FIVE YEAR LIMIT ON REFUND OF TAXES (Sec. 252) If income, war-profits or excess-profits taxes have been overpaid under this act or the Acts of 1909, 1913, 1916, or 1917, then (notwithstanding the provisions of sec. 3228, RS.) the excess will be credited against any such taxes due under any return, and the balance of the excess immediately refunded; but no credit or refund will be made after 5 years from date when the return was due or made, unless a claim has been filed. FAILURE OR REFUSAL TO GIVE INFORMATION PUNISHED (Sec. 253) If any person or concern required to pay or collect any tax, to make return or supply information, fails to do so at the times required, they are liable to a penalty of not over $1,000. Any person or concern, or officer, or employee who refuses to pay or collect the tax, make return or supply information, or who attempts to defeat the tax, is guilty of a misdemeanor and will be fined not over $10,000 or imprisoned not over a year, or both, together with costs. REPORTS OF DIVIDEND PAYMENTS REQUIRED (Sec. 254) Every corporation subject to this tax and every personal service corporation will, when required, make a return of its dividend payments with the names, addresses, amounts paid, and shares owned by each stockholder. BROKERS MUST REPORT ON CUSTOMERS (Sec. 255) All brokers will, when required, make a return giving the names of customers for whom they have transacted any business, with all details as to profits, losses or other information required. INFORMATION AT THE SOURCE (Sec. 256) All individuals, corporations and partnerships, including lessees or mortgagors, fiduciaries and employers, paying any individual or concern interest, rent, salaries, wages, premiums, annuities, compensations, remunerations, or other fixed or determinable gains, profits and income (other than in dividend and brokers' reports) of $1,000 or more a year, must report the amount with name and address of the recipient; also officers or employees of the U. S. must report such payments by the U. S.; such returns to be under such regulations and to such extent as the commissioner may prescribe. This report may be required regardless of amount in case of interest on bonds, mortgages, deeds of trust, or other obligations of corporations, and in case of collections (not payable in the U.S.) of interest on bonds of foreign countries and interest on bonds of and dividends from foreign corporations by individuals or concerns collecting such foreign payments by coupons, checks, or bills of exchange. If necessary the name and address of the recipient of income must be furnished on demand of those paying it. This section applies to 1918 and thereafter, but not to payment of interest on U. S. obligations. NAMES OF TAXPAYERS MADE PUBLIC—MAY BE INSPECTED (Sec. 257) Tax returns constitute public records, but may be inspected only on the President's order and under regulations by the Secretary. The proper officers of a state imposing an income tax may, on the Governor's request, have access to them, or to an abstract. Also, bona fide stockholders owning 1% or more of the stock of any corporation will be allowed to examine its income returns as well as of its subsidiaries. Any stockholder allowed to examine any corporation's return, and who makes known unlawfully any particulars set forth therein, is guilty of a misdemeanor and may be fined not more than $1,000 or imprisoned, or both. The names and postoffice addresses of all persons making income tax returns will be prepared and made available to public inspection each year, in the office of the collector in each district, and such other places as the commissioner may determine. PUBLICATION OF TAX STATISTICS (Sec. 258) Statistics on the operation of the income, war profits and excess-profits tax laws, including classification of taxpayers, income, deductions, exemptions, credits, etc., will be prepared and published by the commissioner each year. LICENSE TO COLLECT FOREIGN PAYMENTS (Sec. 259) Those engaged in collecting foreign payments of interest or dividends by coupons, checks or bills of exchange, must obtain a license, and be subject to the regulations. Penalty for failure to obtain license: Fine not over $5,000, or imprisonment not over a year, or both. CITIZENS OF U. S. POSSESSIONS- PORTO RICO AND PHILIPPINES 2 yor31 10 vnsbu V (Secs. 260-261) baba suitsu Alany did Srepossession (but not otherwise a citizen of the U. S.), who does not reside in the U.S., is subject to income tax only as to income from sources in the U. S. In Porto Rico and the Philippines the income tax is paid under Act of 1916 as amended, by every citizen or resident, and every corporation organized or deriving its income from sources therein. Persons not citizens or residents and corporations_organized outside those islands, are taxed as Homresident aliens and as foreign 201 Corporations. For the purpose of the credits (under sec. 216) aid dividends (under sec, 23 a 637013 trong hot the pumpe (9, 20 m 933 max imposed in Porto Rico or the Philippines on a corporatfon's net income is not deemed a foreign . Title III. WAR PROFITS AND EXCESS-PROFITS TAX RATES FOR 1918 (Sec. 301) (a) In lieu of the War Excess-Profits tax under the Revenue Act of 1917, but in addition to the other taxes imposed by this Act, there shall be levied, collected and paid for the taxable year 1918 upon the net income of every corporation, a tax as follows: First Bracket 30% of the net income in excess of the excess-profits credit (determined under sec. 312) and not in excess of 20% of the invested capital. Second Bracket 65% of the net income in excess of 20% of the invested capital. Third Bracket The sum, if any, by which 80% of the net income in excess of the war-profits credit (determined under sec. 311) exceeds the amount of the tax computed under the first and second brackets. Rates for 1919 (b) For the taxable year 1919 and each taxable year thereafter the tax on the net income of every corporation (except corporations taxable under subdivision (c) of this section) will be as follows: First Bracket 20% of the net income in excess of the excess-profits credit (determined under sec. 312) and not in excess of 20% of the invested capital; Second Bracket 40% of the net income in excess of 20% of the invested capital. (c) For the taxable year 1919 and each taxable year thereafter there shall be paid on the net income of every corporation which derives in such year a net income of more than $10,000 from any government contract or contracts made between April 6, 1917, and November 11, 1918, both dates inclusive, a tax as follows: 1. Such portion of a tax computed at the rates specified in subdivision (a) as the part of the net income attributable to such government contract or contracts bears to the entire net income. In computing such tax the excess-profits credit and the war-profits credit applicable to the taxable year shall be used; 2. Such a portion of a tax computed at the rates specified in subdivision (b) as the part of the net income not attributable to such government contract or contracts bears to the entire net income. For the purpose of determining the part of the net income attributable to such government contract or contracts, the proper apportionment and allocation of the deductions with respect to gross income derived from such government contract or contracts and from other sources respectively, shall be determined under rules and regulations prescribed by the commissioner. (d) Where the full amount of the excess-profits credit is not allowed under the first bracket of (a) and (b) because it is in excess of 20% of the invested capital, the part not so allowed will be deducted from the amount in the second bracket. (e) For the purposes of the Act of March 21, 1918 (providing for operating the railroads) the tax under this title is treated as levied by an Act amending the 1917 Revenue Act (title II.) The tax under 301-a-will in-no-case-be-more than 30% of the net income over $3,000, and not over $20,000, plus 80% of the net income over $20,000; the tax under 301-b will in no case be more than 20% of the net income over $3,000, and not over $20,000, plus 40% of the net income over $20,000; and the above limitations shall apply to the taxes computed under (a) and (b) of sec. 301, respectively, when used in (c) of that section. This section cannot be construed to increase the tax under sec. 301.. 1918 Normal Rates 12%; Provided, that the Income Rate on the First $4000 in Excess of the Credits is 6% INCOME TAX TABLE- Normal and Surtax Rates on n surtax rates are for the taxable as the income increases. This table is based upon the assumption tha dependents, namely, $2,000. A single person's tax (with an exempti 6% normal rate only, or $120 more where both fall under the 12% ra 10 $6,000 6% $2,500 $30 3,600 96 5,000 180 6,000 240 12% 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% 11% 12% 13% 14% 15% 16% 17% 18% 19% 20% 21% 22 8,000 240 | ៖ ៖ ៖ ៖ ៖ | 8 ៖ ៖ ៖ ៖ |៖ ៖ ៖ ៖ ៖ ៖ ៖ ៖ ៖ ៖ ៖ ៖ ៖ ៖ ៖ ៖ ៖ ៖ ៖ ៖ ៖ ៖ ៖ ៖ ៖ |8 ៖ ៖ ៖ ៖ |៖ ៖ ៖ ៖ ៖ ៖ 60 60 80 100 120 140 160 180 200 220 240 260 280 300 80 100 120 140 160 180 200 220 80 100 120 140 160 180 200 220 240 260 280 300 320 240 260 280 300 320 340 80 100 120 140 160 180 200 220 240 260 280 300 320 340 360 80 100 120 140 160 180 200 220 240 260 280 300 320 340 360 380 400 420 44 80 100 120 140 160 180 200 220 240 260 280 300 320 340 360 380 400 420 44 80 100 120 140 160 180 200 220 240 260 280 300 320 340 360 380 400 420 44 80 100 120 140 160 180 200 220 240 260 280 300 320 340 360 380 400 420 44 80 100 120 140 160 180 200 220 240 260 280 300 320 340 360 380 400 420 44 80 100 120 140 160 180 200 220 240 260 280 300 320 340 360 380 400 420 44 80 100 120 140 160 180 200 220 240 260 280 300 320 340 360 380 400 420 440 80 100 120 140 160 180 200 220 240 260 280 300 320 340 360 380 400 420 440 80 100 120 140 160 180 200 220 240 260 280 300 320 340 360 380 400 420 44 80 100 120 140 160 180 200 220 240 260 280 300 320 340 360 380 400 420 44 60 60 60 60 70,000 240 7,680 10 40 60 72,000 240 7,920 10 40 60 74,000 240 76,000 240 78,000 240 8,160 10 40 60 8,400 10 40 60 80 100 120 140 160 180 200 220 240 260 280 300 320 340 360 380 400 420 44 80 100 120 140 160 180 200 220 240 260 280 300 320 340 360 380 400 420 44 80 100 120 140 160 180 200 220 240 260 280 300 320 340 360 380 400 420 44 80 100 120 140 160 180 200 220 240 260 280 300 320 340 360 380 400 420 44 8,640 10 40 80,000 240 82,000 240 84,000 240 86,000 240 8,880 10 40 9,120 10 40 9,600 10 40 60 60 88,000 240 9,840 10 40 90,000| 240 10,080 10 40 92,000 240 10,320 10 40 60 80 100 120 140 160 180 200 220 240 260 280 300 320 340 360 380 400 420 44 80 100 120 140 160 180 200 220 240 260 280 300 320 340 360 380 400 420 44 60 80 100 120 140 160 180 200 220 240 260 280 300 320 340 360 380 400 420 44 80 100 120 140 160 180 200 220 240 260 280 300 320 340 360 380 400 420 44 80 100 120 140 160 180 200 220 240 260 280 300 320 340 360 380 400 420 44 80 100 120 140 160 180 200 220 240 260 280 300 320 340 360 380 400 420 44 60 80 100 120 140 160 180 200 220 240 260 280 300 320 340 360 380 400 420 44 60 80 100 120 140 160 180 200 220 240 200 280 300 320 340 360 380 400 420 44 80 100 120 140 160 180 200 220 240 260 280 300 320 340 360 380 400 420 44 80 100 120 140 160 180 200 220 240 260 280 300 320 840 360 380 400 420 44 60 80 100 120 140 160 180 200 220 240 260 280 300 320 340 360 380 400 420 44 80 100 120 140 160 180 200 220 240 260 280 300 320 340 360 380 400 420 44 100,000 240 11,280 10 40 60 ividual citizens and residents. The normal rates are for 1918 only and the ubsequent years; showing the steps by which the surtax rates progress s total credit is the personal exemption of the head of a family, without ould be $60 more in each instance, where both amounts fall under the nce must be made in case there are additional credits. % 28% 29% 30% 31% 32% 33% 34% 35% 36% 37% 38% 39% 40% 41% 42% 43% 44% 45% 46% 47% 48% $ Total Normal and Surtax 40 40 560 40 560 580 40 560 580 600 40 560 580 600 620 40 560 580 600 620 640 40 560 580 600 620 640 660 40 560 580 600 620 640 660 680 40 560 580 600 620 640 660 680 700 30 96 180 250 530 830 1,150 1,490 1,850 2,230 2,630 3,050 3,490 3,950 4,430 4,930 5,450 5,990 6,550 7,130 7,730 8,350 8,990 9,650 10,330 11,030 11,750 12,490 13,250 14,030 14,850 15,650 16,490 17,350 18,230 19,130 20,050 20,990 21,950 22,930 23,930 24,950 25,990 27,050 28,130 29,230 30,350 31,490 32,650 33,830 720 740 760 780 800 820 840 860 300,000, 60%; over $300,000 to $500,000, 63%; over $500,000 to $1,000,000, 64%, and over $1,000,000, 65%. Explanation of the New Tax To compute taxes under the above provisions use the method shown below: Plus 10% of difference between average invested capital for pre-war period and taxable year (a to c).. Plus specific exemption. 25,000 3,000 (f) $128,000 Tax Under First Bracket 30% of net income in excess of excess-profits credit (e) and not in excess of 20% of invested capital, (20% of $1,000,000 is $200,000); $200,000 minus $83,000 is $117,00 at 30%..... $35,100 Tax Under Second Bracket 65% of net income in excess of 20% of invested capital; 20% of invested capital is $200,000; net income in excess of that is $50,000, 65% of $50,000 is $32,500 Total of first and second bracket is.. 67,600 Tax Under Third Bracket (War Profits Tax) Sum by which 80% of net income in excess of war profits credit exceeds sum of first and second brackets: Which exceeds the sum of the first and second brackets by (war profits tax). 30,000 30% of net income in excess of excess profits credit ($23,000) and not in excess of 20% of capital; 20% of capital is $50,000 (credit $23,000) taxable, $27,000, at 30%; tax, $8,100.** $250,000 120,000 20,000 3,000 23,000 250,000 .03. 120,000 |