(T. D. 2130.) Corporation income tax. T. D. 2005 not applicable to returns made for 1909 to 1912, inclusive, if values of securities were treated in returns for that period in accordance with regulations then in force, in which case no reopening or readjustment of securities account will be required. TREASURY DEPARTMENT. OFFICE OF COMMISSIONER OF INTERNAL REVENUE, Washington, D. C., January 18, 1915. To collectors of internal revenue, internal-revenue agents, and others concerned: Reference is made to T. D. 2005, which holds, in effect, that neither increase nor shrinkage in the book value of securities due to market fluctuations or otherwise is to be taken into account in making returns of annual net income as required by section 2, act of October 3, 1913. Numerous inquiries have been made as to whether or not the terms of this Treasury decision are applicable to returns made under the special excise tax law. (Sec. 38, act of Aug. 5, 1909.) Relative to this, it is held that if returns made for the years 1909 to 1913, inclusive, were made strictly in accord with the regulations then in force that is, if the increase in the book values of securities was returned as income and the shrinkage was deducted from gross income, as the regulations then required and permitted--no readjustment of the income in so far as it is affected by the adjusted values of securities need now be made. The return as to this item will be accepted as correct and final where the adjustment was made in the ordinary course of business and without reference to the special excise tax on corporations. In all such cases wherein the book values of the securities were taken into account in making returns for the years 1909 to 1912, inclusive, if such securities have been, or shall be hereafter, sold or otherwise disposed of, the gain or loss resulting from such sale or disposal will be determined upon the basis of the difference between the last adjusted value subsequent to January 1, 1909, taken into account in making the return and the amount realized for the securities when disposed of, and in this event no prorating will be required or permitted. If for the purpose of the special excise tax no adjustment of the value of securities acquired prior to January 1, 1909, had been made or taken into either side of the account in the return of annual net income subsequent to January 1, 1909, the gain or loss will be determined in accordance with the rule set out in T. D. 2005; that is, the 78411°-VOL 17-15-3 gain or loss will be determined on the basis of the difference between the actual cost and selling price and prorated according to the number of years the securities were held. Therefore, if, in the examination of the books of corporations, examining officers find that the securities account was treated in the returns for the years 1909 to 1912, inclusive, in accordance with the regulations then in force, no reopening or readjustment of this account will be required. In such case, as to this item, the returns will be considered final and correct, the gain or loss resulting from the disposal thereafter of such securities to be determined in accordance with the instructions hereinbefore given. Approved: W. G. MCADOO, W. H. OSBORN, Commissioner of Internal Revenue. Secretary of the Treasury. (T. D. 2131.) Income tax. Use of Form 1008, revised, for claiming refundment of normal tax withheld in excess of total tax liability. TREASURY DEPARTMENT, OFFICE OF COMMISSIONER OF INTERNAL REVENUE, Washington, D. C., January 19, 1915. To collectors of internal revenue: There follows a synopsis of the requirements in the use of Form 1008, revised, and the relation between that form and Form 1040, revised. 1. A person who has had income tax withheld from his income during the year 1914 in excess of his total liability for the normal tax should file Form 1008, revised, with either the withholding agent or the collector of internal revenue with whom the withholding agent's return is required to be filed, as he may elect. The withholding agent is required by T. D. 1965 to retain the amount of tax withheld by him until 30 days prior to March 1, 1915, in order to refund amounts withheld in excess of the taxpayer's liability for the normal tax should a proper claim be filed for deductions and exemptions. He is required by law to file his return on or before March 1, 1915, and may, in his discretion, file his return on any date between January 1 and March 1. If he has filed his return with the collector, Form 1008, revised, should also be filed with the collector, who will notify the withholding agent and authorize him to make a refundment, changing the entry on the return and filing therewith Form 1008, revised, as a voucher for the refundment. If, however, the withholding agent has not filed his return, and a claim on Form 1008, revised, is filed with him, he will make the proper refundment on his own responsibility, filing Form 1008, revised, as a voucher therefor. If Form 1008, revised, is filed with the collector under these circumstances, he will authorize the withholding agent to make refundment. The withholding agent is not required by law to forward to the collector the tax withheld by him until he has received notice of assessment, and then, like the tax assessed in other cases, payment should be made by him on or before June 30 of each year. 2. Where there are two or more withholding agents whose collection districts are the same, Form 1008, revised, should be filed with the collector of that district, and a statement setting forth the names of the withholding agents and the amounts withheld by each should be attached to the form. The collector will then notify the withholding agents of the exact amount that may be refunded by each. 3. Where excess deductions have been made by two or more withholding agents in different collection districts, Form 1008, revised, may be filed with either collector, as the individual may elect; and there should be attached to the form a complete statement setting forth the names of all withholding agents, the amounts withheld by each, and the exact amount claimed as a refundment from each. The collector with whom the statement is filed will accept it as a part of Form 1008, revised, and as subject to the penalties imposed by law, and will notify the withholding agents, whether in his district or other districts, to make the refundment claimed from each. 4. It is to be noted that this ruling provides for the execution by the taxpayer of only one Form 1008, revised, covering all the general deductions and exemptions claimed by him for the tax year. 5. The adjustment of total tax liability by the use of Form 1008, revised, does not, necessarily, mean that a return on Form 1040, revised, is not required under the law. A return of annual net income on Form 1040, revised, is required in all cases of individual incomes subject to the tax, except where the individual's tax liability is required by law to be satisfied at the source. In other words, when an individual is liable for the normal tax, only, and his entire net income is subject to withholding, no return on Form 1040, revised, is required to be filed. If, however, his net income includes any item that is not subject to withholding, a return on Form 1040, revised, is required to be filed, although no further tax may be due, and whether or not Form 1008, revised, has been filed. W. H. OSBORN, Commissioner of Internal Revenue. Approved: W. G. MCADOO, Secretary of the Treasury. (T. D. 2132.) Oleomargarine. Modification of regulations No. 9, revised July, 1907, and T. D. 1315 of February 12, 1908, and T. D. 1323 of February 24, 1908, relative to wrappers and cartons for prints, bricks, or rolls of oleomargarine. TREASURY DEPARTMENT, OFFICE OF COMMISSIONER OF INTERNAL Revenue, Washington, D. C., January 18, 1915. To collectors of internal revenue and others concerned: The provisions of subdivisions 1 and 11, paragraph 4, page 38, of regulations No. 9, revised July, 1907, concerning oleomargarine, and T. D. 1315 of February 12, 1908, and T. D. 1323 of February 24, 1908, are hereby modified and amended to read as follows: (1) No device or brand shall be imprinted upon any brick, print, or roll of oleomargarine packed in any statutory package unless the word "Oleomargarine” is also impressed thereon in letters not less than two-thirds of the size and of relative shading to those used in expressing any brand or word used by the manufacturer: Provided, Where the word "Oleomargarine" appears on two or more panels or sides of the bricks, prints, or rolls in plain legible letters equally displayed with any brand or word used by the manufacturer, the letters in the word "Oleomargarine" may be less than twothirds the size and shading as above prescribed, but in no instance shall the letters in the word "Oleomargarine" be less than one-fourth of an inch square. When no display is made except a device, then the word "Oleomargarine" shall be impressed on such bricks, prints, or rolls in letters not less than one-fourth of an inch square, and in all cases the word "Oleomargarine" shall be equally displayed with any device, brand, or word used by the manufacturer in close proximity thereto and on the same surface of such bricks, prints, or rolls. (2) The same rule shall be observed where any device, brand, or word is used upon the wrapper or carton encasing any brick, print, or roll of olecmargarine. This modification does not apply to 5-pound circular paraffined or enameled fiber board cartons or drums covered by T. D. 1613 of April 8, 1910. Approved: W. G. MCADOO, W. H. OSBORN, Commissioner of Internal Revenue. Secretary of the Treasury. (T. D. 2133.) Emergency revenue law-Bonds. T. D. 2072 modified to exclude agreements without sureties and not under seal, and imposing no additional liability. TREASURY DEPARTMENT, OFFICE OF COMMISSIONER OF INTERNAL REVENUE, Washington, D. C., January 18, 1915. To collectors of internal revenue and others concerned: Every bond or obligation of the nature thereof, without regard to form sealed or unsealed, with or without sureties, made by any individual, firm, or corporation to indemnify any person, corporation, or other entity for loss, damage, or liability, or for the doing or not doing of anything therein specified, and all undertakings, proposals, or agreements of every character offering indemnity or guaranteeing validity to any person or thing, is subject to a 50-cent tax, unless the sureties thereon, if any are offered, consist of persons, companies, or corporations transacting the business of fidelity, etc., insurance, when the rate of tax and the only tax required to be paid thereon will be one-half of 1 cent on each dollar or fractional part thereof of the premium charged. This office has since been convinced, however, that while the definition implied by the quotation above is probably justified technically by the extended scope given to the meaning of the word "bond," by recent legislation and court decisions, it is yet too broad for practical application and more comprehensive than contemplated by the framers of the act of October 22, 1914. T. D. 2072 is therefore hereby modified so as to exclude from its provisions such documents as applications addressed to surety and fidelity companies wherein the applicant agrees to indemnify the surety company in case of loss under the bond applied for, agreements executed by shippers undertaking to hold railroads harmless on account of any loss occurring by reason of the payment of claims against such railroad without the presentation of original bills of lading, etc., agreements executed by depositors of banks and institutions of a similar character agreeing to hold such institutions harmless on account of the payment to depositors of sums covered by pass books or checks and drafts, etc., which have been lost, and other papers of similar character and scope which, not under seal and without sureties, impose upon those executing them no liability other than that which would be automatically imposed upon them by operation of law. It must, however, be clearly understood that the exemption from the provisions of T. D. 2072 provided above is in no case to be extended to any form of agreement of indemnification to which sureties are parties. W. H. OSBORN, Commissioner of Internal Revenue. |