policyholders on account of premiums previously paid by them, and interest paid upon such amounts between the ascertainment thereof and the payment thereof.

Life insurance companies shall not include as income in any year such portion of any actual premium received from any individual policyholder as shall have been paid back or credited to him, or treated as an abatement of premium of such individual policyholder within the year.

All of the foregoing provisions which relate to domestic mutual life insurance companies, mutual fire insurance companies and mutual marine insurance companies, are applicable to foreign companies but apply only to the business done in the United States.

The tax herein imposed upon corporations shall be upon their entire net income accruing within each preceding calendar year ending December 31st: Provided however that for the months of January and February 1913, the tax shall be only one-sixth of the entire net income of such corporation etc. ascertained in the manner hereinbefore stated in Par. G. Any corporation, joint-stock company or association or insurance company subject to this tax may designate the last day of any month in any year as the day of the closing of its fiscal year and shall be entitled to have the tax payable by it computed upon the basis of the net income ascertained as hereinbefore provided for the year ending on the day so designated in the year preceding the date of assessment, instead of upon the basis of the net income for the calendar year preceding the date of assessment. Notice must be given the collector of the designation of such day not later than 30 days prior to the first day of March each year.

As soon as the return of a corporation has been received by the collector of internal revenue he will transmit the same to the Commissioner of Internal Revenue for the pur

pose of the assessment of the tax thereon. Notice will be sent to such corporation of the amount of the tax on or before the first day of June each year and the tax must be paid on or before the 30th day of such month. In those cases where there has been a day designated by the corporation as the close of the fiscal year the tax due under said assessment shall be paid within one hundred and twenty days after the date upon which the corporation is required to file a list or return of income for assessment.

The Act approved August 5, 1909 relative to the imposition of an excise tax upon corporations has been repealed and re-enacted in Section 4 of the Tariff Act approved October 3, 1913, which act abolishes the specific deduction of $5000; but permits income derived from the obligations of the United States or its possessions, or of any State, or a political subdivision thereof, or of the District of Columbia to be deducted in the ascertainment of net income subject to the normal tax.

The provisions of the Act of August 5, 1909 shall remain in force for the collection of the excise tax for the year 1912; but for the year 1913, it shall not be necessary to make more than one return and assessment for all the taxes imposed herein upon said corporations, joint-stock companies or associations and insurance companies either by way of income or excise, which return shall be made at the times and in the manner provided in the Act of October 3, 1913.

The word State or United States, when used in this Act shall be construed to include any Territory, Alaska, the District of Columbia, Porto Rico, and the Philippine Islands, when such construction is necessary to carry out its provisions.

Penalties are provided for a failure to comply with the provisions of the act as follows:

Under Paragraph E, a penalty is imposed for a neglect or refusal to make a return or for one fraudulently made. Under subdivision 2 of said Paragraph a penalty of $300 is imposed upon the individual for falsely stating a material fact in reference to a claim for exemption under Paragraph C.

Under the provisions of Paragraph F,it is provided: "That if any person corporation joint-stock company, association. or insurance company liable to make a return or to pay the tax aforesaid shall refuse or neglect to make a return at the time or times hereinbefore specified in each year, such person shall be liable to a penalty of not less than $20 nor more than $1000. Any person or any officer of any corporation required by law to make, render, sign, or verify any return who makes any false or fraudulent return or statement with intent to defeat or evade the assessment required by this Act to be made shall be guilty of a misdemeanor, and shall be fined not exceeding $2000 or be imprisoned not exceeding one year or both, at the discretion of the court."

Under subsection c, of Paragraph G, a penalty is imposed for a neglect or refusal, to make a return by a corporation or for one fraudulently made. And under Subdivision d, of said Paragraph a penalty of $1000 is imposed upon corporations, joint-stock companies or associations or insurance companies for a refusal or neglect to make a return at the time or times specified in each year, or for a fraudulent or false return.

If any person shall be compelled to pay a tax on his return which was unlawfully assessed and collected, or excessive in amount, he may file his claim for refund of such tax with the collector under regulations made and provided in such cases by the Secretary of the Treasury, under the provisions of Section 3220 of the Revised Statutes of the United States. If relief is denied by the Commissioner of

Internal Revenue, or if such officer fails to render a decision on said claim in six months from the date of its submission, the courts are open to the taxpayer to obtain a judgment against the United States or the collector for the amount of said tax wrongfully collected.

The payment of the tax illegally assessed should be made under protest and must not be a voluntary one, but made under duress, that is, under threat to distrain and sell the taxpayer's property unless such payment is made. The reasons for the protest should be stated therein and, after being dated and signed by the taxpayer, handed to the collecting officer and a copy thereof retained.

Under Treasury Decision 1934, of January 16, 1914, in all cases herein mentioned where the tax is levied upon income in excess of $3000 for the taxable year the tax will be assessed upon such income if the same is $2500 or more for the ten months from March 1st to December 31, 1913.

This analysis and interpretation of the income tax law comprehends all Treasury Regulations and decisions to January 16, 1914.