The sun., 1918-12-07
ID CHANGED, GOES TO SENATE

- 4 - w.
porations make consolidated returns
30 far as the income tax Is concerned
and only n specific war excess profits
credit Of $4,000 shall be permitted
The Senate Finance Committee
after exempting the life insurance
companies from the corporation tax
inserted in the bill a part ~. provld-
ing a specific Ia on such companies
as follows:
Section 245. That there shall be
levied, collected and paid for each
taxable year pon the net income OF
every life insurance company a tax as
follows:
"(a) In the case of a domestic life
insurance company:
"G) For the calendar year 1918, IL
per cent. of its net income;
"(2) For eacn calendar year there
after s per cent. OF Its net income.
"(b) In the case OF a foreign life
insurance company:
"G) For the calendar year 1918, ~
per cent. OF the same proportion of the
net income which the reserve fund
upon business transacted within the
United. States Is Of the total reserve
fund upon all business transacted
whether within or without the United
States.
seq For each calendar year there
after, 8 per cent. Of such proportion
of Its net income.
Meaning of Net Income.
Section 24e. GAY That in the case
OF a life insurance company the term
net income means the gross income
less:
"(1) The amount of interest received
during the taxable year, which under
paragraph (4) OF subdivision (b) OF
Section 213 is exempted from taxation
under this title;
"(2) An amount equal to the excess
IL n of 4 per cent. of the mean OF
the reserve funds required by law and
held during the taxable year over the
amount specified in paragraph l of this
subdivision;
"(3) An amount equal to 2 per cent.
OF any sums held at the end OF the
taxable year as a reserve for divi-
dends (other than dividends payable
during the year following the taxable
year,. the payment Of which is de-
ferred for a period OF not less than
Ave years from the date OF the policy
contract:
"(4) Investment expenses paid
during the taxable year not exceed
ing o~ne-quarter OF 1 per cent. OF the
mean invested assets;
"(5) Taxes and other expenses paid
during the taxable YEAR exclusively in
connection with real estate owned by
the company, not including taxes as
sessed against local benefits Of a kind
tending to increase the value Of the
property assessed and not including
any amount paid out for new buildings
or for permanent improvements or
betterments made to increase the
value OF any property.
"(6) In the case of a domestic life
insurance company $4,000.
"Cb) The net income shall be COM
lputed on the same basis as Is pro-
vided in subdivision (b) of section 212
and in section 226."
Section PAT. That in the case of q
| life insurance company the term gross
income means the gross amount of in
come received during the taxable year
from interest. dividends and rents"
Quarterly Payments Provided.
The Finance Committee eliminated
the House provision for the payment
of taxes in three instruments at bi-
monthly intervals and substituted pro-
vision for payment at quarterly in
tervals. the first instalment being due
with the fling of the return and the
others at regular three months periods
Hereafter. In case Of an extension
of time for the fling Of returns only
the first payment year is affected
thereby and 1t is provided that inter
est shall be Niid by the taxpayer al
the rate of one-half OF / per cent 8
month during the period Of delay.
At the option of the taxpayer pay
ment may be made in one lump, in
which event the Senate committee
provided a discount of 1 per cen may
be allowed on all payments of 5000 oil
under. Overpayment OF quarterly IN
stalments are to be credited 10 the in
stalments next due and other pay.
= ments made on demand by the col,
~lector.
No penalty is attached on under
/ payment in cases where the return:
are made in good faith. II under
= statement is due to negligence bu'
without intent to defraud a s pei
cent. penalty attaches to single pen,
, alties plus ] per cent. a month inter,
est on instalment payments. II un
: reinstatement on returns Ia false OF
fraudulent with intent to deceive a pen,
atty OF so per cent additional is in.
CURED by the taxpayer in addition t.
The penalties provided in section 317t
Of the Revised Statutes.
1 The House provision making a limI
tation Of five years on attempts t.
correct returns and make collection.
Is retained, with the provision tina
there is no time limitation with re
spect to fraudulent returns. A pen.
atty Of : per cent. is attached for fail.
ure TO pay within ten days OF demand
taxes that are due. Immediate as,
z sessment and demand for paymen
4 may be made in the case OF any per.
son who designs quickly to leave the
: country or remove his property.
$1,000 Penalty for EvndIng Re-
The general penalty section pro.
> vides that any individual, corporation
mr. DartnarzhIn rarnira1 np6ar tbts 81