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the act of June 13, 1898, if the proceeds are to be devoted to "sick benefits" or to other like objects, and special tax is not required to be paid therefor under this act.

(2) A draft or order drawn on the treasurer of such an organization by another of its officers for the payment of money to a third person, whether "for payment of bills" or for "sick benefits," as you state, or for any other purpose, requires a 2-cent stamp under Schedule A of this act.

(3) An entertainment given by a grange of the Patrons of Husbandry, such as a "harvest-home festival" or the like, is not regarded as such a public exhibition or show for money as the statute contemplates, and special tax is not required to be paid therefor.

Respectfully, yours, G. W. WILSON, Acting Commissioner. Mr. B. F. WAYNE, Metcalf, Mass.

EXPRESS COMPANIES.

(See BILLS OF Lading; ManiFESTS; RECEIPTS.)

INSURANCE COMPANIES.

ACCIDENT.

(20022.)

Stamp tax-Accident insurance policies.

Monthly reports can not be made in installment insurance-No rebate or refund for stamps or policies surrendered for changes in terms or canceled upon the return of all or any part of the premium.

TREASURY DEPARTMENT,

OFFICE OF COMMISSIONER OF INTERNAL REVENUE,

Washington, D. C., September 7, 1898.

SIR: This office acknowledges the receipt of your letter of July 9, 1898, and the subjects mentioned therein have been given careful consideration.

It is the desire and policy of this office to render assistance to and afford facilities in the operations of all persons or corporations in the exercise of their business functions, and not to arbitrarily compel com. pliance with the law when the law is susceptible of such a construction as would justify concessions to taxpayers.

In construing the act, it must be done with perfect impartiality and in entire consistency with the rights of all persons affected. The Government's revenue must first be protected, while to grant the conces sions that have been asked by your company, and others writing similar

insurance, might not result in bringing in less revenue, yet the form of return that you ask for would be repugnant to the provisions relating to the manner of collecting revenue in the instances mentioned by you. The law specifically provides how the revenue shall be raised in these instances. It is by stamps bought, affixed, and canceled. The instrument that is taxed should carry with it the evidence of the compliance with the law, and you have asked this office to allow you to make reports at stated periods and remit therewith the amount of stamp taxes required upon the instruments issued by you instead of stamping these instruments, because of the trifling amount of the premium in each case (i. e., railroad ticket insurance, policies issued with the sale of goods, etc.), it would be extremely difficult and burdensome to stamp each and every instrument on issue. This office is of the opinion, and so holds, that this concession asked, viz, "of reporting. at the end of specific periods," can not be granted. Where the instrument is subject to a definite tax that can be determined at its issue, it must have affixed and canceled the stamp that the law requires, be it large or small. This decision is reached after having given the subject careful consideration in reference to the multitudinous effects that a contrary decision might produce.

In regard to your second statement, with reference to rebate or refund from the Government for revenue stamps upon policies of insurance or renewals which have been canceled by mistake, or upon policies surrendered for changes in terms or surrendered and canceled upon the return of all or any portion of the premium for any unexpired term, this office informs you that it can not make any provisions for refund for stamps canceled by mistake. Such a provision, if granted, would lead to interminable difficulties in other cases, in all of which the claim would be made that the stamp was canceled by mistake.

In regard to policies surrendered for changes in terms or surrendered and canceled upon the return of all or any portion of the premium for any unexpired time, it is held that in both instances it is the pleasure and desire of the parties interested to so have the policy changed in terms or surrendered or canceled. That policy which was originally issued, and which did and must have had its appropriate stamp, is not longer desired. The original intent is changed, and a ruling is asked to meet this changed intention. It can not be granted. If it were, every deed, promissory note, draft, etc., that failed of its first intent would and could come in under such a ruling. If the policy is issued it must bear its stamp. If it fails of its purpose and intent, this office can not make a provision that would cover such a contingency.

All insurance companies charge a premium, the amount of which is arrived at after due consideration of the percentage of lapses, deaths, accidents, changes, etc. These are contingencies almost mathematically determinable, and this would seem to be all the protection that would be needed in such cases.

'See also decision 19973 p. 182.

This office can not afford any assistance on this point. The same holds good in reference to your installment insurance. This kind of insurance is effected for a period that is certain and for a premium that is fixed. Although the premium is payable in installments, it appears from your application blank, statement 13- "I wish the policy written for four consecutive periods of two, two, three, and five months, respectively, from the date below, each period covered by a distinct premium, to be paid respectively from my wages for the months of; and I agree that the policy shall embrace four separate insurance contracts, and shall remain in force after the first insurance period only as continued by payments of premium for the consecutive periods following; and that I will make no claim for injuries effected during any period for which its respective premium has not been actually paid”—that this insurance is desired for one year, for statement 14 states that the total premium for the four periods is $.

Your company reserves the right to cancel the policy for any period not paid for, or rather the policy shall be void for that period that is not paid for. This contingency of not paying for a period-in other words, allowing the policy to lapse-is a contingency that this office can not make an allowance for under this law. Such a decision would entail upon the force of the internal revenue countless difficulties. While the desire to benefit you is great, the difficulties are such that compel a denial of the request that you ask; the protection, if there is any, is elsewhere than through this office.

These facts you will thoroughly appreciate after due reflection of the circumstances as viewed from the standpoint of this office.

Respectfully, yours, G. W. WILSON, Acting Commissioner.

Mr. S. C. DUNHAM,

Counsel Travelers' Insurance Company, Hartford, Conn.

(20027.)

Stamp tax-Accident insurance policies.

Policies of insurance or renewal receipts not subject to taxation until issued-Issue defined-Taxation based on premium regardless of its payment in installments— The policy must have the stamp affixed to it; the application must not be stamped.

TREASURY DEPARTMENT,

OFFICE OF COMMISSIONER OF INTERNAL REVENUE,

Washington, D. C., September 8, 1898.

SIR: This office is in receipt of your letters of June 28 and August 18, and three letters, under date of August 29, September 2, and September 3, to Maj. George H. Hopkins, your second vice-president, which were left by that gentleman at this office.

The questions presented in your letters have been given careful consideration.

In your letter of the 28th you state that the failure to provide for one-half-cent stamps involves the payment of a full cent in many cases where but the fractional part of a dollar is involved.

You are advised that stamps are issued of the value of one-half of one cent, and the collector or any of his deputies for your district will furnish you, upon application, with these internal revenue stamps.

The second matter to which you call attention is the stamping of policies before delivery, and also the stamping of renewal receipts.

You are informed that neither the policy nor renewal receipt are subject to taxation until they are issued. This is a question of fact that is determinable in each instance. Your agent, before delivering the policy, can affix and cancel the stamp. It is not necessary to stamp it when it leaves the main office. This office does not consider that it is issued until it leaves your company or your company's representative and is operative in the hands of some one else not representing your company. This latter would seem to be an issuing of the policy. If the policy is delivered or issued it should be stamped regardless of the fact that it may be held only for a short period by the insured.

In regard to policies of insurance payable in monthly installments, you are informed that the policy itself is the instrument that is taxed, not the installments representing the payment. The amount of taxation is based on the premium charged, irrespective of the manner of payment of the premium.

You state that the failure to pay any of the monthly installments works the cancellation of the policy, which would otherwise run for a year or indefinitely, and that here again is the prospect of paying the full tax for the least benefit.

This office regrets that it can not assist you in regard to the manner of paying the stamp tax on such policies by making monthly returns based upon the amount of premium received.

It is true that there is one exception in the act, which relates to industrial insurance. This office can not assume legislative functions to make another exception.

This question has been considered in all its phases, and this decision is reached after having viewed the situation from all standpoints.

These policies of accident insurance are all issued for a definite period and for a fixed premium. The law states that the policy is the instrument that is subject to taxation, and it should have affixed and canceled the stamp that is appropriate to the amount of premium charged.

You have asked to be allowed to stamp the application for insurance instead of the policy, and to affix a stamp every time an installment is paid.

This request must be denied. This office can not provide for the contingencies of lapses, deaths, changes, etc. The premium is fixed and the stamp must be affixed when the policy is issued, whether the installments are paid or not.

In regard to the question of stamping renewals of business written

prior to July 1, 1898, you are advised that on life policies the fact that annual or semiannual payments are made is not considered a renewal of the policy which would subject the receipt to taxation. If, however, the policy is written for a certain period, such as one year, the receipt that renews the policy is subject to taxation, though the business was written prior to July 1, 1898. Such renewal receipts are in effect new policies for the term mentioned in the receipt.

In regard to the orders that a railroad employee gives on his paymaster, providing for the payment of the four premiums in installment insurance, you are advised that this office considers this to be an order for the payment of money in four installments, and subject to a tax of 2 cents only.

I regret that the concessions that you have asked for can not be granted. The circumstances attending these cases are such that this office would be led into interminable difficulties if your requests were met. *

*

Respectfully, yours, G. W. WILSON, Acting Commissioner. Mr. W. C. MAYBURY,

Managing Director, Standard Life and

Accident Insurance Company, Detroit, Mich.

FIRE.

(19620.)

Stamp act-Premium notes.

Stamps must be affixed to premium notes as well as to policies.

TREASURY DEPARTMENT,

OFFICE OF COMMISSIONER OF INTERNAL REVENUE,

Washington, D. C., July 2, 1898. SIR: Mr. R. J. Taylor, manager of the loss department of the Continental Insurance Company, 46 Cedar street, New York, in a letter to this office, dated the 24th ultimo, states that his company takes notes for premiums on farm business in the Western States, which notes represent the amount of premium stated in the policy. He inquires whether a stamp must be affixed to these premium notes as well as to the policies issued on such notes.

* * You will please advise him in the affirmative. There appears to be nothing in Schedule A of the act of June 13, 1898, which could warrant this office in holding that the stamp tax which this act imposes upon all promissory notes is not imposed on the notes in question on the ground that tax is paid on the policies of insurance to which they refer.

Respectfully, yours,

N. B. SCOTT, Commissioner.

Mr. CHAS. H. TREAT, Collector Second District, New York, N. Y.

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