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was not in business, or if his records for any part of such period are so inadequate as not to furnish satisfactory data, the average price of the taxpayer for such part of such period shall, when necessary for a fair comparison, be deemed to be the average price, as determined by the Commissioner, of representative concerns engaged in a similar business and similarly circumstanced. The presumption established by this subsection may be rebutted by proof of the character described in subsection (i).

(1) The taxes imposed by subsection (a) shall be imposed on the net income from the sources specified therein, regardless of any loss arising from the other transactions of the taxpayer, and regardless of whether the taxpayer had a taxable net income (under the income-tax provisions of the applicable Revenue Act) for the taxable year as a whole; except that if such application of the tax imposed by subsection (a) is held invalid, the tax under subsection (a) shall apply to that portion of the taxpayer's entire net income for the taxable year which is attributable to the net income from the sources specified in such subsection.

SEC. 701. CREDIT FOR OTHER TAXES ON INCOME.

There shall be credited against the total amount of the taxes imposed by this subchapter an amount equivalent to the excess of (a) The amount of the other Federal income and excess-profits taxes payable by the taxpayer for the taxable year, over

(b) The amount of the other Federal income and excess-profits taxes which would have been payable by the taxpayer for the taxable year if his net income were decreased by the amount of net income taxable under this subchapter.

SEC. 702. ADMINISTRATIVE PROVISIONS.

(a) All provisions of law (including penalties) applicable with respect to taxes imposed by chapter 1, shall, insofar as not inconsistent with this subchapter, be applicable with respect to the taxes imposed by this subchapter, except that the provisions of sections 101, 131, 251, and 252 shall not be applicable.

(b) Every person (1) upon whom a Federal excise tax was imposed but not paid, or (2) who received any reimbursement specified in section 700 (a) (2), or (3) who received a refund or credit of Federal excise tax, shall make a return under this subchapter, which return shall contain such information and be made in such manner as the Commissioner, with the approval of the Secretary, shall prescribe.

(c) If the Commissioner finds that the payment, on the date prescribed for the payment thereof, of any part of the amount determined by the taxpayer as the tax under this subchapter, or of any deficiency with respect thereto, would impose undue hardship upon the taxpayer, the Commissioner may grant an extension for the payment of any such part for a period not in excess of three years. In such case the amount with respect to which the extension is granted shall be paid on or before the date of the expiration of the period of the extension, and the running of the statute of limitations for assessment and collection shall be suspended for the period of any such extension. If an extension is granted, the Commissioner may require the taxpayer to furnish a bond in such amount, not exceeding double the amount with respect to which the extension is granted, and with such sureties as the Commissioner deems necessary, conditioned upon the payment of the amount with respect to which the extension is granted in accordance with the terms of the extension. There shall be collected, as a part of any amount with respect to which an extension is granted, interest thereon at the rate of 6 per centum per annum from the expiration of six months after the due date thereof to the expiration of the period of the extension.

SEC. 703. TAXABLE YEARS TO WHICH SUBCHAPTER IS APPLICABLE. The taxes imposed by this subchapter shall apply only with respect to taxable years ending during the calendar year 1939 and to subsequent taxable years.

SEC. 704. APPLICATION OF SUBCHAPTER TO POSSESSIONS.

With respect to the following income, the tax under this subchapter shall be in force in any possession of the United States (including the Philippine Islands); such tax shall (without regard to the residence or citizenship or place of organization of the taxpayer) be collected by the appropriate internal-revenue officers of such possession; and the proceeds thereof shall accrue to the general government of such possession: (a) Any income specified in subsection (a) (1) or (3) of section 700 if the Federal excise tax with respect to the articles in question accrued in such possession; and (b) any income specified in subsection (a) (2) of section 700 if the reimbursement specified therein relates to articles sold in such possession by the taxpayer under this subchapter and if the geographical scope of the Federal excise tax in question extended to such possession. Income taxable as provided in this section shall not be otherwise taxable under this subchapter. In applying section 700 to such income, the gross income and deductions shall be determined in accordance with the Federal Revenue Act applicable to the taxable year. In applying section 701 to such income, income taxes paid to such possession shall be deemed to be Federal income taxes.

SEC. 705. CLOSING AGREEMENTS.

Any person who is liable for the tax imposed by this subchapter and who has filed any claim or claims for refund of any amount paid or collected as tax under the Agricultural Adjustment Act, 48 Stat. 31, as amended, may apply to the Commissioner for an adjustment of such liability for tax in conjunction with such claim or claims for refund, and thereafter, the Commissioner, for such purposes, may, in his discretion, consider such liability and such claim or claims as one case and, in his discretion, may enter into a written agreement with such person for the settlement of such case by such payment by, or refund to, such person as may be specified in such agreement. Such agreement shall be a final settlement of the liability for tax and the claim or claims for refund covered by such agreement, except in case of fraud, malfeasance, or misrepresentation of a material fact. In the absence of fraud or mistake in mathematical calculation, any action taken or any consideration given by the Commissioner pursuant to this section shall not be subject to review by any court, or any administrative, or accounting officer, employee, or agent of the United States.

SEC. 706. PUBLICITY OF RETURNS.

For provisions with respect to publicity of returns under this subchapter, see subsection (a) (2) of section 55.

TABLE OF CONTENTS

CHAPTER 3-ESTATE TAX

SUBCHAPTER A-BASIC ESTATE TAX

PART I-INTRODUCTORY PROVISIONS

Sec. 800. Application of subchapter.
Sec. 801. Classification of provisions.

Sec. 802. Application of parts.

PART II-ESTATES OF CITIZENS OR RESIDENTS OF THE UNITED STATES

Sec. 810. Rate of tax.

Sec. 811. Gross estate.

Sec. 812. Net estate.

SUBPART I-COMPUTATION OF TAX

Sec. 813. Credits against tax.

SUBPART II-RETURNS AND PAYMENT OF TAX

Sec. 820. Executor's notice.

Sec. 821. Returns.

Sec. 822. Payment of tax.

Sec. 823. Duplicate receipts.

Sec. 824. Examination of return and determination of tax.
Sec. 825. Discharge of executor from personal liability.

Sec. 826. Collection of unpaid tax.

Sec. 827. Lien for tax.

Sec. 828. Cross references.

SUBPART III-MISCELLANEOUS PROVISIONS

Sec. 840. Other laws applicable.

Sec. 841. Cross references.

SUBPART IV-SPECIAL CLASSES OF RESIDENTS

Sec. 850. Missionaries in Foreign Service.

Sec. 851. Citizens with estates in China.

PART III-ESTATES OF NONRESIDENTS NOT CITIZENS OF THE UNITED STATES

Sec. 860. Rate of tax.

Sec. 861. Net estate.

Sec. 862. Property within the United States.

Sec. 863. Property without the United States.

Sec. 864. Returns.

Sec. 865. Cross reference.

PART IV-SUPPLEMENTAL PROVISIONS

SUPPLEMENT A-ASSESSMENT AND COLLECTION OF DEFICIENCIES

Sec. 870. Definition of deficiency.

Sec. 871. Procedure in general.

Sec. 872. Jeopardy assessments.

Sec. 873. Claims in abatement.

Sec. 874. Period of limitation upon assessment and collection.

Sec. 875. Suspension of running of statute.

Sec. 876. Cross reference.

SUPPLEMENT B-INTEREST, ADDITIONS TO THE TAX, AND PENALTIES

Sec. 890. Interest on extended payments.

Sec. 891. Interest on deficiencies.

Sec. 892. Interest on jeopardy assessments.

Sec. 893. Additions to the tax in case of nonpayment.

Sec. 894. Penalties.

Sec. 895. Cross reference.

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Sec. 921. Authority of clerk of United States Court for China to act as collector.

SUPPLEMENT FEXTENSION OF PAYMENT IN CASE OF FUTURE INTERESTS

Sec. 925. Period of extension.

Sec. 926. Requirements for extension.

Sec. 927. Credit for State death taxes.

SUPPLEMENT G-DEFINITIONS

Sec. 930. "Executor," "Net estate," "Month," "Collector."
Sec. 931. Cross references.

SUBCHAPTER B-ADDITIONAL ESTATE TAX

Sec. 935. Rate of tax.

Sec. 936. Credits against tax.

Sec. 937. Assessment, collection, and payment of tax.

Sec. 938. Publicity of returns.

CHAPTER 3-ESTATE TAX

SUBCHAPTER A-BASIC ESTATE TAX

Part I-Introductory Provisions

SEC. 800. APPLICATION OF SUBCHAPTER.

The provisions of this subchapter shall apply only to estates of decedents dying after the date of the enactment of this title. Estate taxes in the case of decedents dying on or prior to the date of the enactment of this title shall not be affected by the provisions of this subchapter, but shall remain subject to the applicable provisions of the Revenue Act of 1926 and prior revenue acts, except as such provisions are modified by legislation enacted subsequent to the Revenue Act of 1926.

SEC. 801. CLASSIFICATION OF PROVISIONS.

The provisions of this subchapter are herein classified and designated as

Part I-Introductory provisions.

Part II-Citizens or residents of the United States.

Part III-Nonresidents not citizens of the United States.
Part IV-Supplemental provisions.

SEC. 802. APPLICATION OF PARTS.

Part II shall apply to the estates of citizens or residents of the United States and, except as otherwise provided, to the estates of nonresidents not citizens of the United States, subject to the exceptions and additional provisions contained in Part III. Part IV shall apply to the estates both of citizens or residents of the United States and nonresidents not citizens of the United States.

Part II-Estates of Citizens or Residents of the United States

SUBPART I-COMPUTATION OF TAX

SEC. 810. RATE OF TAX.

A tax equal to the sum of the following percentages of the value of the net estate (determined as provided in section 812) shall be imposed upon the transfer of the net estate of every decedent, citizen or resident of the United States, dying after the date of the enactment of this title.

1 per centum of the amount of the net estate not in excess of $50,000;

2 per centum of the amount by which the net estate exceeds $50,000 and does not exceed $100,000;

3 per centum of the amount by which the net estate exceeds $100,000 and does not exceed $200,000;

4 per centum of the amount by which the net estate exceeds $200,000 and does not exceed $400,000;

5 per centum of the amount by which the net estate exceeds $400,000 and does not exceed $600,000;

6 per centum of the amount by which the net estate exceeds $600,000 and does not exceed $800,000;

7 per centum of the amount by which the net estate exceeds $800,000 and does not exceed $1,000,000;

8 per centum of the amount by which the net estate exceeds $1,000,000 and does not exceed $1,500,000;

9 per centum of the amount by which the net estate exceeds $1,500,000 and does not exceed $2,000,000;

10 per centum of the amount by which the net estate exceeds $2,000,000 and does not exceed $2,500,000;

11 per centum of the amount by which the net estate exceeds $2,500,000 and does not exceed $3,000,000;

12 per centum of the amount by which the net estate exceeds $3,000,000 and does not exceed $3,500,000;

13 per centum of the amount by which the net estate exceeds $3,500,000 and does not exceed $4,000,000;

14 per centum of the amount by which the net estate exceeds $4,000,000 and does not exceed $5,000,000;

15 per centum of the amount by which the net estate exceeds $5,000,000 and does not exceed $6,000,000;

16 per centum of the amount by which the net estate exceeds $6,000,000 and does not exceed $7,000,000;

17 per centum of the amount by which the net estate exceeds $7,000,000 and does not exceed $8,000,000;

18 per centum of the amount by which the net estate exceeds $8,000,000 and does not exceed $9,000,000;

19 per centum of the amount by which the net estate exceeds $9,000,000 and does not exceed $10,000,000;

20 per centum of the amount by which the net estate exceeds $10,000,000.

SEC. 811. GROSS ESTATE.

The value of the gross estate of the decedent shall be determined by including the value at the time of his death of all property, real or personal, tangible or intangible, wherever situated, except real property situated outside of the United States

(a) DECEDENT'S INTEREST.-To the extent of the interest therein of the decedent at the time of his death;

(b) DOWER OR CURTESY INTERESTS.-To the extent of any interest therein of the surviving spouse, existing at the time of the decedent's death as dower, curtesy, or by virtue of a statute creating an estate in lieu of dower or curtesy;

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