riod of limitation properly applicable thereto. § 86.69 Closing agreements relating to tax liability in respect to internal revenue taxes. Closing agreements provided for in section 3760 may relate to the total tax liability of the donor, or to one or more separate items affecting such liability. For example, an agreement may be entered into with respect to the total amount of gifts, to deductions, or to the value of property on the date of gift. Accordingly, there may be a series of agreements relating to the tax liability for a single taxable period. Any tax or deficiency in tax determined pursuant to such an agreement shall be assessed and collected, and any overpayment determined pursuant thereto shall be credited or refunded, in accordance with the applicable provisions of the statute. Such agreements are final and conclusive, except upon a showing of fraud or malfeasance, or misrepresentation of a material fact. (See also section 3762.) § 86.70 Personal liability of fiduciaries. Every executor, administrator, or assignee, or other person, who pays, in whole or in part, any debts due by a donor or a donor's estate for whom or for which he acts before he satisfies and pays the gift tax due to the United States from such donor, is, to the extent of such payments, personally liable for the payment of such tax. § 86.71 Securing evidence; taking testimony. In order to ascertain the correctness of a return or to determine the liability of a transferee of the property, the Commissioner has power to require the attendance and to take the testimony of the person rendering the return, any employee of such person, a transferee of the property, or any other person having knowledge in the premises. Such persons may be required to produce any relevant book, paper, or other record. This power may be exer cised by any revenue agent or inspector designated for the purpose. For penalties, see § 86.56. § 86.72 Power to compel compliance. Where any person is summoned to appear and testify, or to produce books, papers, or other data, the district court of the United States for the district in which such person resides has power to compel the giving of testimony, the production of books, papers, or data, and to issue any appropriate process, writ, or order. § 86.73 Laws made applicable. All administrative, special, or stamp provisions of law, including the law relating to the assessment of taxes, so far as applicable, are made a part of chapter 4 of the Internal Revenue Code imposing the gift tax for the calendar year 1940 and each calendar year thereafter. For provisions of law and regulations authorizing the postponement by reason of war of the performance of certain acts required or permitted under the gift tax law, see section 507 of the Revenue Act of 1942 and regulations pertaining thereto separately promulgated. § 86.74 Definitions-(a) Calendar year. The term "calendar year" as used in the gift tax provisions of the Internal Revenue Code includes the portion of the calendar year 1932 after the date of the enactment of the Revenue Act of 1932, i. e., June 6, 1932, and succeeding calendar years. (b) Property within the United States. Section 1030 provides that stock in a domestic corporation owned and held by a nonresident not a citizen of the United States shall be deemed property situated in the United States for the purposes of the gift tax provisions of the Internal Revenue Code. For regulations relating to situs of property generally, see § 86.18. (c) Other definitions. For other definitions, see section 3797. SUBPART A-INTRODUCTORY § 101.0 Scope of part. The regulations in this part deal with the excise taxes imposed on admissions, cabarets, dues, and initiation fees by Chapter 10 of the Internal Revenue Code, as amended by section 521, Part II, and sections 541, 542, 543, and 550, Part IV, of Title V, of the Revenue Act of 1941, and section 622, Title VI, of the Revenue Act of 1942, and as modified by Chapter 9A of the Internal Revenue Code, as amended by section 302, Title III, of the Revenue Act of 1943, the Public Debt Act of 1944, and the Excise Tax Act of 1947. The regulations with respect to the determination of tax liability, the computation of tax and the manner of its application are contained in Subparts C to F, of this part. The regulations relating to collection and return of tax, the imposition of penalties and related matters are contained in Subpart G of this part. [Regs. 43, 6 F. R. 5367, as amended by T. D. 5349, 5 F. R. 2998, T. D. 5385, 9 F. R. 7375, T. D. 5562, 12 F. R. 3286] SUBPART B-GENERAL PROVISIONS § 101.1 Effective period. (a) The taxes on admissions, cabarets, dues, and initiation fees were effective under Title V of the Revenue Act of 1926, as amended. The applicable provisions of the Revenue Act of 1926, as amended, were superseded, effective March 1, 1939, by provisions of the Internal Revenue Code. (b) The Revenue Act of 1940 made amendments of the Code, effective during a limited period only, with respect to the taxes covered by the regulations in this part. These amendments were superseded by amendments made by the Revenue Act of 1941, effective October 1, 1941. The amendments made by the Revenue Act of 1941, and all subsequent amendments relative to these taxes including, by reason of sections 2 and 3 of the Excise Tax Act of 1947, the amendments made by the Revenue Act of 1943, as amended by the Public Debt Act of 1944, apply indefinitely. (c) The effective date of the amendments made by the Revenue Act of 1943, and of the amendments of this part pursuant to the Revenue Act of 1943, is April 1, 1944. In the case of the cabaret tax, the amendments become effective at 10 a. m. on April 1, 1944. The amendment made by the Public Debt Act of 1944, and the amendments of these regulations pursuant to such act, with respect to the cabaret tax become effective at 10 a. m. on July 1, 1944. [T. D. 5349, 9 F. R. 2999, as amended by T. D. 5385, 9 F. R. 7376, T. D. 5562, 12 F. R. 3286] SUBPART C-ADMISSIONS § 101.2 Meaning of “admission.” (a) The tax is imposed on "the amount paid for admission to any place," and applies to the amount which must be paid in order to gain admission to a place. (See § 101.4.) The term "admission" means the right or privilege to enter into a place. The law specifically provides that it shall also include "seats and tables, reserved or otherwise, and other similar accommodations." A charge for their use in any place must, therefore, be treated as a taxable charge for admission. So an amount paid for the right to use a reserved seat in a theater or circus, a seat in a room or window to view a parade, or the like, is taxable. This is true whether the charge made for the use of the seat, table, or similar accommodation is combined with an admission charge proper to form a single charge, or is separate and distinct from an admission charge, or is itself the sole charge. The tax under section 1700 (a) as amended does not apply, however, to admissions to or charges for seats and tables in a cabaret, roof garden or similar place which are subject to the provisions of section 1700 (e) of the Code as amended. (See §§ 101.13 and 101.14.) (b) Where an original admission charge carries the right to remain in a place, or to use a seat or table, or other similar accommodation for a limited time only, and an additional charge is made for an extension of such time, the extra charge is paid for "admission" within the meaning of the Code. (c) The amount paid for admission by season ticket is a fixed sum which entitles the holder to admission on definite dates to a series of scheduled attractions, or to admission at all times during the season, and the form of the ticket is not controlling. (d) A subscription ticket is one which is issued to a person who subscribes a sum of money to the expense of an entertainment or who agrees to bear a portion of the expense thereof when the amount is ascertained. (e) An amount paid to become regularly entitled to the privileges of a club or other organization, as members or otherwise, is not an "amount paid for ad mission" even though one of the privileges be the right to enter a clubhouse, club grounds, gymnasium, swimming pool, or the like. But where the chief or sole privilege of a so-called membership is a right of admission to certain particular performances or to some place on a definite number of occasions (as contrasted with a more or less unlimited right to enter a clubhouse or other place as many times as desired during a year or some other period), then the amount paid for such so-called membership is an "amount paid for admission" within the meaning of the Code. An entirely different tax is levied on amounts paid as initiation fees or as dues or membership fees to certain classes of clubs or organizations, and also upon life members of such clubs, by section 1710 of the Code. (See Subpart F of this part.) (f) Where a person or organization acquires the sole right to use any place or the right to dispose of all the admissions to any place for one or more occasions, the amount paid for such right is not subject to the tax on admissions. Such a transaction constitutes a rental of the entire place and of the attraction, if any, whether or not it is so designated. However, if the person or organization in turn sells admissions to the place the tax will apply to amounts paid for such admissions. (g) If a charge imposed on a person admitted to a place is designated as an admission it will be presumed that it is in fact an admission charge, even though it includes rental of property or services, such, for example, as a charge of 50 cents for admission to a swimming pool, including use of a suit. The tax will apply in such case unless it is clearly shown that the charge is for rental or services, and that persons who do not use the property or services offered (e. g., use of a swimming suit) are admitted free. On the other hand, the designation of a charge as a rental or service charge (e. g., a charge for use of a swimming suit) will not avoid the application of the tax if it in fact represents a charge for admission, or includes the right to admission. If the same charge is made to the person using or furnishing his own property or equipment as where property or equipment is furnished by the management, such charge is an amount paid for admission and subject to tax. If a lesser charge is made to persons who do not desire to use the property or services offered, the lesser charge represents the admission charge. (h) Amounts paid or contributed for the privilege of attending an exclusively religious service conducted in a place of worship are not considered "amounts paid for admission." [Regs. 43, 6 F. R. 5367, as amended by T. D. 5096, 6 F. R. 5583] § 101.3 Meaning of the term "place." The tax under section 1700 (a) of the Code is on the amount paid for admission to any place. "Place" is a word of very broad meaning, and it is not defined or otherwise limited by the Code. But the basic idea it conveys is that of a definite inclosure or location. The phrase "to any place," therefore, does not narrow the meaning of the word "admission," except to the extent that it implies that the admission is to a definite inclosure or location. The inclosure or location may be on, above, or beneath the surface of the earth. Places of amusement obviously constitute the most important class of places admission to which is subject to this tax. § 101.4 Basis, rate, and computation of tax. (a) The amount paid for admission to any place, including any amount paid for a season ticket or as a subscription, is subject under section 1700 (a) of the Code, as amended, to a tax of 1 cent for each 5 cents or major fraction thereof (except that no tax is due on the amount paid for the admission of a child under 12 years of age if the amount paid is less than 10 cents). The tax in each case is to be paid by the person paying for admission. This tax applies to the payment for admission, not to the admission itself, and as soon as payment for admission is made the tax attaches, whether or not the admission ever takes place, and no refund of the tax can be allowed by reason of nonuse of the ticket unless the admission charge also is refunded. tax applies if the payment for admission occurs in the United States, even though the admission is to take place outside the territorial limits of the United States. on each admission and then adding together the taxes so computed. In other words, the tax for 10 single admissions will always be ten times the tax for each single admission. (d) Where a single charge is made to cover admission to more than one attraction, the tax is computed on the basis of such charge. If separate charges are made for each attraction, the tax is computed on each such charge. Where, however, after paying one charge a second charge is made for accommodations which are essentially an extension of the accommodations granted in return for the payment of the first charge, the tax attaches to the total of the two charges made. Thus, if a combination ticket is issued entitling the holder to admission and to the use of a reserved seat for $1.50, the tax is 30 cents, and the same amount of tax would be due if separate tickets of admission and for a reserved seat were sold for 75 cents each. In the latter case the tax on the first admission charge of 75 cents is 15 cents and the tax on the additional charge of 75 cents for a reserved seat is 15 cents. (e) The amount paid for admission to any place is the amount which must be paid to the person or persons controlling such admission in order to secure the privilege. If a ticket or card of admission is sold by the person controlling the admission for an amount in excess of the regular or established price or charge therefor, the tax imposed by section 1700 (a) (1) will apply to the total selling price. As to taxes on excess charges see § 101.9. (f) The following table sets forth the amounts of taxes applicable to certain admission charges: Admission charges (inclusive) The $0.13 to $0.17_ $0.18 to $0.22_ $0.23 to $0.27. $0.28 to $0.32. $0.33 to $0.37. (b) The tax applies whether any profit is contemplated or realized and whether the affair to which admission is charged is public or private. (c) The tax attaches to the amount paid for each admission separately, and, therefore, if two or more admissions are paid for at once, the total tax is determined by computing separately the tax $0.38 to $0.42. $0.43 to $0.47. $0.48 to $0.52_ Tax $0.00 .01 .02 The tax on all other admission charges is likewise to be computed at the rate of 1 cent for each 5 cents or major fraction thereof. [Regs. 43, 6 F. R. 5367, as amended by T. D. 5349, 9 F. R. 2999] § 101.5 Free and reduced rate of admissions-(a) General rule. (1) A person admitted free or at a reduced rate to any place at a time when and under circumstances under which an admission charge is made to other persons, is liable to tax (except as provided in paragraph (b) of this section), in an amount equivalent to the tax on the amount paid by such other persons for the same or similar accommodations. (2) Where persons in a certain group or class, such as students 12 years of age or over, women, or members of a particular organization, are admitted at a price less than the established price of admission to the public generally, they are liable for tax based on the established price of admission to other persons for the same or similar accommodations. Women admitted free or at reduced rates to dances or any other place are liable for tax based on the established price of admission to other persons. (3) If tickets or cards of admission are issued the tax should be collected at the time of the issuance of such tickets or cards, while if no tickets or cards are used tax should be collected when the persons are admitted. (b) Exceptions. (1) A bona fide employee of the management of the theater or other place, a municipal officer on official business, or a child under 12 years of age, is not liable to tax if admitted free but if admitted at a reduced rate is liable to tax on the reduced price, except that a child under 12 years of age admitted for less than 10 cents is not liable for tax. Bona fide employees are (i) those persons, including directors and officers, regularly employed by the proprietor of the place or attraction or regularly engaged in work or business transacted there, whether their duties require admission to the place or not, and whether on duty at the time admitted or not; and (ii) other persons whose admission to the place is required for the performance of some duty to, or work for, the proprietor. (2) Persons in the military or naval forces of the United States when in uniform, members of the military or naval forces of any of the United Nations when in uniform, and members of the Civilian Conservation Corps when in uniform, are not liable for tax if admitted free, and if admitted at a reduced rate are liable for tax on the reduced price. These exemptions do not apply to admissions after December 31, 1947. (See section 11 of Public Law 384, 80th Congress.) (3) Newspaper reporters, photographers, telegraphers, radio announcers, and persons of similar vocation who are admitted free to any place for the performance of special duties in connection with an event and whose special duties are the sole reason for their presence and free admission, are not liable for any tax on admissions. Free admissions, including free admissions to spoken plays, etc., granted to such persons who are not admitted solely for the purpose of performing their special duties in connection with the event are subject to tax equivalent to the tax on the admission charge paid by other persons for the same or similar accommodations. [Regs. 43, 6 F. R. 5367, as amended by T. D. 5129, 7 F. R. 2382, T. D. 5170, 7 F. R. 7656, T. D. 5611, 13 F. R. 1477] LEASES OF BOXES OR SEATS § 101.7 Meaning of "lease." This tax applies to cases where a person has the permanent use, or a lease for the use, of a box or seat in any opera house or other place of amusement. The term "lease" means a continuous and exclusive right to use a particular box or seat for the term of the lease. It does not include the right to use a box or seat merely on the occasion of regular performances given by a particular company, but the contract must give the holder of the box or seat the right of use thereof whenever an attraction of any kind is presented in that place during the continuance of the lease. constitute a lease of a box or seat a formal document of lease is not necessary. Το Examples. (1) A corporation owning a theater gives the exclusive right to the use of a particular box for a year to each stockholder owning a certain number of shares. Since the stockholder has the exclusive use of the box for the period, this tax applies. (2) A theater presents attractions, each running for a period of a week. A person arranges to reserve for his use a certain seat for every Monday night during the year. Such a reservation is not a lease. § 101.8 Basis, rate, and computation of tax. In the case of a person having the permanent use or a lease for the use of a box or a seat in any opera house or other place of amusement the tax imposed by section 1700 (a) (1) on "the amount paid for admission to any place" does not apply. Instead, the provisions quoted above impose a tax on the right |