total tax due upon the income of such non-resident alien so in his custody and control for the entire year 1917 and subsequent years. (Reg. 33 Rev., Art. 32.)

CHAPTER 7

NOMINAL STOCKHOLDERS

[Page 68.]

Procedure When Actual Owner Is Non-Resident. In all cases where the actual owner is a non-resident alien, individual or corporation, and the record owner is an individual, firm, or corporation in the United States (a citizen or resident alien), and the aforesaid showing of actual ownership is made, the record owner will be held, for income-tax purposes, to have the receipt, custody, control, and disposal of the dividend income and will be required to make return for the actual owner and pay the tax found by such return to be due. Where the actual owner is a non-resident alien corporation, return will be made regardless of the amount of dividend and the normal income tax will be paid, and when the actual owner is a non-resident alien individual, a return shall be made regardless of the amount of the income, and when the net amount of such income exceeds $5,000 said custodian shall also pay the additional tax on such income. When it shall appear from the disclosure herein provided for that the actual owner is a non-resident alien partnership, all certificates making such disclosure shall be transferred to the Commissioner of Internal Revenue for the information of the collector of internal revenue, but no return will be made for such partnership and no amount will be retained from such income by the representative of such partnership in the United States unless and until such

representative shall be so instructed by the Commissioner of Internal Revenue. (Reg. 33 Rev., Art. 32.)

In all cases where the actual owner of stock is a nonresident alien corporation and the record owner is an individual, firm, or corporation in the United States, citizen, or resident alien, and the actual ownership has been disclosed, the record owner will be held for income tax purposes to have the receipt, custody, control, and disposal of the dividend and will be required to make return for the actual owner and pay the tax found by such return to be due. (Reg. 33 Rev., Art. 201.)

The record owner is held to be "the proper representative having the receipt, custody, control, or disposal" of income of the actual owner and is required to file a return for or on behalf of the actual owner for the purpose of assessment of income tax not withheld at the source.

When a return is not required to be filed by or on behalf of the actual owner, the showing may be made upon the certification of the record owner.

Upon the showing thus made, either by certification or return, as the circumstances may require, the Commissioner of Internal Revenue will make such assessments and issue such instructions to debtors and withholding agents as will insure the proper collection of tax in accordance with the respective tax liabilities. (Reg. 33 Rev., Art. 32.)

[Page 69.]

Procedure When Nominal Stockholder Is a Non-Resident Alien. When the record owner of such stock is a non-resident alien corporation, etc., not having an office or place of business in the United States, the debtor corporation will withhold the normal income tax and

pay the same to the proper officer of the United States authorized to receive it in manner and form provided for withholding and accounting for tax withheld.

When a non-resident alien record owner of stock of domestic or resident corporations is an organization subject to withholding at the source of dividend payments, but is not the actual owner of the stock, such record owner may make disclosure, in form prescribed by the Commissioner of Internal Revenue, of actual ownership, in which case said domestic or resident corporations will be governed by the established facts.

If the record owner does not exercise his right to disclose actual ownership for the purpose of claiming exemption from having tax withheld at the source, debtor corporations and their withholding agents in the United States will be held liable on their stock records of ownership for the tax required to be withheld by section 13 (f) of the act of September 8, 1916.

In the absence of disclosure of actual ownership filed with debtor corporations or their withholding agents, in manner and form provided for, the normal tax required to be withheld in accordance with stock records of ownership can only be released to a record owner not liable for tax upon a proper showing to the Commissioner of Internal Revenue of record and actual ownership, the names and post office addresses of debtor corporations and withholding agents, and the amounts withheld. (Reg. 33 Rev., Art. 32.)

CHAPTER 8

FIDUCIARIES

[Page 74.]

Who Are Fiduciaries. "Fiduciary" is a term which applies to all persons or corporations that occupy posi

tions of peculiar confidence toward others, such as trustees, executors, or administrators; and the fiduciary for income tax purposes is any person or corporation that holds in trust an estate of another person. (Reg. 33 Rev., Art. 29.)

[Page 77.]

Duties of Executors and Administrators. If the net income of a decedent from January 1 to the date of his death within that year was $1,000 or over, if unmarried, or $2,000 or over if married, a return for such decedent must be made by the executor or administrator, and such executor or administrator may claim all deductions and exemptions to which the decedent would have been entitled under the law. (Reg. 33 Rev., Art. 4.)

Liability for payment of income tax attaches to the person of an executor or administrator for income tax up to and including the date of his discharge, regardless of the fact that the time in which claim is made and filed against the estate has expired or where, prior to distribution and discharge, the executor or administrator had notice of his obligations to the Federal Government or where he failed to exercise due diligence in determining whether or not such obligations existed.

Liability for the tax due from a deceased person, or from his estate, also attaches to the estate itself, and when by reason of distribution of the estate and discharge of the executor or administrator it shall appear that collection of the tax cannot be made from the executor or administrator, the collector will make demand on the distributees for their proportionate share of the tax due and unpaid. (Reg. 33 Rev., Art. 29.)

[Page 78.]

Receiver. Receivers who, as officers of a court, stand in the stead of some principal are required to account for income tax as the principal would have been required to account. (Reg. 33 Rev., Art. 26.)

[Page 79.]

Trust Estates. A deed of trust must be absolute so far as the conveyance of title is concerned and irrevocable by the donor, otherwise the income from the property in question will accrue to the donor and must be accounted for by him. (Reg. 33 Rev., Art. 29.)

[Page 79.]

Income of Trust Estates. Where, during the period of administration, an executor converts the estate in his possession as such executor into money for the purpose of settling the estate and closing the administration and in which conversion a profit is realized which with other income exceeds $1,000, a return of income should be made by the executor covering the period of administration in which should be included all gains, profits and income of the estate during such period, and he should pay the tax found by such return to be due. The income of the estate being thus freed of income tax liability may thereafter be dealt with without further regard to income tax requirements.

Proceeds of life insurance policies payable to the estate of a decedent, when received by an executor or administrator, are, in the amount by which such proceeds exceed the premium or premiums paid by the decedent, income of the estate to be accounted for by the executor or administrator under the provisions of section 2 (b), act of September 8, 1916. (Reg. 33 Rev., Art. 29.)