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1965 to retain the amount of tax withheld by him until 30 days prior to March 1, 1915, in order to refund amounts withheld in excess of the taxpayer's liability for the normal tax should a proper claim be filed for deductions and exemptions. He is required by law to file his return on or before March 1, 1915, and may, in his discretion, file his return on any date between January 1 and March 1. If he has filed his return with the collector, Form 1008, revised, should also be filed with the collector, who will notify the withholding agent and authorize him to make a refundment, changing the entry on the return and filing therewith Form 1008, revised, as a voucher for the refundment. If, however, the withholding agent has not filed his return, and a claim on Form 1008, revised, is filed with him, he will make the proper refundment on his own responsibility, filing Form 1008, revised, as a voucher therefor. If Form 1008, revised, is filed with the collector under these circumstances, he will authorize the withholding agent to make refundment. The withholding agent is not required by law to forward to the collector the tax withheld by him until he has received notice of assessment, and then, like the tax assessed in other cases, payment should be made by him on or before June 30 of each year.

2. Where there are two or more withholding agents whose collection districts are the same, Form 1008, revised, should be filed with the collector of that district, and a statement setting forth the names of the withholding agents and the amounts withheld by each should be attached to the form. The collector will then notify the withholding agents of the exact amount that may be refunded by each.

3. Where excess deductions have been made by two or more withholding agents in different collection districts, Form 1008, revised, may be filed with either collector, as the individual may elect; and there should be attached to the form a complete statement setting forth the names of all withholding agents, the amounts withheld by each, and the exact amount claimed as a refundment from each. The collector with whom the statement is filed will accept it as a part of Form 1008, revised, and as subject to the penalties

imposed by law, and will notify the withholding agents, whether in his district or other districts, to make the refundment claimed from each.

4. It is to be noted that this ruling provides for the execution by the taxpayer of only one Form 1008, revised, covering all the general deductions and exemptions claimed by him for the tax year.

5. The adjustment of total tax liability by the use of Form 1008, revised, does not, necessarily, mean that a return on Form 1040, revised, is not required under the law.

A return of annual net income on Form 1040, revised, is required in all cases of individual incomes subject to the tax, except where the individual's tax liability is required by law to be satisfied at the source.

In other words, when an individual is liable for the normal tax, only, and his entire net income is subject to withholding, no return on Form 1040, revised, is required to be filed. If, however, his net income includes any item that is not subject to withholding, a return on Form 1040, revised, is required to be filed, although no further tax may be due, and whether or not Form 1008, revised, has been filed.

(T. D. 2135.)

Synopsis of rulings on questions relating to the income tax imposed by section 2 of the act of October 3, 1913.

The following synopsis of rulings on questions relating to the income tax imposed by section 2 of the act of October 3, 1913, on individuals, corporations, joint-stock companies, associations, and insurance companies is published for the information of internal-revenue officers and others concerned. All rulings or parts of rulings heretofore made which are in conflict herewith are hereby revoked.

Accident insurance.-Money paid to the person insured by an accident insurance policy on account of accidents sustained is returnable as gross income by the insured person.

The proceeds of accident insurance policies paid upon the death of the person insured to the beneficiaries is to be treated like the proceeds of life insurance policies.

Administration of estates, expenses of.-Referring to the difference between the expenses of administration of estates, set forth as not allowable deductions in T. D. 2090, and the expenses itemized as allowable deductions on Form 1041, revised, the distinction is sought to be made between such first expenses as are properly chargeable against an estate as an entity, and such other expenses incident to administration as may arise from the nature of the properties and the details of business management.

Among the former, T. D. 2090 cites court costs, attorneys' fees, executors' commissions, etc., and among the latter may be cited the usual and necessary expenses of carrying on a business, including salaries, wages, and rentals paid, and such repairs to business properties as do not constitute permanent improvements or betterments which increase the value of the property or estate. The former is meant to apply to expenses that reduce the estate in the administrator's hands, and the latter to legitimate expenses that reduce the income accruing to beneficiaries, but not the estate itself.

Agent.-An agent having entire charge of property with authority to effect and execute leases with tenants entirely on his own responsibility, and without consulting his principal, paying taxes and expenses and all other charges in connection with the property out of funds in his hands from collection of rents, merely turning over the net proceeds from the property periodically to his principal by virtue of authority conferred upon him by a power of attorney, is not a fiduciary within the meaning of the income tax law.

Agent for a nonresident alien.—An agent, whether an individual or a corporation, for a nonresident alien stands in the place of the principal and should execute Form 1040, revised, for the principal when the principal is liable for the tax on income passing through the agent's hands. As a nonresident alien is not subject to the tax on income derived from stocks and bonds of domestic corporations, no return is required to

be made by an agent in such a case. (See Aliens, nonresident, income from mortgages accruing to.)

Agents, withholding, responsibility of, for refundment when Form 1008, revised, is filed.-No penalty attaches to the action of a withholding agent in refunding amounts improperly claimed in Form 1008, revised, properly executed, when the refundment is made in good faith and without intention to defraud the Government.

Withholding agents should be aware of the fact that the assessment will be made on their returns by this office in the light of the facts shown by the certificates and the Form 1008, revised, attached to their returns; and that reasonable care, under the penalties of law, is to be exercised in the performance of the duties imposed upon them by law.

When it is apparent on the face of Form 1008, revised, and from the facts in possession of the withholding agent that the claim is either erroneous or fraudulent, refundment should be denied. In such a case the claimant has proper redress by means of a claim for abatement or refundment as provided by Article 33 (c), Regulations No. 33, of January 5, 1914.

The same care should be exercised by collectors in authorizing refundment as would be expected of withholding agents in cases of refundment made on their own responsibility.

Bank stock, taxes paid by banks on, held by individuals.— Taxes assessed against the stockholders of a bank and paid by the bank in behalf of the stockholders do not constitute an allowable deduction from the gross income of the bank, but do constitute an allowable deduction in the return of the individual. If such individual is subject to the additional tax, the amount of taxes so paid should be included in his return as income, the said amount being considered as an additional dividend to the amount of the taxes paid.

Citizenship.-Determination by the State Department of right to registry is not conclusive upon the Treasury in fixing citizenship for income-tax purposes. Held, that native and naturalized status remains unless changed by affirmative action or forfeited by overt act.

Collecting agent, duties of, when no certificate is filed.— The first bank or collecting agency receiving an interest coupon from a domestic bond, unaccompanied by a certificate of ownership, shall withhold the normal tax of 1 per cent and execute Form 1002. The amount of tax withheld should be reported by the bank or collecting agency on monthly list return, Form 1044. The certificate should accompany the coupon to the debtor corporation in order that the normal tax may not be withheld again should the coupons pass through the hands of other banks or collecting agencies. The debtor corporation, upon receipt of Form 1002, should treat such certificate as an exemption certificate.

Compensation. If an employee's total compensation, salary, and bonus is fixed, determined, and paid to him at one time, withholding should occur at that time; and both the company's withholding return and the employee's individual return of income for the year in which the amount is thus determined and paid should take consideration of the item. It follows that where a part of the compensation is in the form of a salary payable monthly, and a part in the form of a bonus not fixed and determined until on or after January 1 of the year following that in which the services were rendered, the two parts of any one year's compensation can not be considered together for the purposes of withholding the tax and making return; but the fixed salary of one year should be considered together with the bonus received on or after January 1 of that year. Thus, if the services were rendered in the year 1914 the employee's compensation would be liable to withholding whenever the fixed salary and the bonus paid on or after January 1, 1914, amounted to $3,000, subject to the exemption claimed under the law. The bonus to be paid on or after January 1, 1915, will belong to the tax year 1915, together with the fixed salary received during 1915.

Compensation for services as trustee. If no determination was made of the amount due the trustee of an estate as compensation for his services over a period of years until the trust was terminated, the amount allowed him should be re

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