809); section 55 of the Revenue Act of 1932 (47 Stat. 169, 189), as amended by section 218 (h) of the National Industrial Recovery Act (48 Stat. 195, 209); sections 215 (e) and 216 (b) of the National Industrial Recovery Act (48 Stat. 195, 208); sections 55 (a), 701 (e), and 702 (b) of the Revenue Act of 1934 (48 Stat. 680, 698, 770); sections 105 (e) and 106 (c) of the Revenue Act of 1935 (49 Stat. 1014, 1018, 1019); section 905 of the Social Security Act (49 Stat. 620, 641); sections 55 (a), 351 (c), and 503 (a) of the Revenue Act of 1936 (49 Stat. 1648, 1671, 1733, 1738); and sections 55 (a), 409, 601 (e), and 602 (c) of the Revenue Act of 1938 (52 Stat. 447, 564, 565, 567), it is hereby ordered that the following designated returns shall be open to inspection by the District of Columbia, Alaska, Hawaii, the Philippine Islands, and Puerto Rico in accordance and upon compliance with the rules and regulations prescribed by the Secretary of the Treasury in the Treasury decision relating to the inspection of such returns approved by me on August 28, 1939, and the amendment thereto approved by me this date, and the rules and regulations prescribed by the Secretary of the Treasury in the Treasury decision relating to inspection of returns under revenue acts prior to the Internal Revenue Code approved by me on November 12, 1938, and the amendment thereto approved by me this date:

(1) Income (including income of personal holding companies and unjust enrichment income), excess-profits, capital stock, estate, and gift tax returns under the Internal Revenue Code and returns of employment tax on employers under Subchapter C of Chapter 9 of such Code.

(2) (a) Income, excess-profits, and capital stock tax returns made under the Revenue Act of 1938, the Revenue Act of 1936, the Revenue Act of 1935, the Revenue Act of 1934, the National Industrial Recovery Act, the Revenue Act of 1932, the Revenue Act of 1932, as amended by the National Industrial Recovery Act, and under the prior Revenue Acts, (b) estate and gift tax returns made under the Revenue Act of 1932 or the Revenue Act of 1932 as amended, and filed after June 16, 1933, (c) returns made under Title IX of the Social Security Act, and (d) returns made under any of such Acts as amended.

FRANKLIN D. ROOSEVELT.

The WHITE HOUSE,

July 20, 1940.

[8490]

[Filed with the Division of the Federal Register, July 22, 1940, 2:46 p. m.]

(T. D. 4992)

Regulations 43, as amended, relating to taxes on admissions, dues, and initiation fees, as made applicable to the Internal Revenue Code by T. D. 4885, amended

OFFICE OF COMMISSIONER OF INTERNAL REVENUE,

TREASURY DEPARTMENT,

Washington, D. C.

To Collectors of Internal Revenue and Others Concerned:

Section 210 and section 211 of the Revenue Act of 1940 (Public, No. 656, Seventy-sixth Congress, third session) approved June 25, 1940, provide in part as follows:

SEC. 210. MISCELLANEOUS EXCISES.

The Internal Revenue Code is amended by inserting at the end of chapter 9 the following new chapter:

CHAPTER 9A-DEFENSE TAX FOR FIVE YEARS

SEC. 1650. DEFENSE TAX FOR FIVE YEARS.

(a) In lieu of the rates of tax specified in such of the sections of this title as are set forth in the following table, the rates applicable with respect to the period after June 30, 1940, and before July 1, 1945, shall be the rates set forth under the heading "Defense-Tax Rate":

Section 1700 (a) (1) of the Internal Revenue Code is amended by striking out "until July 1, 1941, is less than 41 cents" and inserting in lieu thereof "until July 1, 1940, is less than 41 cents, and after June 30, 1940, and before July 1, 1945, is less than 21 cents" and by striking out "is less than 41 cents, until July 1, 1941" and inserting in lieu thereof "is less than 41 cents until July 1, 1940, and is less than 21 cents after June 30, 1940, and before July 1, 1945."

In conformity with the provisions of law above quoted, Regulations 43 (revised June, 1932), as amended [part 100, title 26, Code of Federal Regulations], but only as prescribed and made applicable to the Internal Revenue Code by T. D. 4885, approved February 11, 1939 [part 465, subpart B of such title 26, 1939 Sup.] are further amended as follows:

(1) Article 1 [section 100.1] is amended as follows:

(a) By inserting after the words "41 cents" wherever appearing therein the words, "(21 cents on and after July 1, 1940 and before July 1, 1945.)"

(b) By striking out the sixth sentence of the fifth paragraph and inserting in lieu thereof the following:

If, in a case similar to the ones above, the amount paid for admission on and after July 1, 1940 and before July 1, 1945, is 20 cents, and a second charge of 20 cents is made for a reserved seat, or for the use of a table, no tax would attach at the time of the payment of the 20-cent admission charge, since admissions of less than 21 cents are not subject to tax, but a tax of 4 cents must be collected at the time of the payment of the additional 20 cents for the reserved seat or for the use of the table, which is 1 cent for each 10 cents or fraction thereof of the total 40 cents paid for admission and for the reserved seat or table.

(2) Articles 3, 4, 29, 30 and 43 [sections 100.3, 100.4, 100.29, 100.30,. 100.43] are amended by inserting after the words "41 cents" wherever

appearing therein the words, "(21 cents on and after July 1, 1940 and before July 1, 1945)".

(3) Article 6 [section 100.6] is amended as follows:

(a) By striking out the last line of the table at the end of the second paragraph which reads as follows:

Tax due at 10 per cent

.065.

(b) By inserting after the words "10 per cent" wherever appearing therein the words, "(11 per cent on and after July 1, 1940 and before July 1, 1945)".

(c) By inserting at the end of example (1) in the seventh paragraph the following:

Note. If the resale is made on and after July 1, 1940 and before July 1, 1945 the tax would be $.088 instead of $.08.

(d) By inserting in the last line of example (2) after the words "1 cent" the words "(1.1 cents on and after July 1, 1940 and before July 1, 1945).”

(4) Article 7 [section 100.7] is amended by inserting in the example after the words "five cents" the words, "(five and one-half cents on and after July 1, 1940 and before July 1, 1945)", and after the words "10 per cent", the words "(11 per cent)".

(5) Article 8 [section 100.8] is amended as follows:

(a) By inserting in the second paragraph after the words "10 per cent" wherever appearing therein the words, "(11 per cent on and after July 1, 1940 and before July 1, 1945)".

(b) By inserting at the end thereof the following new paragraph: If the leases in the above three examples were made on and after July 1, 1940 and before July 1, 1945 the rate of tax would be 11 per cent instead of 10 per cent.. (6) Article 10 [section 100.10] is amended as follows:

(a) By inserting after the words "11⁄2 cents" wherever appearing therein the words, "(2 cents on and after July 1, 1940 and before July 1, 1945)".

(b) By inserting at the end thereof the following new paragraph:

The examples in this article are applicable to the period prior to July 1, 1940. For the period on and after July 1, 1940 and before July 1, 1945 the tax is computed at the rate of 2 cents for each 10 cents or fraction thereof of the amount paid instead of 12 cents.

(7) Article 11 [section 100.11] is amended by inserting in lieu of the last sentence the following sentence:

This tax applies to each individual payment for a dinner ticket.

(8) Article 12 [section 100.12] is amended by inserting in example (1) after the words "10 cents" the words, "(11 cents on and after July 1, 1940 and before July 1, 1945)".

(9) Articles 34, 40, 41, and 49 [sections 100.34, 100.40, 100.41, and 100.49] are amended by inserting after the words "10 per cent"

wherever appearing therein the words, "(11 per cent on and after July 1, 1940 and before July 1, 1945)”.

(10) Article 57 [section 100.57], as amended by T. D. 4923, approved August 15, 1939, is further amended to read as follows:

Art. 47. Effective date of change in exemption.-The sums paid for admission prior to July 1, 1940, which are not subject to tax under section 1700 (a) (1) of the Internal Revenue Code, as amended, are those which are "less than 41 cents". Effective July 1, 1940, any admission charge of 21 cents or more is subject to tax. Effective July 1, 1945, any sum of "$3.00 or less" paid for admission will not be taxable. The time of payment and not the time of admission will govern in determining which exemption is applicable. Consequently, if prior to July 1, 1940, a person should purchase a ticket of admission for less than 41 cents where the payment was made before July 1, 1940, for an admission to take place after that date, the payment so made would not be subject to tax. Likewise, if a person should purchase after June 30, 1940, and before July 1, 1945, a ticket for 21 cents or more and less than $3.00, for an admission to take place after July 1, 1945, the amount so paid would be subject to tax.

(This Treasury decision is issued under the authority of sections 1700 (a), 1700 (b), 1700 (c), 1700 (e), and 1710 of the Internal Revenue Code (53 Stat. 189, 190, 192), as amended by section 210 and section 211 of the Revenue Act of 1940 (Public, No. 656, Seventy-sixth Congress, third session) and section 3791 of the Internal Revenue Code (53 Stat. 467).)

Approved July 23, 1940:

JOHN L. SULLIVAN,

T. MOONEY,

Acting Commissioner of Internal Revenue.

Acting Secretary of the Treasury.

[Filed with the Division of the Federal Register July 25, 1940, 12:11 p. m.]

(T. D. 4993)

Subchapter C-Miscellaneous excise taxes; part 181-Stills and distilling

The act of July 2, 1940 (Public, No. 705, 76th Congress), provides as follows:

That section 2810 (a), Internal Revenue Code, is amended by adding an additional paragraph at the end thereof to read as follows:

Stills and distilling apparatus set up at refineries for the refining of crude petroleum or the production of petroleum products and not used in the manufacture of distilled spirits are not required to be registered under this section.

401572-41-vol. 35--24

Pursuant to the foregoing provision of law, section 181.15 (d) of Regulations 23 (part 181, title 26, Code of Federal Regulations) is amended to read as follows:

(d) Registration not required in certain cases.-The registration of stills and distilling apparatus is not required when set up for use by the United States or any Governmental agency thereof, other than for distilling as defined by section 181.12, or when set up at refineries for the refining of crude petroleum or the production of petroleum products and not used in the manufacture of distilled spirits. T. MOONEY,

Approved July 25, 1940:

JOHN L. SULLIVAN,

Acting Commissioner of Internal Revenue.

Acting Secretary of the Treasury.

[Filed with the Division of the Federal Register, July 29, 1940, 3:22 p. m.]

(T. D. 4994)

Tax on wine and withdrawal of brandy for fortification

(Amending Regulations No. 7)

TREASURY DEPARTMENT,

OFFICE OF COMMISSIONER OF INTERNAL REVENUE,

Washington, D. C. To Collectors of Internal Revenue, District Supervisors, and Others Concerned:

The act of June 24, 1940 (Public, No. 655, 76th Congress), reads in part as follows:

That, effective July 1, 1940, section 3030 (a) (1) (A), Internal Revenue Code, is amended to read as follows:

(A) Imposition.-Upon all still wines, including vermouth, and all artificial or imitation wines or compounds sold as still wine produced in or imported into the United States after June 30, 1940, or which on July 1, 1940, were on any winery premises or other bonded premises or in transit thereto or at any customhouse, there shall be levied, collected, and paid taxes at rates as follows, when sold or removed for consumption or sale:

On wines containing not more than 14 per centum of absolute alcohol, 5 cents per wine-gallon, the per centum of alcohol under this section to be reckoned by volume and not by weight;

On wines containing more than 14 per centum and not exceeding 21 per centum of absolute alcohol, 15 cents per wine-gallon;

On wines containing more than 21 per centum and not exceeding 24 per centum of absolute alcohol, 25 cents per wine-gallon;

All such wines containing more than 24 per centum of absolute alcohol by volume shall be classed as distilled spirits and shall pay tax accordingly.

Any such wines may, under such regulations as the Commissioner may prescribe, with the approval of the Secretary, be sold or removed tax-free for the manufacture of vinegar, or for the production of dealcoholized wines containing less than -one-half of 1 per centum of alcohol by volume.