Sec. 1251. Nontaxable transfers.

The tax imposed by section 1250 shall not apply (a) if the transferee is an organization exempt from income tax under section 103 of the Revenue Act of 1932; or

(b) if prior to the transfer it has been established to the satisfaction of the Commissioner that such transfer is not in pursuance of a plan having as one of its principal purposes the avoidance of Federal income taxes.

Sec. 1252. Definition of "foreign trust.”’

A trust shall be considered a foreign trust within the meaning of this chapter if, assuming a subsequent sale by the trustee, outside the United States and for cash, of the property so transferred, the profit, if any, from such sale would not be included in the gross income of the trust under Title I of the Revenue Act of 1932.

Sec. 1253. Payment and collection.

Sec. 1253. (a) The tax imposed by section 1250 shall, without assessment or notice and demand, be

Sec. 1300. Rate of tax.

due and payable by the transferor at the time of the transfer, and shall be assessed, collected, and paid under regulations prescribed by the Commissioner with the approval of the Secretary.

Sec. 1253. (b) Under regulations prescribed by the Commissioner with the approval of the Secretary the tax may be abated, remitted, or refunded if after the transfer it has been established to the satisfaction of the Commissioner that such transfer was not in pursuance of a plan having as one of its principal purposes the avoidance of Federal income taxes.

Sec. 1253. (c) All administrative, special, or stamp provisions of law, including penalties and including the law relating to the assessment of taxes, so far as applicable, shall be extended to and made a part of this chapter.

Sec. 1254. Publicity of returns.

For provisions with respect to publicity of returns under this chapter, see subsection (a) (2) of section 55.

There shall be levied and collected, for each taxable year beginning after December 31, 1938, a tax of one per centum on the gross annual income of all railroad corporations doing business in Alaska, on business done in Alaska.

Sec. 1301. Assessment and collection of tax.

The tax imposed by section 1300 shall be computed and collected in the manner provided in section II of the act of October 3, 1913, c. 16, 38 Stat.

114, 174. The proceeds of such tax when collected shall be deposited into the Treasury as miscellaneous receipts, and amounts equal thereto are (1) authorized to be appropriated annually from the general fund of the Treasury, (2) paid to the treasurer of Alaska, and (3) made applicable to general Territorial purposes. If the total of receipts for any fiscal year is greater than the amount appropriated for the payment of such receipts to the Alaskan government, such excess is authorized to be appropriated for the following fiscal year.

Sec. 1621. Definitions.
As used in this subchapter—

Sec. 1621. (a) Wages.-The term "wages" means all remuneration (other than fees paid to a public official) for services performed by an employee for his employer, including the cash value of all remuneration paid in any medium other than cash; except that such term shall not include remuneration paid—

Sec. 1621. (a) (1) for services performed as a member of the military or naval forces of the United States, other than pensions and retired pay includible in gross income under Chapter 1, or

Sec. 1621. (a) (2) for agricultural labor (as defined in section 1426 (h)), or

Sec. 1621. (a) (3) for domestic service in a private home, local college club, or local chapter of a college fraternity or sorority, or

Sec. 1621. (a) (4) for casual labor not in the course of the employer's trade or business, or,

Sec. 1621. (a) (5) for services by a citizen or resident of the United States for a foreign govern ment or for the government of the Commonwealth of the Philippines, or

Sec. 1621. (a) (6) for services performed by a nonresident alien individual, other than a resident of a contiguous country who enters and leaves the United States at frequent intervals, or

Sec. 1621. (a) (7) for such services, performed by a nonresident alien individual who is a resident of a contiguous country and who enters and leaves the United States at frequent intervals, as may be designated by regulations prescribed by the Commissioner with the approval of the Secretary, or

Sec. 1621. (a) (8) for services for an employer performed by a citizen or resident of the United States while outside the United States (as defined in section 3797 (a) (9)) if the major part of the services for such employer during the calendar year is to be performed outside the United States, or

Sec. 1621. (a) (9) for services performed as a minister of the gospel.

For the purpose of paragraph (8) services performed on or in connection with an American vessel (as defined in section 1426 (g)) under a contract of service which is entered into within the United States or during the performance of which the vessel touches at a port in the United States, or on or in connection with any vessel as an employee of the United States employed through the War Shipping Administration, shall not constitute services performed outside the United States.

Sec. 1621. (b) Payroll period. The term "payroll period" means a period for which a payment of wages is ordinarily made to the employee by his employer, and the term "miscellaneous payroll period" means a payroll period other than a daily, weekly, biweekly, semimonthly, monthly, quarterly, semiannual, or annual payroll period.

Sec. 1621. (c) Employee.-The term "employee" includes an officer, employee, or elected official of the United States, a State, Territory, or any political subdivision thereof, or the District of Columbia, or any agency or instrumentality of any one or more of the foregoing. The term "employee" also includes an officer of a corporation.

Sec. 1621. (d) Employer. The term "employer" means the person for whom an individual performs or performed any service, of whatever nature, as the employee of such person, except that—

Sec. 1621. (d) (1) if the person for whom the individual performs or performed the services does not have control of the payment of the wages for such services, the term "employer" (except for the purposes of subsection (a)) means the person having control of the payment of such wages; and

Sec. 1621. (d) (2) in the case of a person paying wages on behalf of a nonresident alien individual, foreign partnership, or foreign corporation, not engaged in trade or business within the United States, the term "employer" (except for the purposes of subsection (a)) means such person.

Sec. 1621. (e) Single person.-The term "single person" means a person with respect to whom a withholding exemption certificate is in effect under section 1622 (h) stating that such person is single, or is married and not living with husband or wife, and is not the head of a family.

Sec. 1621. (f) Married person.-The term "married person" means a person with respect to whom a withholding exemption certificate is in effect under section 1622 (h) stating that he is married and living with husband or wife.

Sec. 1621. (g) Married person claiming all of personal exemption for withholding. The term "married person claiming all of personal exemption for withholding" means a married person with respect to whom a withholding exemption certificate is in effect under section 1622 (h) stating that for the purposes of this subchapter such person claims all of the personal exemption and that for the purposes

of this subchapter his spouse is claiming none of the personal exemption.

Sec. 1621. (h) Married person claiming half of personal exemption for withholding.-The term "married person claiming half of the personal exemption for withholding" means a married person with respect to whom a withholding exemption certificate is in effect under section 1622 (h) stating that for the purposes of this subchapter such person claims half of the personal exemption and that for the purposes of this subchapter his spouse is claiming not more than half of such exemption.

Sec. 1621. (i) Married person claiming none of personal exemption for withholding.-The term "married person claiming none of the personal exemption for withholding" means a married person with respect to whom a withholding exemption certificate is in effect under section 1622 (h) making no claim with respect to the personal exemption for the purposes of this subchapter.

Sec. 1621. (j) Head of family. The term "head of a family" means a person with respect to whom a withholding exemption certificate is in effect under section 1622 (h) stating that he is the head of a family.

Sec. 1621. (k) Dependent.-The term "dependent" means a person included in a withholding exemption certificate in effect under section 1622 (h) as a person dependent upon and receiving his chief support from the employee and either under eighteen years of age or incapable of self-support because mentally or physically defective.

See note following Sec. 1632, infra.

Sec. 1622. Income tax collected at source.

Sec. 1622. (a) Requirement of withholding. Every employer making payment of wages shall deduct and withhold upon such wages a tax equal to the greater of the following:

Sec. 1622. (a) (1) 20 per centum of the excess of each payment of such wages over the family status withholding exemption allowable under subsection (b) (1) (A), or

Sec. 1622. (a) (2) 3 per centum of the excess of each payment of such wages over the Victory tax withholding exemption allowable under subsection (b) (1) (B).

Sec. 1622. (b) Withholding exemption.

Sec. 1622. (b) (1) In computing the tax required to be deducted and withheld under subsection (a), there shall be allowed as a withholding exemption with respect to the wages paid for each payroll period

(A) in computing the tax required to be deducted and withheld under subsection (a) (1), a family status withholding exemption determined in accordance with the following schedule:

Sec. 1622. (b) (2) If wages are paid with respect to a period which is not a payroll period, the withholding exemption allowable with respect to each payment of such wages shall be the exemption allowed for a miscellaneous payroll period containing a number of days (including Sundays and holidays) equal to the number of days in the period with respect to which such wages are paid.

Sec. 1622. (b) (3) In any case in which wages are paid by an employer without regard to any payroll period or other period, the withholding exemption allowable with respect to each payment of such wages shall be the exemption allowed for a miscellaneous payroll period containing a number of days equal to the number of days (including Sundays and holidays) which have elapsed since the date of the last payment of such wages by such employer during the calendar year, or the date of commencement of employment with such employer during such year, or January 1 of such year, whichever is the later.

Sec. 1622. (b) (4) In any case in which the period, or the time described in paragraph (3), in respect of any wages is less than one week, the Commissioner, under regulations prescribed by him with the approval of the Secretary, may authorize an employer, in computing the tax required to be deducted and withheld, to use the excess of the aggregate of the wages paid to the employee during the calendar week over the withholding exemption allowed by this subsection for a weekly payroll period.

Sec. 1622. (b) (5) In determining the amount to be deducted and withheld under this subsection, the wages may, at the election of the employer, be computed to the nearest dollar.

Sec. 1622. (c)/ Wage bracket withholding.—

Sec. 1622. (c) (1) At the election of the employer with respect to any employee, the employer shall deduct and withhold upon the wages paid to such employee a tax determined in accordance with the following tables, which shall be in lieu of the tax required to be deducted and withheld under subsection (a).

(The tables referred to in Sec. 1622 (c) (1), I. R. C., supra, are shown in fn. 33, pp. 1142-1146, inclusive.

Sec. 1622. (c) (2) If wages are paid with respect to a period which is not a payroll period, the amount to be deducted and withheld shall be that applicable in the case of a miscellaneous payroll period containing a number of days (including Sundays and holidays) equal to the number of days in the period with respect to which such wages are paid.

Sec. 1622. (c) (3) In any case in which wages are paid by an employer without regard to any payroll period or other period, the amount to be deducted and withheld shall be that applicable in the case of a miscellaneous payroll period containing a number of days equal to the number of days (including Sundays and holidays) which have elapsed since the date of the last payment of such wages by such employer during the calendar year, or the date of commencement with such employer during such year, or January 1 of such year, whichever is the later.

the

Sec. 1622. (c) (4) In any case in which period, or the time described in paragraph (3), in respect of any wages is less than one week, the Commissioner, under regulations prescribed by him with the approval of the Secretary, may authorize an employer to determine the amount to be deducted and withheld under the tables applicable in the case of a weekly payroll period, in which case the aggregate of the wages paid to the employee during the calendar week shall be considered the weekly wages.

Sec. 1622. (c) (5) If the wages exceed the highest wage bracket, in determining the amount to be deducted and withheld under this subsection, the wages may, at the election of the employer, be computed to the nearest dollar.

Sec. 1622. (d) Tax paid by recipient.-If the employer, in violation of the provisions of this subchapter, fails to deduct and withhold the tax under this subchapter, and thereafter the tax against which such tax may be credited is paid, the tax so required to be deducted and withheld shall not be collected from the employer; but this subsection shall in no case relieve the employer from liability for any penalties or additions to the tax otherwise applicable in respect of such failure to deduct and withhold.

Sec. 1622. (e) Nondeductibility of tax in computing net income.-The tax deducted and withheldunder this subchapter shall not be allowed as a deduction either to the employer or to the recipient of the income in computing net income for the purpose of any tax on income imposed by Act of Congress.