page 8.

Contributions made to an organization which is essen- Rev. Rul. 59-151,
tially a war veterans organization are deductible by
the donors to the extent provided by section 170 of
the Code, even though a small percentage of the or-
ganization's members have not served in the Armed
Forces during a period of war.

page 9.

Contributions made to or for the use of a State Bar Rev. Rul. 59–152,
which exercises governmental functions and is not
subject to Federal income tax are deductible by the
donors to the extent provided by section 170 of the
Code.

page 11.

The Revenue Service sets forth an acceptable method for Rev. Rul. 59-153,
adjusting for gains arising in the current taxable year
in the determination of the deductible limit of an em-
ployer's contribution to an exempt pension trust.

page 13.

Income from property of a decedent held by trustees Rev. Rul. 59–154,
under a power in trust will be treated as income of a
trust, for which the trustees are required to file fidu-
ciary income tax returns, even though legal title to
the property is in the beneficiaries.

EXCISE TAXES:

50

The retailers tax applies to the sale of taxable articles Rev. Rul. 59-155, exempt from Federal income tax,

by an organizati

even though suc

consignment basis,

icles are received and sold on a

page 15.

Under the circumstances, the dissolution of a corporate Rev. Rul. 59-156,
maker of a bondietid not affect its liability as surety
under the boneliherefore, an agreement extending

the time o

out of such bond is subject to the

documentary sta na tax.

page 17.

Regulations have bee adopted relating to the regulatory T. D. 58,

taxes on narcotics rugs.

(Continued on page 3)

page 19.

Index page 89.

Finding Lists begin on page 86.

TREASURY DEPARTMENT

503054°-59-1

• INTERNAL REVENUE SERVICE

INTRODUCTION

The Internal Revenue Bulletin is the authoritative instrument of the Commissioner of Internal Revenue for the announcement of official rulings and procedures of the Internal Revenue Service, and for the publication of Treasury Decisions, Executive Orders, tax conventions, legislation, and court decisions pertaining to internal revenue matters. Other items considered to be of general interest are also published in the Bulletin, such as announcements relating to proposed regulations published with notice of proposed rulemaking, announcements relating to decisions of the Tax Court of the United States, announcements of the disbarment and suspension of attorneys and agents from practice before the Treasury Department, Delegation Orders, etc.

It is the policy of the Service to publish in the Bulletin all substantive and procedural rulings of importance or of general interest, the publication of which is considered necessary to promote a uniform application of the laws administered by the Service. It is also the policy to publish all rulings and statements of procedures which supersede, revoke, modify, or amend any published ruling or procedure. Except where otherwise indicated, published rulings and procedures apply retroactively. Rulings and statemen's of procedures relating solely to matters of internal managen ent are not published. However, statements of internal practices and procedures affecting rights or duties of taxpayers, or industry regulation, which appear in internal management documents, are published. Revenue Rulings and Revenue Procedures are based upon rulings and internal management documents prepared in the various divisions of the National Office, including the Office of the Chief Counsel for the Internal Revenue Service. In the preparation of these, caution is exercised to conceal the identity of the taxpayer, as was any confidential personal and business information. All Revenue Rulings published in the Bulletin have received the consideration and concurrence of the Chief Counsel.

Revenue Rulings and Revenue Procedures repartir the Bulletin do not have the force and effect of Treasury Denent Regulations (including Treasury Decisions), but are publised to provide precedents to be used in the disposition of other ca es, and may be cited and relied upon for that purpose. Since each published ruling represents the conclusion of the Service as to the application of the law to the entire state of facts involved, Service personnel and others concerned are cautioned against reaching the same conclusions in other cases unless the facts and circumstances are substantially the same. In applying rulings and procedures published in the Bulletin,

(Continued on page 4)

HIGHLIGHTS OF THIS ISSUE-(Continued from page 1)

ALCOHOL TAX:

page 82.

Announcement,

page 6.

Certificates of origin and identity must accompany Rev. Proc. 59-12,
French Table Wines shipped to the United States
from foreign ports on or after March 1, 1959.
Proposed interim regulations would provide for con-
tinued operations, on and after July 1, 1959, by
present permittee dealers and users of specially de-
natured spirits and users of tax-free spirits, and the
qualification of applicants for a permit, or permits,
as required to commence such operations.
Amendments have been proposed to the regulations as
they relate to the drawback on distilled spirits used
in the production of medicines, food products, and
flavoring extracts, which are unfit for beverage pur-

poses.

Announcement,

page 6.

page 6.

Proposed regulations would liberalize requirements re- Announcement,
garding the location of volatile fruit-flavor concen-
trate plants and permit other authorized business on
the premises upon approval of a proprietor's appli-
cation to so use concentrate plant premises and
equipment.

Regulations have been proposed which would amend
the Rules of Practice in Permit Proceedings to con-
form to the applicable provisions of the Excise Tax
Technical Changes Act of 1958.
Regulations have been proposed to implement certain
provisions of the Excise Tax Technical Changes Act
of 1958 which makes basic statutory changes in the
1954 Code relative to the establishment of distilled
spirits plants as of July 1, 1959.

Announcement,

page 6.

Announcement,

page 6.

page 6.

Proposed regulations implementing the Excise Tax Announcement,
Technical Ganges Act of 1958 would allow the ex-
portation wine from a taxpaid wine bottling house
with benef of drawback of the amount of tax de-
termined S paid thereon.

page 6.

Proposed antendment of the regulations would provide Announcement,
for the prepayınent of beer taxes where the brewer
is in default in payment of such taxes under the
return system.

page 6.

Regulations have been proposed to clarify provisions in Announcement,
respect of the imposition of tax on imported distilled
spirits, wines, and beer and imported perfumes con-
taining such spirits.

ADMINISTRATIVE:

Guides are established for taxpayers filing claims for Rev. Rul. 59-157, refund under Public Law 408, 84th Congress.

A record owner of stock may report on a single Form Rev. Proc. 59-11,

1087 the name and address of the actual owner and
the total amount of dividends received without itemiz-
ing the dividends so received; Revenue Ruling
56-567, amplified.

page 79.

page 83.

59-48,

page 84.

The 4 percent Treasury Notes of Series B-1963, an- Announcement
nounced in Treasury Department Circular 1023, will
not be acceptable in payment of taxes; however, the
4 percent Treasury Bonds of 1969, announced in
Treasury Department Circular 1024, will be accept-
able in payment of Federal estate taxes.

INTRODUCTION-(Continued from page 2)

personnel of the Service and others concerned must consider the effect of subsequent legislation, regulations, court decisions, rulings and procedures.

Each published ruling is designated as a "Revenue Ruling," and each published procedure is designated as a "Revenue Procedure." These should be cited by reference to the year of issuance and the Bulletin and page where reported. Thus, Revenue Ruling No. 11 for 1958, which is reported on page 8 of Bulletin No. 2 for 1958, should be cited as "Rev. Rul. 58-11, I.R.B. 1958-2, 8," until it appears in the Cumulative Bulletin, when it should be cited as "Rev. Rul. 58-11, C.B. 1958-1, -" Similarly, Revenue Procedure No. 1 for 1958, which is reported on page 15 of Bulletin No. 3 for 1958, should be cited as "Rev. Proc. 58-1, I.R.B. 1958-3, 15," until such time as it appears in the Cumulative Bulletin. Revenue Rulings are keyed to the applicable sections of the Internal Revenue Code and regulations. The Bulletin is published weekly, and the contents thereof are consolidated at least semiannually into a permanent Cumulative Bulletin. Persons so desiring may subscribe to the Bulletin through the Superintendent of Documents, as indicated below.

The contents of this publication are not copyrighted and may be reprinted freely. A citation of the Internal Revenue Bulletin as the source would be appropriate.

For sale by the Superintendent of Documents, U.S. Governmg Printing Office, Washington 25, D.C. Price 20 cents (single copy). Subsliption price: $6 a year; $2.75 additional for foreign mailing.

u

FOREWORD

The Internal Revenue Bulletin is prepared in six parts as follows: 1. Part I includes rulings and decisions which are based on the application of provisions of the Internal Revenue Code of 1954 and, unless otherwise stated in the ruling or decision, are published without consideration as to any application of the provisions of the Internal Revenue Code of 1939 or other related public laws.

II. Part II includes rulings and decisions which are based on the application of the Internal Revenue Code of 1939, the Federal Firearms Act, and other public laws except those pertaining to the various alcohol taxes; and, unless otherwise noted therein, they are published without consideration as to any application of the provisions of the Internal Revenue Code of 1954. Part II is subdivided into three subparts according to matters issued under the Internal Revenue Code of 1939 (Subpart A), the Federal Firearms Act (Subpart B), and other public laws (Subpart C).

III. Part III contains rulings and decisions pertaining to the various alcohol taxes. This part is subdivided into four subparts according to matters issued under the Internal Revenue Code of 1954 (Subpart A), the Internal Revenue Code of 1939 (Subpart B), the Federal Alcohol Administration Act (Subpart C), and other public laws (Subpart D).

IV. Part IV contains treaties and tax legislation, including related committee and Conference Reports. This part is subdivided into three subparts according to tax conventions, Treasury Decisions and Revenue Rulings issued with respect thereto (Subpart A), legislation (Subpart B), and Committee Reports (Subpart C). House, Senate and Conference Committee Reports printed in the Bulletin do not include the portion entitled "Changes in Existing Law."

V. Part V is devoted to administrative, procedural and miscellaneous matters.

VI. Part VI includes general announcements which are deemed to be of interest to the general public. With the exception of the disbarment list included in this part, none of the other announcements will be consolidated in the Cumulative Bulletin.

The Highlights of this Bulletin include a reference to each item published in the Bulletin. Because these are grouped according to the type of tax involved, the Highlights for a particular issue serve as an index to matters published therein. The Bulletin service carries a cumulative index on a monthly basis. That index appears in the first Bulletin for each month and indexes matters published during the preceding month. These monthly indexes are cumulated on a quarterly and semiannual basis, and the indexes so cumulated are published in the first Bulletin of the succeeding quarterly period, respectively.