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1918 Law




States issued under the Act of April 24, 1917, entitled "An Act to authorize an issue of bonds to meet expenditures for the national security and defense,” etc., also certificates of the United States issued under any subsequent Act.

151. The new statute contains a much more liberal refund provision than appeared in any of the previous laws. It provides that if (under the Corporation Excise Tax Law of 1909 or the Income Tax Laws of 1913, 1916, or 1917 respectively), any income or profits tax has been paid in excess of that properly due, then, not withstanding the pertinent provision of the Revised Statutes, (Sec. 3228) the amount of such excess will be credited against any income or profits tax due from the taxpayer under any other returns. The balance of any such excess, if any, shall be immediately refunded to the taxpayer; the application of this provision is limited to five years from the date when the return was due, unless before the expiration of such five years a claim therefor was filed by the taxpayer.

152. Annual returns shall be filed in the office of the Commissioner of Internal Revenue and shall constitute Inspection of public records and shall be open to inspection as such, but "only on the order of the President" and under regulations by the Secretary of the Treasury, etc. This language of the statute indicates that it applies to both individual and corporate returns. It is also provided by the statute that in accordance with the regulations of the Secretary of the Treasury and upon request of the Governor of a State imposing an income tax, the proper officers of such State may have access to the returns or

an abstract thereof showing the name and income of each corporation.

153. The Statute further provides that any bona fide stockholder of record owning one per cent. or more of the outstanding stock of any corporation, shall, on request, be allowed to examine the returns of any corporation and of its subsidiaries. The stockholders, however, upon heavy penalty must not disclose such information obtained in any manner "not provided by law."

154. An alphabetical list of all individuals filing returns in each district is to be open to public inspection. This information will include the addresses of taxpayers but presumably not the amount of income or tax due.


155. All Collectors of Internal Revenue and all other officers or employees of the United States are prohibited Secrecy of from making known any particular or fact disclosed in any income tax return, and any offense against this provision shall be a misdemeanor and shall be punishable by fine, or imprisonment, or both, and the offenders shall be dismissed from office or discharged from the Government service.

Advisory Tax Board

156. An Advisory Board of six members appointed by the Commissioner with the approval of the Secretary is created by the statute. The Board has the power to summon witnesses, administer oaths, take testimony, etc. It will deal with questions regarding the interrelation and administration of the income, war profits and excess profits tax laws.

157. Every individual who is a citizen of any possession of the United States, but not otherwise a citizen of

Powers of

Porto Rico

and the Philippine Islands

the United States, shall be taxed only on income from sources within the United States, and the tax shall be computed as in the case of other persons so taxable.

158. In Porto Rico and the Philippine Islands, the income tax is to be levied and collected in accordance with the Act of 1916, as amended. The tax laws in force in these island possessions may be amended or repealed by their respective legislatures.

Being Titles I and II and Parts of Titles XIII and

XIV of the Revenue Act of 1918

In Effect February 25, 1918


To provide revenue, and for other purposes.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,


Section 1. That when used in this Act

The term "person" includes partnerships and corporations as well as individuals;

The term "corporation" includes associations, joint-stock companies, and insurance companies;

The term "domestic" when applied to a corporation or partnership means created or organized in the United States;

The term "foreign" when applied to a corporation or partnership means created or organized outside the United States;

The term "United States" when used in a geographical sense includes only the States, the Territories of Alaska and Hawaii, and the District of Columbia;

The term "Secretary" means the Secretary of the Treasury;

The term "Commissioner" means the Commissioner of Internal Revenue;

The term "collector" means collector of internal revenue;

The term "Revenue Act of 1916" means the Act entitled "An Act to increase the revenue, and for other purposes," approved September 8, 1916;

The term "Revenue Act of 1917" means the Act entitled "An Act to provide revenue to defray war expenses, and for other purposes," approved October 3, 1917;

The term "taxpayer" includes any person, trust or estate subject to a tax imposed by this Act;

The term "Government contract" means (a) a contract made with the United States, or with any department, bureau, officer, commission,

Termination of Present War



Personal Service Corporation

board, or agency, under the United States and acting in its behalf, with any agency controlled by any of the above if the contract is for benefit of the United States, or (b) a sub-contract made with a co tractor performing such a contract if the products or services to furnished under the subcontract are for the benefit of the Unit States.

The term "Government contract or contracts made between Ap 6, 1917, and November 11, 1918, both dates inclusive" when applied to contract of the kind referred to in clause (a) of this paragraph, includ all such contracts which, although entered into during such period, we originally not enforceable, but which have been or may become enforc able by reason of subsequent validation in pursuance of law;

The term "military or naval forces of the United Statse" include the Marine Corps, the Coast Guard, the Army Nurse Corps, Female and the Navy Nurse Corps, Female, but this shall not be deemed t exclude other units otherwise included within such term;

The term "present war" means the war in which the United State is now engaged against the German Government.

For the purposes of this Act the date of the termination of the present war shall be fixed by proclamation of the President.


Part I.-General Provisions.

Sec. 200. That when used in this title

The term "taxable year" means the calendar year, or the fiscal year ending during such calendar year, upon the basis of which the net income is computed under section 212 or section 232. The term "fiscal year" means an accounting period of twelve months ending on the last day of any month other than December. The first taxable year, to be called the taxable year 1918, shall be the calendar year 1918 or any fiscal year ending during the calendar year 1918;

The term "fiduciary" means a guardian, trustee, executor, adminis trator, receiver, conservator, or any person acting in any fiduciary capacity for any person, trust or estate;

The term "withholding agent" means any person required to deduct and withhold any tax under the provisions of section 221 or section 237; The term "personal service corporation" means a corporation whose income is to be ascribed primarily to the activities of the principal owners or stockholders who are themselves regularly engaged in the active conduct of the affairs of the corporation and in which capital (whether

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