х W178in tremely complicated, and many of them are also heterogeneous. Moreover, those provisions of the statute which relate to any one subject, are generally scattered so widely and promiscuously through its subsections, subdivisions, paragraphs and provisos, that nobody can reliably learn all the enactments of the statute, relevant to any particular subject, without a long study of the entire statute, made either by himself or by some other person. Such a study made by any man for himself, would take all his time and energy for several days, even if he aimed to learn the statute upon only one subject; and no man, by unaided study of the statute, can learn in a month, all the law which it enacts. Indeed, that study of the statute which was made and was necessary in producing this pamphlet, took much more than a month of the hard and constant mental labor of its long experienced. author. Though the text of the statute is generally ambiguous in its sentences, and often heterogeneous in the sequences of its provisions; it is also true that those provisions, when clearly restated and logically rearranged, constitute a nearly complete system of enacted law. That law, being founded upon the recently ratified sixteenth amendment to the Constitution of the United States, and having been lately enacted by the Congress of the United States and signed by the President, is entitled to the willing obedience of every citizen of any of those States, and of every alien who resides or conducts business in our country. But no law can be reliably obeyed without being reliably known. And it is the intended function of this pamphlet to inform every attentive reader of its pages, precisely how the law applies to him, or to any other person, or to any organization anywhere. PARK ROW BUILDING, MANHATTAN, NEW YORK, October 16, 1913. OCT 29 1913 ALBERT H. WALKER. CHAPTER IV. INCOME TAX ASSESSMENTS ... PAGE 46-53 Section 1, Collecting Data for Assessments..... 46-50 Section 2, Making Assessments of Income Taxes 50-53 CHAPTER V. TERRITORIAL SCOPE OF THE STATUTE CHAPTER VI. ADMINISTRATIVE PROVISIONS Section 1, Relevant to Collections at Sources.... 53-56 56-57 56 57 ANALYSIS of THE UNITED STATES INCOME TAX LAW. CHAPTER I. RELEVANT TO NATURAL PERSONS. SECTION 1. INTRODUCTION. The first paragraph of the statute purports to specify three classes of persons as subjected thereto: First, all citizens of the United States: Second, all aliens residing in the United States: and Third, all persons residing elsewhere, who derive incomes from sources in the United States. That paragraph also provides that every person, belonging to the first or to the second of these classes, shall pay an income tax upon his entire net income, arising from all sources; but its only provision relevant to the third class of persons is that every person belonging to that class, shall pay an income tax upon his entire net income, derived from sources in the United States. A serious ambiguity in this paragraph arises from the fact that all citizens of the United States who reside in foreign countries belong to the first class, and also belong to the third class of persons which the paragraph purports to tax; and in the fact that it purports to tax every person belonging to the first class on his entire net income, while purporting to tax every person belonging to the third class, on only that portion of his entire net income which he derives from sources in the United States. Inasmuch as the paragraph clearly purports to tax the incomes which aliens, residing in this country, derive from sources in foreign countries; it appears to be probable that Congress also intended to tax the incomes which citizens of the United States, residing in foreign countries, derive from sources in foreign countries. And that is the clear purport of the first part of the paragraph. But the last part of the paragraph appears to exempt citizens of the United States residing in foreign countries, from all income taxes upon incomes derived from foreign sources. This inconsistency between the two parts of the first paragraph of the statute, is not plainly removed anywhere in the statute. But it is probable that the Commissioner of Internal Revenue, and also whatever courts are called upon to construe the statute on this point, will hold that it applies to all citizens of the United States alike, and that it taxes every one of them upon his entire net income whether that income is derived from sources in the United States, or from sources in one or more foreign countries, or from both those classes of sources. The first paragraph of the statute provides that every net income subjected thereto, is thereby made liable to the "normal income tax" of one per cent per annum, whatever the amount of that net income may be ascertained to be; and subsequent parts of the statute prescribe the method of ascertainment of the amount of a net income, for the purpose of the assessment of the normal tax. |