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Exemptions as to nonresidents

porations.

the aggregate, owned by any individual, partnership, association, or corporation, shall be exempt from graduated additional income taxes, commonly known as surtaxes, and excess-profits and war-profits taxes, now or hereafter imposed by the United States, upon the income or profits of individuals, partnerships, associations, or corporations.

(b) In addition to the exemption provided in subdivision (a), and in addition to the other exemptions therein referred to, the interest received on and after January 1, 1919, on an amount of the bonds therein specified the principal of which does not exceed $20,000 in the aggregate, owned by any individual, partnership, association, or corporation, shall be exempt from the taxes therein specified: Provided, That no owner of such bonds shall be entitled to such exemption in respect to the interest on an aggregate principal amount of such bonds exceeding three times the principal amount of notes of the Victory Liberty Loan originally subscribed for by such owner and still owned by him at the date of his

tax return.

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SEC. 4. That section 3 of the Fourth Liberty Bond Act is hereby amended to read as follows:

"SEC. 3. That, notwithstanding the provisions of the and foreign cor. Second Liberty Bond Act or of the War Finance Corporation Act or of any other Act, bonds, notes, and certificates of indebtedness of the United States and bonds of the War Finance Corporation shall, while beneficially owned by a nonresident alien individual, or a foreign corporation, partnership, or association, not engaged in business in the United States, be exempt both as to principal and interest from any and all taxation now or hereafter imposed by the United States, any State, or any of the possessions of the United States or by any local taxing authority."

Circular relating to tax exemptions of Liberty bonds and Victory notes. (T. D. 2836.)

For purposes of additional tax exemption for Liberty bonds and Victory notes of either series issued upon conversion of Victory notes of the other series which were originally subscribed for by any taxpayer will be deemed to have been originally subscribed for by such taxpayer. (T. D. 2857. )

Interest on 44 per cent Victory notes converted into 3} per cent Victory notes, and on 34 Victory notes converted into 4 Victory notes. (T. D. 2865.)

Sec.

PROVISIONS COMMON TO SEVERAL OBJECTS OF TAXATION.

3441. Repealed.

3442. Obsolete.

3443. Fraudulent claims for drawback; penalty.

3444. Collector's monthly account of articles in bonded warehouses and articles exported.

3445. Stamps, instruments for attaching, canceling, etc.

3446 (amended).

Power to alter or change stamps, marks, labels, etc.

1. Act of August 15, 1876. Stamps to be sent to officers by mail, registered.

3447. Where mode of assessing or collecting tax is not provided for; regulations authorized. 3448. Internal-revenue laws, when coextensive with jurisdiction of United States.

3449. Removing liquors under other than the proper name known to the trade; penalty.

3450. Removing or concealing articles with intent to defraud; forfeiture and penalty.

3451. Fraudulently executing documents; penalty.

3452. Having property in possession with intent to sell in fraud of law or to evade taxes; penalty. 3453. Property found in possession in fraud of revenue laws; forfeiture.

3454. Sales to evade tax; forfeiture. 3455. Disposing of or receiving or making empty stamped packages; penalties.

3456. Penalty and forfeiture by distillers, etc., for omitting things required and for doing things forbidden.

3457. Packages included in forfeiture of goods.

3458. Goods seized may be delivered to marshal before process issues, etc.

3459. Bonding of goods seized.

3460. Proceedings on seizure of goods valued at $500 or less.

3461. Application for remission. 3462. Search warrants.

1-23. Act June 15, 1917-Title XI.

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Sec.

2982 (amended). Foreign war vessels. 3433 (amended). Articles for exportation, manufactured in bonded warehouses.

IV. Par. M, act of October 3, 1913. Manufacturer of articles in tended for exportation ir bonded warehouses.

20. Act of March 1, 1879, as amended by act of May 28, 1880. Withdrawal of spirits by manufacturer of cordials, etc.

15. Act of May 28, 1880. Allowance for leakage.

3434. Superseded by Par. M, Sec. IV, act of October 3, 1913.

IV. Par. O, act of October 3, 1913. Drawback equal to tax on domestic alcohol used in medicinal and toilet preparations. IV. Par. P, act of October 3, 1913. Articles reimported on which no revenue tax was paid, or, if paid, was refunded. 3465. Construction of act March 2, 1833.

Act of August 13, 1894, amended. Guarantee corporation may be accepted as sole surety on recognizances, stipulations, bonds, and undertakings.

1320. Act of February 24, 1919. Liberty or other United States bonds in lieu of surety bonds. Act of August 5, 1909. Bonds from surety companies; joint commission.

5. Legislative, executive, and judicial appropriation act of March 2, 1895. Official bonds. 1,2. Act of August 8, 1888. Notice of deficiency in accounts of principals to be given to sureties upon bonds of United States officials; limitation of time within which suits shall be brought against sureties. Legislation relative to Hawaii, Porto Rico, the Philippines, and the Virgin Islands. Provisions of act of February 24, 1919, of general application:

1. Definitions. 1305. Laws part of act; returns on notice from

Commissioner; examination of books, etc.

587

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Fraudulent claims for drawback; penalty.

monthly account

Provisions of act of February 24, 1919, of general application-Continued.

1312. Payment of taxes by vendee or lessee in

certain cases.

1313. Fractional part of cent disregarded.

1314. Certificates of indebtedness, etc., receivable in payment of certain taxes.

1318. Jurisdiction of district courts; issue of writs.

1319. False statements as
to tax in connection
with sales or leases.

1400. Repeal of acts.
1402. Effect of partial in-
validity of act.

1405. Citation of act.
1408. Copies of contracts
with United States.

1409. Effective date of act.

SEC. 3441. Relative to drawback on fermented liquors; repealed by act of June 18, 1890 (26 Stat., 162). See page 317.

SEC. 3442. Obsolete by repeal of section 3441.

SEC. 3443. Whenever any person fraudulently claims or seeks to obtain an allowance of drawback on goods, wares, or merchandise on which no internal duty shall have been paid, or fraudulently claims any greater allowance of drawback than the tax actually paid as aforesaid, he shall forfeit triple the amount wrongfully or fraudulently claimed or sought to be obtained, or the sum of five hundred dollars, at the election of the Secretary of the Treasury.

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Section 3330, page 281, provides a penalty in the case of fraudulent claims for drawback on spirits, and section 25, act of February 8, 1875 (p. 391), in the case of fraudulent claims for drawback on tobacco.

Drawback is now allowed on distilled spirits, page 279; tobacco, snuff, cigars, cigarettes, page 393; and stills, page 164.

No drawback is allowed upon spirits bottled in bond, page 294.

Drawback allowed on articles shipped to the Philippines or Porto Rico, page 625.

Collector's SEC. 3444. Every collector who has charge of any wareof articles in house in which distilled spirits, or other articles, are houses and arti- stored in bond, shall render a monthly account of all such cles exported. articles to the Commissioner of Internal Revenue, by

bonded ware

whom such account shall be examined and adjusted monthly, so as to exhibit a true statement of the responsibility of such collector thereon. In adjusting such account, the collector shall be charged with all the articles

which may have been deposited or received under the provisions of law, in any warehouse in his district and under his control, and shall be credited with all such articles shown to have been removed therefrom according to law, including transfers to other collectors and to his successor in office, and also whatever allowances may have been made in accordance with law to any owner of such goods or articles for leakage or other losses.

And every collector from whose district any distilled spirits, tobacco, snuff, or cigars are shipped in bond, under the provisions of this Title, shall render a monthly account of the same to the Commissioner of Internal Revenue, showing the amount of each article produced and shipped in bond, the amounts of which the exportation is completed according to law, and the amount remaining unaccounted for at the end of each month; also any excesses or deficiencies on the amounts originally reported as shipped.

stamps, instru

protecting, and canceling.

SEC. 3445. The Commissioner of Internal Revenue may Changes of make such change in stamps, and may prescribe such in- ments for attachstruments or other means for attaching, protecting, and ing canceling stamps, for tobacco, snuff, cigars, distilled spirits, and fermented liquors, or either of them, as he and the Secretary of the Treasury shall approve; such instruments to be furnished by the United States to the person using the stamps to be affixed therewith, under such regulations as the Commissioner of Internal Revenue may prescribe.

Regulations under this section have the force of law. (15
Op. Atty. Gen., 191.)

Rubber stamps may be used instead of stencils for can-
celing strip stamps on cigar boxes. (Circular letter, Octo-
ber 15, 1897; 43 Int. Rev. Rec., 385.)

es

tablish, alter, or

revenue stamps,

SEC. 3446. [Amended by sec. 18, act of March 1, 1879 Power to (20 Stat., 327).] The Commissioner of Internal Reve- change internalnue, with the approval of the Secretary of the Treasury, marks, or labels, may establish and, from time to time, alter or change the etc. form, style, character, material, and device of any stamp, mark, or label used under any provision of the laws relating to internal revenue. Such stamps shall be attached, protected, removed, canceled, obliterated, and destroyed, in such manner and by such instruments or other means as he, with the approval of the Secretary of the Treasury, may prescribe; and he is hereby authorized and empowered to make, with the approval of the Secretary of the Treasury, all needful regulations relating thereto; and all pains, penalties, fines, and forfeitures now provided by Penalties. law relating to internal-revenue stamps shall apply to and have full force and effect in relation to any and all stamps which may or shall be so established by the Commissioner of Internal Revenue:

Provided, Such stamps or device or instrument_or means of removal or obliteration, shall entail no addi

Expense.

Stamps to be

sent to officers by

tional expense upon the persons required to affix or use the same.

See section 321, page 51, as to authority of Commissioner to provide stamps, etc.

Stamps for special taxes, section 3238, page 156; for distilled spirits, section 3312, page 268; for imitation wines, page 325; for fermented liquors, section 3341, page 310; for tobacco, section 3369, page 383; for cigars, section 3395, page 406; for oleomargarine, section 8, act of August 2, 1886, amended, page 433. See appropriate sections for other articles.

The portraits of living persons upon internal-revenue stamps not prohibited by section 3576, R. S., but their exclusion therefrom is in consonance with its spirit. (14 Op. Atty. Gen., 528.)

Hamilton-Brooks cigar stamp. (16 Op. Atty. Gen., 444; 26 Int. Rev. Rec., 33; 17 Op. Atty. Gen., 111.)

Use of the Hunter stamp. (15 Op. Atty. Gen., 191.)
Fletcher's invention. (11 Ct. Cls., 748.)

Alleged infringement of patent. (Fletcher v. Blake, 131
U. S., exevii appendix; 27 Int. Rev. Rec., 6; Hollister v.
Benedict & Burnham Manufacturing Co., 113 U. S., 59; 31
Int. Rev. Rec., 30; Solomons v. United States, 22 Ct.
Cls., 335.)

Stamps for spirits, beer, tobacco, snuff, and cigars are not legitimate articles of traffic. (11 Int. Rev. Rec., 57; Amer. Brewing Co. v. United States, 33 Ct. Cls., 351.)

**

Public policy forbids the sale of official stamps uncanceled which have become obsolete. (28 Op. Atty. Gen., 201.) SEC. 1. [Act August 15, 1876 (19 Stat., 152).] mail, registered. And hereafter the transmission of internal revenue stamps to the officers of the internal revenue service shall be made through the mails of the United States in registered packages. * *

Where mode of assessing or col

regulations.

Internal-revenue stamps may be mailed to collectors and stamp deputy collectors or returned by them to the Commissioner in full packages without regard to the 4-pound limit of weight. (T. D. 18947.)

Delivery of stamps to be made directly to taxpayer. (T. D. 2504.)

SEC. 3447. Whenever the mode or time of assessing or lecting any tax is collecting any tax which is imposed is not provided for, not provided for; the Commissioner of Internal Revenue may establish the same by regulation. He may also make all such regulations, not otherwise provided for, as may have become necessary by reason of any alteration of law in relation to internal revenue.

Internal - reve nue laws,

United States.

Spreckels Sugar Refining Co. v. McClain. (113 Fed., 244; T. D. 462; 109 Fed., 76; T. D. 350; Herold v. Kahn, 159 Fed., 608.)

SEC. 3448. The internal-revenue laws imposing taxes on extensive with distilled spirits, fermented liquors, tobacco, snuff, and jurisdiction of cigars shall be held to extend to such articles produced anywhere within the exterior boundaries of the United States, whether the same be within a collection district or not.

Indian Territory: The Cherokee Tobacco (Boudinot's factory). (11 Wall., 616; 14 Int. Rev. Rec., 11.)

In this case the Supreme Court ruled that the Indian Territory was included in the general terms of this section,

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