Returns by Receivers and Others Assessment and Payment of Tax of annual income within the prescribed time, it was permissible for such corporations, upon the showing of this fact, to file with the Collector of Internal Revenue a tentative return in which there should be approximated as nearly as possible the actual business transacted during the year. This tentative return was to be substituted by a true and accurate return as soon as the necessary data to make such return became available. Receivers, trustees in bankruptcy, or assignees operating the property or business of organizations subject to tax hereunder, shall make returns in the usual form for the properties of which they have custody and control. Except in the case of corporations or other organizations having a fiscal year different from the calendar year, assessments shall be made and the notice thereof shall be given on or before June first following the tax year, and such tax shall be paid on or before June fifteenth. It will be recalled that the previous Statute allowed payment on or before June thirtieth. Corporations whose fiscal years are different from the calendar year shall pay their taxes within one hundred and sixty-five days after the close of such fiscal years. The Income Tax Law of October 3, 1913, is repealed by this Statute except as otherwise provided, and except that the previous Law shall remain in force for the assessment and collection of all taxes that shall have accrued thereunder and for the imposition and collection of all penalties or forfeitures which have accrued or may accrue in relation to such taxes. Annual returns shall be filed in the office of the Commissioner of Internal Revenue and shall constitute public records and shall be open to inspection as such, but "only on the order of the President" and under regulations by the Secretary of the Treasury, etc. This language of the Statute indicates its application to both individual and corporate returns. It is worthy of note, however, that the provision is inserted in that portion of the Law entitled and relating to corporations; and, further, that the context is in relation to the returns of corporations. In respect to the annual returns it is also provided by the Statute that in accordance with the regulation of the Secretary of the Treasury, the Governor of a State imposing a general income tax may have access to the returns or an abstract thereof showing the name and income of each corporation, joint stock company or association, or insurance company. Previous Law Repealed Possible Inspection of Returns Secrecy of Returns Island All Collectors of Internal Revenue and all other officers or employees of the United States are prohibited from making known any particular or fact disclosed in any income tax return, and any offence against this provision shall be a misdemeanor and shall be punishable by fine, or imprisonment, or both, and the offender shall be dismissed from office or discharged from the Government service. It may be noted in closing that the Income Tax Law applies to Porto Rico and the Philippine Islands, and that all revenues collected by these jurisdictions shall accrue intact to the general Government of each respectively. Analysis and Comment In conformity with what is generally regarded as a modern tendency in tax legislation, Congress has enacted a Federal Estate Tax Law as a part of its general revenue measure, approved September 8, 1916. Taxes on estates or inheritances are already imposed by substantially all of the several States, but the Federal tax is additional to such State taxes as may be applicable. The Federal tax is levied upon the estate as an entirety and not upon such distributive shares or separate parts thereof as may be provided by will or intestate laws. In this respect the inheritance tax laws of many States are different in that they generally impose a tax upon the several distributive shares or interests. Another dissimilarity is that it is more usual than otherwise for a State inheritance tax law to impose lower or higher rates of tax upon the various distributive interests of the estate depending not only upon the value thereof but upon the relationship between the decedent and the beneficiary. The rates imposed by the Federal Statute, however, are not altered by reason of relationship but are graduated solely according to the value of the net taxable estate. As a practical matter it will be observed that the effect of imposing the tax in Federal and Basis of Estates Taxable Rates of Tax conformity with the system laid down in the Federal Law rather than in accordance with the usual State law will be to impose a higher rate of tax than would otherwise apply and thus substantially increase the taxes levied upon the average large estate. The Federal Tax is imposed on the transfer of the defined net estate of every individual dying after the passage of the Act. The rates are levied and the provisions are applied without regard to citizenship but according to whether the decedents were residents or nonresidents of the United States; it being understood in this Statute that United States shall include the several States, the Territories of Alaska and Hawaii, and the District of Columbia. The estate of a resident decedent may be taxable under the Law regardless of the location of the decedent's property; but a nonresident estate may be taxable only to the extent that it is located within the United States. The rates of tax on net estates hereunder are as follows: 1% on amount of net estate not exceeding.... $50,000 10% on amount of net estate exceeding....5,000,000 |