The evening telegraph. [volume] (Philadelphia [Pa.]) 1864-1918, 1871-03-07
CITY YINTELL ENCE.
INTERNAL REvENUE.

Iu,pattant Iustructioss Concerning Taxes
DiViaend-, snrsi"s Profits, uud Interest on
tho Funds of corporations.
The commissioner OF Internal Revenue has
issued the following important circular:-
Upon further consideration IL Is deemed adj
yieable to- publish the following instructions,
which it il believed cover all the questions which
have arisen respecting the liability To tax OF
dividends, surplus profits ~ irterest on bonds
of the corporations enumerated IA sect, in5 10
aud l22 act June 80, 1861, AS amended, aud Sec
ticn 10. act July Ia. 1870.
Fjrst Dividends of the corporations enume-
rated in sections 100 and l22 aforesaid, which
were declared at any time prior to August l,
1870. are subject No n tax OF five per cent.
Second Undivided profits of said corporations
which were carried To the account of any sur
plus or contingent fund prior TO August /, 1870,
are subject to like tax of per cent
Third. Interest (Or coupons representing in
teresD due from the corporations mentioned in
section l22, which became due and payable
prior To August 1, 1870, is also ssbject to tax
Of five per cent. Returns of these dividends
and surplus profits should he made on Form 90,
and returns of this interest on Form 6S
Fourth. All dividends of the corporations be-
fore mentioned which were declared within the
last five months OF 1870 are exempted from
diUidend tax, even when said dividends are con-
prsed wholly or III part Of profits accrued prior
TO August l. 1870.
Fiftn. Profits carried to the account OF funt
within the last five months of 1870 are exempt
from a surplus tax, even II said profits were
earned prior to August |, 1870.
Sixth. No tax shall be withheld from interest
(or coupons representing interesD falling due
and payable within the above period of five
mouths.
Seventh. Dividends of said corporations which
are declared on or after January 1, 1871, are
taxable as follows:-If composed wholly of
profits accrued or earned prior To August l,
1870 at the rate of 21S per cent; II composed
partly of profits accrued prior To August |,
partly of those accrued within the last five
months OF 1870 aud partly of those accrued since
January |, 1871 at the rate of 2l5 per cent. upon
SO much of the dividend as represents profits
accrued either prior to August |, or subsequent
TO December 81, 1870, excluding profits of the
last five months of 1870
Eighth. Profits carried to the account of a
fund on or after January l, l01l are subject TO
the same liability to tax the dividends above
described. So much of said PROFITS as were
earned prior to August !, or subsequent to De-
cember 81, 1870, are taxable ~ the rate OF rs
per cent.
Ninth. Profits of the corporations previously
mentioned, which were earned or accrued
within the last five months of 1870 are not taxa.
BILE when divided or carried to the account of a
fund subsequent to December 81, 1870.
Tenth. Interest falling due aud payable on or
subsequent To January 1st. 1871, is taxable at
the rate OF 90 per cent, if such interest accrued
either prior to August lst or subsequent TO De-
pember 3lst 1870 From much of it a.
accrued within the last five months of 1870, M
tax whatever is to be withheld
Eleventh. Returns of dividends and surplus
profits by the corporations mentioned In section
Is, act of July II, 1870, should De rendered on
Horn 6j16 and returns of interest onFo 6S a
revised.
Twelfth. All previous rulings of this Office
Inconsistent with these Instructions are here
with revok ed. A. PLEAsoNToN,
Commissioner.