Evening journal., 1913-10-27
INCOME-TAX
RULES ARE OUT
Treasury Department Issues
Regulations For Deduction
At OurCe
PAYMENT BEGIN
ON NEXT A TUROAY

4 Treasury Department has issued the
I finally revised regulations for
deduction OF the new income tax at
the source of interest maturing on
bonds, notes and similar obligations
\ of corporations, joint stock compan-
les classed by the department under
the general term of debtor" for the
collection purposes.
The regulations embody various
forms of certificates as to ownership.
exemption, partnership, etc, and are
technical in terms. Because of the
short time allowed for the interpreta-
ton of the law and the issuance of
these regulations, bringing the date
SO near November l, when the deduc-
tion must begin, it is temporarily pro-
vided that on November 1. and for 10
days thereafter, interest coupons pre-
sented to a debtor need be accom-
panied only by temporary informal
certificates.
A taXsof l per cent. will be deducted
at the source, beginning next Satur-
day, from all incomes accruing and
payable to every United States citizen
residing at home or abroad and to
every person residing in the United
States, although not a citizen. which
income may be derived from interest
upon bonds and mortgages or deeds
of trust or other similar obligations.
including equipment trusts. trust
agreements and receivers certificates
of corporations. joint stock compan-
les as associations and insurance
companies. Government obligations
being excepted. Certificates claiming g
exemption may be filled by bond
holding individuals.
Collecting Tax at Source.
For the purpose of collecting this
tax on all coupons and registered in
terest, originating. or payable in the
United States, the source shall be the
debtor or its paying agent in the Uni
ed-States. which shall deduct the tax
when same is 10 be withheld, and no
other bank. trust company banking
firm or individual taking coupons for
collection, or otherwise, shall with
hold the tax thereon; provided that
all such coupons or orders for regis
tered interest are accompanied by
certificates Of ownership, signed by
the owners of the bonds from which
the coupons we're detached.
IT, however. the coupons are not ac-
companied by certificates as pre-
scribed above, the first bank. trust
company, banking firm or individual
or collecting agency receiving the
coupons for collection or otherwise
shall deduct and withhold the tax and
shall attach to such coupons its own
certificate, giving the name and ad.
dress Of the owner of, or the person
representing such coupons, II the
; owner is not known, with a descrip
tion of the coupons. also setting fortl
b the fact that they are withholding thu
tax upon them; whereupon the debtoi
shall not again withhold the tax OF
= said coupons but in lieu thereof shal
Z deliver TO the Government the Ger
tificate of such bank, trust company
, etc. which is Withholding such tai
money.
Debtors whose bonds may be regis
tered must deduct the normal tax of
, per cent. from the accruing interest or
all bonds before sending out checks
for the interest to registered owner.
, or before paying such interest upor
interest orders until proper certih.
Gates claiming exemption are filed
with the debtor or its fiscal agent.
b The tax shall not be withheld the
regulations provide. on coupons oi
registered interest maturing and pay
able before March 1 1913. although
later presented for payment.
Licenses For Tax Agencies.
All persons. firms or corporation
q undertaking for accommodation ol
e profit (this includes handling eithe
by way of purchase or by collection
e the collection of coupons, checks O
Z. bills Of exchange for or in paymen
I Of interest upon bonds issued I'm for
eign countries and upon foreign
u mortgages. or like obligations, ant
\ for any dividends upon stock or in
terest upon obligations Of foreigl
corporations, associations or insur
ance companies engaged in.-busines
in foreign countries, are required b.
, law to obtain a license from the Com
missioner of Internal Revenue and d
give bond in such amount and unde
such conditions as the Commissions
= of Internal Revenue may prescribe.
% All persons licensed shall keeI
y their records in such manner as Il
!, show from whom every such item ha
been received, and such records shal
be open at all times to the inspection
of Internal Revenue officers.
= Failure TO obtain license or to com
ply with regulations is punishable b
:. fine not exceeding $4,000, or i'm
e prisonment not exceeding one year, o
a both. in the discretion of the cour
is Such license shall continue in fore
4. until revoked
: Heavy Penalties.
If any person, for the purpose {
= obtaining any allowance or reductio
L by virtue of a claim for exemption
~ either for himself or for any othe
knowingly makes a false statement {
a false or fraudulent representation,
s. is liable under the act to severe pei
3 alties.
y Where coupons presented for pa.
? ment are from bonds owned by par
nership. though not taxable again
. the partnership as such, the certii
cate of ownership may be signed
yt the firm name by member of Il
firm, instead of the individual men
bers of the partnership, and sha
=. show their respective interest in sa
bonds and the normal tax shall
withheld by the debtor with respect
the income represented by said inte
est. except to the extent that sa
a partners may claim In the proper ce
~ tifcate the benefit of exemptions
individuals.
- This tax will not be deducted fro
the income which may be deriv
~ from interest on bonds, mortgage
~ equipment trusts, receivers certi