REVENUE ACT OF 1917. STAMP TAXES ACT OF OCTOBER 3, 1917. [Repealed by Act of Feb. 24, 1919.] Titles I, II, III, IV, V, VI, VII, VIII, IX, X, XII repealed by act of February 24, 1919. TITLE I-WAR INCOME TAX. " SECTION 1. That in addition to the normal tax imposed by subdivision (a) of section one of the Act entitled "An Act to increase the revenue, and for other purposes,' approved September eighth, nineteen hundred and sixteen, there shall be levied, assessed, collected, and paid a like normal tax of two per centum upon the income of every individual, a citizen or resident of the United States, received in the calendar year nineteen hundred and seventeen and every calendar year thereafter. Income. Where defendant embezzled moneys which were delivered to him to be paid as insurance premiums, he committed a larceny, and the money so received was not subject to taxation under the income (Rau v. United States, 260 F. 131.) tax act. TITLE VIII-STAMP TAXES SCHEDULE A. 3. Capital stock, issue: On each original issue, whether on organization or reorganization, of certificates of stock by any association, company, or corporation, on each $100 of face value or fraction thereof, 5 cents: Provided, That where capital stock is issued without face value, the tax shall be 5 cents per share, unless the actual value is in excess of $100 per share, in which case the tax shall be 5 cents on each $100 of actual value or fraction thereof. The stamps representing the tax imposed by this subdivision shall be attached to the stock books and not to the certificates issued. Section 807-Schedule A (3)-Capital stock, issue. Issue of certificates of stock of one class in conversion and exchange for stock of another class held not required to be stamped as an "original issue," for the reason that Congress intended to tax transactions by which substantial consideration passed, and also for the reason that Congress in reenacting a similar provision of the revenue acts of 1898 and of 1914, which had been construed by the Treasury Department as not requiring stamps upon certificates issued for conversion purposes, had approved and made part of the present act such former practical construction. In his opinion Judge Hand said: I can not regard an issue of stock based upon a conversion privilege which does not increase the total stock liability of a corporation as coming within the purview of the statute. (Unreported case of Wabash Ry. Co. v. Edwards, Collector, U. S. D. C.; So. Dist. of New York, June, 1919. This case now on appeal, October, 1919.) ACT OF OCTOBER 3, 1917-TITLE X. SEC. 1004. That whoever fails to make any return required by this Act or the regulations made under authority thereof within the time prescribed or who makes any false or fraudulent return, and whoever evades or attempts to evade any tax imposed by this Act or fails to collect or truly to account for and pay over any such tax, shall be subject to a penalty of not more than one thousand dollars, or to imprisonment for not more than one year, or both, at the discretion of the court, and in addition thereto a penalty of double the tax evaded, or not collected, or accounted for and paid over, to be assessed and collected in the same manner as taxes are assessed and collected, in any case in which the punishment is not otherwise specifically provided. Prosecution where compromise accepted. Under Revised Statutes, section 3229 (Comp. St. sec. 5952), empowering Commissioner of Internal Revenue, with advice of Secretary of the Treasury, to compromise any criminal case arising under the internal revenue laws, one who failed to file an income tax return as required by the act October 3, 1917 (sec. 1004) can not be successfully prosecuted for this failure, where the collector of internal revenue offered to compromise on payment of the tax and penalty, and such offer was accepted. (Rau v. United States, 260 Fed. 131.) Where internal-revenue officers, after defendant admitted he had not filed an income tax return as required by Act October 3, 1917 (sec. 1004), accepted not only the tax, but the penalty, informing defendant that such payment would end the matter and there would be no indictment, such acceptance and statement was a "compromise," within Revised Statutes (séc. 3229), and was a bar to prosecution. (Id.) In a prosecution for failure to file an income tax return as required by act October 3, 1917 (sec. 1004), that sum paid by defendant to internal-revenue officer after he had admitted he did not file the return was retained by the Treasury is evidence that the money was received in compromise of the case, which compromise was authorized by Revised Statutes section 3229. (Id.) In a prosecution for failure to file an income tax return as required by act October 3, 1917 (sec. 1004), the question whether the internalrevenue officers compromised the case, as authorized by Revised Statutes section 3229, held for the jury. (Id.) INCOME TAX. ACT OF FEBRUARY 24, 1919-TITLE II-INCOME TAX. INDIVIDUAL RETURNS. SEC. 223. That every individual having a net income for the taxable year of $1,000 or over if single or if married and not living with husband or wife, or of $2,000 or over if married and living with husband or wife, shall make under oath a return stating specifically the items of his gross income and the deductions and credits allowed by this title. If a husband and wife living together have an aggregate net income of $2,000 or over, each shall make such a return unless the income of each is included in a single joint return. If the taxpayer is unable to make his own return, the return shall be made by a duly authorized agent or by the guardian or other person charged with the care of the person or property of such taxpayer. Returns under oath. Indictment, charging that perjury had been committed by falsely swearing to an income tax return before a commissioner of deeds of New York City, had been demurred to, raising point that as such an officer was not authorized to take an oath by any law of the United States no crime had been committed. Judge Hand overruling this demurrer held that article 406 of Regulations 45 which was promulgated, under concededly legal powers, by the Commissioner of Internal Revenue, includes all such persons as were authorized by local law to take oaths in their several districts and allows a commissioner of deeds among other officials to take such an oath. (Op. Judge Hand, Oct. 20, 1919, U. S. D. C., So. Dist. of New York, case of United States of America v. Benowitz, T. D. 2952.) RECEIPTS FOR TAXES. SEC. 251. That every collector to whom any payment of any tax is made under the provisions of this title shall upon request give to the person making such payment a full written or printed receipt, stating the amount paid and the particular account for which such payment was made; and whenever any debtor pays taxes on account of payments made or to be made by him to separate creditors the collector shall, if requested by such debtor, give a separate receipt for the tax paid on account of each creditor in such form that the debtor can conveniently produce such receipts separately to his several creditors in satisfaction of their respective demands up to the amounts stated in the receipts; and such receipt shall be sufficient evidence in favor of such debtor to justify him in withholding from his next payment to his creditor the amount therein stated; but the creditor may, upon giving to his debtor a full written receipt acknowledging the payment to him of any sum actually paid and accepting the amount of tax paid as aforesaid (specifying the same) as a further satisfaction of the debt to that amount, require the surrender to him of such collector's receipt. 126 1. Receipts to taxpayers-Duty to issue. The fact that section 251 of the act of February 24, 1919, requires that full written or printed receipts be issued to taxpayers only on request therefor does not limit the collector's mandatory duty to issue them when requested and does not fail to make them documents required to be issued whenever requested, and the receipts are plainly documents required to be issued by such section. 2. Same Simulation or fraudulent execution. Such receipts are documents required by provisions of the internal revenue laws and by regulations made in pursuance thereof, within the meaning of section 3451, Revised Statutes, making it an offense to simulate or falsely or fraudulently execute or sign any document required by the internal revenue laws, or any regulation made in pursuance thereof, or to procure the same to be falsely or fraudulently executed, or to advise, aid in, or connive at such execution thereof. 3. Same--Blanks. The offense may be committed either where the receipt itself is a genuine receipt of the kind kept for that purpose in the office of the internal revenue collector, but signed by the defendant without authority, or where, even if not a blank of the kind required to be kept, the blank itself is simulated or falsely or fraudulently executed and issued by a person who has no power or authority to do so. 4. Same Income-tax receipts. Where defendant was charged with violating section 3451, Revised Statutes, in that he falsely, fraudulently, etc., simulated and executed and advised, aided in, and connived at the execution of certain income-tax receipts required by section 251 of the act of February 24, 1919, to be given when requested, what defendant told the persons who paid the money is not material, nor is the question whether or not such persons were subject to the payment of an income tax, or to assessment and levy of such tax. (United States v. Pittaro, reported only in T. D. 2874, 1919.) |