of the property having its situs within the United States (the term "United States" including not only the several states, but also the territories of Alaska and Hawaii, and the District of Columbia). The funeral expenses, administration expenses, and claims against the estate aggregate $75,000, and there are charitable bequests, for use within the United States, amounting to $25,000. Hence the property situated within the United States constitutes 20 per cent of the entire gross estate wherever situated, and a like percentage of the $75,000 is $15,000. As the last named amount does not exceed 10 per cent of the value of the property situated in the United States, the whole thereof is deductible. The following result is accordingly obtained:

For the manner of computing the tax on the net estate, see article 8.

In the example given, had the funeral expenses, administration expenses and claims against the estate aggregated $150,000, 20 per cent thereof, or $30,000, would not have been deductible for the reason that it would have exceeded 10 per cent of the value of the property situated in the United States; such 10 per cent being the maximum permitted by the statute. The deduction would accordingly have been limited to 10 per cent of $200,000, plus the charitable bequests, or a total of $45,000, and the resultant net estate would have been $155,000, instead of the amount given in the example.

ART. 56. Payment of tax.- The provisions relating to rates and payment of the tax are the same in estates of nonresidents and of residents. The statute provides that the executor shall pay the tax. If there is no executor or administrator appointed, qualified, and acting within the United States, every person in either the actual or constructive possession of any property of the decedent is constituted by the statute an executor for the purpose of tax payment, and is liable for the tax to the extent of the property so in his possession. (See arts. 78 to 85, inclusive). All checks, drafts, or money orders should be made payable to the order of Collector of Internal Revenue.

CHAPTER VI

NOTICE AND RETURNS

Revenue Act of 1924.

SEC. 304. (a) The executor, within two months after the decedent's death, or within a like period after qualifying as such, shall give written notice to the collector. The executor shall also, at such times and in such manner as may be required by regulations made pursuant to law, file with the collector a return under oath in duplicate, setting forth (1) the value of the gross estate of the decedent at the time of his death, or, in case of a nonresident, of that part of his gross estate situated in the United States; (2) the deductions allowed under section 303; (3) the value of the net estate of the decedent as defined in section 303; and (4) the tax paid or payable thereon; or such part of such information as may at the time be ascertainable and such supplemental data as may be necessary to establish the correct tax.

(b) Return shall be made in all cases where the gross estate at the death of the decedent exceeds $50,000, and in the case of the estate of every nonresident any part of whose gross estate is situated in the United States. If the executor is unable to make a complete return as to any part of the gross estate of the decedent, he shall include in his return a description of such part and the name of every person holding a legal or beneficial interest therein, and upon notice from the collector such person shall in like manner make a return as to such part of the gross

estate.

Revised Statutes, Section 3176, as amended by Section 1003, Revenue Act, 1924 . The Commissioner of Internal Revenue shall determine and assess all taxes, other than stamp taxes, as to which returns or lists are so made under the provisions of this section.

Revised Statutes, Sec. 3176, as amended by Sec. 1003, Revenue Act, 1924: . . . If the failure to file a return (other than a return under Title II of the Revenue Act of 1924) or a list is due to sickness or absence, the collector may allow such further time, not exceeding 30 days, for making and filing the return or list as he deems

proper.

Revised Statutes, Sec. 3176, as amended by Sec. 1003, Revenue Act of 1924: If any person, corporation, company, or association fails to make and file a return or list at the time prescribed by law or by regula

tion made under authority of law, or makes, willfully or otherwise, a false or fraudulent return or list, the collector or deputy collector shall make the return or list from his own knowledge and from such information as he can obtain through testimony or otherwise. In any such case the Commissioner of Internal Revenue may, from his own knowledge and from such information as he can obtain through testimony or otherwise, make a return or amend any return made by a collector or deputy collector. Any return or list so made and subscribed by the Commissioner, or by a collector or deputy collector and approved by the Commissioner, shall be prima facie good and sufficient for all legal purposes. . .

SEC. 307. As used in Part I of this title the term “deficiency" means— (1) The amount by which the tax imposed by Part I of this title exceeds the amount shown as the tax by the executor upon his return; but the amount so shown on the return shall first be increased by the amount previously assessed (or collected without assessment) as a deficiency, and decreased by the amounts previously abated, refunded, or otherwise repaid. in respect of such tax; or

(2) If no amount is shown as the tax by the executor upon his return, or if no return is made by the executor, then the amount by which the tax exceeds the amounts previously assessed (or collected without assessment) as a deficiency; but such amounts previously assessed, or collected without assessment, shall first be decreased by the amounts previously abated, refunded, or otherwise repaid in respect of such tax.

Regulations 68.

ART. 57. When notice required.—A preliminary notice is required to be filed in the case of every resident decedent whose gross estate exceeded $50,000 in value at the date of death. The notice must be filed within two months after the decedent's death, or within two months after the executor has qualified, and must be filed in duplicate with the collector in whose district the decedent had his domicile at the time of death. Where there is doubt as to whether the gross estate exceeded $50,000, the notice should be filed as a matter of precaution in order to avoid the possibility of penalties attaching.

ART. 58. Notice by executor or administrator.- The duly qualified executor or administrator is required to file such preliminary notice on Form 704, copies of which may be obtained from the collector within two months after qualifying as such, if notice has not already been filed. The primary purpose of the notice is to advise the Government of the existence of taxable estates, and filing should not be delayed beyond the two

months period because of uncertainty as to the exact value of the assets. Since the filing of the notice within the prescribed period is mandatory, the estimate of the gross estate called for by the notice is merely the best approximation of value which can be made within the time allowed. The instructions upon the back of the form should be read carefully before executing the notice. The signature of one executor or administrator upon Form 704 is sufficient. For penalties for delinquency in filing notice, or for filing a false or fraudulent notice, see. articles 91, 92, and 94.

ART. 59. Notice by others than duly qualified executor or administrator.-The term "executor" embraces any person in actual or constructive possession of any property of the decedent at the time of the latter's death, where within two months after the decedent's death no executor or administrator qualifies. The notice on Form 704 must be filed by such persons in every case where an executor or administrator has not duly qualified within such period. Where, within the period mentioned, an executor or administrator qualifies, the duty of filing the notice devolves upon him, and all other persons are relieved therefrom.

ART. 60. Estates of nonresidents; preliminary notice.—In estates of nonresidents, notice on Form 705, copies of which may be obtained from the Commissioner of Internal Revenue, Washington, D. C., or from any United States Collector of Internal Revenue, upon application, is required in the case of every nonresident decedent any part of whose gross estate was situated (within the meaning of the statute, as to which see article 50), in the United States. The notice must be filed, in duplicate, by every appointed, qualified, and acting executor or administrator within the United States with the United States Collector of Internal Revenue of the district in which such part of the gross estate was situated, or, if parts of the gross estate were situated in more than one district, then with such collector as the Commissioner may designate. The notice is necessary if any part of the decedent's gross estate was situated, within the meaning of the statute, in the United States, regardless of the value of that part or of the entire gross estate. If no executor or administrator has qualified, notice must be filed within two months after the date of death by every person in either the actual or constructive possession of any property

of the decedent so within the United States at the time of his death. If such person has no knowledge of the decedent's death within two months following its occurrence, he should file the notice immediately upon obtaining such knowledge. The term "person in actual or constructive possession of any property of the decedent" (section 300) includes, among others, the decedent's agents and representatives; safe-deposit companies, warehouse companies, and similar custodians of property in this country of a nonresident decedent; brokers holding, as collateral, securities belonging to the decedent or investment funds owned by the decedent and debtors of the decedent in this country. As to any moneys deposited by or for a nonresident decedent with any person, corporation, or association carrying on the banking business, no notice is required, unless however, the decedent was engaged in business in the United States at the time of his death.

ART. 61. Transfer agents' notice.- A notice on Form 714 is required to be filed whenever a corporation, its transfer agent, registrar, or paying agent, is called upon to make a transfer of stock or bonds, or to pay dividends or interest, to any successor in interest of a nonresident stockholder or bondholder. who died after September 8, 1916, unless the transfer is made upon the order of an executor or administrator appointed, qualified, and acting within the United States. The notice is required for dividends declared, and for interest which had accrued on bonds prior to the death of the decedent, although payable thereafter. Notice should be filed with the Commissioner of Internal Revenue at Washington, D. C., within two months following the date of death, or immediately upon receipt of the request for transfer or payment. A transfer agent should be vigilant to report all cases in which the fact of the death of a nonresident appears. Where the securities are received without the personal assignment of the decedent, but with the transfer order of the foreign executor, it is clear that the case should be reported. Where the securities bear the personal assignment of the decedent, the transfer should be reported if made upon the order of a foreign executor, or if information is received in any other manner that the record owner has died a nonresident of the United States.

In order to prevent loss of the tax upon nonresident estates,