REGULATIONS FOR THE ASSESSMENT AND COLLECTION OF THE SPECIAL INCOME TAX UPON THE INCOME OF 1863. Special Income tax. TREASURY DEPARTMENT, WASHINGTON, July 20, 1864. The joint resolution imposing a special income duty, approved July 4, 1864, provides that there shall be levied on the 1st of October, 1864, upon the gains, profits, or income, for the year 1863, of all persons residing in the United States, or of citizens of the United States residing abroad, a duty of 5 per cent. on all sums exceeding $600. It is also provided that, in estimating income for this purpose, no deductions shall be made for dividends or interest received from any association, corporation, or company, nor shall any deduction be made for any salary or pay received. In order to facilitate the assessment of this tax, assessors are directed to scrutinize carefully the returns of income heretofore made to them for the year 1863 by persons residing within the United States, and to select all such as have been made in detail, in the manner provided upon Form No. 24, issued by the Commissioner of Internal Revenue, and with the accuracy and correctness of which they are thoroughly satisfied. When deductions have been made from any such return on account of dividends or interest received from any corporation, or on account of any salary or pay as an officer of the United States, the amounts thus deducted will be added to the amount heretofore assessed, and any income derived from interest upon United States securities will be included in the same total. The income thus determined may be entered in the list as the amount upon which the special duty of 5 per cent. is to be assessed. Assessors will direct their assistants to procure returns from all persons residing in their several divisions who have heretofore made no return in detail, or with whose returns as heretofore made they have any reasons to be dissatisfied, and from the agents of all citizens of the United States residing abroad and belonging in their several divisions. Notice should be left with all such persons at least ten days before the first day of October, requiring them to make return, under oath or affirmation, on or before said first day of October, in the manner provided by the act of June 30, 1864. By the terms of that act, the return must state the sources from which the income is derived whether from any kind of property, or the purchase and sale of property, rents, interest, dividends, salaries, or from any profession, trade, employment or vocation, or otherwise. The distinction heretofore made between the incomes of residents and of non-resident citizens is set aside, and the latter are to be treated in all respects in the same manner as the former. Assistant assessors will transmit the returns to the assessors of their respective districts as rapidly as they are received, and in all cases within ten days after the first day of October. If a any person shall have neglected to give in a return in the form required, or if any person shall have given in a return which, in the opinion of the assessor, is false or fraudulent, or contains any understatement or undervaluation, it will be the duty of the assessor to summon such person, or his agent, to appear and produce all books of account containing entries relating to the trade or business of such person, and to summon any other persons, as he may deem proper, to give testimony, in the manner prescribed in section 14 of the act of June 30, 1864. If, upon such examination, it shall appear that any person has made a false or fraudulent return, the assessor will estimate the income of such person according to the best information which he can obtain, and assess the duty thereon, and enter the same in the list, adding one hundred per centum to such duty. The assessor will, in like manner, estimate the income of all persons who shall have neglected to make return on or before the first day of October, and assess the duty thereon; and, except in cases of sickness or absence, he will add fifty per centum to such duty. No return can be accepted which is not verified by oath or affirmation; and if any such return is transmitted to the assessor, he will proceed in the same manner as if no return had been received. Immediately thereafter the assessor will make up an alphabetical list of all persons who have been assessed for the special income duty in each division of his district, and will then advertise in some newspaper published in each county in his district, if any such there be if not, in some newspaper nearest thereto in the same collection district the time and place, within said county, where said list may be examined; and the list shall remain open for ten days for the inspection of all persons who may apply for the same. No relief from assessments which are made after the examination of witnesses, as provided in section 14 of the act of June 30, 1864, can be given by the assessor; but any persons aggrieved will have a right of appeal to the Commissioner of Internal Revenue. In all other cases the assessor may revise any assessment, including those made upon the basis of returns heretofore received, at any time before the first day of November, 1864. It is explicitly provided by the act of June 30, 1864, that copies of all lists returned to the collector shall remain in the office of the assessor, and shall be open to the inspection of all persons who may apply to inspect the same. It is of especial importance that assessors give full effect to this provision with reference to the lists heretofore made up and containing the assessments upon the income for the year 1863, in order that the amplest opportunity may be given for the detection of any fraudulent returns that may have been made, and any omissions that may have occurred; and for this purpose assessors should seek the co-operation of all tax-paying citizens. Assistant assessors will be particularly careful to obtain returns from persons employed in the service of the United States whose names may not appear on the annual assessment list, as the special income duty upon their salaries, imposed by the joint resolution of July 4, is not to be withheld by paymasters, but must be assessed in the same manner as income from other sources. Immediately after the first of November the lists made in accordance with these regulations will be returned to the several collectors in the manner provided by law, and the subsequent proceedings for the collection of the duty will be in all respects similar to those for the collection of taxes assessed in the annual list. W. P. FESSENDEN, Secretary of the Treasury. CIRCULAR TO PAYMASTERS AND DISBURSING OFFICERS OF THE UNITED STATES GOVERNMENT CONCERNING THE INTERNAL REVENUE TAX UPON SALARIES. Tax on salaries. Rate. Where persons are transiently employed. army. TREASURY DEPARTMENT. By the 123d section of the Internal Revenue act of June 30, 1864, the rate of tax upon salaries is fixed at five per centum. The particular attention of Paymasters and Disbursing Officers is requested to the following REGULATIONS. 1. The duty of five per centum is to be withheld from all salaries of officers or payments for services to persons in the civil, military, naval, or other employment or service of the United States, including senators, representatives, and delegates in Congress, when exceeding the rate of six hundred dollars per annum. 2. Where persons are transiently employed, the tax will be computed on a basis of three hundred working days in each year. In such cases, the amount of two dollars per day will consequently be exempt from taxation. Officers of the 3. Each commissioned officer in the army receives from a paymaster compensation at a rate exceeding six hundred dollars; therefore, all payments to commissioned officers made by a quartermaster, or disbursing agent other than a paymaster, will be in excess of the rate of six hundred dollars per annum, and the duty of five per centum must be withheld from such payments. Return. 4. An accurate return should be made upon Form No. 10, which will be furnished by this office, showing the names of the person or persons to whom the payments were made, and from whom the tax was withheld, and also the month or months for which the salaries were due. 5. This return, in all cases accompanied by payment of the Payment. amount of tax, must be transmitted to the Commissioner of Internal Revenue at Washington. 6. If the payment is remitted by certificate of deposit with an assistant treasurer or designated depositary of the United States, or with a National Bank duly authorized to receive such moneys, special care must be exercised to forward the proper certificate in accordance with the note upon its margin. JOSEPH J. LEWIS, Commissioner. Certificate case of deposit. in CIRCULAR TO BANKS, TRUST COMPANIES, SAVINGS INSTITUTIONS, AND INSURANCE COMPANIES, CONCERNING DIVIDENDS AND UNDIVIDED PROFITS. tum. TREASURY DEPARTMENT, WASHINGTON, July 1, 1864. The Internal Revenue act, approved June 30, 1864, fixes the rate of taxation upon dividends and surplus gains at five (5) per cenAll dividends payable on or after July 1, 1864, no matter when declared, are subject to the duty of five (5) per centum; and a list or return is to be made and rendered to the assessor or assistant assessor in duplicate; and one of said lists or returns is to be transmitted, and the duty paid to the Commissioner of Internal Revenue, by the company, within thirty (30) days after the time when said dividends become due or payable. When any dividend is made which includes any part of the surplus fund which has been assessed and the duty paid thereon, the amount of duty so paid on that portion of the surplus or contingent fund may be deducted from the duty on such dividend. The full amount of profit is subject to taxation, without any regard to the manner in which it was acquired. As soon as they can be prepared, the blank form for returns (No. 65) will be furnished to the assessors, and by the assessors to the companies. A complete return of all dividends not payable until on or after July 1, 1864, must be made to the assessor. It is very desirable that the company should transmit the duplicate return and the payment to the Commissioner of Internal Revenue at the same time. JOSEPH J. LEWIS, Commissioner. RETURN BY PAYMASTERS AND DISBURSING OFFICERS OF THE UNITED STATES. (SECTION 123.) Certificate of money paid as salary to officers, or payments to persons in the civil, military, naval, or other employment or service of the United States, including Senators and Representatives and Delegates in Congress, with the amount of tax thereon withheld, conformably to the provisions of the 123d section of an act entitled "An act to provide internal revenue to support the government, to pay interest on the public debt, &c., approved June 30, 1864. |