The new dominion. [volume] (Morgantown, W. Va.) 1876-1904, 1894-09-01

The income tax provision in the
Tariff bill begins to operate on Jan.
!, 1895, and continues until Jan. l,
1900. The tax 2 per cent? is to be
levied on all incomes above $4,000.
1t is to be paid not only by all who
reside within the country, on in
come derived from any source, but
by citizens of the United States re-
siding abroad, and by all residents
of foreign countries on incomes de-
rived from property situated in the
United States or from business car
ried on here. The tax is on the in
come of the year previous to that for
which it is levied. Therefore the
first tax will be levied on incomes
received in 1894.
There are two classes of incomes
recognized by the bill-the incomes
of individuals and the incomes of
corporations. The taxable income
of corporation is all its income
above its operating expenses, includ-
ing the sums paid to shareholders.
The tax of 2 per cent. is paid by the
corporation. Therefore that part of
an individuals income which is de-
rived 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 the $4,000. They are
as follows: The necessary expenses
of conducting business, all interest
paid or due within the year, local
taxes, losses in trade or from fires,
storms or shipwreck, not compensa-
ted for by insurance or otherwise;
worthless debts, and income on which
the tax has been paid by corpora
tions.
As to corporations, charitable, re-
ligious and educational corporations
are exempted, as are States, coun-
ties and municipalities, building and
loan associations, savings banks hav-
ing no stockholders, receiving no
more than 81 900 in year from any
one depositor, and dividing all the
yearly profits among the depositors
except contribution to 10 per ct.
surplus. Mutual companies, in
Gliding insurance companies, are all
exempt.
Every person having an income of
$4,000 must report it to the Collec-
tor of Internal Revenue for his dis
trict, or his deputy. Salaries receiv-
ed from corporations are reported by
the corporations to the collector of
the recipients district. The tax on
the salaries of officials of the United
States is to be deducted by the pay
master.
The collector may require 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
underestimated." If there is neg
leet or refusal to make a return, or
if a return is fraudulent, the collec-
tor or his deputy shall himself make
a list, by examination Of the person
taxed, or other evidence. A so per
cent. penalty is to be charged for
neglect or refusal, aud 100 per cent
penalty for fraud.
A person may declare that he has
not 81, 900 of income liable to be as
sessed or that he has paid his income
tax elsewhere. If the collector or
deputy is convinced that the declar-
alton is true he may grant an ex-
emption. If return is increased by
the collector or deputy the person
taxed may offer proof that the in
crease is unjust, but the officer will |
not be obliged to take the facts shown
as conclusive, and it is within his
discretion to refuse relief. An APP
peal from his decision may be taken
to the Commissioner of Internal
Revenue.
If corporation does not y. it's
statement a fine of $1,000 is to be
levied 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 l in
each year. If it is not paid within
ten days after that penalty of 5
per cent. is to be charged, together
with interest at the rate of per ct.
per month.