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so that the return shall be made in the district of the legal residence of the taxpayer. These, and other suggestions concerned with the administration of the law, are the only probable changes contemplated except such as may arise for the purpose of increasing revenue. For this latter purpose it is proposed that the $3,000 limit be lowered so as to include net incomes exceeding $1,000, and between this idea and the opposing one of placing a heavier additional tax on the great incomes, will be fought out the future battles in connection with the Income Tax.

Because of the changes that will likely be made during the ensuing year, a concise supplement to this work will be published soon after the amendments are enacted, which will probably be on or about the first day of 1917. As these new amendments, whatever they are, will affect only the taxes for 1917, this supplement will be all that is needed for additional information for the year 1917, and doubtless for several years thereafter.

BRUCE CRAVEN, Trinity, N. C.

R. O. EVERETT, Durham, N. C. FEBRUARY 10, 1916.

ABBREVIATIONS

(Used in Cross References, Index, etc.) | refers always to the paragraphs in the Analysis or first part of this book. 142 signifies paragraph 42 of the Analysis.

Int., Introduction.
T. R., Treasury Regulations, articles 1-199, Part III.
T. D., Treasury Department special rulings, Part IV.
St., Statute, Part II.

“Statute” refers always to the complete Federal Income Tax Law, now in force, enacted October 3, 1913, and given in full in Part II.

“Analysis” refers always to the 58 paragraphs in the first part of this book.

"R. S.” refers to the Revised Statutes of the United States.

“Sup. Ct.” refers to the Supreme Court opinion in the Brushaber case, Part V.

The Federal Income Tax was enacted by the Congress of the United States and signed by the President, October 3, 1913.

The new law has been fully upheld by the Supreme Court of the United States, construing the Sixteenth Amendment. (sf13.)

The income on which the taxation is based is the income since March 1, 1913. (s13.)

The calendar year is the basis for determining the income, except for certain corporations whose fiscal year ends at some other time. (137.)

The return for all individuals must be made on or before the first day of March of each year, this return being of the amount of income for the previous calendar year ending De cember 31. (37.)

Every individual 21 years of age, whose net income for any calendar year exceeds $3,000, must list the income for taxation on or before the first day of the following March.

Unmarried persons pay the "normal tax” on the amount by which the net income exceeds $3,000, and married persons pay only on the excess above $4,000. (s58.)

Every corporation conducted for private gain must make a return of the income, and must pay the "normal tax” on all of the net income. (15.) "Net income" means the income above the

expenses ducting business, but this "expense” does not include personal or family expenses. (120.)

The income from Government bonds and from salaries of State officers are exempt from taxation under the present statute. (19.)

The “normal tax” is a tax of 1 per centum on net income. The "additional tax," ranging from 1 to 4 per centum, is on incomes exceeding $20,000, but this additional tax does not apply to Corporations. (s16.)

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PART I

ANALYSIS

Discussion of the Income Tax law in paragraphs from 1 to 58, inclusive, with cross references to other parts of the work.

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