ART. 1010. Enforcement of tax lien by bill in equity.-In any case here there has been failure to pay the tax and it has become necesry to seize and sell real estate to satisfy it, a bill in equity may be led in a district court of the United States to enforce the lien of e United States for tax upon any real estate in which the delinent has any right, title or interest. This remedy does not superde distraint, but is cumulative. In the event of nonpayment of a x after demand it becomes a lien in favor of the United States com the time when the assessment list was received by the collector pon all property and rights to property belonging to the taxpayer, xcept that the lien is not valid as against any mortgagee, purchaser r judgment creditor until notice thereof is filed in the proper ublic office or offices on form 668. See sections 3186 (as amended y the Act of March 4, 1913) and 3207 of the Revised Statutes and egulations No. 12 (revised).

ART. 1011. Compromise of tax cases.-The Commissioner, with the Ivice and consent of the Secretary of the Treasury, may compromise ny civil or criminal case arising under the internal revenue laws stead of commencing suit thereon, and with the advice and consent f the Secretary and the recommendation of the Attorney-General ay compromise any such case after suit thereon has been comenced by the United States. Accordingly, the power to comproise extends to (a) both civil and criminal cases; (b) cases whether efore or after suit; and (c) both taxes and penalties. Refunds can ot be made of accepted offers in compromise in cases where it is bsequently ascertained that no violation of law was involved. See urther sections 3229 and 3469, and sections 5292 and 5293 (as mended by the Act of February 27, 1877), of the Revised Statutes. ART. 1012. Assessment of tax.-When the returns are received at the ollectors' offices, they are examined and listed before being forarded to the Commissioner. If it appears that the tax is greater r less than shown in the return, it is recomputed. After checking he figures the Commissioner assesses the tax on the basis of the ollectors' lists. The collectors then send out bills for the taxes, ther as computed by the taxpayer or as recomputed. If a taxpayer elieves that he has been overassessed, he may file a claim for abateent or (after payment of the tax) for a refund of the excess. See ection 252 of the statute and articles 1031-1038. As soon as practiable the returns are carefully audited by accountants in the office f the Commissioner at Washington, assisted where necessary by reorts of the examination of taxpayers' books and records made by evenue agents in the field. If error in a return is detected, the taxayer is notified accordingly and an additional assessment is made gainst him or he is given the opportunity to file a claim for a re158036°-20--14

fund, as the case may be. Any assessment must be made within five years after the return was due or was made, except in the case of false returns with intent to evade the tax. See sections 228, 1305 and 1318 of the statute and articles 451 and 1711.

ART. 1013. Declaration of termination of taxable period. In the case of a taxable person who designs by immediate departure from the country or otherwise to avoid payment of the tax for the preceding or current taxable year, the Commissioner may so find upon evidence satisfactory to him and may declare the taxable period for such person terminated at the end of the month last past, causing the service upon him of a notice and demand for immediate payment of the tax declared due and any other tax unpaid. In such a case the taxpayer is entitled to a full personal exemption and credit for dependents. See section 216 of the statute and article 305. If suit is necessary to collect the tax, the Commissioner's finding is presumptive evidence of the taxpayer's design. A person who is not in default in making returns or in paying other taxes may procure the postponement until the usual time of the payment of taxes declared or declarable to be due pursuant to this article by depositing with the Commissioner United States bonds of a principal amount double the estimated amount of taxes due from such person for the taxable year or by furnishing such other security as may be approved by the Commissioner. See section 1320.

RECEIPTS FOR TAXES.

SEC. 251. That every collector to whom any payment of any tax is made under the provisions of this title shall upon request give to the person making such payment a full written or printed receipt, stating the amount paid and the particular account for which such payment was made; and whenever any debtor pays taxes on account of payments made or to be made by him to separate creditors the collector shall, if requested by such debtor, give a separate receipt for the tax paid on account of each creditor in such form that the debtor can conveniently produce such receipts separately to his several creditors in satisfaction of their respective demands up to the amounts stated in the receipts; and such receipt shall be sufficient evidence in favor of such debtor to justify him in withholding from his next payment to his creditor the amount therein stated; but the creditor may, upon giving to his debtor a full written receipt acknowledging the payment to him of any sum actually paid and accepting the amount of tax paid as aforesaid (specifying the same) as a further satisfaction of the debt to that amount, require the surrender to him of such collector's receipt. ART. 1021. Receipts for tax payments.-Upon request a collector wil give a receipt for each tax payment. In the case of payments made by check or money order the cancelled check or the money order receipt is usually a sufficient receipt. In the case of payments in cash, however, the taxpayer should in every instance require and the collector should furnish a receipt.

REFUNDS.

SEC. 252. That if, upon examination of any return of income made pursuant to this Act, the Act of August 5, 1909, entitled "An Act to provide revenue, equalize duties, and encourage the industries of the United States, and for other purposes," the Act of October 3, 1913, entitled "An Act to reduce tariff duties and to provide revenue for the Government, and for other purposes," the Revenue Act of 1916, as amended, or the Revenue Act of 1917, it appears that an amount of income, war-profits or excess-profits tax has been paid in excess of that properly due, then, notwithstanding the provisions of section 3228 of the Revised Statutes, the amount of the excess shall be credited against any income, war-profits or excess-profits taxes, or installment thereof, then due from the taxpayer under any other return, and any balance of such excess shall be immediately refunded to the taxpayer: Provided, That no such credit or refund shall be allowed or made after five years from the date when the return was due, unless before the expiration of such five years a claim therefor is filed by the taxpayer. ART. 1031. Authority for abatement, credit and refund of taxes.-Auority for the credit, refund or abatement of taxes erroneously colcted or assessed is contained in section 252 of the statute and in secon 3220 of the Revised Statutes, as amended by section 1316 of the evenue Act of 1918, which provides:

SEC. 3220. The Commissioner of Internal Revenue, subject to regulations, prescribed by the Secretary of the Treasury, is authorized to remit, refund, and pay back all taxes erroneously or illegally assessed or collected, all penalties collected without authority, and all taxes that appear to be unjustly assessed or excessive in amount, or in any manner wrongfully collected; also to repay to any collector or deputy collector the full amount of such sums of money as may be recovered against him in any court, for any internal revenue taxes collected by him, with the cost and expenses of suit; also all damages and costs recovered against any assessor, assistant assessor, collector, deputy collector, agent, or inspector, in any suit brought against him by reason of anything done in the due performance, of his official duty, and shall make report to Congress at the beginning of each regular session of Congress of all transactions under this section.

ection 3225 of the Revised Statutes, as amended by section 1316 of e Revenue Act of 1918, however, provides:

SEC. 3225. When a second assessment is made in case of any list, statement or return, which in the opinion of the collector or deputy collector was false or fraudulent, or contained any understatement or undervaluation, such assessment shall not be remitted, nor shall taxes collected under such assessment be refunded, or paid back, or recovered by any suit, unless it is proved that such list, statement, or return was not willfully false or fraudulent and did not contain any willful understatement or undervaluation.

uthority for the abatement of uncollectible taxes due from persons sconded or insolvent is contained in section 3218 of the Revised tatutes. These provisions apply to the income and war profits and

excess profits taxes imposed by the present statute and also to th excise tax under the Act of 1909, the income tax under the Acts o 1913 and 1916, and the income and excess profits taxes under th Act of 1917.

ART. 1032. Claims for abatement of taxes erroneously assessed.-Claim by the taxpayer for the abatement of taxes or penalties erroneousl or illegally assessed or abatable under remedial acts shall be mad on form 47. They must be sustained by the affidavits of the partie against whom the taxes were assessed, or of other parties cognizan of the facts. When a tax has been assessed and turned over to th collector, the presumption is that the assessment is correct. Th burden of proof in rebutting the presumption and showing that i was improperly or illegally assessed, or that relief should be giver under a remedial statute, rests upon the applicant for abatement The affidavits must therefore contain full and explicit statements of all the material facts relating to the claim in support of which they are offered and to the proper consideration of which they are essential. The legality of the claim is to be determined by the Commis sioner upon the facts presented by the affidavits. The filing of a claim for abatement does not necessarily operate as a suspension of the collection of the tax or make it any less the duty of the collector to exercise due diligence to prevent the collection of the tax being jeopardized. He should, if he considers it necessary, collect the tax and leave the taxpayer to his remedy by a claim for refund. See further Regulations No. 14 (revised). A collector may himself present once a month a blanket claim on form 47 for the abatement of taxes coming within certain classes of taxes erroneously assessed.

ART. 1033. Claims for abatement of uncollectible taxes.-When a tax is found to be uncollectible, the collector or deputy collector who made the demand for payment and is conversant with the facts may prepare a claim for abatement on form 53. See Regulations No. 14 (revised). Although credits allowed on account of insolvency or absconding release the collector from the obligation created by his receipt for the amount credited, the obligation to pay still remains upon the person assessed. It is the duty of the collector to use the same diligence to collect a tax after it has been abated as uncollectible as before abatement. Collectors should therefore keep a record of all taxes thus credited and of the persons from whom they are due, and should enforce payment whenever it is in their power to do so.

ART. 1034. Claims for credit of taxes erroneously collected.—Any amount of income, war profits or excess profits tax paid in excess of that properly due shall be credited against any such taxes due from the taxpayer under any other return. To obtain such credit the taxpayer should proceed as follows:

(1) Where the credit demanded is equal to or less than any outstanding assessment of tax, a taxpayer desiring to obtain such credit shall file with the collector for the district in which his original return was filed a claim on form 47 A, which shall be sworn to and shall contain the following statements: (a) business engaged in by claimant; (b) character of assessment; (c) amount of tax paid and for what taxable year; (d) portion of tax under (c) claimed as a credit; (e) unpaid assessment against which credit is asked and for what taxable year; and (ƒ) all facts regarding the overpayment.

(2) Where the amount claimed as a credit is greater than the outstanding assessment of tax, a taxpayer desiring to obtain such credit and the refund to which he is entitled shall file, in addition to the claim for credit required to be made on form 47 A for the amount of the outstanding assessment, a claim for refund of the overpayment in excess of the credit. See article 1036. This claim for refund may be attached to the claim for credit or it may be separately filed with the Commissioner. All the facts regarding the total overpayment should be stated in the claim for refund and a reference made to such claim in the claim for credit.

ART. 1035. Action on claims for credit.-Upon receipt of a claim for credit on form 47 A the collector shall certify thereon the required information concerning all outstanding assessments and payments covered thereby and shall note on his records that a claim for credit has been filed. He shall thereupon transmit the claim to the Commissioner. Due notice will be given the collector and the taxpayer of the action taken on the claim. A schedule of credit claims on form 7220 A will be transmitted to the collector once a month and formal credit shall be taken by the collector at that time. If a claim is allowed against additional taxes due for other years, but such other taxes have not yet been assessed, only the amount of the excess of such taxes over the overpayment shall be assessed, or the excess of the overpayment over such other taxes due shall be refunded, as the case may be. A taxpayer desiring to convert a claim for refund previously filed into a claim for credit may file with the collector a claim on form 47 A, referring in it to such claim for refund. Upon its receipt by the Commissioner the claim for credit will be attached to the claim for refund and will be adjusted in the same manner as if the taxpayer had originally filed the claim for credit. The effective date of filing of the claim for credit shall be the actual date of filing such claim with the collector. The filing of a claim for credit against a tax due under another return shall be subject to the same rules with respect to the addition of interest and penalties as if the taxpayer had filed a claim for abatement of the tax against which credit is desired. See articles 1003 and 1006.