posed upon such persons and organizations, only when and where they respectively have the control, receipt, custody, disposal, or payment, of interest, rent, salaries, wages, premiums, annuities, compensation, remuneration, emolument, or other fixed or determinable annual gains, profits and income of some other person or persons, and only under the circumstances stated in this section.

The function of those provisions of the statute which relate to this subject, is to increase the efficiency and diminish the cost of the official work, which is involved in assessing and collecting personal normal income taxes; while sometimes increasing, and sometimes not increasing, the burden of such a tax upon the persons out of whose incomes it is taken. That function is performed by the statute, substantially as follows:

The statute undertakes to compel every person and every organization, such as any of those mentioned in this Section 5, as having vicarious duties, to act as agents of the Government, in respect of all fixed or determinable payments which will accrue, at any time after the end of October, 1913, to be made by those vicarious parties respectively, to the person or persons, for whom they shall have been respectively accumulated or otherwise received.

In executing that agency, each vicarious party will begin by classifying the moneys due from him or it, to each person, who in the absence of this statute, would be entitled to receive any of those moneys.

The first class of those moneys will include all items such as those which, according to the statute, are exempt from the normal income tax, when they are in the hands of the persons to whom they beneficially belong. Those items are the following:

FIRST: All interest, received upon any obligation of the United States or any of its possessions, or any State or any political subdivision thereof.

SECOND: The value of any property, received by the vicarious party, by way of gift, bequest, devise, or descent, for the benefit of the person beneficially entitled thereto.

THIRD: All proceeds of life insurance policies, paid upon the death of the insured, and received by the vicarious party on behalf of the respective beneficiaries of those life insurance policies.

FOURTH: All repayments, made for the benefit of any holder of any life insurance, endowment, or annuity contract, upon the maturity or surrender of any such contract.

FIFTH: All dividends, received upon corporate stock, and all other amounts received from the net earnings of any corporation, joint stock company, association, or insurance company, which is taxable upon its net income under the statute.

The statute does not, in respect of any item in this first class, put any reportorial or returning duty, upon the vicarious party which has the custody or control of that item.

The second class of those moneys will include all items which, according to the statute, must be reported in full. Those items are the following:

FIRST: All interest upon bonds, mortgages or deeds of trust, or other similar obligations of corporations, joint stock companies or associations, or insurance companies, whether payable annually or at shorter or longer periods.

SECOND: Coupons, checks, or bills of exchange, for or in payment of any dividend upon any stock, or any interest upon any obligation of any foreign corporation,

association or insurance company, engaged in business in any foreign country.

THIRD: Coupons, checks or bills of exchange, for or in payment of interest, upon any bond of any foreign country, or upon any foreign mortgage or like obligation, which is not payable in the United States.

The statute requires the vicarious party who receives any money of this second class, to return to the collector of internal revenue, an itemized account of all such money, and to pay to the collector one per cent of its aggregate amount, instead of paying the whole of that money to the party which, in the absence of the statute, would be entitled to receive it all.

The statute also provides that all persons, firms or corporations, undertaking as a matter of business or for profit, the collection of foreign payments of such interest or dividends, by means of coupons, checks, or bills of exchange, shall obtain a license from the Commissioner of Internal Revenue, and shall be subject to such regulations as that officer, with the approval of the Secretary of the Treasury shall prescribe; and that any person who undertakes to collect such payments without such a license, or without complying with such regulations, will be guilty of a misdemeanor; and for each offense will be fined not more than $5,000, or imprisoned not more than one year, or both, in the discretion of the Court.

The third class of those moneys will include all items which do not belong to the first class or to the second. class. Where this class of money aggregates not more than $3,000 in the case of a particular beneficiary, the statute does not put any reportorial duty upon the vicarious party, which has the custody or control of that money.

But where this third class of moneys aggregates more than $3,000 in the case of a particular beneficiary of a particular vicarious party, the statute requires that party to return, to the collector of internal revenue, an itemized account of all those moneys, and to pay to the collector one per cent of their aggregate amount, instead of paying that one per cent to the party to whom the ninety-nine per cent of that aggregate amount is paid.

The statute recognizes the probability that the foregoing plan for collecting some portion or portions, and in some cases the whole, of the income tax due from a particular person, at the source or sources of his income, would, unless modified for particular cases, operate to deprive that person of the benefit of one or more of the first nine deductions from the "personal gross income" which are specified in Section 2 of this chapter, as proper to be made, when ascertaining the "personal taxable income" of particular persons.

To enable any person, thus likely to suffer from the plan, to avert such an injustice, the statute provides that such a person, not less than thirty days prior to the day on which personal incomes are returnable to the collector of internal revenue, may file with his vicarious party, a true and correct return of his annual gains, profits and income, from all other sources than that vicarious party; together with a true and correct statement of such of the first nine deductions which are specified in Section 2 of this chapter, as ought to be made from the "personal gross income" of the person filing the said true and correct return. Such a paper having been filed with the vicarious party; the statute provides that it shall become a part of the return to the collector of internal revenue, which is to be made by that party. But the statute does not provide that the vicarious party

may refrain, on account of having received such a paper, from diverting from its sender, to the collector of internal revenue, the whole or any portion of the money which, in the absence of such a paper, he is required to divert.

The statute also indicates, without elaborately providing, that any person who might otherwise suffer injustice from the plan of taxing personal incomes at their respective sources, may make an application to the collector of internal revenue, asking that any of the said nine deductions from his gross personal income may be subtracted therefrom, or he be somehow credited therewith. But the statute does not provide how any person can recover any money from the collector of internal revenue, on account of any such credit or deduction; even where it is plain that the plan of taxing personal incomes at their sources, has caused the collector of internal revenue to receive more money out of the gross personal income of a particular person, than he would have received if that income had been accounted for, in the hands of that person himself. That subject is apparently relegated to section 3220 of the Revised Statutes of the United States, which provides that the Commissioner of Internal Revenue, subject to regulations prescribed by the Secretary of the Treasury, is authorized, on appeal to him made, to remit, refund and pay back all taxes that appear to have been unjustly assessed, or made excessive in amount, or to have been in any manner, wrongfully collected.

To enable any person who might otherwise lose the benefit of the tenth or eleventh deduction specified in Section 2 of this chapter, as a result of the plan of taxing personal incomes at their sources; the statute provides that such a person, not less than thirty days prior