detail necessary to fix the amount but not affecting the time when the tax was imposed or became a lien. (Westhus et al. v. Union Trust Co., 164 Fed. Rep., 795; 168 Fed. Rep., 617; petition for rehearing denied. Contra Lynch v. Union Trust Co., 164 Fed. Rep., 161.)

The fact that the testator dies within one year prior to the taking effect of the repealing act of April 12, 1902, does not relieve from taxation legacies otherwise taxable under sections 29 and 30 of the act of June 13, 1898, as amended by the act of March 2, 1901, being saved by the saving clause of the repealing act. (Hertz, Collector, v. Woodman (218 U. S., 205), T. D. 1636, overruling decision in Eidman v. Tilghman (136 Fed. Rep., 141).) In Disston v. McClain, collector (1906), it was held that an annuity passing as a legacy prior to repeal of the act, payable in quarterly installments out of the income of personal property during the life of the beneficiary was taxable, only as to so much of the income as was vested in the actual possession of the legatee prior to the 1st day of July, 1902, when the law was repealed. (147 Fed. Rep., 114, reversing 143 Fed. Rep., 191; T. D. 976).

A petition was filed in the United States Supreme Court for a writ of certiorari in this case, but the court refused to issue the writ. (207 U. S., 587.)

REFUND OF TAX ON LEGACIES AND BEQUESTS FOR USES OF A RELIGIOUS, CHARITABLE, OR EDUCATIONAL CHARACTER; REFUND OF TAX ON CONTINGENT BENEFICIAL INTERESTS, WHICH HAD NOT BECOME VESTED JULY 1, 1902. NO TAX TO BE ASSESSED ON CONTINGENT BENEFICIAL INTERESTS NOT VESTED JULY 1, 1902.

AN ACT To provide for refunding taxes paid upon legacies and bequests for uses of a religious, charitable, or educational character, for the encouragement of art, and so forth, under the Act of June thirteenth, eighteen hundred and ninety-eight, and for other purposes, approved June 27, 1902. (32 Stat., 406.)

SEC. 1. That the Secretary of the Treasury, under appropriate rules and regulations to be prescribed by him, be, and he is hereby, authorized and directed to pay, out of any money in the Treasury not otherwise appropriated, to the corporations, associations, societies, or individuals as trustees or executors, such sums of money as have been paid by them as taxes upon bequests or legacies for uses of a religious, literary, charitable, or educational character, or for the encouragement of art, or legacies or bequests to societies for the prevention of cruelty to children, under the provisions of section twenty-nine of the Act entitled "An Act to provide ways and means to meet war expenditures, and for other purposes," approved June thirteenth, eighteen hundred and ninety-eight.

SEC. 2. (See p. 340.)

SEC. 3. That in all cases where an executor, administrator, or trustee shall have paid, or shall hereafter pay, any tax upon any legacy or distributive share of personal property under the provisions of the act approved June thirteenth, eighteen hundred and ninety-eight, entitled "An Act to provide ways and means to meet war expenditures, and for other purposes," and amendments thereof, the Secretary of the Treasury be, and he is hereby, authorized and directed to refund, out of any money in

the Treasury not otherwise appropriated, upon proper application being made to the Commissioner of Internal Revenue, under such rules and regulations as may be prescribed, so much of said tax as may have been collected on contingent beneficial interests which shall not have become vested prior to July first, nineteen hundred and two. And no tax shall hereafter be assessed or imposed under said Act approved June thirteenth, eighteen hundred and ninety-eight, upon or in respect of any contingent beneficial interest which shall not become absolutely vested in possession or enjoyment prior to said July first, nineteen hundred and two.

Circular No. 627, relative to refunding legacy taxes as provided in the first paragraph. July 3, 1902. T. D. No. 543.

The act of June 27, 1902, relative to the refund of tax collected on contingent beneficial interests not vested prior to July 1, fixes no time within which the claim for refund must be filed with the collector.

If the two years' limit is applicable under section 3228, R. S., it must be two years from the passage of the act and not two years from payment of the tax. Thacher v. United States. (United States Circuit Court, District of Massachusetts, 149 Fed. Rep., 902; 26 Op. Atty. Gen., 194.)

Attorney General's opinion as to vested interests, August 1, 1902. (T. D. 570, modifying Circular No. 630, T. D. 552; 24 Op. Atty. Gen., 98.)

Sec.

CHAPTER THIRTEEN.

SPECIAL EXCISE TAX ON CORPORATIONS.

[Sec. 38, act of August 5, 1909. (36 Stat., 112.)]

Corporations subject to tax. (36 Stat. 112.)

Rate.

Sec.

38. Excise tax, etc.-Continued.

or

Seventh. Government officer employee divulging information; penalty.

Eighth. Failure to make true returns; false returns; penalty; revenue laws made applicable for collection, etc., of tax; jurisdiction United States courts to compel testimony and production of books, etc.

Act of June 17, 1910 (36 Stat., 494). Appropriation for expenseз of collecting corporation tax. Returns open to inspection by order of the President.

Act of June 25, 1910 (36 Stat., 780). Additional employees authorized.

SEC. 38. [Act of Aug. 5, 1909.] That every corporation, joint stock company or association, organized for profit and having a capital stock represented by shares, and every insurance company, now or hereafter organized under the laws of the United States or of any State or Territory of the United States or under the Acts of Congress applicable to Alaska or the District of Columbia, or now or hereafter organized under the laws of any foreign country and engaged in business in any State or Territory of the United States or in Alaska or in the District of Columbia, shall be subject to pay annually a special excise tax with respect to the carrying on or doing business by such corporation, joint stock company or association, or insurance company, equivalent to one per centum upon the entire net income over and above five thousand dollars received by it from all sources during such year, exclusive of amounts received by it as dividends upon stock of other corporations, joint stock companies or associations, or insurance companies, subject to the tax hereby imposed; or if organized under the laws of any foreign country, upon the amount of net income over and above five thousand dollars received by it from business transacted and capital invested within the United States and its Territories, Alaska, and the District of Columbia during

such year, exclusive of amounts so received by it as dividends upon stock of other corporations, joint stock companies or associations, or insurance companies, subject to the tax hereby imposed: Provided, however, That nothing Corporations in this section contained shall apply to labor, agricultural exempt from tax. or horticultural organizations, or to fraternal beneficiary societies, orders, or associations operating under the lodge system, and providing for the payment of life, sick, accident, and other benefits to the members of such societies, orders, or associations, and dependents of such members, nor to domestic building and loan associations, organized and operated exclusively for the mutual benefit of their members, nor to any corporation or association organized and operated exclusively for religious, charitable, or educational purposes, no part of the net income of which inures to the benefit of any private stockholder or individual:

how ascertained.

Second. Such net income shall be ascertained by de- Net income; ducting from the gross amount of the income of such corporation, joint stock company or association, or insurance company, received within the year from all sources, (first) all the ordinary and necessary expenses actually paid within the year out of income in the maintenance and operation of its business and properties, including all charges such as rentals or franchise payments, required to be made as a condition to the continued use or possession of property; (second) all losses actually sustained within the year and not compensated by insurance or otherwise, including a reasonable allowance for depreciation of property, if any, 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; (third) 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, all interest actually paid by it within the year on deposits; (fourth) all sums paid by it within the year for taxes imposed under the authority of the United States or of any State or Territory thereof, or imposed by the government of any foreign country as a condition to carrying on business therein; (fifth) all amounts received by it within the year as dividends upon stock of other corporations, joint stock companies or associations, or insurance companies, subject to the tax hereby imposed: Provided, That in the case of a corporation, Foreign corpojoint stock company or association, or insurance company, tions allowable. organized under the laws of a foreign country, such net income shall be ascertained by deducting from the gross

amount of its income received within the year from 72170°-11-21

rations; deduc

business transacted and capital invested within the United States and any of its Territories, Alaska, and the District of Columbia, (first) all the ordinary and necessary expenses actually paid within the year out of earnings in the maintenance and operation of its business and property within the United States and its Territories, Alaska, and the District of Columbia, including all charges such as rentals or franchise payments required to be made as a condition to the continued use or possession of property; (second) all losses actually sustained within the year in business conducted by it within the United States or its Territories, Alaska, or the District of Columbia not compensated by insurance or otherwise, including a reasonable allowance for depreciation of property, if any, 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; (third) interest actually paid within the year 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; (fourth) the sums paid by it within the year for taxes imposed under the authority of the United States or of any State or Territory thereof; (fifth) all amounts received by it within the year as dividends upon stock of other corporations, joint stock companies or associations, and insurance companies, subject to the tax hereby imposed. Assessment In the case of assessment insurance companies the actual deposit of sums with State or Territorial officers, pursuant to law, as additions to guaranty or reserve funds shall be treated as being payments required by law to reserve funds.

insurance compareserve

nies, funds.

Specific deduction.

Third. There shall be deducted from the amount of the net income of each of such corporations, joint stock companies or associations, or insurance companies, ascertained as provided in the foregoing paragraphs of this section, the sum of five thousand dollars, and said tax Computation of shall be computed upon the remainder of said net in

$ax.

come of such corporation, joint stock company or association, or insurance company, for the year ending December thirty-first, nineteen hundred and nine, and for each calendar year thereafter; and on or before the first day of March, nineteen hundred and ten, and the first day of be March in each year thereafter, a true and accurate return March 1 to collec- under oath or affirmation of its president, vice-president, or other principal officer, and its treasurer or assistant treasurer, shall be made by each of the corporations, joint stock companies or associations, and insurance companies,

Return to made on or before

tor of district.