ment lists, however, should in no case be delayed, beyond the time allowed, on account of unexamined returns, as such returns can be examined and reported on a subsequent list. As the law limits the time in which these assessments are to be made and notice of assessment given, collectors will assign to this work all available force in their respective offices.

Notice to be Sent to Delinquents.

ART. 196. Where the required returns are not filed within the prescribed time, either by individuals or corporations, notice on Form 1045 should in each case be sent to the delinquent. (For authorized extension of time, see Articles 23 and 173.)

Notice of Assessment. Demand for Tax, Penalty, and

Interest.

ART. 197. When assessment has been made, collectors will, on receipt of their returned lists, at once issue preliminary notices of assessment (Form 647), and where in any case the tax assessed is not paid on or before the 30th day of June or, in case of corporations designating their own fiscal year, within 120 days following the date on which the return should have been filed, notice and demand (Form 17) should be at once issued, and unless the tax in such case is paid within 10 days after the service of such notice, general demand for tax, penalty, and interest (Form 21) should at once be issued. Immediate notice and demand (Form 17) will, however, be served in case of failure to file the required return within the statutory period.

Notice of Assessment to be Sent Immediately on Return of List.

ART. 198. Pending assessment on returns forwarded to the commissioner, collectors will have prepared the necessary notices of assessment, with properly addressed envelopes, to be used immediately on return of their assessment lists.

Payments, Abatements, and Outstanding Balances.

ART. 199. Statements of payment, abatement, and outstanding balances of such assessed taxes will be rendered monthly by collectors on special Form 325. Such statements will be prepared in the same manner as required in the case of assessments on the regular Form 23, except that in Statement III the outstanding balances on the various lists will be reported in aggregate only. Items constituting such balances, however, will be carded by collectors, but only as to such as were assessed during the month for which the return is rendered, thus avoiding detailed statements each month of outstanding balances previously reported. A separate card (Form 1020) will be used for each such item; and all cards so prepared each month should be arranged alphabetically, and so forwarded by the collector with his report on special Form 325. W. H. OSBORN, Commissioner of Internal Revenue.

Approved:

W. G. McADOO,

Secretary of the Treasury.

PART IV

TREASURY DEPARTMENT SPECIAL RULINGS

Sixty-six decisions, construing the law, supplementary to the preceding 199 articles. The ones given here are the Treasury Department rulings concerning the income tax, from T. D. 1892, November 6, 1913, to T. D. 2289, January 28, 1916, and all are given except a few of temporary application which are now obsolete. The usual headings and signatures are omitted from all after the first. See general subjects in Table of Contents, and detailed references in Index.

TREASURY DEPARTMENT SPECIAL RULINGS

(T. D. 1892.)

Income Tax.

Interest upon obligations of the United States or its possessions, or of any State, county, city, or any other political subdivision thereof, is not subject to income tax.

TREASURY DEpartment,

OFFICE OF COMMISSIONER OF INTERNAL REVENUE,
WASHINGTON, D. C., November 6, 1913.

To collectors of internal revenue:

It has been called to the attention of this office that banks in certain sections are refusing to pay coupons for interest on bonds of States, counties, cities, or other political subdivisions of the United States, when such coupons are not accompanied by certificates of ownership, without deducting the normal income tax of 1 per cent, which the law and the regulations of this department require shall be deducted at the source in paying the interest on bonds of corporations, joint-stock companies or associations, and insurance companies.

Please inform all parties interested, giving the information wide publicity, that the income derived from the interest upon the obligations of a State, county, city, or any other political subdivision thereof, and upon the obligations of the United States or its possessions, is not subject to the income tax, and a certificate of ownership in connection with the coupons or registered interest orders for such interest will not be required.

The interest coupons should clearly show on their face whether they are issued by the United States or any political subdivision thereof. If, however, they do not clearly show this, then, of course, an ownership certificate should be required W. H. OSBORN, Commissioner.