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amending or repealing it have been made. It simply requires that when any bank or other corporation or agent has the duty of handling and receiving certain income belonging to an individual, then the corporation or other agent must withhold the tax before paying out the amount to the individual, and pay the tax to the collector. (T. R. 29-75.) This applies, however, only when the amount to be so paid out exceeds $3,000. It does not apply to interest paid by banks on deposits. (T. R. 67.) An agent whose duty it is to collect rents, etc., for a landlord, withholds the tax only when the total amount reaches $3,000. The provision for withholding applies only to the normal tax of 1 per centum, and does not apply to the income from dividends from stocks on which the normal tax is paid elsewhere. (149.) The provision as to withholding applies to banks, corporations, trust companies, associations, organizations, trustees acting in any trust capacity, agents, administrators, executors, receivers, conservators, employers, Government paymasters, and all others entrusted with the control of income payable to any taxpayer, provided such income exceeds $3,000 (St. E.) It is not required of corporations or other organizations which are not themselves subject to the tax. (T. R. 37 and T. D. 1967.) The tax is not to be paid prior to thirty days before return is due. (T. R. 33a and T. D. 1965.) Reports are required from withholding agents on special blanks supplied by the collector of the district. (T. D. 1976.) See Fiduciaries, 133. Banks, 1138. Partnerships, [36. See T. D. 2135,

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133. Fiduciaries. Guardians, trustees, executors, administrators, agents, receivers, conservators, and all persons, corporations, or associations acting in any fiduciary capacity, are referred to as fiduciary agents by Treasury Regulation, Article 70. All such fiduciaries are required to list the income for the person for whom they act in such capacity. They list, however, only such part of the income as comes into their control. All such income which may be subject to a withholding tax elsewhere, by notice from the fiduciary, will become subject to the withholding tax only by the fiduciary and not elsewhere. The return by the fiduciary is to be made only when the income for the beneficiary exceeds $3,000, and in this and other things it is subject to the same regulations as individual returns, though made on a different form. (T. D. 2090, “Fiduciaries.") Treasury Regulations, 70-75. See Withholding, [32. Where a fiduciary or guardian acts only for one person, the return is made for the person by the fiduciary as any personal return. Fiduciaries acting for more than one person must report to the collector for all of them, and also make a return for each one whose income exceeds $3,000. (T. D. 1943, 1947, 1961, 2231.) See (53 for Forms. Depreciation for Fiduciaries, T. D. 2267.

(34. Foreign Corporations. The normal tax of 1 per cent must be paid by foreign corporations the same as if they were domestic corporations, though they are required to pay the tax only on that portion of their income accruing from business done in the United States. (St. E.) If such corporation has more than one branch office in the United States it must designate to the Department the office and the person who is authorized to make the return of the income. (T. R. 83.) The allowable deduction for taxes paid is for taxes paid in the United States only, and other deductions are likewise limited. For foreign corporations, as for domestic corporations, there is no allowable deduction for debts proven worthless, as in the case of individuals. Foreign corporations, with respect to their business in the United States, are treated exactly on a basis with domestic corporations. (s15.) Form of return, T. R. 163. Foreign corporation bonds, T. D. 1992. Foreign corporations subject to tax, T. D. 2161, page 2.

135. Americans Residing Abroad. The Income tax is levied upon "every citizen of the United States, whether residing at home or abroad, and every person residing in the United States, though not a citizen thereof." (St. A.) For a foreigner residing abroad the income is based on his property in the United States. (F45.) The citizen residing abroad may make his own return of income, or it may be

made for him in his own collection district by any one who will swear that he is sufficiently acquainted with his business to make it and authorized to do so. (St. E.) There is no difference otherwise in estimating the tax of the citizen abroad from the methods used if he were at home. (T. R. 15-17.) Forms for Returns, [53. Nonresident aliens, [45. Time and place for making returns, 137. Who must make returns, (17.

(36. Partnerships. A partnership is not required to make return of income, except when specially requested to do so by the Collector of Internal Revenue for the district in which it is located. (St. D.) When this is requested the partnership must make a correct and complete statement of gross income, actual expenses, net profit, and the names and addresses of all persons who are partners, with their respective proportional interests in the net profits. (T. R. 12.) The net profits if divided to the partners during the year are to be returned as income by the individuals. If not divided they are to be returned also by the individuals as if they had been divided and distributed; but later, when the distribution is made, it shall not be required that the amount be again returned. (T. R. 11-12.) The net profits must be returned by the partners in their individual returns, whether they are apportioned out to them from the partnership treasury or not. (T. R. 94.) As a partnership is not taxable on its income, the "withholding” provision (132) does not apply, and the tax on income due to a partnership cannot be withheld by any one.

(T. D. 1957.) Partnerships owning bonds, mortgages, etc., shall file certificates of ownership of such so that the normal tax on them will not be withheld. Foreign Partnerships, T. R. 48-49. Forms for returns, 53. Undivided profits, 139.

1137. Time and Place for Making Returns. All individuals are required to make the return of their income on or before March of each year, the income to be that of the previous calendar year ending December 31. (St. D.) Corporations are required to make returns at the same time unless they apply to the Collector for special permission to make return for their own fiscal year, ending at some other time than with the calendar year, and, in such cases, they make the return within sixty days after the end of the fiscal year. (T. D. 2029.) (According to the report of the commissioner not more than 20 per cent of the corporations ask for this special permission, the others preferring to make their fiscal year correspond to the calendar year.) Both individuals and corporations make their returns to the Collector of that district in which is located their principal place of business. (T. R. 15; St. D.; T. D. 2090.) The taxpayer is notified on or before June 1 of the amount of tax due, and it is to be paid on or before June 30. (T. R. 25 and 197.) For unavoidable causes, special permission may be obtained from the Collector for delay not exceeding thirty days in making the return, but the permission must be requested in advance of the time for return. (T. R. 23 and 173.) The return is due to be made on or before March 1; the taxpayer is notified of the amount of his tax on or before June 1, and the amount must be paid on or before June 30. Who must make returns, (17. Time for returns and penalties, T. D. 1950. Penalties, 140.

138. Banks. All National and State and private incorporated banks, trust companies, etc., operated for private gain of the stockholders, are subject to all the provisions of the Income Tax law as to corporations. ((15.) The one exception is a mutual savings bank not having a capital stock represented by shares, which, though called a bank, is in reality merely an association for the benefit of all concerned and not for the gain of any special persons. (St. G a). Gross income of banks consists of the total revenue derived from the operation of the business, including income, gains, or profits from all other sources, as shown by the entries on the books for the year for which the return is made. A bank, as any other corporation, may make the return either for the calendar year or for its own fiscal year (37.) Interest paid by a bank to the depositors is deductible under allowance for interest, but the total amount on which such interest is paid cannot exceed the amount of the capital stock plus onehalf the outstanding interest-bearing indebtedness. ([22.) A bank is a withholding agent and is bound by the requirements for withholding at the source. (132.) A bank, however, does not withhold tax or interest paid on deposits. (T. R. 67.) See Treasury Regulations 38, 39, 43 and 46. Undivided profits or surplus accruing in any year for which the return is made must be included as a part of the income of the bank on which tax must be paid. (See paragraphs 15 and 36.) Taxes assessed against shareholders are due to be paid by the holders, and, if paid by the bank, cannot be de ducted as expense. (T. R. 154, 121.) Withholding certificates, T. D. 1986 and 2258.

1139. Surplus and Undivided Profits. Section A of the Statute provides that the taxable income of any individual shall include the share to which he would be entitled in any surplus or undivided profits, whether divided or distributed or not, in any corporation, partnership or other association. Even if the company is a mere holding company the same rule holds. When requested by the Commissioner of Internal Revenue or any District Collector, such company must make a report of all such profits or surplus, with the names of the individuals who would be entitled to the same if distributed. If the gains and profits shall be allowed to accumulate and become surplus, it shall be prima facie evidence of a fraudulent purpose to evade the tax, but such surplus shall not be construed as evidence of fraud unless the Secretary of the Treasury shall certify that in his opinion such accumulation is unreasonable for the purpose of the business. (Statute, section A.) See Partnerships, 136.

140. Penalties and Fines. The final day of payment is June 30, and to any taxes remaining unpaid after that date and for ten days after notice and demand from the Collector, there shall be added the sum of 5 per centum on the amount of unpaid tax and interest at the rate of 1 per centum a month from the time the tax became due. (St. G c.) A corporation

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