is paid. SEC. 298. BANKRUPTCY AND RECEIVERSHIPS. 'Bankruptcy and re- ceiverships, If the unpaid portion of the claim allowed in a bankruptcy or eIIaeinana if not paid receivership proceeding, as provided in section 274, is not paid in Ante, p. 856, full within 10 days from the da te of notice and demand fr om the collector, then there shall be collected as a part of such amount intere st upon the unpa id porti on there of at th e rate o f 1 per centum a month from the d ate of such notice and dema nd until payment. 54835' -29-FT 1-55

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 860 SEVENTIETH CONGRESS. SEss. I. CH. 852 . 1028 . INC OME TAX SEC. 299. REMOVAL OF PROPERTY OR DEPARTURE FROM UNITED Remo val ofproper ty. STATES. Additions to tax for, For additions to tax in case of leaving the United States or con- et ante, p. 836. cealing property in such manner as to hinder collection of the tax, see section 147. Claims a gainst trans- ferees and Supplement N-Claims against Transferees and Fidu- ciaries Transferred assets.'* SEC. 311. TRAN SFE RRE D ASSETS. Me tax Met hod ofr collection to de- (a ) Me thod of c ollec tion .-The amounts of the followin g liabil ities ficiency~ - shall, except as hereinafter in this section provided, be assessed, collected, and paid in the same manner and subject to the same pro- visions and limitations as in the case of a deficiency in a tax imposed by this title (including the provisions in case of delinquency in pay- ment after notice and demand, the provisions authorizing distraint and proceedings in court for collection, and the provisions prohibit- ing claims and suits for refunds) Transferees. (1) TRANSFEREES.-The liability, at law or in equity, of a transferee of property of a taxpayer, in respect of the tax (including interest, additional amounts, and additions to the tax provided by law) imposed upon the taxpayer by this title. Fiduciaries. (2) FIDUCIARIES .-The liability of a fiduciary under section 68 7. S ., sec. 3467, p: 3467 of the Revised Statutes in respect o f the payment of any such tax from the estate of the taxpayer. aDunr rminatlenof Any such liabi lity may be either as to the amount of t ax shown on the return or as to any deficiency in tax. Limitation periods. (b) Peri od o f lim itat ion .-The period of limitation for assessment one year after tat ° of any such liability of a transferee or fiduciary shall be as follows : payer's a ssessment. (1) In the case of the liability of an initial transferee of the property of the taxpayer,-within one year after the expiration Transferee of a trans- of the peri od of li mitation for ass essment against the taxp ayer ; feree, within one year (2) In the case of the liability of a transferee of a transferee after period of first transferee. of the prop erty of the taxp ayer,-wi thin one year af ter the expi- ration of the period of limitation for assessment agai nst the preceding transferee, but only if within three years after the expiration of the period of limitation for assessment against the One year af ter court taxpayer ;- proceedings. except that if before the expiration of the period of limitation for the assessment of the liability of the transferee, a court pro- ceeding for the collection of the tax or liability in respect thereof has been begun against the taxpayer or last preceding transferee, respectively,-then the period of limitation for assessment of the liability of the transferee shall expire one year after the return of execut ion in t he court proceed ing. after Fiduciary, liability arises. ye ar (3) In the case of the liability of a. fiduciary, not later than . one year after the liability arises or not later than the expira- tion of the period f or collec tion of the tax in respe ct of wh ich such liability arises, whichever is the later. Provision for death taxpayer or terminated (c) Period for assessment against taxpayer .-For the purposes corporation° of this section, if the taxpayer is deceased, or in the case of a cor- poratio n, has t erminate d its ex istence, the per iod of l imitatio n for assessm ent agai nst the taxpayer shall b e the pe riod tha t would be in effect had the death or termination of existence not occurred. Suspe nsio n of run- nin e of statute of limi - (d) Suspension of running of statute of limitations .-The running tatio n, after notice of the statute of limitations upon the assessment of the liabil- mailed, etc. Ante, p. ssz. ity of a transferee or fiduciary shall, after the mailing to the trans- feree or fiduciary of the notice provided for in section 272(a),

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Page:United States Statutes at Large Volume 45 Part 1.djvu/912

 SEVENTIETH CONGRESS. SEss. I. Cia. 852. 1928 . be suspended for the period during which the Commissioner is prohibited from making the assessment in respect of the liability of the transferee or fiduciary (and in any event, if a proceeding in respe ct of the liabilit y is plac ed on th e docket of the Bo ard, unti l the decision of the Board becomes final), and for 60 days thereafter. (e) Address for notice of liability .-In the absence of notice to the Commissioner under section 312 (b) of the existence of a fiduciary relationship, notice of liability enforceable under this section in respe ct of a t ax impose d by this title, if mailed to the p erson sub ject to th e liabili ty at his last kno wn addre ss, shall be suffi cient for the purposes of this title even if such person is deceased, or is under a legal disability, or, in the case of a corporation, has terminated its existence. (f) Definition of "transferee ."-As used in this section, the term " transferee " includes heir, legatee, devisee, and distribi .tee. SEC. 312. NOTICE OF FIDUCIARY RELATIONSHIP. (a) Fiduciary of taxpayer .Upon notice to the Commissioner that any person is acting in a fiduciary capacity such fiduciary shall assu me the power s, rig hts, d uties, and pr ivileg es of the ta xpayer in resp ect of a tax impos ed by this t itle (e xcept as oth erwise speci fi- cally provided and except that the tax shall be collected from the estate of the taxpayer), until notice is given that the fiduciary capacity has terminated. (b) Fiduciary of transferee .-Upon notice to the Commissioner that any person is acting in a fiduciary capacity for a person subject to the liability specified in section 311, the fiduciary shall assume, on beha lf of such p erson, the p owers, rights, duti es, an d priv ileges of such person under such section (except that the liability shall be col- lected from the estate of such person), until notice is given that the fiduc iary c apacit y has termin ated. (c) Manner of notice .-Notice under subsection (a) or (b) shall be given in accordance with regulations prescribed by the Commis- sioner with the approval of the Secretary. Supplement «-Overpayments SEC. 321 . OVERPAYMENT OF INSTALLMENT. If the taxpayer has paid as an installment of the tax more than the amount determined to be the correct amount of such installment, the overpayment shall be credited against the unpaid installments, if any. If the amount already paid, whether or not on the basis of inst allmen ts, ex ceeds the am ount d etermin ed to be the corre ct amo unt of the tax, the overpayment shall be credited or refunded as provided in section 322. SEC. 322 . REFUNDS AND CREDITS. (a) Authorization .-Where there has been an overpayment of any tax imposed by this title, the amount of such overpayment shall be credited against any income, war-profits, or excess-profits tax or installment thereof then due from the taxpayer, and any balance shall be refunded immediately to the taxpayer. (b) Limitation on allowance .- (1) PERIO D Or LIMIT ATION. -N o such credit or refund shall be allowed or made after two years from the time the tax was paid, unless before the expiration of such period a claim therefor is filed by the taxpayer. 861 INCOME TAX Unt il decision of Board, etc. Address for notice of liability. Meaning of "trans. feree." Notice of fiduciary relationship . Powers, etc., of tax- payer transferred to fiduciary on notice ,to Com miss ione r. Powers assumed by fiduciary of transferee. Manner of notice. Overpayments. O f installment. Credit, if installment pay ment exce eds cor- rect amount. Credit or refund for amount already paid. Infra. Refunds and credits. Cre dit agai nst t ax then due . Period of limitation .

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Page:United States Statutes at Large Volume 45 Part 1.djvu/913

 862 SEVENTIETH CONGRESS. SEss. I. ' Cix. 852 . 1928 . INC OME TAX Amount of credit or refund limited. Restriction on credit or refund if deficiency notice mailed taxpayer and petition filed with Board . Exc eptio ns. Ove rpaym ents de- cided by Board. Excess collected. Collection after stat- utor y li mitat ion. Decision by Board of overpayment. Limi tatio n. Refund or credit of tax withheld at source. Ante, p. 533. Miscellaneo us taxes. TITLE II-MISCELLANEOUS TAXES Estate tax. Nonresident dece- den ts. Limit on deductions fr om gross estate of, repealed. Vol. 44, p. 73, amend- ed. Application to deaths hereafter . Statute of limita- tioas. Vol.44,p. 77, amend- ed. Suspension of, during period of prohibition of assessment, etc . Vol. 44, p.75. (2) LIMI T ON AMOU NT OF CREDIT OR REFUND .-The amount of the cr edit or re fund s hall not e xceed the portion of the tax paid during the two years immediately preceding the filing of the claim, orifno claim was filed, then during the two years immediately preceding the allowance of the credit or refund. (c) Effect of petition to Board .-If the Commissioner has mailed to the taxpayer a notice of deficiency under section 272(a) and if the taxpayer files a petition with the Board of Tax Appeals within the time prescribed in such subsection, no credit or refund in respect of the tax for the taxable year in respect of which the Commissioner has determined the deficiency shall be allowed or made and no suit by the taxpa yer f or th e reco very of any part of such tax shall be instituted in any court except- (1) As to overpayments determined by a decision of the B oard w hich has b ecome final ; and (2) As to any amount collected in exces s of an amount com- puted in accordance with the decision of the Board wh ich has become final ; and (3 ) As to any amou nt colle cted aft er the p eriod of limitat ion upon the beginning of distraint ora proceeding in co urt for collection has expired ; but in any s uch claim for credit or refund or in any such suit for refund the decision of the Board which has become final, as to whether such period has expired be fore the notice of defic iency wa s mailed, shall be concl usive. (d) Overpayment found by Board .-If the Board fin ds th at there is no d efic ienc y and fu rth er f inds tha t the ta xpay er has m ade an overpayment of tax in respect of the taxable year in respect of which the Commissioner determined the deficiency, the Board shall ha ve jurisdiction to determine the amount of such overpayment, and such amount shall, when the decision of the Board has become final, be credited or refunded to the taxpayer. No suc h credit or refund sha ll be made of any portion of the tax paid more than two years before the filing of the claim or the filing of the petition, whichever is earlier. (e) Tax withheld at source .-For refund or credit in case of exces- sive withholding at the source, see section 144(f). Pa rt I-Estate Tax SEC. 401. DEDU CTIO NS IN CAS E OF NONR ESID ENT D ECED ENTS. (a) Section 303(b) (1) of the Re venue Act of 1926 (relating to deductions from the gross estate of a nonresi dent decedent) is ame nded by stri king out : ", but in no case shall the amount so deduct ed excee d 10 per centum of the v alue of that par t of his gross estate which a t the time of hi s death is situa ted in the Unite d States ." (b) Subsection (a) of this section shall apply in the case of non- resident decedents dying after the enactment of this Act. SEC. 402. SU SPENSI ON OF RUNNIN G OF S TATUTE OF LI MITATIO NS. (a) Section 310(b) of the Revenue Act of 1926 is amended to read as foll ows "(b) The running of the statute of limitations provided in this section or in section 311 on the making of assessments and the begin- ning of distraint or a proceeding in court for collection, in respect of any deficiency, shall (after the mailing of a notice under sub- division (a) of section 308) be suspended for the period during which the Commissioner is prohibited from making the assessment or

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Page:United States Statutes at Large Volume 45 Part 1.djvu/914

 SEVENTIETH CONGRESS. SEss. I. CH. 852 . 1928 . 863 beginning distraint or a proceeding in court (and in any event, if a ESTATE TAX proceeding in respect of the deficiency is placed on the docket of the Board, until the decision of the Board becomes final), and for 60 Bo Uardntiletc decision of , . days thereafter ." Applicable to pres . (b) Subsection (a) of this section shall apply in all cases where cut cases. the period of limitation has not expired prior to the enactment of this Act . SEC . 403 . SAME-TRANSFEREE CASES . Transferee cases . (a) Section 316(c) of the Revenue Act of 1926 is amended to read e vo1 .44, p . 81, amend- as follows : Suspension of run- "(c) The running of the statute of limitations upon the assessment ning, of statute, during of the liabilit y of a transferee or fiduciary shall, after the mailing g prohibition of assess- of etc. of the notice under subdivision (a) of section 308 to the transferee or fiduciary, be suspended for the period during which the Commis- sioner is prohibited from making the assessment in respect of the liability of the transferee or fiduciary (and in any event, if a pro- ceeding in respect of the liability is placed on the docket of the Unt il decision of Board, until the decision of the Board becomes final), and for 60 Board, etc. days there after ." Applicable to present (b) Subsec tion ( a) of this s ection shall apply in all cases where cases . the period of limitation has not expired prior to the enactment of this Act . SEC. 404. CREDIT OF GIFT TAX. Gift tax, etc. Provisions revived. Section 322 of the Revenue Act of 1924 (relating to the credit of Vol.43,p. 315. gift tax a gainst estat e tax where the amo unt of the g ift is requi red to be included in the gross estate of the decedent) is revived as of January 1, 1926 (the effective date of its repeal by the Revenue Act Vol.44,p.86. of 1926) . Such section shall also be applied in the case of the estate tax imposed by Title III of the Revenue Act of 1926, in the same manner and to the same extent as in the case of the estate tax imposed by Title III of the Revenue Act of 1924. Part 11-Tax on Admissions and Dues TAX ON AD E S Sfoxs AND DUES SEC . 411 . ADMIS SIONS TAX. (a) The first two paragraphs of section 500 of the Revenue Act of 1926 are amended to read as follows " S EC . 50 0 . ( a) There shall be levied, a ssessed, collected, and pai d- "(1) A tax of 1 cent for each 10 cents or fraction thereof of the amount paid for admission to any place, including admission by season ticket or subscription, to be paid by the person paying for such admission ; except that in case the amount paid for admission is $3 or less, no tax shall be imposed, and except that in case of admission to a prize fight, or boxing, sparring, or other pugilistic match or exhi- bition, for which the amount paid for admission is $5 or more, the tax shall be 25 per centum of such amount : Provided, That an equ ivalen t tax shall be col lected on al l free or com plimen tary t ick- ets or admissions to such prize fight, or boxing, sparring, or other pugilistic match or exhibition and the tax shall be on the amount for which a similar seat or box is sold at the said match or exhi- bition. Amounts paid for admission by season ticket or subscrip- tion shall be exempt only if the amount which would be charged to the holder or subscriber for a single admission is $3 or less ;" . (b) Subsection (a) of this section shall take effect on the expira- tion of thirty days after the enactment of this Act . Admissions tax . Vol. 44, p. 91, amend- ed. Rates . No tax if admission $3 or less. For prize fights, etc. Proviso. Equivalent for com- plimentary tickets, etc . Season tickets. Effective in 30 days.

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