The Income Tax

Sec. 54. That from and after Jan. 1, 1895, and until Jan. 1, 1900, there shall be assessed, levied, collected and paid annually upon the gains, profits and income received in the preceding calendar year by every citizen of the United States, whether residing at home or abroad, and every person retiding therein, whether said gains, profits or income be derived from any kind of property, rents, interest, dividends or salaries, or from any profession, trade, eniployment or vocation carried on in the United States or elsewhere, or from any other source whatever, a tax of 2 per cent on the amount so derived, over and above 84,000, and a like tax shall be levied, collected and paid annually upon the gains, profits and income from all property owned, and of every I business, trade or profession carried on in tho United States by persons residing without tho United States. And the tax hereln provided for shall be assessed by the commissioner of internal revenue and collected and paid upon the gains and proflts and income for the year ending Dec. 31 next preceding the time for levying, collecting and paying said tax. Sec. 55. That in estimating the income of any person there shall be included all income derived from interest upon notes, bonds and other securities, except such bonds of the United States, the principal and interest of which arebylhelaw of their issuance exempt from all federal taxation; profits realized within the year from sales of real estáte purchased within two years previous to the close of the ! jrearfor which income is estimated; interest received or accrued upon all notes, bonds, mortgages or other forma oí iudebtedness bearinu interest, whether paid or not, if goocï. and collcctible, less the interest which has become due from said person or which has been paid by him during the year; the amount of all premium on bonds, notes or coupons: the amount of sales of live stock, sugar, cotlon, wool, butter, cheese, pork, beei', mutton or other meats, hay, and grain or othei vegetable or other productions, being the growth or produce of the estaie of such person, less the nmount expended in the purchase or product ion of eaid stock or produce, and not Including any part thereof consumed djrectly by the family; money and ' the value of all personal property acqulred by gift, nr inbeHtjiwp; all "tnr "roflts and ' ni nrr rnnrre Trnntever ( ceptihat portio.i i) thi salacy, compunsatíon i Dr pay reeeiveü forserviccs Id tbe i tary, naval nr ofher service oí the Uuited t States, iDcludini! soiia'.o'-. lepreeentatives and j delégales in congreï-a, r m wh.ch ihetaxhas ] been 'educted, and except i'.iat pnriioo oí' any i Balary upon which i" i:iploei required ( by Jaw to wltlihold, and does, withhold the t&x ! ( and paye tbe same to tbe offictr autborized to , receive it. ín computing incomeR the ■ , ry expenses actnally ineurred in carrylng i , on any bushiess, occupation or profesBion i shall be deduoted and also all interest doe ' . or paid wíthin the year by goch peraon on exiating indebtedness. And all national, state, ' coanty, school and municipal taxeB, not I cludine tliübt awfesa-ed againet local benefitp, I pald wíthin tbe year, shall be deducted frora I tbe fraine, profits or income of toe person who haB actually paid the f-ame, whether such per8on te owner, tenant or mortgagor. Al.so lose actually euMained during the year, incnrred in trilde or ansinK from fires, storms or shipwreck, and not compensated for by ineurance or otherwise, and debts aseertained to be worthless, but excludingall estimated depreciation of valué and losses within the year on real estáte parehused within two years previous to the year for which income is estimated. Provided, That no deduction ehall be made for any amount paid out for new buildings permanent improvements or bet terments, made to increase the valué of any propcrty or estáte. Provided further, That only one deduction. of $4,000 shall be made from tne aggregate income of all the members of any iamily, composed of one or both parenis, and one or more minor children or hu&band and wife; that guardians shall be allowed to make a deduction in favor of each and every ward, except that in case where two or more wards are compriwi in one family and have joint property inteiests, the aggregate deduction in iheir favor shall not exeeed $4,000. And provided further, that in cases where the salary or otber compensation paid to any person in the employment or service of the United States shall not exceed the rate of $4,000 per anmnn, or shall be by tees, or uncertain or irregular in the amount or in the time during which the same bhall have accrued or been earned, such salary or other compensation shall be included in estimatiner the annual gains, prolits or income of the person to whoru the same shall have been paid, and shall inelude that portion of any income or salary upon which a tax has not been paid by the employer, where the employer is required by law to pay on the exc s over $4,000; provided also, that in cqmputing the income of any person, Corporation, conipany or association, there shall not be included the amount received from any Corporation, company or association, as dividends upon tlie stock of Fuch Corporation, company or association, if the tax of 2 per cent has been paid upon its net profits by said Corporation, company or association ae required by this act. Must Keport His Profits. Sec. 56. That it shall be the duty of all persons of lawful age having an income ot more than $3.W0 for the taxable year, computed on the basis herein prescribed, to make and render a list. or return, on or before the day provided liy law. in such form and manneras may be directed by the commissioner of internal reven ue, with the approval of the secret&ry of the treasury, to the collector or a deputy collector of the district in which they reside, of the amount of their income, gains and profits as aforesaid. And all guardians and trustees, executors, administraiors, agents, reoeivers and all persons or corporations acting in any fldnciary capacity, shall make and render a list or return, as aforesaid, to the collector or a deputy collector of the district in which euch pereon acting in a fiduciary capacity resides or does business, of the amount of income, gains and profits of any minor or perron for wliora they act, but persons ha ving less than $3,500 income are not required to make euch report, and the collector or deputy collector shall require every list or return to be verified by the oath or affirmation of the party rendering it and may increase the amount, of any list or return if he lias reason to believe that the same is understated, and in case any such person having a taxable income shalineglect or refuse to make and render such list and return or shall render a willfully false or fraudulent list or return it shall be the duty of the collector or deputy collector to make such list, according to the best information he can obtain, by the examination of such person or any other evidence and to add 50 per cent as a penalty to the amount of the tax due on such list in all cases ot willful neglect or reí u-al to make and render a list or return, and in all cases of a willfully false or fraudulent list or return having been rendered to add 100 per cent as a penalty to the amount of tax ascertained to be due, the tax and the additions thereto as a penalty to be assessed and collected in the marnier provided for in other cases of willful neglect or refusal to render a list or return or of rendering a false or fraudulent return. Provided, That any person or Corporation in his. lier, or itsown behalf, or as such flduciary, shall be permitted to declare, under oath or afflrmation, the form and manner of which shall be prescribed by the commissioner of internal revenue, with the approval of the 6ecretary of tbe treasury, that he, she or his, her or its ward or beneficiary was not possessed of an income of $4,000, liable to be assessed according to the provisions of this act; or may declare that lie. she or it, or his, her or its ward or beneflciary has been assessed and has paid an iccome tax elsewhere in the same year, under authority of the United States, upon all his, her or lts income, gains, or profíts, and upon all the income, gains or proftts for which he. she or it is liable as such nduciary, as prescribed by law; and if the collector or deputy collector shall be satiyfied of the truth of the declaration, such person or Corporation shall thereuixm be exempt from income tax in the said district for that year; or if the list or return of any person or Corporation, company or associatiou hall have been increased by the collector or deputy collector, such person or Corporation, company or association may be permitted to prove the amount of income liable to be assessed; but such proof shall not be considered a conclusive of the facts, and no deductions claimed in such cases shall be made or allowed until approved by the collector or deputy collector. Any person or company, Corporation or association feeling aggrieved by the decisión of the deputy collector in such cases may appeal to the collector of the district, and his decisión thereon, unless reversed by the commissioner of internal revenue, shall be final. If dissatisfled with the decisión of the collector such person or corporation, company or association may submit the case, with all the papers, to the commiseioner of internal revenue for his decisión, and may furnish the testimony of witnesses to prove any relevant facts, having served notice to that effect upon the commissionerof internal revenue, as herein prescribed. Such notice shall state the time and place at which, and the officer before whom the testimony will be taken; the name, age, residence and business of the proposed witnese, with the questions to be propounded to the witness or a brief statement of the substanee of the testimouy he is expected to give. Provided, that the governmeut may at the same time and place take testimony upon like notice to rebnt the testimony of the witnesses examined by the person taxed. The notice shall be delivered or mailed to the commissioner of internal revenue a sufficientnumber of days previous to the day h'xed for taking the testimony to allow him after its receipt at least live days, exclusive of the period required tor mail communication with the place at which the testimony is to be taken, in which to give, should he so desire, iustructions as to the cross examination of the proposed witness. V henever practicable, the affidavit or deposition shall be taken before a collector or deputy collector of internal revenue, in which case reasonable notice shall be sriveu to the collector or deputy collector of the time fixed for taking the deposition or affltVivit. Provided further, That no penalty shall be assessed upon any person or corporation, corupariy or association for such neglect or refusal or for making or reudering a willfully false or iraudulent return, except atter reasonable notice of the time and place of hearing, to be prescribed by the commissioner of internal revenue, so as to give the person charged an opportunity tobe heard. Sec. 57. That every corporation, company or association doing business lor prolit shall make and render to the collector of lts collectiou district, on or before the tirst Jlonday of Maren in every year, beginning with the year 1895. a full return, veriüed by oath or afflrmation, in such torm as the commissioner of internal revenue may prescribe, of all the following matters for the whole calendar year last preceding the date of such return: The, gross profits of such corporation, company or associatiou, from all kinds of business of every name and nature. bec.ond- The expenses of such corporation, company or association, exclusive of interest, aunuities and dividends. Tbird- The net prolits of such corporation, company or asbociation, without allowance for interest, auuuities or divídesete. Foui'Ui- The amount paid on account of interest, annuities and dividends, stated separataly. Fitth- The amount paid in salaries of S-Í.0O0 or less to each person employed. Sixth - The amount paid in salaries of mn: e than $4,000 to each person employed, and the name and address of eaeh of such persons, and the amount paid to each. Books to IV Inspect(U Sec. 58. That it shall be the duty of every corporation, company or association doing business for proht, to keep full, regular and accurate book6 of accouiii, upun which all its transactions shall be entered from day U dny, i:i regular order, and whenever a collector ur rigjTiry r-'llectcr ft the district 1,n wftiffr tij; I ciriTPTánSTTr ennrra:.;. tí1, eül.,-.:!..!. Festable símil believe that a truc and corred return of the iiicome of such cor[oratíon, touijjany or asociation has uot been made, lie shall make an atiidavit oí such j lief and of the grounds od wnich ít is foundBd, and file the same with the cornmisnioner of internal revenue, and if said commlssioner ehall, on examination thereof, and after full hearing npon notlce given to all parties, conclude there is good ground for sucli belief, he shall issue a request in writlng to Büoh corporation, company or association to perniii an tnspection of the books of such Corporation, company or asuocialion to be made; and 11 unen Corporation, eompany or asï-ociation f-halï refnse to comply with Buch request, then the collector or deputy collector of the district ehall make, from puch informa tion as lie can obtain, an estímate oí' the amounl of such inconie aud . then add 60 per cent lhe reto, wbieh said as?t-ssment eo made snall then be the lawful así-t&tment of such income. Sec. 59. That it shall be tlie duty of every collector of internal revenue, to wliom any i payment of any laxes other than tfce tax ; resented by an adhe6ive stauip or other engraved stamp is made under the provisions of i this act, to give to the person muking such payment a full wriiten or printed receipt, ; presBing the amonnt paid and the particular ! account for which such payment was made; and whenever tuch payment is made such ' collector shall, if required. give a separate reclpt for each tax paid by any debtor, on account of payments made to or to be made by him to separate creciitors, in such torm that such debtor can cnnver.ier.tly produce the ! same separately to his several creditors in ', isiaction of thtir respective dem&nds to the j amounta specifled in Buoh receipts, and such receints shail be sufBcitnt evidence in favor of suchdebtor to JuRtify him in withholdlng the ; amount therein expiessed from his next payment to his creditor, but such creditor niay, upon givingto hib aebtor a full written receipt, acknowledgiug tbe payment to him of whatever suin may be actually paid, and acc-epting the amouut of tax paid as aforesaid (spccifying the same) as a further satisfaction of the debt to t hat amount, require the surrender to him oí' 6uch collecter's receipt. Extra Tax on Arrears. Sec. 60. The taxes on incomes herein imposed ühaü be due and payable on or before the first day of July in eaeh year, and to any suin or sums annually due and unpaid after the first day of July as aforesaid, and for 10 i days after notice and demand thereof by the collector, there shall be levied in addition thereto the sum of 5 per cent on the amount of taxes unpaid and interest at the rate of 1 per cent per nionlh upon said tax from the time the same becomes due as a penalty, except from the estatesof deceased, insane or insolvent persons. Nonresidents. Sec. 61. Any nonresident may also receive i the benefit of the exerr.ptions hereinbefore Í vided for by filing with the deputy collector of ; any district a true list of all his property and ] source of ii,.ume in the United States, and i comulying wtth the provisions of section 29 ! of this act, as if a resident. In computing income he shall include all income from eyery ! source, but uuless je be a citizen of the United I States he shali only pay on that part of the income which isi'.erived trom any source in the United Staies. In case such ïionre.sident fails to tile sut;h statement, the collector of each district shall collect the tax on the income derived from property situated in his district subject to income tax, inaking no allowauce ! for exemptious, and all property belonging to ; such uonresident shall be Hable to distraint i ior tax; Provided, that nonresident corporations shall be subject to the same laws as to tax as resident corporations, and the coilection of the tax shall be made in the same manner as provided for collections of taxes against nonresident persons. - -