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(20415.)

Legacy taxes.

Legacies and distributive shares.-Instructions to collectors of internal revenue and

internal revenue agents.

TREASURY DEPARTMENT,

OFFICE OF COMMISSIONER OF INTERNAL REVENUE,

Washington, D. C., December 10, 1898.

To collectors of internal revenue and internal revenue agents:

From information received, this office is inclined to the opinion that the fact that there is an internal revenue tax on legacies and distributive shares of estates, where the decedent died on or after June 13, 1898 (leaving a personal estate, the "whole amount" of which exceeds in value $10,000), is not fully understood.

All wills filed for probate in the offices of registers of wills or other similar offices should be examined. Effort should be made to have the public advised of the requirements of this law. It would be well to have the press give it publicity. Executors and administrators should be furnished with forms for making return of tax, and notified of their liability. The payment of this tax in all cases where it accrues before distribution of personal estate is imperative.

Attention is called to regulations and instructions concerning the tax on legacies and distributive shares, series 7, No. 3, revised; also to the following Treasury decisions, published since said regulations were issued, to wit: Nos. 20237, 20368, 20388, and 20392.

G. W. WILSON, Acting Commissioner.

(20416.)

Special tax-Commercial brokers.

Modification of ruling No. 19650 in TREASURY DECISIONS (vol. 2, No. 2) concerning

commercial brokers.

TREASURY DEPARTMENT,

OFFICE OF COMMISSIONER OF INTERNAL REVENUE,

Washington, D. C., December 12, 1898.

GENTLEMEN: In reply to your letter of the 21st ultimo, you are hereby advised that the ruling, No. 19650, in TREASURY DECISIONS, volume 2, No. 2, dated July 14, 1898, concerning commercial brokers, has been modified, and the following is now the settled ruling of this office on that subject, namely:

Every person, firm, or company who negotiates sales or purchases of goods, wares, produce, or merchandise for another as a business, or material part of a business, without acquiring possession of, or any right or

title in, the subject of the sale or purchase, and receives a commission for such service, except under contract to sell or purchase exclusively for certain persons or firms, or who negotiates freights and other business for the owners of vessels, or the shippers, consignors, or consignees of freight carried by vessels, for a commission, is to be regarded as a commercial broker under the fourth paragraph of section 2 of the act of June 13, 1898, and is required to pay special tax accordingly. Respectfully, yours,

N. B. SCOTT, Commissioner. Messrs. J. N. CARTER & Co., Waco, Tex.

(20417.)

Special tax-Commercial brokers.

Persons engaged in negotiating sales of flour for one company, sales of meats for another

company, sales of coffee, sugar, etc., for another company, and so on, receiving a commission, are commercial brokers within the meaning of the fourth paragraph of section 2, act of June 13, 1898.

TREASURY DEPARTMENT,
OFFICE OF COMMISSIONER OF INTERNAL REVENUE,

Washington, D. C., December 12, 1898. GENTLEMEN: This office has received your letter of the 7th instant, referring to a demand notice which has been served by a deputy collector upon your clients, Messrs. E. M. Hendrix, W. W. Ellington, and J. R. Donnell, to pay special tax as commercial brokers.

You state that these persons negotiate sales of flour for a milling company, sales of meats for another company, sales of coffee, sugar, and molasses for another company, and so on, receiving a commission on all the sales thus negotiated.

In the opinion of this office, the business thus described is that of a commercial broker within the meaning of the fourth paragraph of section 2 of the act of June 13, 1898, and special tax must be paid accordingly.

The settled ruling of this office on this subject is the following, which modifies prior rulings in any manner inconsistent herewith: “Every person, firm, or company who negotiates sales or purchases of goods, wares, produce, or merchandise for another as a business, or material part of a business, without acquiring possession of, or any right or title in, the subject of the sale or purchase, and receives a commission for such service, except under contract to sell or purchase exclusively for certain persons or firms, or who negotiates freights and other business for the owners of vessels, or the shippers, consignors, or consignees of freight carried by vessels, for a commission, shall be regarded as a commercial broker." Respectfully, yours,

N. B. SCOTT, Commissioner. Messrs. KING & KIMBALL, Attorneys at Law, Greensboro, N. C.

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(20418.)

Special tax-Stills or worms.

Special tax is required to be paid for every still or worm manufactured for the recovery of alcohol, except where it is made for a druggist, who sets it up for use only in recovering alcohol previously used by him in the preparation of medicines.

TREASURY DEPARTMENT,

OFFICE OF COMMISSIONER OF INTERNAL REVENUE,

Washington, D. C., December 12, 1898.

SIR: In reply to a letter addressed to this office on the 30th ultimo by E. B. Badger & Sons, coppersmiths, 63, 65, 67, and 69 Pitts street, Boston (who have to-day been referred to you), you will please inform them that the information which they say they have received, that special tax is not required to be paid upon "any apparatus used for the recovery of alcohol or spirits of any kind," is erroneous.

Special tax is required to be paid for every still or worm manufactured for the recovery of alcohol, except where it is manufactured for a druggist, who sets it up for use only in the recovery of alcohol previously used by him in the preparation or making up of his medicines, the alcohol thus recovered to be used again by him in making up medicines (sec. 3246, Rev. Stat.).

Messrs. Badger & Sons say that they "recently manufactured for the Lowell Barrel Company a copper worm to be used in connection with the condensation of vapors taken from whisky barrels, or, in other words, whisky recovered from barrels."

You will please inform them that the special tax of $20 is required to be paid by them on this worm.

Respectfully, yours,

N. B. SCOTT, Commissioner.

Mr. JAMES D. GILL, Collector Third District, Boston, Mass.

(20419.) Special tax-Banks.

Where two banks, which have carried on business in separate places, and have each paid its special tax, consolidate, the consolidated bank must pay special tax at the rate of $50 from the first day of the month when it began business to the 1st day of July following.

TREASURY DEPARTMENT,

OFFICE OF COMMISSIONER OF INTERNAL REVENUE, Washington, D. C., December 13, 1898. SIR: Your letter of the 5th instant has been received, stating that two banks of your city have consolidated, and they contemplate a reorganization and change of corporate name; that one of these banks paid special tax on the basis of $254,000, and the other on $101,000; that the

new bank will be capitalized with $325,000, and that the cashier desires to know if the (new) bank must pay special tax.

In reply you are advised that you were correct in holding that said consolidated bank is liable to tax as bankers, and it must pay special tax as such at the rate of $50 for the year, which is to be reckoned from the first day of the month in which it began business to the 1st day of July following (see TREASURY DECISIONS, vol. 2, No. 14, ruling No. 20114). Also, that all certificates of stock issued under the new corporate name must be stamped, as provided under paragraph 1 of Schedule A of the act of June 13, 1898. Respectfully, yours,

N. B. SCOTT, Commissioner. Mr. E. T. FRANKS, Collector, Owensboro, Ky.

(20420.)

Stamp tax-Certificates of deposit. Certificates of deposit, payable on demand, and bearing interest if left for specified time,

require a 2-cent stamp when issued, and if paid subsequent to time interest accrues, additional stamps at rate of 2 cents per $100.

TREASURY DEPARTMENT,
OFFICE OF COMMISSIONER OF INTERNAL REVENUE,

Washington, D. C., December 13, 1898. SIR: This office is in receipt of your letter under date of December 7, 1898, relative to the amount of stamps required on certificates of deposit, and calling attention to the contradiction of rulings as expressed in Treasury decision 19601, and paragraph 47, circular 503, revised.

You are advised that Treasury decision 19601 was made before Schedule A went into effect, and has been superseded for sometime by the following:

Demand certificates of deposit, not drawing interest, require only a 2-cent stamp, regardless of the amount.

Certificates of deposit payable on demand, but drawing interest if money is left on deposit for a specified time, require a 2-cent stamp when issued, but if paid subsequent to the time interest accrues, additional stamps at the rate of 2 cents per $100 or fraction thereof must be affixed.

Certificates of deposit payable otherwise than on demand must be stamped at the rate of 2 cents per $100 or fraction thereof, whether they draw interest or not. Treasury decision 19601 is hereby revoked. Respectfully, yours,

N. B. SCOTT, Commissioner. Mr. A. J. DAUGHERTY, Collector Fifth District, Peoria, IU.

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(20421.)

Legacy taxes.

The value of an income payable to a person for life is to be determined by approved

tables, which are now being prepared by the Government Actuary.—Legacy tax is required to be paid thereon.—Legacies to charitable institutions are not exempt from tax.

TREASURY DEPARTMENT,
OFFICE OF COMMISSIONER OF INTERNAL REVENUE,

Washington, D. C., December 18, 1898. SIR: This office is in receipt of a letter from W. & N. E. Kernan, Utica, N. Y., under date of the 3d instant (who have to-day been referred to you), relative to tax upon legacies and distributive shares under sections 29 and 30 of the war-revenue act.

In reply, you will please inform them that, in a case where $12,000 is left to a certain person, the income to be paid to that person for life, the value of such income is liable to legacy tax, and said value is to be determined by approved tables, which are now being prepared by the Government Actuary.

Upon the death of the above beneficiary, the will provides that the principal of said $12,000 is to be divided between three charitable institutions. Legacy tax accrued on these legacies on the death of the testator, but is not payable until the legacy is payable, and the legacy must not be paid until the tax shall have been paid. Charitable institutions are not exempt from legacy tax, so far as the internal revenue laws are concerned.

Where sisters-in-law or brothers-in-law (if strangers in blood) are left legacies, said legacies are subject to tax under paragraph 5 of section 29 of the war-revenue act.

Further, you may inform them that they can secure legacy return form 419, revised, at your office upon application. Respectfully, yours,

N. B. SCOTT, Commissioner. Mr. C. C. COLE, Collector, Syracuse, N. Y.

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