The daily dispatch. [volume] (Richmond [Va.]) 1850-1884, 1871-03-09
Important Internal Revenue Deci.
sfOua.
OFFICE OF INTERNAL REVENUE, }

Sir :-Up pom furtner c0nSlucrallOu IL IL
deemed advisable to publish in the Internal
which, it is believed, cover al the queS-
tions which have arisen respecting the liza
bility to tax Of dividends, surplus profits,
and interest on bonds of the corporations
enumerated in sections 100 and l22, act
June 80, 1864, as amended, and section 10,
act July IA, 1870.
First-DiYiiends of the corporations emu
merated In sections 100 and 122 aforesaid,
which were declared at any time prior to
August /, 1870, are subject to tax OF five
per cent. 4 .s.
Second-Undivided profits of said corpo-
rations which were carried to the account
of any surplus or contingent fund prior to
August /, 1870, are subject to like tax of
five per cent.
Thlrd-Interest Tor coupons representing
interest) due from the corporations men-
toned in sectiou 122, which became due and
PAYABLE prior to August l, 1870, is also sub
ject to tax of five per cent. Returns OF
these dividends and surplus profits should
be made on Form 65, and returns Of this
interest on Form 6S.
Fourth-All dividends of the corpora
tions aforementioned which were declared
within the last five months of 1870 are en-
empted from u dioidcnd tax, even when said
dividends are composed wholly or In part
of profits accrued prior to August !, 1870.
Fifth-Protits carried to the account of 4
fund within the last five months of 1870 are
exempt from surplus tax, even if said
profits were earned prior to August l,
1870.
SiXth-No tax should be withheld from
interest Tor coupons representing INTEREST,"
falling due and payable within the above
period OF five months.
SsNenth-Dividends of said corporations
which are declared on or after january /,
1871, are taxable as follows: II composed
wholly of profits accrued or earned prior
to August 1, 1870, at the rate of 2% per
cent; if composed partly OF profits accrued
prior to August !, partly Of those accrued
within the last tive months of 1870, and
partly Of those accrued since january !,
1871, at the rate of 24 per cent. upon so
much of the dividend as represents profits
accrued either prior to August /, or SUBJ
sequent to December 81, 1870, excluding
profits OF the last five months Of 1870.
Eighth-Profits carried to the account of
aJund on or after January l, 1871, are sub
ject to the same liability to tax as the dlyl-
dends above described. So much of such
profits as were earned prior to August /,
or subsequent to December 81, 1870, are
taxable at the rate Of OK per cent.
Ninth-Protits of the corporations pre-
Yiously mentioned, which were earned or
accrued within the last tive months of 1870,
are not taxable when divided or carried to
the account Of fund subsequent to De-
c,mber 81, 1870.
Tenth-Interest falling due and payable
on or subsequent to january /, 1871, is tax
able at the rate of 2H per cent. il such in
sarest accrued either prior to August /, or
subsequent to December 81, 1870. From
so much Of it as accrued within the last five
mouths of 1870 no tax whatever is to be
withheld.
Eleyenth-Returns of dividends and sur.
plus profits by the corporations mentioned
In section 10, act of July IA, 1870, should b.
rendered ON form 65H, and returns OF in
terest on form 6S as revised.
"Twelfth-Au previous rulings of this of
fee inconsistent with these instructions ar
herewith revoked. A. PLEAsoNToN,
,r.,.. Commissioner.
STAMPS ON RENEWALS OF INSURANCE POLICIES
-..,.@ OFFICE OF INTERNAL REvENUE,1
..,, sY. WASHINGTON, Feb. 10, 1871.
Sir: In your letter Of the 7th instant yol
enclose fire policy on the Merchants In
newal receipt attached, and submit tn
question whether the latter should b.
stamped.
BY the terms of the policy it expires b.
limitation in one year. The "renewal re
ceipt" contains new contract renewing
or continuing the policy for another year
and it should have stamps to the same
amount as the original policy. [lnterna
Revenue Record, vol ", p. CO.
Some misapprehension on this subject
has been occasioned by the exemption OF
receipts from stamp duty, under section 4
of the act of July IA, 1870. Previous tc
that amendment receipts for premiums
which simply prevented policy from ex
pirine by reason OF non-pe1ormance Of its
conditions, as in the case of common form
of life policies of indefinite duration, wer'
held to require only two-cent receip
stamp.
Accordingly, they are now considered a
coming under the general exemption o
receipts. There is no other change in tn
stamp tax affecting insurance.
Any writing, whether called receipt OF
otherwise, which contains q contract re-
newing policy that has expired from any
cause, or is about to expire by limitation,
should be stamped the same as an original
policy. Schedule B, lst proyiso under the
head of mortgage0
'GseS A. PLEAsoNToN, Commissioner.