ported on return. subject to the tax imposed by this section, to the collector of internal revenue for the district in which such corporation, joint stock company or association, or insurance company, has its principal place of business, or, in the case of a corporation, joint stock company or association, or insurance company, organized under the laws of a foreign country, in the place where its principal business is carried on within the United States, in such form as the Commissioner of Internal Revenue, with the approval of the Secretary of the Treasury, shall prescribe, setting forth (first) Items to be rethe total amount of the paid-up capital stock of such corporation, joint stock company or association, or insurance company, outstanding at the close of the year; (second) the total amount of the bonded and other indebtedness of such corporation, joint stock company or association, or insurance company at the close of the year; (third) the gross amount of the income of such corporation, joint stock company or association, or insurance company, received during such year from all sources, and if organized under the laws of a foreign country the gross amount of its income received within the year from business transacted and capital invested within the United States and any of its Territories, Alaska, and the District of Columbia; also the amount received by such corporation, joint stock company or association, or insurance company, within the year by way of dividends upon stock of other corporations, joint stock companies or associations, or insurance companies, subject to the tax imposed by this section; (fourth) the total amount of all the ordinary and necessary expenses actually paid out of earnings in the Deductions al maintenance and operation of the business and properties penses. of such corporation, joint stock company or association, or insurance company, within the year, stating separately all charges such as rentals or franchise payments required to be made as a condition to the continued use or possession of property, and if organized under the laws of a foreign country the amount so paid in the maintenance and operation of its business within the United States and its Territories, Alaska, and the District of Columbia; (fifth) the total amount of all losses actually sustained during the Losses actually year and not compensated by insurance or otherwise, preciation. stating separately any amounts allowed for depreciation of property, and in the case of insurance companies the sums other than dividends, paid within the year on policy and annuity contracts and the net addition, if any, required by law to be made within the year to reserve funds; and in the case of a corporation, joint stock company or association, or insurance company, organized under the laws of a foreign country, all losses actually sustained by it during the year in business conducted by it within the United States or its Territories, Alaska, and the District of Columbia, not compensated by insurance or otherwise, stating separately any amounts allowed for depreciation of property, and in the case of insurance companies the sums lowed. sustained. Ex De by foreign corpoportioned. other than dividends, paid within the year on policy and annuity contracts and the net addition, if any, required by law to be made within the year to reserve fund; (sixth) Interest actual the amount of interest actually paid within the year on its bonded or other indebtedness to an amount of such bonded and other indebtedness not exceeding the paid-up capital stock of such corporation. joint stock company or association, or insurance company, outstanding at the close of the year, and in the case of a bank, banking association or trust company, stating separately all interest paid by it Interest paid within the year on deposits; or in case of a corporation, rations to be ap joint stock company or association, or insurance company, organized under the laws of a foreign country, interest so paid on its bonded or other indebtedness to an amount of such bonded and other indebtedness not exceeding the proportion of its paid-up capital stock outstanding at the close of the year, which the gross amount of its income for the year from business transacted and capital invested within the United States and any of its Territories, Alaska, and the District of Columbia, bears to the gross amount of its income derived from all sources within and without the United States; (seventh) the amount paid by it within the year for taxes imposed under the authority of the United States or any State or Territory thereof, and separately the amount so paid by it for taxes imposed by the government of any foreign country as a condition to carrying on business therein; (eighth) the net income of such corporation, joint stock company or association, or insurance company, after making the deductions in this section authorized. All such returns shall as received be transmitted forthwith by the collector to the Commissioner of Internal Revenue. Taxes paid. may require in Commissioner Fourth. Whenever evidence shall be produced before formation as to the Commissioner of Internal Revenue which in the opinincorrect or delin-ion of the Commissioner justifies the belief that the return quent return. made by any corporation, joint stock company or association, or insurance company, is incorrect, or whenever any collector shall report to the Commissioner of Internal Revenue that any corporation, joint stock company or association, or insurance company, has failed to make a return as required by law, the Commissioner of Internal Revenue may require from the corporation, joint stock company or association, or insurance company making such return, such further information with reference to its capital, income, losses, and expenditures as he may deem expedient; and the Commissioner of Internal Revenue agents Revenue, for the purpose of ascertaining the correctness of such return or for the purpose of making a return where none has been made, is hereby authorized, by any regularly appointed revenue agent specially designated by him for that purpose, to examine any books and papers bearing upon the matters required to be included in the return of such corporation, joint stock company or association, or insurance company, and to require the attend to examine books, etc. ance of any officer or employee of such corporation, joint stock company or association, or insurance company, and to take his testimony with reference to the matter required by law to be included in such return, with power to administer oaths to such person or persons; and the Commissioner of Internal Revenue may also invoke the aid of any court of the United States having jurisdiction to require the attendance of such officers or employees and the production of such books and papers. Upon the information so acquired the Commissioner of Internal Revenue may amend any return or make a return where Commissioner none has been made. All proceedings taken by the make return. Commissioner of Internal Revenue under the provisions of this section shall be subject to the approval of the Secretary of the Treasury. may amend or or fraudulent re may extend time for and how collected. Fifth. All returns shall be retained by the Commis- Penalty for false sioner of Internal Revenue, who shall make assessments turn. thereon; and in case of any return made with false or fraudulent intent, he shall add one hundred per centum of such tax, and in case of a refusal or neglect to make a return or to verify the same as aforesaid he shall add fifty per centum of such tax. In case of neglect occasioned by Collector the sickness or absence of an officer of such corporation, making return. joint stock company or association, or insurance company, required to make said return, or for other sufficient reason, the collector may allow such further time for making and delivering such return as he may deem necessary, not exceeding thirty days. The amount so added to the tax Penalty. When shall be collected at the same time and in the same manner as the tax originally assessed unless the refusal, neglect, or falsity is discovered after the date for payment of said taxes, in which case the amount so added shall be paid by the delinquent corporation, joint stock company or association, or insurance company, immediately upon notice given by the collector. All assessments shall be Notification made and the several corporations, joint stock companies or associations, or insurance companies, shall be notified of the amount for which they are respectively liable on or before the first day of June of each successive year, and said assessments shall be paid on or before the thirtieth day of June, except in cases of refusal or neglect to make such return, and in cases of false or fraudulent returns, in which cases the Commissioner of Internal Revenue shall, upon the discovery thereof, at any time within three years after said return is due, make a return upon information obtained as above provided for, and the assessment made by the Commissioner of Internal Revenue thereon shall be paid by such corporation, joint stock company or association, or insurance company immediately upon notification of the amount of such assessment; and to any sum or sums due and unpaid after the Penalty for thirtieth day of June in any year, and for ten days after when due. notice and demand thereof by the collector, there shall be added the sum of five per centum on the amount of tax of assessments. nonpayment Returns to be filed with Com-. missioner. Unlawful to divulge informa unpaid and interest at the rate of 1 per centum per month upon said tax from the time the same becomes due. T. D. 1659, Oct. 20, 1910; sec. 3184, p. 95. Sixth. When the assessment shall be made, as provided in this section, the returns, together with any corrections thereof which may have been made by the Commissioner, shall be filed in the office of the Commissioner of Internal Revenue and shall constitute public records and be open to inspection as such. Amended by the Act of June 17, 1910, which provides that the returns shall be open to inspection only upon the order of the President, page 328. Seventh. It shall be unlawful for any collector, deputy tion. Penalty. collector, agent, clerk, or other officer or employee of the United States to divulge or make known in any manner whatever not provided by law to any person any information obtained by him in the discharge of his official duty, or to divulge or make known in any manner not provided by law any document received, evidence taken, or report made under this section except upon the special direction of the President; and any offense against the foregoing provision shall be a misdemeanor and be punished by a fine not exceeding one thousand dollars, or by imprisonment not exceeding one year, or both, at the discretion of Penalty for refusal or neglect to fraudulent re turn. the court. Eighth. If any of the corporations, joint stock commake return, or panies or associations, or insurance companies, aforesaid, making false or shall refuse or neglect to make a return at the time or times hereinbefore specified in each year, or shall render a false or fraudulent return, such corporation, joint stock company or association, or insurance company, shall be liable to a penalty of not less than one thousand dollars and not exceeding ten thousand dollars. Laws made applicable. conferred on courts. Any person authorized by law to make, render, sign, or verify any return who makes false or fraudulent return, or statement, with intent to defeat or evade the assessment required by this section to be made, shall be guilty of a misdemeanor, and shall be fined not exceeding one thousand dollars or be imprisoned not exceeding one year, or both, at the discretion of the court, with the costs of prosecution. All laws relating to the collection, remission, and refund of internal-revenue taxes, so far as applicable to and not inconsistent with the provisions of this section, are hereby extended and made applicable to the tax imposed by this section. Jurisdiction Jurisdiction is hereby conferred upon the circuit and United States district courts of the United States for the district within which any person summoned under this section to appear to testify or to produce books, as aforesaid, shall reside, to compel such attendance, production of books, and testimony by appropriate process. Regulations relating to the assessment and collection of the special excise tax imposed on corporations, joint-stock companies,. associations, and insurance companies. (Regulations No. 31, Excise tax-Publicity clause. (T. D. 1594, Feb. 17, 1910; Synopsis of decisions relating to the tax. (T. D. 1606, Mar. Corporations engaged in business after approval of act of August 5, 1909, are amenable to the provisions of section 38, although having gone into liquidation prior to December 31, 1909. (T. Ď. 1615, Apr. 15, 1910.) Assets belonging to corporations liable to this tax are subject to the lien created by section 3186, R. S., after demand has been made for the tax. Where assets have been distributed prior to such demand the Government may collect the tax by pursuing the assets into the hands of the stockholders. (28 Op. Åtty. Gen., 241; T. D. 1615.) As the tax imposed is measured by and is not a tax upon the net receipts of corporations, etc., interest received during the year on Government bonds is not a proper deduction from such income in determining the amount of tax due. (28 Op. Atty. Gen., 138; T. D. 1583.) Dividends received by corporations on stock of other corporations whose net income does not exceed $5,000 is nevertheless a proper deduction under the law. (28 Op. Atty. Gen., 140, Jan. 24, 1910.) Limited partnerships under Pennsylvania Statutes, if organized for profit and having a capital stock represented by shares, although "no certificates of stock" are issued, are liable to the tax. (28 Op. Atty. Gen., 189, Feb. 14, 1910.) Mutual savings banks under West Virginia Statutes having no capital stock not liable to tax. (28 Op. Atty. Gen., 189, Feb. 14, 1910.) Mortgage indebtedness on real estate, if assumed by the corporation acquiring such real estate, to be included in the indebtedness of the corporation. But if not so assumed and remains only as a lien on the property, interest paid thereon may be deducted as a charge "made as a condition to the continued use or possession of the property." (28 Op. Atty. Gen., 198, Feb. 21, 1910.) Stella P. Flint, as general guardian, etc., v. Stone Tracy Co. et al. (Test Case in United States Supreme Court; appeal from United States circuit court, district of Vermont.) Decided March 13, 1911. Constitutionality of the act sustained. (T. D. 1685.) A coroporation which owned an office building, leased the property for 130 years and reorganized, practically going out of business, its sole authority being to hold title and receive and distribute the rentals or proceeds of sale, if the property should be sold, Held, Not liable to the tax. Zonne v. Minneapolis Syndicate, Supreme Court decision Mar. 13, 1911. (T. D. 1687.) Certain real estate trusts in Massachusetts not liable. Congress intended to embrace only such corporations and jointstock associations as are organized under some statute, or derive from that source some quality or benefit not existing at the common law. Eliot v. Freeman et al. (Cushing Real Estate Trust). Maine Baptist Missionary Convention . Cotting et al. Trustees (Department Store Trust), Supreme Court decision Mar. 13, 1911. (T. D. 1686.) [Extract from the legislative, executive, and judicial appropriation act for the fiscal year ending June 30, 1911, approved June 17, 1910. (36 Stat. 494.)] * * * * * For expenses of collecting the corporation tax authorized by the Act approved August fifth, nineteen hundred and nine: "To provide revenue, equalize duties, and encourage the industries of the United States, and for other purposes," one hundred thousand dollars. Appropriation for expenses. |