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deducted from the gains, profits or income of the person who has actually paid the same, whether such person be owner, tenant or mortgagor; losses actually sustained during the year arising from fires, shipwreck or incurred in trade, and debts ascertained to be worthless, but excluding all estimated depreciation of values and losses within the year on sales of real estate purchased two years previous to the year for which income is estimated; the amount actually paid for labor or interest by any person who rents lands or hires labor to cultivate land, or who conducts any other business from which income is actually derived; the amount actually paid by any person for the rent of the house or premises occupied as a residence for himself or his family; the amount paid out for usual or ordinary repairs: Provided, That no deduction shall be made for any amount paid out for new buildings, permanent improvements or betterments, made to increase the value of any property or estate: And provided further, That only one deduction of one thousand dollars shall be made from the aggregate income of all the members of any family, composed of one or both parents, and one or more minor children, or husband and wife; that guardians shall be allowed to make such deduction in favor of each and every ward, except that in case where two or more wards are comprised in one family, and have joint property interest, only one deduction shall be made in their favor: And provided further, That in cases where the salary or other compensation paid to any person in the employment or service of the United States shall not exceed the rate of one thousand dollars per annum, or shall be by fees, or uncertain or irregular in the amount, or in the time, during which the same shall have accrued or been earned, such salary or other compensation shall be included in estimating the annual gains, profits or income of the person to whom the same shall have been paid.

30 June 1864.

Ibid. 118.

Returns to be

made by parties

liable to income

duty.

refusal.

298. It shall be the duty of all persons of lawful age to make and render a list or return, on or before the day prescribed by law, in such form and manner as may be prescribed by the commissioner of internal revenue, to the assistant assessor of the district in which they reside, of the amount of their income, gains and profits as aforesaid; and all guardians and trustees, executors and administrators, or any person acting in any other fiduciary capacity, shall make and render a list or return, as aforesaid, to the assistant assessor of the district in which such person acting in a fiduciary capacity resides, of the amount of income, gains and profits of any minor or person for whom they act; and the assistant assessor shall require every list or return to be verified by the oath or affirmation of the party rendering it, and may increase the amount of any list or return, if he has reason to believe that the same is understated. And in case any How assessed in such person shall neglect or refuse to make and render such list or return, or shall case of neglect or render a false or fraudulent list or return, it shall be the duty of the assessor, or the assistant assessor, to make such list, according to the best information he can obtain, by the examination of such person, or his books or accounts, or any other evidence, and to add fifty per centum as a penalty to the amount of the tax due on such list, in all cases of wilful neglect or refusal to make and render a list or return; and, in all cases of a false or fraudulent list or return having been rendered, to add one hundred per centum, as a penalty, to the amount of tax ascertained to be due, the tax and the additions thereto as a penalty, to be assessed and collected in the manner provided for in other cases of wilful neglect or refusal to render a list or return, or of rendering a false and fraudulent return: Provided, That any party, in his or her own behalf, or as such Oath, where infiduciary, shall be permitted to declare, under oath or affirmation, the form and manner $1000. of which shall be prescribed by the commissioner of internal revenue, that he or she or his or her ward or beneficiary, was not possessed of an income of one thousand dollars, liable to be assessed according to the provisions of this act; or may declare that or where duty he or she has been assessed and paid an income tax elsewhere, in the same year, under has been paid in authority of the United States, upon his or her income, gains and profits, as prescribed by law; and if the assistant assessor shall be satisfied of the truth of the declaration, shall thereupon be exempt from income tax in the said district; or if the list or return or where amount of any party shall have been increased by the assistant assessor, such party may exhibit has been inhis books and accounts, and be permitted to prove and declare, under oath or affirma- assistant astion, the amount of income liable to be assessed; but such oaths and evidence shall not be considered as conclusive of the facts, and no deductions claimed in such cases shall be made or allowed until approved by the assistant assessor. Any person feeling Appeals. aggrieved by the decision of the assistant assessor in such cases may appeal to the assessor of the district, and his decision thereon, unless reversed by the commissioner of internal revenue, shall be final; (a) and the form, time and manner of proceedings shall be subject to rules and regulations to be prescribed by the commissioner of internal revenue: Provided further, That no penalty shall be assessed upon any person for

come is less than

another district.

creased by the

sessor.

(a) Unless such appeal be taken, a bill for an injunction will not lie against the collector. Roback v. Taylor, 4 Int. R. Rec. 170 Magee v. Denton. 5 Platch. C. C. 130.

30 June 1864.

Ibid. 119. When income

such neglect or refusal, or for making or rendering a false or fraudulent return, except after reasonable notice of the time and place of hearing, to be regulated by the commissioner of internal revenue, so as to give the person charged an opportunity to be heard.(a)

299. The taxes on incomes herein imposed shall be levied on the 1st day of March, and be due and payable on or before the 30th day of April, in each year, until and includduties to be paying the year 1870, and no longer. And to any sum or sums annually due and unpaid

able.

Penalty for de

fault.

Ibid. 120.

Duty on dividends.

How paid.

Returns.

Penalty for default.

Ibid. 121. Returns where

no dividends are declared.

Ibid. § 122.

Duties on inte

rest payable on corporation bonds.

after the thirtieth of April, as aforesaid, and for ten days after notice and demand thereof by the collector, there shall be levied, in addition thereto, the sum of five per centum on the amount of taxes unpaid, and interest at the rate of one per centum per month upon said tax, from the time the same became due, as a penalty, except from the estates of deceased, insane or insolvent persons. (b)

300. There shall be levied and collected a tax of five per centum on all dividends in scrip or money thereafter declared due, wherever and whenever the same shall be payable, to stockholders, policy holders, or depositors or parties whatsoever, including nonresidents, whether citizens or aliens, as part of the earnings, income or gains of any bank, trust company, savings institution, and of any fire, marine, life, inland insurance company, either stock or mutual, under whatever name or style known or called, in the United States or territories, whether specially incorporated or existing under general laws, and on all undistributed sums, or sums made or added during the year to their surplus or contingent funds; (c) and said banks, trust companies, savings institutions and insurance companies shall pay the said tax, and are hereby authorized to deduct and withhold from all payments made on account of any dividends or sums of money that may be due and payable, as aforesaid, the said tax of five per centum. And a list or return shall be made and rendered to the assessor or assistant assessor, on or before the tenth day of the month following that in which any dividends or sums of money become due or payable as aforesaid; and said list or return shall contain a true and faithful account of the amount of taxes as aforesaid; and there shall be annexed thereto a declaration of the president, cashier, or treasurer of the bank, trust company, savings institution or insurance company, under oath or affirmation, in form and manner as may be prescribed by the commissioner of internal revenue, that the same contains a true and faithful account of the taxes as aforesaid. And for any default in the making or rendering of such list or return, with such declaration annexed, the bank, trust company, savings institution or insurance company making such default, shall forfeit as a penalty the sum of one thousand dollars; and in case of any default in making or rendering said list or return, or of any default in the payment of the tax as required, or any part thereof, the assessment and collection of the tax and penalty shall be in accordance with the general provisions of law in other cases of neglect and refusal: Provided, That the tax upon the dividends of life insurance companies shall not be deemed due until such dividends are payable; nor shall the portion of premiums returned by mutual life insurance companies to their policy holders, nor the annual or semi-annual interest allowed or paid to the depositors in savings banks or savings institutions, be considered as dividends. (d)

301. Any bank legally authorized to issue notes as circulation, which shall neglect or omit to make dividends or additions to its surplus or contingent fund as often as once in six months, shall make a list or return in duplicate, under oath or affirmation of the president or cashier, to the assessor or assistant assessor of the district in which it is located, on the first day of January and July in each year, or within thirty days thereafter, of the amount of profits which have accrued or been earned and received by said bank during the six months next preceding said first days of January and July; and shall present one of said lists or returns and pay to the collector of the district a duty of five per centum on such profits; and in case of default to make such list or return and payment within the thirty days as aforesaid, shall be subject to the provisions of the foregoing section of this act: Provided, That when any dividend is made which includes any part of the surplus or contingent fund of any bank, trust company, savings institution, insurance or railroad company, which has been assessed and the duty paid thereon, the amount of duty so paid on that portion of the surplus or contingent fund may be deducted from the duty on such dividend.

302. Any railroad, canal, turnpike, canal navigation or slack-water company, indebted for any money for which bonds or other evidence of indebtedness have been issued, payable in one or more years after date, upon which interest is stipulated to be paid, or coupons representing the interest, or any such company that may have declared any

(a) So amended by act 2 March 1867. 14 Stat. 479. (b) So amended by act 2 March 1867. 14 Stat. 480.

(c) This is not a direct tax, but a duty on excise. Pacific Insurance Co. v. Soule, 7 Wall, 484.

(d) So amended by act 13 July 1866. 14 Stat. 138.

30 June 1864.

dividend in scrip or money due or payable to its stockholders, including non-residents, whether citizens or aliens, as part of the earnings, profits, income or gains of such company, and all profits of such company carried to the account of any fund, or used for construction, shall be subject to and pay a tax of five per centum on the amount of all such interest, or coupons, dividends or profits, whenever and wherever the same shall be payable, and to whatsoever party or person the same may be payable, including non-residents, whether citizens or aliens; and said companies are hereby authorized to How payable. deduct and withhold from all payments on account of any interest or coupons, and dividends, due and payable as aforesaid, the tax of five per centum; (a) and the payment of the amount of said tax so deducted from the interest, or coupons, or dividends, and certified by the president or treasurer of said company, shall discharge said company from that amount of the dividend, or interest, or coupon on the bonds or other evidences of their indebtedness, so held by any person or party whatever, except where said companies may have contracted otherwise. And a list or return shall be made Returns. and rendered to the assessor or assistant assessor, on or before the tenth day of the month following that in which said interest, coupons or dividends become due and payable, and as often as every six months; and said list or return shall contain a true and faithful account of the amount of tax, and there shall be annexed thereto, a declaration of the president or treasurer of the company, under oath or affirmation, in form and manner as may be prescribed by the commissioner of internal revenue, that the same contains a true and faithful account of said tax. And for any default in making or Penalty for derendering such list or return, with the declaration annexed, or of the payment of the tax as aforesaid, the company making such default shall forfeit, as a penalty, the sum of one thousand dollars; and in case of any default in making or rendering said list or return, or of the payment of the tax or any part thereof, as aforesaid, the assessment and collection of the tax and penalty shall be made according to the provisions of law in other cases of neglect or refusal: Provided, That whenever any of the companies mentioned in this section shall be unable to pay the interest on their indebtedness, and shall, in fact, fail to pay such interest, in such cases, the tax levied by this section shall not be paid to the United States, until said company resume the payment of interest on their indebtedness.(b)

fault.

Ibid. 123.

303. There shall be levied, collected and paid on all salaries of officers, or payments for services to persons in the civil, military, naval or other employment or service of Duty on salaries. the United States, including senators and representatives and delegates in congress, when exceeding the rate of one thousand dollars per annum, a tax of five per centum

on the excess above the said one thousand dollars. And it shall be the duty of all pay- To be deducted by disbursing masters and all disbursing officers, under the government of the United States, or per- oficers. sons in the employ thereof, when making any payment to any officers or persons as aforesaid, whose compensation is determined by a fixed salary, or upon settling or adjusting the accounts of such officers or persons to deduct and withhold the aforesaid tax of five per centum; and the pay-roll, receipts or account of officers or persons paying such tax as aforesaid shall be made to exhibit the fact of such payment. And it shall be the duty of the accounting officers of the treasury department, when auditing the accounts of any paymaster or disbursing officer, or any officer withholding his salary from moneys received by him, or when settling or adjusting the accounts of any such officer, to require evidence that the taxes mentioned in this section have been deducted and paid over to the treasurer of the United States, or other officer authorized to receive the same: Provided, That payments of prize-money shall be regarded as Prize-money. income from salaries, and the tax thereon shall be adjusted and collected in like manner: Provided further, That this section shall not apply to payments made to mecha- Not to apply to nics or laborers employed upon public works. (c)

mechanics.

to be

304. Consuls of foreign countries in the United States, who are not citizens thereof, Ibid. 178. shall be and hereby are exempt from any income tax imposed by this act, which may Foreign consuls be derived from their official emoluments or from property in such countries: Provided, to be exempt That the governments which such consuls may represent shall extend similar exemp- duty. tion to consuls of the United States.

14 Stat. 147.

Returns to state whether they are made in currency or specie.

305. It shall be the duty of all persons required to make returns or lists of income, 13 July 1866 3 9. and articles or objects charged with an internal tax, to declare in such returns or lists whether the several rates and amounts therein contained are stated according to their values in legal tender currency, or according to their values in coined money; and in case of neglect or refusal so to declare, to the satisfaction of the assistant assessor receiving such returns or lists, such assistant assessor is hereby required to make neglect. returns or lists for such persons so neglecting or refusing, as in cases of persons neg

(a) See Haight v. Railroad Co., 6 Wall. 15; 8. c. 24 Leg. Int. 381; 6 Int. R. Rec. 161.

Penalty for

(b) So amended by act 13 July 1866. 14 Stat. 138.
(c) So amended by act 2 March 1867. 14 Stat. 480.

13 July 1866. lecting or refusing to make the returns or lists required by the acts aforesaid, and to assess the tax thereon, and to add thereto the amount of penalties imposed by law in cases of such neglect or refusal. And whenever the rates and amounts contained in the returns or lists as aforesaid shall be stated in coined money, it shall be the duty of each assessor receiving the same, to reduce such rates and amounts to their equivalent in legal tender currency, according to the value of such coined money in said currency for the time covered by said returns. (a) And the lists required by law to be furnished to collectors by assessors, shall in all cases contain the several amounts of taxes assessed, estimated or valued in legal tender currency only.

30 June 1864

2124. 13 St. 285.

Duty on legacies

and distributive

shares of person al property.

Rates of duty.

Exemptions.

Ibid. 125.

XIII. LEGACY AND SUCCESSION DUTIES.

306. Any person or persons, having in charge or trust, as administrators, executors or trustees, any legacies or distributive shares arising from personal property, where the whole amount of such personal property, as aforesaid, shall exceed the sum of one thousand dollars in actual value, passing, after the passage of this act, from any person possessed of such property, either by will, or by the intestate laws of any state or territory, or any personal property or interest therein, transferred by deed, grant, bargain, sale or gift, made or intended to take effect in possession or enjoyment, after the death of the grantor or bargainor, to any person or persons, or to any body or bodies politic or corporate, in trust or otherwise, shall be and hereby are made subject to a duty or tax, to be paid to the United States, as follows, that is to say:

I. Where the person or persons entitled to any beneficial interest in such property shall be the lineal issue or lineal ancestor, brother or sister, to the person who died possessed of such property, as aforesaid, at the rate of one dollar for each and every hundred dollars of the clear value of such interest in such property.

II. Where the person or persons entitled to any beneficial interest in such property shall be a descendant of a brother or sister of the person who died possessed, as aforesaid, at the rate of two dollars for each and every hundred dollars of the clear value of such interest.

III. Where the person or persons entitled to any beneficial interest in such property shall be a brother or sister of the father or mother, or a descendant of a brother or sister of the father or mother, of the person who died possessed, as aforesaid, at the rate of four dollars for each and every hundred dollars of the clear value of such interest.

IV. Where the person or persons entitled to any beneficial interest in such property shall be a brother or sister of the grandfather or grandmother, or a descendant of the brother or sister of the grandfather or grandmother, of the person who died possessed, as aforesaid, at the rate of five dollars for each and every hundred dollars of the clear value of such interest.

V. Where the person or persons entitled to any beneficial interest in such property shall be in any other degree of collateral consanguinity than is herein before stated, or shall be a stranger in blood to the person who died possessed, as aforesaid, or shall be a body politic or corporate, at the rate of six dollars for each and every hundred dollars of the clear value of such interest: Provided, That all legacies or property passing by will, or by the laws of any state or territory, to husband or wife of the person who died possessed, as aforesaid, shall be exempt from tax or duty: "Provided further, That any legacy or share of personal property passing as aforesaid to a minor child of the person who died possessed as aforesaid, shall be exempt from taxation under this section, unless such legacy or share shall exceed the sum of one thousand dollars, in which case, the excess only above that sum shall be liable to such taxation."(b)

307. The tax or duty aforesaid "shall be due and payable whenever the party interDuty to be a lien. ested in such legacy or distributive share of property or interest aforesaid shall become entitled to the possession or enjoyment thereof, or to the beneficial interest in the profits accruing therefrom, and the same”(b) shall be a lien and charge upon the property of every person who may die as aforesaid, for twenty years, or until the same shall, within Payment of duty. that period, be fully paid to and discharged by the United States. "And every administrator, executor or trustee, having in charge or trust any legacy or distributive share, as aforesaid, shall give notice thereof in writing to the assessor or assistant assessor of the district where the deceased grantor or bargainor last resided, within thirty days after he shall have taken charge of such trust;"(b) and every executor, administrator or trustee, before payment and distribution to the legatees or any parties entitled to beneficial interest therein, shall pay to the collector or deputy-collector of the district of which the deceased person was a resident, the amount of the duty or tax assessed upon such legacy or distributive share, and shall also make and render to the assessor or (a) See Pacific Insurance Co. v. Soule, 7 Wall. 433.

Account to be rendered.

(b) So amended by act 13 July 1866, 14 Stat, 140,

fault.

assistant assessor of the said district a schedule, list or statement, in duplicate, of the 30 June 1864. amount of such legacy or distributive share, together with the amount of duty which Effect of receipt. has accrued or shall accrue thereon, verified by his oath or affirmation, to be administered and certified thereon by some magistrate or officer having lawful power to administer such oaths, in such form and manner as may be prescribed by the commis sioner of internal revenue, which schedule, list or statement shall contain the names of each and every person entitled to any beneficial interest therein, together with the clear value of such interest, the duplicate of which schedule, list or statement shall be by him immediately delivered, and the tax thereon paid to such collector; and upon such payment and delivery of such schedule, list or statement, said collector or deputycollector shall grant to such person, paying such duty or tax, a receipt or receipts for the same in duplicate, which shall be prepared as hereinafter provided; such receipt or receipts, duly signed and delivered by such collector or deputy-collector, shall be sufficient evidence to entitle such executor, administrator or trustee, to be credited and allowed such payment by every tribunal which, by the laws of any state or territory, is, or may be, empowered to decide upon and settle the accounts of executors and administrators. And in case such executor, administrator or trustee, shall refuse or neglect Penalty for deto pay the aforesaid duty or tax to the collector or deputy-collector, as aforesaid, within the time herein before provided, or shall neglect or refuse to deliver to said collector or deputy-collector, the duplicate of the schedule, list or statement of such legacies, property or personal estate under oath, as aforesaid, or shall neglect or refuse to deliver the schedule, list or statement of such legacies, property or personal estate, under oath, as aforesaid, or shall deliver to said assessor or assistant assessor a false schedule or statement of such legacies, property or personal estate, or give the names and relationship of the persons entitled to beneficial interests therein untruly, or shall not truly and correctly set forth and state therein the clear value of such beneficial interest, or where no administration upon such property or personal estate shall have been granted or allowed under existing laws, the assistant assessor shall make out such lists and valuation as in other cases of neglect or refusal, and shall assess the duty thereon; "and in case of wilful neglect, refusal or false statement by such executor, administrator or trustee as aforesaid, he shall be liable to a penalty of not exceeding one thousand dollars, to be recovered with costs of suit;"(a) and the collector shall commence appropriate Proceedings proceedings before any court of the United States, in the name of the United States, administration. against such person or persons as may have the actual or constructive custody or possession of such property or personal estate, or any part thereof, and shall subject such property or personal estate, or any portion of the same, to be sold upon the judgment or decree of such court, and from the proceeds of such sale the amount of such tax or duty, together with all costs and expenses of every description to be allowed by such court, shall be first paid, and the balance, if any, deposited according to the order of such court, to be paid under its direction to such person or persons as shall establish title to the same. The deed or deeds, or any proper conveyance of such property or Tax deeds. personal estate or any portion thereof, so sold under such judgment or decree, executed by the officer lawfully charged with carrying the same into effect, shall vest in the purchaser thereof all the title of the delinquent to the property or personal estate sold under and by virtue of such judgment or decree, and shall release every other portion of such property or personal estate from the lien or charge thereon created by this act. And every person or persons who shall have in his possession, charge or custody, any Papers to be exrecord, file or paper containing or supposed to contain, any information concerning such property or personal estate as aforesaid, passing from any person who may die, as aforesaid, shall exhibit the same at the request of the assessor or assistant assessor of the district, and to any law-officer of the United States, in the performance of his duty under this act, his deputy or agent, who may desire to examine the same; and Penalty for reif any such person, having in his possession, charge or custody, any such records, files or papers, shall refuse or neglect to exhibit the same on request as aforesaid, he shall forfeit and pay the sum of five hundred dollars: Provided, That in all legal controver- Effect of recitals sies where such deed or title shall be the subject of judicial investigation, the recital in said deed shall be primâ facie evidence of its truth, and that the requirements of the law had been complied with by the officers of the government.(a)

where there is no

hibited.

fusal.

in deeds.

308. For the purposes of this act the term "real estate" shall include all lands, tene- Ibid. 126. ments and hereditaments, corporeal and incorporeal; that the term "succession" shall Definitions. denote the devolution of title to any real estate; and that the term "person" shall be

held to include persons, body, corporate, company or association.

309. Every past or future disposition of real estate by will, deed or laws of descent,

Ibid. 127.

(a) So amended by act 13 July 1866, which further provides shall be deducted from the particular legacy or distributive share that any tax paid under the provisions of sectious 124 and 125 on account of which the same is charged. 14 Stat. 140.

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