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assume all responsibilities in reference thereto, including the penalties provided for erroneous, false or fraudulent return.

Guardians, executors, and all other persons, corporate or otherwise, acting in a fiduciary capacity, are required to make a return of the income of a person, trust, or estate for whom or which they act, and are generally subject to the Statute's provisions relating to individuals. The fiduciary filing such a return shall make oath that he has sufficient knowledge of the affairs of the person, trust, or estate on whose behalf he acts to enable him to make the return, and further, that such return is true and correct to the best of his knowledge and belief. This dual form of oath appears somewhat curious but is according to the Statute. In this connection, it is required only that a return be filed by one of two or more joint fiduciaries.

The Commissioner of Internal Revenue is given authority in meritorious cases to grant a reasonable extension of time for filing returns by persons residing or traveling abroad. The old Statute limited this extension to thirty days, which, seemingly, may now be extended in the discretion of the Commissioner. The Collector of Internal Revenue may also allow an extension not to exceed thirty days in the filing of a return on account of sickness or absence.

Returns by Guardians and Others

Extension of Time

for Returns

Assessment

and Payment

Claiming
Deductions

Assessments shall be made by the Commissioner of Internal Revenue, and all persons shall be notified of their tax liability on or before June first, following the tax year. Such taxes shall be paid on or before June fifteenth; the date of payment under the previous Law was on or before June thirtieth.

In respect of the normal tax which is paid or to be paid at the source, no person shall be allowed the benefit of any deduction hereunder, such as for taxes, losses, etc., unless he shall file a statement in substantially the form of his annual return of income, either with the withholding agent or with the Collector of Internal Revenue; obviously such a statement including practically all of the annual return of an individual cannot be prepared until the close of the year and the Statute requires that it shall be filed with the withholding agent or Collector not later than thirty days prior to March first following the tax year. The previous Statute was similar in this respect, but the revised Law adds the very convenient provision that when any amount allowable as a deduction is known at the time the person receives fixed annual or periodical income, he may file an appropriate statement claiming the allowance with the person or corporation making such payment to him; and thereupon the payment or proper part thereof shall be made without deduction of tax..

The Statute further provides in respect to the tax paid or to be paid at the source, that a person shall not receive the benefit of the specific exemption of $3,000 or $4,000 except by filing an appropriate claim with the withholding agent not less than thirty days prior to March first following the tax year, or by application for a refund of the tax. It appears that in the case of serious illness or absence from the United States the applications and returns hereinabove referred to may be made by an agent on behalf of the taxpayer, subject of course to the usual provisions as to form of oath and liability of agents.

Claiming
Specific
Exemption

Former Corporate Income

Tax Laws

Present
Statute

Organizations
Taxable

Corporate net income in the United States has been subject to tax continuously since the enactment of the so-called Corporation Excise Tax Law of 1909. In its effect that Statute levied a one per cent. tax on corporate net income, after allowing an exemption of $5,000. The Income Tax Law of 1913 also levied a one per cent. tax on such net income, and in its corporate provisions was substantially the same as the old Excise Tax Statute, excepting, however, that the $5,000 exemption was eliminated.

The corporate provisions of the present In come Tax Law, approved September 8, 1916, make a number of changes in the former Statute and increase the tax to two per cent. No amount of net income as defined by the Act is exempt from tax, but surtaxes, or so-called additional taxes, are not imposed upon corporations. The revised law and the two per cent. tax thereby imposed apply to income of the calendar year 1916.

The organizations taxable hereunder are divided into two classes:

(a) Corporations, joint stock companies or associations, or insurance companies organized in the United States (generally referred to in these comments as domestic organizations);

(b) Similar organizations authorized, organized or existing under the laws of any foreign country (generally referred to as foreign organizations).

Generally speaking, domestic organizations are taxable upon their defined net income derived from every source within and without the United States; foreign organizations are taxable only as to their net income received from all sources within the United States.

It is provided in the revised Statute, as well as in the previous Law, that partnerships are not taxable under the corporation section; but limited partnerships in the view of the Treasury Department have been subject to tax as corporations under the old Law, and presumably that view will obtain under the present Statute.

The following organizations are declared to be non-taxable under the Act:

(a) Labor, agricultural or horticultural;
(b) Mutual savings bank not having a capital
stock represented by shares;

(c) Fraternal benefit society operating under
the lodge system, which provides payment
of benefits to its members, or is operated for
the exclusive benefit of the members of a
similar society;

(d) Domestic building and loan association or
co-operative bank without capital stock, or-
ganized and operated for mutual purposes
and without profit;

(e) Mutual benefit cemetery association;
(f) Farmers' or other mutual hail, cyclone, or
fire insurance company; mutual ditch or irri-
gation company; mutual or co-operative
telephone company; or like organization of
a purely local character the income of which
consists solely of members' contributions for
the sole purpose of meeting expenses;

Partnerships

Non-taxable
Organizations

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