Non-resident aliens must file to obtain benefits of deductions and credits ther amended by adding a new subdivision to read as follows: "(c) A nonresident alien individual shall recomplete returns ceive the benefit of the deductions and credits provided for in this section only by filing or causing to be filed with the collector of internal revenue a true and accurate return of his total income, received from all sources, corporate or otherwise, in the United States, in the manner prescribed by this title; and in case of his failure to file such return the collector shall collect the tax on such income, and all property belonging to such nonresident alien individual shall be liable to distraint for the tax." Amendment to Specific personal SEC. 1203. (1) That section seven of such Act of September eighth, nineteen hundred and sixteen, is hereby amended to read as follows: "SEC. 7. That for the purpose of the normal tax only, there shall be allowed as an exemption in the nature of a deduction from the amount of the net income of each citizen or resident of the United States, ascertained as provided herein, the sum of $3,000, plus $1,000 additional if the person making the return be a head of a family or a married man with a wife living with him, or plus the sum of $1,000 additional if the person making the return be a married woman with a husband living with her; but in no event shall this additional exemption of $1,000 be deducted by both a husband specific personal and a wife: Provided, That only one deduction of Additional exemption of $200 for each dependent child $4,000 shall be made from the aggregate income of both husband and wife when living together: Provided further, That if the person making the return is the head of a family there shall be an additional exemption of $200 for each child dependent upon such person, if under eighteen years of age, or if incapable of self-support because mentally or physically defective, but this provi sion shall operate only in the case of one parent in the same family: Provided further, That guardians or trustees shall be allowed to make this personal exemption as to income derived from the property of which such guardian or trustee has charge in favor of each ward or cestui que trust: Provided further, That in no event shall a ward or cestui que trust be allowed a greater personal exemption than as provided in this section from the amount of net income received from all sources. There shall also be allowed an exemption from the amount of the net income of estates of deceased citizens or residents of the United States during the period of administration or settlement, and of trust or other estate of citizens or residents of the United States the income of which is not distributed annually or regularly under the provisions of subdivision (b) of section two, the sum of $3,000, including such deductions as are allowed under section five." (2) Subdivision (b) of section seven of such Act of September eighth, nineteen hundred and sixteen, is hereby repealed. Repeal of (Sec. 7, b) requirement of returns from non-resident personal aliens to obtain exemption . Amendments to SEC. 1204. (1) (1) That subdivisions (c) and (e) of section eight of such Act of September Sec. 8, (e) eighth, nineteen hundred and sixteen, are hereby amended to read as follows: and (e) need make no not exceeding "(c) Guardians, trustees, executors, adminis- Fiduciaries trators, receivers, conservators, and all persons, return of income corporations, or associations, acting in any fiduci- $3,000 ary capacity, shall make and render a return of the income of the person, trust, or estate for whom or which they act, and be subject to all the provisions of this title which apply to individuals. Such fiduciary shall make oath that he has sufficient knowledge of the affairs of such person, trust, or estate to enable him to make such return and that the same is, to the best of his knowledge and belief, true and correct, and be subject to all the provisions of this title which apply to individuals: Provided, That a return made by one of two or more joint fiduciaries filed in the district where such fiduciary resides, under such regulations as the Secretary of the Treasury may prescribe, shall be a sufficient compliance with the requirements of this paragraph: Provided further, That no return of income not exceeding $3,000 shall be required except as in this title otherwise provided. 66 e) Persons carrying on business in partnership shall be liable for income tax only in their individual capacity, and the share of the profits of the partnership to which any taxable partner would be entitled if the same were divided, whether divided or otherwise, shall be returned for taxation and the tax paid under the provisions of this title: Provided, That from the net distributive interests on which the individual members shall be liable for tax, normal and additional, there shall be excluded their proportionate shares received from interest on the obligations of a State or any political or taxing subdivision thereof, and upon the obligations of the United States (if and to the extent that it is provided in the Act authorextent provided izing the issue of such obligations of the United States that they are exempt from taxation) and its possessions, and that for the purpose of computing the normal tax there shall be allowed a credit, as provided by section five, subdivision (b), for their proportionate share of the profits derived from dividends. Such partnership, when requested by the Commissioner of Internal Revenue or any district collector, shall render a correct return of the earnings, profits, and income of the partnership, except income exempt under section four of this Act, setting forth the item of the gross income and the deductions and credits allowed by Interest on U. S. obligations is exempt only to in Act of issue Partnerships own fiscal year this title, and the names and addresses of the individuals who would be entitled to the net earnings, profits, and income, if distributed. A partnership shall have the same privilege of fixing and making returns upon the basis of its own fiscal year as is accorded to corporations under this title.. If a fiscal year ends during nineteen hun- may fix their dred and sixteen or a subsequent calendar year for which there is a rate of tax different from the rate for the preceding calendar year, then (1) the rate for such preceding calendar year shall apply to an amount of each partner's share of such part- calculation of nership profits equal to the proportion which the year of part of such fiscal year falling within such calen- partnership dar year bears to the full fiscal year, and (2) the rate for the calendar year during which such fiscal year ends shall apply to the remainder." (2) Subdivision (d) of section eight of such Act of September eighth, nineteen hundred and sixteen, is hereby repealed. Method of tax for fiscal Repeal of (Sec. relating to 8, d) provision withholding at source (c), Amendment to (1), and (g) Sec. 9, (b), (c), Sep SEC. 1205. (1) That subdivisions (b), (f), and (g) of section nine of such Act of tember eighth, nineteen hundred and sixteen, are hereby amended to read as follows: 66 source applies accruing to non except income (b) All persons, corporations, partnerships, wWithholding at associations, and insurance companies, in what- to income ever capacity acting, including lessees or mortgag- resident aliens, ors of real or personal property, trustees acting in from dividends any trust capacity, executors, administrators, receivers, conservators, employers, and all officers and employees of the United States, having the control, receipt, custody, disposal, or payment of interest, rent, salaries, wages, premiums, annuities, compensation, remuneration, emoluments, or other fixed or determinable annual or periodical gains, profits, and income of any nonresident alien individual, other than income derived from dividends on capital stock, or from the net earnings of a Returns and withheld to the government corporation, joint-stock company or association, or insurance company, which is taxable upon its net income as provided in this title, are hereby authorized and required to deduct and withhold from such annual or periodical gains, profits, and income such sum as will be sufficient to pay the normal tax imposed thereon by this title, and shall payment of tax make return thereof on or before March first of each year and, on or before the time fixed by law for the payment of the tax, shall pay the amount withheld to the officer of the United States Government authorized to receive the same; and they are each hereby made personally liable for such tax, and they are each hereby indemnified against every person, corporation, partnership, association, or insurance company, or demand whatsoever for all payments which they shall make in pursuance and by virtue of this title. Withholding at source applies interest from "tax-free" person entitled to same files with withholding agent a claim for exemption granted under Sec. 7 66 (c) The amount of the normal tax hereinto normal tax on before imposed shall also be deducted and withbonds containing held from fixed or determinable annual or periodcovenant, unless ical gains, profits, and income derived from interest upon bonds and mortgages, or deeds of trust or other similar obligations of corporations, jointstock companies, associations and insurance companies (if such bonds, mortgages, or other obligations contain a contract or provision by which the obligor agrees to pay any portion of the tax imposed by this title upon the obligee or to reimburse the obligee for any portion of the tax or to pay the interest without deduction for any tax which the obligor may be required or permitted to pay thereon or to retain therefrom under any law of the United States), whether payable annually or at shorter or longer periods and whether such interest is payable to a non-resident alien individual or to an individual citizen or resident of the United States, subject to the provisions of the foregoing subdivision (b) of this section requiring the tax to |