The sun., 1918-12-07

organizations. the Inclusion OF per-
sonaI service corporations was done by
the Senate Finance Committee.
The provides that the in
come and supertaxes shall apply to the
income of estates Of any kind OF prop
erty held in trust, including income
received by estates of deceased per-
sons during the period Of administra-
ton or settlement of the estates,
income accumulated in trust for the
bentft OF unborn or unascertained per-
sons or persons with contingent in
terests, income held for future dir
tributfon under the terms of wills or
trusts, income distributed to the bene-
ficiaries periodically and income COL
lected by a guardian of an infant to
be held and distributed as the court
may direct.
Reports ON $4,000 Incomes.
The bill provides that every single
person with a gross income of 81, 900
a year or over must make q return
under oath stating specifically the
items Of gross income and the deduc-
tons and credits allowed. This pro-
vision differs from the present law
and from the House bill by requiring
the report upon gross income rather
than upon net in both cases, but does
not require the married man with de-
pendents to make any return except
his gross income exceed $1,000.
1t provides that returns shall be
Vaoda nm ~ .hofnro NhA ARka1.A A. "A
the third month following the close of
the fiscal year or on the 18th day of
March If 1t is based on the calendar
year. The Commissioner of Internal
Revenue is given discretion Il extend
the time The House limit of extern
sions to two months was stricken out
Provision is made for a check of re-
turns by the collector In any case in
which he has doubt Of a full return
and on the other hand the taxpayer
has the right to appeal to the Com
missioner Of Internal Revenue on any
increase made.
New Taxes on Corpora lions.
The bill provides that in lieu of ex-
listing taxes on corporations by the
two laws now in effect there shall be
levied each year on the net income OF
every corporation other than a life in.
surance company the following taxes:
"(1) For the calendar year 1918 II
per cent. Of the amount OF income In
exces of the credits provided In Sec
ton 236.
"(2) For each calendar year there
after s per cent. Of such amount"
These rates were written into the
bill by the Senate Finance Committee
in place OF the House rates. The
House bill provided that the a should
be IS per cent. Of the net income, with
the proviso hat on the portion of in.
dends the tax should be IL per cent
This diferential was attacked and was
quickly eliminated by the Finance
Committee. The provision lowering
the tax for succeeding fiscal years Is
In accordance with the Administration
plan of providing next years take:
now rather than let a Republican Con.
gress determine them.
Labor, agricultural, Horticultural
and similar organizations are exempt
from the payment OF this tax. as are
mutual savings banks not having 6
capital stock represented by shares
beneficial societies and the like. domes'
tic building loan organizations and CO
operative banks without capital stocl
organized for mutual purposes anC
without profit, cemetery companie:
operated exclusively for the benefit o.
their members. purely religious anC
charitable organizations, chambers O.
commerce and boards OF trade not op'
Grated for profit, civic leagues ant
clubs not organized for profit, mutua
hail. cyclone and fire insurance com
psnies, farmers and similar coopera'
tive societies. purely holding corpora
tons, Federal land banks and nationa
farm loan associations and persona
service corporations.
Deductions That Are Barred.
The items which may not be de
Quoted from personal gross income ar,
likewise barred for corporations.
Credits allowed corporations. excep
In the case OF life insurance oompa
MES, which are treated separately, in
clude the amount received as interes
on obligations Of the United States an,
finance corporation bonds to tn
amount OF war excess profits take
paid, and In the Isl OF a domesti
corporation a specific exception 0
So, 900.
The bill In It's present form provide
that a domestic corporation shall &c
credit with the amount Of income, wa
profits or excess profits taxes pal
during the taxable year to any foreigl
| country on income derived from
sources therein. This credit is to b
! allowed only when sufficient evidenc
is furnished showing the amount o
such income and other information
! necessary for the computation of thi
credit.
In the case OF a corporation maxim.
! return for a fiscal year beginning II
1917 and ending IN 1918 any tax pal
for that fiscal year under existing rev
enue taxes shall be credited agains
the tax imposed by the present bill.
Parts of House Bill That Remain
The manner for making the return
and the requirement that all corpora
| tons not specifically exempt shal
make returns is the same a in tn
House bill.
The Finance Committee, however
added an amendment permitting con
solidated returns In certain instances
| Consolidated returns are permitted
one corporation owns directly IT con
trolls substantially all the stock OF an
other OF others, IL substantially all O