The Washington times., 1901-11-15
STAMP TAX ON BONDS.
Railing by the Acting Conn missioner
of Internal Rcvelue.


Robert Williams. jr., Acting Commis-
| sioner of Internal Revenue has rendered
| a construction of paragraph 7, act of
| June 1s. 1888, as amended. imposing stamp
tax on bosds and concerning the liability
| of bonds of administrators and executors
| hereunder. Paragraph OF schedule A
OF the act OF June 10. 1885. as amended by
| the-act of March 2. 1901. reads as follows
Bond; For indemnifying any person or
persons, firm or corporation who shall
| nave become bound or engaged as surety
| Tor the payment of any sum of money,
| or for the due execution or perforfna nce
| of the duties of any office or position. and
TO account for money received BY virtue
| thereof. 50 cents
Mr.. Williams has construed the above
paragraph as imposing stamp taxes on
two classes Of bonds, as follows:
i. Bonds for indemnifying any person
or persons, firm. or corporation who shall
nave become bound or engaged as surety
for the payment of any sum of money
2. Bonds for the due execution or per-
Tormance of the duties of any office or
position. and to account for money re-
cetved by virtue thereof
This construction was the same as wa q
formerly made by this office upon almost
the same language appearing in the act
Of July l. 1852 That this construction
was the only true one appears from the
following considerations:
In the technical sense bond Is AN
obligation in writing and under seal. bind
ing the obligator to pay sum of money
to the obligee. Under this definition Is
included every sealed obligation for the
payment of money, whether absolutely or
upon condition.
There are two great classes Of bonds
single bonds (simplex obligation and
conditional bonds. single bond is an
absolute promise to pay money, usually
executed without sureties. A conditional
POND has condition In the nature of
defeasance, upon the performance of
which the obligation shall be void, or for
the specifled breach OF which the obliga-
ton in the nature of a penalty becomes
payable. Conditional bonds are usually
executed with sureties, and are primarily
obligations to pay money Therefore as
all bonds are obligations to pay money.
congress, in imposing a tax on bonds to
indemnify persons who shall have become
bound as surety for the payment OF any
sum of money, covered all bonds which
could be given to indemnify any surety
on bond. Consequently. the second
clause of said paragraph must refer to
another class OF bonds. namely, condition
al bonds for the due performance OF the
duties of any office or position, and to ac-
count for money received BY virtue there
Of.
The bonds of administrators, executors,
guardians, receivers. and other fiducIarfes
appointed by State courts become liable
to tax under the second clause of this
paragraph, because such bonds are for
the due performance OF the duties OF an
Office or position. and to account for
money received by virtue thereof and be-
cause the exemption that was made in
schedule A of the war-revenue act Of
bonds required in legal proceedings was
omitted In the act as amended.
THE word position as used in the
second clause OF paragraph seven above
referred to, is construed TO refer TO an
employment which could not be character
ized properly as office Therefore,
the bonds given by all officers or en-
ployes. whether public or private. condi-
toned for the due execution or perform
ance Of the duties of any Office or posi-
ton. and to account for money received
by virtue thereof are taxable. except
that this Office has ruled, in conformity
with the decisions OF the United States
courts, that the official bonds of State,
county. or municipal officers are exempt
from tax.
There is only one class OF indemnity
bonds taxable under the first clause Of
paragraph seven. namely, bonds to In
demnify persons who have become sure
ties on other bonds.
Bonds given by contractors for the due
performance of public or private work re-
qJIire no stamps under the law as amend
ed"