The times. [volume] (Richmond, Va.) 1890-1903, 1894-12-14
INCOME TAX REGULATIONS.
Th. Rules Under Which the Treasury
Viii Collect the Duty.
WHAT ARE TO CONSTITUTE PROFITS
Exemptions Allowed and Penslties Im-
posed for Fraud ulent Returns and
Failures to Obey.

WASHINGTON, Dec. 13.--The Secreta-
ry of the Treasury to-day approved the
income tax regulations. Every citizen OF
the United States, whether residing at
hQme or abroad, and every person residing
or doing business in the United states, who
has an annual income OF more than $500,
is required to make return under oath
before the first Monday in March of each
year. The first return is to include all
income received In the year 1884, from
January lst, to December 3lst. Guardi-
ans, trustees, and all corporations acting
In any Gduciary capacity, are required to
make similar returns for minors, wards
or beneticiaries.
Persons having less than $500 annual in
come are not required to make returns.
All incomes Of $4,000 and over are taxable
per cent The person making return is
required to make affidavit that ne has in
cluded in said return all gains, profits
and income from every source whatever
received by him, or to which he Is justly
entitled for ttat year. and that he IS
honestly and truly entitled tc make all
the deductions entered on his return. and
that ne has truly answered the interroga-
tories set forth on said blank form.
THE GAINS. PROFIT AND INCOME.
The gross gains. profits and income re-
turned by persons are 10 include Gross
profits Of any trade or business, where
ever carried on; rents received or accrued
during the year; profits from sales OF real
estate purchased within two years; larm-
ing operations and proceeds; money ana
value of all personal property acquired
by gift or Inheritance; premiums on bonds,
stocks, notes and coupons; income from
trade or profession, not by stated salary,
and not heretofore enumerated; from sala-
ry OF compensation other than that re-
ceiyed from the United States; from salary
or compensation paid by the United
States; undivided gains and profits OF any
partuerships; interest received or accrued
from All notes bonds, or other securities;
interest on bonds or coupons paid OF any
cornOrauon: diVidens from corporation;
Income of wife, or minor child or children;
all other sources OF income not above
enumerated.
The deductions allowed on the return
are: -Four thousand dollars exempt bylaw;
interest due and paid within the year;
national. State, county, school ana munlcl-
pal taxes, paid, not including assessments
for local benefits: amount eNpondeh ih
nurchase or production Of 1--we stock, or
produce sold within the year necessary
expenses. specified by items. actually in
Cured. i'm carrying on any business or
trade. losses actually sustained during the
wear specified; actual losses on safes OF
real estate purchased within two years
debts contracted or ascer'ained duiihr He
,ear. salary or compensation over AOW
from which the tax of per centum mas
been withheld by disburslnS ottlcerS oI the
Trnited States Government; dividends IN
cluded in the estimates OF gross prohIs
from corporations, on which the per
ton.
IN CASE or FAILURE.
II any person fails to make return OF
makes false return. the collector IS 10
make return for him from evidence op-
toined bv summoning the person ana
oyamining his books, and from all other
evidence obtainabe and shall add 90 per
cont. 10 the amount Of tax found TO De
due as a penalty for neglect, and 100 per
cent. for a fraudulent return
All corporations, companies ana asso-
Citations. both resident and foreign dol"B
business in the United states are re-
quired 10 make annual return OF net
profits on separate UldHN W O'''' w.
calendar year. 1894.
The exemption OF 5000 allowed TO per
sons il not extended to corporations, but
the return must cover all net prohts Win
out exemption. The annual return ot cor
porations must include:
The gross profits from all kinds or busl-
ness.
The expenses, exclusive Of interest an
nuities. or dividends
The net profits, without allowance Tor
interest, annuties or dividends.
The amount paid on account OF interest
annuities and dividends.
The amount paid I'm salaries or NWo
or loss to each emDlOyc.
The amount paid in salaries or more
ttan $1,000 10 each employe, and the name
and address Of each Of such employees.
The GROSS PROFITS.
The gross profits must include:
All profits of any trade or business.
Interest or coupons from bonds or other
securities Of any corporation.
Dividends received from any corpora
tion.
Undivided profits OF any corporation.
Premium on bonds, notes or stocks.
Commission or percentage
Interest on Government securities not
exempt by law.
Interest on other notes, bonds and Sc
curities.
Profits from real estate, from rents, and
profits from all other sources to be emu
merated
OPERATING EXPENSES AND NET PROFITS.
The operating expenses must include:
Interest paid or accrued within the
wear on bonded or other Indebtedness OF
such corporation.
Losses actually sustained during the
year which must be separately stated
and fully described as to cause, date and
amount.
All taxes actually paid.
Salaries and pay Of officers and en-
ployes actually paid during the year.
Rents and necessary repairs.
All other necessary expenses, which
must be ttemized and fully explained In
the returns.
The net profits include:
All amounts paid TO stockholders or
shareholders.
The amount of ur divided profits carried
TO surplus or any other fund
Amount Of net profits used for construc-
ton, enlargement or Improvement OF plant.
ALI other expenses or investments from
the net profits.
Certain specified corporations, for chart
table and like purposes, and certain saw
ings banks, mutual insurance companies
and building and loan associations are
exempt from income tax. In such cases
IL is held by the Department that the IN
tentfon OF the exemption Is to extend its
benefits TO the small depOsitors aud bene-
rciaries OF such mutual and savings in
stitutions, and that the corporations, as
such. and those who speculate I'm the
shares, stock or funds, are not the in
tended benehciaries OF the exemption.