The Lexington dispatch. [volume] (Lexington, South Carolina) 1870-1917, 1894-08-29
THE INCOME TAX.
A S:a,tme Of Its Scope and Provisiops
and Who It VIII Reach.

New YORK, Aug. 22.-The Income
| tax provision in the tariff bill begins
to operate on Jan. l, 1885, and contin-
ues until Jan. l. 1900. The tax e per
cent? is to be levied on all incomes
above $4,000. 1t is to be paid not only
by al who reside within the country,
on income derived from any source.
but by citizens of the United States
residing abroad, and by all residents Of
foreign countries on incomes derived
from property situated in the United
States or from business carried On here.
The tax is On the income Of the year
previous to that for which it is levied.
| Therefore the first tax will be levied en-
| incomes received in 1894.
There are two classes of incomes re.
cognjZed by the bill-the incomes of
individuals and the income OF corpora
tions. The taxable income of corpo-
ration is all its incomes above its opera.
ting expenses, including the sums paid
to shareholders. The tax of per cent.
is paid by the corporation. Therefore
that part of an individuals income
which is derived from dividends on the
shares of a corporation that has paid
the tax is deducted, on his return, from
| his own taxable income.
There are exemptions allowed by
the bill in computing an individuals
income besides to $4,000. They are as
follows: The necessary expenses of
! conducting business, all interest paid
sr due within the year, local taxes,
losses in trade or from Tres, storms or
shipWreck, not compensated for by IT,
surance or otherwise; worthless debts,
and income on which the tax has been
paid by corporations.
AS 20 corporations, charitable, rell.
gious and educational corporations are
exempted, as are States, counties and
municipalities, building and loan as
sociatious, savings banks having no
| stockholders. receiving no more than
$1,000 in year from any one depost
Tor, and dividing all the yearly profits
among the depositors except a contri.
button to 10 per cent. surplus. Mu-
tual companies, including insurance
companies are all exempt.
Every person having an Income OF
S., $500 must report it to the collector OF
internal revenue for his district, or his
deputy. Salaries received from corpo-
rations are reported by the corporations
to the collector of the recipients dis
trict. The tax on the salaries Of Off.
cials Of the United States Is to be de-
Quoted by the paymaster.
The collector may require a return to
be verified by oath. The collector or
his deputy may increase the amount OF
income reported if she has reason to
believe that the same is underestima.
ted" If there Is a neglect or refusa!
| to make return, or If a return IS
fraudulent, the collector or his deputy
shall himself make a list, by examlna-
tion of the person taxed, or other evil
deDce. A so per cent. penalty is to be
charged for neglect or refusal, and 100
per cent. penalty for fraud,
a person may declare that he has
not $4,000 income liable to be assessed
or that he has paid his income tax else
where. If the collector or deputy Is
convinced that the declaration Is true
he may grant an exemption. If re-
turn is increased by the collector or
deputy the person taxed may offer proof
that the increase is unjust, but the Off
Ger will not be obliged to take the facts
shown as conclusive, and it is within
his discretion to refuse relief. An ap-
peal from his decision may be taken to
the Commissioner of Internal Revenue.
If the corporation does not file its
statement a fine of 1000 IS to be lev
led on it and 2 per cent. month is to
be charged on the amount of tax due
until it is paid.
The tax is payable on July lst in
eaca year. If it is not paid within
ten days after that penalty of per
cent. is to be charged. together with
interest at the rate of per cent. per
month.-World.