the tax. In case a false or fraudulent return is willfully made, the Commissioner of Internal Revenue shall add to the tax 100 per cent of its amount. The amount so added to any tax shall be collected at the same time and in the same manner and as part of the tax unless the tax has been paid before the discovery of the neglect, falsity, or fraud, in which case the amount so added shall be collected in the same manner as the tax.

ART. 23. Time of payment of tax.-All assessments shall be made by the Commissioner of Internal Revenue. The collector shall within 10 days after receiving any list of taxes from the Commissioner of Internal Revenue give notice to each corporation liable to pay any tax stated therein, to be left at its place of business or to be sent by mail, stating the amount of such tax and demanding payment thereof. If such corporation does not pay the tax within 10 days after the service or the sending by mail of such notice, it shall be the duty of the collector to collect the said tax with a penalty of 5 per cent additional upon the amount of the tax and interest at the rate of 1 per cent a month. A collector has no authority to extend the time for payment of the tax, and any extension granted by him. would be at his own risk. The collector may accept payment of the tax when the return is filed as an "advance collection," subject to any adjustment later found necessary, but no corporation is required to pay the tax until after notice and demand.

ART. 24. Miscellaneous provisions.-So-called subsidiary corporations, all or a part of the stock of which is owned by another corporation, must render returns in the same way as other corporations. No deduction is allowed in the return of a holding corporation for the tax paid by a subsidiary. The term "corporation" is used in these regulations for convenience to include also "joint-stock company or association" and "insurance company." "United States" includes the States, the Territories of Alaska and Hawaii, and the District of Columbia.

ART. 25. Promulgation.-In pursuance of the statute the foregoing regulations are hereby made and promulgated and all prior rulings are hereby superseded.

Approved August 9, 1918:

L. S. ROWE,

DANIEL C. ROPER,

Commissioner of Internal Revenue.

Acting Secretary of the Treasury.

DO NOT PASTE RIDERS TO FACE OF RETURN.

1. Name.

2 Addrem.

TAX PAYABLE IN ADVANCE FOR THE YEAR ENDING JUNE 30, 1919. CAREFULLY READ
ALL INSTRUCTIONS BEFORE MAKING RETURN.

3. Nature of business in detail.

4. Incorporated or organized in State of..

5. Date of incorporation or organization....

(Oive name of corporation, jalat-stock company, or associstign.)

(The address must be that of the principal place of business.)

(Olve street and number, efty or town, and State.)

of the above-named company, whose return for special excise tax is herein set forth, being severally duly sworn, each for himself, deposes and says that the items entered in the foregoing report and in any additional list or lists attached to or accompanying this return are, to his best knowledga and belief and from such information as he has been able to obtain, true and correct.

SPECIAL INSTRUCTIONS.

[As prescribed on page 4 of form 707.]

1. Required value. The capital stock tax is measured by the fair value of the total capital stock, including surplus and undivided profits, for the year preceding the taxable year, whether the conduct of the business is profitable or otherwise.

For the purpose of this tax the fair value of the entire capital stock of a going concern, regardless of stock ownership or the ability of individual stockholders to liquidate their holdings, is required. The sales prices for any number of shares of stock less than a majority interest are not necessarily indicative of the fair value of the entire capital stock. The capital invested, the nature of the business, the kind of assets (slow or quick turning), good will, franchises, earning capacity, etc., are important factors that affect the worth of enterprises and must be given due consideration in arriving at the fair value at any given date.

In order that consideration may be given the various factors governing worth, three exhibits are provided for furnishing information, and the taxpayer will complete each exhibit or state why the required data are not available.

Exhibit A provides for adjusting any overstated or understated values contained in the taxpayers' books of account, and Exhibit C provides for showing an adjusted income, which should be the actual operating income upon which the value of the capital stock may be computed. Ample provision having been made for proper adjustments, the taxpayer will report as the fair value of its capital stock in item 14 on page 1 the amount reflected by the exhibit showing the greatest value. However, corporations materially affected by ex'traordinary conditions may report as the fair value in item 14 on page 1 the amount reflected by the exhibit which in their opinion more nearly shows the required value, and shall attach to their returns a comprehensive statement for examination and consideration by the Commissioner of Internal Revenue, explaining why the tax should be so assessed.

2. Closing date of fiscal year.-In item 6 on page 1 hereof the taxpayer will show the closing date of its fiscal year ended between July 1, 1917, and June 30, 1918, if other than June 30, and the information furnished under Exhibits A, B, and C will be as of the year or years ended on such date.

3. Exhibits. The three Exhibits, A, B, and C, are provided to indicate the information desired and the manner in which it should be furnished. So far as adaptable these forms should be completed by taxpayers, but if they find it more convenient they may attach