what to be de

empted.

In estimating shall have been withheld; the share of any person of the gains and income, what to be included; profits, whether divided or not, of all companies or partnerships, but not including the amount received from any corporations whose officers, as authorized by law, withhold and pay as taxes a per centum of the dividends made, and of interest or coupons paid by such corporations; profits realized within the year from sales of real estate purchased within two years previous to the year for which income is estimated; the amount of sales of live stock, sugar, wool, butter, cheese, pork, beef, mutton, or other meats, hay and grain, fruits, vegetables, or other productions, being the growth or produce of the estate of such person, but not including any part thereof consumed directly by the family; and all other gains, profits, and income drawn from any source whatever, but not including the rental value of the homestead used or occupied by any person, or by his family. SEC. 8. And be it further enacted, That military or naval pensions ducted and ex- allowed to any person under the laws of the United States, and the sum of two thousand dollars of the gains, profits, and income of any person, shall be exempt from said income tax, in the manner hereinafter provided. Only one deduction of two thousand dollars shall be made from the aggregate income of all the members of any family composed of one or both parents and one or more minor children, or of husband and wife; but when a wife has by law a separate income, beyond the control of her husband, and is living separate and apart from him, such deduction shall then be made from her income, gains, and profits; and guardians and trustees shall be allowed to make the deduction in favor of each ward or beneficiary except that in a case of two or more wards or beneficiaries comprised in one family, having joint property interest, only one deduction shall be made in their favor. For the purpose of allowing said deduction from the income of any religious or social community holding all their property and the income therefrom jointly and in common, each five of the persons composing such society, and any remaining fractional number of such persons less than five over such groups of five, shall be held to constitute a family, and a deduction of two thousand dollars shall Unpaid income be allowed for each of said families. Any taxes on the incomes, gains, and profits of such societies, now due and unpaid, shall be assessed and collected according to this provision, except that the deduction shall be only one thousand dollars for any year prior to eighteen hundred and seventy.

Deduction from income of members of a family;

wards and beneficiaries;

religious or social communi

ties.

taxes of such communities.

Deductions in estimating amount of income.

SEC. 9. And be it further enacted, That in addition to the exemptions provided in the preceding section, there shall be deducted from the gains, profits, and income of any person all national, State, county, and municipal taxes paid by him within the year, whether such person be owner, tenant, or mortgager; all his losses actually sustained during the year arising from fires, floods, shipwreck, or incurred in trade, and debts ascertained to be worthless, but excluding all estimated depreciation of values; the amount of interest paid during the year, and the amount paid for rent or labor to cultivate land, or to conduct any other business from which income is derived; the amount paid for the rent of the house or premises occupied as a residence for himself or his family, and the amount paid Certain deduc- out for usual and ordinary repairs. No deduction shall be made for any amount paid out for new buildings, permanent improvements, or betterments made to increase the value of any property or estate

tions not to be made.

The income tax to be as

sessed for what

time, and when

to be collected.

Penalty for default of payment.

SEC. 10. And be it further enacted, That the tax hereinbefore provided shall be assessed upon the gains, profits, and income for the year ending on the thirty-first day of December next preceding the time for levying and collecting said tax, and shall be levied on the first day of March, eighteen hundred and seventy-one, and eighteen hundred and seventy-two, and be due and payable on or before the thirtieth day of April in each of said years. And in addition to any sum annually due and unpaid after the thirtieth day of April, and for ten days after notice and demand

thereof by the collector, there shall be levied and collected, as a penalty, the sum of five per centum on the amount unpaid, and interest on said amount at the rate of one per centum per month from the time the same became due, except from the estates of deceased, insane, or insolvent persons.

ex

Persons liable to pay income tax to make re

turns to assistant

Returns to in

To be verified by oath.

Assistant assessor may in

SEC. 11. And be it further enacted, That it shall be the duty of every person of lawful age, whose gross income during the preceding year ceeded two thousand dollars, to make and render a return on or before the day designated by law, to the assistant assessor of the district in which he assessor. resides of the gross amount of his income, gains, and profits as aforesaid; but not including the amount received from any corporation whose officers, as authorized by law, withhold and pay as taxes a per centum of the div- clude what, &c. idends made and of the interest or coupons paid by such corporation, nor that portion of the salary or pay received for services in the civil, military, naval, or other service of the United States, or as senator, representative, or delegate in Congress, from which tax has been deducted, nor the wages of minor children not received; and every guardian and trustee, executor or administrator, and any person acting in any other fiduciary capacity, or as resident agent for, or copartner of, any non-resident alien, deriving income, gains, and profits from any business, trade, or profession carried on in the United States, or from rents of real estate situated therein, shall make and render a return as aforesaid to the assistant assessor of the district in which he resides of the amount of income, gains, and profits of any minor or person for whom he acts. The assistant assessor shall require every such return to be verified by the oath of the party rendering it, and may increase the amount of any return, after notice to such party, if he has reason to believe that the same is understated. In case any person having a gross income as above, of two thousand dollars or more, shall neglect or refuse to make and render such return, or shall render a false or fraudulent return, the assessor or the assistant assessor shall make such return, according to the best information he can obtain by the exami- false return; nation of said person, or of his books or accounts, or by any other evidence, and shall add, as a penalty, to the amount of the tax due thereon, fifty per centum in all cases of willful neglect or refusal to make and render a return, and one hundred per centum in all cases of a false or fraudulent return having been rendered. The tax and the addition thereto as penalty shall be assessed and collected in the manner provided for in and collected; cases of willful neglect or refusal to render a return, or of rendering a false or fraudulent return. But no penalty shall be assessed upon any person not to be asfor such neglect or refusal, or for making or rendering a false or fraudu- sessed until after lent return, except after reasonable notice of the time and place of hear- reasonable noing, to be regulated by the commissioner of internal revenue, so as to give the person charged an opportunity to be heard: Provided, That no collector, deputy collector, assessor, or assistant assessor shall permit to be not to be pubpublished in any manner such income returns, or any part thereof, except such general statistics, not specifying the names of individuals or firms, as he may make public, under such rules and regulations as the commissioner of internal revenue shall prescribe.

crease amount. Penalty for not making return;

or making

how assessed

tice.

Income returns

lished.

When returns

assistant assess

or, amount li

SEC. 12. And be it further enacted, That when the return of any person is increased by the assistant assessor, such person may exhibit his are increased by books and accounts and be permitted to prove and declare, under oath, the amount of income liable to be assessed; but such oath and evidence able to tax may shall not be conclusive of the facts, and no deductions claimed in such be shown. cases shall be allowed until approved by the assistant assessor. Any per- Appeals from son may appeal from the decision of the assistant assessor, in such cases, to the assessor of the district, and his decision thereon, unless reversed by ors. the commissioner of internal revenue, shall be final. The form, time, and manner of proceedings shall be subject to regulations to be prescribed Proceedings in by the commissioner of internal revenue.

assistant assessors and assess

appeals.

How persons

may become exempt from in

district

SEC. 13. And be it further enacted, That any person, in his own behalf, or as such fiduciary or agent, shall be permitted to declare, under oath, come tax in any that he, or his ward, beneficiary, or principal, was not possessed of an in come of two thousand dollars, liable to be assessed according to the provisions of this act; or may declare that an income tax has been assessed and paid elsewhere in the same year, under authority of the United States, upon his income, gains, and profits, or those of his ward, beneficiary, or principal, as required by law; and if the assistant assessor shall be satisfied of the truth of the declaration, such person shall thereupon be exempt from income tax in the said district.

Consuls of

SEC. 14. And be it further enacted, That consuls of foreign governforeign governments who are not citizens of the United States shall be exempt from any ments exempt income tax imposed by this act which may be derived from their official emoluments, or from property in foreign countries: Provided, That the governments which such consuls may represent shall extend similar exemption to consuls of the United States.

from income

tax, if, &c.

Tax of two

and one half per cent. upon dividends or interest paid by certain corporations;

amount paid

may be withheld;

SEC 15. And be it further enacted, That there shall be levied and collected for and during the year eighteen hundred and seventy-one a tax of two and one half per centum on the amount of all interest or coupons paid on bonds or other evidences of debt issued and payable in one or more years after date, by any of the corporations in this section hereinafter enumerated, and on the amount of all dividends of earnings, income, or gains hereafter declared, by any bank, trust company, savings institution, insurance company, railroad company, canal company, turnpike company, canal navigation company, and slack-water company, whenever and wherever the same shall be payable, and to whatsoever person the same may be due, including non-residents, whether citizens or aliens, and on all undivided profits of any such corporation which have accrued and been earned and added to any surplus, contingent, or other fund, and every such corporation having paid the tax as aforesaid, is hereby authorized to deduct and withhold from any payment on account of interest, coupons, and dividends an amount equal to the tax of two and one half per centum payment to the on the same; and the payment to the United States, as provided by law, United States to of the amount of tax so deducted from the interest, coupons, and dividends free corporation aforesaid, shall discharge the corporation from any liability for that amount from liability. of said interest, coupons, or dividends, claimed as due to any person, except in cases where said corporations have provided otherwise by an express contract: Provided, That the tax upon the dividends of insurance companies shall not be deemed due until such dividends are payable, either in money or otherwise; and that the money returned by mutual insurance companies to their policy holders, and the annual or semi-annual interest allowed or paid to the depositors in savings banks or savings institutions, shall not be considered as dividends; and that when any dividend is made, or interest as aforesaid is paid, which includes any part of the surplus or contingent fund of any corporation which has been assessed and the tax paid thereon, or which includes any part of the dividends, interest, or coupons received from other corporations whose officers are authorized by law to withhold a per centum on the same, the amount of tax so paid on that portion of the surplus or contingent fund, and the amount of tax which has been withheld and paid on dividends, interest, or coupons so received, may be deducted from the tax on such dividend or interest.

Dividends, &c

of insurance companies. Interest paid to depositors in savings banks not a dividend.

Certain deduc

tions from tax on dividend or interest.

See Pub. Res.

No. 109.
Post, p. 387.

Certain corporations to

make returns to assessors.

Form of returns.

SEC. 16. And be it further enacted, That every person having the care or management of any corporation liable to be taxed under the last preceding section, shall make and render to the assessor or assistant assessor of the district in which such person has his office for conducting the business of such corporation, on or before the tenth day of the month following that in which any dividends or sums of money become due or payable as aforesaid, a true and complete return, in such form as the commissioner of internal revenue may prescribe, of the amount of in、

come and profits and of taxes as aforesaid; and there shall be annexed thereto a declaration of the president, cashier, or treasurer of the corporation, under oath, that the same contains a true and complete account of the income and profits and of taxes as aforesaid. And for any default in the making or rendering of such return, with such declaration annexed, the corporation so in default shall forfeit, as a penalty, the sum of one thousand dollars; and in case of any default in making or rendering said return, or of any default in the payment of the tax as required, or of any part thereof, the assessment and collection of the tax and penalty shall be in accordance with the general provisions of law in other cases of neglect and refusal.

Penalty upon corporation for default in making returns

Taxes upon

dividends of

comes of those

States, to cease after August 1,

1870.

1866, ch. 184. 1867, ch. 169. 138, 480.

SEC. 17. And be it further enacted, That sections one hundred and twenty, one hundred and twenty-one, one hundred and twenty-two, and one banks, trust hundred and twenty-three of the act of June thirty, eighteen hun- companies, savdred and sixty-four, entitled "An act to provide internal revenue to sup- insurance ings institutions, port the government, to pay interest on the public debt, and for other companies, and purposes," as amended by the act of July thirteen, eighteen hundred and upon the insixty-six, and the act of March two, eighteen hundred and sixty-seven, in the service of shall be construed to impose the taxes therein mentioned to the first day the United of August, eighteen hundred and seventy, but after that date no further taxes shall be levied or assessed under said sections; and all acts and parts of acts relating to the taxes herein repealed, and that all the provisions of said acts, shall continue in full force for levying and collecting all taxes properly assessed or liable to be assessed, or accruing under the provisions of former acts, or drawbacks, the right to which has already accrued or which may hereafter accrue under said acts, and for maintaining and continuing liens, fines, penalties, and forfeitures incurred under and by virtue thereof. And this act shall not be construed to affect any act done, right Saving clause. accrued, or penalty incurred under former acts, but every such right is hereby saved. And for carrying out and completing all proceedings which have been already commenced or that may be commenced to enforce such fines, penalties, and forfeitures, or criminal proceedings under said acts, and for the punishment of crimes of which any party shall be or has been found guilty.

Vol. xiv. pp.

dated.

SEC. 18. And be it further enacted, That the President is hereby au- Adjoining collection districts thorized to annex to, and unite with each other, two or more adjoining colmay be united, lection districts, whenever in his opinion it will reduce the expenses of and supervisors' collecting the internal revenue, without impairing the efficiency of the districts consoliservice; and thereupon shall retain but one collector and one assessor for One collector such enlarged district. And the President is also authorized to consoli- and assessor and date in like manner, at his discretion, any two or more adjoining supervi- supervisor for sors' districts, and to retain or appoint one supervisor for such consolidated district.

each district.

Number of assistant assessors

SEC. 19. And be it further enacted, That as soon as practicable after the passage of this act the number of assistant assessors employed shall to be permanentbe permanently reduced by the discharge of all officers of that class who ly reduced. are assigned specially to the assessment of any taxes which shall have been abolished by law; and the commissioner of internal revenue shall be required further to reduce the number of assistant assessors in proportion to any reduction of the service of assessment which has been made, or may hereafter be made, by the repeal of any portion of the internal taxes.

SEC. 20. And be it further enacted, That section sixty-seven of an act approved July thirteen, eighteen hundred and sixty-six, entitled "An act to reduce internal taxation, and to amend an act entitled 'An act to pro- § vide internal revenue to support the government, to pay interest on the public debt, and for other purposes,' approved June thirty, eighteen hundred and sixty-four," be amended by inserting after the words "that in any case civil or criminal," the words "at law or in equity"; also, by inserting after the words "if the suit were commenced in the court below

Amendment of act 1866, ch. 184,

67.

Vol. xiv. p. 171.

Provision as

to removal of courts against

suits in State

&c. to courts of the United States.

revenue officers, by summons," the words following: "subpoena, petition, or by any other form of action except as hereinafter provided"; also, by inserting after the words "or if it were commenced by capias," the words following: or by any similar form of proceeding by which a personal arrest is ordered."

Customs duties after De

cember 31, 1870, in lieu of present duties upon

teas, coffee, and cocoa;

molasses, sirups, and sugars.

[Amended, 1871, ch. 6. Post, p. 397.

Pub. Res. No.

18, § 2.

66

SEC. 21. And be it further enacted, That after the thirty-first day of December, eighteen hundred and seventy, in lieu of of the duties now imposed by law on the articles hereinafter enumerated or provided for imported from foreign countries, there shall be levied, collected, and paid the following duties and rates of duties, that is to say:

On teas of all kinds, fifteen cents per pound.
On coffee of all kinds, three cents per pound.

On cacao, or cocoa, two cents per pound.

On cocoa leaves or shells, one cent per pound.

On ground or prepared cacao, or cocoa, five cents per pound; and on chocolate, seven cents per pound.

On all molasses, five cents per gallon.

On tank-bottom sirup of sugar-cane juice, melada, concentrated melada, and concentrated molasses, one and one half cents per pound.

On all raw or muscovado sugar not above number seven, Dutch standard in color, one and three quarter cents per pound.

On all raw or muscovado sugar above number seven, Dutch standard in color, and on all other sugars not above number ten, Dutch standard in Post, p. 598.] color, two cents per pound.

Provision as to samples.

On all other sugars above number ten, Dutch standard in color, and not above number thirteen, Dutch standard in color, two and one quarter cents per pound.

On all other sugars above number thirteen, Dutch standard in color, and not above number sixteen, Dutch standard in color, two and three quarter cents per pound.

On all other sugars above number sixteen, Dutch standard in color, and not above number twenty, Dutch standard in color, three and one quarter cents per pound.

On all sugar above number twenty, Dutch standard in color, and on all refined loaf, lump, crushed, powdered, and granulated sugar, four cents per pound: Provided, That the Secretary of the Treasury shall, by regulations, prescribe and require that samples shall be taken by inspectors from the hogshead, box, or other package, in such a manner as to represent a true average of the contents of the package, and from a sufficient number of packages of the same mark in each and every invoice, so that the samples on which the classification is made shall be a fair average in quality of the sugar imported under that mark, and the classification shall Weights how be adjudged on the entire mark accordingly; and the weights of sugar imported in casks or boxes shall be marked distinctly by the custom-house weigher by scoring the figures indelibly on each package: Provided, That all sirup of sugar, sirup of sugar-cane juice, melada, concentrated melada, or concentrated molasses entered under the name of molasses, shall be forfeited to the United States.

to be marked.

Sirups, &c.

entered as mo

lasses to be for

feited.

Customs duties on wines im

On all wines imported in casks, containing not more than twenty-two ported in casks; per centum of alcohol, and valued at not exceeding forty cents per gallon, twenty-five cents per gallon; valued at over forty cents, and not over one dollar per gallon, sixty cents per gallon; valued at over one dollar per gallon, one dollar per gallon, and in addition thereto twenty-five per centum ad valorem.

in bottles.

On wines of all kinds, imported in bottles, and not otherwise herein provided for, the same rate per gallon as wines imported in casks, but all bottles containing one quart or less than one quart, and more than one pint, shall be held to contain one quart, and all bottles containing one pint or less shall be held to contain one pint, and shall pay in addition three cents for each bottle.