Brother or sis

of the grand

mother.

each and every hundred dollars of the clear value of such interest.

Fourth. Where the person or persons entitled to any benfather or grand-eficial interest in such property shall be the brother or sister of the grandfather or grandmother, or a descendant of the brother or sister of the grandfather or grandmother, of the person who died possessed as aforesaid, at the rate of four dollars for each and every hundred dollars of the clear value of such interest.

Any other degree of collateral

or corporate.

wife exempt.

When the whole amount for dis

Fifth. Where the person or persons entitled to any beneconsanguinity or ficial interest in such property shall be in any other degree stranger in blood or a body politic of collateral consanguinity than is hereinbefore stated, or shall be a stranger in blood to the person who died possessed, as aforesaid, or shall be a body politic or corporate, at the rate of five dollars for each and every hundred dolHusband or lars of the clear value of such interest: Provided, That all legacies or property passing by will, or by the laws of any State or Territory, to husband or wife of the person (who) died possessed, as aforesaid, shall be exempt from tax or duty. Where the amount or value of said property shall exceed tribution is over the sum of twenty five thousand dollars, but shall not ex$25,000 and not ceed the sum or value of one hundred thousand dollars, the rates of duty or tax above set forth shall be multiplied by one Over $100,000 and one-half; and where the amount or value of said propand not over erty shall exceed the sum of one hundred thousand dollars, but shall not exceed the sum of five hundred thousand dolOver $500,000 lars, such rates of duty shall be multiplied by two; and where the amount or value of said property shall exceed the sum of five hundred thousand dollars, but shall not exceed the sum of one million dollars, such rates of duty shall be multiplied by two and one half; and where the amount Over $1,000,000. or value of said property shall exceed the sum of one million dollars, such rates of duty shall be multiplied by three.

over $100,000.

$500,000.

and not over $1,000,000.

Tax a lien for twenty years.

paid by executor,

bution.

Op. Atty. Gen., construing section 29. January 5, 1899. (Vol. 1, Treas. Dec. (1899), No. 20545.)

Legacy tax accrues where the whole amount of personal property left for distribution, after payment of legal debts and expenses, exceeds the sum of $10,000, without regard to the amount or value of each legacy or share. (Vol. 2, Treas. Dec. (1899), No. 21649.)

SEC. 30. That the tax or duty aforesaid shall be a lien and charge upon the property of every person who may die as aforesaid for twenty years, or until the same shall, within that period, be fully paid to and discharged by the United Tax must be States; and every executor, administrator, or trustee, beetc., before distri fore payment and distribution to the legatees, or any par ties entitled to beneficial interest therein, shall pay to the collector or deputy collector of the district of which the deceased person was a resident the amount of the duty or tax assessed upon such legacy or distributive share, and shall also make and render to the said collector or deputy colSchedule, list, lector a schedule, list, or statement, in duplicate, of the duplicate to be amount of such legacy or distributive share, together with made and rep the amount of duty which has accrued, or shall accrue,

or statement in

dered.

thereon, verified by his oath or affirmation, to be adminis tered and certified thereon by some magistrate or officer having lawful power to administer such oaths, in such

collector.

case of neglect.

form and manner as may be prescribed by the Commissioner of Internal Revenue, which schedule, list, or statement shall contain the names of each and every person entitled to any beneficial interest therein, together with the clear value of such interest, the duplicate of which schedule, list, or statement shall be by him immediately delivered, and the tax thereon paid to such collector; and upon such payment and delivery of such schedule, list, or statement said collector or deputy collector shall grant to such person paying such duty or tax a receipt or receipts for the same in duplicate, which shall be prepared as hereinafter provided. Such receipt or receipts, duly signed and Receipt of the delivered by such collector or deputy collector, shall be sufficient evidence to entitle such executor, administrator, or trustee to be credited and allowed such payment by every tribunal which, by the laws of any State or Territory, is, or may be, empowered to decide upon and settle the accounts of executors and administrators. And in case such executor, administrator, or trustee shall refuse or neglect to pay the aforesaid duty or tax to the col- Proceedings in lector or deputy collector, as aforesaid, within the time herein before provided, or shall neglect or refuse to deliver to said collector or deputy collector the duplicate of the schedule, list, or statement of such legacies, property, or personal estate, under oath, as aforesaid, or shall neglect or refuse to deliver the schedule, list, or statement of such legacies, property, or personal estate, under oath, as aforesaid, or shall deliver to said collector or deputy collector a false schedule or statement of such legacies, property, or personal estate, or give the names and relationship of the persons entitled to beneficial interests therein untruly, or shall not truly and correctly set forth and state therein the clear value of such beneficial interest, or where no administration upon such property or personal estate shall have been granted or allowed under existing laws, the collector or deputy collector shall make Collector or out such lists and valuation as in other cases of neglect or to make list and deputy collector refusal, and shall assess the duty thereon; and the collector assess the duty. shall commence appropriate proceedings before any court of the United States, in the name of the United States, against such person or persons as may have the actual or constructive custody or possession of such property or personal estate, or any part thereof, and shall subject such property or personal estate, or any portion of the same, to. Legal proceedbe sold upon the judgment or decree of such court, and from the proceeds of such sale the amount of such tax or duty, together with all costs and expenses of every description to be allowed by such court, shall be first paid, and the balance, if any, deposited according to the order of such court, to be paid under its direction to such person or persons as shall establish title to the same. The deed or deeds, Deed of the proper officer to or any proper conveyance of such property or personal vest title in the estate, or any portion thereof, so sold under such judgment purchaser. or decree, executed by the officer lawfully charged with carrying the same into effect, shall vest in the purchaser thereof all the title of the delinquent to the property or personal estate sold under and by virtue of such judgment

ings.

or decree, and shall release every other portion of such prop erty or personal estate from the lien or charge thereon created by this Act. And every person or persons who shall have in his possession, charge, or custody any record, file, or paper containing, or supposed to contain, any informa tion concerning such property or personal estate, as aforesaid, passing from any person who may die, as aforesaid, shall exhibit the same at the request of the collector or deputy collector of the district, and to any law officer of the United States, in the performance of his duty under this Act, his deputy or agent, who may desire to examine Penalty for re- the same. And if any such person, having in his possession, records, files, etc. charge, or custody any such records, files, or papers, shall refuse or neglect to exhibit the same on request, as aforesaid, he shall forfeit and pay the sum of five hundred dollars: Provided, That in all legal controversies where such deed or title shall be the subject of judicial investigation, Recital in deed the recital in said deed shall be prima facie evidence of its to be prima facie truth, and that the requirements of the law had been comevidence. plied with by the officers of the Government.

fusing to exhibit

See section 3467, Appendix, p. 396.

Section 29 took effect immediately, being within the exception in section 51, p. 354, which declares "that this act shall take effect on the day next succeeding the date of its passage, except as otherwise specially provided for."

Instructions concerning the tax on legacies and distributive shares. Regulations, Series 7, No. 3, revised, January 28, 1899; and circular No. 527 dated March 31, 1899.

The tax must be paid on a legacy before its distribution to the legatees.

No tax is due unless the whole amount of said personal property passing from the decedent exceeds in value ten thousand dollars.

In all cases where legacy taxes are due, the executors, administrators, or trustee should immediately make return on Form No. 419, revised.

The law taxing legacies is constitutional. (High v. Coyne, Collector, Circuit Court N. Dist. Ill., 1899; 93 Fed. Rep., 450.) The legacy tax is not upon the property, in the ordinary sense of the term, but upon the right to dispose of it, and it is not until it has yielded its contribution to the State that it becomes the property of the legatee. (United States v. Perkins, 163 U. S., 625.)

Where the property of the decedent includes United States bonds, the tax may be assessed upon the basis of their value. The tax is not imposed upon the bonds, but is merely a tax upon the privilege of acquiring property by inheritance. (Wallace et al . Myers, Comptroller, Circuit Court S. Dist. N. Y., 1889; 38 Fed. Rep., 184.)

State inheritance tax laws declared constitutional. v. Illinois Trust and Savings Bank, 170 U. S., 283.)

(Magoun

The personal property going to the widow is to be included in making up the total value of the estate, for the purpose of determining whether the "whole amount" of personal property exceeds "the sum of $10,000 in actual value." (Vol. 1, Treas. Dec. (1899), No. 20950.)

The whole amount of personal property left for distribution, after payment of legal debts and expenses, determines the rate of tax without regard to the amount or value of each legacy or share. (Vol. 1, Treas. Dec. (1899), No. 20587.)

In the case of a decedent, who executed a will in New York, where she was then residing, but whose domicile at the time of her death was not in the United States, the tax accrues. The law makes no discrimination between the estates of resident and nonresident decedents. (Vol. 1, Treas. Dec. (1899), No. 21052.)

Legacy to a daughter-in-law is subject to tax under paragraphi 5, section 29. (Vol. 1, Treas. Dec. (1899), No. 20608.)

A bequest made in Government bonds to a city, the income to be expended in the maintenance and improvement of a public park, held taxable. No exception in cases of bequests for benevolent purposes, or bequests to a city. The tax is not upon the property, but upon the right to dispose of it. A bequest of Government bonds liable. (Vol. 1, Treas. Dec. (1899), 20791.)

No legacy tax accrues where the testator died prior to June 13, 1898, even though part of the estate is still in process of settlement, if there is nothing in the terms of the will which postpones the right of the legatees to the immediate possession and enjoyment of their legacies upon the death of the testator. (Vol. 1, Treas. Dec. (1899), No. 20946.)

The law does not state whether the tax on legacies should be deducted from the individual legacies, but it is understood that each share should bear its own tax unless otherwise specified in the will. (Vol. 2, Treas. Dec. (1898), No. 20089; vol. 1, Ibid. (1899), No. 21022; vol. 2, Ibid. (1899), No. 21649.)

The law does not exempt heirlooms from the legacy tax. A legacy conditioned on legatee marrying is subject to tax, but the tax is not payable until the legacy is payable. (Vol. 2, Treas. Dec. (1898), No. 20392.)

Legacies to charitable institutions are not exempt. (Vol. 2, Treas. Dec. (1898), No. 20421.)

Beneficial interests held in trust by trustees are subject to tax, even though their taxable value can not be determined in all cases until a certain contingency arises, such as the termination of a life interest. (Vol. 2, Treas. Dec. (1898), No. 20445.)

Legacies paid out of the proceeds of real estate, directed to be sold for that purpose, are not subject to the tax upon legacies arising from personal property. Where estates consist of both real and personal property, the whole amount of the personal property should be appraised separately from the real property. (Vol. 1, Treas. Dec. (1899), No. 20596.)

Where mortgages and notes are assets of an estate, moneys derived therefrom, although so derived through foreclosure and sale of the real estate by the executor or administrator, should be included in the personal property left for distribution. (Vol. 1, Treas. Dec. (1899), No. 21049.)

Mode of procedure in cases where an executor, administrator, or trustee has distributed an estate on which tax has accrued without first paying the legacy tax. (Vol. 1, Treas. Dec. (1899), No. 21078.)

Legacy tax accrues where the whole amount of personal property left for distribution, after payment of legal debts and expenses, exceeds the sum of $10,000, without regard to the amount or value of each legacy or share. (Vol. 2, Treas. Dec. (1899), No. 21649.)

Taxes on life interests, or interests for given periods, should be paid at one time, and not annually. (Vol. 2, Treas. Dec. (1899), No. 21778.)

The old law relative to legacies. Sections 124 and 125, act of June 30, 1864, amended by act of July 13, 1866, R. S. Section 3438, R. S. (§ 3438-3440, R. S.; repealed by act July 14, 1870.) The act of July 14, 1870 (16 Stat., 256), repealed taxes on legacies and successions under the old law. The repeal took effect on and after October 1, 1870; but section 17 of the repealing act saved "all taxes properly assessed, or liable to be assessed, or accruing under the provisions of former acts."

Decisions under the old act. The succession tax not a direct tax; law constitutional. (Scholey v. Rew, 23 Wall., 331.)

Tax not due on successions to which the successors became entitled in possession since October 1, 1870. (Clapp . Mason, 94 U. S., 589; 23 Int. Rev. Rec., 144.)

Legacies not taxable where payable after October 1, 1870. (Mason v. Sargent, 104; U. S., 689; 28 Int. Rev. Rec., 89; Sturges v. United States, 117 U. S., 363.) Suit against executor or administrator; stale claims. (United States v. Trucks, admr., 32 Int. Rev. Rec., 184.)

10228- -19

Every person, etc., whose gross

subject to tax.

CHAPTER THIRTEEN.

EXCISE TAXES ON PERSONS, FIRMS, COMPANIES, AND
CORPORATIONS ENGAGED IN REFINING PETROLEUM
AND SUGAR.

[(Act of June 13, 1898, 30 Stat., 464.)]

SEC. 27. Act of June 13, 1898. That every person, firm, corannual receipts poration, or company carrying on or doing the business of exceed $250,000 refining petroleum, or refining sugar, or owning or controlling any pipe line for transporting oil or other products, whose gross annual receipts exceed two hundred and fifty thousand dollars, shall be subject to pay annually a special excise tax equivalent to one-quarter of one per centum on the gross amount of all receipts of such persons, firms, corporations, and companies in their respective business in excess of said sum of two hundred and fifty thousand dollars.

Rate of tax.

turns to be made.

Monthly re- And a true and accurate return of the amount of gross receipts as aforesaid shall be made and rendered monthly by each of such associations, corporations, companies, or persons to the collector of the district in which any such association, corporation, or company may be located, or in which such person has his place of business. Such return shall be verified under oath by the person making the same, or, in case of corporations, by the president or chief officer Penalty for thereof. Any person or officer failing or refusing to make return as aforesaid, or who shall make a false or fraudulent return, shall be liable to a penalty of not less than one thousand dollars and not exceeding ten thousand dollars for each failure or refusal to make return as aforesaid and for each and every false or fraudulent return.

failure to make return.

The provisions of section 27 do not apply to beet-sugar factories where sugar is made directly from beets and there is no refining except in the process of manufacture. (Vol. 2, Treas. Dec. (1898), No. 19831).

The term "pipe line" applies only to the comparatively recent system of transportation by which oil or other products are conveyed from place to place through pipes, instead of in tanks, barrels, etc., transported by rail or other conveyance, and is not intended to apply to gas mains and pipes through which gas is conveyed and distributed directly to the consumer. (Vol. 2, Treas. Dec. (1899), No. 21341.)

Gross receipts taxable under section 27. (Vol. 2, Treas. Dec., (1899), No. 21367).

As to what constitutes a refiner of oil, within the meaning of this section. (Vol. 2, Treas. Dec. (1898), No. 20002.)

Returns of gross receipts to be made for period ending June 30, and for each monthly period thereafter. Tax on such gross receipts accruing each month assessable under section 31 of that act. (Vol. 2, Treas. Dec. (1898), No. 20023.)

Persons, firms, and companies owning or controlling pipe lines connected with mains or pipes for distributing natural or artificial gas not exempt from tax. (Vol. 2, Treas. Dec. (1899), No. 21494.)