Treasury Department : : : ureau of Int

Interna Revenue uetn

Cumuatve uetn 19 9-2
ULY-D C M R 19 9
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
SP CI L TT NTION d cted to the cautonary notce on ths page that pub-
. shed rungs of the ureau do not have the force and effect
of Treasury Decsons and that they are appcabe ony to facts presented n the pubshed case
Treasury Department : : : : : ureau of Interna Revenue
Interna Revenue uetn
Cumuatve uetn 19 9-2
ULY-D C M R 19 9
IN T IS ISSU
Pa o
Introductory Notes . . . I
Contents
Rungs Nos. 13120-13266
Ta Court of the Unted States. The, formery Unted
States oard of Ta ppeas 1-
Income Ta
Part I (Interna Revenue Code) -109
Part II (Revenue ct of 1938 and pror Revenue
cts) 110-112
state and Gft Ta es 113-118
mpoyment Ta es 119 126
Msceaneous Ta es
cse Ta es, Stamp Ta es, etc 127-13
Msceaneous Rungs 137 268
Legsaton 269-281
Commttee reports 282-301
Inde 303-312
The rungs reported n the Interna Revenue uetn are for the nformaton of ta payers and ther counse aa
showng the trend of offca opnon n the admnstraton of the ureau of Interna Revenue; the rungs other than
Treasury Decsons have none of the force or effect of Treasury Decsons and do not commt the Department to
any nterpretaton of-the aw whch has not been formay approved and promugated by the Secretary of tha
Treasury. ach rung embodes the admnstratve appcaton of the aw and Treasury Decsons to the entre
state of facts upon whch a partcuar case rests. It s especay to be noted that the same resut w not neces-
sary be reached n another case uness a the matera facts are dentca wth those of the reported case. s t s
not aways feasbe to pubsh a compete statement of the facts underyng each rung, there can be no assurance
that any new case s dentca wth the reported case. s bearng out ths dstncton, t may be observed that th
rungs pubshed from tme to tme may appear to reverse rungs prevousy pubshed.
Offcers of the ureau of Interna Revenue are especay cautoned aganst reachng a concuson n any cass
merey on the bass of smarty to a pubshed rung, and shoud base ther |udgment on the appcaton of a
pertnent provsons of the aw and Treasury Decsons to a the facta n each case. These rungs shoud be used
as ads n studyng the aw and ts forma constructon as made n the reguatons and Treasury Decsons pre-
vousy ssued.
In addton to pubshng a Interna Revenue Treasury Decsons, t a the pocy of the ureau of Interna
Revenue to pubsh aU rungs and decsons, ncudng opnons of the Chef Counse for the ureau of Interna
Revenue, whch, because they announce a rung or decson upon a nove queston or upon a queston n regard
to whch there e sts no prevousy pubshed rung or decson, or for other reasons, arc of such mportance aa
to be of genera nterest. It s aso the pocy of the ureau to pubsh a rungs or decsons whch revoke,
modfy, amend, or affect n any manner whatever any pubshed rung or decson. In many nstances opnons
of the Chef Counse for the ureau of Interna Revenue are not of genera nterest because they announce no
new rung or new constructon of the revenue aws but smpy appy rungs aready made pubc to certan
stuatons of fact whch arc wthout speca sgnfcance. It s not the pocy of the ureau to pubsh such opnons.
Therefore, the numbers assgned to the pubshed opnons of the Chef Counse for the ureau of Interna
Revenue are not consecutve. No unpubshed rung or decson w be cted or reed upon by any offcer or
empoyee of the ureau of Interna Revenue as a precedent n the dsposton of other cases. Uness otherwse
specfcay ndcated, a pubshed rungs and decsons have receved tbe consderaton and approva of thn
Chef Counse for the ureau of Interna Revenue.
UNIT D ST T S GO RNM NT PRINTING OFFIC : W S INGTON : 19 0
For sae by Superntendent of Documents, U. S. Government Prntng Offce, Washngton 2 , D. C.
See back of tte for prces
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
The Interna Revenue uetn servce conssts of buetns ssued
every other week and semannua cumuatve buetns.
The buetns contan the rungs and decsons whch are made
pubc and a Treasury Department decsons (known as Treasury
Decsons) pertanng to Interna Revenue matters. The semannua
cumuatve buetns contan a rungs and decsons (ncudng
Treasury Decsons) pubshed durng the prevous 6 months.
The compete uetn servce may be obtaned, on a subscrpton
bass, from the Superntendent of Documents, Government Prntng
Offce, Washngton 2 , D. C, for S2. 0 per year; foregn, 3.7 . Snge
copes of the uetn, 10 cents each.
Certan ssues of cumuatve buetns are out of prnt and are.
therefore, not avaabe. Persons desrng avaabe cumuatve bue-
tns may obtan them from the Superntendent of Documents at prces
as foows:
Year
Cumuatve uetn
Frst 0 months
Second 0 months
1920 -.-
2
0. 2
3
0. 30
1928 -.-
II-1
. 3
I1-2
. 0
1929.
III-1
. 0
II1-2
.
1930,.
I -1
. 0
I -2
. 0
1932 -
I-
. 30
-1
.
-2
.
1939-1
Part 1
. 0
1939-2
. 60
Part 2
1. 00
19 0
19 0-1
. 30
19 0 -2
. 60
19 1
19 1-1
.
19 1-2
. 60
19 2
19 2-1
. 0
19 2-2
.60
19 3a - -
1. 2
19 1
2. 2
19 3
1. 0
19 6
19 6-1
. 0
19 6-2
. 7
19 7
19 7-1
. 0
19 7-2
. 7
19 8-1
. 7
19 8-2
1. 00
19 9.
19 9-1
.7
19 9-2
.7
Contans ony ncome ta rungs.
ouse, Senate, and conference reports on revenue bs enacted as the ct of October 3,
1913, the ct of October 22, 191 . and the Revenue cta of 1916 to 1938, ncusve, and on
amendments to such cts.
Prnted In one voume.
Persons desrng to obtan the servce n dgest form may do so at
prces as foows: Dgest No. 19 (ncome ta rungs ony, pr 1919,
to December, 1921 ncusve), 0 cents; Dgest No. 13 (1922-2 ), 60
cents; Dgest No. 22 (192 -27), 3 cents; and Dgest (ncome ta
rungs ony, pr, 1919, to December, 1930, ncusve), 1. 0.
nqures n regard to these pubcatons and subscrptons shoud
be sent to the Superntendent of Documents, Government Prntng
Offce, Washngton 2 , D. C.
()
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
INTRODUCTORY NOT S
The Interna Revenue Cumuatve uetn 19 9-2, n addton to
a decsons of the Treasury Department (caed Treasury Decsons)
pertanng to Interna Revenue matters, contans opnons of the Chef
Counse for the ureau of Interna Revenue, and rungs and decsons
pertanng to ncome, estate, gft, saes, e cess profts, empoyment,
soca securty, and msceaneous ta es, and egsaton affectng the
revenue statutes, as ndcated on the tte page of ths uetn, pub-
shed n the uetns (19 9, Nos. 1 to 26, ncusve) for the perod
uy 1 to December 31, 19 9. It aso contans a cumuatve st of
announcements reatng to decsons of The Ta Court of the Unted
States, formery the Unted States oard of Ta ppeas, pubshed
n the Interna Revenue uetn Servce from uy 1 to December 31,
19 9.
Income ta rungs are prnted n two parts. The rungs under
the Interna Revenue Code are prnted as Part I, the aw headngs
correspondng wth the sectons of the Code, as amended, and the
reguatons headngs correspondng wth the secton headngs of Regu-
atons 111 or 103. Rungs under the Revenue ct of 1938 and pror
revenue acts are prnted as Part II, the aw headngs correspondng
wth the secton headngs of those revenue acts and the reguatons
headngs correspondng wth the artce headngs of the appcabe
reguatons.
Rungs under Ttes III and I of the Soca Securty ct and
under Subchapters and C, Chapter 9, of the Interna Revenue Code
n force pror to anuary 1, 19 0, are pubshed under artce headngs
of Reguatons 91 and 90, respectvey; rungs under Subchapters
and C, Chapter 9, of the Code n force on or after anuary 1, 19 0, are
pubshed under the secton headngs of Reguatons 106 and 107,
respectvey; rungs under the Carrers Ta ng ct of 1937 and under
Subchapter , Chapter 9, of the Code for perods pror to anuary 1,
19 9, arc pubshed under the artce headngs of Reguatons 100, and
rungs under Subchapter , Chapter 9, of the Code for perods subse-
quent to December 31, 19 8, w be pubshed under the secton head-
ngs of Reguatons 11 .
R I TIONS
The foowng abbrevatons are used throughout the uetn:
, , C, etc. The names of ndvduas.
. R. M. Commttee on ppeas and Revew memorandum.
. R. R. Commttee on ppeas and Revew recommendaton.
. T. coho Ta Unt.
. T. . oard of Ta ppeas.
C. . Cumuatve uetn.
Ct. D. Court decson.
C. S. T. Capta Stock Ta Dvson.
C. T. Ta es on mpoyment by Carrers.
D. C. Treasury Department crcuar.
(n)
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
I
m. T. Ta es mposed by the Soca Securty ct, the Carrers Ta ng ct of
1937, and Subchapters , , and C of the Interna Revenue Code.
. P. C. cess Profts Ta Counc rung or memorandum.
. T. state and Gft Ta Dvson.
G. C. M. Genera Counse s, ssstant Genera Counse s, or Chef Counse s
memorandum.
I. R. . Interna Revenue uetn.
I. R. C. Interna Revenue Code.
I. T. Income Ta Unt.
M, N, , Y, Z, etc. The names of corporatons, paces, or busnesses, accordng
to conte t.
Mm. Mmeographed etter.
MS. or M. T. Msceaneous Dvson.
O. or L. O.- Soctor s aw opnon.
O. D. Offce decson.
Op. . G. Opnon of the ttorney Genera.
P. T. Processng Ta Dvson.
S. T Saes Ta Dvson.
S. Sver Ta Dvson.
S. M. Soctor s memorandum.
So. Op. Soctor s opnon.
S. R. Soctor s recommendaton.
S. S. T. Ta es on mpoyment by others than carrers.
T. Tobacco Dvson.
T. . M. dvsory Ta oard memorandum.
T. . R. dvsory Ta oard recommendaton.
T. C Ta Court of the Unted States.
T. D. Treasury Decson.
and y are used to represent certan numbers, and when used wth the word
doars represent sums of money.
NNOUNC M NT R L TING TO D CISIONS OF T T COURT OF T UNIT D
ST T S, FORM RLY NOWN S T UNIT D ST T S O RD OF T PP LS
In order that ta payers and the genera pubc may be nformed
whether the Commssoner has acquesced n a decson of The Ta
Court of the Unted States, formery known as the Unted States
oard of Ta ppeas, dsaowng a defcency n ta determned by
the Commssoner to be due, announcement w be made n the b-
weeky Interna Revenue uetn at the earest practcabe date.
Notce that (he Commssoner has acquesced or nonacquesced n a
decson f the Ta Court reates ony to the ssue or ssues decded
adversey to the Government. Decsons so acquesced n shoud be
reed upon by offcers and empoyees of the ureau of Interna
Revenue as precedents n the dsposton of other cases.
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
CUMUL TI CONT NTS
Rung
Treasury Decsons:
706.
6707.
708.
6709 _
6710
6711
6712
6713
671
6716
716
717
6718
719
720
721
722
723
72
726
6726
727
6728
729
730
6733
73
73 -
730
6737 -.
738
739
7 0
7 1
7 2
7 3
7
67
7 6
67 7
7 8.
7 9
67 0.-
7 1
67 2..
7 3..
7
7
7 6
67 7
7 8
7 9
760
761
6762
6763
76
6766
6766
Court decsons:
1722
1723
172 .
172 .
Chef Counse smemorandu:
26013
26031
26082.
Rung No.
19 9-1 -13123
19 9-1 -1312
19 9-1 -1312
19 9-1 -13133
19 9-1 -13131
19 9-1 -13136
19 9-1 -1313
19 9-1 -1313
19 9-1 13137
19 9 17-131 8
19 9-17-131 0
19 9-17-131 2
19 9-17-131
19 9-17-1316
19 9-17-131 7
19 9-17-131 9
19 9-17-13161
19 9-17-13163
19 9-17-1316
19 9-17-1316
19 9-17-13166
19 9 17-131 9
10 9-17-131 1
1919-17-131 3
19 9-17-131 6
19 9-17-131 8
19 9-17-13160
19 9-17-13162
19 9 17-13169
19 9-19 13180
19 9-19-13181
19 9-19-1318
19 9-19-1318
19 9-19-13183
19 9-19-13182
19 9-19-13190
19 9-20-1319
19 9-20-13199
19 9-20-13201
19 9-20-13202
19 9-20-13203
19 9-20-1320
19 9 20-13200
19 9-21-13211
19 9-22-13218
19 9-22-13219
19 9-23-13223
19 9-23-1322
19 9-23-1322
19 9-23-13228
19 9-23-13227
1919-2 -1323
19 9-2 -132 2
19 9-2 -132 3
19 9-2 -132
19 9 2 -132 6
19 9-26-13260
1919 26-13261
19 9-26-13262
19 9-26-13263
19 9-26-1326
19 9-26-13266
19 9-1 -13132
19 9-16-13139
19 9-21-13210
19 9-26-132 7
19 9-16-131 0
19 9-21-13209
19 9-17-131 7
19 9-17-131
19 9-18-1317
19 9-2 -132 3
Page
220
Mt
2 2
110
M
202
1 1)
119
21
177
IS)
21 S
an
227
231
237
2 0
. 2
M
2 6
2 7
LSI
IM
210
228
M
238
2 2
182
17
198
2 1
22
212
2:,
.-
11
170
s7
111.)
un
133
18
1 7
116
117
171
188
196
2
2.7
21
138
180
119
123
229
233
136
2 0
M
239
62

80
19
n
69
110
38
127
1 12
Rung
Unted States Ta Court
798
91
2 1
3216
6767
896
7 12
8790 _
899
9780
9938
10867
11090
111 9
113 1
11987
12128
12316
12319
12320
12 11
12 21
12 86
12827
12908
129 6
13032
13116
13617 _
13618
13619
13620
13621 _
13622
13623
1373
13828
1 22 .
1 227
1 228
1 31
1 31
1 316
1 10
1 11
1 12
1 6 8
1 982
1 01
1 101
1 102
16187
1 210
1 376 -
1 02
1 669
16816
1 990
1 991
16100
10182
162 1
16 26
16 2
167
167 6
169
17039
17066
17093
17098
17101
17160
17162
Rung N o.
19 9 -2 -132
19 9-17-131 3
19 9-17-131 3
19 9-17-131 3
19 9-22-1321
19 9-17-131 3
19 9-18-13170
19 9-17-131 3
19 9-17-131 3
19 9-18-13170
19 9-22-1321
19 9-1 -13128
19 9 1 -13120
19 9-1 -13128
19 9-22-1321
19 9-17-131 3
19 9-21-13206
19 9-1 -13120
19 9-1 -13128
19 9-22-1321
19 9 22-1321
19 9-23-13221
19 9-22-1321
19 9-17-131 3
19 9-26-132 8
19 9-17-131 3
19 9-1 -13120
19 9-23-13221
19 9-19-13170
19 9-19-13176
19 9-19-13176
19 9-19-13176
19 9-19-13176
19 9-19-13176
19 9-19-13176
19 9-1 -13128
19 9-23-13221
19 9-2 -132
19 9-2 -132
19 9-2 -132
19 9-22-1321
19 9-22-1321
19 9 22 13211
19 9-2 -132
19 9-2 -132
19 9-2 -132
19 9-20-13191
1919-22-1321
19 9-19-13176
19 9-2 -132
19 9-2 -132
19 9-26-132 8
19 9-18-13170
19 9-17-131 3
19 9-1 -13120
19 9-17-131 3
19 9-23-13221
19 9-20-13191
19 9-20-13191
19 9-22-1321
19 9-26-132 8
19 9-22-1321
19 9-2 -132
19 9-1 -13128
19 9-17-131 3
19 9-17-131 3
19 9-19-13176
19 9-18-13170
19 9-21-13206
19 9-2 -132
1919-23-13221
19 9-18-13170
19 9-26-132 8
1919-26-132 8
( )
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
I
Rung
Unted States Ta Court-
Contnued
17163
1716 .
20010
20611
780
781
81801
908 1
11O010 _
Ofoe decsons (t. T.):
3960
3961
3962
396
396
396(1
3967
396S
3971
3972
3973
397
397
3976
3977
Rung o.
19 9 26-132 8
1919-26-132 8
19 9-23-13221
19 9-19-13176
19 9-22-1321
19 9-22-1321
19 9-26-132 8
19 9-23-13221
19 9-23-13221
19 9-19-13176
19 9-23-13221
1919-23-13221
19 9-23-13221
19 9-1 -13128
19 9-19-13176
19 9-23-13221
19 9-19-13176
19 9-20-13191
19 9-20-13191
19 9-2 -132
19 9-2 -132
19 9-2 -132
19 9-22-1321
19 9-2 -1323
19 9-21-13206
19 9-22-1321
19 9-22-1321
19 9-23-13221
19 9-23-13221
19 9-17-131 3
19 9-23-13221
19 9-19-13176
19 9-1 -13121
19 9-1 -13122
19 9-1 -13129
19 9-1 -13130
19 9-17-131
19 9-17 131 6
19 9-18-13171
19 9-18-13172
19 9-18-13173
19 9-20-13192
19 9-20-13193
19 9-20-1319
19 9-21-13207
19 9-21-13208
19 9-22-1321
19 9-22-13216
19 9-22-13217
19 9-23-13222
Page
-1

1
1. 3

3
3
3
3
2
3
3
1
3
3

3
1
3
1
1
2
1,3
2

1
2
1.3
3
1
13
38
2
38
.r,
ss
27
33
0
13
28
I
1
3
17
8
90
92
Rung
Offce decsons (I. T.) Con
3978
3979
3980
3981
3982
3983
398 _
398
3986
Offce decsons ( . P. 0.):
3

Offce decson ( . T.):
22
Offce decson (M. T :
38
Offce decsons (MS.):
336
337
338
339
3 0
3 1.
Offce decsons (T :
239.
2 0
2 1
2 2...
2 3.
2 .
2 .
2 6
2 7
2 R
2 9
Mneosrraphs:
6383.
6 32
6 33
6
Crcuar:
2131
Rung No.
Legsaton...
Msceaneous.
19 9-2 -13236
19 9-2 -13237
19 9-2 -13238
19 9-2 -13239
19 9-2 -132 8
19 9-2 -132 9
19 9 2 -132 0
19 9-2 -132 1
19 9-26-132 9
19 9-1 -13127
19 9-2 -132 2
19 9-2 -132 1
19 9-20-13196
19 9-1 -13126
19 9-17-13167
19 9-19-13186
19 9-21-13212
1919-23-13228
19 9-2 -132 6
19 9-16-131 1
19 9-16-131 2
1919-17-13168
19 9-18-1317
19 9-19-13187
19 9-20-1320
19 9-21-13213
19 9-22-13220
1919 23-13233
19 9-2 -132 7
19 9-26-1326
19 9-2 -132 0
19 9-20-13197
19 9-20-13198
19 9-2 -132 8
19 9-19-13178
19 9-1 -13138
19 9-19-13188
1919-19-13189
19 9-19-13177
19 9-23-13229
19 9-2 -132
19 0-19-13179
19 9-23-13230
19 9-23-13231
19 9-23-13232
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
CONT NTS OF CUMUL TI ULL TINS a. T.) I to ; S. T. FOR 1920 ND 1921; INT RN L
R NU 1-1,1-2, II-, II-2. III-. III-2. I -1, I -2, -, -2. I-I, I-2, II-1. n-2. UI-1, III-2.
I -1, I -2. -. -2. I-1, I-2, II-1. II-2, III-1. III-2. I -1, I -2, -1, -2. 1937-1, 1937-2.
1938-1. 1938-2, 1939-1 (P RT 1 ND P RT 2). 1939-2. 19 0-1. 19 0-2. 19 1-1. 19 1-2. 19 2-1, 19 2-2; N-
NU L ULL TINS FOR 1913, 19 . ND 19 ; S MI NNU L ULL TINS 19 6-1. 19 6-2. 19 7-1.
19 7-2. 19 8-1, 19 8-2. 19 9-1. ND 19 9-2
Cumuatve uetn
Income Ta :
December, 1919 (No. 1)
anuary- une, 1920 (No. 2)
uy-December, 1020 (No. 3)
anuary- une, 1921 (No. )
uy-December, 1921 (No. )
ae Ta :
1920 (S. T. 1-20).
anuary- une, 1921.
uy-December, 1921
Interna Revenue uetn:
anuarv- une, 1922 (No. 1-1)
uy-December. 1922 (No. 1-2).
anuary- une, 1923 (No. II-)
uy-December, 1923 (No. II-2)
anuary- une, 192 (No. III-)
uy-December, 192 (No. III-2)
anuary- une. 192 (No. I -1).
uy-December, 192 (No. I -2)
anuary- une, 1926 (No. -)
uy-December, 1926 (No. -2)
anuary- uno, 1927 (No. I-1)
uy-December, 1927 (No. I-2)
anuary- une, 1928 (No. II-1)
uy-December, 1928 (No. II-2)...
anuary- une, 1929 (No. III-1).
uy-December, 1929 (No. III-2)
anuarv- une, 1930 (No. I -1)
uy-December, 1930 (No. I -2)
anuarv- une, 1931 (No. -).
uy-December, 1931 (No. -2)
anuarv- une, 1932 (No. I-1)
uy-December, 1932 (No. I-2)
anuarv- une, 1933 (No. II-1)
uy-December, 1933 (No. II-2)
anuarv- une, 193 (No. III-1)
uy-December. 193 (No. III-2)
anuary- une, 193 (No. I -1)._
uy-December, 193 (No. I -2)
anuarv- une, 1936 (No. -1)...
uy-December, 1936 (No. -2)
anuarv- une, 1937 (1937-1)
uy-December, 1937 (1937-2)
anuary- une, 1938 (1938-1)
uy-December. 1938 (1938-2).
annarv- une, 1939 (1939-1 Part 1 and Part 2).
uy-December, 1939 (1939-2)
anuarv- une, 19 0 (19 0-1)
uy-December, 19 0 (19 0-2)
anuary- une, 19 1 (19 1-1)
uy-December. 1911 (19 1-2)
anuarv- une, 19 2 (19 2-1)
uy-December, 19 2 (19 2-2)
anuary-December, 19 3 (12 months)
anuary-December, 19 (12 months).
anuary-December. 19 (12months).
anuary- uno, 19 6 (19 6-1)
uy-December, 19 6 (19 6-2).
anuary- une, 19 7 (19 7-1)
uy-December, 19 7 (19 7-2)
anuary- une, 19 8 (19 8-1)
uy-December. 19 8 (19 8-2) _
anua/y- une. 19 9 (19 9-1)
uv-December, 19 9 (19 9-2)
( II)
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
T T COURT OF T UNIT D ST T S
CUMUL TI LIST OF NNOUNC M NTS R L TING TO
D CISIONS OF T T COURT OF T UNIT D
ST T S PU LIS D IN T INT RN L R NU ULL -
TIN S R IC FROM ULY 1, 19 9, TO D C M R 31, 19 9,
INCLUSI
19 9-26-132 8
The Commssoner acquesces n the foowng decsons:
Ta payer
bbe, Rchard Frank
en, r., Cfford R
tumor Manufacturng Co., Inc.
1
eggs, eanor ughes, estate of 1
e, Irene L
enson et u ., Marcus O.
erger, oseph
erger Shern, Inc
ackstone Theatre Co. (formery Savn musement
Co.)
radbury, I. C.3
rtsh Tmken Lmted
rody Sons Co., F
uchoz, ohn Whem
uchoz, Naom Towe
Cadwaader, . W., estate of
Cadwaader, Rose M., e ecutr of estate of . W.
Cadwaader
Cty ank Farmers Trust Co., e ecutor of estate of
Lan May Schroeder 1
Cark et a., roy N., trustees of Chares W. Water-
man Trusts 11
Cement, Caroyn ., estate of 1
Cement et a., Norman P., e ecutors of estate of
Caroyn . Cement
Darne, T.
Durst Productons Corporaton
Report
No.
oume
rage
1806
12
900
17721
12
227
169
12
9 9
173 3
13
131
17093
13
3
110010
2
12
18228
13
221
18229
13
221
17318
12
801
780
23
13 2
1 210
12
880
12128
11
298
1 227
13
201
1 22
13
201
798
13
21
798
13
21
19381
13
2 9
81301
1
663
12 21
13
19
12 21
13
19
1 31
12
7
10867
8
1326
oard of Ta ppeas.
state ta decson.
Nonacqucscenco pubshed n Cumuatve uetn 19 .1, pap; 27. wthdrawn.
Nonacquescence pubshed n Cumuatve uetn I- 2 (1932), page II, wthdrawn.
OUt ta decson.
Parta nonacquescence pubshed n Cumuatve uetn 19 3, page 28, wthdrawn.
cquescence mted to the resut, pubshed n Cumuatve uetn 19 7-2, page 2, wthdrawn.
(1)
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
cquescences Contnued
Ta payer
Docket
No.
Report
oume Page
fert, ar C
sse Constructon Co.,

Inc.
Farquhar, Naom ngsbury uchoz 3
Fe , bert T
Frst Natona ank of Mobe, e ecutor of estate of
aron Lowensten
Frst Wsconsn Trust Co., e ecutor of estate of Cyrus
C. Yawkey 3
Fagg nttng Co., Inc., . T ..
Fruehauf, arvey C ..
Gasse, . C
Gasse, r., . C -
Gasse, Lan acon
Gordon, ames D.
Gorman Lumber Saes Co.
G
a, Grace R. Ma son.
arvey Coa Corporaton.
eer Son, Inc., L
ess, Sdney
tchcock, Careton C
tchcock, Caude R
tchcock, arod M_. ...
tchcock, Lucy Utter
tchcock, Margaret nn.
tchcock, Raph C
tchcock, r., Raph C...
II
orden, D. .
aufman. Morgan S.
Lark n, ce ., estate of
Larkn, George ., e ecutor of estate of ce .
Lark n 3
Lehgh aey Raroad Co.
Leonard Refneres, Inc
Lowensten, aron, estate of.
Lucas, Chrstne M
781
20238
1 228
13828
12 11
162 1
1 02
8790
1 12
1 11
1 10
129 6
13116
11090
2 1
896
18987
17039
13619
13620
13618
13623
13621
13617
13622
1373
17098
1 816
1 816
767
9938
12320
12 86
111 9
12 11
17693
oard of Ta ppeas.
Nonacqueseencc pubshed In Cumuatve uetn CI-2 (19S2), page 12, wthdrawn.
1 Gft ta decson.
state ta decson.
1 Nonacqucyconce pubshed n Cumuatve uetn 19 8-2, page , wthdrawn.
23
12
13
12
12
12
12
12
12
12
12
10
12
12
12
12
12
12
12
12
12
12
12
12
11
12
18
18
12
11
12 .
12 I
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
cquescences Contnued
Ta payor
Car.
M
Marks Co.
Marsh, W. F.
Meon Natona ank Trust Co., successor by
merger and consodaton to The Unon Tnst Co. of
Pttsburgh, e ecutor of estate of eanor ughes
eggs 1
Meredth, Owen
Merz, Frederck O
Mtche, ohn F.
Myers, Guy C
N
Nachman, Morrs
Natona ank of Commerce n Memphs, e ecutor
under the ast w and testament of ohn . Snowden, II.
Natona uders, Inc
North ersey uarry Co
R
Ranger, zabeth, e ecutr of estate of Raph Ranger
Ranger, Raph, estate of 1
Rte-Way Products, Inc
S
Sa ton, ugene F., estate of 1
Sa ton, Martha P., ndvduay and as soe e ecutr
of the ast w and testament of ugene F. Sa ton -.
Schroeder, Lan May, estate of 1
Shern, arry
Smon, Israe
Smon, rgna
Snowden, II, ohn ., estate of
Spege et a., Lena S., coe ecutors of estate of Modo
. Spege
Spege, Mode ., estate of
Spor Co., Inc., C. .
Standard O Co. of New ersey..
Te as Co. (Carbbean), Ltd., The..
Tobas, Wam L
Toedo ade Co The
Toedo Termna Raroad Co., The.
Topeka Insurors, The
Tyer, Grover
Tuy, . verett.
W
Waterman Trusts, Chares W.1
Woff et u ., Donad D
Wooten, oyt
Y
Yawkey, Cyrus C, estate of 1
Docket
No.
1 187
17 39
173 3
1 69
17837
17 61
91
3216
1 990
1 316
1 01
16182
S99
899
1 31
16 2
16 2
19381
18222
1770
17703
1 316
1 6 S
1 16 8
903
7 12
17621
1 991
12827
16 26
1 376
1787
180 3
81301
17 8
11987
162 1
oard of Ta ppeas.
state ta decson.
Nonacquescence pubshed n Cumuatve uetn 19 0-1, page 8, wthdrawn.
Parta nonacquescence pubshed n Cumuatve uetn 19 3, page 1, wthdrawn.
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
The Commssoner does NOT acquesce n the foowng decsons:
Ta payer
Docket
No.
Report
oume Page

mes Trust Savngs ank

owen, Truman --
C
Communty Pubc Servce Co

merson, Isaac
F
Fawn Lake Ranch Co

orton, een
orton, Rodney
L
Loughrdge, Mar|ore Mead, e ecutr of estate of
Pau Loughrdge 1
Loughrdge, Pau, estate of 1
M
Meon, Rchard
Ms, dward M.
Mnookn, Dora, e ecutr of estate of Samue
Mnookn
Mnookn, Samue, estate of
Mo|onner Sons, Inc
Mutua Fre, Marne Inand Insurance Co., The..
N
Novak, C. Ray_
Novak, Dorothy
S
Scafe, Sarah Meon
Strauss, Ma , aso known as Mar Strauss, estate of .
Strngham, L. eever
Swtk, Lotte
Swtk, Rchard
Swtk, Staney
Swtk. Water
T
Treganowan, Mar|ore F., e ecutr of estate of Ma
Strauss, aso known as Mar Strauss 1
1 982
12319
17066
16100
113 1
20611
20610
9780
9780
1 101
12316
13032
17210
17210
12908
180 0
167
167
1 102
17372
17101
17162
1716
17160
17163
17372
12
12
12
12
12
13
13
11
11
12
12
a
12
12
12
11
11
12
13
12
13
13
13
13
13
state ta decson.
Gft ta decson.
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
INCOM T RULINGS. P RT I
INT RN L R NU COD
C PT R 1. INCOM T
SU C PT R . G N R L PRO ISIONS
P RT II. COMPUT TION OF N T INCOM
S CTION 22(a). GROSS INCOM : G N R L
D FINITION
Secton 19.22(a)-. Reguatons 103: What 19 9-16-13139
ncuded n gross ncome. Ct. D. 1723
( so Secton 181, Secton 19.181-1.)
INCOM T INT RN L R NU COD : D CISION OF SUPR M COURT
1. Gross Income Famy Partnershp.
partner s ntenton to contrbute capta or servces to the part-
nershp sometme n the future s not suffcent to satsfy ordnary
concepts of partnershp as requred n Commssoner v. Tower (327
U. S. 280; Ct. D. 1070, C. . 19 6-1, 11) for appcaton n famy
partnershp ta cases. The decson n the Tower case ceary nd-
cates the mportance of partcpaton n the busness by the partners
durng the ta year. The Ta Court s use of vta servces or
orgna capta tests n ths case gnores the requred determna-
ton of whether the partnershp s rea wthn the meanng of the
Federa revenue aws, whch determnaton depends upon the
partners ntenton of |onng together n good fath n the present
conduct of an enterprse. The dstncton between actve partcpa-
ton n the affars of the busness by a donee of a share n the
partnershp on the one hand, and hs passve acquescence to the w
of the donor on the other, s of mportance n determnng the true
ntent of the partes.
2. Decson Reversed and Cause Remanded.
Decson of the Court of ppeas for the Ffth Crcut (168 Fed.
(2d) 979) reversed, and cause remanded to the Ta Court for de-
cson as to whch, f any, of respondent s sons were partners wth
hm n the operaton of the busness durng 19 0 and 19 1.
Supreme Court of the Unted States
Commssoner of Interna Revenue, pettoner, v. W. O. Cubertson, Sr., and
Gadys Cubertson
On wrt of certorar to the Unted States Court of ppeas for the Ffth Crcut
une 27,19 9
OPINION
Mr. Chef ustce nson devered the opnon of the Court
Ths case requres our further consderaton of the famy partnershp probem.
The Commssoner of Interna Revenue rued that the entre ncome from a
( )
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
19.22(a)- .
6
partnershp aegedy entered Into by respondent and hs four sons must be ta ed
to respondent, and the Ta Court sustaned that determnaton. The Court of
ppeas for the Ffth Crcut reversed. 168 Fed. (2d) 979. We granted certo-
rar, 33 U. S. 883, to consder the Commssoner s cam that the prncpes of
Commssoner v. Totcer, 327 U. S. 280 (19 6) Ct. D. 1670, C. . 19 6-1, 11 , and
Lusthaus v. Commssoner, 327 U. S. 293 (19 6) Ct. D. 1669, C. . 19 6-1, 9 , have
been departed from n ths and other courts of appeas decsons.
Respondent ta payer s a rancher. From 191 unt October, 1939, e had
operated a catte busness n partnershp wth R. S. Coon. Coon, who had
numerous busness nterests n the Southwest and had argey fnanced the
partnershp, was 79 years od In 1939 and desred to dssove the partnershp
because of heath. To that end, the buk of the partnershp herd was sod
unt, In October of that year, ony about 1, 00 head remaned. These catte were
a regstered erefords, the brood or foundaton herd. Cubertson wshed to
keep these catte and approached Coon wth an offer of 0 a head. Coon agreed
to se at that prce, but ony upon condton that Cubertson woud se an
undvded one-haf nterest n the herd to hs four sons at the same prce. s
reasons for mposng ths condton were hs ntense nterest n mantanng the
ereford stran whch he and Cubertson had deveoped, hs convcton that
Cubertson was too od to carry on the work aone, and hs persona nterest In
the Cubertson boys. Cubertson s sons were enthusastc about the proposton,
so respondent thereupon bought the remanng catte from the Coon and Cubert-
son partnershp for . 99, 0. Two days ater Cubertson sod an undvded
one-haf Interest to the four boys, and the foowng day they gave ther father
a note for 9,720 at percent nterest due 1 year from date. Severa months
ater a new note for 7,67 was e ecuted by the boys to repace the earer note.
The ncrease n amount covered the purchase by Cubertson and hs sons of
other propertes formery owned by Coon and Cubertson. Ths note was pad by
the boys n the foowng manner:
Credt for overcharge ,930
Gfts from respondent 21, 7
One-haf of a oan procured by Cubertson Sons partnershp 30, 000
The oan was repad from the proceeds from operaton of the ranch.
The partnershp agreement between ta payer and hs sons was ora. The
oca paper announced the dssouton of the Coon and Cubertson partnershp
and the contnuaton of the busness by respondent and hs boys under the name
of Cubertson Sons. bank account was opened n ths name, upon whch
ta payer, hs four sons and a bookkeeper coud check. t the tme of formaton
of the new partnershp, Cubertson s odest son was 2 years od, marred, and
vng on the ranch, of whch he had for 2 years been foreman under the Coon and
Cubertson partnershp. e was a coege graduate and receved 100 a month
pus board and odgng for hmsef and hs wfe both before and after formaton
of Cubertson Sons and unt enterng the rmy. The second son was 22
years od, was marred and fnshed coege n 19 0, the frst year durng whch
the new partnershp operated. e went drecty nto the rmy foowng grad-
uaton and rendered no servces to the partnershp. The two younger sous, who
were 18 and 16 years od respectvey n 19 0, went to schoo durng the wnter
and worked on the ranch durng the summer.2
The ta years here Invoved are 19 0 and 19 1. partnershp return was fed
for both years ndcatng a dvson of ncome appro matng the captu attrb-
uted to each partner. It s the dsaowance of ths dvson of the ncome from
the ranch that brngs ths case Into the courts.
Frst. The Ta Court read our decsons n Commssoner v. Tower, supra, and
usthaus v. Commssoner, supra, as settng out two essenta tests of partnershp
for ncome ta purposes: that each partner contrbute to the partnershp ether
vta servces or capta orgnatng wth hm. Its decson was based upon a
fndng that none of respondent s sons had satsfed those requrements durng
the ta years n queston. Sancton for the use of these tests of partnershp
Is sought n ths paragraph from our opnon n the Tower case:
There can be no queston that a wfe and a husband may, under certan cr-
cumstances, become partners for ta , as for other, purposes. If she ether nvests
Gadys Cubertson, the wfe of W. O. Cubertson, Sr.. s oned as a party because of net
communty of Interest In the property and Income of her husband under Te as aw.
1 daughter was aso made a member of the partnershp some tme after ts formaton
upon the gft by respondent of one-quarter of hs one-haf Interest n the partnershp.
Respondent dd not contend before the Ta Court that she was a partner for ta purposes.
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
7
19.22(a)- .
capta orgnatng wth her or substantay contrbutes to the contro and man-
agement of the busness, or otherwse performs vta servces, or does a of
these thngs she may be a partner as contempated by 26 U. S. C. sectons 181, 182.
The Ta Court has recognzed that under such crcumstances the ncome beongs
to the wfe. wfe may become a genera or a mted partner wth her husband.
ut when she does not share n the management and contro of the busness, con-
trbutes no vta addtona servce, and where the husband purports n some
way to have gven her a partnershp nterest, the Ta Court may propery take
these crcumstances Into consderaton In determnng whether the partnershp s
rea wthn the meanng of the Federa revenue aws. 327 T . S. at 2tM C. .
19 6-1, 1 -1 .
It Is the Commssoner s contenton that the Ta Court s decson can and shoud
be renstated upon the mere reaffrmaton of the quoted paragraph.
The court of appeas, on the other hand, was of the opnon that a famy
partnershp entered nto wthout thought of ta avodance shoud be gven
recognton ta wse whether or not t was Intended that some of the partners
contrbute ether capta or servces durng the ta year and whether or not
they actuay made such contrbutons, snce t was formed wth the fu e pec-
taton and purpose that the boys woud, n the future, contrbute ther tme and
servces to the partnershp. 3 We must consder, therefore, whether an nten-
ton to contrbute capta or servces sometme n the future s suffcent to satsfy
ordnary concepts of partnershp, as requred by the Tower case. The sectons
of the Interna Revenue Code nvoved are sectons 181 and 182, whch set out
the method of ta ng partnershp ncome, and sectons 11 and 22(a),1 whch reate
to the ta aton of ndvdua ncomes.
In the Tower case we hed that despte the camed partnershp, the evdence
fuy |ustfed the Ta Court s hodng that the husband, through hs ownershp
of the capta and hs management of the busness, actuay created the rght to
receve and en|oy the beneft of the ncome and was thus ta abe upon that entre
ncome under sectons 11 and 22(a). In such case, other members of the
partnershp cannot be consdered Indvduas carryng on busness n partner-
shp and thus abe for ncome ta n ther ndvdua capacty
wthn the meanng of secton 181. If t Is conceded that some of the partners
contrbuted nether capta nor servces to the partnershp durng the ta years
In queston, as the court of appeas was apparenty wng to do n the present
case, t can hardy be contended that they are n any way responsbe for the pro-
ducton of ncome durng those years. The partnershp sectons of the Code are,
of course, geared to the sectons reatng to ta aton of ndvdua ncome, snce
no ta s mposed upon partnershp ncome as such. To hod that Indvduas
carryng on busness n partnershp ncude persons who contrbute nothng
durng the ta perod woud voate the frst prncpe of ncome ta aton: that
Income must be ta ed to hm who earns t. Lucas v. ar, 281 U. S. I (1930) ;
everng v. Cfford, 309 U. S. 331 (19 0) Ct. D. 1 , C. . 19 0-1, 10 ;
Natona Carbde Corp. v. Commssoner. 336 U. S. 22 (19 9) Ct. D. 1718, C. .
19 9-1, 16 .
Furthermore, our decson n Commssoner v. Tower, supra, ceary ndcates
the mportance of partcpaton n the busness by the partners durng the ta
year. We there sad that a partnershp s created when persons on together
ther money, goods, abor, or sk for the purpose of carryng on a trade, pro-
fesson, or busness and where there s communty of nterest n the profts and
osses. Ths Is, after a, but the appcaton of an often terated defnton of
ncome the gan derved from capta, from abor, or from both combned to
a partcuar form of busness organzaton. partnershp s, n other words, an
168 Fort. (2 1) 979 at 982. The court further ad: Nether statute, common sense,
nor Impeng precedent requres the hodng that a partner must contrbute cnpta or render
servces to the partnershp pror to the tme that he s taken Into It. These tests are
equay effectve whether the cnpta and the servces are presenty contrbuted or are ater
to be contrbuted or to be rendered. Id. at 983. See note. 7 Mch. L. Rev. 9 .
26 U. S. C. sectons 181, 182.
26 U. S. C. sectons 11. 22(a).
Of course one who has been a bona fde partner does not ose that status when he f
caed Into mtary or Government servce, and the Commssoner has not so contended.
On the other hand, one hardy becomes a partner In the conventona sense merey becaus
he mght have done so had he not been caed.
sner v. Macomber, 2 2 U. S. 189. 207 (1920) T. r . 3010. C. . 3. 2 (1920) ; Mer-
chants Loan d Trust Co. v. Smctanka, 2 U. S. 09, 19 (1921) T. D. 3173, Ct. D. 6,
C. . , 3 (1921) . See Treasury Reguatons 101, art. 22(a)-.. See 1 Mertens, Law of
Federa Income Ta aton, 1 9 et seq.
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
19.22(a)- .
8
organzaton for the producton of ncome to whch each partner contrbutes one
or both of the ngredents of ncome capta or servces. Ward v. Thompson, 22
ow. 330, 33 (18 9). The ntent to provde money, goods, abor, or sk some-
tme n the future cannot meet the demands of sectons 11 and 22(a) of the Code
that he who presenty earns the ncome through hs own abor and sk and the
utzaton of hs own capta be ta ed therefor. The vagares of human e per-
ence precude reance upon even good fath ntent us to future conduct as a bass
for the present ta aton of ncome.
Second. We turn ne t to a consderaton of the Ta Court s approach to the
famy partnershp probem. It treated as essenta to membershp n a famy
partnershp for ta purposes the contrbuton of ether vta servces or org-
na capta. Use of these tests of partnershp ndcates, at best, an error
n emphass. It gnores what we sad s the utmate queston for decson,
namey, whether the partnershp s rea wthn the meanng of the Federa
revenue aws and makes decsve what we descrbe as crcumstances to be
taken nto consderaton n makng that determnaton.10
The Tower case thus provdes no support for such an approach. We there sad
that the queston whether the famy partnershp s rea for ncome ta purposes
depends upon whether the partners reay and truy ntended to |on together for
the purpose of carryng on the busness and sharng n the profts and osses or
both. nd ther ntenton n ths respect Is a queston of fact, to be determned
from testmony dscosed by ther agreement, consdered as a whoe, and by ther
conduct n e ecuton of ts provsons. Drennen v. London ssurance Co., 113
U. S. 1, 6; Co v. ckman, 8 . L. Cas. 268. We see no reason why ths
genera rue shoud not appy n ta cases where the Government chaenges the
e stence of a partnershp for ta purposes. 327 U. S. at 287 C. . 19 6-1, 13 .
The queston s not whether the servces or capta contrbuted by a partner are
of suffcent mportance to meet some ob|ectve standard supposedy estabshed
by the Tower case, but whether, consderng a the facts the agreement, the con-
duct of the partes n e ecuton of ts provsons, ther statements, the testmony
of dsnterested persons, the reatonshp of the partes, ther respectve ab-
tes and capta contrbutons, the actua contro of Income and the purposes for
whch t s used, and any other facts throwng ght on ther true ntent the
partes n good fath and actng wth a busness purpose ntended to |on together
n the present conduct of the enterprse. There s nothng new or partcuary
dffcut about such a test. Trers of fact are constanty caed upon to deter-
The rtducto ad abtturdum of the theorv that chdren may hp partners wth ther parents
before they are capabe of beng entrusted wth the dsposton of partnershp funds or of
contrbutng substanta servces occurred In Tnknff v. Commssoner, 120 Fed. (2d) 6 ,
where a ta payer made hs son a partner n he accountng frm the day the son was born.
Whe the Ta Court went on to consder other factors. It s cear from Its opnon that
a contrbuton of ether vta servces or orrna capta was consdered essenta to
membershp In the partnershp. fter fndng that none of respondent s sons had, n the
court s opnon, contrbuted ether, the court contnued : In addton to the above Inqury
as to the presence of those eements deemed by the Tower case essenta to partnershps
recognzabe for Federa ta purposes, ( CCII TCM 692, 689. gan, the
court commented :
Though the pettoner urges thnt many catte busnesses are composed of fathers and
sons, and that the nature of the Industry so requres, we thnk the sume s probaby equay
true of other Industres where men wsh to take cdrcn Into busness wth them. Never-
theess, we thnk that fact does not overrde the many decsons to the genera effect that
partners must contrbute capta orgnatng wth them, or vta servces. Id. at 700.
10 See Mannhener and Mook, Tn wse vauaton of Famy Partnershps, 32 Iowa
L. Rev. 36, 7- 8.
Ths Is not, as we understand t. contrary to the approach taken by the ureau of
Interna Revenue n ts most recent statement of pocy. I. T. 38 , C. . 19 7-1, 66,
states at page 67:
Where persons who are cosey reated by bood or marrage enter Into an agreement
purportng to create a so-caed famy partnershp or other arrangement wth respect to the
operaton of a busness or Income-producng venture, under whch agreement a of the
partes are accorded substantay the same treatment and consderaton wth respect to
ther desgnated nterests and prescrbed responsbtes In the busness as f they were
strangers deang at arm s ength; where the actons of the partes as egay responsbe
persons evdence an ntent to carry on a busness n n partnershp reaton ; and where the
terms of such agreement are substantay foowed n the operaton of the busness or
venture, as we as n the deangs of the partners or members wth each other, t s the
pocy of the urenu to dsregard the cose famy reatonshp e stng between the partes
and to recognze, for Federa Income ta purposes, the dvson of profts prescrbed by such
agreement. owever, where the Instrument purportng to create the famy partnershp
e pressy provdes that the wfe or chd or other member of the famy sha not be requred
to partcpate n the management of the busness, or s merey sent on that pont, the
e tent and nature of the servces of such Indvdua n the actua conduct of the busness
w be gven approprate evdentary weght as to the queston of ntent to carry on the
busness as partners.
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
9
19.22(a)- .
mne the ntent wth whch a person acted. The Ta Court, for e ampe, must
make such a determnaton n every estate ta case n whch t Is contended that a
transfer was made n contempaton of death, for The queston, necessary, s as
to the state of mnd of the donor. Unted States v. Wes, 283 U. S. 102, 117
(1S31) Ct. D. 3 0, C. . -, 7 , 80 (1931) . See en v. Trust Co. of Georga,
326 U. S. 630 (19 6) Ct. D. 1667, C. . 19 6-1, 282 . Whether the partes reay
ntended to carry on busness as partners s not, we thnk, any more dffcut of
determnaton or the manfestatons of such ntent any ess perceptbe than s
ordnary true of nqures nto the sub|ectve.
ut the Ta Court dd not vew the queston as one concernng the bona fde
ntent of the partes to |on together as partners. Not once n ts opnon s
there even an obque reference to any ack of ntent on the part of respondent
and hs sons to combne ther capta and servces for the purpose of carryng
on the busness. Instead, the court, focusng entrey upon concepts of vta
servces and orgna capta, smpy decded that the aeged partners had
not satsfed those tests when the facts were compared wth those n the Tower
case. The court s opnon s repete wth such statements as we dscern nothng
consttutng what we thnk s a requste contrbuton to a rea partner-
shp We fnd no son addng vta addtona servce whch woud
take the pace of capta contrbuted because of formaton of a partner-
shp t s cear that the sons made no capta contrbuton wthn the
meanng of the Tower case.
Unquestonaby a court s determnaton that the servces contrbuted by a
partner are not vta and that he has not partcpated n management and
contro of the busness 1 or contrbuted orgna capta has the effect of
pacng a heavy burden on the ta payer to show the bona fde ntent of the partes
to |on together as partners. ut such a determnaton s not concusve, and
that s the vce n the tests adopted by the Ta Court. It assumes that there
s no room for an honest dfference of opnon as to whether the servces or
capta furnshed by the aeged partner are of suffcent mportance to |ustfy
hs ncuson n the partnershp. If, upon a consderaton of a the facts, t s
found that the partners |oned together n good fath to conduct a busness,
havng agreed that the servces or capta to be contrbuted presenty by each
s of such vaue to the partnershp that the contrbutor shoud partcpate n the
dstrbuton of profts, that s suffcent. The Tower case dd not purport to
authorze the Ta Court to substtute ts |udgment for that of the partes; t
smpy furnshed some gudes to the determnaton of ther true ntent. ven
though t was admtted n the Tower case that the wfe contrbuted no orgna
capta, management of the busness, or other vta servces, ths Court dd not
say as a matter of aw that there was no vad partnershp. We sad, nstead,
that There was, thus, more than ampe evdence to support the Ta Court s
fndng that no genune unon for partnershp purposes was ever ntended and
that the husband earned the ncome. 327 U. S. at 292 C. . 19 6-1, 1 .
(Itacs added.)
Thrd. The Ta Court s soaton of orgna capta as an essenta of
membershp n a famy partnershp aso ndcates an erroneous readng of the
Tower opnon. We dd not say that the donee of an Intra-famy gft coud never
become a partner through nvestment of the capta n the famy partnershp,
any more than we sad that a famy trusts are nvad for ta purposes n
evcrng v. Cfford, supra. The facts may ndcate, on the contrary, that the
amount thus contrbuted and the Income therefrom shoud be consdered the
Neary three-quarters of a century ago. owen. L. ., made the cassc statement that
the state of a man s mnd Is as much a fact as the state of hs dgeston. dgngon v.
Ftmaure.e, 29 L. R. Ch. Dv. 9, 83. State of mnd hns aways been determnatve of
the queston whether a partnershp has been formed as between the partes. See e. g.,
Drennen v. London ssurance Co.. 113 C S. 1. 8 (188 ) ; Medan . aentne, 1
D. S. 611. 621 (1892) : arker v. raft. 2 9 Mch. 70. 2 2 N. W. 8 1 (1932) ; Zuback v.
akmaz. 3 6 Pa. 279, 29 t. 2d 73 (19 3) ; ennedy v. Muns, 1 a. 166, 1 S. .
68 (1930).
In the Tower case the ta payer argued that he had a rght to reduce hs ta es by
any ega means, to whch ths Court agreed. We sad, however, that e stence of a ta
avodance motve gves some Indcaton that there was no bona fde Intent to carry on
busness as a partnershp. If Tower had set up ob|ectve requrements of membershp n
a famy partnershp, such as vta servces and orgna capta, the motves behnd
adopton of the partnershp form woud have been rreevant.
though management and contro of the busness was one of the crcumstances
emphaszed by the Tower case, aong wth vta servces and orgna capta, the Ta
Court dd not consder It an aternatve test of partnershp. See dscusson, ntra, at
part thrd, and note 17.
868972 80 2
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
19.22(a)- .
10
property of the donee for ta , as we as genera aw, purposes. In the Tower
and Lusthaus cases ths Court, appyng the prncpes of Lucas v. ar, supra;
everng v. Cfford, supra; and everng v. orst, supra Ct D. 1 72, C. .
19 0-2, 206 ; found that the purported gft, whether or not techncay com-
pete, had made no substanta change n the economc reaton of members of
the famy to the ncome. In each case the husband contnued to manage and
contro the busness as before, and ncome from the property gven to the wfe
and nvested by her n the partnershp contnued to be used n the busness or
e pended for famy purposes. We characterzed the resuts of the transactons
entered nto between husband and wfe as a mere paper reaocaton among the
famy members, notng that The actuates of ther reaton to the ncome
dd not change. Ths, we thought, provded ampe grounds for the fndng that
no true partnershp was ntended; that the husband was st the true earner of
the ncome.
ut appcaton of the Cfford- orst prncpe does not foow automatcay
upon a gft to a member of one s famy, foowed by Its nvestment In the famy
partnershp. If It dd, It woud be necessary to defne famy and to set precse
mts of membershp theren. We have not done so for the obvous reason that
e stence of the famy reatonshp does not create a status whch tsef de-
termnes ta questons, 1 but s smpy a warnng that thngs may not be what
they seem. It s frequenty stated that transactons between members of a
famy w be carefuy scrutnzed. ut more partcuary, the famy reaton-
shp often makes t possbe for one to shft ta ncdence by surface changes
of ownershp wthout dsturbng n the east hs domnon and contro over the
sub|ect of the gft or the purposes for whch the ncome from the property s
used. e s abe, n other words, to retan the substance of fu en|oyment of
a the rghts whch prevousy he had In the property. everng v. Cfford,
supra, at 336 C. . 19 0-1, 107 .
The fact that transfers to members of the famy group may be mere camou-
fage does not, however, mean that they nvaraby are. The Tower case recog-
nzed that one s partcpaton n contro and management of the busness s a
crcumstance ndcatng an ntent to be a bona fde partner despte the fact that
the capta contrbuted orgnated esewhere In the famy. If the donee of
property who then nvests t n the famy partnershp e ercses domnon and
contro over that property and through that contro nfuences the conduct of
the partnershp and the dsposton of ts ncome he may we be a true partner.
Whether he s free to, and does, en|oy the fruts of the partnershp s strongy
ndcatve of the reaty of hs partcpaton n the enterprse. In the Tower
and Lusthaus cases we dstngushed between actve partcpaton n the affars
of the busness by a donee of a share n the partnershp on the one hand, and hs
passve acquescence to the w of the donor on the other. Ths dstncton s
of obvous mportance to a determnaton of the true ntent of the partes. It
s meanngess f orgna capta Is an essenta test of membershp n a famy
partnershp.
The cause must therefore be remanded to the Ta Court for a decson as to
whch, f any, of respondent s sons were partners wth hm n the operaton of
the ranch durng 19 0 and 19 1. s to whch of them, n other words, was there
cept, of course, when Congress defnes famy and attaches ta consequences
thereto. See, e. g. 26 U. S. C. secton 03(a) (2).
It s not enough to say In ths case, as we dd n the Cfford case, that It Is hard to
Imagne that respondent fet hmsef the poorer after ths partnershp agreement had
been e ecuted or, f he dd, that t had any ratona foundaton In fact. 309 U. S. at
336 C. . 19 0-1, 107 . Cubcrtson s Interest In hs partnershp wth Coon was worth
about 0,000 Immedatey pror to dssouton of the partnershp. In order to sustan the
Ta Court, we woud have to concude that he fet hmsef worth appro matey twce
that much upon hs purchase of Coon s Interest, even though he had agreed to se that
nterest to hs sons at the same prce.
s noted above (note 13), partcpaton n contro and management of the busness,
athough gven equa promnence wth contrbutons of vta servces and orgna cap-
ta as crcumstances Indcatng an Intent to enter nto a partnershp reaton, was ds-
carded by the Ta Court as a test of partnershp. Ths Indcates a basc and erroneous
assumpton that one can never make a gft to a member of one s famy wthout retanng
the essentas of ownershp, f the gft Is then nvested In a famy partnershp. We ncuded
partcpaton In management and contro of the busness as a crcumstance ndcatve of
Intent to carry on busness as a partner to cover the stuaton n whch actve domnon
and contro of the sub|ect of the gft had actuay passed to the donee. It Is a crcumstance
of prme mportance.
There s testmony In the record as to the partcpaton by respondent s sons n the
management of the ranch. Snce such evdence dd not fa wthn ether of the tests
adopted by the Ta Court, t faed to consder ths testmony. Wthout ntmatng any
opnon as to ts probatve vaue, we thnk that t s ceary reevant evdence of the Intent
to carry on busness as partners.
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
11
29.22(a)-
a bona fde Intent that they be partners In the conduct of the catte busness,
ether because of servces to be performed durng those years, or because of
contrbutons of capta of whch they were the true owners, as we have defned
that term In the Cfford, orst, and Tower cases No queston as to the
aocaton of Income between capta and servces Is presented n ths case, and
we ntmate no opnon on that sub|ect.
The decson of the court of appeas s reversed wth drectons to remand the
cause to the Ta Court for further proceedngs In conformty wth ths opnon.
Reversed and remanded.
Sr. ustce ack and Mr. ustce Rutt.edge thnk that the Ta Court propery
apped the prncpes of the Tower and Lusthaus decsons (327 U. S. 280, d.,
2 3) n ths case. owever, they consder t of paramount Importance n ths
case to have a court nterpretaton of the appcabe ta ng statute, for gudance
In ts appcaton. ccordngy, they acquesce n the Court s opnon and
udgment.
Mr. ustce urton, concurrng, states that, upon remand of the cause to the
Ta Court, there s nothng n the facts whch have been presented here whch,
as a matter of aw, w precude that court from fndng that the 19 0 and 19 1
ncome was propery ta abe on a partnershp bass. The physca absence of
some of the Cubertson boys from the ranch does not necessary precude them
or others from the obgatons or the benefts of the partnershp for ta purposes.
Ther contrbutons of capta, ther partcpaton n the ncome and ther com-
mtments to return to the ranch or otherwse to render servce to the partnershp
are among the matera factors to be consdered. present commtment to
render future servces to a partnershp s n tsef a matera consderaton to be
weghed wth a other matera consderatons for the purposes of ta aton as
we as for other partnershp purposes.
Mr. ustce ackson woud affrm on the opnon of the court beow, beng of the
vew that the ordnary common-aw tests of vadty of partnershps are the tests
for ta purposes and that they were met In ths case.
Concurrng opnon by Mr. ustce Frankfurter.
Secton 29.22(a)-: What ncuded n gross 19 9-2 -132 6
ncome. Mm. 6
( so Secton 2, Secton 29. 2-1.)
Ta abe status of refunds of ta es
Treasury Department,
Offce of Commssoner of Interna Revenue,
Washngton 2 , D. C, November 1 , 191 .
Coectors of Interna Revenue, Interna Revenue gents n Charge,
eads of Fed Dvsons of the Technca Staff, and Others Con-
cerned:
1. In G. C. M. 2 298 (C. . 19 7-2, 39), t was hed that unpad
amounts asserted aganst a ta payer as addtona ta abtes, whch
amounts are the sub|ect of a bona fde contest, are not accruabe tems
for Federa ncome ta purposes whe they are unsetted as to amount
and pror to estabshment of the fact of abty. owever, defcen-
ces of ta whch have been pad were hed to be deductbe not ater
than the tme of payment even though contested. G. C. M. 2 298 states
that the term contest ncudes not ony a contest n court but any
bona fde contest odged wth the ta authortes. Where payment of
a ta s requred as a prerequste to further appea, such payment s
not to be regarded as a payment of a demanded ta defcency. If,
however, the payment s made to avod penates or nterest, then the
payment f es the tme of the deducton.
2. eretofore the ureau has hed that ta deductons are aowabe
ony for actua ta abtes and not for ta es for whch t s ut-
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
29.22(a)- .
12
matey determned the ta payer was not abe. No dstncton was
drawn between ta es found to be erroneous or e cessve and those
found to be unconsttutona. Cases n whch the ta was not errone-
ous but was emnated by an event n a ater ta abe year, n whch
cases the refunds were ta ed and the pror deductons were aowed
to stand, were dstngushed. so, even n the case of ega ta es,
the refund was ta ed f an assessment for the year n whch the
deducton was taken was barred by the statute of mtatons.
3. Snce the decson n urnet v. San ford rooks Co. (282 U. S.
3 9, Ct. D. 277, C. . -, 363 (1931)), emphass has been gven to the
pont that ncome ta aton s on an annua bass. So ong as an
tem of ncome or e pense was propery accounted for n one perod,
no change s |ustfed under ths doctrne merey because events n a
subsequent perod mght materay change the treatment of the org-
na tem. The opnon of the Supreme Court of the Unted States
n Securty Fovr Ms Co. v. Commssoner (321 U. S. 281, Ct. D.
1603, C. . 19 , 26) reterated ths doctrne. There the ta payer
had coected processng ta es from vendees n 193 . Some of these
ta es were pad and deductons taken n 193 and some were merey
deposted wth the court, but deductons were taken by the pettoner
as accrued ta abtes n ts 193 ta return. Ths ta was decared
unconsttutona n 1936, mpounded funds were returned to the ta -
payer, and rembursements were made by the ta payer to ts custo-
mers n 1936, 1937, and 1938. The Court hed that these remburse-
ments coud not be reated back to the year 193 to reduce the ta abe
ncome for that year.
. It s concuded from an anayss of the opnon of the Supreme
Court n the Securty Four Ms case, n con|uncton wth the earer
cases, ncudng Unted States v. nderson (269 U. S. 22, T. D. 3839,
C. . -, 179 (1926)), D e Pne Products Co. v. Commssoner
(320 U. S. 16, Ct. D. 1 98, C. . 19 , 09) and Fawcus Machne Co.
v. Unted States (282 U. S. 37 , Ct. D. 278, C. . -, 2 (1931)),
that each ta abe year s to be treated as a separate unt. It foows
that f a deducton for a ta s propery taken n a gven year and the
ta s subsequenty nvadated n whoe or n part, any refund or
credt w be ncome n the subsequent year n the absence of a statu-
tory provson to the contrary, and such nvadaton w not dsturb
the orgna deducton.
. In I. T. 38 9 (C. . 19 7-1,18), the ureau hed that an e cessve
accrua of New York State franchse ta , the rate havng been retro-
actvey reduced n the succeedng ta abe year shoud be treated as
ncome n the succeedng ta abe year. It s beeved that a dfference
n the treatment of ta refunds or credts cannot be |ustfed soey by
reason of a dfference n the type of ta refunded or credted but that,
generay, a ta refunds or credts shoud be treated as ncome n the
year of refund or credt to the e tent that any pror deducton resuted
n a ta beneft, regardess of whether the ta was egay or egay
mposed n the frst nstance. n e cepton, of course, s necessary n
the case of a Federa ta hed to be unconsttutona, the refund of
whch s covered by the provsons of secton 128 of the Interna
evenue Code.
6. ccordngy, t s hed that the recept by a ta payer of refunds
of ta es, the deducton of whch n pror years resuted m ta benefts,
houd be treated as ncome for the ta abe year n whch such refunds
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
13
29.22(a)-2.
are receved, e cept as otherwse provded by Federa statutes. Ths
treatment s not appcabe n the case of refunds of State ta es re-
sutng from renegotaton or rembursements n respect of Govern-
ment contracts (see secton 3806, Interna Revenue Code, and I. T.
3611, C. . 19 3, 978).
7. In conformty wth the poston heren taken, Mmeograph 39 8
(C. . -2, 33 (1932)), Mmeograph 6 (C. . 1937-1, 93), I. T.
2 78 (C. . -, 119 (1931)), I. T. 27 1 (C. . II-2, 8 (1933)),
and I. T. 293 (C. . I -2, 63 (193 )) are modfed to the e tent
that thev are nconsstent wth such poston. O. D. 7 1 (C. . 3,11
(1920) ) s revoked.
8. Correspondence reatng to ths mmeograph shoud refer to ts
number and the symbos ndcated: Coectors of nterna revenue,
C: Co; nterna revenue agents n charge, IT: IM; heads of fed
dvsons of the Technca Staff, TS: RM.
Geo. . Schoeneman,
Commssoner.
Secton 29.22(a)-: What ncuded n gross
ncome.
INT RN L R NU COD
Cash aowance receved by Coumbus, Oho, poce offcers for pur-
chase and mantenance of unforms. (See I. T. 3978, page 2 .)
Secton 29.22(a)-2: Compensaton for persona 19 9-1 -13121
servces. I. T. 3960
nterna revenue code
Ta abe status for Federa ncome ta purposes of the Ross ssay
Prze awarded by the mercan I ar ssocaton.
Reference s made to the decson of the Unted States Court of
ppeas for the Dstrct of Coumba n Macom McDermott v. Com-
mssoner (1 0 Fed. (2d) 8 ), n whch t was hed that the Ross
ssay Prze awarded by the mercan ar ssocaton for 1939 was
not ta abe to the recpent (McDermott) snce t was a gft to hm.
The ureau does not agree wth the concuson reached n the
McDermott case. Where servces are requred drecty n connecton
wth an award, t s the vew of the ureau that any prze money
receved s ta abe ncome under secton 22(a) of the Interna Revenue
Code and that t s not e cudabe from gross ncome under secton
22(b) (3) of the Code.
ccordngy, the wnners of the Ross ssay Prze for 19 9 and
future years w be hed to have receved ta abe ncome.
Secton 29.22(a)-2: Compensaton for persona 19 9-20-13192
servces. I. T. 3969
( so Secton 162 , Secton 0 . 01, Reguatons
116.)
nterna revenue code
Where a Federa Government empoyee s separated from the
servce and s reempoyed by the Government wthn the same ta -
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
29.22(a)-2.
1
abe year pror to the e praton of the empoyee s accrued annua
eave perod, the amount, f any, of hs compensaton for accrued
annua eave whch s refunded or repad to the empoyng agency
by the empoyee pursuant to the ct of December 21, 19 ( 8 Stat.
8 ), shoud be treated for Federa ncome ta purposes as an
ad|ustment of hs compensaton for the ta abe year.
The empoyee s gross saary for the year, ncudng the fu
amount of hs compensaton for accrued annua eave, shoud be
entered on Form W-2. Ony the net amount of the saary re-
ceved by the empoyee shoud be entered on Form 10 0, accom-
paned by an e panatory statement.
dvce s requested as to the treatment for Federa ncome ta pur-
poses of the amount of compensaton whch s refunded or repad by
a former Federa Government empoyee upon hs reempoyment by
the Government wthn the same ta abe year durng whch he was
separated from the servce.
In the nstant case, a Government empoyee was separated from the
servce on March 31, 19 8, and thereupon receved a ump-sum pay-
ment of 6 .18 for accrued annua eave n accordance wth the ct
of December 21, 19 ( 8 Stat. 8 ). On pr , 19 8, after a apse
of ony two workng days, the separated empoyee was reempoyed by
the Government n another Government agency. In accordance wth
the ct of December 21, 19 , supra, he refunded to the empoyng
agency 11.39, practcay a of the ump-sum payment he had re-
ceved. t the end of the caendar year 19 8, the empoyee was fur-
nshed a Form W-2 (Wthhodng Statement 19 8) showng
8,0 1.20 as the amount of tota wages pad durng 19 8, whch amount
ncuded the ump-sum payment of 6 .18.
The ct of December 21, 19 , supra, provdes n part as foows:
whenever any cvan offcer or empoyee of the Federa Government
or the government of the Dstrct of Coumba s separated from the servce or
eects to be pad compensaton for eave n accordance wth the ct of ugust 1,
19 1, as amended by the ct of pr 7, 19 2, or secton of the ct of une 23,
19 3, he sha be pad compensaton n a ump sum for a accumuated and
current accrued annua or vacaton eave to whch he s entted under e stng
aw. Such ump-sum payment sha equa the compensaton that such empoyee
woud have receved had he remaned n the servce unt the e praton of the
perod of such annua or vacaton eave: Provded, That f such empoyee s re-
empoyed n the Federa servce or n or under the government of the Dstrct
of Coumba under the same eave system pror to the e praton of the perod
covered by such eave payment, he sha refund to the empoyng agency an
amount equa to the compensaton coverng the perod between the date of re-
empoyment and the e praton of such eave perod, and the amount of eave
represented by such refund sha be credted to hm n the empoyng agency.
Provded further, That the ump-sum payment heren authorzed sha
not be regarded, e cept for purposes of ta aton, as saary or compensaton and
sha not be sub|ect to retrement deductons.
Under the provsons of secton 162 (a) of the Interna Revenue
Code, every empoyer requred to wthhod and coect a ta on wages
must furnsh to each empoyee wth respect to hs empoyment durng
the caendar year a wrtten statement showng the entre amount of
wages pad durng the caendar year and the amount of ta deducted
and wthhed on such wages. Therefore, n the nstant case, the tota
amount of compensaton ( 8,0 1.20) pad the Government empoyee
durng the caendar year 19 8, ncudng the ump-sum payment of
6 .18, was propery shown on the wthhodng statement (Form
W-2) furnshed hm for such year. (See secton 0 . 01 of Regua-
tons 116.)
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
1
f| 29.22(a)-2.
In those cases n whch both events, the separaton from the Gov-
ernment servce and the reempoyment by the Government of the em-
poyee, occur durng the same ta abe year, an ad|ustment of ncome
to be reported on Form 10 0 for the ta abe year shoud be made by
the empoyee by takng nto account the amount refunded to the
empoyng agency. (Cf. ppea of . C. Couch, 1 . T. . 103,
acquescence, C. . I -1, 1 (192 ); Guy Futon v. Commssoner, 11
. T. . 6 1, acquescence, C. . II-1, 11 (1928); bert W. Russe
v. Commssoner. 3 . T. . 602, acquescence, C. 1937-1, 22; and
1. T. 27 3, C. . II-2,103 (1933).) The Government empoyee here
nvoved shoud ad|ust the amount of S,0 1.20, shown on the Form
W-2 as saary (wages) pad hm durng the ta abe year, by em-
natng therefrom the amount of 11.39 whch was refunded to the
empoyng agency. The net amount ( 7, 29.81) receved by hm dur-
ng the ta abe year 19 8 shoud be reported as saary on page 1, tem
2, of Form 10 0 for such year, accompaned by an e panatory state-
ment wth respect to the dfference between the amount of saary shown
on Form W-2 and that reported on Form 10 0.
In vew of the foregong, t s hed that where a Federa Govern-
ment empoyee s separated from the servce and s reempoyed by the
Government wthn the same ta abe year pror to the e praton of
the empoyee accrued annua eave perod, the amount, f any, of hs
compensaton for accrued annua eave whch s refunded or repad
to the empoyng agency by the empoyee pursuant to the ct of De-
cember 21, 19 ( 8 Stat. 8 ), shoud be treated for Federa ncome
ta purposes as an ad|ustment of hs compensaton for the ta abe
year. The empoyee s gross saary for the year, ncudng the fu
amount of hs compensaton for accrued annua eave, shoud be entered
on Form W-2. Ony the net amount of the saary receved by the
empoyee shoud be entered on Form 10 0, accompaned by an e -
panatory statement.
Secton 29.22 (a)-2: Compensaton for persona 19 9-21-13207
servces. I. T. 3972
INT RN L R NU COD
The ordnary death beneft receved by the wdow of an
empoyee of the Government of the Terrtory of awa pursuant
to secton 708(8) (b) of chapter 1 of the Revsed Laws of awa,
19 , represents consderaton for servces rendered by the empoyee
and consttutes ta abe ncome to the wdow.
dvce s requested as to the status for Federa ncome ta purposes
of the ordnary death beneft receved by the wdow of an empoyee
of the Government of the Terrtorv of awa pursuant to secton
708(8) (b) of chapter 1 of the Revsed Laws of awa, 19 .
In the nstant case, the ta payer s husband, who ded durng the
year 19 8, was empoyed by the Government of the Terrtory of awa
for severa years pror and up to the tme of hs death. e was a
member of the mpoyees Retrement System of the Terrtory of
awa, and, as such, he made contrbutons to the annuty savngs
fund of the system n order to provde for a retrement annuty. Sub-
sequent to hs death, the Terrtora government pad to hs wdow,
hs desgnated benefcary, an amount equa to 0 percent of the
compensaton earnabe by hm durng the year mmedatey precedng
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
29.22 a)-2.
16
hs death. No contrbuton was made by the empoyee to the fund
from whch the payment was made. Such amount was pad pursuant
to secton 708(8) (b) of chapter 1 of the Revsed Laws of awa,
19 .
The pertnent awaan aw provdes as foows:
Sec. 708. enefts.

8. Ordnary death beneft. Upon the recept of proper proofs of the death
of a member there sha be pad to hs estate or to such person havng an
Insurabe nterest n hs fe as he sha have nomnated by wrtten desgnaton
duy e ecuted and fed wth the board: (a) hs accumuated contrbuton and,
f the member has had one or more years of credtabe servce, and no penson
be payabe under the provsons of subsecton 9 of ths secton, n addton
thereto, (6) on amount equa to 0 per centum of the compensaton earnabe by
hm durng the year mmedatey precedng hs death. Itacs supped.

Sec. 712. Methods of Fnancng. The funds hereby created are
the penson accumuaton fund
3. Penson accumuaton fund. The penson accumuaton fund sha be the
fund n whch sha be accumuated a reserves for the payment of a pensons
and other benefts payabe from contrbutons made by the Terrtory or any
county and from whch sha be pad a pensons and other benefts on account
of members wth pror servce credt and the ump sum death benefts for a
members payabe from such contrbutons. Contrbutons to and payments from
the penson accumuaton fund sha be made as foows:
(a) On account of each member who s an empoyee of the Terrtory or a
county, there sha be pad annuay nto the penson accumuaton fund by the
Terrtory or county, for the precedng fsca year a certan percentage of the
earnabe compensaton of such member to be known as the norma contrbuton,
and an addtona percentage of such compensaton to be known as the accrued
abty contrbuton. The rates per centum of such contrbutons sha be
f ed on the bass of the abtes of the system as shown by actuara vauatons.
Itacs supped.
It s seen from the foregong that the contrbutons by the Terrtory
or a county to the fund from whch the ordnary death beneft
s pad to the wdow or other benefcary desgnated by an empoyee,
or to hs estate, become the funds of the mpoyees Retrement System
of the Terrtory of awa. The death beneft s pad n consderaton
of the servces whch the empoyee rendered, and there e sts a vad
cam aganst the fund for such death beneft.
In arnedoe v. en (1 8 Fed. (2d) 67, certorar dened, 330
U. S. 821), the facts, brefy stated, were as foows: The ta payer
was the wdow of a captan n the fre department, of the cty of
tanta, Ga., who ded whe n servce. Pursuant to a Georga State
statute, she receved 100 per month after her husband s death. The
ta payer was never empoyed by, nor dd she render any servces to,
the cty of tanta, and she never pad or gave any persona consdera-
ton n e change for the payments she receved from the cty. Under
the aws of Georga, deductons were made from her husband s saary
durng hs fetme. The queston presented was whether the pay-
ments receved by the wdow were ta abe to her under the ncome
ta provsons of the Interna Revenue Code. The opnon of the
Unted States Crcut Court of ppeas for the Ffth Crcut ncudes
the foowng anguage:
The ta payer ctes no provson of the statutes that specfcay e empts ths
type of ncome. Secton 22(a) provdes that gross ncome, among other thngs,
Incudes compensaton for persona servces of whatever knd and n whatever
form pad. Secton 29.22(a)-2 of Treasury Reguatons 111, promugated under
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
17
29.22(b) (2)-2.
the Interna Revenue Code, provdes that compensaton for persona servces n-
cudes, generay, pensons or retrng aowances and are ncome to the recp-
ents. One e cepton to ths genera rue s stated n the foowng anguage:
owever, 60-caed pensons awarded by one to whom no servces have been
rendered are mere gfts or gratutes and are not ta abe.
Usuay the camant of an e empton has the burden of proof, but we do not
put our decson on ths ground. If the payments to the ta payer were not mere
gfts or gratutes, under the above-quoted e cepton, awarded by one to whom no
servces had been rendered, they are tn abe. It s not necessary that the servces
shoud have been rendered by the payee. The payor s the one to whom the
servces must have been rendered. The payments that the ta payer receved
were awarded to her n consderaton of servces rendered to the cty by her
husband n hs fetme. They are gross ncome to her as compensaton for
servces rendered wthn the meanng of secton 22(a) of the Interna Revenue
Code, and n our opnon are not wthn the e cepton to the genera rue wth
reference to mere gfts or gratutes.
It s hed that the ordnary death beneft receved by the w dow of
an empoyee of the Government of the Terrtory of awa pursuant
to secton 708(8) (b) of chapter 1 of the evsed Laws of awa,
19 , represents consderaton for servces rendered by the empoyee
and consttutes ta abe ncome to the wdow. (See I. T. 38 0, C. .
19 7-1, 7.)
Secton 29.22(a)- : Gross ncome from busness.
INT RN L R NU COD
Prvege ta es mposed by Forda Revenue ct of 19 9. (See
LT. 3983, page 31.)
S CTION 22(b). GROSS INCOM : CLUSIONS
FROM GROSS INCOM
INT RN L R NU COD
Mantenance and cure, ncudng cash payments, receved by dsabed
seamen. (See I. T. 3977, page 92.)
Secton 29.22(b) (2)-1: Lfe nsurance ndow-
ment contracts mounts pad other than by
reason of the death of the nsured.
INT RN L R NU COD
ecton, on or after maturty date, to receve endowment pocy
proceeds n nstaments. (See I. T. 3963, page 36.)
Secton 29.22(b) (2)-2: nnutes. 19 9-22-1321
I. T. 397
INT RN L R NU COD
Payments receved by a retred Federa cv servce empoyee wth
respect to an addtona annuty purchased wth amounts voun-
tary deposted pursuant to the provsons of secton 10 of the Cv
Servce Retrement ct of -May 29, 1030 ( 0 Stat. 68), as amended
by the ct of February 28, 19 8 (02 Stat. 8), consttute payments
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
29.22(b) (2)-2.)
IS
receved from an annuty separate and dstnct from the reguar
annuty provded for under such ct. The two types of annuty
shoud not be merged, for Federa ncome ta purposes, but shoud
be treated as separate annutes n computng the amounts to be
Incuded n gross ncome.
dvce s requested as to the treatment, for Federa ncome ta
purposes, of annuty payments receved by a retred Federa cv
servce empoyee wth respect to an addtona annuty purchased
by the vountary depost of addtona sums pursuant to the provsons
of secton 10 of the Cv Servce Retrement ct of May 29, 1930
( 6 Stat. 68), as amended by the ct of February 28, 19 8 (62 Stat.
8), where such retred empoyee aso receves reguar annuty pay-
ments under the provsons of such ct.
The sgnfcance of the queston presented arses from the fact that
f the payments attrbutabe to the addtona annuty and the pay-
ments attrbutabe to the reguar annuty are treated as payments wth
respect to one annuty, the combned cost of the two annutes woud
be recovered free of ta n appro matey 2 to years, whereas, f
the payments are treated as payments from separate annutes, the
cost of the reguar annuty woud be recovered free of ta n appro -
matey 2 years but the cost of the addtona annuty woud not be
recovered free of ta unt after e praton of a perod consderaby
n e cess of years.
The pertnent porton (second paragraph) of secton 10 of the Cv
Servce Retrement ct of May 29, 1930, as amended by secton 10 of
the ct of February 28, 19 8, supra, provdes as foows:
ny offcer or empoyee may at hs opton and under such reguatons as may
be prescrbed by the Cv Servce Commsson depost addtona sums n mu-
tpes of 2 but not to e ceed 10 per centum of hs annua basc saary, pay, or
compensaton, for servce rendered snce ugust 1, 1920, whch amount together
wth nterest thereon at 3 per centum per annum compounded as of December 31
of each year, sha, at the date of hs retrement, be avaabe to purchase, as
he sha eect and n accordance wth such rues and reguatons as may be
prescrbed by the Cv Servce Commsson, aw annuty n addton to the annuty
provded by ths ct. The fe annuty sha consst of 7 for each 100, Increased
by 20 cents for each fu year, f any, such offcer or empoyee Is over the age of
years at the date of retrement. In the event of death or separaton from the
servce of such offcer or empoyee before becomng egbe for retrement on
annuty, the tota amount so deposted, wth nterest at 3 per centum per annum
to date of death or separaton compounded on December 31 of each year, sha
be refunded n accordance wth the provsons of secton 12 of ths ct. In
case a retred empoyee who s recevng a fe annuty under ths paragraph
sha de wthout havng receved n annuty purchased by the tota amount so
deposted, wth nterest at 3 per centum per annum compounded on December 31
of each year, to date of retrement, the dfference sha be pad, upon the estab-
shment of a vad cam therefor, n the order of precedence prescrbed n
secton 12(e). Itacs supped.
revew of the Cv Servce Retrement ct, as amended, and the
reguatons ssued thereunder dscoses that the annutes mentoned
n the statute have dstngushng features and condtons n that (1)
regardess of the type of reguar annuty eected, an empoyee at
retrement may mate a separate and dstnct eecton wth respect to
the type of annuty to be purchased wth hs vountary contrbutons,
and (2) f an empoyee has served 20 years or more n Federa cvan
work, he s not entted to a ump-sum refund of the amount deducted
and wthhed n connecton wth hs reguar annuty, whereas, regard-
ess of ength of servce, vountary deposts are refundabe n fu
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
19
29.22(b) (13)-1-
upon absoute separaton from the servce before the empoyee becomes
egbe for retrement. The second paragraph of secton 10 of the
ct, supra, e pressy refers to an annuty n addton to the reguar
annuty, and the amount of the annuty purchased by vountary depos-
ts s determned n a dfferent manner than the amount of the reguar
annuty. Informaton obtaned from the Cv Servce Commsson
ndcates that athough the aggregate amount of the two annutes
may be ncuded, for admnstratve purposes, n one check, separate
and dstnct accounts are mantaned n the records of the Commsson
wth respect to the reguar annuty and to the addtona annuty
purchased wth vountary deposts, both n reaton to the funds
credted to the empoyee and to the recovery of the costs of the respec-
tve annutes.
ccordngy, snce the addtona annuty purchased by vountary
deposts s nvested wth ega characterstcs whch are dfferent from
those of the reguar annuty, t s hed that the two types of annuty
shoud not be merged, for Federa ncome ta purposes, but shoud be
treated as separate annutes n computng the amounts to be ncuded
n gross ncome.
Secton 29.22(b) (13)-1: Compensaton of mem- 19 9-2 -132 7
bers of mtary and nava forces. Ct. D. 172
ncome ta nterna revenue code, as amended decson of
supreme court
1. Gross Income cusons ddtona owance for M-
tary and Nava Personne,
On February 19, 19 3, ta payer, a cv servce empoyee n the
ega dvson of the Coast Guard, was enroed as a eutenant
commander wthn one of the cassfcatons whch consttuted
the temporary members of the Coast Guard Reserve, under the
authorty of the Const Guard u ary and Reserve ct, whch pro-
vded for the enroment of persons (ncudng Government em-
poyees wthout pay other than the compensaton of ther cvan
postons). On pr 2 , 1C , he was reenroed as a commander,
and hs cass was descrbed as -Coast Guard Cv Servce m-
poyees. ed: Whe ta payer had a mtary status for some
purposes, he receved hs compensaton n a cvan status, and s
not entted to the camed e cuson of 1, 00 from gross Income
provded by secton 22(b) (13) ( ) of the Interna Revenue Code.
2. Decson Reversed.
Decson of the Unted States Court of ppeas for the Dstrct of
Coumba (172 Fed. (2d) 877 (19 9)), reversng decson of The Ta
Court of the Unted States (8 T. C. 8 8 (19 7)), reversed.
Supreme Court of the Unted States
Commssoner of Interna Revenue, pettoner, v. Wam I. Conney and ertha
Conney
On wrt of certorar to the Unted States Court of ppeas for the Dstrct of Coumba
November 7,19 9
opnon
Mr. ustce Mnton devered the opnon of the Court.
The queston we have here s whether respondent Wam I. Conney, here-
after referred to as the ta payer, s entted to the 1, 00 e cuson from gross
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
29.22(b) (13)-1.
20
ncome provded by secton 22(b) (13) ( ) of the Interna Revenue Code.1 The
ta payer camed ths addtona aowance for the ta abe years 19 3 and 19 .
The Commssoner dsaowed the sum deducted. The Ta Court sustaned the
Commssoner, 8 T. C. 8 8, and the court of appeas reversed, one |udge dssent-
ng. 172 Fed. (2d) 877. We granted certorar. 337 U. S. 92 .
On February 19,19 3, ta payer was a cv servce empoyee n the ega dvson
of the Coast Guard. On that date he was enroed as a eutenant commander
wthn one of the s cassfcatons whch consttuted the temporary members
of the Coast Guard Reserve.1 s enroment was under authorty of the Coast
Guard u ary and Reserve ct whch provded for the enrong of persons
(ncudng Government empoyees wthout pay other than the compensaton of
ther cvan postons). Stat. 12, as amended, 6 Stat. 1021, 1 U. S. C.
secton 307. On pr 2 , 19 , he was reenroed as a commander and hs cass
was descrbed as Coast Guard Cv Servce mpoyees.
fter enroment ta payer performed dutes dentca wth those whch he
had prevousy performed. t the tme he was enroed, hs cv servce ratng
was P- . Later ths ratng was rased to P-6 and hs rank was Increased at the
same tme to that of commander. e receved the same pay after enroment
that he had receved as a cv servce empoyee. e receved overtme pay as a
cv servce empoyee, deductons were made from hs pay for cv servce retre-
ment, and he was sub|ect to cv servce reguatons as to annua and sck eave.
If he had been n|ured or ked, he woud have receved benefts as a cv em-
poyee of the Unted States. e was st sub|ect to the Seectve Tranng and
Servce ct. In the case of sckness or dsease contracted whe on actve duty,
ta payer was entted to the same hospta and medca care as members of the
reguar Coast Guard, but denta care was not ncuded. Whe on actve duty
he was requred to wear the unform of and he receved the courteses due hs
rank. e was sub|ect to the aws, reguatons and orders of the Coast Guard
and to dscpnary acton.
It s apparent that ta payer had a dua status. e had a mted mtary
status wth the rank of eutenant commander and ater that of commander.
e had aso the status of a cv servce empoyee, carefuy so mted and wth
a the prveges ncdent to such status. e was gven ust enough mtary
status to enabe hm effectvey to carry out hs dutes. consderatons of
an economc character pertanng to hs empoyment by the Government were
reated to hs cv servce status.
In Mtche v. Cohen, 333 U. S. 11, we hed that one empoyed n a department
of the Federa Government as a cv servce empoyee who was enroed tem-
porary n the ounteer Port Securty Force of the Coast Guard Reserve and
who worked part-tme as a reservst wthout pay was not an e -servceman
wthn the meanng of the eterans Preference ct. Lookng to the egsatve
hstory of that statute, we found that the overshadowng purpose of the ct was
to favor those who had a rea record of ntary servce.
The court of appeas found n ths case that by the appcaton of ong-estab-
shed crtera oath of offce, mtary duty, and sub|ecton to mtary dscpne
ta payer had acqured a mtary status and was thus entted to the e cuson.
We agree that he had a mtary status for some purposes. ut the queston for
ta purposes s whether he receved hs pay n that status. To come wthn
secton 22(b) (13) ( ), he must have receved hs compensaton for actve servce
as a commssoned offcer. We understand ths to mean that f ta payer receved
hs ray at a commssoned offcer, he woud be entted to the e cuson. It seems
equay pan that f he receved hs pay at a cv servce empoyee and served
wthout mtary pay and aowances, he s not entted to the camed e cuson.
s In the Cohen case, the emphass of the statute s on a mtary and not on a
cvan status.
nd t s ceat that ta payer receved hs compensaton n a cvan status.
s noted, secton 307 of the Coast Guard u ary and Reserve ct provded for
s amended by Revenue ct of 19 . secton 1 1(a), 69 Stat. 71 (19 ).
(IS) ddtona aowance for mtary and nava personne.
( ) In the case of compensaton receved for actve servce as a com-
mssoned offcer In the mtary or nava forces of the Unted States
so much of such compensaton as does not e ceed 1, 00.
1 Those cassfcatons and the organzaton of the Coast Guard Reserve are detaed In
Mtche v. Cohen, 333 U. S. 11. 12-1 .
8 See udge dgerton, dssentng n part, beow :
I woud be unabe, In vew of the rue that ta e emptons are strcty con-
strued, to say that the compensaton of a man who dd not receve a commssoned offcer s
pay but served wthout pay other than the compensaton of hs cvan postons was
receved for actve servce as a commssoned offcer . 172 Fed. (2d) at 8S0.
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
21
29.22(d)- .
the enrong of persons (Incudng Government empoyees wthout pay other
than the compensaton of ther cvan postons). The Commttee on Merchant
Marne and Fsheres referred to the amendment by whch the parenthetca
phrase was added to the statute as beng advsabe to carfy ths authorty
enroment of temporary members wthout the pay of ther mtary rank and
resove any doubt of ts appcabty to Government empoyees by specfcay
provdng for temporary membershp n the Coast Guard Reserve of Government
empoyees wthout mtary pay but wth contnuance n ther cvan postons
and the recept of the compensaton thereof.
From the date of the enactment of the enroment statute there seems to have
been no devaton from the vew that the ta payer was to be pad as a cv
servce empoyee and not aR a commssoned offcer. s pay came from congres-
sona appropratons aocated to cvan postons. s pay was at the cv
servce scae for hs grade, wth overtme pay and approprate deductons for
cv servce retrement. s contnung cvan status s underned by hs
recept of a cv servce promoton, from whch hs mtary promoton resuted.
Indeed, the ta payer s certfcate of dsenroment descrbed the duty performed
as Chef of dmraty and Martme Secton havng cv servce status, recevng
cvan but no mtary pay, and hodng rank of commander as a temporary
member of the Coast Guard Reserve.
The court of appeas gnored the status n whch ta payer was compensated
and gave effect to hs mtary status whch was provded ony to factate the
performance of hs dutes n wartme. Ta payer s rank was for the purpose of
gettng the |ob done, and not for the purpose of recevng compensaton.
The |udgment of the court of appeas s
Reversed.
Mr. ustce Frankfurter and Mr. ustce Dougas took no part n the consd-
eraton or decson of ths case.
S CTION7 22(d). GROSS INCOM : IN NTORI S-
L CTI M T OD
Secton 29. 22 (d)-: Inventores under 19 9-2 -1323
eectve method. T.D. 7 6
( so Secton 29.22 (d)-2; Sectons
19.22(d)- and 19.22(d)-2, Regua-
tons 103.)
TITL 26 INT RN L R NU . C PT R I, SU C PT R , P RT 19 ND
P RT 29
Reguatons 103 and Reguatons 111 amended wth respect to
eectve nventory computatons.
Treasury Department,
Offce of Commssoner of Interna Rkvenue,
Washngton 2 , D. C.
To Coectors of Interna Revenue and Others Concerned:
Paragraph 1. Secton 29.22(d)- of Reguatons 111, as amended
by Treasury Decson 60 C. . 19 8-1,16 , approved March ,19 8
26 CFR 29.22(d)- , and secton 19.22(d)- of Reguatons 103, as
. R. Rept. No. 2. 2. . 77th Cong., 2d sees., 3 (19 2). The commttee added thnt the
amendment woud obvnte any possbe Imparment of the rght of such empoyees to
contnue to receve the compensaton of ther cvan postons for the entre perod of ther
performance of actve Coast (uard duy as such temporary members. There w be tte,
f any. change In the nature of ther dutes after enroment.
Offce memorandum No. 13 3 Issued by the Commandant of the Coast Guard on
uy 2 . 19 3, states :
6. The attenton of heads of offces and chefs of dvsons Is Invted to the fact that
one of the prncpa reasons for the nducton of cv servce empoyees nto the mtary
estabshment as tcmpornry members of the Reserve was to obtan a homogeneous organza-
ton on a mtary bass and to emnate dfferences In procedure and practces appcabe to
mtary personne and cv servce personne engaged on e acty the same duty
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
29.22(d)- .
22
amended by Treasury Decson 60 26 CF 19.22(d)- , are further
amended by nsertng n each case at the end thereof the foowng:
If a ta payer uses consstenty the so-caed doar-vaue method of prcng
Inventores, or any other method of computaton estabshed to the satsfacton
of the Commssoner as reasonaby adaptabe to the purpose and Intent of sec-
ton 22(d), and If such ta payer eects under secton 22(d) to use the eectve In-
ventory method authorzed by such secton, the ta payer s openng and cosng n-
ventores sha be determned under secton 22(d) by the use of the approprate
adaptaton.
Par. 2. Secton 29.22(d)-2 of Reguatons 111. as amended by Treas-
ury Decson 60 26 CFR 29.22 (d)-2 , s further amended by revs-
ng that porton thereof precedng the numbered paragraphs to read
as foows:
cept as otherwse provded n secton 29.22(d)- wth respect to raw matera
computatons, wth respect to reta nventory computatons, and wth respect to
doar-vaue and other methods of computaton estabshed to the satsfacton of
the Commssoner as reasonaby adapted to the purpose and ntent of secton
22(d), the adopton and use of the eectve nventory method s, by secton 22(d)
and the reguatons thereunder, made sub|ect to the foowng requrements:
Par. 3. Secton 19.22(d)-2 of Reguatons 103, as amended by Treas-
ury Decson 60 26 CFR 19.22(d)-2 , s further amended by re-
vsng that porton thereof precedng the numbered paragraphs to
read as foows:
cept as otherwse provded n secton 19.22(d)- wth respect to reta n-
ventory computatons and wth respect to doar-vaue and other methods of
computaton estabshed to the satsfacton of the Commssoner as reasonaby
adapted to the purpose and ntent of secton 22(d), the adopton and use of the
eectve nventory method s, by secton 22(d) and the reguatons thereunder,
made sub|ect to the foowng requrements:
Par. . The amendments made by ths Treasury Decson sha be
appcabe to a ta abe years begnnng after December 31,1938.
(Ths Treasury Decson s ssued under the authorty contaned
n sectons C2 and 22(d) of the Interna Revenue Code ( 3 Stat. 32,
11; 26 U. S. C. 62,22(d)).)
ecause the amendments made by ths Treasury Decson merey
reeve ta payers from a mtaton appcabe under e stngregua-
tons, t s found that t s unnecessary to ssue ths Treasury Decson
wth notce and pubc procedure thereon under secton (a) of the
dmnstratve Procedure ct, approved une 11, 19 6, or sub|ect
to the effectve date mtaton of secton (c) of sad ct.
Geo. . Schoeneman,
Commssoner of Interna Revenue.
pproved November 2, 19 9.
ohn S. Graham,
ctng Secretary of the Treasury.
(Fed wth the Dvson of the Federa Regster November 8, 19 9, 8: 7 a. m.)
Secton 29.22(d)-: Inventores under eec- 19 9-2 -132 8
tve method. I. T. 3982
INT RN L R NU COD
Prce ndces for uy, 19 9, pubshed by the ureau of Labor
Statstcs under date of September 9, 19 9, for use by department
stores empoyng the reta nventory and eectve nventory methods.
The foowng prce ndces for uy, 19 9, pubshed by the ureau
of Labor Statstcs for use by department stores empoyng the reta
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
23
29.22(n)-.
nventory and eectve nventory methods, are accepted by the ureau
of Interna Revenue pursuant to Treasury Decson 60 (C. . 19 8-1,
16), approved March ,19 8, and Mmeograph 62 (C. . 19 8-1,21),
dated March 9, 19 8, for approprate appcaton to nventores for
ta abe years of 12 months ended on une 30,19 9, and uy 31,19 9.
The ndces pubshed heren represent a contnuaton of department
groups and prces shown n Tabe I, Tabe II ( uy to uy), and
Tabe III of I. T. 390 (C. . 19 8-1, 18), as e tended by the prce
ndces and data for uy. 19 8, shown n I. T. 3927 (C. . 19 8-2, 26),
and for anuary, 19 9, shown n I. T. 39 3 (C. . 19 9-1, 3).
ureau of Labor Statstcs, department store nventory ,prce ndces.
department groups
( anuary, 19 1 100
I
Group
uy, 19 8
uy. 19 9
uy, 16 8,
to uy,
19 9.
percent
change
I. Pece Roods, domestcs, and draperes
II. Shoes...
III. Lades underwear
I . Lades outerwear and grs wear
. Men s and boys wear
I. Furnture and beddng
II. ome furnshngs
III. Ma|or appances and eectrca (roods
I . Notoas and toet artces
. Lades accessores
Tota, Oroups t II, III, I , , I , and ..
Tota, Oroups I, II, and III
Store tota
222.3
196.
181.6
183.7
19 .2
192.9
I6S. 9
169.8
1 1.1
17 .0
199.0
192.7
171.1
176.
18 .9
188.9
171.0
160.9
1 2. S
107.1
-10.2
-1.9
- .8
- .0
- .3
-2.
3.1
- .2
1.2
- .0
187.3
17 .8
183.6
179.0
173. 7
177.
- .
-.6
-3.
Secton 29.22(d)-2: Requrements ncdent to
adopton and use of eectve method.
( so Secton 19.22 (d)-2, Reguatons 103.)
INT RN L R NU COD
Reguatons 103 and 111 amended. (SeeT. D. 7 6, page 21.)
S CTION 22(n). GROSS INCOM : D FINITION OF
D UST D GROSS INCOM
Secton 29.22(n)-: d|usted gross ncome.
INT RN L R NU COD
Gasone cense ta pad by ndvduas n certan abama countes
who use gasone n trade or busness. (See I. T. 3962, page 2 .)
Secton 29.22(n)-: d|usted gross ncome.
INT RN L R NU COD
mounts e pended by Coumbus, Oho, poce offcers from cash
aowance for purchase and mantenance of unforms. (See I. T.
3978, papo 2 .
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
29.23(a)-. 2
Secton 29.22(n)-: d|usted gross ncome.
INT RN L R NU COD
Forda prvege ta es pad by ndvduas n connecton wth trade
or busness. (See I. T. 3983, page 31.)
S CTION 23(a). D DUCTIONS F OM GROSS
INCOM : P NS S
Secton 29.23 (a.)-1: usness e penses. 19 9-2 -13236
( so Secton 22(a), Secton 29.22(a)-; Secton LT. 3978
22(n), Secton 29.22(n)-; and Secton 1621(a),
Secton 0 .101, Reguatons 116.)
INT RN L R NU COD
Treatment for Federa ncome ta purposes of amounts receved
by, and amounts e pended by, poce offcers of the cty of Coumbus,
Oho, n connecton wth the purchase and mantenance of ther
unforms.
dvce s requested reatve to the treatment for Federa ncome
ta purposes of amounts receved by, and amounts e pended by, poce
offcers of the cty of Coumbus, Oho, n connecton wth the purchase
and mantenance of ther unforms.
Cty of Coumbus, Oho, Ordnance No. 00- 8, approved une 28,
19 8, provdes for an annua aowance to a mae poce offcers n
the dvson of poce, who entered the dvson as patromen, to re-
mburse them for unforms purchased for use n the dvson of poce.
ach such offcer s aowed, as a cothng rembursement, the sum of
1 0 for the frst caendar year (or part thereof) n servce and 7
for each succeedng year n servce.
The ureau has adopted the poston that amounts e pended for
the purchase and mantenance of poce offcers unforms consttute
ordnary and necessary busness e penses under secton 23(a) (1) ( )
of the Interna Revenue Code. s a resut, nonacquescence (C. .
19 3. 27) n Marcus O. enson v. Commssoner (2 T. C. 12, affrmed,
1 6 Fed. (2d) 191) has been wthdrawn and acquescence (page 1,
ths uetn) substtuted.
Secton 29.22(n)- of Reguatons 111 provdes n part that the
term ad|usted gross ncome means the gross ncome computed under
secton 22 of the Code mnus such of the deductons aowabe under
secton 23 of the Code as are specfed n secton 22(n) of the Code.
Secton 22(n) does not-create any new deductons, but merey spec-
fes whch of the deductons provded n secton 23 sha be aowed
n computng ad|usted gross ncome. In addton to traveng e -
penses, an empoyee s e penses whch are deductbe from gross n-
come n computng net ncome and for whch he s rembursed by
the empoyer under an e press agreement for rembursement, or pur-
suant to an e pense aowance arrangement, are deductbe from gross
-ncome n computng ad|usted gross ncome. ccordngy, n com-
putng ad|usted gross ncome, a poce offcer may deduct hs actua
e penses for unforms up to, but not e ceedng, the amount whch he
receves as an aowance or rembursement therefor. In addton, for
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
2
29 23(c)-.
the purpose of computng net ncome, he may ether deduct any un-
form e penses ncurred n e cess of such aowance or rembursement f
he eects to temze hs deductons, or he may cam the standard
deducton.
Snce the annua cash aowance pad to remburse poce offcers of
the cty of Coumbus, Oho, for the purchase and mantenance of
ther unforms represents an amount pad specfcay for bona fde
ordnary and necessary busness e penses ncurred or reasonaby e -
pected to be ncurred n the busness of the empoyer, such aowance
does not consttute wages and s not sub|ect to the wthhodng of
ncome ta by the empoyer. (See secton 0 .101(c) of Reguatons
116.) owever, such cash aowance s ncudbe n gross ncome
under secton 22(a) of the Interna Revenue Code.
Secton 29.23 (a)-: usness e penses.
INT RN L R NU COD
Prvege ta es mposed by Forda Revenue ct of 19 9. (See I. T.
3983, page 31.)
Secton 29.23(a)-2: Traveng e penses.
INT RN L R NU COD
Nonresdent aen ndvdua traveng to Unted States to fuf
performance contracts. (See G. C. M. 26013, page 76.)
S CTION 23(c). D DUCTIONS FROM GROSS
INCOM : T S G N R LLY
Secton 29.23(c)-1 : Ta es. 19 9-1 -13129
( so Secton 22(n), Secton 29.22 (n)-.) I. T. 3962
INT RN L revenue code
In genera, the gasone cense ta mposed by the act of the
abama Legsature approved September 16, 19 7, effectve October
1,19 7, In countes whch have a popuaton of 00,000 nhabtants or
more, Is deductbe for Federa ncome ta purposes, under secton
23(c)(1) of the Interna Revenue Code, by the consumer. If,
however, an ndvdua eects the optona standard deducton, no
temzed deducton s aowabe wth respect to such ta uness t s
attrbutabe to a trade or busness carred on by hm, n whch event
the amount of the ta s deductbe from gross ncome In computng
ad|usted gross ncome.
The amount of the above-mentoned abama gasone cense
ta coected by the dstrbutor or deaer shoud not be ncuded n
hs gross ncome, and no deducton s aowabe wth respect to the
amount of the ta remtted to the county.
dvce s requested whether the abama gasone cense ta
mposed by the act of the abama Legsature approved September
16,19 7, effectve October 1, 19 7, may be deducted by the consumer n
hs Federa ncome ta return.
868972 60 3
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
29.23(c)- .
26
The pertnent provsons of the abama statute mposng the ta n
queston provde n part as foows:
Secton 1. Ths act sha appy In, and ony tn, countes whch have a popuaton
of 00,000 nhabtants, or more, accordng to the ast or any subsequent Federa
census; ths act sha not have the effect of aterng or repeang n any wse
any statute now n effect, e cept a ordnances of any muncpaty wthn
such countes whch mpose or evy any gasone e cse ta or cense ta based upon
or graduated by the number of gaons of gasone sod, dstrbuted, stored, de-
vered or wthdrawn from storage, but sha be n addton to and cumuatve to
a aws now n effect.
Sec. 2. When used n ths act (a) The term person means and ncudes every
human beng, frm, corporaton, cub, partnershp, company, trustee, agency, or
assocaton, and any agent, servant, empoyee, or offcer thereof, snguar and
pura, (b) The term dstrbutor and the term seer each sha mean and
ncude any person, as the word person s heren defned, who s engaged n
the busness of seng, dstrbutng, deverng, storng, or takng out of storage
gasone wthn the county, or who ses, devers, stores or takes out of storage
gasone wthn the county.
Sec 3. (a) very dstrbutor or seer of gasone sha n addton to a other
ta es and censes mposed or eved by aw, pay a cense ta to the county equa
to 1 cent on each gaon of gasone by hm sod, dstrbuted, devered, stored or
taken out of storage wthn the county;
Sec. . very dstrbutor and seer and every reta deaer of gasone sha
add the amount of the cense ta eved and assessed heren to the prce of the
gasone; t beng the purpose and ntent of ths provson that the ta eved by
ths act s n fact a evy upon the consumer, wth the dstrbutor, seer and reta
deaer actng merey as agent of the county for the coecton of the ta . ach
dstrbutor and seer (e cept the reta deaer) sha state the amount of the
ta separatey from the prce of the gasone on a Invoces or saes or devery-
sps; and each reta deaer sha state the amount of the ta separatey from
the prce of the gasone on a dspay sgns and advertsements whch state or
Indcate the prce of the gasone. It sha be unawfu for any dstrbutor, seer,
or reta deaer engaged n or contnung wthn such county n the busness for
whch the cense ta s requred by ths act to fa or refuse to add to the saes
prce and coect from the purchaser the amount due by the ta payer on account
of the ta heren provded or to refund or offer to refund a or any part of the
amount coected or to absorb or advertse drecty or ndrecty the absorpton
or rebate of the ta or any porton thereof.
Secton 23(c)(1) of the Interna Revenue Code provdes that n
computng net ncome there sha be aowed as deductons ta es pad
or accrued wthn the ta abe year, wth certan e ceptons not here
matera, and secton 29.23(c)- of Reguatons 111 provdes that n
genera ta es are deductbe ony by the person upon whom they are
mposed.
In vew of the e press ntent of the abama State Legsature, as
set forth n secton , supra, of the act approved September 16, 19 7,
that the ta n queston s n fact a evy upon the consumer, wt the
dstrbutor, seer, and reta deaer actng merey as agents of the
county for the coecton of the ta , t s hed that the gasone cense
ta s deductbe for Federa ncome ta purposes, under the provsons
of secton 23(c) (1) of the Interna Revenue Code, by the consumer,
provded, however, that n the case of an ndvdua who eects to take
the optona standard deducton, no deducton s aowabe uness the
gasone cense ta s attrbutabe to a trade or busness carred on
by hm. If the ta s attrbutabe to a trade or busness carred on by
an ndvdua, the amount of such ta s deductbe from gross ncome
n computng ad|usted gross ncome.
The amount of ta coected by the dstrbutor or deaer shoud not
be ncuded n hs gross ncome, and no deducton s aowabe wth
respect to the amount of the ta remtted to the county.
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
27
29.23(c)- .
Secton 29.23 (c)-1 : Ta es. 19 9-18-13171
I. T. 3966
INT RN L R NU COD
Contrbutons made by empoyers and empoyees to the State of
Caforna pursuant to the Caforna Unempoyment Insurance ct,
as amended, are deductbe as ta es under secton 23(c) (1) of the
Interna Revenue Code n computng net ncome for Federa ncome
ta purposes.
L T. 3096 (C. . 1937-2, 81) revoked.
dvce s requested as to the deductbty for Federa ncome ta
purposes of contrbutons made by empoyers and empoyees to the
State of Caforna pursuant to the Caforna Unempoyment In-
surance ct, as amended.
The Caforna Unempoyment Insurance ct (formery known as
the Unempoyment Reserves ct), as orgnay enacted, provded
for the payment of unempoyment compensaton by the State to nd-
vduas who were unempoyed but were abe to work. The act provded
for percentage contrbutons by both empoyers and empoyees based
on saares. ffectve May 21,19 6, the act was amended by the add-
ton of artce 10 whch provdes for compensaton to empoyees n
case of dsabty due to sckness or accdent. The moneys obtaned
from such contrbutons consttute a separate fund n the hands of
the State to carry out the purpose of the amendment.
The Caforna Unempoyment Insurance ct (then known as the
Unempoyment Reserves ct) was gven consderaton by ths offce,
pror to the addton of artce 10, n I. T. 3096 (C. . 1937-2, 81), and
t was there hed n effect that contrbutons made by empoyers and
empoyees under the provsons of the act were deductbe from gross
ncome for Federa ncome ta purposes as busness e penses. s
ndcated n the rung, that concuson was based on an opnon of the
attorney genera of the State of Caforna as to the ega status of
such contrbutons.- e had hed that The payro contrbuton cannot
be hed to be a ta .
Recent decsons ndcate that the Caforna courts regard the con-
trbutons made by both empoyers and empoyees to the State fund as
ta es. In Isenberg v. Caforna mpoyment Stabzaton Comms-
son eta. (172Pac. (2d) 27), the court sad (at page 31) : y what-
ever name t may be caed, the contrbuton s a ta . To the same
effect are: La Socete Francase de enfasance Mutuee v. Caforna
mpoyment Commsson (133 Pac. (2d) 7); mpre Star Mnes
Co., Ltd., v. Caforna mpoyment Commsson (168 Pac. (2d) 686);
Modern arber Coeges, Inc., v. Caforna mpoyment Stabzaton
Commsson (192 Pac. (2d) 916).
In vew of the above, t s hed that contrbutons made by empoyers
and empoyees to the State of Caforna pursuant to the Caforna
Unempoyment Insurance ct, as amended, are deductbe as ta es
under secton 23(c) (1) of the Interna Revenue Code n computng
net ncome for Federa ncome ta purposes. (See Mn. 0 , C. .
1937-1, 63.) I. T. 3096, supra, s hereby revoked.
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
29.23(c)- .
28
Secton 29.23(c)-: Ta es.
( so Secton 2 , Secton 29.2 -1.)
19 9-20-13193
I. T. 3970
INT RN L R NU COD
Contrbutons made by empoyers and empoyees (workers) to the
New ersey unempoyment compensaton fund and to the State dsa-
bty benefts fund pursuant to chapter 21, tte 3 of the Revsed
Statutes of New ersey, as amended and suppemented, are deductbe
as ta es under secton 23(e) (1) of the Interna Revenue Code.
Contrbutons made by empoyees (workers) n accordance wth
prvate pans whch provde for payment of dsabty benefts pur-
suant to chapter 21, tte 3 of the Revsed Statutes of New ersey,
as amended and suppemented, are not ta es wthn the meanng of
secton 23(c)(1) of the Code, nor medca e penses under secton
23( ) of the Code. They are persona e penses under secton
2 (a) (1) of the Code whch are not deductbe for Federa ncome
ta purposes.
dvce s requested as to the deductbty for Federa ncome ta
purposes of contrbutons made by empoyers and empoyees (referred
to sometmes n the New ersey statute as workers) to the New ersey
unempoyment compensaton fund and to the State dsabty benefts
fund pursuant to chapter 21, tte 3 of the Revsed Statutes of New-
ersey, as amended and suppemented. dvce s aso requested as
to the deductbty of contrbutons made by such empoyees n ac-
cordance wth prvate pans whch provde for payment o dsabty
benefts pursuant to the same provsons of New ersey aw.
Pror to une 1,19 8, chapter 21, tte 3 of the Revsed Statutes of
New ersey provded for the payment of unempoyment compensa-
ton benefts to those unempoyed persons who were abe to work and
avaabe for work. ffectve une 1, 19 8, the aw was amended to
provde aso for compensaton to empoyees n case of dsabty due
to nonoccupatona sckness or accdent as the resut of whch they are
unavaabe or unabe to work. mpoyees may -be covered by the
State pan or by prvate pans. The pertnent provsons of the New-
ersey Revsed Statutes read as foows:
3: 21-1. Short Tte.
Ths chapter sha be known and may be cted as the Unempoyment Com-
pensaton Law.
3:21- . kneft gbty Condtons.
n unempoyed ndvdua sha be egbe to receve benefts wth respect
to any week ony f t appears that:

(c) e s abe to work, and s avaabe for work.
3: 21-7. Contrbutons.
(a) Payment.
(1) On and after December frst, one thousand nne hundred and thrty-s ,
contrbutons sha accrue and become payabe by each empoyer for each ca-
endar year n whch he s sub|ect to ths chapter, wth respect to havng n-
dvduas n hs empoy durng such caendar year Such contrbutons
sha become due and be pad by each empoyer to the commsson unempoy-
ment compensaton commsson for the fund unempoyment compensaton
fund n accordance wth such reguatons as may be prescrbed, and sha not
be deducted, n whoe or In part, from the remuneraton of ndvduas n hs
empoy.

(d) Contrbuton of workers; transfer to temporary dsabty beneft fund.
(1) ach worker sha contrbute to the fund one per centum (1 ) of hs
wages pad by an empoyer wth respect to hs empoyment provded,
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
29
29.23(c)- .
however, that such contrbuton sha be at the rate of one-fourth of one per
centum ( of 1 ) of wages pad wth respect to empoyment on and after
anuary frst, one thousand nne hundred and forty-nne, whe the worker s
covered by an approved prvate pan under the Temporary Dsabty enefts
Law. ach empoyer sha, notwthstandng any provsons of aw n ths State
to the contrary, wthhod n trust the amount of hs workers contrbutons from
ther wages at the tme such wages are pad, sha show such deducton of sc
hs payro records, sha furnsh such evdence thereof to hs workers as the
commsson may prescrbe, and sha transmt a such contrbutons, n add-
ton to hs own contrbutons, to the offce of the commsson n such manner
and at such tmes as may be prescrbed. If any empoyer fas to deduct the
contrbutons of any of hs workers at the tme ther wages are pad, or fas
to make a deducton therefor at the tme wages are pad for the ne t succeedng
payro perod, he aone sha thereafter be abe for such contrbutons, and
for the purposes of secton 3:21-1 of ths tte, such contrbutons sha be
treated as empoyer s contrbutons requred from hm.
(2) There sha be deposted n and credted to the State dsabty benefts
fund, as the same sha be estabshed by aw, three-quarters of a worker con-
trbutons, receved by the commsson pursuant to subparagraph (1) above on
and after pr frst, one thousand nne hundred and forty-eght or the date
ths subparagraph takes effect, whchever s ater, wth respect to wages upon
whch the rate of contrbuton s one per centum (1 ) as provded n (1) above.

(e) Contrbutons by empoyers to State dsabty benefts fund.
(1) cept as herenafter provded, each empoyer sha contrbute
one-quarter of one per centum ( of 1 ) of the wages pad by such empoyer
to workers wth respect to empoyment after anuary frst, one thousand nne
hundred and forty-nne. Such contrbutons sha become due and be pad by
each empoyer to the commsson for the State dsabty benefts fund as estab-
shed by aw, n accordance wth such reguatons as may be prescrbed, and
sha not be deducted, n whoe or n part, from the remuneraton of ndvduas
n hs empoy.
3 : 21-2 . Short Tte.
Ths act sha be known and may be cted as the Temporary Dsabty enefts
Law.
3:21-20. Purpose.

The pubc pocy of ths State, aready estabshed, s to protect empoyees
aganst the sufferng and hardshp generay caused by nvountary unempoy-
ment. ut the unempoyment compensaton aw provdes beneft payments to
repace wage oss caused by nvountary unempoyment ony so ong as an n-
dvdua s abe to work, and s avaabe for work, and fas to provde any
protecton aganst wage oss suffered because of nabty to perform the dutes
of a |ob nterrupted by ness. Itacs supped.

It has been found that e stng vountary pans for the payment of cash sck-
ness benefts cover ess than one-haf of the number of workng peope of ths
State who are now covered by the unempoyment compensaton aw, and that
even ths degree of vountary protecton affords uneven, unequa and sometmes
uncertan protecton among the varous vountary beneft programs. It s
therefore desrabe and necessary to f the gap n e stng provsons for pro-
tecton aganst the oss of earnngs caused by nvountary unempoyment, by
e tendng such protecton to meet the hazard of earnngs oss due to Inabty
to work caused by nonoccupatona sckness or accdent. Itacs supped.
In order to mantan consumer purchasng power, reeve the serous
menace to heath, moras and wefare of the peope caused by nsecurty and the
oss of earnngs, to reduce the necessty for pubc reef of needy persons, and In
the nterest of the heath, wefare and securty of the peope of ths State, such a
system, enacted under the poce power, s hereby estabshed, requrng the pay-
ment of reasonabe cash benefts to egbe ndvduas sufferng accdent or I-
ness whch s not compensabe under the workmen s compensaton aw. Itacs
supped.
3 : 21-32. stabshment ot Prvate Pans.
ny covered empoyer may estabsh a prvate pan for the payment of dsabty
benefts n eu of the benefts of the State pan herenafter estabshed. eneft
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
29.23(c)- .
30
under such a prvate pan may be provded by a contract of nsurance ssued by an
nsurer duy authorzed and admtted to do busness n ths State, or by an agree-
ment between the empoyer and a unon or assocaton representng hs empoyees,
or by a specfc undertakng by the empoyer as a sef-nsurer. Sub|ect to the
nsurance aws of ths State, such a contract of nsurance may be between the
nsurer and the empoyer; or may be between the nsurer and two or more em-
poyers, actng for the purpose through a nomnee, desgnee or trustee; or may
be between the nsurer and the unon or assocaton wth whch the empoyer has
an agreement wth respect thereto.

(d) no greater amount s requred to be pad by empoyees toward the cost
of benefts than that prescrbed by aw as the amount of worker contrbuton
to the State dsabty benefts fund for covered ndvduas under the State
pan;
3: 21-33. ecton by mpoyees ; Deducton op Contrbutons.
If empoyees are to be requred to contrbute toward the cost of benefts under
a prvate pan, suc pan sha not become effectve uness pror to the effectve
date a ma|orty of the empoyees n the cass or casses to be covered thereby have
agreed thereto by wrtten eecton. In such event, the empoyer may durng the
contnuance of the approved prvate pan coect the requred contrbu-
tons thereto by deducton from the wages pad to covered ndvduas under
such pan; provded, that f any empoyer fas to deduct the contrbutons
of any of hs empoyees at the tme ther wages are pad, or fas to make a
deducton therefor at the tme wages are pad for the ne t succeedng payro
perod, he may not thereafter coect a contrbuton wth respect to such wages
prevousy pad.
The decsons ndcate that the New ersey Unempoyment Compen-
saton Commsson and the Federa and New ersey courts regard the
contrbutons to the State unempoyment compensaton fund as ta es.
(See In re Wsonte Corporaton, 28 Fed. Supp. 913; In re Wm.
kers, r., Co., Inc., 121 Fed. (2d) 8 6; Snger Sewng Machne Co. v.
New ersey Unempoyment Compensaton Commsson et a., 128
N. . L. 611,27 . (2d) 889, affrmed, 130 N. . L. 173,31 . (2d) 818;
Ranes v. Unempoyment Compensaton Commsson, 129 N. . L. 28,
28 . (2d) 6, affrmed, 129 N. . L. 387, 30 . (2d) 31, certorar
dened, 319 U. S. 7 7.)
ccordngy, t s hed that contrbutons made by empoyers and
empoyees to the New ersey unempoyment compensaton fund pur-
suant to chapter 21, tte 3 of the Revsed Statutes of New ersey, as
amended and suppemented, are deductbe as ta es under secton
23(c) (1) of the Interna Revenue Code. It s hed further that con-
trbutons made by empoyers and empoyees to the State dsabty
benefts fund pursuant to the same provsons of New ersey aw are
aso deductbe as ta es under secton 23(c) (1) of the Code.
It was hed n Robert 0. Demng, r., v. Commssoner (9 T. C. 383,
acquescence, C. . 19 8-1,1) that the pettoner was entted to a de-
ducton for medca e penses computed by subtractng from the tota
medca e penses pad, after approprate ad|ustment as to percent of
hs ad|usted gross ncome, ony the amount receved under three acc-
dent nsurance poces as ndemnfcaton for e penses of hospta and
medca care. The amount receved as ndemnfcaton for oss of earn-
ngs was not requred to be used as a set-off aganst medca e penses.
mounts receved by empoyees under a prvate pan for payment
of dsabty benefts are to compensate for oss of earnngs ony. It
s hed that contrbutons made by empoyees n accordance wth such
prvate pans are not ta es wthn the meanng of secton 23(c) (1) of
the Code, nor medca e penses under secton 23 ( ) of the Code. They
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
31
29.23(c)- .
are persona e penses under secton 2 (a) (1) of the Code whch are
not deductbe for Federa ncome ta purposes. (See I. T. 3967,
page 33, ths uetn, reatng to Caforna.)
Treatment for Federa ncome ta purposes of the ta es wth
respect to rentas, admssons, and saes of tangbe persona prop-
erty mposed by the Forda Revenue ct of 19 9.
dvce s requested as to the treatment for Federa ncome ta pur-
poses of the ta es wth respect to rentas, admssons, and saes of
tangbe persona property mposed by the Forda Revenue ct of
19 9 whch became effectve on November 1,19 9.
The pertnent provsons of the Forda Revenue ct of 19 9 provde
n part as foows:
Sec. 3. (a) That t s hereby decared to be the egsatve ntent that every
person s e ercsng a ta abe prvege who engages n the busness of rentng,
easng or ettng any vng quarters, seepng or housekeepng accommodatons
In, from, or a part of, or n connecton wth any hote, apartment house, roomng
house, tourst or traer camp, as herenbefore defned n ths act. For the e er-
cse of sad prvege a ta s hereby eved as foows: n the amount equa to
three percent (3 ) of and on the tota renta charged for such vng quarters,
seepng or housekeepng accommodatons by the person chargng or coectng
the renta
(b) The ta provded for heren sha be n addton to the tota amount of the
renta and sha be charged by the essor or person recevng the rent n and by
sad renta arrangement to the essee or person payng the renta, and sha be
due and payabe at the tme of the recept of such renta payment by the essor
or person, as defned n ths act, who receves sad renta or payment. The owner,
essor or person recevng the rent sha remt the ta to the Comptroer at the
tmes and n the manner herenafter provded for deaers to remt ta es under
ths act. The same dutes mposed by ths act upon deaers n tangbe persona
property respectng the coecton and remsson of the ta sha appy
to and be bndng upon a persons who manage or operate hotes, apartment
houses, roomng houses, tourst and traer camps, and to a persons who coect
or receve such rents on behaf of such owner or essor ta abe under ths act.

Sec. . It s hereby decared to be the egsatve ntent that every person e er-
csng a ta abe prvege who ses or receves anythng of vaue, by way of
admssons and that every person who ses admssons to any pace of amusement,
or for the prvege of enterng or stayng n any pace of amusement, ncusve of
admssons to theatres, outdoor theatres, shows, e hbtons, games, races and
any pace where charge s made through any seng of tckets, gate charges, seat
charges, bo charges, season pass charges, and cover charges or recepts of any-
thng of vaue measured on an admsson or ength of stay, or seat bo accommoda-
tons, n any pace of busness or where there s any e hbton or entertanment,
sha be sub|ect to a ta for the e ercse of such prvege.
(a) t the rate of three percent (3 ) of the saes prce or the actua vaue
receved for such admssons, the sad three percent (3 ) to be added and co-
ected wth a such admssons from the purchaser thereof, and such ta sha be
pad for the e ercse of the prvege as defned n the precedng paragraph.

(d)
of the provsons of ths act reatng to coecton of ta es pon
saes of tangbe persona property sha kewse appy to a prveges descrbed
or referred to n ths secton
Secton 29.23(c)- : Ta es.
( so Secton 22(a), Secton 29.22(a)- ; Secton
22(n), Secton 29.22(n)-; Secton 23(a), Sec-
ton 29.23(a)- ; Secton 2 , Secton 29.2 -2.)
19 9-2 -132 9
I. T. 3983
INT RN L R NU COD
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
29.23(c)- .
32
Sec. . That t Is hereby decared to be the egsatve ntent that every person
s e ercsng n ta abe prvege who engages n the busness of seng tangbe
persona property at reta n ths State, or who rents or furnshes any of the
thngs or servces ta abe under ths act, or who stores for use or consumpton n
ths State any tem or artce of tangbe persona property as defned heren and
who eases or rents such property wthn the State of Forda. For the e ercse
of sad prvege a ta s eved as foows:
(a) t the rate of three percent (3 ) of the saes prce of each tem or artce
of tangbe persona property when sod at reta n ths State; the ta to be com-
puted on gross saes for the purpose of remttng the amount of ta due the State,
and to ncude each and every reta sae.
(b) t the rate of three percent (3 ) of the cost prce of each tem or artce
of tangbe persona property when the same s not sod but s used, consumed,
dstrbuted or stored for use or consumpton n ths State; provded there sba
be no dupcaton of the ta .
(c) t the rate of three percent (.3 ) of the gross proceeds derved from
the ease or renta of tangbe persona property, as denned heren
(d) t the rate of three percent (3 ) of the ease or renta prce pad by
essee or rentee, or contracted or agreed to be pad by essee or rentee, to the
owner of the tangbe persona property.
(e) The sad ta sha be coected from the deaer as denned heren and
pad at the tme and n the manner as herenafter provded.
-
Sec. 7. (a) The prvege ta heren eved measured by reta saes sha be
coected by the deaers from the purchaser or consumer.
(b) Deaers sha, as far as practcabe, add the amounts of ta mposed under
ths act to the sae prce or charge, whch sha be a debt from the purchaser or
consumer to the deaer, unt pad
.
(d) person engaged n any busness ta abe under ths act sha not adver-
tse or hod out to the pubc, n any manner, drecty or ndrecty, that he w
absorb a or any part of the ta , or that he w reeve the purchaser of the
payment of a or any part of the ta .

Sec. 12. For the purpose of compensatng the essors of rea and persona
property ta ed hereunder, and for the purpose of compensatng deaers n tangbe
persona property and for the purpose of compensatng owners of paces where
admssons are coected, as compensaton for the keepng of prescrbed records
and the proper accountng and remttng of ta es by them, such seer, essor,
owner and deaer sha be aowed three percent (3 ) of the amount of the
ta due and accounted for and remtted to the Comptroer, n the form of a
deducton n submttng hs report and payng the amount due by hm
Secton 23(c)(1) of the Interna Revenue Code provdes that n
computng net ncome there sha be aowed as deductons ta es pad
or accrued wthn the ta abe year, wth certan e ceptons not here
matera. Secton 29.23(c)-(a) of Reguatons 111 provdes that n
genera ta es are deductbe ony by the person upon whom they are
mposed. Secton 23(c) (3) of the Code provdes that a ta mposed
by any State, Terrtory, Dstrct, or possesson of the Unted States,
or any potca subdvson thereof, upon persons engaged n seng
tangbe persona property at reta, whch s measured by the gross
saes prce or the gross recepts from the sae or whch s a stated sum
per unt of such property sod, or upon persons engaged n furnshng
servces at reta, whch s measured by the gross recepts for furnsh-
ng such servces, f the amount of such ta s separatey stated, then
to the e tent that the amount so stated s pad by the purchaser (other-
wse than n connecton wth the purchaser s trade or busness) to
such person such amount sha be aowed as a deducton n computng
the net ncome of such purchaser as f such amount consttuted a ta
mposed upon and pad by such purchaser.
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
33
29.2 (c)- .
It s not necessary, for the purposes of secton 23(c) (3) of the Code,
that the purchaser be furnshed wth a saes sp, b, nvoce, or other
statement on whch the ta s separatey stated. Inasmuch as the aw
(secton 7(d) of the Forda Revenue ct of 19 9) prohbts the seer
from absorbng the ta , t s presumed that the amount of the ta ,
n each nstance, s separatey stated. (See secton 29.23(c)-(2 ) of
Reguatons 111.)
In vew of the foregong, t s hed that the ta es mposed by sectons
3, , and of the Forda Revenue ct of 19 9 are deductbe, under
the provsons of secton 23(c) (1) of the Interna Revenue Code, by
the persons e ercsng the respectve prveges set forth theren. If
such persons are ndvduas, the deducton must be taken n computng
ad|usted gross ncome. (See secton 22(h)(1) of the Code.) The
ta coected from the purchasers, ncudng that porton of the ta
coected whch s retaned as compensaton for keepng prescrbed
records and the proper accountng and remttng of ta es, must be
ncuded n the gross ncome of the persons e ercsng the prveges.
It s further hed that to the e tent the ta es mposed by sectons 3,
, and of the Forda Revenue ct of 19 9 are pad by the purchaser,
otherwse than n connecton wth hs trade or busness, they are de-
ductbe by the purchaser under secton 23(c) (3) of the Code, e cept
n the case of an ndvdua who eects to take the optona standard
deducton. Where such ta es are pad n connecton wth the pur-
chaser s trade or busness, they are deductbe by the purchaser as a
busness e pense f the cost of the property or servces s propery
chargeabe to e pense. In case the purchaser s an ndvdua, the
ta es must be deducted n computng ad|usted gross ncome. (See
secton 22(n) (1) of the Code.) Such ta es are to be treated as capta
tems where the cost of the property or servces s propery captazed.
S CTION 23( ). D DUCTIONS FROM GROSS INCOM :
M DIC L, D NT L, TC., P NS S
Secton 29.23( )-: Medca, denta, etc., e penses.
INT RN L R NU COD
Contrbutons by empoyees under a Caforna vountary pan for
payment of unempoyment compensaton dsabty benefts. (See
I. T. 3967, beow.)
S CTION 2 . IT MS NOT D DUCTI L
Secton 29.2 -1: Persona and famy e penses. 19 9-18-13172
( so Secton 23( ), Secton 29.23( )-.) I. T. 3967
INT RN L R NU COD
Contrbutons made by empoyees to a fund estabshed under a
vountary pan for the payment of unempoyment compensaton
dsabty benefts to empoyees, whch contrbutons are made pur-
suant to secton 6 of artce 10 of the Caforna Unempoyment
Insurance ct, are not aowabe as deductons under secton 23( )
of the Interna Revenue Cede, but are nondeductbe persona
e penses under secton 2 (a) (1) of the Code.
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
29.2 -2.
3
dvce s requested reatve to the deductbty for Federa ncome
ta purposes of contrbutons made by empoyees to a fund estabshed
under a vountary pan for the payment of unempoyment compensa-
ton dsabty benefts pursuant to secton 6 of artce 10 of the
Caforna Unempoyment Insurance ct.
Pror to the enactment of artce 10 of the Caforna Unempoyment
Insurance ct, unempoyment compensaton benefts were payabe ony
to those unempoyed persons who were abe to work and avaabe for
work. ffectve May 21, 19 6, the act was amended by the addton
of artce 10 whch provdes for compensaton to empoyees n case of
dsabty due to sckness or accdent as the resut of whch they are
unavaabe or unabe to work. The stated purpose of artce 10 s to
compensate n part for the wage oss sustaned by ndvduas unem-
poyed because of sckness or n|ury. Secton 0 of artce 10 provdes
that an empoyer, the ma|orty of empoyees empoyed n Caforna
by an empoyer, or both, sha have the rght to estabsh a vountary
pan of dsabty benefts. Secton 6 or artce 10 provdes that an
empoyer mav deduct percentage contrbutons from the wages of hs
empoyees. These contrbutons are payabe nto the fund provded
by the vountary pan and are n eu of contrbutons nto the State
Unempoyment Compensaton Dsabty Fund.
It was hed n Robert O. Demng, r., v. Commssoner (9 T. C. 383,
acquescence, C. . 19 8-1, 1) that the pettoner was entted to a
deducton for medca e penses computed by subtractng from the tota
medca e penses pad, after approprate ad|ustment as to percent
of hs ad|usted gross ncome, ony the amount receved under three
accdent nsurance poces as ndemnfcaton for e penses of hospta
and medca care. The amount receved as ndemnfcaton for oss
of earnngs was not requred to be used as a set-off aganst medca
e penses.
In vew of the fact that amounts receved by empoyees under a vo-
untary pan for the payment of unempoyment compensaton dsabty
benefts are to compensate for oss of earnngs ony, t s hed that
contrbutons made by empoyees to a fund estabshed under a voun-
tary pan for the payment of such benefts, whch contrbutons are
made pursuant to secton 6 of artce 10 of the Caforna Unem-
poyment Insurance ct, are not aowabe as deductons under sec-
ton 23( ) of the Interna Revenue Code, but are nondeductbe per-
sona e penses under secton 2 (a) (1) of the Code.
Secton 29.2 -1: Persona and famy e penses.
INT RN L R NU COD
Contrbutons by empoyees (workers) under a New ersey prvate
pan for payment of dsabty benefts. (See I. T. 3970, page 28.)
Secton 29.2 -2: Capta e pendtures.
INT RN L R NU COD
Forda prvege ta on saes of tangbe persona property. (See
I. T. 3983, page 31.)
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
3
29. 2-1.
P RT I . CCOUNTING P RIODS ND M T ODS OF CCOUNTING
S CTION 2. P RIOD IN W IC IT MS OF
GROSS INCOM INCLUD D
Secton 29. 2-1: When ncuded n gross 19 9-1 -13122
ncome. I. T. 3961
INT RN L R NU COD
Income resutng from a retroactve ncrease n temporary ar ma
rates, granted by an order of the Cv eronautcs oard f ng per-
manent rates wth respect to transportaton of ar ma, accrues, for
Federa ncome ta purposes, for the ta abe years durng whch the
servces were rendered.
dvce s requested as to accrua of ncome resutng from retro-
actve ncreases n temporary ma rates, n the case of an ar ma
carrer, by the f ng of permanent rates by the Cv eronautcs
oard wth respect to transportaton of ar ma durng pror ta abe
years.
In the nstant case, the ta payer operated an ar ma route for a
number of years pror to 19 6 under a permanent certfcate of pubc
convenence and necessty ssued to t by the Cv eronautcs oard,
for whch t was compensated at a permanent rate. In 19 , the oard
ssued to the ta payer a certfcate of pubc convenence and necessty
for a new route, and servce thereunder was commenced n 19 6. Pur-
suant to an appcaton by the ta payer for a ma rate on ths new
route, the oard ssued an order n 19 7 f ng a temporary rate of 20
cents per arpane me for the new route, effectve as of the date upon
whch servce was commenced on the new route. Due to the fact that
the addton of the new route materay atered the nature and n-
creased the scope of the ta payer s operatons, the same order f ed a
temporary rate of 20 cents per arpane me for the od route. In
19 8, the oard ssued an order effectve as of anuary 1, 19 8, n
whch the temporary rate was ncreased to 3 cents per arpane me,
and the order stated That the proceedng reman open pendng entry
of an order f ng a fna rate retroactve to such date as the oard
sha then determne, whch sad fna rate may be ower or hgher
than the temporary rate. The fna rate to be f ed by the oard
w be hgher than the temporary rate and w be retroactve to the
date upon whch servce was commenced on the new route.
Secton 01 (m) of the Cv eronautcs ct of 1938 ( 2 Stat. 973,
990) provdes that:
(m) Whenever so authorzed by ts certfcate, any ar carrer sha provde
necessary and adequate factes and servce for the transportaton of ma, and
sha transport ma whenever requred by the Postmaster Genera. Such ar
carrer sha be entted to receve reasonabe compensaton therefor as heren-
after provded.
Secton 2(a) of the Interna Revenue Code provdes n part as
foows:
(a) Genera Rue. The amount of a tems of gross ncome sha be n-
cuded n the gross ncome for the ta abe year n whch receved by the ta -
payer, uness, under methods of accountng permtted under secton 1, any such
amounts are to be propery accounted for as of a dfferent perod.
Where ncome s propery reported on the accrua bass, t s the
rght to receve and not the actua recept whch determnes the n-
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
29. 2-2.
36
euson of the amount n gross ncome. (See Sprng Cty Foundry
Co. v. Commssoner, 292 U. S. 182, Ct. D. 829, C. . III-1, 281
(193 ).) It appears that the temporary rate appcabe to both routes,
f ed by the order of the Cv eronautcs oard n 19 7, was not
ntended to represent and dd not represent the reasonabe compensa-
ton to whch the ta payer was entted. That rate was estabshed
when the ta payer materay atered the nature and ncreased the
scope of ts operatons. The oard was obvousy of the opnon that
the e act amount of |ust and reasonabe compensaton to be pad to
the ta payer from and after e panson of ts operatons requred e -
tended consderaton. pparenty, the oard beeved that the ta -
payer had, at a tmes subsequent to commencement of servce on the
new route, the rght to receve compensaton n e cess of the temporary
rates whch the oard f ed and that ony further study was requred
to determne the e act amount.
ccordngy, t s hed that ncome resutng from a retroactve n-
crease n temporary ar ma rates, granted by an order of the Cv
eronautcs oard f ng permanent rates wth respect to transporta-
ton of ar ma, accrues, for Federa ncome ta purposes, for the
ta abe years durng whch the servces were rendered.
L T. 38 1 (C. . 19 7-1,32) s not appcabe to the facts presented
n the nstant case.
Secton 29. 2 1: When ncuded n gross ncome.
INT RN L R NU COD
Ta refunds. (See Mm. 6 , page 11.)
Secton 29. 2-2: Income not reduced to 19 9-1 -13130
possesson. I. T. 3963
( so Secton 22(b), Secton 29.22(b) (2)-.)
INT RN L R NU COD
hoder of an endowment pocy who, pror to the maturty date,
notfes the nsurer of hs eecton to receve the proceeds under an
opton whch provdes for the payment of the proceeds n nsta-
ments does not constructvey receve the tota amount of the
proceeds on the date of maturty. If the pocyhoder does not, pror
to the maturty date, notfy the nsurer of hs eecton to receve the
proceeds of the pocy under such an opton, the pocy matures on
a ump-sum bass, and the ncome therefrom s ncudbe n gross
ncome as provded n secton 22(b) (2) of the Interna Revenue
Code.
dvce s requested whether any Federa ncome ta abty woud
resut wth respect to the proceeds of an endowment nsurance pocy
where, on or after the maturty date, the pocyhoder eects to receve
the proceeds n specfed nstaments over a specfed perod of tme.
The pocy n queston provdes that, n the absence of an eecton
to receve the proceeds n nstaments, upon the e praton of a
desgnated term of years the nsurer w pay to the nsured the face
amount of the pocy, f the nsured be then vng, or w pay such
amount before maturty of the pocy to hs benefcary upon due proof
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
37
29. 2-2.
of the death of the nsured. The optona methods of settement pro-
vde, nter aa, that the nsured may, by wrtten notce to the nsurer,
make the proceeds of the pocy payabe pursuant to certan optons
ncudng (1) n equa annua, semannua, quartery, or monthy n-
staments for a f ed perod of tme n accordance wth a tabe con-
taned n the pocy, and (2) n equa annua, semannua, quartery, or
monthy nstaments of such amounts as may be agreed upon unt the
entre proceeds, pus nterest, have been pad. It s stated that, a-
though the pocy does not so provde, the nsurer ordnary aows the
payee a reasonabe tme after the date of maturty of the pocy wthn
whch to make the eecton of an optona settement.
Secton 22(b)(2)( ) of the Interna Revenue Code provdes n
part that there sha be e empt from Federa ncome ta :
In Genera. mounts receved (other than amounts pad by reason of the
death of the nsured and nterest payments on such amounts and other than
amounts receved as annutes) under a fe nsurance or endowment contract,
but f such amounts (when added to amounts receved before the ta abe year
under such contract) e ceed the aggregate premums or consderaton pad
(whether or not pad durng the ta abe year) then the e cess sha be ncuded
n gross ncome.
Secton 29. 2-2 of Reguatons 111 provdes n part as foows:
Income Not Reduced to Possesson. Income whch s credted to the account
of or set apart for a ta payer and whch may be drawn upon by hm at any
tme s sub|ect to ta for the year durng whch so credted or set apart, athough
not then actuay reduced to possesson. To consttute recept n such a case
the ncome must be credted or set apart to the ta payer wthout any substanta
mtaton or restrcton as to the tme or manner of payment or condton upon
whch payment s to be made, and must be made avaabe to hm so that t may
be drawn at any tme, and ts recept brought wthn hs own contro and
dsposton.
It s evdent that where no optona settement has been eected, the
rghts of the nsured become f ed as of the date the proceeds of the
pocy become payabe, . e., the date of maturty. e s entted, on
the date of maturty, to demand a ump-sum payment of the proceeds
of the pocy. There are no restrctons or mtatons on hs rght to
draw the fu amount and to brng t wthn hs own contro and
dsposton. In such a case the nsured w constructvey receve
any ncome from the pocy on the maturty date.
ment pocy who, pror to the maturty date, notfes the nsurer of hs
eecton to receve the proceeds under an opton whch provdes for the
payment of the proceeds n nstaments does not constructvey receve
the tota amount of the proceeds on the date of maturty. If the
pocyhoder does not, pror to the maturty date, notfy the nsurer of
hs eecton to receve the proceeds of the pocy under such an opton,
the pocy matures on a ump-sum bass, and the ncome therefrom
s ncudbe n gross ncome as provded n secton 22(b)(2) of the
Interna Revenue Code. (Cf. enry L. um v. Rg gns, 7 Fed.
Supp. 1 0, affrmed, 1 0 Fed. (2d) 71, and Constance C. Fracketon
v. Commssoner, 6 . T. . 883.) The fact that the pocyhoder may,
on or after the maturty date of the pocy, be permtted by the nsurer
to change the method of acceptng payment of the proceeds does
not resut n the e ercse of an optona eecton as a contractua rght.
n vew
hoder of an endow-
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
29. 3-2.
38
S CTION 3. P RIOD FOR W IC D DUCTIONS
ND CR DITS T N
Secton 29. 3-2: When charges deductbe. 19 9-17-131
G. CM. 26069
INT RN L R NU COD
New York Cty rea estate ta es accrue, for Federa ncome ta
purposes, as of the dates on whch, under the charter of New York
Cty, they become due and payabe and become ens, . e., on October
1 and pr 1.
Reference s made to I. T. 3 27 (C. . 19 2-1, 3), whch hods that
New York Cty rea estate ta es accrue, for Federa ncome ta pur-
poses, at the tme when, under the charter of the cty of New York,
the rea property assessment ros are devered to the coectng offcer
wth warrants attached authorzng coecton of the ta es.
The poston so taken was based on the decson of the Unted States
oard of Ta ppeas (now The Ta Court of the Unted States) n
S. . ds M. . ernhemer Co. v. Commssoner ( 1 . T. . 2 9),
whch was affrmed (121 Fed. (2d) ), per curam, by the Crcut
Court of ppeas for the Second Crcut. In that case, the oard
quoted from the opnon n Unted States v. nderson (269 U. S. 22;
T. D. 3839, C. . -, 179 (1926)) as foows: n advance of the
assessment of a ta a the events may occur whch f the amount of
the ta and determne the abty of the ta payer to pay t, and hed
n substance that New York Cty rea estate ta es accrue before the
end of March when the ta bs are sent out wth coecton warrants
attached. Foowng the affrmance of the oard decson n the ern-
hemer case by the crcut court, the Commssoner wthdrew (C. .
19 2-1, 2) hs nonacquescence n that decson and pubshed I. T.
3 27, supra, whch adopted the concusons of the oard and the crcut
court. t the same tme, the ureau revoked I. T. 283 (C. . III-2,
189 (193 )) and modfed I. T. 3328 (C. . 1939-2, 8 ), to the e tent
that t was n confct wth the vews e pressed n I. T. 3 27, supra.
owever, n dda, Inc., v. Commssoner (9 T. C. 199, acquescence,
C. . 19 9-1, 1) the Ta Court hed that where a ta payer pur-
chased rea property n New York Cty (from a vendor resdng n
the same ta dstrct n whch the property was ocated) on ugust
, 19 0, after the competon of the assessment ro for the fsca year
begnnng uy 1, 19 0, and pad the ta es on such property pror to
une 30, 19 1, the cose of ts ncome-ta ta abe year, t was entted
to deduct the amounts pad as ta es pad or accrued for the ta abe
year ended une 30, 19 1. The Ta Court aowed the deducton of
the ta es by the vendee on the ground that, under New York aw,
there was nether a en on the property nor persona abty on the
vendor for payment of the ta es at the tme of the ta payer s acqu-
ston of the property, regardess of whether the vendor was a resdent
or nonresdent of the ta dstrct and, further, that even f there was a
persona abty mposed on the vendor under New York aw, t
woud be neffectve, snce, under secton 172 of the New York Cty
charter, the ta es n queston dd not become due and the ta en dd
not attach unt October 1, 19 0, whch was after the acquston
of the property by the ta payer. In dda, Inc., supra, the Ta Court
hed that the ernhemer case was dstngushabe for the reason that,
as stated n the opnon of the Crcut Court of ppeas for the Second
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
39
29. 3-2.
Crcut n Commssoner v. LeRoy (1 2 Fed. (2d) 936, affrmng the
Ta Court, T. C. 70), The ssue there nvoved the rght of the
owner of property who reported ts ncome on the accrua bass to
accrue and deduct ta es after they had been assessed but before they
were due, where ownershp remaned unchanged, and added that
prvege accorded the ta payer to accrue ta es before they are due,
when hs books are kept and returns made on the accrua bass, does not
thereby mpose a abty to pay ta es before they become due.
The Ta Court decson n the dda, Inc., case was affrmed by the
Crcut Court of ppeas for the Second Crcut (171 Fed. (2d) 367)
on anuary 1 , 19 9. The court cted wth approva ts decson n
the LeRoy case, supra. Certorar was not apped for n the dda,
Inc., case.
In the LeRoy case the Crcut Court of ppeas for the Second
Crcut hed, ctng Magruder v. Suppee (316 U. S. 39 ; Ct. D. 1 9,
C. . 19 2-1, 173), that where rea property n a borough n New
York Cty, owned by a nonresdent of that borough, aganst whom,
under the genera ta aw, there s no persona abty for the pay-
ment of the ta on such property, was sod by such owner before the
ta es became a en on the property, the purchaser may deduct the fu
amount pad n satsfacton of such abty as ta es. The ureau
concuded that the decson dd not requre the modfcaton of any
e stng rungs. The nonacquescence n the LeRoy case was wth-
drawn, and the decson was acquesced n (C. . 19 6-1, 3). The
decsons of the Ta Court and the Crcut Court of ppeas for the
Second Crcut n the dda, Inc., case were foowed n the smar case
of Commssoner v. Lawrence Operatng Co. (See 1 2 Fed. (2d) 938,
C. C. .-2, affrmng the Ta Court s memorandum opnon of Feb-
ruary 3, 19 .)
The queston at ssue n the dda, Inc., case was aso at ssue n
Commssoner v. Mner otes, Inc., New York (173 Fed. (2d) 66,
certorar not apped for). In that case, the Crcut Court of ppeas
for the S th Crcut cted the decson of the Crcut Court of ppeas
for the Second Crcut n the dda, Inc., case, supra, and hed that
the second nstament of New York Cty rea estate ta es on a parce
of rea estate n the orough of Manhattan, purchased by the ta payer
on anuary 7,19 3, from a corporaton, a resdent of the same borough,
whch was pad by the ta payer on or about pr 1,19 3, accrued for
Federa ncome ta purposes on pr 1, 19 3, the due date of the
second nstament. (The case went to the Crcut Court of ppeas
for the S th Crcut because Mner otes, Inc., New York, the
ta payer-vendee, had ts prncpa offces n Detrot, Mch., and fed
ts Federa ncome ta returns n that cty.)
It s apparent that the decsons n the above cases were based argey
on the provsons of secton 172 of the charter of New York Cty
adopted November 3, 1936, effectve anuary 1, 1938, whch, as
amended to September 30, 19 6, and as now n effect, provdes n part
as foows:
ta es upon rea estate for each fsca year whch, under secton 111 of the
charter, begns on the 1st day of uy n each year and ends on the ensung 30th
day of une sha be due and payabe n two equa nstaments, the frst of
whch sha be due and payabe on the 1st day of October n such year, the second
of whch sha be due and payabe on the 1st day of pr n such year
ta es sha be and become ens on the rea estate affected thereby and
sha be construed as and deemed to be charged thereon ou the respectve days
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
29. 3-2.)
0
when they become due and payabe, and not earer, and sha reman such ens
unt pad.
though the Ta Court and the Crcut Court of ppeas for the
Second Crcut n ther decsons n the LeRoy and dda, Inc., cases
dstngushed, rather than overrued, the ernhemer decson, t seems
cear, n the fna anayss, that those courts are now of the opnon
that New York Cty rea estate ta es accrue, for Federa ncome ta
purposes, as of the dates on whch, under the charter of New York
Cty, the ta es become due and payabe and become ens, . e., on
October 1 and pr 1. The Crcut Court of ppeas for the S th
Crcut n the Mner otes, Inc., New York, case dd not refer to
the ernhemer decson, but cted and foowed the decson of the
Crcut Court of ppeas for the Second Crcut n the dda, Inc.,
case. Under these crcumstances, t s beeved that the ureau can
no onger hope to sustan the poston taken n I. T. 3 27, supra.
ccordngy, t s recommended that I. T. 3 27, whch hods that New
York Cty rea estate ta es accrue at the tme when, under the charter
of New York Cty, the rea property assessment ros are devered to
the coectng offcer wth warrants attached, be revoked, and that the
poston be taken that those ta es accrue, for Federa ncome ta pur-
poses, on the respectves dates when, under secton 172 of the charter
of New York Cty, they become due and payabe.
Chares Ophant,
Chef Counse, ureau of Interna Revenue.
Secton 29. 3-2: When charges deductbe. 19 9-18-13173
L T. 3968
INT RN L R NU COD
Corporatons whch accrued and deducted, for Federa ncome-ta
ta abe years ended uy 31, 19 8, to and ncudng December 31,
19 8, the New York State franchse ta at the rate of / percent w
be consdered to have propery accrued and deducted such ta . The
addtona ta of 1 percent made appcabe to such years by the
amendment to the New York State franchse ta aw whch became
effectve March 21, 19 9, shoud be accrued and aowed as a deduc-
ton n the Federn ncome ta returns of such corporatons for the
succeedng ta abe year.
dvce s requested as to the accrua, for Federa ncome ta pur-
poses, of the ncrease n the New York State franchse ta on busness
corporatons whch became effectve March 21,19 9.
Subdvson 1 of secton 210 of the New York State franchse ta
aw, added by chapter 1 of the Laws of New York, 19 , as amended,
was further amended by chapter 2 1 of the Laws of New York, 19 9,
by addng the foowng:
and provded, further, that the ta computed on the bass of a or
any part of each and every fsca or caendar year begnnng after uy 31, 19 7,
to the e tent computed on the bass of entre net ncome or entre net ncome pus
saares or on the porton thereof aocated wthn the State, sha be at the rate
of per centum nstead of per centum.
The ast-cted statute was enacted and became effectve on March 21,
19 9.
In an Norman Co. v. Wech (1 1 Fed. (2d) 99), decded by the
Unted States Crcut Court of ppeas for the Frst Crcut on
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
1
29. 3-2.
Mareh 8,19 , the court stated n part as foows: On the accrua bass
no attempt shoud be made to ncude thngs whch cannot be earned
unt beyond a reasonabe tme after the ta perod. That s to say,
the ta payer shoud not be requred to hod hs books open beyond a
reasonabe tme after the cose of the perod. (See I. T. 3672, C. .
19 , 11.)
The ureau has hed that the New York State franchse ta accrues
on the frst day of a corporaton s ta abe year. (See I. T. 3697, C. .
19 , 116.) new aw whch merey changes the rate of ta aton
ordnary does not change the otherwse recognzed accrua date.
(See G. C. M. 173 0, C. . -2, 81 (1936).) owever, where the
change n rate occurs after the cose of the corporaton s ta abe year,
consderaton must be gven to the queston whether the statute chang-
ng the rate was passed n ampe tme to aow the ta payer to read-
|ust ts accounts pror to the due date of the return. (See Fawcus
Machne Co. v. Unted States, 282 U. S. 37 ; Ct. D. 278, C. . -,
2 (1931).)
In the case of corporatons usng the accrua method of accountng
and havng ncome-ta ta abe years ended uy 31, 19 8, to and n-
cudng December 31,19 8, the aw changng the rate of the franchse
ta was not enacted unt after the due dates for fng ther Federa
ncome ta returns for such years.
ccordngy, t s hed that corporatons whch accrued and de-
ducted, for Federa ncome-ta ta abe years ended uy 31, 19 8, to
and ncudng December 31,19 8, the New York State franchse ta at
the rate of y2 percent w be consdered to have propery accrued and
deducted such ta . The addtona ta of 1 percent made appcabe
to such years by the amendment to the New York State franchse ta
aw whch became effectve March 21, 19 9, shoud be accrued and
aowed as a deducton n the Federa ncome ta returns of such
corporatons for the succeedng ta abe year. (See I. T. 38 9, C. .
19 7-1, 18, reatng to accrua of the New York State franchse ta
where the rate was retroactvey decreased.)
Secton 29. 3-2: When charges deductbe. 19 9-20-1319
I. T. 3971
INT RN L R NU COD
Date of accrua for Federa Income ta purposes of the New York
State franchse ta on busness corporatons for the perod begn-
nng November 1, 19 ( anuary 1, 19 , n the case of hodng cor-
poratons), and e tendng through any subsequent part of the ta -
payer s frst fsca or caendar year endng after such date.
I. T. 3697 (C. . 19 , 116) modfed.
Reconsderaton has been gven to that part of I. T. 3697 (C. . 19 ,
116) reatng to the accrua for Federa ncome ta purposes of the
New York State franchse ta mposed on busness corporatons by
secton 209.2, artce 9- , chapter 62 of the New York ta aw (as
added by secton 2, chapter 1 , Laws of 19 , effectve March 31,
19 ) for the transtona perod begnnng November 1, 19 ( an-
uary 1, 19 , n the case of hodng corporatons), and e tendng
through any subsequent part of the ta payer s frst fsca or caendar
year endng after such date, n vew of the decson n Durst Produc-
868872 0
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
29. 3-2.)
2
tons Corporaton v. Commssoner (8 T. C. 1326, acquescence, page
1, ths uetn).
1. T. 3697, supra, hods n part that wth respect to a corporaton
e ercsng ts franchse or dong busness n the State of New York
for a or any part of the perod begnnng November 1,19 ( anuary
1, 19 , for hodng corporatons), and e tendng through any sub-
sequent part of ts frst fsca or caendar year endng after that date
(the transtona perod), the franchse ta accrues on November 1,
19 ( anuary 1,19 , for hodng corporatons), and s deductbe n
the Federa ncome ta return of such corporaton for the ta abe year
whch ncudes November 1, 19 .
In Durst Productons Corporaton v. Commssoner, supra, the Ta
Court hed that the part of the ta mposed for the prvege of dong
busness durng the transtona perod whch s f ed by the ta payer s
ncome for ts fsca year ended May 31, 19 , was accruabe for Fed-
era ncome ta purposes on the ast mnute of May 31, 19 . The
Ta Court based ts concuson on Unted States v. nderson (269
U. S. 22; T. D. 3839, C. . -, 179 (1926)) and drected attenton
to G. C. M. 2 202 (C. . 19 7-1, 1 ), reatng to accrua of corporate
e cse and corporate franchse ta es mposed by the State of Tennessee.
Pror to March 31, 19 , the effectve date of artce 9- , chapter
62 of the New York ta aw, the New York State franchse ta was
computed upon the bass of facts n respect of ncome-ta ta abe
years whch ended mmedatey pror to the prvege years (begn-
nng November 1) for whch the ta was mposed, e cept that wth
respect to corporatons whose fsca years ended between uy 31 and
October 31, both dates ncusve, the ta was computed upon the bass
of facts n respect of the ncome-ta ta abe year pror to such a year
whch preceded the prvege year. The 19 aw was desgned,
among other thngs, to make the prvege year concde wth the
ncome-ta ta abe year the facts n respect of whch provded the
bass for the computaton of the ta . In makng such change, prov-
son was made for a transtona perod begnnng on November 1,
19 , and endng wth the cose of the ta payer s ncome-ta ta abe
year whch ncuded November 1, 19 . Secton 209.2, artce 9- ,
chapter 62 of the 19 aw, provdes as foows:
2. For the prvege of e ercsng ts franchse or dong busness n ths State
n a corporate or organzed capacty for a or any part of the perod begnnng
November 1, 10 , and e tendng through any subsequent part of ts frst fsca
or caendar year endng after sad date, every domestc or foregn corpora-
ton sha pay a ke franchse ta , to be computed by the ta com-
msson upon the bass of ts entre net ncome, or upon such other bass as
may be appcabe, for each and every fsca or caendar year or part thereof
begun not earer than ugust 1, 19 2, and endng not ater than October 31,
19 , durng whch such corporaton was e ercsng ts franchse or dong bus-
ness n ths State under the appcabe provsons of ths chapter, to the e tent
that such entre net ncome or other appcabe bass, as the case may be, has
not been used for the computaton of any franchse ta under ths chap-
ter. In ether case, such ta sha be deemed a snge ta for such
prvege perod but sha be computed separatey wth respect to each such
fsca or caendar year or part thereof on a report whch sha be fed on or
before the 1 th day of May ne t succeedng the cose of each such year, or,
f any such fsca year ends after the ast day of February and pror to uy 1,
wthn months after the cose of such fsca year, and sha be pad as heren-
after provded.
In vew of the foregong, t s hed that (1) the part of the New
York State franchse ta for the transtona perod whch s com-
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
3
29. 3-2.
puted upon the bass of facts n respect of ncome-ta ta abe years
ended on or after uy 31, 19 3, and not ater than March 31, 19 ,
accrued on March 31,19 , and (2) the part of such ta whch s com-
puted upon the bass of facts n respect of ncome-ta ta abe years
ended on or after pr 30, 19 , and not ater than October 31, 19 ,
accrued on the ast day of such ta abe years. I. T. 3697, supra, s
hereby modfed to accord wth such concusons. The concusons n
I. T. 3697, supra, that (1) the part of the franchse ta for the trans-
tona perod whch s computed on the bass of facts n respect of n-
come-ta ta abe years ended on or after November 30, 19 , and not
ater than October 31,19 , accrued on November 1,19 , and (2) the
franchse ta for ta abe years begnnng on or after December 1,19 ,
. e., ta abe years ended on or after November 30, 19 , accrued on
the frst day of such ta abe years, are not modfed.
Secton 29. 3-2: When charges deductbe. 19 9-21-13208
( so Secton 19. 3-2, Reguatons 103.) I. T. 3973
INT RN L R NU COD
Montgomery Count -, Md., rea estate ta es accrue for Federa
ncome ta purposes on May 1 of each year, begnnng May 1, 19 8.
Such ta es accrued on une 30 of each year for the years 19 1 to
19 7. both ncusve.
I. T. 3 3 (C. . 19 0-2, 73) s nappcabe wth respect to ta es
for years subsequent to 19 0.
dvce s requested as to the contnued appcabty of I. T. 3 3
(C. . 19 0-2, 73), reatng to the date of accrua of Montgomery
County, Md., rea estate ta es, n vew of the changes n the aws evy-
ng such ta es snce the promugaton of that rung.
The rung n I. T. 3 3 , supra, was predcated on the provsons of
secton 26 of artce 81, nnotated Code of Maryand (1939), whch
provded n part as foows:
cept ta es requred to be eved upon assessments made by the State ta
commsson, a ordnary county and cty ta es sha he eved for the same perod
as now prescrbed by oca aw, and a ordnary State, county and cty ta es sha
be eved as of the same date of fnaty as now prescrbed by oca aw; pro-
vded ( ) that n any county or cty n whch the date of fnaty s not
now specfcay prescrbed by statute, a State, county and cty ta es sha be
eved as of the 1st day of anuary of each year as the date of fnaty.
Inasmuch as a date of fnaty was not specfcay prescrbed by
statute for ta es on rea estate n Montgomery County, t was hed n
I. T. 3 3 , supra, that snce such ta es woud generay be assessed
as of anuary 1, that date woud be consdered as the accrua date for
Federa ncome ta purposes. It shoud be noted, however, that chap-
ter 278 of the Laws of Maryand, 19 1, added secton 168 to the Code
of Pubc Loca Laws of Montgomery County (1939 edton). Sec-
ton 168 provded that the date of fnaty for the evyng of a ta es
shoud be une 30 n each year. That provson of aw was n effect
from March 31, 19 1, unt December 31, 19 7. Chapter 72 of the
Laws of Maryand, 19 7, approved pr 2 ,19 7, effectve anuary 1,
19 8, repeaed and reenacted, wth amendments, secton 168 of the
Montgomery County Code (1939 edton). That secton now provdes
as foows:
168 . In Montgomery County the date of fnaty for the evyng of a ta es
whch the county commssoners are now or may hereafter be authorzed to evy
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
29. 3-2.

sha be May 1 n each year and a such ta es sha be eved for a ta abe year
begnnng on the 1st day of uy and endng on the 30th day of une n the ne t
caendar year, and the State and county ta es sha be eved not ater than the
1st day of uy n each year; provded, however, that nothng heren contaned
sha be construed to prevent the evyng of any assessment for front foot beneft
charges or speca beneft assessments for speca mprovements by the county
commssoners of Montgomery County sttng as the dstrct counc for the Mont-
gomery County Suburban Dstrct, at any such tme as the sad dstrct counc
sha determne the speca beneft thereunder.
ccordngy, t s hed that Montgomery County, Md., rea estate
ta es accrue for Federa ncome ta purposes on May 1 of each year,
begnnng May 1, 10 8. Such ta es accrued on une 30 of each year
for the years 19 1 to 19 7, both ncusve.
I. T. 3 3 , supra, s nappcabe wth respect to ta es for years sub-
sequent to 19 0.
Secton 29. 3-2: When charges deductbe. 19 9-2 -132 0
I. T. 398
INT RN L R NU COD
egnnng wth the property ta year ended on November 30,
19 , rea and persona property ta es n the State of Coorado
accrue, for Federa Income ta purposes, on March 1 of the property
ta year for whch eved.
I. T. 3021 (C. . -2, 1 (1930)) s napp .cabe wth respect
to ta es for property ta years endng after November 30, 19 3.
dvce s requested as to the proper accrua date, for Federa
ncome ta purposes, of rea and persona property ta es mposed
by the State of Coorado pursuant to the provsons of chapter 1 2
of the 193 Coorado Statutes nnotated, as amended by chapter 1 8
of the Sesson Laws of 19 3.
I. T. 3021 (C. . -2, 1 (1936)), pubshed under the Revenue
cts of 1932 and 193 pror to the 19 3 amendment of chapter 1 2 of
the 193 Coorado Statutes nnotated, hods that rea and persona
property ta es n the State of Coorado accrue, for Federa ncome
ta purposes, on pr 1 of each year.
The pertnent sectons of chapter 1 2 of the 193 Coorado Statutes
nnotated, as amended (effectve anuary 1, 19 ) by chapter 1 8
of the Sesson Laws of 19 3, provde n part as foows:
Sec. 3. Ta Leved Lkn Propehty Omtted Sub|ect to Ta . ta es,
sha be eved for the fsca year whch sha end wth November thr-
teth.
Sec. . Len to ttach on March Frst at Tweve O cock Merdan.
The en of genera ta es for the current ta year sha attach to a property,
rea and persona, not e empt by aw, on the frst day of March, at tweve
o cock merdan, n each year.

Sec 8. Ta payer Requred to Fe Schedue Wth ssessor. On the
frst day of March, or as soon thereafter as practcabe, the assessor or hs deputy
sha ca upon each nhabtant of hs county and obtan from each
person a statement under oath, settng forth specfcay a the rea and persona
property owned by such person, or n hs possesson, or under hs contro, at
tweve o cock merdan and t s hereby requred that such person sha fe
such statement wth the assessor between the frst day of March and May of
each year

Sec. 0. Owner to Descrbe Rea state Descrpton of Mnng Cams.
Overy property owner makng any such schedue sha set down, theren a
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e

.
rea estate stuated wthn the county by hm owned or controed on the frst
day of March of the then current year, descrbng the same

Sec. 72. Persona Property Lsted and ssessed March Fkst. persona
property wthn ths State on March frst at tweve o cock merdan n the then
current year sha be sted and assessed n the county where t sha be on sad
March frst.
It s hed that begnnng wth the property ta year ended No-
vember 30, 19 , rea and persona property ta es n the State of
Coorado accrue, for Federa ncome ta purposes, on March 1 of the
property ta year for whch eved. It s further hed that I. T.
3021, supra, s nappcabe wth respect to ta es for property ta
years endng after November 30, 19 3.
Secton 19. 3-2, Reguatons 103: When charges 19 9-17-131
deductbe. I. T. 396
INT RN L R NU COD
Revocaton of I. T. 3 27 (C. . 19 2-1, 3)
In accordance wth the recommendaton contaned n G. C. M. 26069
(page 38, ths uetn), I. T. 3 27 (C. . 19 2-1, 3) s herepy revoked.
P RT . R TURNS ND P YM NT OF T
S CTION . PU LICITY OF R TURNS
19 9-19-13190
T. D. 7 0
TITL 26 INT RN L R NU . C PT R I, SU C PT R , P RT 8.
INSP CTION OF R TURNS
Reguatons governng the nspecton of ncome, e cess-profts,
and decared vaue e cess-profts ta returns by the Mtary Rene-
gotaton Pocy and Revew oard.
Treasury Department,
Washngton 2 , D. C.
To Coectors of Interna Revenue and Others Concerned:
Secton 8.30 . Inspecton by Mtary Renegotaton Pocy
and Revew oabd. Pursuant to the provsons of sectons (a),
08, 603, and 729(a) of the Interna Revenue Code, ncome, e cess-
frofts, and decared vaue e cess-profts ta returns made under the
nterna Revenue Code, as amended, for the year 1939 and subsequent
years sha be open to nspecton by the Mtary Renegotaton Pocy
and Revew oard. The nspecton of such returns heren authorzed
may be made by any offcer or empoyee of such oard duy authorzed
by the Charman of the oard to make such nspecton. Upon wrtten
notce by the Charman to the Secretary of the Treasury, statng the
casses of returns whch t s desred to nspect, the Secretary of the
Treasury and any offcer or empoyee of the Treasury Department,
wth the approva of the Secretary of the Treasury, may furnsh the
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
.
6
oard wth any data on such returns or make the returns, or any of
them, avaabe n the Offce of the Commssoner of Interna Revenue
for nspecton and takng of such data as the Charman may desgnate.
The nformaton so obtaned may be pubshed or dscosed n stats-
tca form, provded such pubcaton does not dscose, drecty or n-
drecty, the name or address of any ta payer.
Ths Treasury Decson sha be effectve upon ts fng for pubca-
ton n the Federa Regster.
( . 0.10076, September 1,19 9, and sectons (a), 08,603,729(a);
3 Stat. 29, 111; Stat. 97 , 989; 26 U. S. C. (a), 08, 603, 729(a).)
ohn W. Snyder,
Secretary of the Treasury.
pproved September 1,19 9.
arry S. Truman,
The Whte ouse.
(Fed wth the Dvson of the Federa Regster September 1, 19 9, : 3 p. m.)
CUTI ORD R INSP CTION OP INCOM , C SS-PROFITS. ND D -
CL R D LU C SS-PROFITS T R TURNS 1ST T MILIT RY R -
N GOTI TION POLICY ND R I W O RD
y vrtue of the authorty vested n me by sectons (a), 08, 603,
and 729(a) of the Interna Revenue Code ( 3 Stat. 29, 111, Stat.
97 , 989; 26 U. S. C. (a), 08, 603, and 729(a)), and n the nterest
of the nterna management of the Government, t s hereby ordered
that ncome, e cess-profts, and decared vaue e cess-profts ta re-
turns made under the Interna Revenue Code for the year 1939 and
subsequent years sha be open for nspecton by the Mtary Renego-
taton Pocy and Revew oard, sub|ect to the condtons stated n the
Treasury Decson reatng to the nspecton of returns by such oard,
approved by me ths day.
Ths Order sha be pubshed n the Federa Regster.
arry S. Truman,
The Whte ouse.
September 1, 19 9.
(Fed wth the Dvson of the Federa Regster September 1, 19 9, :3 p. m.)
19 9-26-1326
T. D. 76
TITL 20 INT RN L R NU . C PT R I, SU C PT R . P RT 8.
SU P RT C INSP CTION UND R SP CI L CUTI ORD RS
Reguatons governng the nspecton of corporaton ncome ta
returns by the Federa Trade Commsson.
Treasury Department,
Washngton 2 ,1). C.
To Coectors of Interna Revenue and Others Concerned:
Sec. 8.303a. Inspecton by Federa Trade Commsson of Cor-
poraton Income Ta Returns. (a) Pursuant to the provsons of
secton (a) of the Interna Revenue Code ( 3 Stat. 29; Stat.
1008; Stat. 722; 26 U. S. C. (a)), and n the nterest of the n-
terna management of the Government, corporaton ncome ta returns
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
7
.
made for the caendar year 19 9 and fsca years endng n the caendar
year 19 9 and for any ta abe year endng after une 30, 19 9, and
before uy 1, 19 0, sha be open to nspecton by the Federa Trade
Commsson as an ad n e ecutng the powers conferred upon such
Commsson by the Federa Trade Commsson ct of September 26,
191 , 38 Stat. 717. The nspecton of such returns heren.authorzed
may be made by any offcer or empoyee of the Federa Trade Com-
msson duy authorzed by the Charman of the Federa Trade
Commsson to make such nspecton. Upon wrtten notce by the
Charman of the Federa Trade Commsson to the Secretary of the
Treasury, the Secretary and any offcer or. empoyee of the Treasury
Department, wth the approva of the Secretary of the Treasury,
may furnsh the Federa Trade Commsson wth any data on such
returns or may make the returns avaabe n the offce of the Comms-
soner of Interna Revenue for the takng of such data as the Charman
of the Federa Trade Commsson may desgnate. ny nformaton
thus obtaned sha be hed confdenta e cept to the e tent that t
sha be pubshed or dscosed n statstca form, provded such
pubcaton sha not dscose, drecty or ndrecty, the name or
address of any ta payer.
(b) Ths Treasury Decson sha be effectve upon ts fng for
pubcaton n the Federa Regster.
. . Foey, r.,
ctng Secretary of the Treasury.
pproved December 6, 19 9.
arry S. Truman,
The Whte ouse.
(Fed wth the Dvson of the Federa Regster December 7, 19 9, 11:00 a. m.)
CUTI ORD R INSP CTION OF INCOM T R TURNS Y F D R L
TR D COMMISSION
y vrtue of the authorty vested n me by secton (a) of the
Interna Revenue Code ( 3 Stat. 29; Stat. 1008; Stat, 722; 26
U. S. C. (a)), and n the nterest of the nterna management of the
Government, t s hereby ordered that corporaton ncome ta returns
made for the caendar year 19 9 and fsca years endng n the caen-
dar year 19 9 and for any ta abe year endng after une 30,19 9, and
before uy 1, 19 0, sha be open to nspecton by the Federa Trade
Commsson as an ad n e ecutng the powers conferred upon such
Commsson by the Federa Trade Commsson ct of September 26,
191 , 38 Stat. 717, such nspecton to be n accordance and upon com-
pance wth the rues and reguatons prescrbed by the Secretary of
the Treasury n the Treasury Decson reatng to the nspecton of
returns by the Federa Trade Commsson, approved by me ths date.
Ths ecutve order sha be effectve upon ts fng for pubcaton
n the Federa Regster.
arry S. Truman.
The Whte ouse,
December 6,19 9.
( . O. 10090)
(Fed wth the Dvson of the Federa Regster December 7, 19 9, 11:06 a. m.)
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
29.117-. 8
SU C PT R C SUPPL M NT L PRO ISIONS
SUPPL M NT . COMPUT TION OF N T INCOM
S CTION 113(a). D UST D SIS FOR D T RMINING
G IN OR LOSS: SIS (UN D UST D) OF PROP RTY
Secton 29.113(a)( )-: ass of property
acqured by bequest, devse, or nhertance.
INT RN L R NU COD
Determnaton of gan or oss from sae of rea property by fe
tenant and remandermen. (See I. T. 397 , beow.)
S CTION 117. C PIT L G INS ND LOSS S
Secton 29.117-1: Meanng of terms. 19 9-22-13216
( so Secton 29.117-7; Secton 113(a), I. T. 397
Secton 29.113(a) ( )-.)
INT RN L R NU COD
Treatment for Federa ncome ta purposes of gan or oss reazed
upon the sae of a farm by a fe tenant and remandermen, each of
whom had a fee nterest n addton to hs fe or remander nterest.
dvce s requested wth respect to the treatment for Federa ncome
ta purposes of gan or oss reazed upon the sae of a farm by a fe
tenant (the ta payer) and the remandermen, each of whom had a fee
nterest n the farm n addton to hs fe or remander nterest.
In the case under consderaton, the ta payer s husband ded ntes-
tate n 1936, possessed of a 197-acre farm. y court decree, 80 acres
(on whch a budngs were stuated) of the farm were receved by
the ta payer as a homestead for use durng her fe, and, n addton,
she obtaned the fee n one-thrd of the remanng 117 acres. Three
sons receved the remander n the homestead and the fee n the other
two-thrds of the remanng 117 acres. In 19 , one son ded ntestate,
and the ta payer nherted hs nterest n the property. The entre
farm was occuped and operated by the ta payer unt t was sod n
19 . t no tme dd the sons assert any contro or authorty wth
respect to ther nterests n the farm.
Secton 117(a) (1) of the Interna Revenue Code provdes n part as
foows:
(1) Capta assets. The term capta assets means property hed by
the ta payer but does not ncude rea property used
n the trade or busness of the ta payer;
Secton 117(|) (1) of the Code provdes n part as foows:
(1) Defnton of property used n the trade or busness. For the
purposes of ths subsecton, the term property used n the trade or busness
means property used n the trade or busness, of a character whch Is sub|ect
to the aowance for deprecaton provded n secton 23(1), hed for more
than 6 months, and rea property used n the trade or busness, hed for more
thnn 0 months, whch s not ( ) property of a knd whch woud propery be
ncudbe n the nventory of the ta payer f on hand at the cose of the
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
9
29.117-1.
ta abe year, or ( ) property ed by the ta payer prmary for sae to
customers n the ordnary course of hs trade or busness.
The operaton of a farm for proft consttutes a trade or busness.
(Cf. sec ton 29.23(a)-11 of Reguatons 111.) fe estate n and s
rea property. (See e ander et a. v. Goeert et a., 109 Par. (2d)
1 6,1 8, 1 8 an. 202: see aso Natona ank of merca of Sana v.
arrtt et a.. 18 Pac. (2d) 2,136 an. 870, and Santary Dstrct of
Chcago v. Manasse, 2 N. . (2d) 3, 380 111. 27.) ccordngy,
e cept for the dweng and the and whch the ta payer occuped as a
resdence, the ta payer s nterest n the homestead (80 acres), as we
as her nterest n fve-nnths of the remanng 117 acres, consttuted
rea property used n the trade or busness of the ta payer, and the
gan or oss reazed by her from the sae of such nterests s sub|ect
to the treatment prescrbed by secton 117(|) (2) of the Interna Rev-
enue Code.
The dweng and the and consttutng the persona resdence of the
ta payer were not used n farmng operatons. Consequenty, the ta -
payers nterests n that part of the homestead consttuted capta
assets, and the gan or oss attrbutabe thereto s a capta gan or oss.
Smary, snce the sons dd not make any use of ther nterests n the
farm, such nterests were capta assets, and the gans or osses attrb-
utabe thereto are capta gans or osses.
The varous nterests of the ta payer n the farm at the tme of the
sae may, for convenence, be dvded nto the foowng categores:
(a) those nherted from her husband n 1936, (b) those nherted from
her son who ded n 19 , and (c) the fee nterest acqured by merger
of the nterests nherted from both her husband and her son.
(a) s to the fee nterest n one-thrd of the 117 acres acqured by
the ta payer from her husband, t s cear that, pursuant to secton
113(a) ( ) of the Code, ts bass woud be one-thrd of the vaue of the
117 acres on the date of death of the husband n 1936. s to the fe
estate n an undvded two-thrds of the 80-acre homestead, the bass
of such property nterest s aso estabshed under secton 113(a) ( ) of
the Code, ad|usted to the tme of sae as contempated n secton 29.113
(a)( )- of Reguatons 111. The method set forth n I. T. 3911
(C. . 19 8-1, 66) for computng such ad|usted bass under the regu-
atons shoud be foowed. s to the fe estate n one-thrd of the
homestead whch was merged nto the fee at the death of one of the
remandermen n 19 , see paragraph (c), beow.
(b) The nterests nherted by the ta payer from the son who ded
n 19 consst of a fee nterest n two-nnths of the 117 acres and a
remander nterest n one-thrd of the 80-acre homestead. Under sec-
ton 113(a) ( ) of the Code, the bass of the fee nterest woud be two-
nnths of the vaue of the 117 acres at the date of the son s death n
19 . The deceased son s remander nterest n one-thrd of the home-
stead, havng been merged wth the ta payer s fe nterest n the
homestead, ceased to e st at the tme of the son s death and presents a
dfferent probem whch s dscussed n (c), beow.
(c) Wth regard to the ta payer s one-thrd nterest n the fee of the
80-acre homestead, t s cear that such fee nterest came nto beng
upon the merger of one-thrd of her fe estate wth one-thrd of an
undvded remander nterest n the homestead. (See 1 Tffany, Rea
Property (3d ed. 1939) sec. 70; 1 Restatement, Property (1930), sec.
1 2.) ence, the bass of such fee nterest s computed by addng the
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
29.117-1.
0
bass of the remander nterest whch she nherted from her son to the
bass of her fe estate theren at the tme of the merger. Snce the
ta payer nherted the remander nterest n 19 , t s hed that she s
entted to the beneft of the substtuted bass provded n secton
113(a)( ) of the Code as to such nterest. ccordngy, the bass
of such remander s to be determned by reference to the 19 vaue of
the homestead. The bass of the merged fe nterest shoud be deter-
mned wth reference to the 1936 vaue of the homestead, ad|usted to
the tme of merger, n accordance wth secton 29.113(a) ( )- of Reg-
uatons 111. For the method of such determnatons, see I. T. 3911,
supra.
In concuson, gan or oss shoud be determned by the dfference
between the bases assgned to the varous nterests and the portons of
the proceeds aocabe to such nterests. (See I. T. 3911, supra.)
Secton 29.117-1: Meanng of terms. 19 9-2 -13237
I. T. 3979
INT RN L R NU COD
Retroactve appcaton of G. C. M. 2 910 (C. . 19 6-1, 101) and
I. T. 3803 (C. . 19 6-1, 103).
dvce has been requested as to the retroactve appcaton of
G. C. M. 2 910 (C. . 19 6-1,101) and I. T. 3803 (C. . 19 6-1, 103).
G. C. M. 2 910, supra, hods that a bank, mortgage fnance company,
budng and oan assocaton, or an nsurance company (other than a
fe nsurance company) whch s offerng for sae parces of rea
estate on whch t has been compeed to forecose, or persona prop-
erty taken over n satsfacton of debts, s not hodng property pr-
mary for sae to customers n the ordnary course of
trade or busness wthn the provsons of secton 117(a) (1) of the
Interna Revenue Code and correspondng provsons of pror revenue
aws. Gans or osses ncurred n such saes are to be treated as cap-
ta gans or osses and not as ordnary gans or osses. G. C. M. 2 910
revoked a contrary rung n G. C. M. 21 97 (C. . 1939-2, 187), and
I. T. 3803, supra, revoked contrary rungs n I. T. 3336 (C. . 1939-2,
189) and I. T. 3600 (C. . 19 3, 369). G. C. M. 2 910 stated that
G. C. M. 21 97,1. T. 3336, and I. T. 3600 were n confct wth the dec-
son of The Ta Court of the Unted States n The anawha aey
ank v. Commssoner ( T. C. 2 2, acquescence, C. . 19 6-1, 3).
In vew of the fact that pubcaton of acquescence n the decson
of the Ta Court n The anawha aev ank case and pubcaton
of G. C. M. 2 910 and I. T. 3803 occurred after anuary 1, 19 6, t
s hed that G. C. M. 2 910 and I. T. 3803 w not be apped to ta abe
years ended pror to anuary 1, 19 6, uness such appcaton s re-
quested by the ta payer. Ths rung s ssued pursuant to authorty
contaned n secton 3791(b) of the Interna Revenue Code.
Geo. . Scoeneman,
Commssoner of Interna Revenue.
pproved October , 19 9.
Thomas . Lynch,
ctng Secretary of the Treasury.
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
1
29.117- .
Secton 29.117- : Determnaton of perod for 19 9-2 -132 1
whch capta assets are hed. I. T. 398
INT RN L R NU COD
Determnaton of the hodng perod of securtes purchased and
sod where the provsons of secton 117(h)( ) of the Interna
Revenue Code, reatng to wash saes, are appcabe.
dvce s requested wth respect to the determnaton of the hod-
ng perod of securtes purchased and sod where the provsons of
secton 117(h)( ) of the Interna Revenue Code, reatng to wash
saes, are appcabe, partcuary whether the perod shoud be de-
termned by the use of days or otherwse.
In the nstant case, the ta payer purchased 1,000 unts of certan
securtes on May 16, 19 7, and sod them on ugust 2, 19 7, at a oss.
e had purchased the same number of unts of substantay dentca
securtes on anuary 1 ,19 7, and February 19,19 7, and sod them at
a oss on March 1,19 7, and pr 19,19 7, respectvey. e acqured
no substantay dentca securtes wthn ether 30 days before or 30
days after ugust 2, 19 7. The securtes nvoved were capta
assets, as denned n secton 117(a) (1) of the Code.
Secton 117(a) (2), (3), ( ), and ( ) of the Code provdes as
foows:
(a) Defntons. s used n ths chapter Chapter 1 of the Code

(2) Short-term capta gan. The term short-term capta gan means
gan from the sae or e change of a capta asset hed for not more than
6 months, f and to the e tent such gan s taken nto account n computng
net ncome;
(3) Short-term capta oss. The term short-term capta oss means
oss from the sae or e change of a capta asset hed for not more than 6
months, f and to the e tent such oss s taken nto account n computng
net ncome;
( ) Long-term capta gan. The term ong-term capta gan means
gan from.the sae or e change of a capta asset hed for more than 6
months, f and to the e tent such gan s taken nto account n computng
net ncome;
( ) Long-term capta oss. The term ong-term capta oss means
oss from the sae or e change of a capta asset hed for more than 6 months,
f and to the e tent such oss s taken nto account n computng net ncome;
Secton 117(h) ( ) of the Code provdes as foows:
(h) Determnaton ok Ferod for Whch ed. For the purpose of ths
secton

( ) In determnng the perod for whch the ta payer has hed stock
or securtes the acquston of whch (or the contract or opton to acqure
whch) resuted In the nondeductbty (under secton 118 of ths chapter
Chapter 1 of the Code or secton 118 of the Revenue ct of 1928, Stat.
826, or the Revenue ct of 1932, 7 Stat. 208, or the Revenue ct of 193 ,
8 Stat. 71 , or the Revenue ct of 1936, 9 Stat. 1692, or the Revenue ct
of 1938, 2 Stat. 03, reatng to wash saes) of the oss from the sae or
other dsposton of substantay dentca stock or securtes, there sha
be Incuded the perod for whch he hed the stock or securtes the oss
from the sae or other dsposton of whch was not deductbe.
Secton 118(a) of the Code provdes as foows:
(a) In the case of any oss camed to have been sustaned from any sae or
other dsposton of shares of stock or securtes where t appears that, wthn
a perod begnnng 30 days before the date of such sae or dsposton and endng
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
29.117- .
2
30 days after such date, the ta payer has acqured (by purchase or by an e -
change upon whch the entre amount of gan or oss was recognzed by aw), or
has entered nto a contract or opton so to acqure, substantay Identca stock
or securtes, then no deducton for the oss sha be aowed under secton
23(e)(2) ; nor sha such deducton be aowed under secton 23(f) uness the
cam s made by a corporaton, a deaer n stocks or securtes, and wth respect
to a transacton made n fte ordnary course of ts busness.
It s the poston of the ureau that the determnaton of the hod-
ng perod of capta assets under secton 117(a) (2), (3), ( ), ( ),and
(h) ( ), supra, must be made wth reference to caendar months and
fractons thereof rather than wth reference to days. In . T. Wer v.
Commssoner (10 T. C. 996, affrmed per curam, 173 Fed. (2d) 222),
t was hed that the hodng perod of shares of stock acqured on May
1, 19 , and sod on November 1, 19 , was not more than 6 months
even though such perod conssted of at east 18 days (more than one-
haf of the year 19 f the perod be determned by the use of days).
Smary, t was hed n /. Gcrber oofne v. Commssoner (7 T. C.
1136, affrmed, 166 Fed. (2d) 0 , certorar dened, 33 U. S. 833) that
where the pettoner, a ctzen of the Unted States, eft the Unted
States on uy 1,19 2, and dd not return unt uy, 19 , he was not,
wthn the meanng of secton 116(a) of the Code, a bona fde nonres-
dent of the Unted States for more than s months durng the ta abe
year 19 2, even though the perod of hs absence durng that year
conssted of more than 183 days (more than one-haf of the year 19 2
f the perod be determned by the use of days).
It s reasonabe to presume that Congress, m usng the term months
n the statute here concerned, ntended that any we-estabshed and
approprate methods or rues of computaton pertanng to such unts
of tme shoud be adopted n appyng t he statute, n the absence of any
provson theren to the contrary. Federa as we as State courts, n
nterpretng the statutory e pressons s months and month, have
repeatedy hed that, uness a contrary ntent s evdenced, the term
s months means s caendar months, and the word month denotes
a caendar month (regardess of whether the month or months of the
caendar nvoved have 28, 29, 30, or 31 days) whch s a perod term-
natng wth the day of the succeedng month (of the caendar) numer-
cay correspondng to the day (date) of ts begnnng, ess one, e cept,
f there be no correspondng day of the succeedng month, such perod
termnates wth the ast day of the succeedng month. Under such
caendar-month computaton rue, a securty sod on February 28,19 7,
was hed for a month whether t was acqured on anuary 28, 29, 30,
or 31 of that year. Consstenty, a securty sod on February 29, 19 8,
was hed for a month whether t was acqured on anuary 29, 30, or
31 of that eap year.
It shoud be noted that the caendar-month computaton rue does not
requre e cuson partcuary of ether the begnnng date or the
endng date of the perod but merey of one day, . e., ess one, so as
to emnate dupcaton and avod computatons of fractons of days.
(Cf. Daey v. nderson et a., 7 Wyo. 1, 8 Pac. 839.)
The above-stated caendar-month computaton rue does not, how-
ever, ncorporate any method or rue for computng fractons of a
month for the purposes of secton 117(a) (2), (3), ( ), ( ), and
(h) ( ), supra, where a perod s ess than a (caendar) month.
It s the poston of the ureau that ony one fracton shoud be
computed where there s but a snge hodng perod of ess than a ca-
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
3
29.117- .
endar month, even though the perod ncudes parts of two dfferent
months of the caendar. For e ampe, where a securty was acqured
on anuary 1 ,19 7, and sod on February 1 ,19 7, the hodng perod,
under the we-estabshed caendar-month computaton rue set forth
above, was one day short of a caendar month, whereas f t be consd-
eredthat the securty was hed | of a month n anuary and Y2s
a month n February, such fractons of months woud tota more
than a (whoe) month. Conversey, where a securty was acqured
on February 1 , 19 7, and sod on March 13, 19 7, the hodng perod
was ony one cay short of a caendar month, whereas f t be consdered
that the securty was hed 9 of a month n February and of a
month n Mnrch, the tota of the fractons woud be more-than two
days short of a caendar month. Thus, t s cear that t woud be
erroneous to compute a snge hodng perod of ess than a caendar
month by the use of two fractons, even though the perod ncudes
parts of two dfferent months of the caendar.
It s aso the poston of the ureau that n the computaton of a
hodng perod for the purposes of secton 117(a) (2), (3), ( ), ( ),
and (h)( ), supra, whch s ess than a caendar month and ncudes
parts of two dfferent months of the caendar, the fracton of a month
shoud be formed by usng as the numerator the number of days n the
entre fractona-month perod (ess one) and usng as the denomna-
tor the number of days n the month (of the caendar) mmedatey
precedng the month n whch the hodng perod ends. (See e ampes
1 and 2, beow.)
Consstenty, where a hodng perod ncudes, n addton to one
or more whoe (caendar) months, a fracton of a month whch
ncudes parts of two dfferent months of the caendar, such fracton
shoud be formed by usng as the numerator the number of days
remanng of the entre hodng perod after frst computng the part
thereof whch conssts of a whoe month or months (usng the
above-stated caendar-month computaton rue) and usng as the de-
nomnator the number of days n the month (of the caendar) m-
medatey precedng the month n whch the entre hodng perod
ends. (See e ampes 3 and , beow.)
euded n ony one month of the caendar, such fracton of a month
shoud, of course, be formed by usng as the numerator the number
of days n the fractona-month perod and usng as the denomnator
the number of davs n the partcuar month of the caendar n whch
the perod s ncuded. That rue s aso appcabe n computng
the fracton of a month nvoved where such a fractona-month
perod s ncuded n a hodng perod whch aso ncudes one or
more whoe (caendar) months. (See e ampes and 6, beow.)
ampe 1. Where a securty was acqured on anuary 1 , 19 8,
and sod on February 1 , 19 8, the entre (fractona-month) hodng
perod conssts of 10 days n anuary and 1 days n February, or 30
days. That fgure, 30, shoud be used as the numerator. anuary,
the month mmedatey precedng the month (of the caendar) n
whch the hodng perod ends (February), has 31 days. That fgure,
31, shoud be used as the denomnator. Thus, the securty was hed
for of a month.
ampe 2. Smary, a securty acqured on February 1 , 19 8,
and sod on March 13, 19 8, was hed for 2S/29 of a month.
(caendar) month s n
| . 0 It , 1 S
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
29.117- .

ampe 3. Where a securty was acqured on November 1 , 19 8,
and sod on February 1 , 19 9, the perod t was hed ncudes two
whoe (caendar) months (November 1 ,19 8, to anuary 1 ,19 9).
The number of days ncuded n the entre perod, n addton to those
two months (16 days n anuary and 1 days n February), s 30.
That fgure, 30, shoud be used as the numerator of the fracton of
a month ncuded n the hodng perod. anuary, the month m-
medatey precedng the month (of the caendar) n whch the hodng
perod ends (February), has 31 days. That fgure, 31, shoud be
used as the denomnator of such fracton. The securty, accordngy,
was hed for 2so/31 months.
ampe - Smary, a securty acqured on November 1 , 19 8.
and sod on March 1 , 19 9, was hed for 32 8 months.
ampe . securty acqured on March 1, 19 9, and sod on
March 31,19 9, was hed for 3 /31 of a month.
ampe 6. Consstenty, a securty acqured on November 1 ,
19 8, and sod on February 28, 19 9, was hed for 3 8 months.
The rue appcabe n computng a fracton of a month whch
ncudes parts of two dfferent months of the caendar must be con-
formed to the e cepton n the caendar-month computaton rue here-
nbefore outned that, uness a dfferent ntent s ndcated, a
month s a perod of tme termnatng wth the day of the succeedng
month (of the caendar) numercay correspondng to the day (date)
of the month of ts begnnng, ess one, e cept f there be no correspond-
ng day of the succeedng month the perod termnates wth the ast
day of the succeedng month. (See e ampe 7, beow.)
ampe 7. s herenbefore ndcated, under the caendar-month
computaton rue, ncudng the sad e cepton, a securty acqured
on ether anuary 28, 29, 30, or 31, 19 9, and sod on February 28,
19 9, was hed for a whoe month. Conformng thereto the frac-
tona-month computaton rue appcabe where the fracton of a
(caendar) month nvoved ncudes parts of two dfferent months
of the caendar, a securty acqured on ether anuary 28, 29, 30, or 31,
19 9, and sod on February 27, 19 9, was hed for /s 0f a month,
snce the begnnng date of the fractona month s n a month of the
caendar ( anuary) whch has 31 days, whch number, therefore, s
the denomnator, and the securty havng been hed one day ess than
a (caendar) month under the sad e cepton to the genera caendar-
month computaton rue, a number of one ess than 31, or 30, s the
numerator of the fracton.
ppyng the foregong computaton methods or rues to the nstant
case (see tabe beow), the tota hodng perod, determned under
secton 117(a) (3), ( ), and (h) ( ), supra, of the securtes purchased
on May 16,19 7, and sod on ugust 2,19 7, s more than 6 months,
even though such perod conssted of ony 182 days.
Substantay dentca securtes
Date pur-
chased
Date sod
Number of
months
hed
Lot 1.000 unts
an. 1 ,19 7
Feb. 19,19 7
May 16,19 7
Mar. 1,19 7
pr. 19,19 7
ug. 2,19 7
Mt
Lot 1,000 unts
2
Lot C 1,000 unts
2
6tt
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
23.11, Regs. 10 .
Secton 29.117-7: Gans and osses from nvountary
conversons and from the sae or e change of certan
property used n the trade or busness.
INT RN L R NU COD
Sae by fe tenant of an nterest n a farm. (See I. T. 397 ,
page 8.)
S CTION 119. INCOM FROM SOURC S WIT IN
UNIT D ST T S
Secton 19.119- , Reguatons 103: Rentas
and royates.
INT RN L R NU COD
Lump-sum advance payments to nonresdent aen author for e cu-
sve pubcaton rghts n Unted States. (See Ct. D. 1722, page 62.)
Secton 29.119-10: pportonment of deductons.
INT RN L R NU COD
Traveng e penses of nonresdent aen ndvdua. (See G. C. M.
26013, page 76.)
SUPPL M NT D. R TURNS ND P YM NT OF T
S CTION 1 1. CONSOLID T D R TURNS
Secton 23.11, Reguatons 10 : Consodated 19 9-2 -13238
returns for subsequent years. I. T. 3980
INT RN L R NU COD
Fng of consodated Federa ncome ta returns for the caendar
year 19 9 by affated corporatons whch fed such returns for the
caendar year 19 8.
dvce s requested whether, under the provsons of cause (2) of
secton 23.11(a) of Reguatons 10 , affated corporatons whch fed
consodated Federa ncome ta returns for the caendar year 19 8
may eect to fe separate Federa ncome ta returns for the caendar
year 19 9.
It s hed that the condtons stated n cause (2) of secton 23.11(a)
of Reguatons 10 for the aowance of a new eecton do not e st
wth respect to the caendar year 19 9. ccordngy, affated corpo-
ratons whch fed consodated Federa ncome ta returns for the
caendar year 19 8 w not be permtted to fe separate Federa ncome
ta returns for the caendar year 19 9 uness one of the other cond-
tons provded n secton 23.11(a) of Reguatons 10 s met, or uness
a subsequent change n the aw or reguatons shoud gve rse to an
occason for an eecton for such year.
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
29.1 3-1.
6
S CTION 1 3. WIT OLDING OF T T SOURC
Secton 29.1 3-1: Wthhodng ta at source. 19 9-1 -13131
( so Secton 29.1 3-3; Secton 1 , Secton T. D. 709
29.1 -2; Secton 1 8, Secton 29.1 8-1; Sec-
ton 211, Secton 29.211-7; Secton 231, Sec-
ton 29.231-1; Secton 2 1, Secton 29.2 1-1.)
TITL 20 INT RN L R NU . C TT R I, SU C PT R , P RT 29 ND
P RT 7
Conformng Reguatons 111 to Unted States-Netherands and
Unted States-Denmark ncome ta conventons: aso amendng
secton 29.1 8-1 reatng to nformaton returns, and secton 29.2 1-1
reatng to ncome from possessons of the Unted States.
Treasury Department,
Offce of Commssoner of Interna Revenue,
Washngton , D. O.
To Coectors of Interna Revenue and Others Concerned:
In order to conform Reguatons 111 26 CFR, Part 29 to the n-
come ta conventon between the Unted States and the ngdom of
the Netherands, and the ncome ta conventon between the Unted
States and the ngdom of Denmark, and to smpf y the procedure
outned n secton 29.1 8-1 26 CFR 29.1 8-1 and to make a technca
amendment to secton 29.2 1-1 26 CFR 29.2 1-1 , such reguatons
are amended as foows:
Paraoraph 1. Secton 29.1 3-1, as amended by Treasury Decson
80 C. . 19 7-2, 88 , approved November 13, 19 7 26 CFR
29.1 3-1 , s further amended by nsertng n the frst paragraph
thereof mmedatey foowng the sentence s to rates of wthhodng
pursuant to the ta conventon and protoco between the Unted States
and the Unted ngdom, see Treasury Decson 32 C. . 19 6-2,
73 , approved ugust 23, 19 6 26 CFR 7. 00-7. 11, ncusve . the
foowng:
s to rates of wthhodng pursuant to the ta conventon between the Unted
States and the ngdom of the Netherands, see Treasury Decson 690 C. .
19 9-1, 92 , approved March 2, 19 9 26 CFR 7.800-7.810, ncusve . s to rates
of wthhodng pursuant to the ta conventon between the Unted States and
the ngdom of Denmark, see Treasury Decson 692 C. . 19 9-1, 10 , ap-
proved March 8,19 9 26 CFR 7.900-7.907, ncusve .
Par. 2. Secton 29.1 3-3, as amended by Treasury Decson 687
C. . 19 9-1, 9 , approved February 16, 19 9 26 CFR 29.1 3-3 ,
s further amended by nsertng mmedatey precedng the penut-
mate thereof the foowng new paragraphs:
s to tems of ncome receved on or after anuary 1, 19 7, by resdents of the
Netherands (ncudng Netherands corporatons) and not sub|ect to the wth-
hodng provsons of the Interna Revenue Code, see the ta conventon between
the Unted States and the ngdom of the Netherands and Treasury Decson
690, approved March 2,19 9 26 CFR 7.800-7.810, ncusve .
s to tems of ncome receved on or after anuary 1, 19 8, by resdents of
Denmark (ncudng Dansh corporatons) and not sub|ect to the wthhodng
provsons of the Interna Revenue Code, see the ta conventon between the
Unted States and the ngdom of Denmark and Treasury Decson 692, ap-
proved March 8, 19 9 26 CFR 7.900-7.907, ncusve .
Par. 3. Secton 29.1 -2 as amended by Treasury Decson 80, ap-
proved November 13, 19 7 26 CFR 29.1 -2 , s further amended
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
7
29.1 3-1.
( ) y nsertng n tabe II mmedatey after ne 6, the foowng:
7. Resdents (Incudng corporatons)
of the Netherands See Treasury Decson 690, approved
March 2. 19 9.
8. Resdents (ncudng corporatons)
of Denmark See Treasury Decson 692, approved
March 8, 19 9.
( ) y strkng out 7 n the ast ne of the tabe, pror to ts
amendment by ths Treasury Decson, and nsertng 9 n eu
thereof.
Par. . Secton 29.1 8-1 as amended by Treasury Decson 687, ap-
proved February 16, 19 9 26 CFR 29.1 8-1 , s further amended by
strkng out the ast sentence of paragraph (c) and nsertng n eu
thereof the foowng:
uthorty for grantng e tensons of tme for fng the return of nformaton
Is hereby deegated to the varous coectors of Interna revenue. ppcatons
for such e tensons sha be addressed to the coector of nterna revenue for the
dstrct n whch the corporaton fes ts ncome ta returns, must contan a
fu recta of the causes for the deay, and must be submtted on or before the
date prescrbed for fng the return of nformaton. No e tenson may be
granted for more than 6 months.
Par. . Secton 29.211-7, as amended by Treasury Decson 80,
approved November 13, 19 7 26 CFR 29.211-7 , s further amended
by nsertng n paragraph (a) mmedatey after uy 3, 19 7. the
foowng:
s to tems of ncome receved on or after anuary 1, 19 7, by ndvdua res-
dents of the Netherands, see the ta conventon between the Unted States and
the ngdom of the Netherands and Treasury Decson 690, approved March 2,
19 9 26 CFR 7.S0O-7.810, ncusve . s to tems of ncome receved n ta abe
years begnnng on and after anuary 1, 19 8, by ndvdua resdents of Den-
mark, see the ta conventon between the Unted States and the ngdom of
Denmark and Treasury Decson 692, approved March 8, 19 9 26 CFR 7.900-
7.907, ncusve .
Par. 6. Secton 29.231-1, as amended by Treasury Decson 80, ap-
proved November 13, 19 7 26 CFR 29.231-1 , s further amended by
nsertng n paragraph (a) mmedatey after uy 3, 19 7. the
foowng:
s to tems of ncome receved on or after anuary 1, 19 7, by a Netherands
corporaton not havng a permanent estabshment n the Unted States, see the
ta conventon between the Unted States and the ngdom of the Netherands
and Treasury Decson 690, approved March 2, 19 9 26 CFR 7.800-7.810, n-
cusve . s to tems of ncome receved n ta abe years begnnng on or after
anuary 1, 19 8, by a Dansh corporaton not havng a permanent estabshment
n the Unted States, see the ta conventon between the Unted States and the
ngdom of Denmark and Treasury Decson 692, approved March 8, 19 9
26 CFR 7.900-7.907, ncusve .
Par. 7. Secton 29.2 1-1, as amended by Treasury Decson 6
C. . 19 8-2, 1 , approved uy 20, 19 8, s further amended by
strkng out the words or 10 0 and nsertng n eu thereof (or
short Form 10 0 for ta abe years begnnng before anu-
ary 1,19 ) .
(Ths Treasury Decson s ssued under the authorty of secton 62
of the Interna Revenue Code ( 3 Stat. 32; 26 U. S. C. 62).)
ecause the purpose of ths Treasury Decson s to efect technca
changes n e stng reguatons and to reeve restrcton t s found
that t s unnecessary to ssue ths Treasury Decson wth notce and
8G8072 0
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
29.1 3-.|
8
pubc procedure thereon under secton (a of the dmnstratve
Procedure ct, approved une 11,19 6, or sub|ect to the effectve date
mtaton of secton (c) of sad ct.
Fred S. Martn,
ctng Commssoner of Interna Revenue.
pproved une 27,19 9.
Thomas . Ltnch,
ctng Secretary of the Treasury.
(Fed wth the Dvson of the Federa Regster une 30,19 9,8: 7 a. m.)
Secton 29.1 3-1: Wthhodng ta at source. 19 9-17-131 6
( so Secton 1 , Secton 29.1 -1.) I. T. 396
INT RN L R NU COD ND UNIT D ST T S-C N D INCOM T
CON NTION
The provsons of secton 7.1 of Treasury Decson 1 7 (C. .
19 2-2, 137), a part of the reguatons reatng to the Unted States-
Canada ncome ta conventon, automatcay appy to Newfound-
and as of the moment (mmedatey before the e praton of the 31st
day of March, 19 9) when Newfoundand became a provnce of
Canada.
ny Unted States Income ta wthhed on or after pr 1, 19 9,
from dvdends, nterest, and other f ed or determnabe annua or
perodca ncome pad to resdents and corporatons of Newfound-
and n e cess of amounts determned under the Unted States-
Canada ncome ta conventon shoud be reeased by wthhodng
agents upon recept by them of proper appcatons from the payees.
dvce s requested as to the e tenson of the Unted States-Canada
ncome ta conventon to Newfoundand whch recenty became a
provnce of Canada and the notfcaton of Unted States wthhodng
agents reatve to the appcaton, on and after pr 1, 19 9, of the
reduced rate of wthhodng of Federa ncome ta at the source on
dvdends, nterest, and other f ed or determnabe annua or perod-
ca ncome pad to resdents and corporatons of Newfoundand.
Newfoundand became a provnce of Canada mmedatey before
the e praton of March 31, 19 9. The ureau, therefore, recognzes
that on and after pr 1, 19 9, the reduced wthhodng rate of 1
percent, as provded n artce I of the Unted States-Canada ncome
ta conventon (see T. D. 206, C. . 19 3, 26, 28- 29), necessary
appes to nonresdent aens (as to the Unted States) who are res-
dents of Newfoundand and to corporatons organzed under the aws
of Newfoundand.
Secton 7.1 of Treasury Decson 1 7 (C. . 19 2-2,137,1 1) pro-
vdes n part that a nonresdent aen ndvdua or a corporaton
whose address s n Canada sha be consdered by Unted States wth-
hodng agents as a resdent of Canada, or as a corporaton organzed
n Canada, as the case may be. That reguaton automatcay appes
to Newfoundand addressees as of the moment when Newfoundand
became a provnce of Canada. (See paragraph of the protoco form-
ng a part of the Unted States-Canada ncome ta conventon, T. D.
6206, C. . 19 3, 26, 32.)
Wth regard to Unted States ncome ta wthhed at the rate of
30 percent from dvdends, nterest, and other f ed or determnabe
annua or perodca ncome pad on or after pr 1,19 9, to resdents
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
9
29.162-1.
and corporatons of Newfoundand, t shoud be observed that such
ta es so wthhed by wthhodng agents n the Unted States are not
payabe nto the Unted States Treasury unt after the cose of the
caendar year 19 9. ccordngy, t foows that where e cess ta
has been thus wthhed at the source n the case of such a ta payer,
the ta n e cess of 1 percent shoud be reeased by the wthhodng
agent upon recept by hm of an approprate appcaton therefor
from the payee.
Secton 29.1 3-3: empton from wthhodng.
INT RN L R NU COD
Reguatons 111 amended. (See T. D. 709, page 6.)
S CTION 1 . P YM NT OF CORPOR TION INCOM
T T SOURC
Secton 29.1 -1: Wthhodng n the case of
nonresdent foregn corporatons.
INT RN L R NU COD ND UNIT D ST T S-C N D INCOM T
CON NTION
tenson of Unted States-Canada ncome ta conventon to New-
foundand. (See I. T. 396 , page 8.)
Secton 29.1 -2: ds to wthhodng agents
n determnng abty for wthhodng of ta .
Reguatons 111 amended. (See T. D. 709, page 6.)
S CTION 1 8. INFORM TION Y CORPOR TIONS
Secton 29.1 8-1: Return of nformaton as to
payments of dvdends.
INT RN L R NU COD
INT RN L R NU COD
Reguatons 111 amended. (See T. D. 709, page 6.)
SUPPL M NT . ST T S ND TRUSTS
S CTION 162. N T INCOM
19 9-21-13209
G. C. M. 26031
Under the terms of the w of , rea property was devsed to a
trustee to hod, manage, and contro the property and to pay the
Income therefrom to the decedent s brother durng hs fetme and,
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
I 29.162-1.)
GO
thereafter, to certan neces and a nephew or ther ssue. The w
provdes that f and when any of the property s sod, certan egaces
to specfed ndvduas, f vng, and to desgnated chartabe
organzatons sha be pad. Upon payment of such egaces, the ba-
ance of trust property sha go to the neces and nephew, or ther
ssue, free of a trusts. The trust s to termnate, n any event, upon
the death of the survvor of the brother, neces, and nephew, and any
egacy then unpad sha apse. ed, the trust s not entted to a
deducton under secton 162(a) of the Interna Revenue Code wth
respect to any capta gan used to pay the egaces to the chartabe
organzatons.
n opnon s requested whether, n the case of the nstant trust, a
deducton s aowabe under secton 102(a) of the Interna R venue
Code for capta gans pad to chartabe organzatons whch are
pecunary egatees of the trust estabshed by the w of the decedent.
, the testatr , a resdent of Massachusetts, ded n October, 19 8.
er w created a testamentary trust, the corpus of whch s rea
property. The trust s to be termnated (1) when the pecunary ega-
ces payabe from the proceeds of sae of trust corpus are pad, or (2)
n any event, upon the death of the survvor or her brother, three
neces, and a nephew. Upon the termnaton of the trust under (1)
above, the trust property w go to the testatr s neces and nephew,
or ther ssue by rght of representaton, free of a trusts. ut f the
trust termnates under (2) above, the remanng corpus and any unds-
trbuted ncome sha go to the ssue of the neces and nephew, or ther
ssue by rght of representaton. Unt hs death, the entre net ncome
of the trust s dstrbutabe currenty to the decedent s brother. fter
hs death, ths ncome s dstrbutabe currenty to the testatr s neces
and nephew.
The trustee s authorzed to se the trust property at any tme,
but he cannot be forced to do so by any of the pecunary ega-
tees. If such saes are made, the net proceeds w be dstrbuted
to the pecunary egatees, f then vng, n the amounts specfed for
e ch, or proportonate parts thereof. Under ths provson, 62,000
s bequeathed to varous partes, of whch 17,000 s bequeathed to
chartabe organzatons. If the trust s termnated under (2) above,
any of the pecunary egaces then unpad sha apse.
The queston presented s whether, n the event of a sae of trust
property, the trust s ta abe on a of the reazed gan, f any, de-
rved from the sae, or whether the trust w be aowed a deducton
of seventeen s ty-seconds of that gan as beng that proporton of
the gan dstrbuted to chartabe organzatons.
Secton 162(a) of the Interna Revenue Code provdes as foows:
S C. 162. N T INCOM .
Te net ncome of the estate or trust sha be computed n the same manner
and on the same bass as n the case of an ndvdua, e cept that
(a) There sha be aowed as a deducton (n eu of the deducton for
chartabe, etc., contrbutons authorzed by secton 23(o)) any part of the
gross ncome, wthout mtaton, whch pursuant to the terms of the w or
deed creatng the trust, s durng the ta abe year pad or permanenty set
asde for the purposes and n the manner specfed n secton 23(o). or s to
be used e cusvey for regous, chartabe, scentfc, terary, or educatona
purposes, or for the preventon of cruety to chdren or anmas, or for the
estabshment, acquston, mantenance or operaton of a pubc cemetery
uot operated for proft;
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
01
29.102-1.
In order for a trust to quafy for the benefts of secton 162(a)
of the Code, the w or deed creatng the trust must drect the pay-
ment or settng asde of some part of the gross ncome for chartabe
purposes. (See I. T. 1966, C. . III-, 21 (192 ).) The w whch
created the present trust does not drect the payment of any part of
the trust ncome to the chartes. The w specfes that the ncome
from the trust w go to the decedent s brother for fe and on hs death
to the neces and nephew of the testatr . Gans reazed from the
sae of trust corpus are consdered accretons beongngto corpus under
Massachusetts aw. (See Chase v. Unon Natona Iante, 27 Mass.
03,176 N. . 08.) The bequests here are specfc pecunary egaces
and are gfts of corpus and not dstrbutons of the trust ncome as
such.
In rthur . Wettman v. Wech (99 Fed. (2d) 7 , affrmng 21 Fed.
Supp. 978), a Massachusetts estate sought to deduct from ts ncome,
as payments to charty under secton 162(a) of the Code, that part of
the ncome of the estate used to pay chartabe pecunary egaces. ut
the dstrct court and the crcut court of appeas hed that the de-
ducton was not aowabe. It was stated that the estate was nsuff-
cent to pay the resduary egaces and, accordngy, a of the ncome of
the estate became corpus, and when part of such ncome was used to
pay the pecunary egaces to charty, the payment was hed to be a part
ayment of such egaces from the assets of the estate and not a dstr-
uton of ncome.
In Od Coony Trust Co. et a.y. Commssoner (38 . T. . 828),
n whch a defcency asserted aganst the estate of enne . adwn
was nvoved, t was hed that the gans derved by e ecutors from the
sae of securtes, whch gans were dstrbuted to pecunary egatees
as part payment of ther egaces,, were not deductbe (as payments
of ncome) by the e ecutors under secton 162 (b) or (c) of the Rev-
enue ct of 193 . The oard of Ta ppeas (now The Ta Court
of the Unted States) sad that what was ncome to the e ecutors be-
came prncpa upon dstrbuton to the pecunary egatees.
G. C. M. 2 702 (C. . 19 , 2 1) cted the above two cases for the
proposton that the payment of a pecunary egacy s an e cepton
to the rue that an estate may deduct payments out of ts ncome to
resduary egatees durng the ta abe year n whch the resdue be-
comes payabe, and such amounts w be ta abe to the egatees (under
secton 162(b) of the Code) even though those amounts are consdered
payments of prncpa under State aw.
Inasmuch as the w of bequeaths certan pecunary egaces to
charty upon the happenng of the contngency (sae of corpus by the
trustee) and does not drect anv of the ncome of the trust, as such, to
be pad or permanenty set asde for the chartabe pecunary ega-
tees, t s the opnon of ths offce that, n the event gan s reazed
from sae of the trust corpus, and even though part of such gan s used
to satsfy the pecunary egaces to charty, the trust w not be entted
to any deducton under secton 162 (a) of the Code, s pra.
Chares Ophant,
Chef Counse, ureau of Interna Revenue.
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
19.212-1, Regs. 103. 62
SUPPL M NT F. P RTN RS IPS
S CTION 181. P RTN RS IP NOT T L
Secton 19.181-1, Reguatons 103: Partnershps.
INT RN L R NU COD
Famy partnershp between father and sons. (See Ct. D. 1723,
page .)
SUPPL M NT . NONR SID NT LI N INDI IDU LS
S CTION 211. T ON NONR SID NT LI N
INDI IDU LS
Secton 29.211-7: Ta aton of nonresdent
aen ndvduas.
INT RN L R NU COD
Reguatons 111 amended. (See T. D. 709, page 6.)
S CTION 212. GROSS INCOM
Secton 19.212-1, Reguatons 103: Gross n- 19 9-1 -13132
come of nonresdent aen ndvduas. Ct. D. 1722
( so Secton 119, Secton 19.119- .)
INCOM T R NU CT OF 1938 ND INT RN L R NU COD , S
M ND D D CISION OF SUPR M COURT
1. Guoss Income Nonresdent en Indvdua Rents or
Royates.
mounts receved n 1938 and 19 1 by a nonresdent aen author
not engaged n trade or busness wthn the Unted States and not
havng an offce or pace of busness theren, each of suc sums havng
been receved by the author as payments n fu, In advance, for an
e cusve sera or book rght throughout the Unted States n rea-
ton to a specfed orgna story wrtten by hm and ready to be
copyrghted, come wthn the knds of gross ncome referred to In
the appcabe revenue acts as rentas or royates for the use of or
the prvege of usng n the Unted States, copyrghts,
and other ke property, and are accordngy ta abe as
gross ncome from sources wthn the Unted States under sectons
119, 211, and 212(a) of the Revenue ct of 1938 and the Interna
Revenue Code as amended n 19 0 and 19 1. The recept of the
respectve amounts n snge ump sums dd not e empt them from
ta aton.
2. Decson Reversed.
Decson of the Unted States Court of ppeas, Fourth Crcut
(((S Fed. (2d) 980), reversng decson of The Ta Court of the
Unted States (8 T. C. G37), reversed.
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

6

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
63
19.212-1, Regs. 103.
Supreme Coubt of the Unted States
Commssoner of Interna Revenue, pettoner, v. Peham . Wodehouse
On wrt of certorar to the Unted States Court of ppeas for the Fourth Crcut
une 13, 19 9
OPINION
Mr. ustce urton devered the opnon of the Court.
The queston before us s whether certan sums receved n 1938 and 19 1, by
the respondent, as a nonresdent aen author not engaged n trade or busness
wthn the Unted States and not havng an offce or pace of busness theren,
were requred by the Revenue cts of the Unted States to be ncuded n hs gross
ncome for Federa ta purposes. ach of these sums had been pad to hm n
advance and respectvey for an e cusve sera or book rght throughout the
Unted States n reaton to a specfed orgna story wrtten by hm and ready
to be copyrghted. The answer turns upon the meanng of gross ncome from
sources wthn the Unted States as that term was used, mted and defned n
sectons 212(a), 211 and 119 of the Revenue ct of 1938, and the Interna Revenue
Code, as amended n 19 0 and 19 1. For the reasons herenafter stated, we hod
that these sums each came wthn those knds of gross ncome from sources wthn
the Unted States that were referred to n those cts as rentas or royates for
the use of or the prvege of usng n the Unted States, copyrghts,
and other ke property, and that, accordngy, each of these sums
was ta abe under one or the other of those cts.
The respondent, Peham G. Wodehou. e, at the tmes matera to ths case, was
a rtsh sub|ect resdng n France. e was a nonresdent aen of the Unted
States not engaged n trade or busness wthn the Unted States and not havng
an offce or pace of busness theren durng ether the ta abe year 1938 or 19 1.
e was a wrter of seras, pays, short stores and other terary works pubshed
In the Unted States n the Saturday venng Post, Cosmopotan Magazne and
other perodcas.
February 22, 1938, the Curts Pubshng Co. (here caed Curts) accepted for
pubcaton n the Saturday venng Post the respondent s unpubshed nove
The Sver Cow. The story had been submtted to Curts by the respondent s
terary agent, the Reynods gency, and, on that date, Curts pad the agency
0,000 under an agreement reservng to Curts the mercan sera rghts n
the story, ncudng n such rghts those n the Unted States, Canada and South
merca. The memorandum quoted n ppend Tpage 7 , ths uetn , nfra,
page , consttuted the agreement. so n 1938, the respondent receved ,000
from Doubeday, Doran Co. for the book rghts n ths story. The story was
pubshed seray n the Saturday venng Post, uy 9 to September 3, 1939.
Pursuant to a ke agreement, the respondent receved 0,000 from Curts,
December 13, 1938, for sera rghts n and to hs story Unce Fred n the Sprng-
tme. It was pubshed seray n the Saturday venng Post, pr 22 to May
27, 1939.
uy 23, 19 1, earst s Internatona Cosmopotan Magazne, through the re-
spondent s sa|ne agent, pad the respondent 2,000 for a mercan and Canadan
sera rghts (whch ncude a mercan and Canadan magazne, dgest, per-
odca and newspaper pubshng rghts) to the respondent s artce entted
My Tears ehnd arbed Wre. The agreement appears n ppend C
page 7 , ths uetn , nfra, page . pparenty ths story was pubshed
shorty thereafter.
ugust 12, 19 1, Curts, through the same agent, pad the respondent 0,000
for the North mercan (ncudng Canadan) sera rghts to respondent s
nove entted Money n the ank. The agreement was n the form used by
Curts n 1938. The evdence does not state that ths story was pubshed but
The matera provsons were Identca n the Revenue ct of 1938, enacted May 28,
1938. c. 289, 2 Stat. 7, et seq., and In the Interna Revenue Code, enacted February o,
1939. 3 Stat. 1, et seq. mendments to these provsons In 19 0 and 19 1 changed ony the
rates of the ta es. For te t of the matera provsons, see ppend I pace 72. ts
uetn. nfra, pages . , foowng ths opnon.
Secton 119(a)( ), 2 Stat. 0 . 3 Stat. , 26 U. S. C. secton 119(a)( ). For fu
te t of the matera provsons of secton 119, sec ppend , nfra, page .
See ppend page 7 , ths uetn , nfra, page .
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

6

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
19.212-1, Regs. 103.
6
It shows that Curts, pursuant to Its agreements, took out a Unted States copy-
rght on each of the respectve stores named n the foregong agreements. fter
each story s sera pubcaton, Curts reassgned to the respondent, on the etter s
demand, a rghts u and to the story e ceptng those rghts whch the respondent
e pressy had agreed that Curts was to retan. The respectve sums were thus
pad to the respondent, n advance and n fu, for the sera or book rghts whch
he had made avaabe. For Unted States ncome ta purposes, the respondent s
terary agent, or some other wthhodng agent, wthhed from the respondent,
or from hs wfe as hs assgnee, a part of each payment.
In 19- the Commssoner of Interna Revenue, pettoner heren, gave the
respondent notce of ta defcences assessed aganst hm for the ta abe years
1923, 192 , 1938. 19 0 and 19 1. In these assessments, among other tems, the
Commssoner camed defcences n the respondent s ncome ta payments
based upon hs above-descrbed 1938 and 19 1 recepts. The respondent, n a
petton to the Ta Court for a redetermnaton of such defcences, not ony
contested the addtona ta es assessed aganst hm, whch were based upon the
fu amounts of those recepts, but he asked aso for the refund to hm of the
amounts whch had been wthhed, for ncome ta purposes, from each such pay-
ment. The Ta Court entered |udgment aganst hm for addtona ta es for
1938, 19 0 and 19 1, n the respectve amounts of 11,800.71, 8,080.83 and
1,8 .8 . In speakng of the ta es for 19 0 and 19 1, the Ta Court sad :
The frst ssue, found aso n the year 1938, presents the queston of the ta -
abty of ump sum payments for sera rghts to terary works. Counse for the
pettoner Wodehouse, the respondent here concedes that substantay the
same ssue was rased and decded n Sa Itohmcr, T. C. 183; affrmed, 1 3 Fed.
(2d) G; certorar dened, 328 U. S. 802.
In Sa Rohmer, supra, we hed that the ump sum payments for sera rghts
were royates and, as such, were ta abe to the recpent. The arguments
advanced In the cases at bar foow the same pattern as those appearng n the
Sa Rohmer case, as presented to ths court and to the crcut court of appeas.
The pettoner s contentons were re|ected n both courts and for the same reasons
stated In the opnons theren, they are re|ec ted here. 8 T. C. 037, 6 3.
s the respondent s ta es for 1938 and 19 1 had been pad to the Coector of
Interna Revenue at atmore, Md Ids petton for revew of the Ta Court s
|udgment for those years was fed n the Unted States Court of ppeas for
the Fourth Crcut. The |udgment aganst hm was there reversed, 100 Fed. (2d)
986, one |udge dssentng on the authorty and reasonng of Rohmer v. Comms-
soner, 1 3 Fed. (2d) 61 (C. . 2d Cr.). ecause of the resutng confct
between the crcuts and aso because comparabe ssues as to ths respondent s
ta es for 19 0 were pendng before the Court of ppeas for the Second Crcut,
we granted certorar. 33 U. S. S07.
The pettoner contends that recepts of the type before us ong have been
recognzed as rentas or royates pad for the use of or for the prvege of usng
In the Unted States, patents, copyrghts and other ke property. eepng n
mnd that, before 1930, such recepts were e pressy sub|ect to wthhodng as
part of the ta abe ncome of nonresdent aen ndvduas, he contends that
those recepts remaned ta abe and sub|ect to wthhodng n 193S and 19 1,
after the standards for ta aton of such aens had been made e pressy co-
termnous wth the standards for sub|ectng ths part of ther ncome to wth-
hodng procedures.
In opposton, the respondent argues, frst, that each sum he receved was a
payment made to hm n return for hs sae of a property nterest n a copyrght
and not a payment to hm of a royaty for rghts granted by hm under the pro-
tecton of hs copyrght. eng the proceeds of a sae by hm of such a property
nterest, he concudes that those proceeds were not requred to be ncuded n
hs ta abe gross ncome because the controng Revenue cts dd not attempt
s the court beow hed that the respondent s 1938 and 19 1 recepts were not sub|ect
to ta aton, t dd not reach the subsdary Issues whch had been rased as to the proper
amount of those ta es f they were sustaned. Smary, the court beow dd not pass
upon the cam that certan of the assessments were sub|ect to the 3-year statute of m-
tatons rather than the -year statute here apped. See secton 27 (a) and (c). 2 Stat.
39. 3 Stat. 8f, 26 U. S. C. secton 27o (a) and (c). Th cam turned upon the recog-
nton to be gven to certan assgnments made by the respondent to hs wfe. Those assgn-
ments, f fuy recognzed, mght have reduced the ta to be assessed aganst the respondent
to an amount ess than 2 percent of the amount orgnay stated by hm n bs return
and thus rendered the -yenr statute nappcabe. owever, the effect of those assgn-
ments was not passed upon by the court beow.
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

6

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
6
19.212-1, Regs. 103.
to ta nonresdent aen ndvduas, ke hmsef, upon Income from saes of
property. Secondy, the respondent argues that, even If hs recepts were to be
treated as royates, yet each was receved n a snge ump sum and not an-
nuay or perodcay, and that, therefore, they dd not come wthn hs
ta abe gross ncome.
The pettoner repes that, n ths case, we do not propery reach the fne
questons of tte, or of saes or copyrght aw, thus rased by the respondent as
to the dvsbty of a copyrght or as to the sae of some nterest n n copyrght.
The pettoner states that the ssue here s one of statutory nterpretaton. It s
confned prmary to the ta abty of the respondent s recepts wthn the broad,
rather than narrow, anguage of certan Revenue cts. ttenton must be focused
on those Revenue cts. If ther terms made these recepts ta abe because of the
genera nature of the transactons out of whch the recepts arse, namey, pay-
ments for the use of or for the prvege of usng copyrghts, then t s those
statutory defntons, propery read n the ght of ther conte t and of ther
egsatve hstory, that must determne the ta abty of the recepts. e argues
that the anguage of the Revenue cts does not condton the rght of the Unted
States to ts revenue upon any fne pont of property aw but covers these recepts
In any event. Treatng the respondent s recepts smpy as representng pay-
ments for the use of or the prvege of usng copyrghts the pettoner argues
that they consttuted ncome that was sub|ect both to wthhodng and to ta aton
n 1938 and 19 1. e cams fnay that the respondent cannot escape ta aton
of such recepts merey by showng that each payment was receved by hm n a
ump sum n advance for certan uses of a copyrght, nstead of n severa
payments to be made at ntermedate dates durng the fe of the copyrght.
I
ums receved by a nonresdent aen ndvdua for the use of a copyrght n the
Unted States consttuted gross ncome ta abe to hm under the Revenue ct
of 938 and the Interna Revenue Code
Under the ncome ta aws of the Unted States, sums receved by a non-
resdent aen author not engaged n trade or busness wthn the Unted States
and not havng an offce or pace of busness theren ong have been requred
to be ncuded n hs gross ncome for our Federa ta purposes. Such recepts
have been an approprate and ready coectbe sub|ect of ta aton. revew
of the statutes, reguatons, admnstratve practces and court decsons ds-
coses ths pocy and, at east from a revenue standpont, no reason has ap-
peared for changng t.
Snce the eary days of our ncome ta eves, rentas and royates pad for
the use of or for the prvege of usng n the Unted States, patents, copyrghts
and other ke property have been ta ed to nonresdent aens and for many
years at east a part of the ta has been wthhed at the source of the ncome.
To e empt ths type of ncome from ta aton n 1938 or 19 1, n the face of ths
ong record of ts ta aton, woud requre a cearness and postveness of egs-
atve determnaton to change the estabshed procedure that s entrey ab-
sent here.
The pocy of ths Court n ths genera fed of statutory nterpretaton was
stated n 193 n a case whch deat wth the ta aton of a somewhat comparabe
form of ncome of a foregn corporaton. In everng v. Stockhom nskda
ank. 293 U. S. 8 Ct. D. 887, C. . III-2, 299 (193 ) , the queston presented
was that of the proper nterpretaton to be gven to secton 217(a)(1) of the
Revenue ct of 1920, e. 27, Stat. 9, 30 (anaogous to secton 119(a) (1) of the
Revenue ct of 1938, 2 Stat, 03, now before us). Certan sums had been re-
ceved by a foregn corporaton from the Unted States Government n the form
of nterest upon a refund of an overpayment by that corporaton of ts ncome
ta es. Ths Court hed that such nterest, n turn, consttuted ta abe gross
ncome derved by the foregn corporaton from a source wthn the Unted States,
because t amounted to nterest upon an nterest-bearng obgaton of a resdent
of the Unted States wthn the meanng of the ct. Ths nterpretaton was
adopted n opposton to the foregn corporaton s argument that the payment
shoud be e empted because t amounted to nterest on one of the obgatons
of the Unted States and that nterest on such an obgaton was e pressy e -
empted from ta aton by secton 21.3(b) ( ) of the Revenue ct of 1920 (anaogous
to secton 22(b)( ) of the Revenue ct of 1938). Ths Court dstngushed
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

6

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
19.212-1, Regs. 103.
66
between the meanng of the word obgatons n the conte t of the dfferent
sectons of the ct and stated the appcabe genera prncpes of statutory con-
structon as foows:
The genera ob|ect of ths ct s to put money nto the Federa Treasury; and
there s manfest n the reach of ts many provsons an ntenton on the part of
Congress to brng about a generous attanment of that ob|ect by mposng a ta
upon pretty much every sort of ncome sub|ect to the Federa power. Pany,
the payment n queston consttutes ncome derved from a source wthn the
Unted States; and the natura am of Congress woud be to reach t. In Irwn v.
Gavt, 268 U. S. 161,166 T. D. 3710, C. . 1 -1,123,12 (192 ) , ths Court, re|ect-
ng the contenton that certan payments there nvoved dd not consttute ncome,
sad : If these payments propery may be caed ncome by the common under-
standng of that word and the statute has faed to ht them t has mssed so
much of the genera purpose that t e presses at the start. Congress ntended
to use ts power to the fu e tent. sner v. Macomber, 2 2 U. S. 189, 203 T. D.
3010, C. 11. 3, 2 , 27 (1920)1. though Congress ntended, as the Court hed
n the scose case, supra 6 Fed. (2d) 1033 (C. . 3d Cr.) Ct. D. 600, C. .
II-1, 213 (1933) , to ncude nterest on a ta refund made to a domestc cor-
poraton, we are asked to deny such ntenton n respect of a competng foregn
corporaton. ut we see nothng n the reatonshp of a foregn corporaton to
the Unted States, or n any other crcumstance caed to our attenton, whch
fary shows that such a dscrmnaton was wthn the contempaton of Congress.
On the contrary, the natura concuson s that f any dscrmnaton had been
ntended t woud have been made n favor of, and not aganst, the domestc cor-
poraton, whch contrbutes n a much more substanta degree to the support of
the peope and Government of the Unted States. Id. at pages 89-90.
nd further:
In the foregong dscusson, we have not been unmndfu of the rue, fre-
quenty stated by ths Court, that ta ng acts are not to be e tended by mpca-
ton beyond the cear mport of the anguage used, and that doubts are to be
resoved aganst the Government and n favor of the ta payer. The rue s a
sautary one, but t does not appy here. The ntenton of the awmaker con-
tros n the constructon of ta ng acts as t does n the constructon of other
statutes, and that ntenton s to be ascertaned, not by takng the word or cause
n queston from ts settng and vewng t apart, but by consderng t n con-
necton wth the conte t, the genera purposes of the statute n whch t s found,
the occason and crcumstances of ts use, and other approprate tests for the
ascertanment of the egsatve w. Compare Ren v. Lane, L. . 2 . . Cases
1- . 1 1. Tn; ntenton beng thus dscosed, t s enough that the word or
cause s reasonaby susceptbe of a meanng consonant therewth, whatever
mght be ts meanng n another and dfferent connecton. We are not at berty
to re|ect the meanng so estabshed and adopt another yng outsde the ntenton
of the egsature, smpy because the atter woud reease the ta payer or bear
ess heavy aganst hm. To do so woud be not to resove a doubt n hs favor,
hut to say that the statute does not mean what t means. Id. at pages 93-9 .
. These recepts unquestonaby woud have been ta ed, to a nonresdent aen
ndvdua f receved by hm under the Revenue ct of 193.
The background and deveopment of the partcuar provsons before us
emphasze the congressona purpose to ta ths type of ncome. They dscose
the fu famarty of Congress wth ths genera type of transacton. Through-
out the hstory of our Federa ncome ta es snce the s teenth amendment to
our Consttuton, the Revenue cts have e pressy sub|ected to ta aton the
ncome receved by nonresdent aen ndvduas from sources wthn the Unted
States. For e ampe, there s no doubt that the recepts here n queston woud
have been ta abe to the respondent f they had been receved by hm under
the Revenue ct of 193 , c. 277, 8 Stat. 680, et seq., and the present ssue resoves
tsef argey nto a determnaton whether such recepts were reeved from ta -
aton by the Revenue ct of 1936, c. 690, 9 Stat. 16 8, et seq., through certan
changes n the ncome ta aws that were made by that ct and whch were st
In effect n 1938 and 19 1.
Under the Revenue ct of 193 , the ncome of a nonresdent aen Indvdua
was ta ed at the same rates as was the ncome of a resdent ctzen (sectons
11 and 12) but hs ta abe gross ncome was mted whoy to that whch he
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

6

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
67
19.212-1, Regs. 103.
had receved from sources wthn the Unted States. secton 211(a). Such
sources were descrbed n secton 119 of that ct, and the matera portons of that
secton have remaned unchanged ever snce. They gve ther own defnton of
rentas and royates. These have been quoted from above and they are set forth
n fu n ppend , nfra, p. . The ct of 193 thus sought to ncude as
ta abe gross ncome any Income whch a nonresdent aen ndvdua receved
as royates for the prvege of usng any copyrghts n the Unted States and
aso sought to ta hs ncome from the sae of any persona property whch he had
produced (n whoe or n part) outsde the Unted Stntes but had sod wthn
the Unted States. Secton 119 (a)( ) and (e)(2). s a mechansm of co-
ecton, the ct aso sought to wthhod from nonresdent aen ndvduas, at
the source of payment, the entre norma ta of percent computed upon numerous
cassfcatons of ther ncome named n secton 1 3(b). Ths anguage s m-
portant n ths case. It e pressy ncuded certan forms of nterest and aso
rent, saares, wages, premums, annutes, compensatons, remuneratons, emo-
uments, or other f ed or determnabe annua or perodca gans, profts, and
ncome, of any nonresdent aen ndvdua, . mphass added.
Whe royates were not mentoned specfcay In ths statutory wthhodng
cause, they had been e pressy sted n the reguatons, snce ong before 193 ,
so that there was no doubt that they were to be sub|ect to wthhodng as a
matter of nterpretaton. It was equay cear that ncome derved from a sae
n the Unted States, of ether rea or persona property, was not Incuded, ether
e pressy or by mpcaton or nterpretaton, n the Income sub|ect to a wth-
hodng of the ta on t at the source of the ncome. The reguatons, snce the
ct of 192 (U. S. Treasury Reguatons 6 , artce 362 (192 )) to the present
tme, have contaned decsve statements on these ponts. Such reguatons
have been substantay dentca wth the foowng whch appeared n Treasury
Reguatons 86, artce 1 3-2 (193 ) :
Ony f ed or determnabe annua or perodca ncome s sub|ect to wth-
hodng. The ct specfcay ncudes n such ncome, nterest, rent, saares,
wages, premums, annutes, compensatons, remuneratons, and emouments.
ut other knds of ncome are ncuded, as, for nstance, royates.
The ncome derved from the sae n the Unted States of property,
whether rea or persona, s not f ed or determnabe annua or perodca ncome.
mphass added.
part from these provsons requrng the wthhodng of ta es at the source
of the ncome, the Revenue cts have contaned other provsons, n smar an-
guage, cang for the reportng to the Commssoner of Interna Revenue of mate-
ra nformaton as to certan ncome whch mght be ta abe. Ths anguage has
receved an Interpretaton whch s reated to and consstent wth that here
gven to the provsons as to wthhodng ta es.
SC1TL M T NONR SID NT LI N INDI IDU LS
S C. 211. GROSS INCOM .
(a) Genera Rue. In the case of a nonresdent aen ndvdna gross ncome In-
cudes ony the gross nco ne from sources wthn the Unted States. Secton 211(a). 8
Stat. 73 .
S C. 1 3. WIT OLDING OF T T SOURC ,
(a) Ta -Free Covenant ond.
(b) Nonresdent ens. persons, In whatever capacty actng, Incudng essees
or mortgagors of rea or persona property, fducares, empoyers, and a offcers and
empoyees of the Unted States, havng the contro, recept, custody, dsposa, or payment
of nterest (e cept nterest on deposts wth persons carryng on the bankng busness
pad to persons not engaged n busness In the Unted States and not havng an offce or
pace of busness theren), rent, saares, rngcs, premums, annutes, compensatons, remu-
neratons, emouments, or other f ed or determnabe annua or perodca pans, profts,
and ncome, of any nonresdent aen ndvdua, or of any partnershp not engaged n trade
or busness wthn the Unted States and not havng any offce or pace of busness theren
and composed In whoe or n part of nonresdent aens, deduct and wthhod
from such annua or perodca gans, profts, and ncome a ta equa to It per centum
thereof: mphass added. 8 Stat. 723-72 .
S C. 1 7. INFORM TION T SOURC .
(a) Payments op 1,000 or More. persons, n whatever capacty actng, ncudng
essees or mortgagors of rea or persona property, fducares, and empoyers, makng
payment to another person, of nterest, rent, saares, wages, premums, annutes, compen-
satons, remuneratons, emouments, or other f ed or determnabe gans, profts, and
ncome of 1,000 or more In any ta abe year, sha render a true
and accurate return to the Commssoner, under such reguatons and n such form and
manner and to such e tent as may be prescrbed by hm wth the approva of the Secretary,
( mphass added. 8 Stat. 726.
Treasury Reguatons , ( . under the ct of 193 . showed among other thngs, that ths
secton apped generay to f ed or determnabe ncome, that royates were Incuded as
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

6

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
19.212-1, Regs. 103.
68
These statutes and Reguatons show that, under the ct of 193 , Congress
sought to ta (and wthhod a or part of the ta on) the ncome of a nonresdent
aen ndvdua nsofar as t was derved from payments for the use of or for
the prvege of usng copyrghts n the Unted States. It aso sought to ta
(athough t coud not generay wthhod the ta on) any gan whch the ta -
payer derved from the sae of persona property produced by hu wthout the
Unted States but sod wthn the Unted States. ccordngy, f the recepts
now before us had been receved by the respondent under the ct of 193 , they
woud have been ta abe whether they were treated as payments n the nature
of royates for the use of the copyrghts under secton 119(a) or were treated
as payments of a sae s prce for certan nterests n copyrghts under secton
119(e). The reguatons hepfuy carred ths anayss further. They showed
that, whe both forms of ncome were ta abe, yet t was ony the royaty pay-
ments (and not the saes proceeds) that were sub|ect to the wthhodng proce-
dure. Treasury Decson made n 1933, under the Revenue cts e tendng from
1921 to 1928, and a decson of the Court of ppeas for the Second Crcut made
In 1938, under the Revenue ct of 1928, c. 8 2, Stat. 791, sustan the above
concusons. The atter case was that of Sabatn v. Commssoner, 98 Fed. (2d)
7 3 (C. . 2d Cr.), ater dscussed and approved n Rohmer v. Commssoner, 1 3
f ed and determnabe Income and that nformaton as to them was not requred when
such royates dd not e ceed the ta payer s e emptons. so, such nformaton at the
source was not requred where the ncome had been wthhed, at the source, from a non-
resdent aen ndvdua and a report had been made to that effect. See, for e ampe:
rt. 1 7-1. though to make necessary a return of nformaton the ncome
must be f ed or determnabe. It need not he annua or perodca.
rt. 1 7-3. Cases where no return of Informaton requred. Payments of the foow-
ng character, athough over 1,000, need not be reported n returns of nformaton :

(h) Payments of snares, rents, rotatcn. Interest (e cept bond nterest requred to
be reported on ownershp certfcates), and other f ed or determnabe ncome aggregatng
ess than 2, 00 made to a marred Indvdua
rt. 1 7- . Return of nformaton as to payments to other than ctzens or resdents.
In the case of payments of f ed or determnabe annua or perodca ncome to nonresdent
aens (ndvdua or fducary), tnP returns fed by wthhodng agents on
Form 10 2 requred by rtce 1 3-8 sha consttute and be treated as returns of nfor-
maton. (See sectons 1 3 and 1 .) mphass added.
Ths opnon was rendered n response to a request to the Treasury for advce as to
whether certan payments receved durng the years 1921 to 1928 by the ta payer, a
nonresdent aen author, were ta abe as ncome from sources wthn the Unted States.
The payments were receved pursuant to contracts grantng certan voume, sera and
moton pcture rghts In consderaton of stpuated royates payabe n varous ways.
Some contracts prescrbed a royaty on each copy sod, others a tota stpuated sum, and.
In at east one case, ths sum was payabe n severa parts. The opnon revewed the
practce of many years and gave a postve answer to gude future practce. The answer
was that a these recepts were ta abe Insofar as they came from sources wthn the
Unted States. The opnon contaned the foowng sgnfcant statements whch Indcate
the admnstratve practce whch had been apped and thereafter was to appy to these
sectons :
The fact that a payment n the nature of a rent or royaty s n a ump sum rather
than ho much per annum, per unt of property, per performance, per book sod, or a
certan percentage of the recepts or profts, does not ater the character of the payment
as rent or royaty. (O. D. 1028, C. . , 83: ppea of . f. t f. S. rocnng Co.. 6
. T. ., 91 , acquescence C. . II-1, 1928 .) Nor s t matera whether the royaty
a pad n advance. ( ppea of ocde s |ewery, Inc., 2 . T. ., 611.) It s accordngy
the opnon of ths offce that the payments n queston are rentas or royates
from or for the use of or for the prvege of usng copy-
rghts and other ke property. Snce the grant by the ta payer n each
nstance s so ceary the grant of a partcuar rght In a the rghts consttutng the
ta payer s terary property and copyrght, the concuson s obvous that the grant
s a cense and not a sae.
The appcabe Revenue cts regard royates from mercan copyrghts (or for the
nse of or for the prvege of usng In the Unted States copyrghts and other ke
property) as ncome from sources wthn the Unted States, and royates from foregn
copyrghts (or for the use of or for the prvege of usng wthout the Unted States
copyrghts and other ke property) ns ncome from sources wthout the Unted State .
Substantay a the ncome here n queston consttutes royates from, or for the use
of, or for the prvege of usng mercan copyrghts. I. T. 273 , C. . II-2, 131 (1933).
The fact that one ump sum wns receved for the prvege of usng the property of
the author Instead of a scres of payments does not ater the rea character of what the
ta payer receved. It was payment for the use of hs terary property for the purpose
named and nsofar as t was In payment for use In the Unted States was ta abe as
a royaty pad In advance and receved for the grantng of that prvege. Whe there
eeems to be no drect authorty for ths vew of the meanng of the statute, we beeve t
correct In prncpe and the order of the oard n ths respect s reversed. Id. at
page 7 . Ths decson effectvey suppements the Treasury uetn of 1933 and empha-
szes the genera anguage of the statute In ta ng proceeds of the type of transacton
that s before us. It reversed an ntermedate hodng made by the oard of Ta ppeas
n 193 In Sabatn v. Commssoner, 32 . T. . 70 . That ntermedate decson, accord-
ngy, was n the process of revew when the Revenue ct of 1936 was enacted and,
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

6

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
69 19.212-1, Regs. 103.
Fed. (2d) 61, 63 (C. . 2d Cr.). Incdentay, these opnons decared not ony
that the ta es n queston were mposed upon the recepts as royates but that t
made no dfference whether such royates were each receved n ump sums n
fu payment n advance, to cover the use of the respectve copyrghts throughout
ther statutory ves, or whether the royates were receved from tme to tme
and n esser sums.
. The. Revenue ct of 1936 preserved the ta abty of the severa knds of
ncome of nonresdent aen ndvduas whch had been the sub|ect of wth-
hodng at ther respectve sources, ncudng recepts n the nature of royates
for the use of copt|rghts n the Unted States.
The Revenue ct of 1936 dd not change materay the statutory defnton of
gross ncome from sources wthn the Unted States under secton 119. It dd,
however, amend secton 211(a) materay n ts descrpton of the ta abe
ncome of nonresdent aen ndvduas. These amendments (1) substtuted a
speca fat rate of 10 percent for the genera norma ta and surta rates, (2)
requred ths entre speca ta , n the usua case, to be wthhed at the source of
the ta abe ncome, (3) mted the ta abty of the ncome of each nonresdent
aen ndvdua to those knds of ncome to whch the wthhodng provsons aso
apped, and ( ) (e cept for the addton of dvdends) nserted verbatm, as
a new statement of the types of ta abe ncome of a nonresdent aen ndvdua
(not engaged n trade or busness wthn the Unted States and not havng an
offce or pace of busness theren), the anguage that prevousy had been used
to stae the specfc types of ncome to whch the wthhodng procedure was to
appy. See ts secton 1 3(b) 11 paraeng ts amended secton 211(a). y
thus restrctng the ncome ta to those specfc types of ncome to whch the
wthhodng procedure had prevousy apped, Congress automatcay reeved
nonresdent aen ndvduas from the ta aton of ther ncome from certan saes
of rea or persona property, prevousy ta ed. Ths amendment, on the other
hand, retaned and ncreased the ta on the very knd of ncome that s before
us. It aso ncreased the porton of such ncome to be wthhed at ts source to
meet the new and hgher fat rate of ta .
The egsatve hstory of the Revenue ct of 1030 confrms the speca meanng
thus apparent on ts face. It emphaszes the pocy whch e pressy marked
the enactment of ths ct, ncudng partcuary these amendments. The pract-
ca stuaton was that t had been dffcut for Unted States ta offcas to
ascertan the ta abe ncome (n the nature of capta gans) whch had been
derved from saes of property at a proft by nonresdent aen ndvduas, or
by foregn corporatons, when the respectve ta payers were not engaged n trade
or busness wthn the Unted States and dd not have an offce or pace of
busness theren. Ths dffcuty was n contrast wth the ease of computng and
coectng a ta from certan other knds of ncome, ncudng payments for the
use of patents and copyrghts, from whch the Unted States ncome ta es were
therefore, t cannot be argued that Congress carred Its nterpretaton nto the Revenue
ct of 1936. If anythng, the contrary mght be argued as to Sabatn v. Commssoner,
98 Fed. (2d) 7 3 (C. . 2d Cr.), whch was decded before the enactment of the
Interna Revenue Code.
S C. 211. T ON NONR SID NT LI N INDI IDU LS.
(a) No Untkd States usness or Offce. There sha be eved, coected, and
pad for each ta abe year. In eu of the ta Imposed by sectons 11 and 12, upon the
amount receved, by every nonresdent aen ndvdua not engaged n trade or busness
wthn the Unted States and not havng an offce or pace of busness theren, from
sources wthn the Unted States as nterest (e cept nterest on deposts wth persons
carryng on the bankng busness), dvdends, rents, saares, wages, premums, annutes,
compensatons, remuneratons, emouments, or other f ed or determnabe annua or
perodca gans, profts, and ncome, a ta of 10 per centum of such amount,
mphass added.) 9 Stnt. 171 .
S C. 1 3. WIT OLDING OF T T SOURC .

(b) Nonresdent ens. persons, n whatever capacty actng, Incudng essees
or mortgagors of rea or persona property, fducares, empoyers, and a offcers and
empoyees of the Unted States, havng the contro, recept, custody, dsposa, or payment
of nterest (e cept nterest on deposts wth persons carryng on the bankng busness
pad to persons not engaged n busness n the Unted States and not havng an offce
or pace of busness theren), dvdends, rent, saares, wages, premums, annutes, com-
pensatons, remuneratons, emouments, or other f ed or determnabe annua or perodca
gans, profts, and ncome (but ony to the e tent that any of the above tems consttute
gross ncome from sources wthn the Unted Staes), of any nonrc dent aen ndvdua,
or of any partnershp not engaged n trade or busness wthn the Unted States an not
havng any offce or pace of busness theren and composed In whoe or n part of non-
resdent aens, sha deduct and wthhod from such annua or perodca
gans, profts, and ncome a ta equa to 10 per centum thereof, mphasa
added. 1 9 Stat. 1700-1791.
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

6

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
19.212-1, Regs. 103. 70
beng, whoy or partay, wthhed at the source. The Congressona Com-
mttee Reports e pressed a purpose of Congress to mt future ta es on non-
resdent aen ndvduas to those ready coectbe. Wth a vew evdenty
to securng substantay as much revenue as before, Congress thereupon ap-
ped a new fat rate of 10 percent to nonresdent aen ndvduas and of 1
percent to foregn corporatons, the entre amount of ths fat rate of ta to be
wthhed and coected at the source of the ncome. The reports referred aso
to ncreases n stock transfer ta es whch mght resut from thus removng the
ncome ta from profts of nonresdent aen ndvduas on ther stock saes.
Congress recognzed a vaue and a convenence n thus turnng to the accessbe,
f ed and determnabe ncome of nonresdent aens. There Is no doubt that
these steps sought to ncrease or at east to mantan the e stng voume of
revenue.11 No suggeston appears that Congress ntended or wshed to reeve
from ta aton the ready accessbe and ong-estabshed source of revenue to
be found n the payments made to nonresdent aens for the use of patents or
copyrghts n the Unted States. Much ess was any suggeston made that ump
sum advance payments of rentas or royates shoud be e empted from ta aton
whe at the same tme smaer repeated payments of rentas or royates woud
be ta ed and coected at the source of the ncome. To have e empted these
nonresdent aens from these ready coectbe ta es derved from sources
wthn the Unted States woud have dscrmnated In ther favor aganst res-
dent ctzens of the Unted States who woud be requred to pay ther reguar
Income ta on such ncome, f treated as royates wthn the meanng of our
gross ncome provsons, or at east to pay a ta upon them as capta gans, f
treated as ncome from saes of capta wthn the meanng of our capta gans
provsons. No such purpose to dscrmnate can be mped.
ccordngy, at the tme n 1936 when these amendments were beng enacted
Into secton 211 (a), the provsons for ta ng the gross ncome of nonresdent aen
Indvduas under the Revenue ct of 193 aready had been ong and offcay
Interpreted as coverng recepts from royates as e pressy and broady defned
Nonresdent aens and foregn corporatons
It has aso been necessary to recommend substanta changes n our present system of
ta ng nonresdent aens and foregn corporatons. In sectoD 211, It Is pro-
osed that the ta on a nonresdent aen not engaged n a trade or busess n the Unted
tates and not havng an offce or pace of bnsness theren, sha be at the rate of
10 percent on hs ron ncome from nterest, dvdends, rents, wages, and saares and
other f ed and determnabe ncome. 7 hs ta (n the usua case) s coected at the
source by wthhodng as provded for n secton US. Such a nonresdent w not be sub|ect
to the ta on capta gans, ncudng gans from hedgng transactons, as at present. It
havng been found mpossbe to effectuay coect ths atter ta . It s beeved that ths
e empton from ta w resut n addtona revenue from the transfer ta es and from
the Income ta n the case of persons carryng on the brokerage busness.
In the case of n foregn corporaton not engaged n trade or busness wthn
the Unted States and not havng an offce or pace of bnsness theren, t s proposed to
evy a fat rate of ta of IS percent on the gross Income of such corporaton from nterest,
dvdends, rents, saares, wages, and other f ed and determnabe ncome (not ncudng
capta tans). Ths ta s to be coected n the usua case by wthhodng at the
Ource.
It Is beeved that the proposed revson of our system of tn ng nonresdent aens
and foregn corpornons w be productve of substanta amounts of addtona revenue,
snce t repaces a theoretca system mpractca of admnstraton n a great number
of cases. runphnss added.1 . R. Rept. No. 2 7 , 7 th Cong., 2d sess. 9-10 (1936)
C. . 1939-1 (Part 2), 607, 073-67 1.
To the same effect, see S. Rept. No. 211)6. 7 th Cong., 2d sess. 21, 23 (1936) C. . 1939-1
(Part 2), 678. 691-093
u On the foor of the ouse. Representatve of Washngton, of the Commttee on
Ways and Means, supportng these amendments, sad :
We have paced n fat ta of 10 percent on nonresdent aens, that s. peope not
ctzens of the Unted States and not resdng In the Unted States ; and ths 10-percent
ta s wthhed nt the source. We e pect to get consderaby more revenue out of both
nonresdent aens and foregn corporatons havng no pace of busness or not engaged
In trade or busness n ths country, than we have been gettng under the present pan,
because we are gong to wthhod t at the source, and not take a chance on ther makng
a report of t. or havng to send our representatves to some foregn country to fnd what
ther net ncome s. and seek to nduce them to pay ther ta . 80 Cong. Rec. 600 (1936).
On the foor of the Senate, Senator ng of Utah, a member of the Fnance Commttee
and n charge of the h, sad, n supportng these amendments :
The ouse b changes the method of ta ng nonresdent aens and foregn corpora-
tons. nonresdent aen not engaged In a trade or busness n the Unted States, or
not havng an offce or pace of busness theren, Is ta ed at a fat rate of 10 percent on
bs Income from Interest, dvdends, rents, wages, saares, and other f ed or determ-
nabe Income, whch are coected at the source. These nonresdent aens are
e empted under the ouse b from the ta on capta gans, ncudng hedgng trans-
actons, t beng found admnstratvey amost mpossbe to coect the capta-gans
ta n such cases. Ths e empton w resut n ncreased revenue from transfer ta ea
or from the ncome ta n the case of persons carryng on the brokerage busness. 80 Cong.
Rec. 80 0 (1936).
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

6

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
71
19.212-1, Regs. 103.
In secton 119(a) and sub|ected to wthhodng at the source of ncome under
secton 1 3(b). The egsatve hstory of the 1936 amendments s, therefore, a
refutaton of any cam that Congress, at that tme, was seekng to e empt such
ta payers from those approprate and ready coectbe tems. On the other
hand, that hstory shows that Congress was seekng to contnue to ta , and even
to ncrease the ta upon, those knds of ncome whch had been found to be ready
wthhodabe at ther respectve sources. ccordngy, what Congress dd was to
ncorporate the very anguage of the wthhodng provsons of secton 1 3(b)
nto the anguage of the ta ng secton 211(a). The reguatons under secton
1 3(b), quoted above substantay as beng n effect snce 192 , had aready
setted that royates were ncuded n secton S(b). The Treasury uetn
aso showed that ump sum payments made n advance for mted rghts under
copyrghts were ncuded n the royates thus sub|ect to wthhodng and ta a-
ton. The type of transactons and the knd of payments were thus dentfed.
The broad anguage there used s entted to be nterpreted n accordance wth
ts pan meanng and estabshed usage. Therefore, after the 1936 amendments,
t became equay cear that these recepts n the nature of royates and prev-
ousy wthhed at ther source were ncuded n the sources of ncome specfed
n secton 211(a) but that profts from saes of property ccre not ncuded n
the sources of ncome specfed n secton 211(a). The decsons of the Court of
ppeas of the Second Crcut n Sabatn v. Commssoner, supra, n 1938, n rea-
ton to the Revenue ct of 1928 and n Rohmcr v. Commssoner, supra, n 19 6,
n reaton to the Interna Revenue Code, as amended n 19 0, refected the same
pont of vew.
None of these provsons of the ct of 1936 were changed by the Revenue ct
of 1938, the Interna Revenue Code, or the 19 0 or 19 1 mendments to that Code,
e cept n reaton to the sze of the ta rates. The prncpa changes even n
those rates were to provde hgher ta es n the hgher brackets, rather than to
reduce the ta es on nonresdent aens.
II
The recept of the respectve amounts by the respondent n snge ump sums as
payments n fu, n advance, for certan rghts under the respectve copyrghts
dd not e empt those recepts from ta aton
Once t has been determned that the recepts of the respondent woud have
been requred to be ncuded n hs gross ncome for Federa ncome ta purposes
f they had been receved n annua payments, or from tme to tme, durng the
fe of the respectve copyrghts, t becomes equay cear that the recept of those
same sums by hm n snge ump sums as payments n fu, n advance, for the
same rghts to he en|oyed throughout the entre fe of the respectve copyrghts
cannot, soey by reason of the consodaton of the payment nto one sum, render
t ta e empt. No Revenue ct can be nterpreted to reach such a resut n the
absence of nescapaby cear provsons to that effect. There are none such here.
The argument for the e empton was suggested by the presence n sectons
211(a) and 1 3(b) of the words annua and perodca. If read apart from
ther te t and egsatve hstory and suppemented by the gratutous nserton
after them of the word payments, they mght support the mtng effect here
argued for them. owever, when taken n ther conte t, and partcuary n
the ght of the egsatve hstory of those cts, and the nterpretaton paced
upon them by the Treasury Department and the ower courts, they have no
such meanng. Those words are merey generay descrptve of the character
of the gans, profts and Income whch arse out of such reatonshps as those
whch produce ready wthhodabe nterest, rents, royates and saares, con-
sstng whoy of ncome, especay n contrast to gans, profts and ncome n
the nature of capta gans from proftabe saes of rea or persona property.
Partcuary n the Revenue ct of 1938, secton 211 was amended to provde that,
f the aggregate amount of a ta payer s ncome of the types ncuded from sources wthn
the Unted States was more than 21,000, durng a ta abe year, then the reguar rate of
ta mposed by sectons 11 and 12 became appcabe, sub|ect to the provso that In no case
It be ess than 10 percent of the gross ncome sub|ect to the ta . Secton 211 (a) and
(c). 2 Stat. 27- 28. and see ppend , nfra, p. .
a Whe payment ordnary s at a certan rate for each artce or certan
percent of the gross sae, that In Itsef s not determnatve. The purpose for whch the
paymnnt s made and not the manner thereof s the determnng factor. Commssoner
v. ffated nterprses, 123 Fed. (2d) 66 . 068 (C. . 10th Cr.).
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

6

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
19.212-1, Regs. 103.
72
In the nstant case, each copyrght whch was to be obtaned had ts fu,
orgna fe of 28 years to run after the advance payment was receved by the
author coverng the use of or the prvege of usng certan rghts under It
F ed and determnabe ncome, from a ta standpont, may be receved ether
n annua or other payments wthout aterng In the east the need or the reasons
for ta ng such ncome or for wthhodng a part of t at ts source. One advance
payment to cover the entre 28-year perod of a copyrght comes wthn the
reason and reach of the Revenue cts as we as, or even better than, two or
more parta payments of the same sum.
rtce 1 3-2 of Treasury Reguatons 101, ssued under the Revenue ct of
1938, provded:
The ncome need not be pad annuay f t Is pad perodcay; that Is to say,
from tme to tme, whether or not at reguar Intervas. That the ength of tme
durng whch the payments are to be made may be ncreased or dmnshed In
accordance wth someone s w or wth the happenng of an event does not make
the payments any the ess determnabe or perodca.
Substantay ths bera anguage n the reguatons has been used n ths
connecton snce 1918. (U. S. Treasury Reguatons , artce 362 (1918).)
Snge ump sum payments of royates were hed to be ta abe under the Revenue
cts of 1921, 192 , 1926 and 1928, I. T. 273 , C. . II-2, 131 (1933) ; under the
Revenue ct of 1928, Sabatn v. Commssoner, supra; and under the Interna
Revenue Code, as amended n 19 0, Rohmer v. Commssoner, supra.
For the foregong reasons, we hod that the recepts n queston were requred
to be ncuded n the gross ncome of the respondent for Federa ncome ta pur-
poses. The |udgment of the court of appeas accordngy s reversed and re-
manded for further proceedngs consstent wth ths opnon.
Reversed and remanded.
Mr. ustce Dougas took no part n the consderaton or decson of ths case.
Dssentng opnon by Mr. ustce Frankfurter, wth whom Mr. ustce Mur-
phy and Mr. ustce ackson |on.
ppend
Matera provsons of sectons 212(a), 211 and 119 of the Revenue ct of 1938
and the Interna Revenue Code:
S C. 212. GROSS INCOM .
(a) Genera Rue. In the case of a nonresdent aen ndvdua gross ncome
ncudes ony the yross ncome from sources wthn the Unted States. m-
phass added. 2 Stat. 28, and 3 Stat. 76, 26 U. S. C. secton 212(a).
S C. 211. T ON NONR SID NT LI N INDI IDU LS,
(a) No Unted States usness or Offce.
(1) Genera rue. There sha be eved, coected, and pad for each
ta abe year, n eu of the ta mposed by sectons 11 and 12 norma ta
and surta mposed generay upon ndvduas and appcabe n the nstant
case, under paragraphs (a)(2) and (c), because the respondent s gross
ncome for each ta abe year e ceeded the aowabe ma mum there spec-
fed , upon the amount receved, by every nonresdent aen ndvdua not
engaged n trade or busness wthn the Unted States and not havng an
offce or pace of busness theren, from sources wthn the Unted States as
nterest (e cept nterest on deposts wth persons carryng on the bankng
busness), dvdends, rents, saares, wages, premums, annutes, compensa-
tons, remuneratons, emouments, or other f ed or determnabe annua or
perodca gans, profts, and ncome, a ta of 10 per centum of such amount,

(2) ggregate more tan 2,600. The ta mposed by paragraph (1)
sha not appy to any ndvdua f the aggregate amount receved durng
the ta abe year from the sources theren specfed s more than 21,600.

(c) No Unted States usness or Offce and Gross Income of More Than
21,600. nonresdent aen ndvdua not engaged n trade or busness wthn
the Unted States and not havng an offce or pace of busness theren who has a
gross ncome for any ta abe year of more than 21,600 from the sources specfed
.
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

6

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
73
19.212-1, Regs. 103.
n subsecton (a) (1), sha be ta abe wthout regard to the provsons of sub-
secton (a) (1), e cept that
(1) The gross ncome sha ncude ony ncome from the sources specfed
n subsecton (a) (1) ;
(2) The deductons (other than the so-caed chartabe deducton pro-
vded n secton 213(c)) sha be aowed ony f and to the e tent that they
are propery aocabe to the gross ncome from the sources specfed n
subsecton (a) (1) ;
(3) The aggregate of the norma ta and surta under sectons 11 and 12
sha, n no case, be ess than 10 per centum of the gross ncome from the
sources specfed n subsecton (a)(1); and mphass added.
2 Stat. 27- 28.
The above provsons of sectons 212 and 211 were reenacted n the Interna
Revenue Code, 3 Stat. 7 -76. The ta rates were changed by the Revenue ct
of 19 0, c. 19, Stat. 16- 17 as foows: the surta es were ncreased generay
n secton 12(b), the fat rates were ncreased from 10 percent to 1 percent and
the aowabe ma mum ncome sub|ect to the fat rates was rased from
21,600 to 2 ,000 n secton 211 (a) and (c), Stat. 18. The Revenue ct of
19 1, c. 12, Stat. 687, OSS, agan ncreased the surta es n secton 12(b),
ncreased the fat rates from 1 percent to 27M percent and decreased the
aowabe ma mum ncome sub|ect to the fat rates from 2 ,000 to 23,000
n secton 211 (a) and (c), Stat. 69 . Snce then, the norma ta and surta
rates have been ncreased st further, the fat rate appcabe to nonresdent
aen ndvduas has been ncreased from 27 percent to 30 percent and the
aowabe ma mum ncome to whch the fat rates appy has b en reduced to
1 , 00. 26 U. S. C. secton 211 (a) and (c).
S C. 119. INCOM FROM SOURC S WIT IN UNIT D ST T S.
(a) Gboss Income From Sources n Unted States. The foowng tems of
gross ncome sha be treated as ncome from sources wthn the Unted States :
(1) Interest.
(2) Dvdends.
(3) Persona servces.
( ) Rentas and royates. Rentas or royates from property ocated
n the Unted States or from any nterest n such property, ncudng rentas
or royates for the use of or for the prvege of usng n the Unted States,
patents, copyrghts, secret processes and formuas, good w, trade-marks,
trade brands, franchses, and other ke property; and
( ) Sae of rea property. Gans, profts, and ncome from the sae of
rea property ocated n the Unted States.
(6) Sae of persona property. For gans, profts, and ncome from the
sae of persona property, see subsecton (e).
(b) Net Income From Sources n Unted States. From the tems of gross
ncome specfed n subsecton (a) of ths secton there sha be deducted the
e penses, osses, and other deductons propery apportoned or aocated thereto
and a ratabe part of any e penses, osses, or other deductons whch cannot
defntey be aocated to some tem or cass of gross ncome. The remander,
f any, sha be ncuded n fu as net ncome from sources wthn the Unted
States.
(c) Gross Income From Sources Wthout Unted States. The foowng
tems of gross ncome sha be treated as ncome from sources wthout the Unted
States:
(1) Interest other than that derved from sources wthn the Unted
States as provded In subsecton (a) (1) of ths secton;
(2) Dvdends other than those derved from sources wthn the Unted
States as provded n subsecton (a) (2) of ths secton;
(3) Compensaton for abor or persona servces performed wthout the
Unted States;
( ) Rentas or royates from property ocated wthout the Unted States
or from any nterest n such property, ncudng rentas or royates for the
use of or for the prvege of usng wthout the Unted States, patents, copy-
rghts, secret processes and formuas, good w, trade-marks, trade brands,
franchses, and other ke propertes; and
868072 0 6
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

6

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
19.212-1, Regs. 103.
7
( ) Gans, profts, and Income from the sae of rea property ocated
wthout the Unted States.
(d) Net Income From Sources Wthout Unted States.
(e) Income From Sources Party Wthn and Pabtt Wthout Unted
States. Gans, profts, and ncome from
(1) transportaton or other servces rendered party wthn and party
wthout the Unted States, or
(2) from the. sae of persona property produced (n whoe or n part)
by the ta payer wthn and sod wthout the Unted States, or produced (n
whoe or n part) by the ta payer wthout and sod wthn the Unted States,
sha be treated as derved party from sources wthn and party from sources
wthout the Unted States. Gans, profts and ncome derved from the purchase
of persona property wthn and ts sae wthout the Unted States or from the
purchase of persona property wthout and ts sae wthn the Unted States, sha
be treated as derved entrey from sources wthn the country n whch sod,
(f) Defntons. . mphass added. 2 Stat. 03- 06, 3 Stat.
3- , 26 U. S. C. secton 119.
ppend
the curts pubshng company
Independence Square
Phadepha
February 22, 1938
Pau R. Reynods Son,
99 Ffth venue,
New York Cty.
We ncose herewth our check forty thousand doars n payment for
Sera: The Sver Cow.
y P. G. Wodehouse. 0,000.00.
mportant
Ths check s offered and accepted wth the understandng that The Curts
Pubshng Company buys a rghts n and of a stores and speca artces
appearng n ts pubcatons and wth the further understandng that every
number of these pubcatons n whch any porton thereof sha appear sha
be copyrghted at ts e pense. fter pubcaton n a Curts perodca s com-
peted t agrees to reassgn to the author on demand a rghts, e cept mercan
(ncudng Canadan and South mercan) sera rghts.
moton pcture bghts
Pease note that our reservaton of sera rghts (whch ncudes pubcaton
n one nstament) ncudes new story versons based on moton-pcture or
dramatc scenaros of short stores and seras that have appeared n Curts
pubcatons, and that we permt the use of such versons ony under the foowng
condtons: Such synopss, scenaro, or new story verson sha not e ceed ffteen
hundred (1, 00) words n ength when based on a short story appearng compete
n one ssue, or fve thousand ( ,000) words when based on a sera appearng
n two or more ssues, or a seres of not ess than three connected short stores
from whch a snge pcture s to be made. Such synopss sha appear ony n
crcuar matter, press books, press notces, trade |ournas and n magaznes
devoted e cusvey to dramatc or moton-pcture matter, and sha n no event
appear as havng been wrtten by the author. When seng moton-pcture or
dramatc rghts of matter, you must notfy the producer to ths effect, so that
there may be no msunderstandng on hs part and no nfrngement of our rghts.
The Curts Puhshnq Company
Respondent s e hbt contanng the foregong memorandum agreement aso
ncuded the statement rendered and the checks ssued by the agent to the
respondent and to the respondent s wfe for 17,100 each, ncudng the foowng:
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

6

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
7
19.212-1, Re-s. 103.
March 3, 1933.
P. G. Wodehouse n account wth Pau It. Reynods Son.
Receved from Saturday venng Post for mercan, Canadan d
South mercan sera rghts to
The Sver Cow 0, 000
Commsson percent 2, 000
3S, 000
U. S. Income Ta 10 percent 3, 800
3 ,200
the Wodehouse share one-haf 17,100
Draft herewth 17,100
mphass added.
No ssue s before us reatng to the computaton of the amount wthhed or
the dvson of the payments between the respondent and hs wfe. In the
statements rendered by the agent as to the payments receved for sera rghts
to Unce Fred n the Sprngtme, the Inta amount wthhed was 10 percent
of the fu payment wthout deducton of the agent s commsson.
ppend C
RST S INT RN TION L COSMOPOLIT N
earst Magazne udng
Ffty-seventh Street and ghth venue
New York Cty
uy 23,19 1.
u 2 , 19 1.
Mb. Pau R. Reynods, Sr.,
99 Ffth venue,
New York Cty.
Dear Mr. Reynods:
Ths w confrm our purchase of the artce entted My Year ehnd arbed
Wre by P. G. Wodehouse for two thousand doars ( 2,000.00). We are buyng
a mercan and Canadan sera rghts (whch ncude a mercan and
Canadan magazne, dgest, perodca and nacspapcr pubshng rghts).
It s understood and agreed that the author, and you as hs agent, w not
use or permt the use of ths artce or any part or parts thereof (1) n any manner
or for any purpose unt thrty (30) days after magazne pubcaton and (2)
n connecton wth or as the bass for any moton and/or takng pcture(s),
rado broadcast(s), teevson, dramatc producton(s) or pubc performance(s)
throughout the word uness the words ased on (or taken from) terary ma-
tera orgnay pubshed n Cosmopotan mmedatey precede or foow or
otherwse accompany the tte of any and a such moton and/or takng pctures,
rado broadcasts, teecasts, dramatc productons or pubc performances.
Your sgnature hereon w consttute an agreement between us.
Sncerey yours,
FR NC S W ITING.
Frances Whtng.
ccepted:
Date:
I am acceptng the above etter on the condton that pubcaton of ths
artce can be reeased n ngand smutaneousy wth pubcaton n Cosmo-
potan Magazne (despte the wordng of (1) n the second paragraph) ; wth
the further understandng that Cosmopotan w permt no dgest or newspaper
pubcaton of ths artce wthout the consent of the author or hs agent n
wrtng; and wth the further condton that we receve payment not ater than
September 1, 19 1. mphass added.
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

6

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
29.213-1.
76
S CTION 213. D DUCTIONS
Secton 29.213-1: Deductons aowed non- 19 9-16-131 0
resdent aen ndvduas. G. C. M. 26013
( so Secton 23(a), Secton 29.23 (a)-2;
Secton 119, Secton 29.119-10.)
INT RN L R NU COD
The e penses ncurred by a ctzen and resdent of France,
whose prncpa pace of busness s n France, In behaf of hmsef,
hs manager, and hs secretary, n traveng from France to the
Unted States n order to fuf performance contracts n the
Unted States and Canada, as we as the e penses Incurred n re-
turnng to France upon competon of such contracts, are deductbe
for Federa ncome ta purposes In the proporton that the gross
ncome from sources wthn the Unted States bears to the tota
gross ncome from sources wthn both the Unted States and Canada.
n opnon s requested as to the deductbty, for Federa ncome
ta purposes, of amounts pad by the ta payer for e penses of hmsef,
hs manager, and hs secretary, n traveng from France to ths coun-
try for the purpose of fufng performance contracts n the Unted
States and Canada, and n returnng to France upon competon of
such contracts.
In the nstant case, the ta payer, a ctzen and resdent of France,
has for many years performed n moton pctures, made recordngs
and rado appearances, and has gven concerts n France and other
uropean countres, as we as n the Unted States. e aso owns
and manages a number of busness enterprses n France. e entered
the Unted States n March, 19 7, under a temporary vstor s vsa
to fuf performance contracts both here and n Canada. e gave
a seres of performances here from March 10,19 7, to May 17,19 7, at
whch tme he departed for Canada to carry out hs engagements
there. Upon concuson of hs performances n Canada, he returned
to the Unted States and departed n une, 19 7, for France, where he
was schedued to gve concerts.
Secton 213(a) of the Interna Revenue Code provdes as foows:
Genera Rue. In the ease of a nonresdent aen ndvdua the deductons
sha be aowed ony If and to the e tent that they are connected wth ncome
from sources wthn the Unted States; and the proper apportonment and
aocaton of the deductons wth respect to sources of ncome wthn and
wthout the Unted States sha be determned as provded n secton 119, under
rues and reguatons prescrbed by the Commssoner wth the approva of the
Secretary.
Secton 29.213-1( ) of Reguatons 111 provdes n part as foows:
Unted States busness. In the case of a nonresdent aen ndvdua who at
any tme wthn the ta abe year was engaged n trade or busness wthn the
Unted States the deductons aowed by secton 23 for busness e penses
are aowed ony f and to the e tent that they are connected wth ncome from
sources wthn the Unted States.
oth the statute and the reguaton whch are set forth above specfy
that deductons are aowed to a nonresdent aen ony f and to
the e tent that they are connected wth ncome from sources wthn
the Unted States. Ths condtona cause was e paned n I. T.
2792 (C. . III-1,8 (193 )) as foows:
To be aowabe, therefore, the deducton must be connected wth
ncome from sources wthn the Unted States. The word connected means
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

6

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
77
29.213-1.
|oned or nked together by some te, as of causaty, reatonshp, or ntmacy.
The meanng at once suggested s that the requste te between the deducton
and the ncome s that of causaty, that s, that the e pendture for whch the
deducton s camed must enter nto, and be drecty reated to, the producton
of the ncome.
The ta payer, accompaned by hs manager and secretary, under-
took the trp from France to ths contnent and return for the e press
purpose of fufng performance contracts n the Unted States and
Canada, and those engagements were the mmedate cause nducng
the transportaton e penses n queston. Thus, the requste te of
causaty s present here, and such transportaton e penses are con-
nected wth, or drecty reated to, the producton of ncome n the
Unted States and Canada. It foows that such e penses quafy
under secton 213(a) of the Code to the e tent that they are connected
wth ncome from sources wthn the Unted States, provded they
aso consttute deductbe busness e penses under secton 23(a)(1)
( ) of the Code.
Srce the transportaton e penses of the ta payer, hs manager, and
hs secretary, n traveng to the Unted States and n returnng to
France, cannot be aocated e cusvey to ncome from sources wthn
the Unted States, such e penses shoud be apportoned upon the rato
of gross ncome from sources wthn the Unted States to the tota
gross ncome from sources wthn both the Unted States and Canada
whch resuted from that trp. (See secton 29.119-10 of Regua-
tons 111.)
There remans to be consdered whether the apportoned part of such
e penses, thus aocated to ncome from sources wthn the Unted
States, s deductbe as a busness e pense under secton 23(a) (1) ( )
of the Code or, more specfcay, as a traveng e pense (ncudng the
entre amount e pended for meas and odgng) whe away from
home n the pursut of a trade or busness. The ta payer s home and
prncpa or reguar pace of busness durng the perod n queston
was n France. Whe n the Unted States, he was on a busness trp
whch requred nothng more than a temporary departure from the
pace where he customary carred on hs busness durng the ta abe
year. Thus, the nstant stuaton s regarded as beng cosey anao-
fous to that consdered n Coburn v. Commssoner (138 Fed. (2d)
63). The fact that the nstant ta payer s a nonresdent aen does
not affect the appcaton of the genera prncpes governng the de-
ductbty of traveng e penses. (See rgna Ruz Carranza
(Zur) v. Commssoner, 11 T. C. 22 .) ccordngy, t s beeved
that the apportoned part of such traveng e penses whch s aocabe
to ncome from sources wthn the Unted States consttutes a
deductbe traveng e pense under secton 23(a) (1) ( ) of the Code.
G. C. M. 9 6 (C. . II-2, 128 (1928)), whch dsaowed the de-
ducton camed by a nonresdent aen muscan for annua, round-
trp transportaton e penses between the Unted States and ustra,
s ready dstngushabe from the nstant case because that muscan s
prncpa and apparenty hs ony pace of busness was n the Unted
States; consequenty, those e penses were not drecty connected wth
hs performance n a domestc orchestra or wth hs ncome from
sources wthn the Unted States. The motvatng factors of such
trave were apparenty hs persona convenences and necesstes rather
than the e gences of hs trade or busness. (See Commssoner v.
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

6

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
29.2 1-1.
78
Fowers, 326 U. S. 6 ; Ct. D. 16 9, C. . 19 6-1, 7.) The rue stated
n the second sentence of O. D. 1 (C. . 2, 1 7 (1920)), whch ds-
aows the e penses ncurred n reachng a new pace of empoyment n
a foregn country, apparenty concerns an empoyee who accepts an
empoyment contract of ndefnte duraton and thereby estabshes
hs prncpa or reguar post of duty n such foregn country. (Cf.
ohn D. ohnson v. Commssoner, 8 T. C. 303.) Such a rue s not
appcabe to an ndvdua who accepts, n pursut of hs trade or
busness, one or more short-term contracts whch requre but a tem-
porary departure from hs usua pace of busness. (Cobum v. Com-
mssoner, supra.) The essenta facts n the nstant case appear to
be substantay the same as those nvoved n I. T. 303 (C. . -2,
136 (1936)). There, a nonresdent aen muscan was aowed to de-
duct hs e pendtures for meas and odgng whe on a bref concert
tour n ths country. If that muscan, who eft hs home and prnc-
pa or reguar pace of busness for the soe purpose of engagng n a
bref concert tour n ths country, had camed a deducton for e penses
ncurred n traveng to and from the Unted States, such deducton,
n the opnon of ths offce, woud aso have been aowabe.
For the reasons stated above, t s the opnon of ths offce that the
apportoned part of the e penses pad by the ta payer for transporta-
ton of hmsef, hs manager, and hs secretary, n traveng to and
from the Unted States, whch s aocabe to ncome from sources
wthn the Unted States, consttutes a proper deducton for Federa
ncome ta purposes.
Chares Ophant,
Chef Counse, ureau of Interna Revenue.
SUPPL M NT I. foregn corporatons
S CTION 231. T ON FOR IGN CORPOR TIONS
Secton 29.231-1: Ta aton of foregn corporatons.
nterna revenue code
Reguatons 111 amended. (See T. D. 709, page 6.)
SUPPL M NT . POSS SSIONS OF T UNIT D ST T S
S CTION 2 1. INCOM FROM SOURC S WIT IN
POSS SSIONS OF UNIT D ST T S
Secton 29.2 1-1: Ctzens of the Unted
States and domestc corporatons derv- I. T. 3981
ng ncome from sources wthn a pos-
sesson of the Unted States.
INT RN L R NU COD
In the case of an ndvdua member of a partnershp, gross
ncome, for the purposes of secton 2 1 of the Interna Revenue Code,
reatng to ncome from sources wthn possessons of the Unted
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

6

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
79
29.2 1-1.
States, ncudes the partner s proportonate share of the partner-
shp s gross ncome, not hs dstrbutve share of the partnershp s
ordnary net ncome.
dvce s requested whether, for the purposes of secton 2 1 of the
Interna Revenue Code, reatng to ncome derved from sources wthn
possessons of the Unted States, gross ncome derved by a partner
from a partnershp conssts of hs proportonate share of the part-
nershp s gross ncome or hs dstrbutve share of the partnershp s
ordnary net ncome.
It s contended that Suppement F (sectons 181 through 190) of
Subchapter C of Chapter 1 of the Interna Revenue Code contans
provsons whch change the nature of the gross ncome derved by
a partner from a partnershp so that t conssts (wth e ceptons not
hereto reevant) ony of hs dstrbutve share of the partnershp s
ordnary net ncome, and not of gross ncome such as s contempated
by secton 22 of the Code.
Wth the e cepton of secton 187 of the Code, none of the sectons
of Suppement F contans any reference to gross ncome. ven n
secton 187, no ndcaton s gven that, as the term s there used, gross
ncome s anythng other than the tems specfed n secton 22 of the
Code.
Secton 29.189-1 (a) (3) of Reguatons 111 reads n part as foows:
s dstrbutve share of a busness ordnary net ncome of the partnershp
sha be ncuded by each partner as ordnary busness gross ncome, and of a
busness ordnary net oss of te partnershp as an ordnary busness deducton.
s dstrbutve share of a nonbusness ordnary net ncome of the partnershp
sha be ncuded by each partner as ordnary nonbusness gross ncome, and of
a nonbusness ordnary net oss of the partnershp as an ordnary nonbusness
deducton.
The soe purpose of secton 29.189-1 of Reguatons 111 s to nter-
pret secton 189 of the Code, a secton whch deas wth the appcaton
of secton 23 (s) of the Code to partnershp ncome. oth the purpose
and the anguage of (he reguaton are such as to precude any reason-
abe contenton that t has the ob|ectve of prescrbng that the gross
ncome derved by a partner from a partnershp shoud consst ony of
hs dstrbutve share of the partnershp net ncome. It s apparent,
therefore, that there s nothng n Suppement F whch makes any
e cepton or addton to the concept of gross ncome as set forth n
secton 22 of the Code.
The genera provsons of the ncome ta statute, n the absence of
specfc provsons to the contrary, appy to partnershp ncome as f
t were receved by the partners wthout the nterventon of the part-
nershp. though a partnershp may generay be consdered as a
busness unt, t s, from the vewpont of Federa ncome ta aton, a
unt ony for the purpose of makng an nformaton return on Form
106 (Unted States Partnershp Return of Income). Nether the
partnershp tsef nor the partnershp return can nsuate the partner
from hs aocabe porton of the partnershp gross ncome. Form
106 s anaogous to certan of the schedues contaned n Form 10 0
(U. S. Indvdua Income Ta Return) n whch the gross ncome
derved from specfed sources s entered and the deductons drecty
aocabe thereto are subtracted, the dfference consttutng an tem
of ad|usted gross ncome (cf. secton 22(n) of the Interna Revenue
Code). If, tor purposes of Federa ncome ta aton, t s necessary
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

6

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
30.719-1, Iegs. 109.
SO
to determne the ta payer s gross ncome, the amount of gross ncome
entered n such a schedue, not the amount of ad|usted gross ncome,
s controng. n essenta dfference between the schedues n Form
10 0 and the return on Form 106 s that the schedues appy to but
one return, whereas Form 106 generay appes to two or more re-
turns. ut the ndvdua partner s dstrbutve share of the part-
nershp s ordnary net ncome s as ceary an tem of ad|usted gross
ncome as f the computaton by whch t was arrved at had been set
forth on hs ndvdua return.
The requrements of secton 2 1 (a) of the Code are based on amounts
of gross ncome as we as sources of gross ncome. d|usted gross
ncome does not enter nto the cacuatons made to determne whether
the ta payer s entted to ts benefts. ta payer camng the
benefts of secton 2 1, a or a part of whose gross ncome durng
the appcabe perod thereunder was derved from a partnershp,
must determne, n addton to the sources of gross ncome, the amount
of the gross ncome of that partnershp whch s aocabe to hm
and make hs cacuatons accordngy. s dstrbutve share of
the ordnary net ncome of the partnershp does not affect ths
cacuaton.
Secton 29.2 1-1: Ctzens of the Unted States
and domestc corporatons dervng ncome
from sources wthn a possesson of the Unted
States.
INT RN L R NU COD
Reguatons 111 amended. (See T. D. 709, page 6.)
C PT R 2. DDITION L INCOM T S
SU C PT R . C SS PROFITS T
P RT I
S CTION 719. ORROW D IN ST D C PIT L
Secton 30.719-1, Reguatons 109: orrowed 19 9-21-13210
nvested capta. Ct. D. 172
C SS PROFITS T INT RN L R NU COD D CISION OF COURT
orrowed Invested Capta Whether dvances to Ta payer bt
Factor Represented orrowed Capta.
Ta payer corporaton entered Into a wrtten agreement wth
a factor n order to obtan suffcent capta for ts busness, under
whch agreement t assgned ts accounts recevabe to the factor
and the atter agreed to advance 90 percent of the face vaue of
such accounts, and the baance, ess the factor s charges, upon pay-
ment of the assgned accounts. The assgnments were effected by
nstruments separate from the agreement. ed: The agreement
and assgnments together were equvaent n effect and In reaty to
an ndebtedness evdenced by a mortgage wthn the meanng of
secton 719(a)(1) of the Interna Revenue Code, and accordngy
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

6

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
81
30.719-1, Regs. 109.
the advances consttuted borrowed capta for the purposes of
computng e cess profts credt under sectons 712 and 71 of the
Code.
Unted States Ckcut Court of ppeas foe the Second Crcut
rewster Shrt Corp., pettoner, v. Commssoner of Interna Revenue, respondent
1 9 Fed. (2d) 227
Petton for revew of decson of The Ta Court of the Unted States
efore Swan, ugustus N. and, and C.abk, Crcut udges
anuary 11, 19 7
From an order determnng a defcency of S3.1 S.91 n the e cess profts
ta es of the pettoner rewster Shrt Corp. on the ground that certan of
the assets (d not consttute borrowed nvested capta wthn the meanng of
secton 719 of the Interna Revenue Code, the pettoner appeas. Reversed.
OPINION
ugustus N. and, Crcut udge: The ta payer seeks to have reversed an
order of The Ta Court of the Unted States whch sustaned a determnaton by
the Commssoner of Interna Revenue of a defcency In e ces profts ta es
for the year 19 1 n the amount of 3,1 8.91.
The queston before us s whether varous advances to the ta payer by ts
factor Ms Factors Corp. represented borrowed capta wthn the meanng
of secton 719(a)(1) for the purpose of computng ts e cess profts.
Secton 710 of the Revenue ct f es the ta on ad|usted e cess profts net n-
comes. In arrvng at the ta the Commssoner dsaowed a sum of 18 ,332.77
borrowed from Ms Factors Corp. whch the ta payer had set forth In ts
return for the purpose of estabshng a proper credt n reportng ts e cess
profts net ncome for the year 19 1. The proprety of ths dsaowance depends
on whether that sum was borrowed capta whc In turn depends on the nter-
pretaton to be paced on de portons of secton 719 of the ct quoted n the
margn.1
The Commssoner gave a narrow constructon to the words bond, note, b
of e change, debenture, certfcate of ndebtedness, mortgage or deed of trust
and assessed a defcency n e cess profts ta es by hodng that the
ta payer was not entted to the credt camed under sectons 712 and 71
because the oans by Ms Factors Corp. dd not come wthn any of the specfca-
tons of secton 719. The Ta Court affrmed the Commssoner.
The rewster Shrt Corp. was organzed n 19111 wth a captazaton of 0,000,
of whch 18,000 was e pended n purchasng a factory at Danbury, Conn. That
e pendture eft t wth nsuffcent capta for proftabe operaton and t was
obged to resort to the common practce of factorng ts accounts n order to
obtan suffcent capta for ts busness. ccordngy t entered nto a wrtten
agreement wth Ms Factors Corp. under whch t assgned ts accounts recevabe
to the Factor and the atter agreed to advance 90 percent of the face vaue of such
accounts and the baance upon payment of the assgned accounts. s s com-
mon n such factorng agreements there was a stpuated charge on the part of
the Factor, for ts e penses and servces, of three-fourths of 1 percent per month
on the net saes of the ta payer assgned to the Factor. The ta payer agreed
to repurchase at face vaue accounts whch were not pad at ther maturty,
assumed a credt rsks wth respect to the accounts, ncudng abty for defects
n goods and agreed to hod returned merchandse n trust for the Factor unt any
S C. 719. ORROW D IN ST D C PIT L.
(a) orkowed Captaf,. The borrowed capta for any day of any ta abe year sha be
determned as of the begnnng of such day and sha be the sum of the foowng :
(1) The amount of the outstandng ndebtedness (not ncudng nterest, and not In-
cudng ndebtedness descrbed n secton 7 1(b) reatng to certan e changes) of the
tn naycr whch s evdenced by a bond, note, b of e change, debenture, certfcate of n-
debtedness, mortgage or deed of trust, .
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

6

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
30.719-1, Regs. 109.
82
amounts advanced thereon shoud be repad. The partes stated the genera terms
of ther arrangements as set forth n the margn.
In accordance wth the agreement the ta payer assgned accounts recevabe
to Ms Factors Corp. and obtaned money thereon from the Factor. These assgn-
ments were effected by nstruments separate from the agreement, refected the
specfc accounts assgned, and were In the foowng form:
For vaue receved, we hereby se, assgn, transfer and set over unto M
Factors Corp., ts successors and assgns the accounts recevabe ndcated be-
ow and a of our rght, tte and nterest n and to any merchandse theren
descrbed that may be returned to us and we hereby guarantee to sad M Factors
Corp. that such accounts are |ust and true, that no payments have been made on
account thereof, that there are no defenses, countercams or offsets thereto, that
the terms of credt are as specfed theren and that no part of these accounts has
been assgned, transferred or n any other manner encumbered, e cept as theren
stated. Ths assgnment s made pursuant to the agreement between us and
M Factors Corp. dated 3/2 /38.
t the end of each month a statement was submtted by the Factor to pettoner
showng baance of the amount advanced by the Factor to pettoner. In ts
e cess profts ta return, fed for the year 19 1, the ta payer computed ts n-
vested capta and ncuded as part of ts average borrowed nvested capta 0 per-
cent of ts day average outstandng ndebtedness to Ms Factors Corp. If
the borrowed nvested capta was evdenced by a bond, note, b of e change,
debenture, certfcate of ndebtedness, mortgage or deed of trust, as
prescrbed by secton 719(a) (1) of the Interna Revenue ct the amount nserted
n the return was the correct amount to be credted under secton 719(b), whch
reads as foows:
(b) orrowed Invested Capta. The borrowed nvested capta for any
day of any ta abe year sha be determned as of the begnnng of such day and
sha be an amount equa to 0 per centum of the borrowed capta for such day.
The opnon of the Ta Court n denyng the above credt camed by the ta -
payer for borrowed nvested capta set forth the ta payer s contenton that
the agreement wth the Factor and the varous assgnments of accounts recevabe
were n effect and n reaty, notes or bs of e change wthn the meanng of
the quoted secton of the Interna Revenue Code, and then merey added : Wth
ths contenton we are unabe to agree, and cted ther decsons n ourna
Pubshng Co. v. Commssoner, 3 T. C. 18; Wm. . ggns Co., Inc.. v. Com-
mssoner, T. C. 1033, and Fnt Nortoc-n Theatre Co. v. Commssoner, T. C.
36, as authorty for the resut reached.
We thnk that the decson nterprets the credt aowabe under secton 719
for borrowed nvested capta too narrowy and was not requred by the pror
authortes on whch t reed.
It s cear that as soon as accounts were assgned and advances made thereon
the agreement and assgnments nvoved securty transactons whch n aw
consttuted a mortgage. What egay s a mortgage s a matter of substance
and not of mere form. Ths has ong been the setted New York doctrne as Is
shown n the decsons n Shedon v. McFee, 216 N. Y. 618, 620; Dunham v. Whte-
head, 21 N. Y. 131, 133; Lctch v. IIo ster, N. Y. 211, 216; cf. In re ernard
atz, Inc., 38 Fed. (2d) 0 (C. C. . 2). Whe the meanng of the term mort-
gage n a ta statute ke the one under consderaton s ordnary a matter for
controng determnaton by the Unted States courts, decsons of the State courts
whch defne a commerca term n such common use as mortgage are a reason-
abe source of gudance.
3 Frst: Where terms of sae to customers sha frst have been approved by the Factor
In wrtng, and the accounts recevabe assgned to the Factor, a as n ths agreement
provded for. the Factor w purchase sad accounts recevabe sub|ect to the terms and
condtons herenafter set forth, at ther net face vaue, ess trade dscounts and comms-
ons. rewster s to pay nterest for a addtona tme taken by ts customers n the
payment of ther bs, provded such nterest Is not pad by customer.
Fourth : s coatera securty for any and a sums whch may now or hereafter be due
from rewster to the Factor, rewster further and hereby assgns to the Factor, e cept as
noted beow, a accounts recevabe, bs recevabe and other evdences of ndebtedness
arsng from saes or created n the course of rewster s busness, and rewster hereby
grants to the Factor a en thereon, and upon any and a merchandse of rewster, the
sae of whch bns resuted n such accounts recevabe. rewster agrees to e ecute any
further form of assgnment whch may be requred by the Factor. The e cepton refers to
a e port shpments and aso saes made on terms of 10 days or ess, whch atter may. at
rewster s opton, be emnated from the terms of ths agreement.
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

6

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
83
30.719-1, Regs. 109.
The effect of the Interpretaton gven by the Ta Court to the term mortgage
woud be to sub|ect factorng agreements to burdensome e cess profts ta es.
Factorng agreements are common enough but are frequenty entered nto by
persons of ony moderate fnanca strength who cannot obtan the money tey
need from commerca banks and must borrow at hgher cost from nsttutons
havng greater freedom n the rsks they may take when makng oans. We
cannot suppose that t was the ntenton of Congress to sub|ect securty gven
under factorng agreements to a form of ta aton whch woud n effect ds-
crmnate aganst those arrangements n favor of secured bank oans, especay
when borrowers from factors are a cass frequenty east abe to bear the bur-
den. The fact that the securty was gven n the form of outrght assgnments
s qute unmportant when the transacton was n effect a mortgage. Indeed,
artce fourth of the agreement wth Ms Factors Corp. assgns a accounts
as coatera securty. rtce nnth and fourteenth moreover show that
the accounts are coatera for oans and that the borrower s abe for any
defcency. We hod that ndebtedness here was evdenced by nstruments whch
consttuted a mortgage. It made no dfference that artce frst of the agree-
ment provded that the Factor shoud purchase sad accounts sub|ect to the
terms and condtons herenafter set forth, at ther net face vaue, ess trade
dscounts and commssons for the advances were n fact oans and assgned
accounts, were coatera securty by the terms of the agreement and repayment
of the advances was guaranteed by the borrower. ome ond Co. v. UeChesney,
239 U. S. 68.
In Fnt Nortocn Theatre Co. v. Commssoner, T. C. 36, t was hed that
certan advances made on open account were not borrowed nvested capta
because they were not evdenced by any of the specfc evdences of ndebtedness
enumerated n secton 719(a)(1) of the Interna Revenue Code. No mortgage
was nvoved. In Wn. . ffgns t Co., Inc., v. Commssoner, T. C. 1033, t
was hed that when drafts were accepted under etters of credt the etters of
credt rpened nto an ndebtedness to the e tent of the acceptances and the
acceptances woud propery be ncuded as bs of e change n the computaton
of borrowed nvested capta. No mortgage was nvoved In the ssues before
the court n that case. There apparenty were trust recepts coverng foregn
shpments but they were gven after the acceptances and dd not enter nto the
dscusson by the Ta Court. Smary n the case at bar when accounts are
assgned and 90 percent was advanced thereon the agreement and assgnment
together consttuted a mortgage of the accounts to secure the ta payer s n-
debtedness to the Factor. In ourna Pubshng Co. v. Commssoner, 3 T. C. 18,
t was hed that an agreement to purchase certan assets and the good w of a
pubshng concern for . 20,000 was not a note and shoud not e ncuded n
the nvested borrowed capta of the purchaser because the abty of the atter
was contngent upon the performance of a counter obgaton of the seer not
to reenter the pubshng busness durng the contract perod and was therefore
not a certan obgaton to pay a f ed amount and accordngy was not the
equvaent of a note. No mortgage was nvoved.
We cannot see that any of the above decsons of the Ta Court ndcate that
the factorng arrangements n the ease at bar were not equvaent to an ndebt-
edness evdenced by a mortgage.
The order of the Ta Court s reversed and the proceedng remanded.
Nnth: rewster assumes a credt rsks n connecton wth the saes made hy t here-
under. rewster sha pay to the Factor upon ts request, or, at the opton of the Factor,
the same may he deducted from any amounts due or to become due on other accounts pre-
vousy or subsequenty assgned, the amount of any account whch sha be dsputed n
whoe or n part or where the merchandse through the sae of whch such assgned account
has resuted or s represented to have resuted, s for any reason not fnay accepted by the
customer and the amount of any account the debtor owng whch sha fa or become
nsovent, make a genera assgnment, have a recever apponted, or become a party to any
proceedng n bankruptcy n whch ts ad|udcaton In bankruptcy s sought, or for an e -
tenson of tme to pay ts debts pursuant to secton 7 or 77-b of the ankruptcy ct, or,
n any event, where an assgned account sha be more th :n 20 days past due. pus the
Factor s commsson and a other charges ncurred by t hereunder n connecton there-
wth, and thereupon the Factor w reassgn such account to rewster.
Fourteenth: If at the termnaton of ths agreement there s any money owng to the
Factor, the same sha be pad by rewster, upon request, otherwse the Factor may se
any coatera hed by t at pubc sae, wth 10 days notce to rewster. The net proceeds
thereof after deducton of a costs of sae, commssons and charges, ncudng ega e -
penses, sha be apped to the ndebtedness of rewster hereunder. ny surpus sha be
turned over to rewster, but f there be a defct, rewster sha reman abe. t ts
opton, the Factor may, n eu of seng any or a of the accounts recevabe, coect such
Of the accounts as t may choose, chargng to rewster a e penses of coecton, ncudng
ega e penses, and appy the net proceeds thereof to the ndebtedness of rewster to the
Factor hereunder.
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

6

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
Msc.
S
C SS PROFITS T COUNCIL
19 9-1 -13127
. P. C. 3
Treatment of abnormates attrbutabe to e traordnary effect
of preparaton for the war and factors resutng from the outbreak
of the war on September 1, 1939.
1. The P Corporaton was organzed n 1926 to engage n the manu-
facture of arcraft. Unt 193 ts actvtes were prncpay research
and deveopment, saes beng confned to custom-but panes. Dur-
ng 193 t frst offered for genera sae two types of arcraft desg-
nated M and C. M was sutabe for mtary use ony. C was
adaptabe to both mtary and commerca purposes. Through 1938
saes were confned to these two types, as modfed and mproved from
tme to tme. Ta payer had no foregn busness pror to 1939.
2. In pr, 1939, the P Corporaton entered nto a contract wth
the government of a hghy ndustrazed uropean naton cang for
the speedy manufacture of 1 0 mtary arcraft of a type known as
M-2. Ths pane was generay smar to M but, n accordance
wth the natona pocy of the uropean naton nvoved, prevousy
had been manufactured soey by producers natve to that country.
y a second contract e ecuted n November, 1939, the quantty was
ncreased to 3 0 and the ta payer agreed to ncrease ts capacty for
producton by acqurng addtona factes, the ma|or part of the
cost of such factes to be contrbuted by the foregn government.
The addtona factes were competed and frst put nto use durng
19 0.
3. Saes of the ta payer, n terms of unts and types of arcraft sod
from 193 through 1939, were as foows:
For com-
merca use
( C)
For mtary use
Unted States
Government
( M)
Foregn
( M-2)
Tota
193
. 1
18
32
38
61
6
6
12
1
1
T
30
7
62
88
18
193 .
1936-
1937
1938
3
9
1939
2
. ctua earnngs per unt sod durng the base perod ncreased
wth voume unt by 1939 they appro mated doars per pane for
M and C. 1939 earnngs for M-2 were 2a doars per unt. For
standard-ssue purposes ta payer s average base perod net ncome s
equa to ts actua earnngs for 1939 by reason of the appcaton of the
growth formua under the provsons of secton 713(f).
. The P Corporaton fed appcatons for reef under secton 722
aegng that t had changed the character of ts busness mmedatey
pror to and durng the base perod by (a) ntroducng a new product,
C, durng 193 ; (b) ntroducng a new product, M, durng 193 ;
(c) enterng the uropean e port market durng 1939 wth a new
product, M-2; and (d) commttng tsef durng 1939 to change ts
capacty for producton or operaton through the acquston of add-
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

6

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
8
Msc.
tona factes. s a part of ts cam, the ta payer has determned ts
constructve eve of earnngs as of December 31, 1939, by assumng
that each of the frst three changes n character took pace 2 years
before they actuay were made and by assumng that the ncrease n
factes was competed December 31, 1937.
6. The record ndcates that saes of arcraft by the P Corporaton
durng the base perod were affected by the foowng ma|or nfuences:
(a) the technoogca deveopments n the ndustry whch re-
suted n permanenty greater acceptance and utzaton of ar
transportaton n the norma economc fe of the word;
(6) the growng reazaton of the potentates of aera war-
fare whch resuted n an ncrease n the proporton of usua m-
tary e pendtures aocated to arcraft and reated equpment;
(c) the reatvey permanent mprovement n the P Corpora-
ton s compettve poston n ts ndustry whch permtted t to
capture an ncreased proporton of the growng norma market
for arcraft; and
(d) the ncreasng nternatona tenson and warke actvty
abroad whch ed to unusuay arge e pendtures for mtary
purposes attrbutabe to preparaton for the war as dstngushed
from ordnary e pendtures ncdent to securty force mante-
nance.
7. The foowng statements were made by the Counc n . P. C. 6
(C. .19 6-2,123):
Thus, In estabshng norma earnngs, factors attrbutabe to condtons n-
duced by the war or preparatons for the war w be consdered abnorma to the
e tent, f any, that such factors were not typca, n character or degree, of the
domestc economy durng the base perod. No factors resutng from the out-
break of the war on September 1, 1939, w be regarded as norma.
In makng these statements the Counc recognzed:
(a) that e pendtures for a mtary estabshment are neces-
sary at a tmes to the natona securty of the government of any
naton and that the ordnary cost of mantanng such estabsh-
ments throughout the word s a factor whch s typcay refected
n our domestc economy;
(b) that the war antcpated by the ma|or powers was of such
scope that preparaton pror to actua hosttes e tended over a
number of years precedng September, 1939, durng Whch perod
e pendtures for securty purposes e ceeded those ordnary to be
e pected;
c) that, whe our domestc economy durng the base perod was
uenced by such preparaton for the war, ths factor, n the
man, had no e traordnary effect on the earnngs of the typca
ta payer and, hence, n the usua case s not consdered to be an
abnormaty or to otherwse requre ad|ustment;
(d) that, on the other hand, n the case of certan ta payers
the unusuay arge preparatory e pendtures resuted n abnor-
ma profts dentfabe as resutng from such preparatory e -
pendtures and so substanta n amount as ceary to be mproper
eements for the purpose of estabshng a standard of norma
earnngs; and
(e) that events or condtons resutng from the outbreak of
the war on September 1, 1939, are not proper eements to be n-
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

6

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
Msc.
86
euded n norma earnngs whether reef s sought because of such
events or condtons or upon other grounds.
8. In . P. C. 13 (C. . 19 7-1, 83), the Counc dscussed abnorma
varaton, fuctuaton, and growth. bnorma varaton and fuctua-
ton were dstngushed as foows:
varaton n ncome, e pense, or net earnngs of a partcuar character of
magntude w be norma (. e., fuctuaton ) when t woud ordnary be e -
pected to occur wthn the base perod or any equa nterva, or abnorma (. e.,
abnorma varaton ) when t woud ordnary be e pected to occur f at a,
ony after ntervas substantay onger than the base perod.
Growth was defned as a reatvey permanent ncrease, durng the
base perod, n the eve of the ta payer s earnngs evdenced by
changes such as the frst three of the four factors sted n paragraph 6
above.
9. In appyng these prncpes to a case such as the one presented
here, the ta payer s entted to a reconstructon of norma earnngs
that gves effect to the hgher of
(a) ta payer s actua eve of earnngs as of December 31,1939,
ad|usted to compensate for abnormates attrbutabe to any e -
traordnary effect of preparaton for the war and any factors
resutng from the outbreak of the war on September 1,1939; and
(b) ta payer s constructve eve of earnngs as of December 31,
1939, determned by appcaton of the push-back rue; whch
woud not ncude among the assumptons made any e traordnary
effects of preparaton for the war or any factors resutng from the
outbreak of the war on September 1 1939.
10. Wth respect to type C, t has been determned that there s
nvoved no abnormaty attrbutabe to any e traordnary effect of
preparaton for the war and no factor resutng from the outbreak of
the war on September 1,1939. The ta payer s actua eve of earnngs
as of December 31, 1939, has been determned to refect producton at
the ate of 70 panes of ths type a year. y appyng the push-back
rue and assumng that t had ntroduced C durng 1932 (. e., 2
years before t actuay dd so), ta payer has estabshed ts construc-
tve eve of earnngs as of December 31,1939, whch ncudes 7 panes
of ths type a year. In makng these determnatons, the reatvey
permanent greater acceptance by the end of the base perod of com-
merca ar transportaton and the accompanyng more proftabe
market en|oyed by producers of acceptabe commerca panes are fac-
tors whch nave been taken nto account, aong wth the P Corpora-
ton s growth wthn ts ndustry. These are condtons whch, sub-
|ect to genera economc fuctuaton durng the base perod, propery
may be assumed to have e sted durng the entre base perod.
11. Wth respect to type M, t has been determned that there s
nvoved some abnormaty attrbutabe to the e traordnary effect of
preparaton for the war, but that there s no factor resutng from
the outbreak of the war on September 1, 1939. Under these crcum-
stances, ta payer s actua eve of earnngs as of December 31, 1939,
has been ad|usted to emnate earnngs resutng from ths abnorma-
ty. s ad|usted, t ncudes 0 panes of ths type. y appyng the
push-back rue and assumng that t had ntroduced M n 1932 (. e.,
2 years before t actuay dd so), and that Unted States Government
buyng refected no e traordnary effect of preparaton for the war,
ta payer has estabshed ts constructve eve of earnngs as of Decern-
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

6

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
87
Msc.
ber 31, 1939, whch ncudes 60 panes of ths type. In makng these
determnatons the reatvey permanent greater acceptance by the end
of the base perod of the arpane as a usua and ordnary part of the
peacetme securty program s a factor whch has been taken nto
account, aong wth the P Corporaton s growth wthn ts ndustry.
These crcumstances aso may be assumed to have e sted durng the
entre base perod.
12. Wth respect to type M-2, t has been determned that the frst
contract s n ts entrety attrbutabe to the e traordnary effect of
preparaton for the war and that any constructve producton under
the second contract woud be n ts entrety the resut of the outbreak
of the war on September 1,1939. Under these fndngs, the ta payer s
actua eve of earnngs as of December 31, 1939, requres ad|ustment
to emnate entrey the effect of performance under the frst contract
and the effect, f any, of preparaton for performance under the second
contract. Nether contract s a proper eement to be ncuded n norma
earnngs, and nether can be made a sub|ect for appcaton of the
Sush-back rue. In short, norma earnngs for the ta payer have been
etermned under the assumpton that these contracts dd not e st.
13. In ght of the facts found, t has been determned that the ta -
payer s actvtes represent to such an e tent abnormates attrbutabe
to the e traordnary effect of preparaton for the war and factors re-
sutng from the outbreak of the war on September 1,1939. that actua
earnngs for 1939 the amount of average base perod net ncome
e ceed norma earnngs. Whether actvtes of a ta payer, n whoe
or n part, represent abnormates attrbutabe to the e traordnary
efTect of preparaton for the war or factors resutng from the out-
break of the war on September 1, 1939, are determnatons whch must
be made n ght of a the facts and for whch no precse rues can be
formuated. The determnatons made n the three precedng para-
graphs are not to be construed as settng any f ed pattern to be fo-
owed n cases nvovng these probems. Thus, t s not the poston
of the Counc that a manufacturers of arcraft (or of mtary sup-
pes, shps, machne toos, and other tems commony assocated wth
natona securty and preparedness programs) necessary were ab-
normay affected by preparaton for the war or that a defense
orders from foregn governments, n whoe or n part, are not proper
eements to be ncuded n norma earnngs. Nether s t ntended to
precude the fndng, n a proper case, that a ta payer may have ab-
norma ncome from domestc saes to prvate ndustry by reason of
reduced competton arsng from an e traordnary nfu of foregn
orders attrbutabe to preparaton for the war.
enrt . Mekry,
Charman, cess Profts Ta Counc.
une 20, 19 9.
19 9-2 -132 2
. P. C.
Under the facts gven, the Counc hods that ta payer Is entted
to consderaton under secton 722; that ta payer s method of aver-
agng constructve base perod earnngs s not acceptabe; and tat
the far and |ust amount representng norma earnngs s 2,800.
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

6

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
Msc.
88
1. The Corporaton, whch was organzed n 192 for the purpose
of operatng a summer resort hote havng a season e tendng from
une 1 through September 1 , fed appcaton for reef under sec-
ton 722 for the fsca year ended September 30, 19 2. It aeged as
ts soe ground that ts average base perod net ncome s an nadequate
standard of norma earnngs because ts base perod operatons were
nterrupted by a fre. Due to a change n accountng perod, the ta -
payer s base perod determned under secton 713(b) s a perod of
7 months, commencng anuary 1, 193G, and endng September 30,
19 0. The fre occurred durng December, 1939, and caused the ta -
payer to suffer a oss for the fsca year ended September 30, 19 0.
2. The actua base perod earnngs of the Corporaton were as
foows:
Ta abe year ended
Inde
(1939 100)
Dec. 31, 1930
2,100
, 00
, 00
60,000
88.9
81.0
7 .1
100.0
Dec. 31. 1937 _
Sept. 30, 193S (9 months)
Sept. 30, f3 )_._
Sept. 30, 19 0
(13,000)
3. The ta payer receves no gross ncome e cept durng ts 3-month
season and deductons appcabe to the nne off-season months are
nomna. It s admtted that, for a practca purposes, the earnngs
for the 9-month perod ended September 30,1938, are equvaent to the
earnngs for a fu year. n nde of earnngs comped from data
reatng to four competng hotes (usng 1939 as 100) shows a cose
correaton wth an nde derved from ta payer s earnngs for 1936,
1937, 1938, and 1939 seasons and ndcates a reaton to 130 for the
19 0 season. It s the ta payer s contenton that constructve earn-
ngs for ts fsca year 19 0 shoud be at east 60,000 (. e., 100 percent
of fsca year 1939) and possby more, f t coud satsfactory em-
nate from the nde of ts four compettors the effect of ts own n-
abty to operate durng the 19 0 season. The ta payer further
contends that the resutng aggregate constructve base perod earn-
ngs shoud be dvded by 7 and the quotent mutped by 12 to ob-
tan ts constructve average base perod net ncome.
. Ths appcaton for reef presents questons typca of those
encountered n deang wth ta payers havng standard-ssue base
perods other than the four caendar years 1936 through 1939. Snce
such cases are numerous, t s consdered advsabe n ths memorandum
to dscuss the probem somewhat generay, as we as n ts reaton
to the partcuar facts presented by the cam of ths ta payer.
. The Corporaton s entted to consderaton under secton 722.
The ta payer s e cess profts credt, computed wthout beneft of sec-
ton 722, s based upon ts average base perod net ncome, whch, n
turn, s based upon the e cess profts net ncome for each of the fve
ta abe years n ts standard-ssue base perod. The fre s an event,
unusua and pecuar n the Corporaton s e perence, whch nter-
rupted ts operaton durng the standard-ssue base perod and whch
adversey affected e cess profts net ncome for the fsca year 19 0.
It may be admtted for purposes of ths dscusson that the fre aso
adversey affected average base perod net ncome.
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

6

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
89
Msc.
6. Whether the ta payer s entted to reef under secton 722 w
depend upon whether ts average base perod net ncome s an nade-
quate standard of norma earnngs and, as stated n . P. C. 16 (C. .
19 7-1,90), there s, n prncpe, no test for ths other than a compar-
son of average base perod net ncome and constructve average base
perod net ncome. Wth respect to the concept of constructve aver-
age base perod net ncome, the foowng statement made n . P. C.
3 (C. . 19 9-1,13 ) shoud be kept n mnd:
whe the grounds for quafcaton necessary dffer, the measure of
reef appcabe to a corporatons entted to consderaton under secton 722
s the same.
Wthout gong further, t can be decded that, regardess of the method
by whch norma earnngs for the Corporaton are to be determned,
nether the actua earnngs of the four compettors for the 19 0 season
nor the earnngs the Corporaton woud have had for the 19 0 season
had there been no fre may be consdered.
7. It s the vew of the Counc that norma earnngs need not n
every case be determned by use of the standard-ssue base perod and
that statements to the opposte effect appearng n the uetn on
secton 722 (e. g., p. 1 7, G. P. O. prntng) are ncorrect. To hod
otherwse woud, for e ampe, be contrary to the purpose of secton
722(b) (3) and woud mmedatey pre|udce many ta payers cam-
ng reef under secton 722(b)(2). Smary, . P. C. (C. .
19 6- 2, 122) specfcay recognzed possbe n|ustce n cases nvov-
ng standard-ssue base perods contanng more or ess than 8 months
couped wth marked seasona varaton n ncome.1 Conversey, t
s beeved that no undue advantage shoud accrue to any ta payer
because of a standard-ssue base perod other than the four caendar
years 1936 through 1939. In a cases, however, the post-1939 proh-
bton set forth n the ast sentence of secton 722(a) must be observed
and ths rung s not to be construed as modfyng . P. C. 9 (C. .
19 7- 1,76).2
8. In the nstant case, the ta payer has a standard-ssue base perod
contanng 7 months. It e perences e treme seasona varaton n
ncome, n that ony 3 months n each caendar year are of any practca
sgnfcance. so, each ta abe year n ts standard-ssue base perod
contans one compete season, so that f reconstructon were based
upon the 7-month perod, a far and |ust amount representng norma
earnngs on an annua bass woud be 20 percent of the aggregate
earnngs for the fve seasons nvoved. y contendng for a construc-
tve average base perod net ncome equa to tweve ffty-sevenths (or 21
percent) of the aggregate constructve earnngs for the fve seasons, the
ta payer s askng for the equvaent of 10 percent of the amount to
whch t woud be entted. Its method of averagng cannot, therefore,
be approved.
9. In vew of the e press prohbton aganst the use of post-1939
data n determnng norma earnngs, a determnaton of constructve
1 In that rung the Counc stated that a far and ust amount representng norma
earnngs coud not be determned (even though nether secton 722(b)(2) nor 722(b)(3)
was Invoved) wthout, n effect, empoyng a perod of tme other than the ta payer s
standard-ssue base perod.
The ta payer cted n . P. C. 9 C. . 19 7-1, 76 camed reef because of a post-
1939 change n the character of ts busness. The reconstructon t sought coud not be
made uness such poat-1939 events or condtons were regarded and aso requred the
assumpton that such events or condtons had e sted throughout the base perod.
868972 0 7
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

6

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
0 .101, Regs. 116.
90
average base perod net ncome made by empoyng a base perod
endng December 31, 1939, s, as a matter of prncpe, consdered
preferabe n any case. (See, for e ampe, . P. C. 23, C. . 19 7-2.
139.) The reguatons, however, provde for reconstructons usur
standard-ssue base perods endng after December 31, 1939,3 and e -
perence has demonstrated that ths has practca advantages, n that
t avods accountng dffcutes, whe at the same tme t generay
acheves substanta |ustce. Nevertheess, t does not foow that a
standard-ssue base perod contanng more or ess than 8 months, or
one endng after December 31,1939, s proper where t resuts n undue
advantage or dsadvantage to the ta payer.
10. ppyng the foregong to ths case, the Counc beeves that
there s nothng n the statement of facts nconsstent wt hodng the
far and |ust amount representng norma earnngs to be equa to
one-fourth of the aggregate earnngs for the frst four ta abe years
of the Corporaton s standard-ssue base perod (. e., 2,800).
The Counc cannot agree that the ta payer s entted to weght the
average by ncudng a ffth season equa to or better than 1939.
enry . Merrt,
Charman, cess Profts Ta Counc.
November 22,19 9.
C PT R 9. MPLOYM NT T S
SU C PT R . MPLOYM NT Y OT RS T N C RRI RS
P RT III. G N R L PRO ISIONS
S CTION 1 20. COLL CTION ND P YM NT
OF T S
Secton 0 .606, Reguatons 116: Use of
Federa Reserve banks and authorzed com-
merca banks n connecton wth payment of
ta es wth respect to wages pad on or after
anuary 1,19 0.
( so Sectons 0 .107 and 0 .60 , Reguatons
116.)
INT RN L R NU COD
Reguatons 116 amended. (See T. D. 760, page 123.)
SU C PT R D. COLL CTION OF INCOM T T SOURC
ON W G S
S CTION 1621(a). D FINITIONS: W G S
Secton 0 .101, Reguatons 116: Wages. 19 9-22-13217
I. T. 3976
INT RN L R NU COD
The actve servce pay and the retrement pay of chapans n the
mtary or nava forces of the Unted States are sub|ect to wthhod-
Subparagraph (10), secton 30.722-2(6), Reguatons 109, and subparagraph (10), sec-
ton 3 .722-2(6), Res- t :s 112.
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

6

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
91
0 .101. Regs. 116.
ng of Income ta at the source on wages under secton 1622 of the
Interna Revenue Code.
dvce s requested whether retrement pay of a retred nava chap-
an s sub|ect to wthhodng of Federa ncome ta at the source on
wages.
The underyng queston s whether, for purposes of wthhodng
Federa ncome ta at the source on wages, a chapan n the Unted
States Navy shoud be consdered a nava offcer or a mnster of the
gospe. Wthhodng of Federa ncome ta from the chapan s pay
s requred f the chapan s to be consdered a nava offcer. Wth-
hodng s not requred f the chapan s to be consdered a mnster
of the gospe, snce secton 1621(a) (9) of the Interna Revenue Code
specfcay e cepts from the term wages, sub|ect to wthhodng,
remuneraton pad for servces performed as a mnster of the
gospe.
The ta abty of pay and aowances of rmy and Navy chapans
was consdered n I. T. 2760 (C. . III-1, 3 (193 )), n whch t
was stated n part as foows:
chapan n the rmy or Navy s a commssoned offcer, and the ta payer s
mtary rank, rather than hs cang as a mnster, determnes hs remuneraton
and emouments. In other words, the pay and aowances are receved by reason
of hs status as a commssoned offcer n the Unted States rmy or Navy and
not by reason of hs cang or vocaton.
The above-quoted statement s appcabe to the nstant case. It s
a we-known fact that not a offcers n the mtary and nava forces
are combatants. Some are members of recognzed professons, such
as awyers, physcans, engneers, mnsters of the gospe, etc. The
fact that such an offcer n prvate fe may be a member of a professon
does not take precedence over, nor supersede, hs status as an offcer n
the mtary or nava forces. On the contrary, hs professona status
s merged nto hs status as a member of the mtary or nava forces.
Consequenty, hs remuneraton, both before and after retrement, as
an offcer or member of such forces s sub|ect to wthhodng to the
e tent provded by the Interna Revenue Code. In I. T. 2963 (C. .
-1, 8 (1936)), the foowng statement was made:
Retrement aowances pad to offcers retred from actve servce n the
Reguar rmy, Navy, or Marne Corps are regarded as compensaton for servces
prevousy rendered and for awatng orders to actve servce whenever the con-
tngency may arse. n offcer who s retred from actve servce s st n the
mtary servce of the Unted States.
Wages representng retred pay for servce n the mtary or nava
forces of the Unted States are sub|ect to wthhodng uness the nd-
vdua recevng such pay has been retred because of persona n|ures
or sckness resutng from actve servce wth such forces. (See sec-
ton 0 .101 ( ), Reguatons 116.)
In vew of the foregong, t s hed that the actve servce pay and the
retrement pay of chapans n the mtary or nava forces of the
Unted States are sub|ect to wthhodng of Federa ncome ta at the
source on wages under secton 1622 of the Interna Revenue Code. It
foows, wth respect to the specfc nqury presented, that the retre-
ment pay of a retred nava chapan s sub|ect to such wthhodng.
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

6

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
0 .101, Regs. 116.
92
Secton 0 .101, Reguatons 116: Wages.
( so Secton 22(b).)
19 9-23-13222
I. T. 3977
INT RN L R NU COD
mounts desgnated as wages, pad to seamen who are dsabed n
the servce of ther shps, consttute payments for servces rendered
and are sub|ect to wthhodng of ncome ta at the source under
secton 1622 of the Interna Revenue Code.
Mantenance and cure (care), ncudng cash payments, provded
for such dsabed seamen consttute damages receved on account of
n|ures or sckness and are e ctdbe from gross ncome under sec-
ton 22(b) ( ) of the Interna fevenue Code. ccordngy, they are
not sub|ect to wthhodng of ncome ta at the source under secton
1622 of the Code.
dvce s requested whether (1) payments made to seamen whe
they are absent from duty due to n|ury or sckness ncurred n the
servce of ther shps, and (2) mantenance and cure (care), ncudng
cash payments n eu thereof, provded for such dsabed seamen are
sub|ect to wthhodng of ncome ta at the source on wages under
secton 1622 of the Interna evenue Code.
ary n the deveopment of admraty aw, the rght of a seaman
who s dsabed n the servce of hs shp to recover from the shp and
her owner or operator for wages and for mantenance and cure (care)
was estabshed. The obgaton of the shpowner or operator to pay
wages s mted n duraton to the end of the voyage or, f the seaman
recovers before then, unt he s we and abe to fnd sutabe empoy-
ment. On the other hand, the obgaton of the owner or operator to
suppy mantenance and cure generay asts so ong as the seaman
has need for them.
Seamen empoyed on a vesse regstered under the martme aws of
the Unted States are entted, upon becomng dsabed, to food, odg-
ng, and treatment, wthout charge, at hosptas of the Unted States
Pubc- eath Servce. If the factes of such a hospta are ava-
abe, a dsabed seaman usuay receves treatment there. If such
factes are not avaabe, or f the seaman s not sent to a Unted
States Pubc eath Servce hospta but, nstead, s sent to a prvate
hospta, the charges for hs food, odgng, and medca care must be
pad by the shpowner or operator.
Secton 1621(a) of the Interna Revenue Code provdes generay
that the term wages means a remuneraton for servces performed
by an empoyee for hs empoyer, ncudng the cash vaue of a re-
muneraton pad n any medum other than cash, wth certan e cep-
tons not here matera. Secton 1622(a) of the Code provdes gen-
eray that every empoyer makng payment of wages sha deduct
and wthhod a ta upon such wages. owever, amounts receved
as damages on account of n|ures or sckness do not consttute wages
and are e cuded from gross ncome, for Federa ncome ta purposes,
by the provsons of secton 22(b) ( ) of the Code.
It s hed that amounts desgnated as wages, pad to seamen who are
dsabed n the servce of ther shps, consttute payments for servces
rendered and are sub|ect to wthhodng of ncome ta at the source
under secton 1622 of the Interna Revenue Code. It s aso hed that
mantenance and cure (care) provded for such dsabed seamen, ether
by means of hosptazaton or cash payments, consttute damages
receved on account of n|ures or sckness and are e cudbe from
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

6

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
93
0 . 01, Regs. 116.
gross ncome under secton 22(b)( ) of the Code. They are, therefore,
not sub|ect to wthhodng of ncome ta at the source under secton
1622 of the Code.
Secton 0 .101, Reguatons 116: Wages.
INT RN L R NU COD
Cash aowance receved by Coumbus, Oho, poce offcers for pur-
chase and mantenance of unforms. (See I. T. 3978, page 2 .)
S CTION 162 . R C IPTS
Secton 0 . 01, Reguatons 116: Recepts for 19 9-19-13178
ta wthhed at source on wages. Crcuar 2131
Form W-2, Wthhodng Statement for 19 0. Rues for repro-
ducton.
Treasury Department,
Offce of Commssoner of Interna Revenue,
Washngton 2 , D. C, ugust 22,19 .
Coectors of Interna Revenue and Others Concerned:
1. Form W-2 for 19 0 has been approved. It may be reproduced,
but ts reproducton must have offca approva. Requests for such
approva must be addressed to the Commssoner of Interna Revenue,
ttenton: C: Co: O, Washngton 2 , D. C, and must ncude the
proposed form of the reproducton and a sampe of the paper to be
used. The foowng specfcatons must be met:
(a) Coor and quaty of paper: The forms must be prnted on buff
paper of substantay the same weght and te ture, and of quaty as
good as that used by the Government. The use of wa -coated paper
w not be permtted.
(b) Typography: The reproducton must be prnted n back nk,
usng type not smaer than the correspondng type on the offca form
and, as neary as possbe, of the same font. mted rearrangement
of the face of the form w be permtted, but the space for the name
of the empoyee must be above that used for the name of the empoyer.
(c) Data to be shown on Form W-2: Reproduced Forms W-2 must
be desgned so as to provde for entry by empoyers of the same data
as to wages pad and ta wthhed as requred by the offca form.
separate showng of the ta wthhed from the empoyee under the
Federa Insurance Contrbutons ct, whch may be abbrevated as
F. I. C. ., w be permtted f ceary ndcated as such. owever,
ony one amount of wages may be shown, the gross wages before any
payro deductons of any nature have been made. Permsson w
not be granted for reproductons whch woud permt empoyers to
show, on the orgna and trpcate copes, any payro deductons
other than those ndcated heren. There s no ob|ecton to the attach-
ment, to the dupcate porton of the form ony, of a stub or e tenson
to provde addtona nformaton not authorzed for reproducton on
the form tsef.
(d) ddtona copes smar to Form W-2b may be reproduced for
the use of empoyers. It w be permssbe to prepare forms, as
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

6

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
S 0 . 01, Regs. 116.
9
carbon mpressons of Form W-2, for use n connecton wth ta es
other than Federa ncome ta , provded such forms bear no menton
of the Interna Revenue Servce or the Unted States Treasury Depart-
ment.. These forms or addtona copes must not be paced ahead of
Form W-2a n the assemby. Forms for devery to State or oca
ta ng authortes shoud be ceary abeed to ndcate the purpose for
whch they are ntended and shoud not bear any part of the desgna-
ton Form W-2.
(e) Dmensons: The offca sze of the form s 7 nches wde by
3 nches n depth, but the depth may vary from 3 to 3 nches and
the wdth from 7 nches to 8 nches.
(/) Carbonzed forms or spot carbons are not permssbe. In-
tereaved carbon, f used, must be of good quaty to precude
smudgng.
(g) The Government Prntng Offce symbo must be omtted from
reproduced forms.
(h) uthorzed reproducton: n approved form must bear the
notaton pp. . I. R. and the date of ts approva n sma type on
the bottom margn, eft-hand sde of the face of both the orgna and
the coector s copy, Form W-2a.
2. facsme of Form W-2 for 19 0 s attached for your nforma-
ton and the nformaton of those who wsh to reproduce the form.
Ths facsme shoud be made avaabe to any empoyers or prnters
n your dstrct who wsh to reproduce the form.
3. Correspondence reatve to the contents of ths crcuar shoud
refer to ts number and to the symbos C: Co.
Geo. . Schoeneman,
Commssoner.
Facsme of Form W-2, for 19 0
The te t of Form W-2 for 19 0 s reproduced herewth. The form
w be prnted on buff paper of 16-pound commerca weght and w
otherwse be arranged and foded smar to the earer forms. Re-
quests for approva to reproduce ths form must be addressed to the
Commssoner of Interna Revenue, ttenton: C: Co., Washng-
ton 2 , D. C.
The pages of the form are reproduced n ths facsme n the fo-
owng order: Front page, orgna copy; back page, orgna copy;
front page, empoyee s copy; front page, coector s copy; and front
page, empoyer s copy.
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

7

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
W-2
U. 8. Traeaunr Department
Intern Revenue ervco
WIT OLDING ST T M NT 1SS0
Wage Pad and Income Ta Wthhed
ORICIN I
Do Not Lose Ths Statement
LOY TO W OM P ID (Prnt name. (uU addrsu. and Soca S cu-
rty Nu|nb )
Tota wages (before pay-ro deduc-
ton.) pad n 19 0
Federa ncome ta wthhed, any
MPLOY R Y W OM P ID (Name, addreae, and Scca Securty Iden-
tfcaton Number)
NOTIC TO MPLOY
Ths statement s mportant
It must be attached to your U. S. ncome
ta return for 19 0.
See nstructons on other sde
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

7

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
INSTRUCTIONS FOR TILING U. S. INCOM T R TURN
Who Must Te. If. your ncome n 19 0 was 600 or more,
you must fe an ncome ta return ether on mpoyee s Optona
Income Ta Return (Form 10 0 ) or on Form 10 0. Copes of
hese forms may be obtaned from the Coector of Interna Reve-
nue, your empoyer, bank, or post offce.
snge person wth ess than 600 ncome shoud fe a return
to get a refund f ta was wthhed. marred person wth
ncome ess than her (or hs) own persona e empton(s) shoud
aways fe a |ont return wth husband or wfe to get the smaer
ta or arger refund for the coupe.
Fng en Form 10 0 . If your tota ncome was ess than
,000 and conssted entrey of wages reported on Wthhodng
Statements (Forms W-2), or of such wages and not more than
100 tota of other wages, dvdends, and nterest, you may use
mpoyee s Optona Income Ta Return (Form 10 0 ). The Co-
ector w compute the ta and send you ether a check for any
refund due you or a b for any amount you owe.. e w de-
termne your ta from the tabe provded by aw whch aows
about 10 percent of your tota ncome for chartabe contrbutons,
Interest, ta es, casuaty osses, medca e penses, and msce-
aneous tems.
Fng on Form 10 0. If your ncome does not meet the tests
gven n the precedng paragraph, or you had ncome from any
other source, such as rents, annutes, etc., you must use Form
10 0 and compute your own ta . so, t w generay be to
your advantage to fe Form 10 0 f your deductons amount to
more than 10 percent of your ncome, or f you cam traveng
or rembursed e penses.
ont Returns of Marred Coupet. usband and wfe may
use Form 10 0 f ther combned ncome was ess than ,000 and
conssted entrey of wages reported on Wthhodng Statements
(Forms W-2), or of such wages and not more than 100 tota of
other wages, dvdends, and nterest.
To assure any benefts of the spt-ncome provsons, a mar-
red coupe shoud fe a |ont ncome ta return. |ont return
on Form 10 0 never resuts n more ta than separate returns
because the ta s computed by the Coector on the combned
ncomes or on the separate ncomes, whchever resuts n the
smaer ta : or arger refund for the coupe. .
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

7

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
97
0 01, Regs. 116.
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

7

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
w-2q WIT OLDING ST T M NT 19 0
. ;pr. r Wooes Pad and Income Ta Wthhed
TO W OM P ID (Prnt name, u addreu, and Soca Securty
Number)
Tota woges (before pay-ro deduc-
tons) pad n 19 0
Federa ncome ta wthhed, f any
MPLOY R Y W OM P ID (Name, addreu, and Soca Securty Ident-
fca on Number)
111
1 I n III
M L
1
p

III :: :
M
1
II

I M
1 ,
h

1
I M
m

II
1
1 11
COLL CTOR S
(TRIPLIC T )
COPY
To MPLOY R:
1. Prepare ths form n trpcate for each empoyes (a)
from whom ta has been wthhed durng the year or
(b) whose wages for any pay-ro perod e ceeded the
amount of one wthhodng e empton for such perod
(even though no ta was wthhed).
2. F n
(a) the empoyee s name, address and S. S. number;
(b) the tota wages pad before any pay-ro deductons;
(c) the amount of ta wthhed, f any; and
(d) your name, address, and S. S. dentfcaton
number.
3. Gve orgna and mpoyee s Copy to the empoyee.
. Forward ths trpcate copy and a other trpcate
copes, together wth your yeary Reconcaton State-
ment, Form W-3, to your Coector of Interna Revenue
wth your mpoyer s uartery Federa Ta Return
(Form 9 1) for the fourth quarter of the caendar year
(or wth your fna return).
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

7

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
99 0 . 01, Regs.
s
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

7

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
3760. 100
Secton 0 . 01, Reguatons 116: Recepts for
ta wthhed at source on wages.
INT RN L R NU COD
Former Federa Government empoyee reempoyed by Government
durng year of separaton. (See I. T. 3969, page 13.)
C PT R 2 . FIR RMS
SU C PT R . PISTOLS ND R OL RS
S CTION 2701. R TURNS
Secton 0 .601, Reguatons 116: Return and
payment of ncome ta wthhed on wages.
INT RN L R NU COD
Reguatons 116 amended. (See T. D. 7 9, page 119.)
C PT R 36. COLL CTION
SU C PT R F. CLOSING GR M NTS ND COMPROMIS S
S CTION 3760. CLOSING GR M NTS
19 9-2 -132 0
Mm.6383
Cosng agreements under secton 3760 of the Interna Revenue
Code.
Treasury Department,
Offce of Commssoner of Interna Revenue,
Washngton 2 , D. C, March 31,19 3.
Coectors of Interna Revenue, Interna Revenue gents n Charge,
Offcers and mpoyees of the ureau of Interna Revenue, and
Others Concerned:
1. Secton 3760 of the Interna Revenue Code authorzes the Com-
mssoner (or any offcer or empoyee of the ureau of Interna
Revenue, ncudng the fed servce, authorzed n wrtng by the Com-
mssoner) to enter nto an agreement n wrtng wth any person
reatng to the abty of such person (or of the person or estate
for whom he acts) n respect of any nterna revenue ta for any ta -
abe perod. The secton further provdes that f the agreement s
approved by the Secretary, the Under Secretary, or an ssstant Sec-
retary, wthn such tme as may be stated n the agreement, or ater
agreed to, the agreement w be fna and concusve, and, e cept upon
a showng of fraud or mafeasance, or msrepresentaton of a matera
fact, (1) the case sha not be reopened as to matters agreed upon or
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

7

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
101
3760.
the agreement modfed, by any offcer, empoyee, or agent of the Unted
States, and (2) n any sut, acton, or proceedng, the agreement, or any
determnaton, assessment, coecton, payment, abatement, refund, or
credt made n accordance therewth, sha not be annued, modfed,
set asde, or dsregarded.
2. Cosng agreements under secton 3760 of the Interna evenue
Code may reate to any ta abe perod endng pror or subsequent to
the date of the agreement. Wth respect to ta abe perods endng
pror to the date of the agreement, the matter agreed upon may reate
to the tota ta abty of the ta payer (Form 866) or t may reate
to one or more separate tems affectng the ta abty of the ta -
payer (Form 906), as, for e ampe, the amount of gross ncome, de-
ductons for osses, deprecatdn or depeton, or the year for whch
an tem of ncome s to be ncuded n gross ncome or the year for
whch an tem of oss s to be deducted, or the vaue of property on a
specfed date. cosng agreement may aso be entered nto n order
to provde a determnaton under the ncome ta aws as defned n
secton 3801 of the Code and for the purpose of aowng a defcency
dvdend credt under secton 06 of the Code. Wth respect to ta -
abe perods endng subsequent to the date of the agreement on Form
906, the matter agreed upon may reate ony to one or more separate
tems affectng the ta abty of the ta payer. The foowng,
among others, are e ampes of the atter type of cosng agreement:
(1) ta payer may se a porton of hs hodngs n a partcuar
stock. cosng agreement on Form 906 may be entered nto f ng
the cost or other ega factor determnng the bass for computng
gan or oss on such sae, and, at the same tme, f ng the cost or other
ega factor determnng the bass. (uness or unt the statute s
changed to requre the use of some other factor to determne bass) of
the remanng porton of the stock st hed by the ta payer upon
whch gan or oss w be computed when the ta payer ses such stock
n a ater year; (2) f the ta payer s undecded whether to se prop-
erty or hod t, or as to the prce at whch to se t, a cosng agreement
may be entered nto determnng the market vaue of the property as
of March 1, 1913, for future ta abe perods, pror to the consum-
maton of the sae by the ta payer. Cosng agreements may be e -
ecuted even though under the agreement the ta payer s not abe
for any ta for the perod to whch the agreement reates. There
may be a seres of agreements reatng to the ta abty for a snge
perod.
3. cosng agreement w be entered nto and submtted for the
approva of the Secretary of the Treasury, the Under Secretary, or
an ssstant Secretary, n any case n whch (1) there appears to be an
advantage n havng the case permanenty and concusvey cosed,
such as where, n the settement of dsputed ssues, the ta payer and
the Government have made mutua concessons, or (2) where good and
suffcent reasons are shown by the ta payer for desrng a cosng
agreement and t s shown that the Government w sustan no ds-
advantage through consummaton of such an agreement, e ampes
of whch are:
(a) states where the fducary desres a cosng agreement n
order that he may be dscharged by the court;
(b) Trusts, or recevershps where the fducary desres a fna
determnaton before dstrbuton s made;
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

7

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
3760.
102
(c) Corporatons n process of qudaton or dssouton whch
desre cosng agreements n order to wnd up ther affars;
(d) Cases where, n connecton wth the ta payer s fnanca
affars, credtors demand authentc evdence of the status of the
ta payer s ta abty;
(e) Cases where ta payers desre to foow the consstent
practce of cosng ther returns from year to year;
or (3) such acton has been determned approprate under the pro-
vsons of secton 06 or secton 3801 of the Code, or ( ) propery e -
ecuted amended returns have been fed by ta payers, after the e pra-
ton of the perod n whch assessments mght have been made and
where no fraud was nvoved, f the barred defcency amounts to 00,
or more, and payment has been made. No appcaton for a cosng
agreement w be re|ected soey because there s no apparent advantage
to the Government.
. n agreement as to fna determnaton of ta abty (Form
866) may be entered nto ony after two condtons have been fufed:
(a) The ta abe perod for whch the agreement s desred
must have ended; and
(b) The ta abty for the ta abe perod must have been
determned.
In any case where an agreement of ths character s n order, the
amount of ta abty for each perod shown n the agreement must
represent the tota ta abty determned for each perod (e cusve
of any penaty or nterest appcabe thereto). If, however, n any
case t s n the nterest of the Government that the cosng agreement
shoud be ncusve of ad vaorem penates whch have been ncurred,
the second paragraph of Form 866 w be modfed by strkng out the
words penaty or, and the ta and penaty w be descrbed n the
agreement consstent wth the foowng e ampe:

Tte number and rev-
enue act or chapter
number and subchap-
ter etter of L R. C.
Perod
Character of ta
mount
of ta
Fsca year ended pr 30 1939
ISO percent penaty..
, 193S ct
/ 3,000
Fsca year ended pr 30 19 0
/Income...
I , I. R. C
-Sff
1, 00
760
60 percent penaty. _
IC, I. R. C
When the agreement s so modfed, the form must be typed n dup-
cate, and the paper used for both the orgna and dupcate must be
of weght at east equa to that used for the prnted form.
. In cases n whch t s proposed to cose concusvey the tota ta
abty for a ta abe perod ended pror to the date of the agree-
ment, Form 866, greement as to Fna Determnaton of Ta La-
bty, w be used. In cases n whch the ta payer and the Comms-
soner have concurred n the dsposton of one or more ssues and a
cosng agreement s consdered necessary to nsure consstent treat-
ment of such ssues n any other ta abe perod, Form 906, Cosng
greement as to Fna Determnaton Coverng Specfc Matters,
w be used.
6. In any case n whch a ta payer desres to submt a cosng agree-
ment (ether on Form 866 or Form 906) and a Form 870 agreement
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

7

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
103
3700.
condtoned upon the approva of the fna cosng agreement, there
shoud be nserted n the Form 870 a paragraph provdng that the
waver of restrctons on assessment and coecton contaned theren
s sub|ect to the approva of the cosng agreement, and that f the
agreement s not approved under secton 3760 of the Code, the waver
sha be neffectve.
7. Where the statutory perod of mtaton on assessment of ta (f
any) for a perod covered by the cosng agreement w e pre on or
before the ast date upon whch the Secretary of the Treasury, the
Under Secretary, or an ssstant Secretary, may approve the cosng
agreement, or w e pre wthn 30 days after that date, the ta payer
shoud be advsed that the cosng agreement w not be submtted for
approva uness a consent (Form 872) s sgned e tendng the perod
of mtaton for assessment to a date at east 90 days subsequent to the
atest day upon whch the agreement may be approved.
8. In the preparaton of an agreement on Form 866 or Form 906,
the foowng matters shoud be carefuy observed:
(a) The agreement must be e ecuted n dupcate.
(b) The orgna and dupcate of the agreement must be
dentca.
(c) The agreement may reate to one or more years.
(d) The agreement must be free from erasures or correctons
of any knd.
(e) The entre ta abty determned must be stated n the
Form 866 and such abty must be segregated as to ta abe
perods and character of ta es, together wth the tte number and
revenue act or chapter number and subchapter etter of the In-
terna Revenue Code under whch each ta covered was mposed.
(/) The frst Whereas cause n the Form 906 must contan
an accurate and concse statement of the determnaton made,
preceded by the premse formng the bass of such determnaton.
( ff) Terms descrptve of the specfc Federa ta or ta es w
be used n the agreement, Form 906, e. g., Federa ncome ta , or
n approprate crcumstances, Federa ncome and e cess profts
ta es. etc.
9. The foowng requrements wth respect to the sgnatures on
cosng agreements sha be adhered to:
(a) The agreement form for an ndvdua ta payer must be
dated and sgned by the ta payer, or by hs egay authorzed
representatve, whose credentas, showng hs authorty to act on
behaf of the ta payer n the matter of sgnng the agreement,
have been submtted. ny agreement wth respect to a year for
whch a |ont ncome ta return was fed by a husband and wfe
must be sgned by both spouses, e cept that one spouse may sgn
as agent for the other, provded an authentcated copy of the
document specfcay authorzng such agent to act n that capac-
ty has been submtted.
(b) The agreement form for a corporaton must be dated and
sgned wth the corporate name, foowed by the sgnature and
tte of an offcer (or offcers) authorzed by the board of drectors
to e ecute an agreement of ths character on behaf of the cor-
poraton (n addton to whch the corporate sea must be aff ed)
and must be accompaned by a certfed copy of the resouton
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

7

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
3760.1
10
adopted by such board, authorzng the offcer (or offcers) sgnng
the agreement to act n the matter of cosng the ta abty (or
matters affectng the abty) of the corporaton. In those
nstances where the corporaton nvoved s n process of ds-
souton, the corporate name w be foowed by the sgnature
and tte of the person (or persons) authorzed by the board of
drectors to act n the matter of wndng up the corporaton s
affars, and the form w be accompaned by a certfed copy of
the resouton adopted by the board of drectors namng and
authorzng the person (or persons) actng as trustee or agent n
dssouton to wnd up the affars of the corporaton. It w aso
be shown th.t the authorty granted remans n fu force and
effect. In any nstance, however, where the corporaton has been
dssoved and the perod durng whch any agent or trustee mght
have acted on behaf of the corporaton has eapsed, the agree-
ment form w be dated and sgned by ndvduas representng
a ma|orty of the votng stock of the corporaton at the date of
dssouton and w be accompaned by an affdavt showng the
tota number of shares of stock outstandng and the number hed
by each ndvdua at that date.
(c) The agreement form for an estate, trust, mnor, ncom-
petent, nsovent corporaton, etc., must be dated and sgned wth
the name of the ta payer, foowed by the sgnature and tte of
each fducary (uness t s defntey shown that ess than a may
act n the matter) and must be accompaned by documentary ev-
dence showng the appontment of the fducares and ndcatng
that ther authorty to act on behaf of the ta payer remans n
fu force and effect.
10. When t has been determned that a cosng agreement w be
recommended, the recevng offcer n the offce n whch the pro-
posed agreement orgnated w cause to be prepared, for the sgna-
ture of the Deputy Commssoner, a supportng memorandum n the
form shown n the foowng hbt or hbt . The orgna
and two carbon copes (and an addtona copy for each return
covered) of that memorandum w accompany the agreement whch
t supports. In the dscusson of the ma|or ssues changed or ma|or
tems unchanged (Form 866) and wth respect to the specfc matter
nvoved (Form 906), the supportng memorandum must ceary set
forth n deta the facts connected therewth, and must show the
reason, or reasons, why an agreement of ths character shoud be
accepted. Terms descrptve of the specfc Federa ta or ta es w
be used n the memorandum, e. g., Federa ncome ta or, n appro-
prate crcumstances, Federa ncome and e cess profts ta es, etc.
ny statutes, reguatons, decsons, etc., reed upon w be cted and
ther appcabty estabshed. ny other reevant crcumstances
whch may ad the Secretary of the Treasury, the Under Secretary,
or an ssstant Secretary, n the e ercse of ndependent |udgment n
the matter w be shown. The recevng offcer n the offce n whch
the proposed agreement orgnated w nta the orgna of the sup-
portng memorandum n the ower eft corner and ndcate hs recom-
mendaton for the acceptance of the proposed agreement n the space
provded on the back of the orgna of the Form 866 or Form 906.
The revewng offcer n the offce n whch the proposed agreement
orgnated w nta the orgna of the supportng memorandum
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

7

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
10
3760.
n the ower eft corner and ndcate hs approva of the proposed
agreement n the space provded on the back of the orgna of the
form. The admnstratve fe, ncudng the proposed agreement,
orgna supportng memorandum and the copes thereof, and the
necessary documentary evdence n support of the agreement w, n
the case of cosng agreements prepared n offces of coectors or n-
terna revenue agents n charge, be forwarded to the ureau n Wash-
ngton, for the attenton of the approprate udt Revew Dvson,
for post revew and transmtta through the proper channes to the
Fna greement Subsecton, Provng Secton, for recordng and con-
tro and other necessary acton eadng to the consummaton of the
agreement.
11. fter approva of a cosng agreement affectng or reatng to
ta abty for a perod endng subsequent to the date of the agree-
ment, the approprate fed dvson shoud be fuy advsed as to the
bass of the agreement n order that through mantenance of proper
records, the Government may be nsured aganst oss through faure to
gve effect to a the terms thereof n the determnaton of ta es for
perods endng subsequent to the date of the agreement.
12. Ths mmeograph supersedes Mmeographs 36 2 (C. . II-2,
79 (1028)), 3670 (unpubshed), 3697 (C. . III-1, 118 (1929)),
3711 (C. . III-1, 122 (1929)), 3728 (C. . III-1, 12 (1929)),
3739 (C. . III-1, 123 (1920)), 1 9 (C. . III-1, 162 (193 )),
and 821 (C. . 1938-2, 2 ), and any other pror nstructons n con-
fct wth the provsons of ths mmeograph to the e tent of such
confct.
13. Communcatons from coectors regardng the nstructons
heren contaned shoud be addressed for the attenton of C: Co.
Communcatons from nterna revenue agents n charge shoud be
addressed for the attenton of IT: F.
Geo. . Schoeneman,
Commssoner.
I IT
Form of memorandum for Form 866
Symbos
Memorandum to ccompany greement Under Secton 3760 of the Interna
Revenue Code n the Cake of (Name of Ta payer) Wth Respect to (Char-
acter of Ta ) Ta es fob the (Ta abe Perod)
Character of ta
Perod
Tota ta
abty
Income

cess profts
Fsca year ended Mar 19
IN G N R L
The openng paragraph w contan a statement wth respect to the e ecuton
of the agreement and the bass upon whch t was submtted. If the agreement
Is sgned by other than the ta payer, the authorty for such sgnature w be
gven. The openng paragraph shoud read substantay as foows:
868972 00 8
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

7

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
3760.
106
cosng agreement under secton 3760 of the Interna Revenue Code has been
sgned for the (ta abe perod) by ((1) the above-named ta payer, f an nd-
vdua ; (2) duy authorzed offcers, stockhoders, or recever of the above-named
corporaton, f a corporaton ; (3) e ecutors, admnstrators, or trustees, f an
estate or trust, mentonng the court or other authorty). The agreement was
submtted as a resut of the ta payer s acceptance of the ta abty whch
was computed by an nterna revenue agent (or deputy coector).
R TURNS
The openng statement under ths headng w contan a descrpton of the
ta payer s busness and any reevant facts connected therewth. schedue w
be set up under ths headng showng, as set forth n the return, a tems of gross
ncome, a deductons, and ta abty for each year. If tems of capta gan or
oss or other ncome and other deductons are shown n the return, an e -
panaton of the computaton and composton of these tems shoud be set forth.
FI LD MIN TION OF T
statement under ths headng w revea, n tabuar form, any and a ad-
|ustments to ncome proposed n any report of fed e amnaton. ny further
ad|ustments made upon fna revew of the case w aso be set up n tabuar form.
That nformaton w be wth regard to amounts ony, the ssue nvovng the
changes w be e paned or supported under subsequent headngs, and shoud
read practcay as foows:
n e amnaton of the ta payer s books and records was ma.de by an nterna
revenue agent (or deputy coector) n connecton wth the returns fed. Ths
e amnaton dscosed an ncrease (or decrease) n net ncome of
wth resutng defcency (or overassessmeut) of based upon the
foowng ad|ustments:
Net ncome as shown on the return
ddtons:
1
2
3
Tota addtons
Deductons:
1
2
3
Tota deductons
Net ncome as ad|usted by nterna revenue agent (or deputy
coector)
The ta payer accepted these ad|ustments, and the defcency was assessed (or
an overassessment was dscosed). The mnor and ma|or ssues resutng n the
above defcency (or overassessment) are herenafter dscussed.
MINOR ISSU S
The statement under ths headng w contan a genera dscusson of the
ess Important ssues n the case. Such statement may be bref provded t s
suffcent to ndcate the proprety of such ad|ustments.
M . O ISSU S
Under ths headng, a detaed dscusson w be made of a ma|or ssues,
sted n numerca order. ny aw, reguatons, decsons, etc., reed upon w
be cted and ther appcabty estabshed. ny other reevant crcumstances
whch may ad the Secretary of the Treasury, the Under Secretary, or an ssst-
ant Secretary, n the e ercse of ndependent |udgment w be shown.
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

7

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
107
3760.
M OR IT MS NOT C NG D
Under ths headng, any mportant or unusua tems appearng on the return
whch have not been changed w be dscussed brefy. The concudng para-
graph under ths headng w ndcate that the case has been thoroughy revewed
and that the bass of the fna determnaton proposed appears to comprehend
a ncdenta and necessary ad|ustments.
ST TUT OF LIMIT TIONS
Under ths headng, the date of the e praton of the perod of mtaton
for assessment of defcences and fng of cams for refund w be gven
for each year.
SUMM RY
schedue w be nserted under ths headng as foows:
Y R
Orgna
return
Fnay de-
termned
1

Deductons
Ta abty
Ta assessed
If authortatve nformaton s In the fe to the effect that the defcency has
been pad, a statement to that effect shoud be made. If such nformaton s
not n the fe, the foowng paragraphs shoud be shown as ndcated:
1. In cases where defcences are ndcated for a years nvoved:
ny unpad porton of the abty determned and assessed w he
made the sub|ect of notce and demand or other proceedngs by the coector
of nterna revenue of the ta payer s dstrct.
2. In cases where defcences are ndcated for some of the years nvoved
and overassessments are ndcated for others:
Ta payer has waved the restrctons respectng the assessment and
coecton of any defcency n ta for any ta abe perod nvoved and
further agrees to pay such defcency by credt or otherwse.
3. In cases where overassessments aone are ndcated for a years or the
returns are accepted as fed, no statement need be made.
The cosng paragraph w show the reasons why the consummaton of the
cosng agreement s warranted, or s advantageous to the Government, or why
t appears to fa wthn the e ceptons to the genera rue.
Deputy Commssoner.
I IT
Form of memorandum for Form 908
Symbos
Memorandum to ccompany greement Under Secton 3760 of the Interna
Revenue Code n the Case of (Name of Ta payer) Wth Respect to a
Specfc Matter ffectng the Income Ta Labty of that Indvdua (or
Corporaton )
n genera
cosng agreement under secton 8760 of the Interna Revenue Code coverng
a specfc matter (or specfc matters) affectng the Income ta abty of
the above-named ndvdua (or corporaton) has been sgned by the ta payer
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

7

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
29.3801(a) (3)- .
108
(or by duy authorzed offcers, stockhoders, e ecutors, admnstrators, recevers,
qudators, etc., to act n the cosng of specfc matters). The agreement was
submtted as the resut of the ta payer s acceptance of the report made by an
nterna revenue agent (or deputy coector) to the effect that (state the ssue
under consderaton).
FI LD MIN TION
The openng statement under ths headng w contan a descrpton of the
.ta payer s busness and nny reevant facts connected therewth.
further statement under ths headng w revea any and a ad|ustments
to ncome proposed n any report of fed e amnaton. ny further ad|ust-
ments made upon fna revew of the case w aso be set up. Ths paragraph
shoud ndcate whether or not the ta payer agreed wth the revenue agent s
(or deputy coector s) fndngs.
SP CIFIC M TT R (8)
Under ths headng, a detaed dscusson w be made of the specfc matters
proposed for fna cosng n Form 906. ny aw, reguatons, decsons, etc.,
reed upon w be cted and ther appcabty estabshed. ny other reevant
crcumstances whch may ad the Secretary of the Treasury, the Under Secretary,
or n ssstant Secretary, n the e ercse of ndependent |udgment w be shown.
The cosng paragraph w show the reasons why the consummaton of the
cosng agreement s warranted, or s advantageous to the Government, or why
t appears to fa wthn the e ceptons to the genera rue.

Deputy Commssoner.
C PT R 38. MISC LL N OUS PRO ISIONS
S CTION 3801(a). MITIG TION OF FF CT OF LIMIT -
TION ND OT R PRO ISIONS IN INCOM T C S S:
D FINITIONS
Secton 29.3801(a) (3)-: Reated ta payer. 1919-26-132 9
I. T. 3986
INT RN L R NU COD
ven though a so-caed famy partnershp s not recognzed or
treated as vad for Federa ncome ta purposes, the ndvduas
comprsng the partnershp are nevertheess reated ta payers
wthn the meanng of secton 3801(a) (3) of the Interna Revenue
Code f the partnershp s recognzed as vad under State aw.
dvce s requested whether the word partner, as used n secton
3801(a) (3) (F) of the Interna Revenue Code, ncudes the ndvdua
members of a so-caed famy partnershp whch s not recognzed as
a vad partnershp for Federa ncome ta purposes but whch s rec-
ognzed as a vad partnershp under State aw.
Secton 3801(a) (3) of the Interna Revenue Code provdes n part
as foows:
S C. 3801. MITIG TION OF FF CT OF LIMIT TION ND OT R PRO-
ISIONS IN INCOM T C S S.
(a) Defntons. For the purpose of ths secton

(3) Reated ta payer. The term reated ta payer means a ta payer
who, wth the ta payer wth respect to whom a determnaton specfed n
subsecton (b)- (1), (2), (3), or ( ) s made, stood, n the ta abe year wth
respect to whch the erroneous ncuson, e cuson, omsson, aowance, or
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

7

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
109
29.3801(a)(3)- .
dsaowance theren referred to was made, n one of the foowng reaton-
shps: ( ) husband and wfe; ( ) grantor and fducary; (C) grantor and
benefcary; (D) fducary and benefcary, egatee, or her; ( ) decedent
and decedent s estate; or (F) partner.
In Loverng v. Unted States ( 9 Fed. Supp. 1), t was hed that the.
reatonshp of fducary and benefcary e sted and secton 3801 of
the Interna Revenue Code, provdng n part for the mtgaton of
effect of mtaton n certan cases of correatve ad|ustments of
ncome between reated ta payers theren defned, was appcabe
even though the trust was propery treated as a corporaton and the
benefcary as a stockhoder for Federa ncome ta purposes. It s
beeved that the court s constructon of the statute n that case was
far and reasonabe. Practcay the same queston s presented where
ta payers are operatng under an agreement whch creates a vad
partnershp under State aw but whch, due to surroundng crcum-
stances, s not recognzed as such for Federa ncome ta purposes.
The stuatons beng anaogous, the rue ad down n the Loverng case
s appcabe and controng wth respect to the nstant nqury.
ccordngy, t s hed that even though a so-caed famy partner-
shp s not recognzed or treated as vad for Federa ncome ta pur-
poses, the ndvduas comprsng the partnershp are nevertheess
reated ta payers wthn the meanng of secton 3801(a)(3) of the
Interna Revenue Code, supra, f the partnershp s recognzed as vad
under State aw.
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

7

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
131, rt. 131-8, Regs. 86. 110
INCOM T RULINGS. P RT II
R NU CT OF 1938 ND PRIOR R NU CTS
SU TITL C SUPPL M NT L PRO ISIONS
SUPPL M NT . COMPUT TION OF N T INCOM
S CTION 119. INCOM FROM SOURC S WIT IN
UNIT D ST T S
rtce 119- , Reguatons 101: Rentas and
royates.
R NU CT OF 1938
Lump-sum advance payments to nonresdent aen author for e -
cusve pubcaton rghts n Unted States. (See Ct. D. 1722, page
62.)
SUPPL M NT C CR DITS G INST T
S CTION 131. T S OF FOR IGN COUNTRI S ND
POSS SSIONS OF T UNIT D ST T S
rtce 131-8, Reguatons 86: Lmtatons 19 9-17-131 7
on credt for foregn ta es. G. C. M. 26062
R NU CT OF 193
G. C. M. 2 723 (C. . 19 8-2, 131), reatng to the computaton of
the foregn ta credt under secton 131 of the Revenue ct of 193 ,
s modfed by emnatng therefrom the statement to the effect that
the decson n ubbard v. Unted States (17 Fed. Supp. 93, certorar
dened, 300 U. S. 666; Ct. D. 122 , C. . 1937-1, 2 9) w no onger
be reed upon as a precedent n the computaton of such foregn
ta credt.
Reference s made to G. C. M. 2 723 (C. . 19 8-2, 131), reatng
to the computaton of the amount of the credt to be aowed to a
ctzen of the Unted States under secton 131(a) (1) of the Revenue
ct of 193 , as mted by secton 131(b) of that ct, n respect of
ncome ta pad to the Phppne Isands.
G. C. M. 2 723, supra, modfed G. C. M. 21 32 (C. . 1939-2, 23 ),
whch hed n part that where, under secton 117(a) of the Revenue ct
of 193 , ony 30 percent of the capta gans s taken nto account for
Federa ncome ta purposes, but the entre amount of capta gans
s ta ed by the Phppne Isands, the ta pad to that Government
on the 70 percent e cuded profts, not ta ed by the Unted States,
was not aowabe as a credt under secton 131(a) of the Revenue
ct of 193 . owever, the Ta Court aowed as a credt the entre
ta pad wth respect to capta gans, ncudng that porton of the
capta gans not sub|ect to Unted States ncome ta . (See /. .
De ter et u . v. Commssoner ( 7 . T. . 28 , acquescence, C. .
19 8-2,1.)
The modfcaton of G. C. M. 21 32, supra, was based n part on
the decson n Ueverng v. Ne (139 Fed. (2d) 86 ), affrmng a
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

7

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
I 131, rt. 131-8, Regs. 86.
decson of the Ta Court entered on November 6,19 2 (memorandum
opnon, Dkt. 107 8). One of the ssues before the Ta Court n the
Ne case nvoved a credt for ta es pad to the Phppne Isands
on saares from sources theren whch were e cuded from gross n-
come by reason of secton 2 1 of the Revenue ct of 1928 and sectons
2C2 of the Revenue cts of 192 and 1926.
The decson n the Ne case, supra, nsofar as t aows a credt
for ta es pad to the Phppne Isands on saares e cuded from
gross ncome for Federa ncome ta purposes, s n drect confct
wth the decson of the Unted States Court of Cams n Iubbard v.
Unted States (17 Fed. Supp. 93, certorar dened, 300 U. S. 666;
Ct. D. 122 , C. . 1937-1, 2 9). That case nvoved the queston
whether ncome ta pad to Great rtan on saary earned abroad,
whch was e empt from Federa ncome ta under secton 213(b) (1 )
of the Revenue ct of 1926, was aowabe as a credt aganst Unted
States ncome ta . In dsaowng the credt, the court stated n part:
Doube ta aton e sts ony when the same ncome s ta ed both n
the foregn country and n the Unted States. The court cted the
decson of the Unted States Supreme Court n urnet v. Chcago
Portrat Co. (28 U. S. 1; Ct. D. 63, C. . I-1, 286 (1932)) wheren
t was stated that the prmary desgn of the provson was to mt-
gate the ev of doube ta aton.
In L. eena Wson v. Commssoner (7 T. C. 1 69, promugated
December 31, 19 6, after the crcut court decson n the Ne case),
the Canadan Government ta ed as ncome a egacy of 20,000 whch
s not consdered ncome under our nterna revenue aws. (See
secton 22(b) (3) of the Interna Revenue Code and urnet v. Whte-
house, 283 U. S. 1 8; Ct. D. 327, C. . -, 366 (1931).) In denyng
the Canadan ta as a credt aganst the Unted States ncome ta ,
the Ta Court stated:
It Is amost superfuous for us to add that secton 131 was enacted to prevent
the doube ta aton of the same ncome n a foregn country and n the Unted
States. ubbard v. Unted States, 17 Fed. Supp. 93; certorar dened, 300 U. S.
660. In the very nature of the facts hefore us, there s no doube ta aton. The
contrary appears. Itacs supped.
In G. C. M. 2 723, supra, t was stated n part as foows:
In vew of the foregong, G. C. M. 21 32, supra, s hereby modfed, . e., n re-
aton to the computaton of the foregn ta credt under secton 131 of the
Revenue ct of 193 , and the derson n Iubbard v. Unted States, supra, w no
onger be reed upon as a precedent n the computaton of such foregn ta credt.
Itacs supped.
Inasmuch as the taczed porton of the above-quoted paragraph
of G. C. M. 2 723, supra, was not necessary n the modfcaton of
G. C. M. 21 32, supra, and as the resut reached n the ubbard case
represents the ong-standng poston of the ureau and appears to be
egay sound, such taczed porton of G. C. M. 2 723, supra, s
hereby deeted, and that memorandum s modfed accordngy.
Chares Ophant,
Chef Counse, ureau of Interna Revenue.
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

7

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
21 (a)(3), rt. 13 , Regs. 6 . 112
SUPPL M NT . NONR SID NT LI N INDI IDU LS
S CTION 212. GROSS INCOM
rtce 212-1, Reguatons 101: Gross ncome of non-
resdent aen ndvduas.
R NU CT OF 1938
Lump-sum advance payments to nonresdent aen author for e -
cusve pubcaton rghts n Unted States. (See Ct. D. 1722, page
62.)
S CTION 21 (a)(3). D DUCTIONS LLOW D
INDI IDU LS: T S
rtce 13 , Reguatons 6 : Federa estate 19 9-2 -132 3
and State nhertance ta es. G. C. M. 26211
R NU CTS OF 1918. 1921, ND 192
Revocaton of S. M. 683 (C. . -, 9 (1926))
In vew of the poston taken n Mmeograph 6 (page 11, ths
uetn), reatng to the ta abe status of ta refunds, S. M. 683
(C. . -, 9 (1926)) s hereby revoked.
Chares Ophant,
Chef Counse, ureau of Interna Revenue.
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

7

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
ST T ND GIFT T S
ST T T
Secton 81.13, Reguatons 10 : Property of 19 9-2 -132 1
decedent at tme of death. . T. 22
INT RN L R NU COD
The decson of the Unted States Court of ppeas for the Second
Crcut n andorf s state v. Commssoner (171 Fed. (2d) 6 ),
hodng that Unted States bonds ssued after March 1, 19 1, are
not ncudbe n the gross estate of a nonresdent aen who s not
engaged n busness n the Unted States, w not be foowed by the
ureau.
dvce s requested whether the ureau w foow the decson of
the Unted States Court of ppeas for the Second Crcut n andorfs
state v. Commssoner (171 Fed. (2d) 6 ).
In the above-cted case, ar andorf, a nonresdent aen not en-
gaged n busness n the Unted States, ded the benefca owner of
Unted States- Treasury bonds, ssued after March 1, 19 1, and phys-
cay ocated n the Unted States, n the face amount of 7 ,000.
The decedent aso owned smar bonds ssued pror to March 1, 19 1,
n the face amount of 7 ,000. In that case The Ta Court of the
Unted States hed (9 T. C. 338) that the bonds ssued after March 1,
19 1, are ncudbe n the decedent s gross estate. owever, on ap-
pea, the Unted States Court of ppeas for the Second Crcut re-
versed the decson of the Ta Court and hed that the bonds shoud
not be ncuded n the gross estate of the decedent.
Under the provsons of secton 81.13 of Reguatons 10 , Unted
States bonds are not e empt from Federa estate ta e cept such bonds
as were ssued before March 1, 19 1, and were benefcay owned by a
nonresdent who was not a ctzen and not engaged n busness n the
Unted States.
The contenton that Unted States bonds ssued on or after March 1,
19 1, benefcay owned by a nonresdent who was not a ctzen and
was not engaged n busness n the Unted States, are e empt from
Federa estate ta s based on secton 3 of the Fourth Lberty ond
ct of uy 9,1918 ( 0 Stat. 8 , 8 ), as amended by secton of the
ctory Lberty Loan ct of March 3, 1919 ( 0 Stat. 1309, 1311), n
whch t s provded that bonds, notes, and certfcates of ndebtedness
of the Unted States sha, whe benefcay owned by a nonresdent
aen ndvdua not engaged n busness n the Unted States, be
e empt both as to prncpa and nterest from any and a ta aton
now or hereafter mposed by the Unted States.
( 3)
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

7

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
81.17, etc., Regs. 10 .
11
The estate ta s not a ta on property. It s an e cse ta mposed
upon the transfer of or shftng n reatonshps to property at death.
(See Unted States Trust Co. ofNew York ( unker w) v. everng,
307 U. S. 7; Ct. D. 1396, C. . 1939-1 (Part 1), 330.) The above-cted
statutory provson specfcay e empts from ta the prncpa and
nterest of Unted States bonds. s the estate ta s not a ta on
ether the prncpa or nterest of such bonds, but s an e cse ta on
the transfer of the bonds at death, the e empton does not e tend to
the estate ta . ence, the bonds are propery ncudbe n the gross
estate of a decedent.
In vew of the above, t s concuded that the provsons of secton
81.13 of Reguatons 10 are correct. The decson n andorfs state
v. Commssoner, supra, w therefore not be foowed by the ureau.
Sectons 81.17, 81.18, and 81.19, Rbgua- 19 9-20-1319
tons 10 . T. D. 7 1
TITL 26 INT RN L R NU . C PT R 1. SU C PT R . P RT 81.
R GUL TIONS R L TING TO ST T T
Sectons 81.17, 81.18, and 81.19 of Reguatons 10 amended
Treasury Detrment,
Offce of Commssoner ok Intern a Revenue,
Washngton 2 , D. C.
To Coectors of Interna Revenue and Others Concerned:
On pr 1 ,19 9, notce of proposed rue makng regardng the ap-
pcaton of the Federa estate ta to transfers ntended to take effect
at or after death was pubshed n the Federa Regster (1 F. R.
182 ). fter consderaton of a such reevant matter as was pre-
sented by nterested persons regardng the rues proposed, the amend-
ments to Reguatons 10 26 CFR, Part 81 set forth beow are hereby
adopted. Such amendments are necessary to conform such regua-
tons to the decson of the Unted States Supreme Court n Comms-
soner v. state of Francos L. Church, 33 U. S. 632. No amendments
are requred as a resut of the decson n state of Sdney M. Spege
v. Commssoner, 33 U. S. 701.
Paragraph 1. Secton 81.17, as amended bv Treasury Decson 12
C. . 19 6-1, 26 , approved May 1, 19 6 26 CFR 81.17 , s further
amended as foows:
( ) y strkng from the frst paragraph the second sentence
(whch begns wth the words The decedent sha not be deemed )
nr.d the thrd sentence (whch begns (For reguatons ) and n-
sertng n eu thereof the foowng:
rght to the possesson or en|oyment of, or a rght to the ncome from, the
property, or the rght to desgnate the persons who sha possess or en|oy the
property or the ncome therefrom, consttutes a rght or nterest n the property.
(See aso sectons 81.18 and 81.19.)
( ) y strkng from the ast sentence of the frst paragraph the
words ast paragraph and nsertng n eu thereof ne t to the
ast paragraph .
(C) y strkng from the fourth sentence n e ampe ( ) the word
aso and by nsertng mmedatey precedng the perod at the end
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

7

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
11
81.2 ( ), Regs. 10 .
of such sentence the foowng: , and s aso satsfed by reason of
the decedent s fe estate .
(D) y strkng out e ampe (6) n ts entrety and nsertng n
eu thereof the foowng e ampe:
ampe (6). The decedent, durng hs fe, transferred property In trust,
provdng that the ncome be accumuated and added to corpus unt hs death,
and that the corpus be pad at decedent s death n equa shares to bs survvng
chdren. The share of any chd who shoud predecease the decedent was to be
pad to hs ssue, or, f no ssue survved the decedent, to other chdren of the
decedent or ther ssue. If no chdren and no ssue of any chd shoud survve
the decedent, the corpus was to be pad to the ne t of kn of the decedent. It s
assumed for the purposes of ths e ampe that the dsposton to the ne t of kn
of the decedent creates a remander n the persons who at hs death are hs ne t
of kn and not a reverson to the decedent s estate. In ths case, the decedent
has parted wth every rght and Interest n the property and hence requrement
(2) s not satsfed. ccordngy, no part of the property s ncudbe n the de-
cedent s gross estate under ths secton.
( ) y nsertng at the end of such secton the foowng:
In the case of a decedent who ded on or before anuary 17, 19 9, the date of
the decson of the Unted States Supreme Court n Commssoner v. state of
Francos L. Church, 33 U. S. 632, property transferred by the decedent sha not
be ncuded n hs gross estate under ths secton f the decedent s ony rght or
nterest n the property conssted of an estate for hs fe. (See, however, sec-
tons 81.18 and 81.19.)
Pah. 2. Secton 81.18 2G CFR 81.18 s amended by nsertng m-
medatey before the second sentence (whch begns wth the words
reservaton ) the foowng: (See, however, secton 81.17.)
Par. 3. Secton 81.19 2G CFR 81.19 s amended by nsertng at the
end of the thrd paragraph (but not as a part of subparagraph (2)
thereof) the foowng: (See, however, secton 81.17.)
(Ths Treasury Decson s ssued under authorty contaned n sec-
ton 3791 of the Interna Revenue Code ( 3 Stat. 67; 26 U. S. C.
3791).)
Geo. . Schoeneman,
Commssoner of Interna Revenue.
pproved September 6, 19 9.
Thomas . Lynch,
ctng Secretary of the Treasury.
(Fed wth the Dvson of the Federa Regster September 8, 19 9, 8: 0 a. m.)
Secton 81.2 ( ), Reguatons 10 . 19 9-22-13218
T. D. 7 9
TITL 26 INT RN L R NU . C PT R I, SU C PT R . P RT 81.
R GUL TIONS R L TINO TO ST T T
Reguatons 10 amended to conform to secton 1 of I ubIc Law 137
( ghty-frst Congress) Tpage 2( 9, ths uetn , reatng to reease
of powers of appontment.
Treasury Department,
Offce of Commssoner of Interna Revenue,
Washngton 2 , D. C.
To Coectors of Interna Revenue and Others Concerned:
In order to conform Reguatons 10 26 CFR, Part 81 to secton 1
of Pubc Law 137 ( ghty-frst Congress, frst sesson) page 269, ths
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

7

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
81.2 (6). Regs. 10 .
116
uetn , approved une 28, 19 9, such reguatons are amended as
foows:
Paragraph 1. There s nserted mmedatey foowng Pubc Law
63 ( ghteth Congress, second sesson), whch was nserted n such
reguatons by Treasury Decson 6 8 C. . 19 8-2, 1 3 , approved
October 1,19 8, and before secton 302(f) of the Revenue ct of 1926
(as orgnay enacted) as set forth precedng secton 81.2 , the
foowng:
PU LIC L W 137 ( IG TY-FIRST CONGR SS, FIRST S SSION),
PPRO D UN 28, 19 9
Resoved by the Senate and ouse of Representatves of the Unted
States of merca n Congress assembed. That sectons 03(d)(3)
of the Revenue ct of 19 2 (reatng to reease of certan powers
of appontment n the case of the estate ta es) are hereby
amended by strkng out 19 9 wherever appearng theren and Insertng
n eu thereof 19 0 .
Par. 2. Secton 81.2 (6), added by Treasury Decson 239 C. .
19 3, 1081 , approved March 10, 19 3, as amended by Treasury
Decson 699 C. . 19 9-1, 181 , approved May 13, 19 9 26 CFR
81.2 (b) , s further amended as foows:
( ) y strkng out. 19 9 wherever t appears, e cept n the second
paragraph of (b) (3) begnnng wth the words Secton 2 of Pubc
Law 63 , approved une 12,19 8, and nsertng n eu thereof 19 0 .
( ) y strkng from the frst sentence of subparagraph (3) (as
amended by Pubc Law 03 ( ghteth Congress), approved une 12,
19 8) and nsertng n eu thereof the foowng: (as amended by
Pubc Law 137 ( ghty-frst Congress), approved une 28, 19 9) .
ecause of the technca nature of the amendments made heren, t
s found that t s unnecessary to ssue ths Treasury Decson wth
notce and pubc procedure thereon under secton (a) of the dmn-
stratve Procedure ct, approved une 11, 19 6, or sub|ect to the
effectve date mtaton of secton (c) of sad ct.
Ths Treasury Decson sha be effectve upon ts fng for pubca-
ton n the Federa Regster.
(Ths Treasury Decson s ssued under authorty contaned n
secton 3791 of the Interna Revenue Code ( 3 Stat. 67; 26 U. S. C.
3791) and secton 1 of Pubc Law 137 ( ghty-frst Congress, frst
sesson), approved une 28, 19 9.)
Geo. . Schoeneman,
Commssoner of Interna Revenue.
pproved October 7, 19 9.
Thomas . Lynch,
ctng Secretary of the Treasury.
(Fed wth the Dvson of the Federa Regster October 12, 19 9, 8: 9 a. m.)
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

7

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
117
86.1, 86.2(6), Regs. 108.
GIFT T
Sectons 86.1 and 86.2 (b), Reguatons 108. 19 9-22-13219
T. D. 7 0
TITL 26 INT RN L R NU . -C PT R I, SU C PT R , P RT 86. GIFT
T UND R C PT R OF T INT RN L R NU COD , S M ND D
Reguatons 108 amended to conform to secton 1 of Pubc Law
137 ( ghty-frst Congress) page 269, ths uetn , reatng to
reease of powers of appontment.
Treasury Department,
Offce of Commssoner of Interna Revenue,
Washngton 2 , D. C.
To Coectors of Interna Revenue and Others Concerned:
In order to conform Reguatons 108 26 CFR, Part 86 to secton 1
of Pubc Law 137 ( ghty-frst Congress, frst sesson) page 269, ths
uetn , approved une 28, 19 9, such reguatons are amended as
foows:
Paragraph 1. There s nserted after secton 37 of the Revenue
ct of 19 8, whch was nserted by Treasury Decson 698 C. .
19 9-1, 222 , approved May 13, 19 9, and mmedatey precedng sec-
ton 86.1, the foowng:
PU LIC L W 137 ( IG TY-FIRST CONGR SS, FIRST S SSION),
PPRO D UN 28, 19 0
Resoved by the Senate and ouse of Representatves of the Unted
States of merca n Congress assembed. That sectons 2(c)
of the Revenue ct of 19 2 (reatng to reease of certan powers of
appontment n the case of the gft ta es) are hereby amended
by strkng out 19 9 wherever appearng theren and Insertng n eu
thereof 19 0 .
Par. 2. Secton 86.1, as amended by Treasury Decson 6 9 C. .
19 8-2, 1 , approved October 1, 19 8 26 CFR 86.1 , s further
amended by strkng from the second sentence 19 9 and nsertng
n eu thereof 19 0 .
Par. 3. Secton 86.2( ), as amended by Treasury Decson 6 9 26
CFR 86.2 (b) , s further amended as foows:
( ) y strkng out 19 9 wherever t appears, e cept n the thrd
sentence of the frst paragraph begnnng wth the words Secton 2
of Pubc Law 63 , approved une 12, 19 8, and nsertng n eu
thereof 19 0 .
( ) y strkng out as amended by Pubc Law 63 ( ghteth
Congress), approved une 12, 19 8 wherever t appears and nsert-
ng n eu thereof the foowng: as amended by Pubc Law 137
( ghty-frst Congress), approved une 28,19 9 .
ecause of the technca nature of the amendments made heren,
t s found that t s unnecessary to ssue ths Treasury Decson wth
notce and pubc procedure thereon under secton (a) of the dmn-
stratve Procedure ct, approved une 11, 19 6, or sub|ect to the
effectve date mtaton of secton (c) of sad ct.
Ths Treasury Decson sha be effectve upon fng wth the Dv-
son of the Federa Regster,
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

7

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
86.1, 86.2(6), Regs. I08. 118
(Ths Treasury Decson s ssued under authorty contaned n
sectons 1029 and 3791 of the Interna Revenue Code ( 3 Stat. 1 7,
67; 26 U. S. C. 1029, 3791) and secton 1 of Pubc Law 137 ( ghty-
frst Congress, frst sesson), approved une 28, 19 9.)
Geo. . Scoeneman,
Commssoner of Interna Revenue.
pproved October 7,19 9.
Thomas . Lynch,
ctng Secretary of the Treasury.
(Fed wth the Dvson of the Federa Regster October 12, 10 9, 8: 9 a. m.)
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

7

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
MPLOYM NT T RULINGS
INT RN L R NU COD
C PT R 9, SU C PT R . F D R L INSUR NC CONTRI UTIONS
CT
Secton 1 11: d|ustment of ta .
Reguatons 106, Secton 02.702: d|ustment of
empoyees ta .
Changes effected by use of Form 9 1. (See T. D. 7 9, beow.)
Secton 1 11: d|ustment of ta .
Reguatons 106, Secton 02.703: d|ustment of
empoyers ta .
Changes effected by use of Form 9 1. (See T. D. 7 9, beow.)
Secton 1 20; Coecton and payment of ta es. 19 9-2 -132
Reguatons 106, Secton 02. 01: mpoyers T. D. 7 9
dentfcaton numbers.
( so Sectons 1 11, 1 20. and 1 21; Reguatons
106. Sectons 02. 0 , 02.601, 02.603, 02.607,
02.702, 02.703, and 02.70 .)
TITL 20 INT RN L R NU . C PT R 1, SU C PT R D. P RTS
02 ND 0
Reguatons 106 nnd 110 amended, wth respect to ta -return pe-
rods commencng after December 31, 19 9, to prescrbe a combned
return for the reportng of the ta es under the Federa Insurance
Contrbutons ct and the ncome ta coected at source on wages.
Tkeasury Depa TM NT,
Offce of Commssoner of Interna Revenue,
Washngton 2 , D. C.
To Coectors of Interna Revenue and Others Concerned:
On September 23. 19 9, notce of proposed rue makng regardng
the amendment of Reguatons 106 and 116 to prescrbe a combned
return for the reportng of the ta es under the Federa Insurance
Contrbutons ct and the ncome ta coected at source on wages
was pubshed n the Federa Regster (18 F. R. 808). fter con-
sderaton of a reevant matter presented by nterested persons re-
gardng the proposed amendments, the foowng amendments are
hereby adopted:
(119)
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

7

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
Regs. 106, 02. 01.
120
R GUL TIONS 106 (20 CFR, P RT 02
Paragraph 1. Secton 02. 01 of Reguatons 106 26 CFR 02. 01
s amended by strkng out n the ast sentence Form SS-a and by
nsertng n eu thereof Form 9 1 (or, wth respect to perods ended
pror to anuary 1,19 0, Form SS-a) .
Par. 2. Secton 02. 0 of Reguatons 106 26 CFR 02. 0 s
amended as foows:
( ) y strkng out n the frst sentence of paragraph (a) Form
SS-a and by nsertng n eu thereof Form 9 1 (or, wth respect
to perods ended pror to anuary 1, 19 0, Form SS-a) .
( ) y addng after Form SS-a n the ffth and s th para-
graphs of secton 02. 0 (a) the foowng: or Form 9 1 .
Par. 3. Secton 02.601 of Reguatons 106 26 CFR 02.601 s
amended by addng after the frst sentence the foowng new sentence:
For quarters commencng after December 31. 19 9, Form 9 1 sha be used n eu
of Form SS-a.
Par. . Secton 02.603 of Reguatons 106 26 CFR 02.603 s
amended as foows:
( ) v addng after Form SS-a n the frst sentence the foow-
ng: or Form 9 1 .
( ) y addng at the end of the secton the foowng:
Wth respect to perods commencng after December 31, 19 9, te term wages
as used n ths secton of these reguatons ncudes any remuneraton whch
consttutes wages as defned n ether secton 1 26(a) or secton 1621(a) of the
Interna evenue ( ode. Thus, f an empoyer censes to pay wages as defned n
one of such sectons, but contnues to pay wages as defned n the other of such
sectons, no fna return shoud be fed so ong as he contnues to pay such wages.
If an empoyer who has been payng remuneraton whch consttutes wages as
defned n each of such sectons permanenty ceases to pay such wages, a fna
return s requred of such empoyer. Such fna return must be fed ou or before
the thrteth day after the date of the ast payment of wages as defned n such
sectons. If an empoyer who has been payng remuneraton whch consttutes
wages as defned n ony one of suc sectons permanenty ceases to pay such
wages, a fna return s requred of such empoyer. Such fna return must be fed
on or before the thrteth day after the date of the ast payment of wages as
defned n such secton.
Par. . Secton 02.607 of Reguatons 106 26 CFR 02.607 s
amended by strkng out n the frst sentence Form SS-a and by
nsertng n eu thereof Form 9 1 (or, wth respect to perods ended
pror to anuary 1,19 0, Form SS-a) .
Par. 6. Secton 02.702 of Reguatons 106 26 CFR 02.702 s
amended as foows:
( ) y strkng out Form SS-a n the frst sentence of secton
02.702 (a) (1) and n the frst and second paragraphs of secton
02.702(a) (2) where the desgnaton frst appears, and Dy nsertng n
eu thereof Form 9 1 (or, wth respect to perods ended pror to
anuary 1,19 0, Form SS-a) .
( ) y strkng out n the frst and second paragraphs of secton
02.702(a) (2) Form SS-1 or Form SS-a and by nsertng n eu
thereof Form SS-1, Form SS-a, or Form 9 1 .
(C) y addng after Form SS-a n the frst and second sen-
tences of secton 02.702(6) (1) the foowng: or Form 9 1 .
Par. 7. Secton 02.703 of Reguatons 106 26 CFR 02.703 s
amended as foows:
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

7

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
121
Regs. Of, 02. 01.
( ) y strkng out Form SS-a n the frst and second para-
graphs of secton 02.703(a) where the desgnaton frst appears, and
by nsertng n eu thereof Form 9 1 (or, wth respect to perods
ended pror to anuary 1,19 0, Form SS-a) .
( ) y strkng out n the frst and second paragraphs of secton
02.703(a) Form SS-1 or Form SS-a and bv nsertng n eu
thereof Form SS-1, Form SS- a, or Form 9 1 .
Par. 8. Secton 02.70 of Reguatons 100, as amended by Treasury
Decson 66 C. . 19 8-2, 13 , approved November 1, 19 8 26
CF 02.70 , s further amended as foows:
( ) y addng after Form SS-a n the frst sentence of para-
graph (a) the foowng: or Form 9 1 .
( ) v strkng out n the ast sentence of paragraph (d) or on
Schedue of Form SS-a and or such Schedue of Form SS-a
and by nsertng n eu thereof , Schedue of Form SS-a, or Sched-
ue of Form 9 1 and , such Schedue of Form SS-a, or such
Schedue of Form 9 1 , respectvey.
R GUL TIONS 116 20 CF . P RT 0
Par. 9. Secton 0 .102( )(2) of Reguatons 110, as added by
Treasury Decson 6 C. . 19 8-2, 1 , approved uy 20, 19 8
26 CFR 0 .102( ) (2) , s amended by strkng out n the frst, sen-
tence of the thrd paragraph Form W- and by nsertng n eu
thereof Form 9 1 (or, wth respect to perods ended pror to anu-
ary 1,19 0. Form W-) .
Par. 10. Secton 0 . 01(c) of Reguatons 116 26 CFR 0 . 01(c)
s amended by strkng out (Form W-) and by nsertng n eu
thereof (Form W- or Form 9 1) .
Par. 11. Immedatey precedng the capton Secton 2702(a) of
the Interna Revenue Code as set forth mmedatey precedng sec-
ton 0 .601 of Reguatons 116 26 CFR 0 .601 , the foowng s
nserted:
S CTION 2701 OF T INT RN L R NU COD
R TURNS
very perscn abe for the ta sha make re-
turns under oath to the coector for the dstrct n whch s
ocated the prncpa pace of busness. Such returns sha contan such
nformaton and be made at such tmes and n such manner as the Com-
mssoner, wth the approva of the Secretary, may by reguatons
prescrbe.
Par. 12. Secton 0 .601 of Reguatons 116 26 CFR 0 .601 s
amended as foows:
( ) y strkng out very n the frst sentence and nsertng n
eu thereof cept as provded n secton 0 .602, every .
( ) y addng after the second sentence the foowng new
sentences:
For quarters commencng after December 31, 10 0, Form 0 1 sha be used n eu
of Form W-. The return on Form 0 1 must be fed wth the coector of
Interna revenue for the dstrct n whch s ocated the prncpa pace of busness
of the empoyer, or f the empoyer has no prncpa pace of busness n the
Unted States, wth the coector of nterna revenue at Ratmore, Md.
(C) y addng after Form W- wherever t appears n the sec-
ond and ast paragraphs the foowng: or Form 9 1 .
868972- 0 9
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

7

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
Regs. 106, 02. 0 .
122
(D) y addng after Forms W- n the eghth paragraph the
foowng: or Forms 9 1 .
Par. 13. Secton 0 .602 of Reguatons 116 26 CFR 0 .602 s
amended as foows:
( ) y addng after Form W- n the frst sentence the foow-
ng: or Form 9 1 .
( ) y nsertng after the coector n the second sentence the
foowng: and the ta sha be pad .
(C) y addng at the end of te secton the foowng:
Wth respect to perods commencng after December 31,19 9, the term wages
as used n ths secton of these reguatons ncudes any remuneraton whch
consttutes wages as defned n ether secton 1 26(a) or secton 1621(a) of the
Interna Revenue Code. Thus, f an empoyer ceases to pay wages as defned
n one of such sectons, but contnues to pay wages as defned n the other of such
sectons, no fna return shoud be fed so ong as he contnues to pay such wages.
If an empoyer who has been payng remuneraton whch consttutes wages as
defned n each of such sectons permanenty ceases to pay such wages, a fna
return s requred of such empoyer. Such fna return must be fed on or
before the thrteth day after the date of the ast payment of wages as defned
n such sectons. If an empoyer who has been payng remuneraton whch con-
sttutes wages as defned n ony one of such sectons permanenty ceases to pay
such wages, a fna return s requred of such empoyer. Such fna return must
be fed on or before the thrteth day after the date of the ast payment of wages
as defned n such secton.
Par. 1 . Secton 0 .701 of Reguatons 116 26 CFR 0 .701 s
amended by strkng out Form W- wherever t appears theren and
by nsertng n eu thereof Form 9 1 (or, wth respect to perods
ended pror to anuary 1,19 0, Form W-) .
Par. 1 . Secton 0 .80 (a) of Reguatons 116 26 CFR
0 .80 (a) s amended by strkng out Return of Income Ta Wth-
hed on Wages (Form W-) and by nsertng n eu thereof return
on Form 9 1 (or, wth respect to perods ended pror to anuary 1,
19 0, Form W-) .
(Ths Treasury Decson s ssued under the authorty contaned n
sectons 1 29 and 3791 of the Interna Revenue Code ( 3 Stat. 178,
67; 26 U. S. C. 1 29, 3791).)
Geo. . Schoeneman,
Commssoner of Interna Revenue.
pproved November 10, 19 9.
Thomas . Lynch,
ctng Secretary of the Treasury.
(Fed wth the Dvson of the Federa Regster November 18, 19 9, 8: 6 a. m.)
Secton 1 20: Coecton and payment of ta es.
Reguatons 106, Secton 02. 01: mpoyers
dentfcaton numbers.
Identfcaton numbers to be shown on Form 9 1. (See T. D. 760,
page 123.)
Secton 1 20: Coecton and payment of ta es.
Reguatons 106, Secton 02. 0 : Dutes of
empoyer wth respect to empoyees account
numbers.
Changes effected by use of Form 9 1. (See T. D. 7 9, page 119.)
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

7

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
123
Regs. 106, 02.201.
Secton 1 20: Coecton and payment of ta es.
Reguatons 106, Secton 02.601: Ta and n-
formaton returns.
Changes effected by use of Form 9 1. (See T. D. 7 9, page 119.)
Secton 1 20: Coecton and payment of ta es.
Reguatons 106, Secton 02.603: Fna returns.
Changes effected by use of Form 9 1. (See T. D. 7 9, page 119.)
Secton 1 20: Coecton and payment of ta es.
Reguatons 106, Secton 02.007: Payment of
ta .
Changes effected by use of Form 9 1. (See T. D. 7 9, page 119.)
Secton 1 21: Refunds, credts, and abatements.
Reguatons 106, Secton 02.70 : Refund or
credt of overpayments whch are not ad|ust-
abe ; abatement of overassessments.
Changes effected by use of Form 9 1. (See T. D. 7 9, page 119.)
Secton. 1 20: Defntons. 19 9-2 -132
Reguatons 106, Secton 02.201: Genera T. D. 760
defntons and use of terms.
( so Sectons 1 20 and 1 30; Reguatons
106, Sectons 02. 01 and 02.607a.)
TITL 20 INT RN L R NU . C PT R I, SU C PT R D. P RTS
02 ND 0
Reguatons 106 and 116 amended wth respect to use of Federa
Reserve banks and authorzed commerca hanks n connecton wth
the payment of the ta es under the Federa Insurance Contrbutons
ct and of the ncome ta coected at source on wages.
Treasury Department,
Offce of Commssoner of Interna Revenue,
Washngton 2 , D. G.
To Coectors of Interna Revenue and Others Concerned:
On September 23, 19 9, notce of proposed rue makng regardng
the amendment of Reguatons 106 and 116, wth respect to the use
of Federa Reserve banks and authorzed commerca banks n con-
necton wth the payment of the ta es under the Federa Insurance
Contrbutons ct and of the ncome ta coected at source on wages,
was pubshed n the Federa Regster (18 F. R. 807). fter con-
sderaton of a reevant matter presented by nterested persons re-
gardng the proposed amendments, the foowng amendments are
hereby adopted.
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

7

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
Regs. 106, 02.201.
12
R GUL TIONS 106 26 CFR, P RT 02
Paragraph 1. Reguatons 106 26 CFR, Part 02 are amended as
foows:
( ) y strkng out the perod at the end of secton 02.201 (t) 26
CFR 02.201 () and by nsertng n eu thereof a comma and the
foowng: e cept that such term when used n secton 02.607a n-
cudes aso the ncome ta coected at source on wages under secton
1622 of the Interna Revenue Code.
( ) y amendng the ast sentence of secton 02. 01 to read as
foows: Identfcaton numbers assgned to empoyers sha be shown
n ther records, returns, and cams to the e tent requred by sectons
02.60 , 02.607a, 02.609, and 02.70 and by the nstructons reatng
to Form 9 1 (or, wth respect to perods ended pror to anuary 1,19 0,
Form SS-a) and to Form 0.
(C) y nsertng mmedatey precedng secton 02.608 26 CFR
02.608 the foowng new secton:
Sec. 02.607n. Use of Federa Reserve anks and uthorzed Commerca
anks n Connecton Wth Payment of Ta es Wth Respect to Wages Pad
on or fter anuary 1. I960. (a) In genera. cept as provded n paragraph
(6) of ths secton, f durng any caendar month utter December 31, 19 9, the
aggregate amount of
(1) the empoyees ta wthhed under secton 1 01,
(2) the empoyers ta for such month under secton 1 10, and
(3) the ncome ta wthhed at source on wages under secton 1622,
of the Interna Revenue Code, e ceeds . 100 n the case of an empoyer, t w be
I he duty of such empoyer to depost such amount wthn 1 days after the cose
of surh caendar month wth a Federa Rwerve bank. The remttance of such
amount sha be accompaned by a Federa Depostary Recept (Form 0).
uch depostary recept sha be prepared n accordance wth the nstructons
and reguatons appcabe thereto. The empoyer, at hs eecton, may forward
such remttance, together wth such depostary recept, to a commerca bank
authorzed n accordance wth Treasury Department Crcuar No. 8 8 to accept
remttances of the aforementoned ta es for transmsson to a federa Reserve
bank. fter the Federa Reserve bank has vadated the depostary recept,
such depostary recept w be returned to the empoyer. very empoyer makng
deposts pursuant to ths secton sha attach to hs return on Form 9 1 for the
caendar quarter wth respect to whch such deposts are made, n part or fu
payment of the ta es shown thereon, depostary recepts so vadated, and sha
pay to the coector the baance, f any, of the ta es due for such quarter.
(6) Payments for ast month of the caendar quarter. Wth respect to the
ta es specfed n paragraph (a) of ths secton for the ast month of the caendar
quarter, the empoyer may ether ncude wth hs return drect remttance to
the coector for the amount of such ta es or attach to such return a depostary
recept vadated by a Federa Reserve bank as provded n paragraph (a) of
ths secton. Payment of the ta es requred to be reported on each return, n the
form of vadated depostary recepts or drect remttances, sha be made to the
coector at the tme f ed for tng such return. If a depost s made for the
ast month of the quarter, the empoyer sha make t n ampe tme (whether
before, on, or after the oth day of the succeedng month) to enabe the Federa
Reserve bank to return the vadated recept to the empoyer so that t can be
attached to and fed wth the empoyer s return at the tme so f ed.
(c) Procurement of prescrbed form. Intay, Form 0, Federa Depostary
Recept, w so far as possbe be furnshed the empoyer by the coector. n
empoyer not supped wth the proper form shoud make appcaton therefor to
the coector n ampe tme to have such form avaabe for use n makng bs
nta depost wthn the tme prescrbed n paragraph (a) of ths secton.
Thereafter a bank form w be sent to the empoyer by the Federa Reserve bank
when returnng the vadated depostary recept. n empoyer may secure add-
tona forms from a Federa Reserve bank by appyng therefor and advsng
the bank of hs dentfcaton number. The empoyer s dentfcaton number and
name, on each depostary recept, shoud be the same as they are requred to be
shown on the combned quartery ta return, Form 9 1, to be fed wth the
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

7

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
12
Regs. 106, 02.201.
coector. The address of the empoyer, as shown on each depostary recept,
shoud be the address to whch the recept shoud be returned foowng vadaton
by the Federa Reserve bank.
Par. 2. Reguatons 116 26 CFR, Part 0 are amended as foows:
( ) y redesgnatng paragraph (d) of secton 0 .107 26 CFR
0 .107 as paragraph (e).
( ) y nsertng mmedatey after paragraph (c) of secton
0 .107 26 CFR 0 .107 the foowng new paragraph:
(d) Identfcaton number means the dentfyng number of an empoyer,
assgned as the case may be, under the Federa Insurance Contrbutons ct or
Tte III of the Soca Securty ct, or by the coector n accordance wth
secton 0 .606(c).
(C) y revsng the headng of secton 0 .60 , whch secton was
amended by Treasury Decson 6 C. . 19 8-2,123 , approved uy
1 , 19 8 26 CFR 0 .60 , to read as foows: Use of Government
Depostares n Connecton Wth Payment of Ta es Wth Respect
to Wages Pad Pror to anuary 1,19 0.
(D) y nsertng at the end of secton 0 .60 , as amended by
Treasury Decson 6 26 CFR 0 .60 , the foowng:
Ths secton sha be appcabe ony wth respect to wages pad pror to anuary
1,19 0.
Sec. 0 .006. Use of Federa Reserve anks and uthorzed Commerca
anks n Connecton Wth Payment of Ta es Wth Respect to Wages Pad
on ok fter anuary 1,19 0. (a) In genera. cept as provded n paragraph
(6) of ths secton, f durng any caendar month after December 31, 19 9, the
aggregate amount of
(1) the empoyees ta wthhed under secton 1 01,
(2) the empoyers ta for such month under secton 1 10, and
(3) the ncome ta wthhed at source on wages under secton 1622,
of the Interna Revenue Code, e ceeds 100 n the case of an empoyer, t w
be the duty of such empoyer to depost such amount wthn 1 days after the cose
of such caendar month wth a Federa Reserve bank. The remttance of such
amount sha be accompaned by a Federa Depostary Recept (Form 0). Such
depostary recept sha be prepared n accordance wth the nstructons and
reguatons appcabe thereto. The empoyer, at hs eecton, may forward such
remttance, together wth such depostary recept, to a commerca bank author-
zed n accordance wth Treasury Department Crcuar No. 8 8, to accept remt-
tances of the aforementoned ta es for transmsson to a Federa Reserve bank,
fter the Federa Reserve bank has vadated the depostary recept, such depos-
tary recept w be returned to the empoyer. very empoyer makng deposts
pursuant to ths secton sha attach to hs return on Form 9 1 for the caendar
quarter wth respect to whch such deposts are made, n part of fu payment of
the ta es shown thereon, depostary recepts so vadated, and sha pay to the
coector the baance, f any, of the ta es due for such quarter.
(6) Payments for ast month of the caendar quarter. Wth respect to the
ta es specfed n paragraph a) of ths secton for the ast month of the caendar
quarter, the empoyer may ether ncude wth hs return drect remttance to
the coector for the amount of such ta es or attach to such return a depostary
recept vadated by a Federa Reserve bank as provded n paragraph (a) of ths
secton. Payment of the ta es requred to be reported on each return, n the
form of vadated depostary recepts or drect remttances, sha be made to the
coector at the tme f ed for fng such return. If a depost s made for the ast
month of the quarter, the empoyer sha make t n ampe tme (whether before,
on, or after the 1 th day of the succeedng month) to enabe the Federa Reserve
bank to return the vadated recept to the empoyer so that t can be attached to
and fed wth the empoyer s return at the tme so f ed.
(c) Procurement of prescrbed form. Intay, Form 0, Federa Depostary
Recept, w so far as possbe be furnshed the empoyer by the coector. n
empoyer not supped wth the proper form shoud make appcaton therefor
to the coector n ampe tme to have such form avaabe for uso n makng
hs nta depost wthn the tme prescrbed n paragraph (a) of ths secton.
R GUL TIONS 116 2C CFR, P RT 0
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

7

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
Regs. 103, 02.607a.
126
Thereafter a bank form w be sent to the empoyer by the Federa Reserve
bank when returnng the vadated depostary recept. n empoyer may secure
addtona forms from a Federa Reserve bank by appyng therefor and advsng
the bank of hs dentfcaton number. (See secton 0 .107(d).) The co-
ector w assgn an dentfcaton number to each empoyer who s not requred
ether to wthhod the empoyees ta under secton 1 01 or to pay the empoyers
ta under secton 1 10. very empoyer makng deposts pursuant to ths secton
sha make such use of hs Identfcaton number as s prescrbed by ths secton
and by the nstructons reatng to Form 9 1 and to Form 0. The empoyer s
dentfcaton number and name, on each depostary recept, shoud be the same
as they are requred to be shown on the combned quartery ta return, Form
9 1, to be fed wth the coector. The address of the empoyer, as shown on
each depostary recept, shoud be the address to whch the recept shoud be
returned foowng vadaton by the Federa Reserve bank.
(Ths Treasury Decson s ssued under the authorty contaned
n sectons 1 29 and 3791 of the Interna Revenue Code ( 3 Stat. 178.
67; 26 U. S. C. 1 29,3791).)
Geo. . Schoeneman,
Commssoner of Interna Revenue.
pproved November 10, 19 9.
TnoM s . Lynch,
ctng Secretary of the Treasury.
(Fed wth the Dvson of the Federa Regster November 18, 19 9, 8 : 6 a. m.)
Secton 1 30: Other aws appcabe.
Reguatons 106, Secton 02.607a: Use of
Federa Reserve banks and authorzed com-
merca banks n connecton wth payment of
ta es wth respect to wages pad on or after
anuary 1,19 0.
Use of Government depostares n connecton wth payment of
empoyment ta es. (See T. D. 760, page 123.)
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

7

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
MISC LL N OUS T RULINGS
ST MP T S
INT RN L R NU COD
S CTION 1802(b), S M ND D. S L S ND TR NSF RS
Reguatons 71 (19 1), Skcton 113.33: Saes and 19 9-18-1317
transfers sub|ect to ta . G. C. M. 20070
ppcabty of documentary stamp ta on transfers of rghts to
receve stock, mposed by secton 3802(b) of the Interna Revenue
Code, where, pursuant to an agreement, stock of a corporaton s
ssued to the partners of M Company, a partnershp, n ther nd-
vdua names n consderaton of the transfer to the corporaton of
a of the assets of M Company and the compete cessaton of Its
busness.
G. C. M. 23 1 (C. . 19 2-2, 2 ) modfed.
dvce s requested wth respect to the appcabty of documentary
stamp ta on transfers of rghts to receve stock, mposed by secton
1802(b) of the Interna Revenue Code, where, pursuant to an agree-
ment, stock of a corporaton s ssued to the partners of M Company,
a partnershp, n ther ndvdua names n consderaton of the trans-
fer to the corporaton of a of the assets of M Company and the com-
pete cessaton of ts busness.
In G. C. M. 23 1 (C. . 19 2-2, 2 ) t was hed on substantay
smar facts that a transfer ta was ncurred upon the transfer to
the partners ndvduay of the rghts of the other partes to receve
the shares of stock as coowners.
Secton 1802(b) of the Interna Revenue Code, as amended, mposes
a stamp ta on transfer of rghts to receve corporate stock. Secton
113.33 of Reguatons 71 (19 1) ncudes among e ampes of ta abe
transfers the transfer from persons hodng ega tte as tenants n
common, as |ont tenants, or as tenants by the entrety, to the same
persons separatey to effect a partton, or from one person to twro or
more persons, whether or not ncudng the transferor as tenants n
common, as |ont tenants, or as tenants by the entrety.
The consstent poston taken by the ureau s that a.partnershp
s not a separate entty and that the assets of a partnershp are hed
by the ndvdua partners as coowners. Thus, where partnershp
assets are transferred there s no compuson to hod that the partner-
shp as such has a rght to the proceeds as s true where the assets of
a corporaton are transferred.
The dssouton of a partnershp and the subsequent dstrbuton
of the partnershp assets to the ndvdua partners nvoves a partton
or dvson of property hed n cotenancy. owever, cotenants may
(127)
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

7

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
Regs. 71 (19 1), 113. . 128
agree |onty to se the property owned n common and to receve back
consderaton as ndvduas wthout any dvson of the |onty hed
property. Thus, n order for a ta to attach n the present case, t
must be found that the partners or cotenants had a rght to receve the
stock as cotenants. Snce there s not necessary an assumpton that
where cotenants se property the consderaton s receved by them
as cotenants, the ntent of the cotenants at the tme of sae must be
determned. Ony f t s evdent that the partners by ther actons
must have ntended to receve the stock of the corporaton as cotenants
s a transfer ta due when the stock s ater dstrbuted to the nd-
vduas.
In the present case the agreement of the partners to se a of the
partnershp assets aong wth the compete cessaton of the partnershp
busness s strong evdence of an agreement to dssove the partnershp
reaton. Fsher v. Fsher, 188 Pac. (2d) 802 (19 8); Cavasso v.
Downey, 188 Pac. 9 (1920).) Therefore, when the property hed
n common was sod by the cotenants |onty, the cotenancy estabshed
by the partnershp was destroyed. To hod that the rght to receve
the stock as consderaton ever e sted n cotenancy woud requre
evdence that the partes ntended that the stock was to be hed n
cotenancy. No such evdence e sts n the present case. On the con-
trary, the partes stpuated that the stock was to be receved n ther
ndvdua names.
It s the opnon of ths offce that the ssue of stock by the corpora-
ton to the partners of M Company n ther ndvdua names under the
crcumstances outned above does not nvove a transfer of the rght
to receve stock wthn the meanng of secton 1802(b) of the Code,
and accordngy, no transfer ta s due.
G. C. M. 23 1 , supra, s modfed to the e tent that t s nconsstent
wth the foregong opnon.
Chares Odphant,
Chef Counse, ureau of Interna Revenue.
S CTION 1801, S M ND D. CORPOR T S CURITI S
Reguatons 71 (19 1), Secton 113. : Issues 19 9-20-13196
sub|ect to ta . M. T. 38
ppcabty of the ta Imposed by sectons 1800 and 1801 of
the Interna Revenue Code on the Issuance of corporate securtes
to nstruments termed promssory notes e ecuted pursuant to aud
under the terms of a oan agreement. .
dvce s requested whether the foowng descrbed corporate n-
struments termed promssory notes consttute debentures wthn
the meanng of secton 1801 of the Interna Revenue Code, and are,
accordngy, ta abe upon ssue.
Sectons 1800 and 1801 of the Interna Revenue Code mpose a ta
on a bonds, debentures, or certfcates of ndebtedness ssued by any
corporaton, and a nstruments, however termed, ssued by any cor-
poraton wth nterest coupons or n regstered form, known generay
as corporate securtes.
M Corporaton, herenafter caed M, entered nto a oan agreement
wth N Insurance Co., herenafter caed N, n accordance wth whch
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

7

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
129 Regs. 71 (19 1), 113. .
M ssued to N nterest-bearng notes evdencng the borrowng of
doars, due y years from date of ssuance. The agreement pursuant
to whch the notes were ssued provdes for an acceeraton of the
maturty date or prepayment pror to such date. The agreement
mts M wth respect to other corporate fnancng and the dsposton
of ts assets and propertes. M s aso restrcted n the decaraton
of dvdends, and n the modfcaton of ts corporate structure, beng
requred to mantan specfed mnmum capta as ong as the notes
are outstandng, and to furnsh baance sheets md ncome and surpus
statements and such addtona nformaton regardng ts busness
affars and fnanca condton as may reasonaby be requred by N.
The oan agreement s made by M and N, sub|ect to the approva of
counse as to the egaty of the notes, and upon the representaton of
N that t s acqurng the notes for the purpose of nvestment ony
and not wth a vew to the sae or dsposton thereof.
In Genera Motors cceptance Corporaton v. ggns (161 Fed.
(2d) 93, Ct. D. 1708, C. . 19 8-2, 1 7; certorar dened, 332 U. S.,
810), t was hed that certan nstruments termed notes, shoud be
cassfed as debentures wthout regard to the name by whch they
were caed. The court hed that the type of nstruments there n-
voved fe wthn a cass apart from ordnary commerca proms-
sory notes and nto the category of debentures as that term s used
n the statute n ts settng wth bonds, and certfcates of ndebtedness,
to desgnate a type of corporate securtes whch does not ncude ord-
nary promssory notes.
It s the opnon of the ureau that the nstruments ssued pur-
suant to the agreement nvoved n the present case create rghts and
abtes not commony assocated wth promssory notes. y ther
terms and provsons, the nstruments represent a method of fnancng
common to debentures, whch s smar to that type of fnancng ac-
compshed through the medum of a pubc ssuance of nvestment se-
curtes under an ndenture. Moreover, the nstruments were ssued
by the corporate borrower to obtan capta for use n ts busness
under condtons smar to the sae of bonds, debentures, or other
nvestment securtes. The fact that the borrowng s effected through
one or more enders, rather than the genera pubc, s not matera
to the queston here at ssue. Thus, from an over-a standpont, and
not based upon any partcuar factor or condton, t s the opnon
of the ureau, n the ght of the decson n the Genera Motors
cceptance Corporaton case, supra, that the nstruments nvoved n
the present case shoud be cassed as debentures. ccordngy, they are
sub|ect to the ta mposed by sectons 1800 and 1801 of the Code, as
amended.
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

7

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
Regs. 2 (19 2), 130.6 . 130
TR NSPORT TION T S
INT RN L R NU COD
T S ON S F D POSIT O S ND ON C RT IN TR NSPORT TION
ND COMMUNIC TIONS S R IC S
Reguatons 2 (19 2), Secton 130.6 : Trans- 19 9-1 -13133
portaton outsde the northern porton of the T. D. 708
Western emsphere.
TITL 26 INT RN L R NU . C PT R I. SU C PT R C, P RT 130.
T S ON S F D POSIT O S ND ON C RT IN TR NSPORT TION ND
COMMUNIC TION S R IC S
Contnuance of e empton, from the ta on transportaton of
persona, of certan foregn trave va Newfoundand.
Treasury Department,
Offce of Commssoner of Interna Revenue,
Washngton 2 , D. C.
To Coectors of Interna Revenue and Others Concerned:
In order to conform Reguatons 2 (19 2 edton) 26 CFR, Part
130 , to the provsons of Pubc Law 3 , ghty-frst Congress C. .
19 9-1, 299 , approved March 31,19 9, such reguatons are amended
as foows:
Paragraph 1. Immedatey precedng secton 130.6 , as added by
Treasurv Decson 9 C. . 19 7-1, 160 , approved pr 18, 19 7
2G CFR 130.6 , there s nserted the foowng:
PU LIC L W 3 ( IG TY-FIRST CONGR SS), PPRO D
M RC 31, 19 9
secton 3 60(a) of the Interna Revenue Code (reatng to
the ta on transportaton of persons) s hereby amended by nsertng
after the second sentence thereof a new sentence to read as foows:
port or staton wthn Newfoundand sha not, for the purposes of
the precedng sentence, be consdered as a port or staton wthn
Canada.
Sec. 2. The amendment made by ths |ont resouton sha appy to
amounts pad for transportaton on or after pr 1, 19 9.
Par. 2. Secton 130.6 s amended by addng at the end of the frst
paragraph thereof the foowng sentence:
port or staton wthn Newfoundand sha not, for the purposes of the precedng
sentences of ths paragraph, be consdered as a port or staton wthn Canada.
(Ths Treasury Decson s ssued pursuant to the authorty con-
taned n sectons 3 72 and 3791 of the Interna Revenue Code ( 3
Stat. 23, G7, Stat. 722; 26 U. S. C. 3 72,3791).)
ecause of the technca nature of the amendments made heren, t
s found that t s unnecessary to ssue ths Treasury Decson wth
notce and pubc procedure thereon under secton (a) of the d-
mnstratve Procedure ct, approved une 11, 19 6, or sub|ect to the
effectve date mtaton of secton (c) of sad ct.
Fred S. Martn,
ctng Commssoner of Interna Re venue.
pproved une 27, 19 9.
Thomas . Lynch,
ctng Secretary of the Treasury.
(Fed wth the Dvson of the Federa Regster une 30, 19 9, 8 : 7 a. m.)
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

7

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
131
Regs. 8 (193 ), rt. 6.
PROC SSING T S
INT RN L R NU COD
S CTION 2 70. PROC SSING OF COCONUT OIL
Reguatons 8 (193 ), rtce 6: Rates of 19 9-20-13197
ta . Mn. 6 32
Termnaton, under secton 0 (b) of the Phppne Trade ct
of 19 6, of the suspenson of the provsons of secton 2 70(a) (2)
of the Interna Revenue Code whch mposes an addtona ta of
2 cents per pound upon the frst domestc processng of certan
coconut o.
Treasury Department,
Offce of Commssoner of Interna Revenue,
Washngton 2 , D. C, September 12,19 9.
Coectors of Interna Revenue and Others Concerned:
The ct approved September 16, 19 2, as amended, 6 Stat. 7 2,
8 Stat. 6 7, suspended for the perod from September 17, 19 2, to
and ncudng une 30, 19 6, the provsons of secton 2 70(a) (2) of
the Interna Revenue Code, whch secton mposes an addtona ta
of 2 cents per pound on the frst domestc processng of coconut o
or any combnaton or m ture contanng a substanta quantty
of coconut o other than that whoy produced n the Phppne
Isands or any possesson of the Unted States, or produced whoy
from materas grown or produced n the Phppne Isands or any
possesson of the Unted States.
Secton 0 (b) of the Phppne Trade ct of 19 6 (60 Stat. 1 7,
22 U. S. C. (19 6) 13 ) provdes that whenever the Presdent, after
consutaton wth the Presdent of the Phppnes, fnds that ade-
quate suppes of nether copra nor coconut o, the product of the
Phppnes, are ready avaabe for processng n the Unted States,
he sha so procam, and after the date of such procamaton the
provsons of secton 2 70(a) (2) of the Interna Revenue Code sha
be suspended unt the e praton of 30 days after e procams that,
after consutaton wth the Presdent of the Phppnes, he has found
that such adequate suppes are so ready avaabe.
y hs procamaton of une 27, 19 6, the Presdent contnued the
suspenson of the addtona ta of 2 cents per pound mposed by
secton 2 70(a) (2) of the Interna Revenue Code.
The Presdent, after consutaton wth the Presdent of the Php-
pnes concernng the suppes of copra and coconut o, the product of
the Phppnes, whch are avaabe for processng n the Unted
States, on uy 27, 19 9, procamed that he has found that such ade-
quate suppes are now ready avaabe for processng n the Unted
States; and that the suspenson of the provsons of secton 2 70(a)
(2) of the Interna Revenue Code affected by hs procamaton of
une 27,19 6, w be termnated so that on and after ugust 27, 19 9,
the processng ta provded for n that secton w be appcabe.
ccordngy, the suspenson of the addtona-ta of 2 cents per
pound mposed by secton 2 70(a) (2) of the Code w be termnated
so that on and after ugust 27, 19 9, such addtona ta of 2 cents
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

7

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
Regs. 8 (193 ), rt. 6. 132
per pound w be appcabe upon the frst domestc processng of
coconut or other than that whoy produced n the Phppne Isands
or any possesson of the Unted States, or produced whoy from ma-
teras grown or produced n the Phppne Isands or any possesson
of the Unted States.
Form 932, monthy return of the Ta on the Frst Domestc Process-
ng or Frst Use of Coconut O, Pam O, Pam erne O, etc., s
beng revsed as of ugust 19 9, to provde space for proper report-
ng of the addtona ta . Processors must keep suffcent records to
enabe the ureau, upon nvestgaton, to determne that the correct
amount of ta has been pad wth respect to the severa knds of coco-
nut o processed.
Those processors who are fng returns on Form 932 shoud be fur-
nshed wth a copy of ths mmeograph, an addtona suppy of whch
w be forwarded for that purpose. Sad processors shoud aso be
furnshed wth a suppy of Form 932, Revsed ugust 19 9.
s of ugust 27, 19 9, and to the e tent herenabove ndcated,
Mmeograph 6033 C. . 19 6-2,17 s hereby superseded.
correspondence n reference to ths mmeograph shoud refer
to the number thereof and the symbos MT: M.
Geo. . Scoeneman,
Commssoner.
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

7

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
133
Regs. 8 (193 ), rts. 7, 76.
TO CCO, SNUFF, CIG RS, CIG R TT S, TC.
INT RN L R NU COD
Reguatons 8 (193 ), rtces 7 and 76. 19 9-20-1320
T. D. 7 6
TITL 26 INT RN L R NU . C PT R I, SU C PT R C. P RT 1 0.
T S ON TO CCO. SNUFF, CIG RS, CIG R TT S, CIG R TT P P RS
ND TU S, ND PURC S ND S L OF L F TO CCO
Reguatons reatng to subdvson packages amended
Treasury Department,
Offce of Commssoner of Interna-Revenue,
Washngton 2 , D. C.
To Coectors of Interna Revenue and Others Concerned:
Reguatons 8 (193 edton) 26 CFR, Part 1 0 but ony as pre-
scrbed and made appcabe to the Interna Revenue Code by Treas-
ury Decson 88 C. . 1939-1 (Part 1), 396 , approved February
11, 1939 26 CFR Cum. Supp., page 876 , are hereby amended as
foows:
Paragraph 1. rtce 7 26 CFR 1 0. 7 s amended to read as
foows:
rtce 7. Subdvson Parces. The quantty of manufactured tobacco or
snuff contaned n a stamped statutory bo or package may be subdvded nto
parces or n any other manner satsfactory to the Commssoner. The cauton
notce provded by artce T26 CFR 1 0. ) ) must not appear on any subd-
vson of a statutory bo or package, but must appear ony on the statutory
bo or package on whch the requste ta stamps are aff ed. Tobacco or
snuff when subdvded must reman n the stamped statutory bo or package
unt sod or devered at arms ength drect to consumers, and the tota net
weght of tobacco or snuff n each stamped statutory bo or package must cor-
respond to the tota denomnatons of the tu stamps aff ed to such bo or
package.
Par. 2. rtce 76, as amended by Treasury Decson 781 C. .
1937-2, 1 , approved December 7, 1937 26 CFR 1 0.7C , s further
amended to read as foows:
rtce 76. Subdvson Pahcks. The number of cgars or cgarettes con-
taned n a stamped statutory bo or package may be subdvded nto parces
or n other manner satsfactory to the Commssoner. The cauton notce pro-
vded by artce 8 (20 CFR 1 0.8 , factory brand provded by artce 8 T26
CFR 1 0.8 , and cassfcaton cause provded by artce 86 2(3 CFR 1 0.S6 ,
must not appear on any subdvson of a statutory bo or package on whch the
requste ta stamp s aff ed Cgars and cgarettes when subdvded must
reman n the stamped statutory bo or package unt sod or devered at arms
ength drect to consumers and the tota number of cgars or cgarettes n each
stamped statutory bo or package must correspond to the denomnaton of the
ta stamp aff ed to such bo or package.
(Ths Treasury Decson s ssued pursuant to the authorty con-
taned n secton 3791 of the Interna Revenue Code ( 3 Stat. 67;
26 U. S. C. 3791).)
ecause the soe purpose of the amendments made heren s to reeve
restrctons, t s found that t s unnecessary to ssue ths Treasury
Decson wth notce and pubc procedure thereon under secton (a)
of the. dmnstratve Procedure ct, approved une 11, 19 6, or sub-
|ect to the effectve date mtaton of secton (c) of sad ct.
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

7

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
Regs. 8 (193 ), rts. 7, 76. 13
Ths Treasury Decson sha be effectve upon ts fng for pub-
caton n the Federa Regster.
Geo. . Schoeneman,
Commssoner of Interna Revenue.
pproved September 12, 19 9.
Thomas . Lynch,
ctng Secretary of the Treasury.
(Ped wth the Dvson of the Federa Regster September 1 ,19 9, 8 : 8 a. m.)
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

7

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
13
Msc.
F D R L FIR RMS CT (1938)
19 9-26-13262
T. D. 763
TITL 26 INT RN L R NU . C PT R I, SU C PT R C, P RT 31 .
LIC NSING UND R T F D R L FIR RMS CT OF M NUF CTUR RS OF,
ND D L RS IN, FIR RMS OR MMUNITION
Treasury Decson G 6
Deaers records
Treasury Department,
Offce of Commssoner of Interna Revenue,
Washngton 2 , D. C, December 8,19 9.
To Coectors of Interna Revenue and Others Concerned:
On September 17, 19 9, notce of proposed rue makng regardng
deaers records of transactons n frearms was pubshed n the Fed-
era Regster (1 F. R. 723). No ob|ecton havng been receved, the
foowng amendment to Treasury Decson 6 6 C. . 19 8-2, 19 ,
approved uy 26, 19 8 26 CFR, Part 31 , s hereby adopted. The
amendment s desgned to estabsh a unform requrement as to the
pace where records of censed deaers sha be kept.
Secton 31 .10(b) s amended by strkng therefrom the frst sentence
thereof and nsertng n eu of such sentence the foowng:
ach censed deaer sha mantan at each store or pace where frearms are
sod or kept a compete and adequate record of a frearms (not Incudng parts
of frearms but ncudng frearms n an unassembed condton) acqured or
dsposed of n the course of hs busness at such store or pace. If desred, dup-
cate or addtona records of transactons at branch estabshments may aso
be mantaned at the home or centra estabshment.
(Ths Treasury Decson s ssued under the authorty contaned n
secton 7 of the Federa Frearms ct ( 2 Stat. 12 2; 1 (T. S. C. 907).)
Thomas . Lynch,
ctng Secretary/ of the Treasury.
(Fed wth the Dvson of the Federa Regster December 8, 19 9, 8: 0 a. m.)
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

7

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

7

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
MISC LL N OUS RULINGS
S CTION 3 OF T INSON CT ( 8 ST T. 03, 0 ),
S M ND D
19 9-20-13198
Mm. 6 33
tenson of tme unt November 1 , 19 9, of the date for fng
annua reports of proft under the proft mtaton provsons of the
nson ct ( 8 Stat. 03, 0 ), as amended, for the caendar year
10 8 and for the fsca year ended anuary 31,19 9.
Treasury Department,
Offce of Commssoner of Interna Revenue,
Washngton 2 , D. C, September 12,19 9.
Coectors of Interna Revenue, Interna Revenue gents n Charge,
eads of Fed Dvsons of the Technca Staff, and Others
Concerned:
. R. 1 6, n ct Makng appropratons for the Natona Secu-
rty Counc, the Natona Securty Resources oard, and for mtary
functons admnstered by the Natona Mtary stabshment for
the fsca year endng une 30,19 0, and for other purposes, passed n
the ouse of Representatves pr 13,19 9, was amended and passed
by the Senate on ugust 29,19 9. Secton 622 of the b, as amended,
reads n part:
(b) Notwthstandng any agreement to the contrary, the proft mtaton
provsons of the ct of March 27, 193 ( 8 Stat. 03, 0 ), as amended and
suppemented, sha not appy to any contract or subcontract whch s sub|ect to
the Renegotaton ct of 19 8.
The annua reports of contracts and subcontracts comng wthn
the scope of the ct of March 27,193 ( 8 Stat. 03, 0 ), as amended,
aso referred to as the nson ct, for the caendar year 19 8 and the
fsca year ended anuary 31, 19 9, are due to be fed on or before
September 1 ,19 9, and October 1 ,19 9, respectvey.
It s e pected that . R. 1 6 w receve further consderaton n
conference and, f ths provson s enacted n the b, t w retro-
actvey emnate the necessty for ncudng n the annua reports
of proft the proft and e cess proft on contracts and subcontracts to
whch the e empton appes and requre the refundng of any e cess
proft theretofore pad wth respect to such contracts and subcontracts.
Therefore, a genera e tenson of tme s hereby granted to contrac-
tors and subcontractors up to and ncudng November 1 , 19 9, for
fng annua reports of proft under the nson ct ( 8 Stat. 03, 0 ),
as amended, for the caendar year 19 8 and for the fsca year ended
anuary 31, 19 9. Contractors and subcontractors who take advan-
tage of ths e tenson of tme w be charged nterest at the rate of
6 percent per annum on the unpad nstaments of e cess proft, f
868972s 0 10 (137)
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

7

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
S 3809.
138
any, from the orgna due date unt pad. The foregong e tenson
of tme s granted under secton 3(a) (2) of the Revenue ct of 193 ,
as made appcabe by secton 6 1 of the Interna Revenue Code.
Correspondence n regard to ths mmeograph shoud refer to ts
number and the symbos IT: IM.
Geo. . Scoeneman,
Commssoner.
S CTION 3809. RIFIC TION OF R TURNS:
P N LTI S OF P R URY
19 9-2 -132 2
T. D. 7 7
TITL 26 INT RN L, R NU . C PT R I, SU C PT R , P RT 7 .
R GUL TIONS UND R S CTION 3809 OF T INT RN L R NU COD
erfcaton of returns, statements, and documents by decaraton
under penates of per|ury requred n eu of verfcaton by oath,
wherever the prescrbed form contans such decaraton.
Treasury Department,
Offce of Commssoner of Interna Revenue,
Washngton 2 , D. C.
To Coectors of Interna Revenue and Others Concerned:
The foowng reguatons reatng to secton 3809, Interna Rev-
enue Code, are hereby adopted:
S C. . RIFIC TION OF R TURNS. PU LIC L W 271,
IG TY-FIRST CONGR SS, PPRO D UGUST 27, 19 9.
(a) Chapter 38 of the Interna Revenue Code s hereby amended by
nsertng at the end thereof the foowng new secton:
S C. 3809. RIFIC TION OF R TURN S; P N LTI S OF
P R URY.
(a) Penates. ny person who wfuy makes and subscrbes any
return, statement, or other document, whch contans or s verfed by a
wrtten decaraton that t s made under the penates of per|ury, and
whch he does not beeve to be true and correct as to every matera
natter, sha be guty of a feony, and, upon convcton thereof, sha
be fned not more than 2,000 or mprsoned not more than fve years,
or both.
(b) Sgnature Presumed Correct. The fact that an ndvdua s
name s sgned to a return, statement, or other document fed sha be
prma face evdence for a purposes that the return, statement, or
other document was actuay sgned by hm.
(c) erfcaton n Leu of Oath. The Commssoner, under regu-
atons prescrbed by hm wth the approva of the Secretary, may
requre that any return, statement, or other document requred to be
fed under any provson of the nterna revenue aws sha contan
or be verfed by a wrtten decaraton that t s made under the penates
of per|ury, and such decaraton sha be n eu of any oath otherwse
requred.
(b) Sectons 1(d), 1 (c), and 1630 of such Code are hereby
repeaed.
(c) The amendments made by ths secton sha be appcabe wth
respect to any return, statement, or document fed after the date of the
enactment of ths ct.
Secton 7 .1. erfcaton by Decaraton n Leu of Oath. If the form
offcay prescrbed for any nterna revenue return, statement, or other docu-
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

7

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
139
3809.
ment contans theren provsons for verfcaton by a wrtten decaraton that
such return, statement, or other document s made under penates of per|ury,
such return, statement, or other document sha be verfed by the e ecuton of
such decaraton, and such decaraton so e ecuted sha be n eu of any oath
otherwse requred for verfcaton by aw or by reguatons (ncudng Treasury
Decsons) prescrbed by the Commssoner wth the approva of the Secretary.
Skc. 7 .2. Pbor Reguatons ad. reguatons (ncudng a Treasury
Decsons) prescrbed by the Commssoner wth the approva of the Secretary
under secton 1630(a) of the Interna Revenue Code and n effect on the date of
the enactment of Pubc Law 271, ghty-frst Congress, ugust 27, 19 9, are
hereby prescrbed under secton 3809(c), Interna Revenue Code.
Sec. 7 .3. ffectve Date. These reguatons sha be effectve on and after
ugust 28, 19 9.
(Ths Treasury Decson s ssued under authorty of secton 3791,
Interna Revenue Code ( 3 Stat. 67; 20 U. S. C. 3791).)
ecause the amendments made by ths Treasury Decson w
operate to reeve ta payers from a mtaton appcabe under e st-
ng aws and reguatons, and to contnue certan reef aready
granted, t s found that t s unnecessary to ssue ths Treasury Dec-
son wth notce and pubc procedure thereon under secton (a) of
the dmnstratve Procedure ct, approved une 11,19 6, or sub|ect
to the effectve date mtaton of secton (c) of sad ct.
Geo. . Schoeneman,
Commssoner of Interna Revenue.
pproved November 3,19 9.
Thomas . Lynch,
ctng Secretary of the Treasury.
f Fed wth the Dvson of the Federa Regster November 8, 19 9, 8: 8 a. m.)
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

7

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
Regs. 3, 182.12, etc. 1 0
INDUSTRI L LCO OL
INT RN L R NU COD
Reguatons 3, Sectons 182.12, tc. 19 9-1 -1318
T. D. 711
TITL 26 INT RN L R NU . C PT R I, SU C PT R C, P RT 182.
INDUSTRI L LCO OL
mendng Reguatons 3
Treasury Department,
Offce of Commssoner of Interna Revenue,
Washngton 2 , D. C.
To Dstrct Supervsors and Others Concerned:
1. On March ,19 9, a notce of proposed rue makng, regardng the
product on of ndustra acoho, was pubshed n the Federa Regster
(1 F. R.980).
2. fter consderaton of a such reevant matter as was presented
by nterested persons regardng the proposa, Reguatons 3 (26 CFR.
Part 182), approved March 6,19 2, s amended, as foows, by
(a) revokng sectons 182.211, 182.303, and 182. 33;
(b) amendng sectons 182.12, 182.13, 182.1 , 182.18, 182.19,
182. (frst paragraph), 182. 9 (frst paragraph), 182. 7, 182. 9,
182.63, 182.72, 182.73, 182.7 (frst paragraph), 182.80, 182.99,
182.110, 182.113, 182.11 , 182.121, 182.122 (frst paragraph),
182.1 9,182.1 1.182.1 3,182.1 ,182.160,182.168,182.181,182.207,
182.208, 182.210,182.212,182.217, 182.218,182.219, 182.262(a) (3),
182.269, 182.270, 182.272, 182.278 (a)(3), (b) (3), 182.28 .
182.286(6), 182.297, 182.329, 182.3 6, 182. 32. 182. 78, 182. 02.
182. 19(6), 182. 27 (a), (c), 182. 39, 182. 0, 182. 1, 182.63 .
182.63 , 182.6 7, 182.66 , 182.666, 182.691, 182.728 (frst para-
graph), 182.773,182.77 , 182.780,182.81 ,182.816,182.8 (a) ( ).
(6), 182.868,182.870,182.87 (6). and 182.89 ; and
(c) addng new sectons 182.1 a and 182.S68a.
Sec. 182.12. Specay Denatured coho Users Premses. manufacturer
quafyng under these reguatons for the use of specay denatured acoho must
have sutahe premses for the busness beng conducted, as ndcated by secton
182.0( ). Proper storage factes must be provded on the premses for safe-
guardng the specay denatured acoho receved for use. These storage fac-
tes must consst of a storeroom or storage tanks (not necessary n a room or
budng), or a combnaton of storeroom and storage tanks. The storage factes
must be constructed n accordance wth secton 1.S2. 7. (Sees. 310 , 312 (a) (6),
317C, I. R. C.)
Sec. 182.13. Specay Denatured coho I on k Deaer Premses.
bonded deaer quafyng under these reguatons for the sae of specay de-
natured acoho must have sutabe premses for such busness, as ndcated by
secton 182.6(u). Proper storage factes must be provded on the premses for
safeguardng the specay denatured acoho receved for sae. These storage
factes must consst of a storeroom or storage tanks (not necessary n a room
or budng), or a combnaton of storeroom and storage tanks. The storage fac-
tes must be constructed n accordance wth secton 182. 9. (Sees. 310 .
312 (a) (0). 3170, 1. R. C.)
Sec. 182.1 . Ta -Fkee coho User s Premses. ta -free acoho user
quafyng under these reguatons for the use of acoho free of ta must have
sutabe premses for the actvtes beng conducted, as Indcated by secton
182.0( ). Proper storage factes must h1 provded on the premses for safe-
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

8

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
1 1
(Regs. 3, 182.12, etc.
guardng the acoho receved for use. The storage factes sa consst of a
room or compartment, constructed n accordance wth secton 182.61. (Sees.
310 , 312 (n) (6), 3176, I. R. C.)
Sec. 182.1 a. qupment Not n - udngs Notwthstandng other provsons
of these reguatons, the Commssoner may, n hs dscreton, approve ndustra
acoho pants consstng, n whoe or n part, of equpment and apparatus not
ocated n a room or budng, f, n hs opnon, the ocaton and constructon are
such that the safety of the acoho and the revenue are not endangered. gh-
wne tanks, recevng tanks, and other tanks used for the recept and storage of
acoho must be encosed and protected n the manner requred by secton 182. .
n adequate number of eectrc foodghts sha be nstaed for propery ghtng
the premses at nght. ny other protectve measures deemed essenta by the
dstrct supervsor or the Commssoner may be requred. (Sees. 310 ,
312 (a)(6), 3176, I. R. C.)
Sec. 182.18. Wa s. The outsde was of ndustra acoho pant budngs
must be securey and substantay constructed. If wood, corrugated ron, or tn
s used, the same must be apped over sod sheathng for the frst 12 feet of
heght, and over sod sheathng or Rheathng spaced not greater than 12 Inches
from board to board for the remanng heght. Where substanta sheet meta s
used and the sheets are weded together n such manner as to consttute a sod
wa, sheathng, f used, may be apped n any manner desred. (Sees. 310 ,
312 (a) (6). 3176. I. R. C.)
8ec. 182.19. Roofs. The roofs of ndustra acoho pant budngs must he
securey and substantay constructed. Where corrugated Iron or tn s used,
the same must ba apped over sheathng spaced not greater than 12 Inches
from board to board. Where substanta sheet meta s used and the sheets
are weded together n such a manner as to consttute a sod roof, sheathng,
f used, may be apped n any manner desred. (Sees. 310 , 312 (a) (6), 3176,
I. R. C.)
Sec. 182. . Storage Tanks as Warehouses. The Commssoner may approve
permanent storage tanks not ocated wthn a room or budng as a bonded
warehouse, or a part thereof: Provded. That such tanks are constructed,
equpped, and encosed n conformty wth the foowng requrements:

Sec. 182. 9. Constructon. Denaturng pants must he constructed n ac-
cordance wth the appcabe provsons of sectons 182.1 to 182.2 , ncusve,
and sectons 182. 1 and 182. . The constructon of the denaturng pant sha
aso conform to the foowng addtona requrements:

Sec. 182. 7. Constructon. manufacturer usng specay denatured acoho
must provde on the manufacturng premses covered by the basc permt a
specay denatured acoho storeroom for the storage of specay denatured
acoho, e cept that ths requrement sha not appy where permanenty f ed
meta tanks, of such sze that they cannot be ready removed and so constructed
that they can be securey ocked, are Instaed on the manufacturng premses
for the storage of specay denatured acoho. The was and ceng of the
storeroom must be securey constructed of substanta materas. The entrance
door must be equpped wth a cynder ock or wth a hasp and stape for the
recepton of a padock so as to afford proper protecton to the denatured
acoho stored theren. The remanng doors, wndows, and other openngs
must be equpped wth hardware for securng the same on the nsde of the
storroom. Specay denatured acoho storage tanks may be paced under-
ground. Such tanks must be equpped for ockng and so constructed that the
contents can be ascertaned. For underground tanks, the dentfyng sgn re-
qured by secton 182. 8 sha be paced at a convenent and sutabe ocaton.
(Sees. 310 , 312 (a) (0), .- 170, I. R. C.
Sec. 182. 0. Constrcton. deaer n specay denatured acoho must
provde on the premses covered by the basc permt a specay denatured
acoho storeroom for the storage of specay denatured acoho. Permanenty
f ed meta tanks, of such sze that they cannot be ready removed and so
constructed that they can be securey ocked, may be ocated wthout the
storeroom and used for the storage of specay denatured acoho. Specay
denatured acoho n orgna packages, or other portabe receptaces, must be
stored n the specay denatured acoho storeroom. The was and ceng
of the storeroom must be securey constructed of substanta materas. The
entrance door must be equpped wth a cynder ock, or wth a hasp and
stape for the recepton of the padock, so as to afford proper protecton to
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

8

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
Regs. 3, 182.12, etc.
1 2
the denatured acoho stored theren. The remanng doors, wndows, and
other openngs must be equpped wth hardware for securng the same on the
nsde of the storeroom. Specay denatured acoho storage tanks may be
paced underground. Such tanks must be -equpped for ockng and so con-
structed that the contents can b3 ascertaned. For underground tanks, the
dentfyng sgn requred by secton 182.60 sha be paced at a convenent and
sutabe ocaton. (Sees. 310 , 312 (a) (6), 3176, I. R. C.)
Sec. 182.63. Scaes. The propretor must provde n the recevng room sut-
abe and accurate scaes for weghng packages of acoho. The propretor
must aso provde on the ndustra acoho pant premses sutabe and accurate
scaes for the weghng of gran and other nonqud dstng materas receved
and used: Provded, That where the propretor receves shpments of materas
by ra or motor carrer, the shpper s weghts appearng on the b of adng
or nvoce may be recorded as the amount receved; and, n such cases, track
or truck scaes for weghng the materas receved need not be furnshed.
If the ndustra acoho pant s equpped wth mea hoppers mounted on scaes,
the mea may be weghed theren. eams or das of scaes used to wegh
packages must ndcate weght n haf-pound graduatons: Provded, That f
packages contanng e acty 1, 2, , and 10 wne gaons, whch woud requre
weghng n terms of pounds and ounces, are fed or receved, scaes ndcatng
weght n ounce graduatons must be provded. The beams or das of weghng
tank scaes must ndcate weght n -pound graduatons for scaes up to and
ncudng 2 tons capacty; n 10-pound graduatons for scaes e ceedng 2 tons
capacty, but not e ceedng 60 tons capacty; and n 20-pound graduatons for
scaes havng a capacty of more than GO tons. (Sees. 2808, 310 , 312 (a)(6),
3176, I. It. C.)
Sec. 182.72. Washwater Recevng Tanks. If carbon do de s recovered
and the washwater s used n the manufacture of acoho, there must be provded
a suffcent number of washwater recevng tanks, whch sha be constructed of
meta and be of unform dmensons from top to bottom. ach such tank sha
be equpped wth a sutabe measurng devce whereby the actua contents w
be correcty ndcated. There must be panted on each tank the words Wash-
water Recevng Tank, foowed by ts sera number and capacty n wne ga-
ons. The outet vave must be equpped for the recepton of Government ock.
Such tanks, f connected wth ow-wne tanks, sts, or other dstng apparatus,
sha be connected by means of f ed meta ppe nes for the purpose of trans-
ferrng the washwater. If the washwater s not used n the manufacture of
acoho, as provded by secton 182.391, washwater recevng tanks need not be
nstaed. (Sees. 2823, 2829, 310 , 312 (a) (6), 3176,1. R. C.)
Sec. 182.73. Sts. The sts must be of substanta constructon, and must
have a cear space of not ess than 1 foot around them. The steam or fue ne to
each st sha be equpped wth a vave so constructed that t may be ocked wth
a Government ock, as provded n secton 182.67. The dran and wash-out ppes
of sts must aso, wherever practcabe, be equpped wth vaves so constructed
that they may be ocked wth Government ocks. If there s a furnace under
the sts or doubet s, the door thereto must, as provded n secton 182.67, be so
constructed that t may be secured wth a Government ock. There must be a
cear space of not ess than 2 feet around every douber and condenser or worm
tank. The douber and worm tanks must be eevated not ess than 1 foot from
the foor. very st must be numbered, commencng wth number 1. and have
panted thereon ts desgnated use, such as eer St, Douber, Rectfyng
Coumn, etc., and ts number. The capacty of sts and doubers sha be
determned n accordance wth secton 182.91 and marked thereon. Where the
st s nsuated or the manufacturer s sera number s otherwse obscured, such
number and capacty w kewse be panted on the coverng of the st. (Sees.
3103, 310 , 312 (a) (6), 3176, I. R. C.)
Sec. 182.7 . Genera Requrements for Tanks and Other qupment.
tanks used as receptaces for sprts between the outet of the frst condenser or
worm and the recevng tanks sha be constructed of meta, and sha be of un-
form dmensons from top to bottom. ach such tank sha be equpped wth a
sutabe measurng devce whereby the actua contents w be correcty Indcated.
tanks must bs so constructed as to permt e amnaton of every part thereof,
and so arranged as to eave an open space of not ess than 3 feet between the top
and the roof or foor above. Where tanks are equpped wth manhoes or vaves
n the top, whch are requred to be ocked wth Government ocks, sutabe waks
or andngs wth steps or starways eadng thereto, must be provded near the
top of such tanks n order that ready access may be had by Government offcers
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

8

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
1 3
Regs. 3, 182.12, etc.
to the manhoes. Dstrct supervsors may requre such waks or andngs, wth
steps or starways eadng thereto, to be nstaed at pants now operatng, where
the tanks have manhoes or vaves n the top, whch are requred to be ocked wth
Government ocks, and the present method of ganng access to the top of the
tanks s hazardous or unsafe to Government offcers who are requred to open
and cose the ocks on such manhoes or vaves, or to nspect the contents of the
tanks from tme to tme. tanks, such as ow-wne tanks, hgh-wne tanks,
heads and tas tanks, fuse o tanks, dsted water tanks, and smar equp-
ment, sha each have pany and egby panted thereon ts desgnated use,
sera number, and capacty n wne gaons. Manheads, nets, and outets of the
tanks and a necessary openngs n the dstng apparatus and equpment,
e cept coumn sts, whereby access may bo had to the acoho, must be provded
wth factes for ockng wth Government ocks: Provded, That dsted water
storage tanks need not be so equpped uness n ppe ne s connected therewth
for the conveyance of dsted water to contguous estabshments, as provded
In secton 182.76. openngs n tanks and other dstng apparatus and
equpment, whch are not absoutey necessary and whch can be permanenty
cosed wthout nterference wth pant operatons, sha be cosed by brazng,
wedng, or otherwse securey fastenng and seang. Tanks used as receptaces
for acoho may be permanenty connected wth ppe nes for the conveyance
thereto of ar and dsted water, but the dsted water ppe ne must be nff ed
to the top of the tank, and may not e tend nto the tank. Such ppe nes must be
equpped wth a contro vave whch may be ocked wth a Government ock.
Ppe nes used for the conveyance of ar must aso be equpped wth a check
vave ocated near the pont of entry to the tank n order to effectvey prevent
any abstracton of acoho from the tank. Ppe nes, e cept those ndcated
heren and those used for the conveyance of acoho, may not be permanenty
connected wth such tanks.

Sec. 182.80. Recevng Tanks. The propretor must provde n the recevng
room recevng tanks of snffcent capacty to hod at east the ma mum quantty
of acoho that can be dsted durng a day of 2 honrs. Recevng tanks must
be constructed and arranged n conformty wth the requrements of secton
182.7 , and, n addton thereto, such tanks must be eevated not ess than 18
nches from the foor and so separated that Government offcers may pass com-
petey around each. ach recevng tank must be equpped wth a sutabe
measurng devce whereby the actua contents w be correcty Indcated, and
sha have pany and egby panted thereon the words Recevng Tank,
foowed by Its sera number and capacty n wne gaons. Ppe nes con-
nected wth recevng tanks must be brazed, weded, or otherwse secured and
seaed, to the tanks n such a manner that they cannot be detached or atered
wthout showng evdence of tamperng. cept as provded by secton 182.7 ,
ppe nes for the conveyance of water, ar, or other substance than acoho mny
not be permanenty connected wth recevng tanks. (Sees. 2823, 2829, 3103, 310 ,
312 (a)(6). 3176, I. R. C.)
Sec. 182.99. Tanks. If the propretor desres to receve specay denatured
acoho n tank cars, tank trucks, or by ppe ne from a denaturng pant on con-
tguous premses operated by hm, he must provde tanks for the storage of the
specay denatured acoho so receved by hm. ach such tank must he con-
structed of meta, and equpped wth a sutabe measurng devce whereby th#
actua contents w he correcty Indcated: Provded. That wooden tanks may
be used for formuas for whch meta tanks are unsutabe. ach such tank sha
have pany and egby panted thereon the words Specay Denatured co-
ho Storage Tnnk, foowed by ts sera number and capacty n wne gaons.
The tanks sha be equpped for ockng n such a manner as to prevent access
to the denatured acoho. Specay denatured acoho storage tanks may be
paced underground. For such underground storage tanks the dentfyng sgn
sha be paced at a convenent and sutabe ocaton. (Sacs. 2829, 310 , 312
(a) (6), 3176, I. R. C.)
Skc. 1S2.110. Descrpton of Premses. The ot or tract of and on whch the
ndustra acoho pant, bonded warehouse, or denaturng pant (or any com-
bnaton thereof) s stuated, must be descrbed on Form 1 31 by courses and
dstances, n feet and Inches, wth the partcuarty requred n conveyances of
rea estate. If the premses consst of two or more ots or parces, the condton
of the tte to whch Is not the same, the entre premses sha be frst descrbed,
foowed by a separate descrpton by courses and dstances, n feet and nches,
of each such ot or parce. The contnuty of the premses must be unbroken,
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

8

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
Regs. 3, 182.12, etc.
1
e cept that the premses may be dvded by n pubc street or hghway f parts
of the premses so dvded abut on such street or hghway opposte each other.
The premses may be smary dvded by a raroad rght-of-way f the raroad
s a common carrer. In such cases, each tract of and consttutng the premses
sha be descrbed separatey on the form. If a porton of the premses s owned
n fee, unencumbered, by the propretor, or a porton s owned by the propretor
but s encumbered, or a porton s not owned by the propretor and he has pro-
cured consent, Form 1602, from the owner and from any encumbrancer, the
entre premses sha be descrbed frst, foowed by a separate descrpton, by
courses and dstances, n feet and nches, of the portons thereof whch are en-
cumbered and/or of the tract whch s not owned by the propretor. (Sees.
2800(e) (1), 310:-), 3112(a), 312 (a) (6), 3176, I. R C.)
Sec. 182.113. Condton ok Tte to Premses. The condton of tte to the -
premses sha be shown on Form 1 31. If the propretor s not the owner n
fee, unencumbered by any mortgage, |udgment, or other en, of the ot or tract
of and on whch the ndustra acoho pant, bonded warehouse, or denaturng
pant s stuated, the name and address of the owner of the fee, and of any
mortgagee, |udgment-credtor, and of any person havng a en thereon, sha be
stated. Where the wrtten consent of the owner of the fee, and of any mort-
gagees, |udgment-credtors, or other enors, s fed for an ndustra acoho
pant or bonded warehouse, as provded n secton 182.119, or where an ndem-
nty bond s fed n eu of such wrtten consent, as provded n secton 182.122,
such fact, together wth nformaton as to the knd, date, and amount of the
encumbrance and the baance due thereon sha be shown on the Form 1 31 n
connecton wth the statement of the present condton of the tte. In enses
where an ndemnty bond s ted, the date of the dstrct supervsor s approva
of the fng of such bond sha aso be gven. (Sees. 2800(e) (1), 281 (b) (1),
310 , 3112(a), 312 (a) (C), 3170,1. II. C.)
Sec. 182.11 . Condton of Tte to pparatus and qupment. The propre-
tor s tte to, or nterest n, the dstng, warehousng, or denaturng appartus
and equpment sha be shown on Form 1 31. If the propretor s not the owner
of such apparatus and equpment, unencumbered by any mortgage, |udgment, or
other en, the name and address of the owner thereof and of any mortgagee. udg-
ment-credtor, condtona saes vendor, or other enor, sha be stated. Where
the wrtten consent of the owner and of the mortgagees, |udgment-credtors, con-
dtona saes vendors, or other enors, s fed for an ndustra acoho pant or
bonded warehouse, as provded n secton 1S2.119, or where an ndemnty bond s
fed n eu of such wrtten consent, as provded n secton 182.122, such fact, to-
gether wth nformaton as to the knd, date, and amount of the encumbrance and
the baance due thereon, or, f the apparatus was purchased under a condtona
saes contract, or other form of tte retanng contract, the purchase prce and the
baance due sha be shown n connecton wth the statement of the propretor s
tte, or nterest n, the property. In cases where an ndemnty bond, Form 100 , s
fed, the date of the dstrct supervsor s approva of the fng of such bond sha
aso be gven. (Sees. 2800(e) (1), 28r (b) (1), 310 , 3112(a), 312 (a) (6). 3176,
I. R. G.)
Sec. 182.121. ppcaton. The appcaton sha contan (1) an accurate
descrpton of the ot or trnct of and on whch the ndustra acoho pant or
bonded warehouse s stuated, and of the budngs, and the dstng apparatus
and equpment thereon ; (2) a fu nnd cear statement of the condton of the
tte to the premses and apparatus and equpment, ncudng the name and address
of the owner and of a mortgagees, |udgment-credtors, condtona saes vendors,
and other persons havng ens thereon, the knd, date, and amount of each en-
cumbrance nnd the baance due thereon, and, n the case of apparatus and equp-
ment purchased under a condtona saes contract, or other form of tte retan-
ng contract, the purchase prce and the baance due; and (3) a fu and cear
statement of the reasons why the appcant cannot obtan the prescrbed wrtten
consent. The dstrct supervsor w take acton on such appcaton n accord-
ance wth the procedure prescrbed n secton 182.28 . (Sees. 3103, 310. ), 312
(a) (6), 3176, I. R. C.)
Sec. 1S2.122. ond, Form 100 . If the appcaton s approved by the dstrct
supervsor, the appcant sha e ecute bond on Form 160 , Indemnty ond.
n trpcate, n conformty wth the provsons of sectons 182.18 to 1S2.20-1,
Incusve, and fe the same wth the dstrct supervsor. The pena sum of the
bond sha bo equa to the apprased vaue of the ot or tract of and on whch
the ndustra acoho pant or, e cept as provded n paragraph (a), the bonded
warehouse s stuated, and the budngs, apparatus, and equpment thereon:
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

8

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
1
Regs. 3, 182.12, etc.
Provded, That the ma mum pena sum of the bond sha be 0,000 for an
ndustra acoho pant, or an ndustra acoho pant and bonded warehouse stu-
ated on the same premses, and 10,000 for a bonded warehouse stuated esewhere.
If such bond s fed n ess than the ma mum pena sum and the vaue of the
premses, budngs, or apparatus or equpment Is ncreased by addtona
and, budngs, or apparatus or equpment, an addtona bond on such form
to cover the ncrease n vaue w be requred: Provded further. That f such
ncrease n vaue s ess than 1,000, no addtona bond w be requred, nor w
an addtona bond be requred n e cess of the ma mum pena sums specfed
heren. In the event of the faure of bond on Form 160 , the propretor w be
no onger quafed uness a new and satsfactory bond s fed, or consent, as
requred by secton 182.119, s obtaned.

Sec. 1S2.1 9. Labes and dvertsng Matter. Sampes of abes or facsmes
thereof (or sketches, sub|ect to the fng of the actua ahes, f approved) must
be attached to each copy of the Form 1 79- . dvertsng matter aso must
be attached when requred by these reguatons or by the Commssoner. Where
permttees change abes whch have been prevousy approved or provde new
abes for products, the formua for whch has been prevousy approved, sampes
of the changed or new abes, or facsmes thereof (or sketches, sub|ect to the
fng of the actua abes, f approved) must be submtted, attached to Form
1 79- , n quadrupcate, to the Commssoner for approva. In such cases, the
formua need not be restated on Form 1 79- , but the form shoud be marked
For abe approva ony, and shoud gve the name under whch the preparaton
was prevousy approved, the aboratory number of the approved sampe, f any,
and the date of approva. The Commssoner w take acton on the proposed
changes n accordance wth secton 182.1 1. The approva of abes by the Com-
mssoner s mted ony to the manufacturng data requred by these reguatons,
and does not e tend to the conte t of the abe reatve to the brand or name of
the preparaton, drectons for use, cams of effcency or strength, or other state-
ments. Such approvas are made wth the foowng wordng: pproved, Cow-
forms to Interna Revenue Reg. 3. (Sees. 310 , 311 (e), 312 (a)(6), 3176,
1. R. C.)
Sec. 182.1 1. pprova or Dsapprova of Sampes, Formuas, Processes,
Labes, and bvebtbng Mattfb. Upon e amnaton of the sampes, formuas,
processes, abes, and advertsng matter by the Commssoner, he w note hs
approva or dsapprova on a copes of Form 1 79- , retan one copy of the
form, and forward the other three copes to the dstrct supervsor, who w
retan one copy for hs fes, furnsh one copy to the branch aboratory for hs
dstrct, and forward the thrd copy to the appcant. oth sets of the sampes
w be retaned by the Commssoner, one of whch w be furnshed to the
branch aboratory when needed. In addton to the other mtatons In these
reguatons, the Commssoner may, n approvng Forms 1 79- , specfy thereon
the ma mum sze of the contaners n whch any preparaton may be sod and the
ma mum quantty that may be sod to any person durng a caendar month.
The approva of the artce or preparaton by the Commssoner w be based on
aboratory e amnaton of the fnshed product, ngredents, formuas, and
processes. pprova, uness restrcted on Form 1 79- or by these reguatons,
permts the packagng and abeng of any sze contaner up to and ncudng 1
gaon capacty. change n contaner sze ony does not necesstate resubmsson
of formua and abe. Such approva sha mean ony that the sampe, formua, or
process has been approved as conformng to the standards of the ureau of
Interna Revenue, and such approva sha In no way requre the dstrct super-
vsor to ssue a basc permt to use specay denatured acoho n such process,
formua, or preparaton. No permt sha be ssued to use specay denatured
acoho uness the processes, formuas, preparatons, abes, and advertsng
matter, when requred to be submtted to the Commssoner, have been approved
by hm. processes, formuas, and sampes of preparatons submtted to the
ureau must be treated as strcty confdenta by ts empoyees, who w be
hed accountabe for any unwarranted dscosure of nformaton respectng such
processes, formuas, or sampes. (Sees. 310 , 312 (a) (0), 3176. I. R. C.)
Sec. 182.1 3. Other uafyng Documents. Where the appcant s a corpo-
raton, there must be submtted wth, and made a part of, the orgna or nta
appcaton on Form 1 79, three copes of (1) certfcate of ncorporaton or
certfcate authorzng the corporaton to operate n the State where premses
are ocated, f other than that In whch ncorporated, (2) a certfed st of names
and addresses of the offcers and drectors, and (3) st of stockhoders, as
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

8

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
Regs. 3, 182.12, etc.
1 6
provded n secton 182.126. In the ease of an ndvdua owner, copartnershp,
or assocaton, there must be submtted wth, and made a part of, the orgna or
nta appcaton on Form 1 79, three copes of (1) certfed copy of the
artces of copartnershp or assocaton, f any, (2) an affdavt gvng the name of
every person nterested, or to be nterested, n the busness, whether such
nterest appears n the name of the nterested party or n the name of another
for hu, and (3) where the busness s to be conducted under a trade name, a
trade name certfcate, or f no such certfcate or other document s requred by
the aws of the State where the premses are ocated, then a certfed statement
to that effect. In addton to the foregong requrements, and the requrements
of secton 182.138 hereby made appcabe, the Commssoner or dstrct super-
vsor may, at any tme n hs dscreton, requre the propretor to furnsh such
addtona nformaton as he may deem necessarv. (Sees. 310 , 312 (a) (6), 3176,
I. R. C.)
Sec. 182.1 . Pena Sum. The pena sum of the bond, Form 1 80, sha be n a
ma mum of 100,000, and a mnmum of 00, and sha be computed on each
wne gaon of specay denatured acoho, ncudng recovered and restored
denatured acoho, authorzed to be on hand, n transt, and unaccounted for at
any one tme, at doube the rate prescrbed by aw as the nterna revenue ta on
acoho (n proof gaons) : Provded, That the pena sum of bonds coverng
specay denatured acoho. Formuas 18 and 19, sha he computed on each wne
gaon at the rate prescrbed by aw as the ta on acoho (n proof gaons). In
the case of manufacturers recoverng competey denatured acoho or artces n
the form of denatured acoho ony, the pena sum of the bond, Form 1 80, sha be
cacuated at the same rate on the ma mum quantty n wne gaons of recovered
and restored denatured acoho that may be on hand and unaccounted for at any
onetme. (Sees. 310 , 311 (a), 312 (a) (6), 3176, I. R. C.
Sec. 182.1G0. I ena Sum. The pena sum of the bond sha be computed on
each wne gaon of specay denatured acoho authorzed to be on hand, n
transt, and unaccounted for at any one tme at doube the rate prescrbed by aw
as the nterna revenue ta on acoho (n proof gaons) : Provded, That the
mnmum pena sum of such hond sha not be ess than 10,000, and the ma mum
not more than 100,000. (Sees. 310 , 311 (a), 312 (a) (6), 3176,1. R. C.)
Sec. 182.168. Other uafyng Documents. Where the appcant s a corpo-
raton, there must be submtted wth, and made a part of, the orgna or nta
appcaton on Form 1 7, three copes of (1) certfcate of ncorporaton or
certfcate authorzng the corporaton to operate n the State where premses are
ocated, f other than that n whch ncorporated, (2) a certfed st of names and
addresses of the offcers and drectors, and (3) st of stockhoders, as provded
n secton 182.120. In the case of an ndvdua owner, copartnershp, or assoc-
aton, there must be submtted wth, and made a part of, the orgna or nta
appcaton on Form 1 7, three copes of (1) certfed copy of the artces of
copartnershp or assocaton, f any, (2) an affdavt gvng the name of every
person nterested, or to he nterested, n the busness, whether such nterest
appears n the name of the nterested party or n the name of another for hm,
and (3) where the busness s to be conducted under a trade name, a trade name
certfcate, or f no such certfcate or other document s requred by the aws of
the State where the premses are ocated, then a certfed statement to that effect.
In addton to the foregong requrements, and the requrements of secton 182.138
hereby made appcabe, the Commssoner or dstrct supervsor may, at any tme
n hs dscreton, requre the propretor to furnsh such addtona nformaton as
he may deem necessary. (Sees. 310 . 312 (a) (6), 3176, I. R. C.)
Sec. 1S2.181. Other uafyng Docu.mknts. Where the appcant s a cor-
poraton, there must be submtted wth, and made a part of. the orgna or nta
appcaton on Form 1 , three copes of (1) certfcate of ncorporaton or certf-
cate authorzng the corporaton to operate n the State where the appcaton
s fed, f other than that n whch ncorporated, (2) st of names and addresses
of the offcers and drectors, and (3) st of stockhoders, as provded n secton
182.126. In the case of an ndvdua owner, copartnershp, or assocaton, there
must be submtted wth, and made a part of, the orgna or nta appcaton
on Form 1 , three copes of (1) certfed copy of the artces of copartnershp or
assocaton, f any, (2) an affdavt gvng the name of every person nterested,
or to be nterested, n the busness, whether such nterest appears n the name
of the nterested party or n the name of another for hm, and (3) where the bus-
ness s to be conducted under a trade name, a trade name certfcate, or f no such
certfcate or other document s requred by the aws of the State where the app-
caton s fed, then a certfed statement to that effect. In addton to the fore-
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

8

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
1 7
Regs. 3, 182.12, etc.
gong requrements, and the requrements of secton 182.138 hereby made ap-
pcabe, the Commssoner or dstrct supervsor may, at any tme n hs dscre-
ton, requre the propretor to furnsh such addtona Informaton as he may
deem necessary. (Sees. 310 ,312 (a) (6), 3176,1. R. C.)
Sec. 182.207. Preparaton. very pat and pan sha be drawn to scae, and
each sheet thereof sha bear a dstnctve tte and the compete name and ad-
dress of the propretor, enabng ready dentfcaton. The cardna ponts of
the compass must appear on each sheet, e cept those of eevatona pans. The
mnmum scae of any pat w not be ess than one-ffteth nch per foot. ach
sheet of the orgna pat and pans sha be numbered, the frst sheet beng desg-
nated number 1, and the other sheets numbered n consecutve order. Pats and
pans sha be submtted on sheets of tracng coth, opaque coth, or senstzed
nen. The dmensons of pats and pans sha be 1 by 20 nches, outsde meas-
urement, wth a cear margn of at east 1 nch on eac sde of the drawng,
etterng, and wrtng. Pats and pans may be orgna drawngs, or reproduc-
tons made by the dtto process, or by bue-, brown-, or back-ne thoprnt, f
such reproductons are cear and dstnct. (Sees. 310 , 312 (a) (6), 3176,1. R. C.)
8kc. 182.208. Depcton of Premses. Pats must show the outer boundares
of the premses by courses and dstances, n feet and nches, n a coor contrastng
wth those used for other drawngs on the pat, and the pont of begnnng wth
respect to ts dstance and hearngs from some near and we-known andmark
must be shown. The pat must aso contan an accurate depcton of the bud-
ng or budngs and/or tanks comprsng the premses, and any drveway, puhc
hghway, or raroad rght-of-way ad|acent thereto or connectng therewth. The
depcton of the premses on the pat shoud agree wth the descrpton thereof In
the appcaton. In the case of an ndustra acoho pant or bonded warehouse,
If the premses consst of two or more ots or parces of and, the condton of
tte to whch s not the same, each such ot or parce sha be separatey depcted
by courses and dstances, n feet and nches, and such ots or parces sha be de-
neated or cross-hatched n contrastng coors. If two or more budngs are to
be used, they must be shown n ther reatve postons, the desgnated name of
each ndcated, and a ppe nes or other connectons, f any, between the same
depcted. Where two or more budngs are used for the same purpose, the name
of each such budng sha ncude an aphabetca desgnaton, begnnng wth
, and they sha be so shown on the pat. If the estabshment conssts of a
room or foor of a budng, an outne of the budng, the precse ocaton and the
dmensons of the room or foor, and the means of ngress from and egress to a
pubc street or yard, sha be shown. frst foor e teror doors of each bud-
ng on the premses w be shown on the pat. cept as provded n secton
182.216, a pne nes eadng to or from the premses, the purpose for whch
used, and the ponts of orgn and termnaton w be ndcated on the pat.
(Sees. 310 , 312 (a) (6), 3176, I. R. C.)
Sec. 182.210. Foor Pans. The pans sha ncude a foor pan of each foor
of each budng comprsng the Industra acoho pant, bonded warehouse, and
denaturng pant showng the genera dmensons of the rooms and foors, and the
ocaton of a doors, wndows, and other openngs, and how such openngs are
protected. The pans sha aso ncude a apparatus, equpment, and tanks
estabshed under sectons 182.1 a, 182. , and 182. 0. apparatus, tanks, and
equpment, e cept ppe nes In the Industra acoho pant, must be shown n ther
e act ocaton on the foor pans, and ther desgnated use ndcated. Ppe nes
In the Industra acoho pant may be shown If desred. s to the bonded ware-
house and denaturng pant, the ppe nes must be shown, uness they are por-
trayed on eevatona fow dagrams n accordance wth secton 182.217. In the
case of sts, tanks, and smar equpment, the sera number and capacty sha
aso be shown. (Sees. 310 , 312 (a) (6), 3176,1. R. C.)
Sec. 182.212. evatona Pans of udngs. The pans sha aso ncude
an e teror, eevatona vew of eac e posure of each budng or room, showng
the type of securty afforded the openngs. The number of stores, and the
heght of each story, w be ndcated on the eevatona pans. In eu of
drawngs, the propretor may submt a photograph of each e posure of each
budng n a sze not smaer than 7 by 9 nches. The photographs must be n
suffcent deta to ceary depct the budngs from the ground to the roof, and
must be propery dentfed. Where photographs are submtted, drawngs must
be furnshed to show the securty afforded the openngs n a rooms requred to
be ocked, such as wne room or recevng room: Provded, That n eu of such
drawngs, the photographs may be noted to show the type of securty afforded the
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

8

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
Regs. 3, 182.12, etc.
1 8
openngs n such rooms by reference to the approprate sheet of pans on fe
whereon such nformaton s shown. (Sees. 310 , 312 (a) (6), 3176, I. R. C.)
Sec. 182.217. evatona Fow Dagrams. evatona fow dagrams (pans)
sha be submtted coverng (1) dstng matera system, (2) mashng and
fermentng systems, (3) dstng system, ( ) the recevng tank system, and
( ) the storage and denaturng systems as provded heren. Such dagrams or
pans sha ceary depct a equpment n ts reatve operatng sequence and
eevaton by foors, wth a connectng ppe nes, vaves, fanges (e cept as pro-
vded n secton 182.21 ), Government ocks, measurng devces, etc. The eeva-
ton by foors on the dagrams may be ndcated by horzonta nes representng
foor eves. the fow dagrams as a unt must show the fow of the dstng
matera, and the resutng products, through the dstng matera tanks,
fermenters, sts, doubers, and other equpment, and the depost of the fnshed
sprts n the recevng room or budng and the method of remova therefrom.
The dagrams must aso show the fow of acoho, denaturng materas and. de-
natured acoho, f the storage and denaturng systems are not fuy ustrated
on pans pursuant to secton 180.210. ma|or equpment, fermenters, sts,
tanks, etc., must be dentfed on these pans as to number and use. The eeva-
tona fow dagram must be so drawn that a f ed ppe nes, e cept those
Indcated by secton 182.216, may be ready traced from begnnng to end. Other
types of drawngs that ceary depct the nformaton requred heren may be
submtted n compance wth ths secton. (Sees. 310 , 312 (a) (6), 3176,1. R. C.)
Sec. 182.218. Certfcate of ccuracy. The pat and pans sha bear a
certfcate of accuracy, preferaby n the ower rght-hand corner of each sheet,
sgned by the propretor, the draftsman, and the dstrct supervsor, substantay
n the foowng form:
(Name of propretor)
( ddress)
(Dstrct supervsor)
(Name and capacty for propretor)
(Draftsman)
Industra coho Pant No
19 Sheet No
(Date)
(Sees. 310 , 312 (a) (6), 3176, I. R. C.)
Sec. 182.219. Revsed Pats and Pans. The sheets of revsed pats and pans
sha bear the same number as the sheets superseded, but w be gven a new data
ny addtona pats and pans sha be gven a new number n consecutve order,
or w be otherwse numbered and ettered n such manner as w permt the
fng of the pats and pans n proper sequence. (Sees. 310 , 312 (a) (6), 3176,
I. R. C.)
Sec. 182.262. Change n Propretorshp. (a) Suspenson.

(3) Regstry of sts. If the busness s to be permanenty dscontnued, fe
Form 26, Regstry of Sts, In trpcate, n accordance wth secton 182. 32.

Sec. 182.269. Changes n Constructon and Use. Where a change s to be
made n the constructon of a room or budng of an ndustra acoho pant,
bonded warehouse, or denaturng pant, not nvovng an e tenson or curta-
ment of the premses, or where a change s to be made n the use of any porton
of such premses, the permttee sha frst secure approva thereof by the dstrct
supervsor, pursuant to appcaton, n trpcate, settng forth specfcay the
proposed changes. Upon approva of the appcaton, the changes w be made
under the supervson of a Government offcer, uness they are of such a nature as,
n the opnon of the dstrct supervsor, do not requre such supervson. The
competed changes w be refected In the ne t amended or annua appcaton.
Form 1 31, and amended pans fed by the permttee, uness the dstrct super-
vsor requres the mmedate fng of an amended appcaton and amended pans.
(Sees. 310 , 312 (a) (6), 3176, I. R. C)
pproved
(Date)
ccuracy certfed by:
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

8

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
1 9
Regs. 3. 182.12. etc.
Sec. 182.270. Indemnty ond Coverng Changes n udngs. If budngs
on ndustra acoho pant or bonded warehouse premses, or on premses whch
have been emnated from the Industra acoho pant or bonded warehouse
premses, are to be demoshed or atered n such a manner as to decrease the
vaue of the property, and a en for ta es e sts on such property under secton
3112, I. R. C, the permttee, f (1) the owner of the fee unencumbered, or (2)
consents, n accordance wth secton 182.119, are necessary and have been ob-
taned, must fe wth the dstrct supervsor an ndemnty bond, Form 1617, n
trpcate, n a pena sum equa to the decrease n the vaue of the property:
Provded, That f such decrease n vaue s ess than 1,000, no ndemnty bond
w be requred.
(a) pprasa. The amount of the decrease n vaue of the property sub|ect
to the Government s en, whch w be caused by the demoton or ateraton
of budngs, sha be determned by apprasa by two or more competent persons
desgnated by the dstrct supervsor. The apprasers sha render to the dstrct
supervsor a report, n dupcate, of ther apprasa, whch sha ncude nforma-
ton as to the methods empoyed by them n determnng ther vauatons. The
npprasa sha be at the e pense of the permttee, uness made by Government
offcers. The dstrct supervsor may dspense wth the forma apprasa when
he has reason to beeve that the vaue of the property concerned s ess than
1,000. (Sees. 3103, 310 , 3112(a), 312 (a) (6), 3176, I. R. C.)
Sec. 182.272. Indemnty ond Coverng Remova of qupment. If apparatus
or equpment on ndustra acoho pant or bonded warehouse premses on
whch a en has attached, under secton 3112, I. R. C, for ta es on acoho pro-
duced or stored, whch has not been ta -pad or wthdrawn for a ta -free
purpose, s to be removed from the premses wthout repacement thereof wth
apparatus or equpment that w become a rea f ture n aw of an equa or
greater vaue than the apparatus or equpment to be removed, (1) where the
propretor s the owner of the premses n fee unencumbered, whether the
property s reaty or personaty; (2) where consents, In accordance wth secton
182.119, are necessary and have been obtaned, whether the property s reaty
or personaty; and (3) where an ndemnty bond, Form 160 , s on te a nd the
property s personaty; the permttee must fe wth the dstrct supervsor an
ndemnty bond on urm 1617, n trpcate, n a pena sum equa to the vaue of
the apparatus or equpment to be removed, or equa to the e cess n vaue of
the od apparatus or equpment to be removed over the vaue of the new apparatus
or equpment to be substtuted therefor: Provded, That If such vaue, or
dfference n vaue, as the case may be, s ess than 1,000, no ndemnty bond
w be requred. The vaue of the apparatus or equpment to be removed, or
the dfference between the vaue of such apparatus or equpment and the vaue
of the apparatus or equpment to be substtuted therefor, w be determned
by apprasa n the manner prescrbed n secton 182.270(a). (Sees. 3103, 310 ,
3112(a), 312 (a) (6), 3176, I. R. C.)
Sec. 182.278. Where Operaton of a onded Warehouse or Denaturng Pant
on Premses Is Contnued. (a) Suspenson. -

(3) Regstry of sts. Regster the sts on Form 26, n trpcate, n accord-
ance wth secton 182. 32, f not prevousy regstered.

(6) Resumpton.

(3) Regstry of sts. Regster the sts on Form 26, n trpcate, n accord-
ance wth secton 182. 32, f not prevousy regstered.
Sec. 182.28 . Indemnty ond ppcaton. In the case of an ndustra
acoho pant or bonded warehouse, when an appcaton for permsson to fe
an ndemnty bond, Form 160 , n eu of the wrtten consent of the owner of
the ndustra acoho pant or bonded warehouse premses or apparatus or
equpment, or of any mortgagee, |udgment-credtor, condtona saes vendor,
or other person havng a en thereon, s submtted by the appcant and such
appcaton conforms to the requrements of these reguatons, the dstrct super-
vsor w cause an nvestgaton to be made of the facts upon whch the ap-
pcaton s based, and w desgnate two or more competent persons to make
an apprasa of the vaue of the ot or tract of and on whch the ndustra
acoho pant or bonded warehouse s stuated, the ndustra acoho pant or
bonded warehouse, the budngs, and apparatus and equpment. The apprasa
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

8

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
Regs. 3, 182.12, etc.
1 0
sha be made as provded In secton 182.123. If the dstrct supervsor fnds, upon
consderaton of the apprasa and reports of nvestgaton, that under the aw and
reguatons an ndemnty bond may propery be accepted n eu of the consent of
the owner or enor, and f he s satsfed that the vauaton paced upon the prop-
erty by the apprasers s far, he w note hs approva on a copes of the appca-
ton. e w then return one copy of the approved appcaton to the appcant
and retan the orgna for hs fes. e w forward the remanng copy of the
appcaton and copes of the reports of nvestgaton and apprasa to the Com-
mssoner at the tme of forwardng the ndemnty bond. If the appcaton s
dsapproved, the dstrct supervsor w note hs dsapprova thereon and w
return a copes of such appcaton to the appcant wth a statement of the
reasons for hs dsapprova. (Sees. 3103, 310 . 312 (a) (6), 3176, I. R. C.)
Sec. 182.280. Investgaton. (a) Inspecton of premses.
(6) uafcaton of appcant to use specay denatured acoho. The dstrct
supervsor sha deta an offcer or offcers to nspect the premses of the appcant
for permt to use specay denatured acoho to determne whether the premses
and storeroom are sutabe for the busness to be carred on and meet the requre-
ments of the reguatons. Ths nvestgaton sha ncude a carefu nqury nto
the character of the appcant. s prevous busness e perence must be care-
fuy nqured nto, and shoud the offcers fnd that the appcant s not reasonaby
quafed to do or engage n the busness proposed, recommendaton for approva
sha not be made. Inqury shoud aso be made of reputabe frms, persons, and
assocates who have knowedge of the partcuar ne of busness beng nqured
nto, and who are famar wth the genera requrements of the trade n ther
respectve terrtores, for the purpose of ascertanng the facts necessary to
determne whether the appcant s proceedng n good fath n a awfu busness
enterprse. The premses where the busness s to be conducted sha aso be
made the sub|ect of carefu and detaed nqury, and approva of any appcaton
sha bo wthhed as to any premses not of a character generay regarded as
sutabe for a manufacturng busness of the knd for whch appcaton s made.
Such premses sha be substantay constructed, and approva sha not be gven
to premses of nsecure constructon where there s a kehood of theft. amn-
ng offcers w be hed strcty accountabe for the recommendaton of approva
of ony such premses as are sutabe for the busness to be carred on, and,
e cept n the case of very sma operatons, as woud be generay satsfactory
to strcty commerca or ndustra estabshments, and n ocatons that woud
commend themseves to any prudent busnessman. The manufacturng suppes
and equpment shoud be ampe for the busness to be conducted. Where toet
artces or varous quds such as deoderants or sprays are to be manufactured,
there sha be on hand raw materas, manufacturng apparatus, and packages
for the fnshed product n a vaue whch, n the opnon of the dstrct supervsor,
evdences the bona fdes or the proposed busness, and whch s commensurate
wth the voume of busness the appcant proposes to conduct. The appcant
must submt a detaed nventory of a raw materas, such as os and chemcas ;
of a manufacturng apparatus, such as tanks, pumps, fters, and fng machnes;
and a packages on hand n whch the fnshed product s to he sod; and the
nventory must be verfed. In case of doubt as to apprasa of partcuar tems,
advce of dsnterested persons who have knowedge of these partcuar nes of
busness sha be sought. (Sees. 310. ), 311 , 312 (a) (6), 3176, I. R. C.)
Skc. 182.207. ppcatons and Reports Coverng Changes. Where an app-
caton coverng changes n apparatus or equpment, or n constructon or use of
a room or budng, s approved by the dstrct supervsor, he w retan one copy
of the appcaton and forward one copy to the permttee: and n the case of an
ndustra acoho pant, bonded warehouse, denaturng pant, or user of specay
denatured acoho, one copy to the Commssoner, and, when reports coverng
changes n apparatus and equpment are receved from Government offcers n
accordance wth secton 182.271, he w retan one copy and prompty forward one
copy to the Commssoner. Smar dsposton w be made of reports receved
from the permttee coverng emergency repars of apparatus and equpment.
Where changes n budngs, apparatus, or equpment are such as to requre
the fng of an ndemnty bond, n the case of an ndustra acoho pant or
bonded warehouse, the dstrct supervsor may approve the appcaton, f he
has recommended approva of the bond, and permt the changes n budngs,
apparatus, or equpment to proceed pendng approva of the bond by the Com-
mssoner. (Sees. 310 , 312 (a) (0), 3176, I. R. C.)
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

8

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
1 1
Regs. 3, 182.12, etc
Sec. 182.329. Chemca Pant Producng coho as a yproduct.
(6) cepton. manufacturer who uses products contanng specay dena-
tured acoho In a process where part or a of the specay denatured acoho Is
recovered w not be requred to quafy the premses as an ndustra acoho
pant, provded he obtans a permt to recover and use specay denatured
acoho n an approved process or preparaton. The recovered acoho. If neces-
sary, must be redenatured before use, or returned to an Industra acoho pant
or denaturng pant If he has no use for such recovered acoho, and otherwse
accounted for, as provded by these reguatons.
(c) cepton. manufacturer who uses chemcas whch do not contan
specay denatured acoho, but whch were manufactured under a permt wth
specay denatured acoho, and uses such chemcas In a process where part or
a of the specay denatured acoho used n ther manufacture s recovered,
w be requred to quafy the premses as an ndustra acoho pant: ProrMcd,
That where the Commssoner fnds there Is no eopardy to the revenue, the
manufacturer may be permtted, n eu of quafcaton as the propretor of an
ndustra acoho pant, to obtan a permt to recover and use specay denatured
acoho. The recovered acoho, f necessary, must be redenatured before use, or
returned to an ndustra acoho pant or denaturng pant, and otherwse
accounted for, as provded by these reguatons. (Sees. 3103, 3103, 312 (a) (6),
3176, I. R. C.)
Sec. 182.3 6. Dstaton of Lqvd Chemcas.

(c) Test for acoho. The chemcas produced, such as buty acoho, sopropy
acoho, acetone, ether, etc., must be tested for the purpose of determnng the
presence of ethy acoho, n accordance wth the appcabe requrements of
sectons 182.368 through 182.388. or by such other method or methods as may
be prescrbed by the Commssoner. (Sees. 310 . 312 (a) (0), 3176, I. R. C.)
Sec. 1S2. 32. Regstry on Form 26. very person havng n hs possesson
or custody, or under hs contro, any st or dstng apparatus that s set
up, must regster the same on Form 26, n trpcate, wth the dstrct supervsor
for the dstrct n whch t s ocated. Sts to be used for the producton of
varous types of acoho may be regstered for acoho, and the specfc type
need not be shown. Thereafter, where the pant s changed from the producton
Of one type of acoho to another, reregstraton by the same propretor w not
be requred. Where an acoho st s regstered for both acoho and chemcas,
ts aternate use for such purposes may be permtted by the storekeeper-gauger
wthout further regstraton. The temporary suspenson of a pant does not
necesstate reregstraton of the sts. The operaton of a pant by aternatng
propretors, where no permanent cange n ownershp occurs, does not requre
reregstraton of the sts by the propretors. When there s a change n ocaton
or use or a bona fde change n ownershp of a st, the st must be regstered
to refect the change. The dstrct supervsor w, upon approvng the regstra-
ton of a st on Form 26, retan one copy, forward one copy to the Commssoner,
and return the remanng copy to the pant propretor. The propretor w retan
hs copy at the ndustra acoho pant avaabe for nspecton by Government
offcers. (Sees. 3103, 310 , 312 (a) (6), 3176, I. R. C.)
Sec. 1S2. 78. Rate of Ta . The aw Imposes a ta on dsted sprts, n-
cudng acoho, produced n or mported nto the Unted States, at the rate
prescrbed theren on each proof gaon, or wne gaon when beow proof, and
a proportonate ta at a ke rate on a fractona parts of such proof or wne
gaon, to be pad when wthdrawn from bond. (Sees. 2800(a)(1), 310 ,
312 (a) (0), 3176, I. R. C.)
Sec. 182. 02. Ft..Na of Tank Car. The tank car must be fed n the m-
medate presence of the storekeeper-gauger. The ppe ne from the weghng
tank to the tank car must he n fu vew of the offcer, and must not be con-
nected or used e cept n hs presence. The offcer w sea-ock the car as soon
as t s fed. The propretor w enter on Form 1 0, coverng the gauge of
the acoho, the symbo and sera number of the car, the number of nches
above or beow the fu mark, and the temperature of the acoho at fng, the
sera number of the ock sea or seas, the destnaton, and the date of shpment;
for e ampe: Wthdrawn n U. P. tank car number 16 3, fed 2 nches above
fu mark at 80 F., ock sea number 0 7, for trnnsfer to Ind. e. onded
Whse. No. 6, New York, N. Y. ed out :30 p. n.. May 1, 10 1. The ock
sea numbers w aso be entered on Form 1 39. (Sees. 3101, 310 , 3107, 3108.
312 (a)(6), 3176, I. R. C)
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

8

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
Regs. 3, 182.12, etc.
1 2
Sec. 182. 19. Masks and ranbs. (a) Drums, barres, etc.
(6) Cases of botted acoho. ach package contanng acoho n bottes sha
bear a the marks requred by sectons 182. 17 and 182. 18 e cept the gross
weght, tare, and net weght, t not beng necessary to ascertan such. The
number and capacty of the bottes sha, however, be shown on each package.
The marks sha be paced on one sde of the case. (Sees. 2808, 3103, 310 ,
312 (a) (0), 3176, I. R. C.)
Skc 182. 27. Stamps. (a) ff ng. Ta -pad and e port stamps sha be
securey aff ed to the Government head of packages, or the sde of cases, wth
a good adhesve, and, when aff ed to wooden packages or cases, wth a tack or
stape n each corner of the stamp.

(c) Coverng. fter the stamp has been canceed, t must be covered wth
a coatng of transparent sheac, acquer, or varnsh, to protect t aganst mosture,
ateraton, and remova. (Sees. 310 , 312 (a) (6), 3176, 3301, I. R. C.)
Skc. 182. 39. otte Stamps. The propretor must aff over the mouth of
each botte of acoho fed n hs warehouse, e cept when acoho s botted
for e port, an engraved botte stamp, wth the sera number prnted thereon.
(Sees. 310 , 312 (a) (6), 3176, 3300, I. R. C.)
Sec. 182. 0. Procurement and Issuance of Stamps. (a) Procurement.
otte stamps are supped to coectors of nterna revenue n the same manner
as other stamps. Dstrct supervsors w obtan suppes of such stamps from
the coectors as desred, and sha forward suffcent stamps of each denomnaton
to the storekeeper-gaugers n charge of the bonded warehouses.
(6) Issuance. The storekeeper-ganger w ssue botte stamps as needed.
The regstry number of the ndustra acoho bonded warehouse and the name
of the propretor sha be entered on each botte stamp by the propretor. The
requred nformaton may be rubber-stamped or overprnted on the botte stamps.
The stamps sha be ssued n proper sera order, startng wth the owest sera
number of the stamps at the tme of ssuance. owever, the stamps need not be
aff ed n sera order. The tota number of stamps used for each ot botted
sha he reported on Form 1 0.
(c) Record and Report, Form 118. Storekeeper-gaugers havng custody of
botte stamps at ndustra acoho bonded warehouses w keep a record of botte
stamps receved and used on part 1 of Form 118, Storekeeper-gauger s Monthy
Record and Report of coho Warehousng Stamps, as requred by the nstruc-
tons on the form. The record w be kept n bound form, avaabe for nspec-
ton by other Government offcers. The storekeeper-gauger w prepare bs
monthy report on part 2 of Form 118 n trpcate, retan one copy thereof,
furnsh one copy to the propretor, and forward one copy to the dstrct supervsor.
(Sees. 310 , 312 (a) (0), 3176. I. R. C.)
Sec. 182. 1. Manner of ff ng otte Stamps. The botte stamps must
be securey aff ed to the bottes wth the use of a good adhesve. The adhesve
used must be n proper qud condton, and care must be taken to cover the en-
tre back of the stamp wth the adhesve, and to press the whoe surface of the
stamp frmy aganst the surface of the botte suffcenty ong to cause the entre
surface of the stamp to adhere securey to the botte. The stamp must pass
over the mouth of the botte, e tendng an appro matey equa dstance on two
sdes of the botte. The stamp must be aff ed n such manner that upon openng
the botte, a porton of the stamp w be eft attached thereto unt empted.
(Sees. 310 , 312 (a) (6). 3176, 3301, I. R. C.)
Sec. 182.63 . Losses From Packages. Losses sustaned from packages n
bonded warehouses w be determned when the packages are wthdrawn from
warehouse, uness they are regauged for repackagng or other reason pror to
wthdrawa, and the oss reported on Form 1 0 and Form 1 3- . Where the
quantty ost from any package e ceeds 1 percent In the case of meta packages,
or 6 percent n the case of wooden packages, of the quantty orgnay contaned
theren,, cam for remsson of ta on the entre quantty ost from the package
w be made by the propretor, e cept as heren provded. If the oss does not
e ceed 1 percent, or 6 percent, so cacuated, cam for remsson of ta w not
be requred: Provded, That (1) cam for remsson of ta w not be requred
for an amount ess than one proof gaon, and (2) there are no crcumstances n-
dcatng that the acoho ost, or any part thereof, was unawfuy used or re-
moved. (Sees. 310 , 3113, 312 (a) (6), 3170, I. R. C.)
Sec. 182.63 . Losses n Transt. Losses n transt to bonded warehouses
must be determned rt fp I ne acoho s receved at the warehouse, and the
oss reported on Form 1 3- when receved n tank cars, and on Form 1 3-
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

8

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
1 3
Regs. 3, 182.12, etc.
when receved n packages. Where fhe quantty ost from any tank car or pack-
age e ceeds 1 percent (3 percent on wooden packages) of the quantty shpped
theren, cam for remsson of ta on the entre quantty ost from the package
w be made by the propretor, e cept as heren provded. If the oss does not e -
ceed 1 percent (3 percent on wooden packages), so cacuated, cam for rems-
son of ta w not be requred: Provded, That (1) cam for remsson of ta
w not be requred for an amount ess than one proof gaon, and (2) there are
no crcumstances ndcatng that the acoho ost, or any part thereof, was un-
awfuy used or removed. (Sees. 310 , 3113. 312 (a) (6), 3171 , I. . ( .)
Sec. 182.6 7. Depost n Storeroom. Ta -free acoho receved pursuant to
wthdrawa permt, Form 1 0, sha be paced n the ocked storeroom or com-
partment requred to be provded n accordance wth secton 182.61. Such acoho
sha reman n the orgna packages n the storeroom or compartment unt wth-
drawn for use. The room or compartment for the storage of ta -free acoho
must be used for the purpose of storng such acoho n the orgna contaners.
(Sees. 310 , 3108, 311 (a), 312 (a)(6), 3176, I. R. C.)
Sec. 182.66 . Losses n Transt. Losses n transt to ta -free permttee s
premses must be ascertaned at the tme the acoho s receved by the permttee.
ccordngy, when packages are receved showng evdence of havng sustaned a
oss n transt, the permttee shoud determne the e tent of the oss at that tme.
The quantty ascertaned to have been ost w be noted on Form 1 1 mmedatey
beow the ne on whch recept of the shpment s reported. Where the quantty
ost from any package e ceeds 1 percent of the quantty orgnay contaned
theren as to any meta package, or 3 percent as to any wooden package, cam for
aowance of the entre quantty ost from the package w be made by the per-
mttee, e cept as heren provded. If the oss does not e ceed 1 percent, or 3
percent, so cacuated, cam for aowance w not be requred: Provded, That
(1) cam for remsson of ta w not be requred for an amount ess than one
proof gaon, and (2) there are no crcumstances ndcatng that the acoho ost,
or anv part thereof, was unawfuy used or removed. (Sees. 310 . 3113, 312 (a)
(6), 3176, I. . C.)
Sec. 182.066. Losses at Permttee s Premses. Losses of ta -free acoho at
permttee s premses w be reported on Form 1 1 for the month n whch the
oss s ascertaned. If the oss of acoho at a permttee s premses durng any
month e ceeds 1 percent of the quantty on hand durng the month, cam for
aowance of the entre quantty ost w be made by the permttee, e cept as
heren provded. If the oss does not e ceed 1 percent, so cacuated, cam for
aowance w not be requred: Provded, That (1) cam tor remsson of ta
w not be requred for an amount ess than one proof gaon, and (2) there are
no crcumstances ndcatng that the acoho ost, or any part thereof, was
unawfuy used or removed. (Sees. 310 , 3113, 312 (a) (6), 3176, I. R. C.)
Sec. 182.691. Return of Recovered Denatured coho for Restoraton and
Redenaturaton. Denatured acoho recovered for reuse by manufacturers usng
the same, may be shpped to ndustra acoho pants for redstaton or to
denaturng pants for restoraton and redenaturaton. If the shpment s to a
denaturng pant, such pant must be equpped for restorng recovered acoho.
The recovered acoho w be returned to the ndustra acoho pant or denatur-
ng pant pursuant to notce on Form 1 8 , as provded n secton 182.89 . (Sees.
3073, 310 , 312 (a) (6), 3176, I. R. C.)
Sec. 182.728. Raroad Tank Cars or Tank Trucks. Denatured acoho may
be shpped In raroad tank cars ony where the premses of both the denaturer
and the consgnee are equpped wth sutabe raroad sdng factes. Dena-
tured acoho may be transported by tank trucks ony where sutabe storage
tanks are provded on the consgnees premses. The manhoe covers, outet
vaves, and a other openngs on a raroad tank cars or tank trucks used for
shppng denatured acoho sha be equpped wth factes for seang so that
the contents cannot be removed wthout showng evdence of tamperng. Ra-
road, or other approprate seas, dssmar n markng from cap seas used by
the P.ureau of Interna Revenue, for securng manhoe covers, outet vaves, and
a other openngs n tank cars or tank trucks contanng denatured acoho, sha
be furnshed and aff ed by the carrer or the propretor: Provded, That seray
numbered cap seas for use on tank trucks for the transportaton of specay
denatured acoho shpped from one denaturng pant to another denaturng pant
sha be furnshed by the Government and aff ed by the storekeeper-ganger.
Immedatey after fng, the tank car or tank truck sha be seaed n such a
manner as w secure a openngs affordng access to the contents of the tank.

868972 O 11
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

8

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
Regs. 3, 182.12, etc.
1
Sec. 182.773. Losses Fbom Packages. Losses sustaned from packages n
denaturng pants w be determned when the packages are dumped for ena-
turaton, and the oss w be reported on Forru 1 68- at that tme. Where te
quantty ost from any package e ceeds 1 percent n the case of meta packages,
or C percent n the case of wooden packages, of the quantty orgnay contaned
theren, cam for remsson of ta on the entre quantty ost from the package
w be made by the propretor, e cept as heren provded. If the oss does not
e ceed 1 percent, or 6 percent, so cacuated, cam for remsson of ta w not
be requred: Provded, That (1) cam for remsson of ta w not be requred
for an amount ess than one proof gaon, and (2) there are no crcumstances
ndcatng that the acoho ost, or any part thereof, was unawfuy used or
removed. (Sees. 310 , 3113, 312 (a) (6), 3176, I. . C.)
Sec. 182.77 . Losses n Transt. Losses n transt to denaturng pants mast
be determned at the tme acoho s receved at the denaturng pant, and the
oss reported on Form 1 68- . Where the quantty ost from any tank car or
meta package e ceeds 1 percent, or 3 percent n the case of any wooden package,
of the quantty shpped theren, cam for remsson of ta on the entre quantty
ost from the package w be made by the propretor, e cept as heren provded.
If the oss does not e ceed 1 percent, or 3 percent, so cacuated, cam for rems-
son of ta w not be requred: Provded, That (1) cam for remsson w not
be requred for an amount ess than one proof gaon, and (2) there are no cr-
cumstances ndcatng that the acoho ost, or any part thereof, was unawfuv
used or removed. (Sees. 3100, 3113, 312 (a) (6), 3176. I. R. C.)
Sec. 18:2.780. Regstry on Form 26. very denaturer havng n hs possesson
or custody, or under hs contro, sts set up, must regster the same wth the
dstrct supervsor on Form 26, as provded by secton 182. 32. (Sees. 2810(a).
310 , 312 (a) (6), 3176, I. R. C.)
Sec. 182.81 . Destructon- or Other Dsposton. Specay denatured aco-
ho n the possesson of a bonded deaer may, upon the approva of the dstrct
supervsor, be destroyed or dsposed of to the propretor of an ndustra acoho
pant or a denaturng pant because of unsaabty or other egtmate reason, n
accordance wth the provsons of sectons 182.867 to 182.869, ncusve. Nota-
tons concernng the destructon or dsposton of specay denatured acoho
sha be made on Form 1 78. (Sees. 310 , 312 (a) (6), 3176, I. . C.)
Sec. 182.816. Losses n Transt. Losses n transt to bonded deaer s premses
must be ascertaned at the tme the specay denatured acoho s receved by the
bonded deaer. ccordngy, when packages, tank cars, or tank trucks are re-
ceved whch show evdence of havng sustaned a oss n transt, the bonded
deaer shoud determne the e tent of the oss at that tme. The quantty ascer-
taned to have been ost w be reported on Form 1 78 on the ne on whch recept
of the shpment s reported, and n the coumn provded therefor. Where the
quantty ost from any meta package, tank car. or tank truck e ceeds 1 percent,
or 3 percent as to any wooden package, of the quantty orgnay contaned
theren, cam for aowance of the entre quantty ost from the package, tank
car. or tank truck w be made by the bonded deaer, e cept as heren provded.
If the oss does not e ceed 1 percent, or 3 percent, so cacuated, cam for aow-
ance w not be requred: Provded, That (1) cam for aowance w not be
requred for an amount ess than one wne gaon, and (2) there are no crcum-
stances ndcatng that the specay denatured acoho ost, or any part thereof,
was unawfuy used or removed. (Sees. 310 . :U3, 312 (a) (0), 3170, I. R. C.)
Sec. 182.8 . Labes. (a) rand abe.
-
( ) The egend Contans 70 percent acoho by voume, Contans 70
percent ethy acoho by voume, or Contans 70 percent absoute acoho
by voume.

(6) Cauton notce. There must he paced on each botte, as a part of the
brand abe or otherwse, hut not on the back of any abe, a cauton notce, prnted
n pan and egbe type of not ess than 6 pont, readng as foows:
Sko. 182.808. Rktttrn to Industra coho Pant, Denaturng Pant or
onded Deaer. Where specay denatured acoho, awfuy n the possesson
of a manufacturer, s found to be unsutabe for use, or where any such manu-
facturer dscontnues the use thereof, or where for any other egtmate reason
such manufacturer desres so to do. such denatured acoho may be returned to
any ndustra acoho pant, denaturng pant, or bonded deaer for awfu
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

8

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
1
Regs. 3, 182.12, etc.
dsposton : Provded, That (1) consent of surety s fed on the bond (f any) of
the manufacturer, e tendng terms thereof to cover the transportaton of the
specay denatured acoho to the ndustra acoho pant, denaturer, or bonded
deaer, (2) the ndustra acoho pant, denaturer or bonded deaer consents
to the return, and (3) permsson for such transfer s, n each nstance, frst
obtaned from the dstrct supervsor of the dstrct from whch the specay
denatured acoho s to be returned. The appcaton sha be fed n trp-
cate wth the dstrct supervsor. If the appcaton s approved, the dstrct
supervsor w forward one copy of the approved appcaton to the Com-
mssoner, attached to Form 1 82, and one copy to the permttee, and retan
the remanng copy for hs fes. If the ndustra acoho pant, denaturer, or
bonded deaer s stuated n another dstrct, the dstrct supervsor authorzng
the return w forward a etter of authorzaton to the dstrct supervsor of
such other dstrct. (Sees. 310 , 312 (a) (6), 3176. I. R. C.)
Sec. 182.86Sa. uthorzaton vor Redenaturaton of Returned Specay
Denatured coho. Pursuant to approprate appcaton by the propretor of
the denaturng pant to whch specay denatured acoho s returned, the dstrct
supervsor may authorze the converson of any specay denatured acoho not
contanng Methy (wood) acoho nto any one of the competey denatured acoho
formuae by addng the requred denaturants, under supervson of the Govern-
ment offcer. Upon authorty of the dstrct supervsor, any such specay
denatured acoho contaned In tank cars may be redenatured n such tank cars
at the denaturng pant premses. pproprate entres, n red, shoud be made
n the denaturng pant records coverng such converson. (Sees. 310 ,
312 (a) (6), 3176, I. R. C.)
Sec. 182.870. Losses n Transt. Losses n transt to a manufacturer s prem-
ses must be ascertaned at the tme the specay denatured acoho s receved
by the manufacturer. ccordngy, when packages, tank cars, or tank trucks
are receved whch bear evdence of havng sustaned a oss n transt, the
manufacturer shoud determne the e tent of the oss at that tme. The quantty
ascertaned to have been ost w be noted on Form 1 82 mmedatey beow the
ne on whch recept of the shpment s reported. Where the quantty ost from
any meta package, tank car, or tank truck e ceeds 1 percent, or 3 percent as to
any wooden package, of the quantty orgnay contaned theren, cam for
aowance of the entre quantty ost from the package, tank car, or tank truck
w be made by the manufacturer, e cept as heren provded. If the oss does
not e ceed 1 percent, or 3 percent, so cacuated, cam for aowance w not be
requred: Provded That (1) cam for aowance w not be requred for an
amount ess than one wne gaon, and (2) there are no crcumstances ndcatng
that the specay denatured acoho ost, or any part thereof, was unawfuy
used or removed. (Sees. 310 , 3113, 312 (a)(6), 3176, I. R. C.)
Sec. 182.87 . Form 1 82. (a) Recovery.
( ) Speca entres. If specay denatured acoho s destroyed on the prem-
ses, or s returned to an ndustra acoho pant, or a denaturer, or bonded
deaer, or dsposed of to another manufacturer, notaton of such transactons, n
the case of destructon, gvng the dates of the destructon and, f supervsed, the
name of the offcer supervsng the destructon : and, n the case of dsposa, the
name and address of the ndustra acoho pant, denaturer, bonded deaer, or
manufacturer to whom shpped, and the date, quantty, and formua number, etc.,
sha be made on te form. (Sees. 3070. 310 , 312 (a) (6), 3176, I. R. C.)
Sec. 182.89 . Snpst NT to Industra coho Pant or Dhnaturno Pant.
Recovered denatured acoho requrng restoraton or redenaturaton, or both,
uness redenatured on the manufacturer s premses n accordance wth secton
182.81) , sha be shpped to an ndustra acoho pant for restoraton, or to a
denaturng pant for restoraton and redenaturaton: Provded, That where the
recovered acoho s to e restored and the shpment s to a denaturng pant, the
denaturng pant must be equpped wth the necessary apparatus to restore the
acoho. pproprate entres of the recovered denatured acoho sha be made
on Forms 1 2 and 1 2 as to ndustra pant transactons, and on Form 1 68-F
as to denaturng pant transactons.
(a) Marks on packages. Packages of recovered denatured acoho shpped
to an ndustra acoho pant or a denaturng pant for restoraton or redenatura-
ton must be numbered n sera order and have marked or stenced thereon the
name of the manufacturer, hs permt number and address, and the quantty of
acoho contaned theren, and the words Recovered (specay) or (competey)
denatured acoho formua No.
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

8

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
Regs. 3, 182.12, etc. 1 6
(6) Notce, Form fk- The manufacturer, at the tme of shppng recovered
denatured acoho to an ndustra acoho pant or a denaturng pant, sha sub-
mt Form 1 8 , Manufacturer s Notce of Shpment of Recovered Denatured
coho. The notce sha gve a of the nformaton caed for by the form,
and sha be forwarded on the day of shpment to the storekeeper-gauger at the
ndustra acoho pant or denaturng pant, and to the dstrct supervsor of the
dstrct n whch the ndustra acoho pant or denaturng pant s ocated, us
ptovdedn subparagraphs (1) and (2).
(1) Interdstrct shpments. When shpment s made to an ndustra acob .
pant or a denaturng pant ocated n another supervsory dstrct, the manufac-
turer w prepare Form 1 8 , n trpcate, and forward one copy to the store-
keeper-gauger at the pant to whch shpment s made, and the remanng copes
to the dstrct supervsor of the dstrct n whch the pant s ocated. The dstrct
supervsor w check both copes of the form wth the monthy report of the re-
cevng pant, e ecute hs certfcate of report of recept on the form, and forward
one copy of the form to the dstrct supervsor of the manufacturer s dstrct, -who
w check the form aganst the manufacturer s monthy report on Form 1 82.
(2) Intrudstrct shpments. When recovered acoho s shpped to an ndus-
tra acoho pant or a denaturng pant ocated n the same dstrct, the manu-
facturer w prepare Form 1 8 , n dupcate, and forward one copy to the
storekeeper-gauger at the recevng pant, and the remanng copy to the dstrct
supervsor. The dstrct supervsor wt check the form wth the monthy reports
of the manufacturer and the recevng pant on Forms 1 82 and 1 2, or 1 68-F.
(c) Record of shpment. denatured acoho recovered for reuse on the
manufacturer s premses and shpped to an ndustra acoho pant or a de-
naturng pant for restoraton or denaturaton sha be duy entered by the
manufacturer on hs monthy report, Form 1 82. (Sees. 3070, 3073, 310o,
312 (a) (6), 3176,1. R. C.)
3. The words Warehouse Stamp are hereby deeted from fgure
of secton 182. 28.
. These amendments are desgned to smpfy requrements deang
wth equpment, pant factes, constructon and premses, the prepa-
raton and fng of quafyng documents, ndemnty bonds requre
for the remova of equpment, the regstraton of sts and osses of
acoho, and to prescrbe other provsons of a correctve or carfyng
nature. It s not ntended by these amendments to requre permttees
to fe addtona pats and pans, or to change equpment mmedatey,
n cases where the e stng documents and equpment conform essen-
tay to the reguatons pror to these amendments. Upon fng new
pats and pans coverng e tensve changes n premses and equpment,
these new requrements must be observed.
. Ths Treasury Decson sha be effectve on the thrty-frst day
after the date of ts pubcaton n the Federa Regster.
6. Ths Treasury Decson s ssued under the authorty contaned n
sectons 2S00, 2808, 2810, 281 , 2823, 2829, 3070, 3073, 3101, 3103, 310 ,
3107, 3108, 3112, 3113, 311 , 312 , 3176, and 3300, Interna Revenue
Code (26 U. S. C. 2800, 2808, 2810, 281 , 2823, 2829, 3070, 3073, 3101,
3103, 310 , 3107, 3108, 3112, 3113, 311 , 312 , 3176, and 3300).
Fred S. Martn,
ctng Commssoner of Interna Revenue.
pproved uy 1, 19 9.
Thomas . Lynch,
ctng Secretary of the Treasury.
(Pubshed n the Federa Regster uy 8, 19 0)
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

8

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
1 7
Regs. 3, 182.6 . etc.
Recusatons 3, Sectons 182.6 , tc. 19 9-21-13211
T. D. 7 8
TITL 26 INT RN L R NU . C PT R I. SU C PT R C, P RT 182.
INDUSTRI L LCO OL
mendng Reguatons 3
Treasury Department,
Offce of Commssoner of Interna Revenue,
Washngton , D. G.
To Dstrct Supervsors and Others Concerned:
1. On ugust 18, 19 9, a notce of proposed rue makng regardng
ndustra acoho was pubshed n the Federa Regster (1 F. R.
1 7).
2. fter consderaton of a such reevant matter as was presented
by nterested persons regardng the proposa, the foowng amend-
ments of sectons 182.0 , 182.8 ,182.87,182.90,182.92,182.17 ,182.176,
182.179, 182.182 (new paragraph (c)), 182.183, 182.229 (new para-
graph ( )), 182.230,182.290,182.322.182. 00,182. 07,182. 08,182. 9 ,
182. 9 (new paragraph (c)), 182. 98, 182. 1 , 182. 8, 182. 0.
182. 6, 182. 7, 182. G0, 182. 61, 182.03 , the ntroductory te t of
secton 182.0 and paragraphs (a) and (b) of secton 182.0 ,182.0 ,
182.090, 182.77 . 182.90 , 182.908, 182.909, 182.910, 182.911, 182.912,
and 182.913 of Reguatons 3 (20 CFR, Part 182), approved March 0,
19 2, reatng to the producton of ndustra acoho, are amended
and sectons 182. 91a, 182. 93a, 182. 02a, 182. 11a, 182. 21a, and
182.098a are added to such reguatons.
qupment
ndustra acoho pants
Sec. 1S2.G . Weghng Tanks. cept as provded n secton 182. 07, the pro-
pretor must provde n the recevng room one or more sutabe weghng tanks
constructed n accordance wth the provsons of secton 182.6 . If moasses or
other quds are used as dstng materas, a sutabe weghng or measurng
tank must be provded for determnng the quantty thereof. (Sees. 2808, 310 ,
3107, 312 (a) (6), 3176, I. R. C.)
OND D W R OUS S
Sec. 182.8 . Weghng Tanks. Where acoho s to be removed by ppe ne
to tank cars for shpment, or to a denaturng pant on the same premses, or to
a rectfyng pant on contguous or nearby premses (as authorzed by secton
S2.82a), or to tank trucks for transfer n bond to another bonded warehouse (as
authorzed by secton 1S2. 0) or to a denaturng pant (as authorzed by secton
182. 00), or where acoho s to be receved n tanks cars, or receved n tank
trucks from an ndustra acoho pant (as authorzed by secton 182. 00) or
from another bonded warehouse (as authorzed by secton 182. 0), the propretor
of the warehouse must provde for use n weghng such acoho one or more sut-
abe weghng tanks, constructed and secured n accordance wth the provsons-
of secton 1S2.6 . (Sees. 2808, 310 , 3107, 312 (a) (6), 3176, I. R. C.)
Sec. 182.87. coho Storage Tanks. The propretor of a bonded warehouse
must provde n suffcent number of acoho storage tanks for the storage of aco-
ho receved by ppe ne, n raroad tank cars, or n tank trucks. ach such
tank must be constructed and secured n accordance wth the provsons of sec-
ton 182.7 , and have panted thereon the words Storage tank, foowed by ta
sera number and capacty n wne gaons. ach storage tank must be equpped
wth a sutabe measurng devce whereby the actua contents w be correcty
Indcated. aves must be provded n the ppe connectons and so arranged as
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

8

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
Regs. 3, 182.6 , etc.
1 8
to contro competey the fow of acoho both Into and out of tanks, and so con-
structed that they may be ocked wth a Government ock. cept as provded
In secton 182.7 , storage tanks must not be permanenty connected wth ppe
nes for the conveyance of ar, dsted water, or other substances than acoho.
(Sees. 2829, 310 , 3107, 312 (a) (6), 3176, I. R. C.)
D N TURING PL NTS
Sec. 182.90. Weghng Tanks. Where acoho s stored n storage tanks or s
receved by ppe ne from a bonded warehouse on the same premses, and the
acoho s not weghed at the tme of transfer n a weghng tank ocated n the
bonded warehouse, or where acoho s receved n tank cars, or s receved n
tank trucks from an ndustra acoho pant (as authorzed by secton 1S2. 00)
or from a bonded warehouse (as authorzed by secton 182. G0), or where dena-
tured acoho s to be removed n tank cars, or n tank trucks (as authorzed by
secton 182.728), or bs ppe ne (as authorzed by secton 182.98), the propretor
of the denaturng pant must provde for use n weghng such acoho and dena-
tured acoho one or more sutabe weghng tanks, constructed and secured n
accordance wth the provsons of secton 182.6 . (Sees. 2808, 310 , 3107,
312 (a) (6), 3170, I. R. C.)
Sec. 182.92. coho Storage Tanks.- Where acoho s receved by ppe ne
from a bonded warehouse on the same premses, or In raroad tank cars, or n
tank trucks as authorzed by these reguatons, a suffcent number of acoho
storage tanks must be nstaed n the denaturng pant, uness the acoho s run
drecty, or through weghng tanks, to m ng tanks, as provded n sectons
182.69 to 182.698. If acoho s receved n barres or drums ony, storage tanks
are not requred, but the propretor may, f he so desres, provde such tanks for
the storage of acoho receved n packages. coho storage tanks must be con-
structed and secured n conformty wth the provsons of secton 182.7 and
must be equpped wth a sutabe measurng devce whereby the actua contents
w be correcty Indcated. :ch such tank sha have pany and egby panted
thereon the words coho storage tank, foowed by ts sera number and
capacty n wne gaons. aves must be provded n the ppe connectons and
so arranged as to contro competey the fow of sprts boh Into and out of tanks,
and so constructed tat they may be ocked wth a Government ock. cept as
provded n secton 1S2.7 , storage tanks must not be permanenty connected wth
ppe nes for the conveyance of ar. dsted water, or other substances than
acoho. (Sees. 2829, 310 , 3107, 312 (a) (6), 317G, I. R. C.)
uafyng Documents
carrers
Sc. 182.17 . ppcaton, Form 1 . very person desrng to transport ta -
free acoho or specay denatured acoho must fe Form 1 , ppcaton for
Permt to Transport Ta -Free and Specay Denatured coho, n trpcate,
for permt so to do. The carrer w specfy the mode of transportaton, such as
raroad, e press company, steamshp, barge ne, truck, etc., and the supervsory
dstrcts n whch ta -free or specay denatured acoho w be transported.
Where steamshp or barge nes or motor carrers operate between certan ponts
and over certan courses or routes, such ponts and courses or routes w be spec-
fed n the appcaton. Where Ihe mode of transportaton Is by tank truck, the
carrer w gve the sera number of each tank truck and ts capacty. very
person desrng to transport, n tank trucks, untenatured ethy acoho for trans-
fer n bond between ndustra acoho pants, ndustra acoho bonded ware-
houses and denaturng pants pursuant to wthdrawa permts, Form 1 .36 or 1 63,
as the case may be, must te Form 1 , propery modfed, n trpcate, for per-
mt so to do. The carrer w gve the sera number of each tank truck and ts
capacty. In cases where transportaton s n more than one supervsory ds-
trct, the appcaton sha be fed wth the dstrct supervsor n whose dstrct
the prncpa offce or pace of busness of the appcant s ocated. The pro-
vsons of sectons 182.10 . 182.106, 1S2.11 , 182.117, and 1S2.118 are hereby e -
tended, nsofar as appcabe to carrers.
(o) Pertons entted to permt. asc permts to transport ta -free or specay
denatured acoho, or undenatured ethy acoho for transfer In bond-n tank
trucks, sha be ssued ony to reputabe carrers who are actvey and reguary
engaged generay n the egtmate busness of transportaton, and who possess
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

8

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
1 9
Regs. 3, 182.0 , etc.
adequate factes to nsure safe devery at destnaton of any acoho trans-
ported by them. (Sees. 310 , 3107, 311 (a), 312 (a) (0), 3170, I. R. C.)
Sec. 182.17C. Use of Motoh Trucks by Raroad, Steamshp, and press
Companes.- If the appcant s a raroad, steamshp, or e press company and
operates motor trucks pursuant to contracts wth the owners of such trucks
n transportng ta -free acoho or specay denatured acoho or n transportng
undenatured ethy acoho n tank trucks for transfer n bond between ndustra
acoho pants, ndustra acoho bonded warehouses, and denaturng pants under
the carrer s b of adng, e press recept, wayb, etc., there must be stpuated
n the appcaton that In consderaton of the ssuance of the basc permt
heren apped for, the appcant agrees to assume fu responsbty for the
safe transportaton and proper devery of any and a such acoho so possessed
for transportng by hs sad truckng agents; and sad appcant further covenants
and agrees to pay to the Unted States a nterna revenue ta es, assessments, and
penates due by reason of any dverson of sad acoho n the hands of any of
hs sad agents, or as the resut of the devery by any such agent of sad a-
coho to any person not authorzed to receve the same. (Sees. 310 ), 3107, 312
(a) (6), 3170, I. R. C.)
Sec. 1S2.179. Condtons of pprova. No appcaton sha be approved uness
and unt t s estabshed by the appcant to the satsfacton of the dstrct
supervsor that he s a reputabe carrer and s actvey and reguary engaged
generay n the egtmate busness of transportaton and that he possesses
adequate factes to nsure safe devery at destnaton of any ta -free acoho
or specay denatured acoho or undenatured ethy acoho n tank trucks whch
may be transported by hm. No appcaton for an orgna or renewa permt
for the transportaton In tank trucks of undenatured ethy acoho or specay
denatured acoho sha be approved uness and unt t Is determned by the ds-
trct supervsor, after nspecton, that each tank truck meets the requrements
of the reguatons n ths part. (Sees. 310 . 3107, 312 (a) (6), I. R. O.)
Sec. 182.182. ond, Form 0.
(c) Undenatured ethy acoho n tank trucks. (1) Transportaton b motor
carrers. Motor carrers, as defned n these reguatons, In order to transport
undenatured ethy acoho by tank trucks, between ndustra acoho pants,
ndustra acoho bonded warehouses, and denaturng pants, must procure
permts so to do, n accordance wth the reguatons n ths part and fe bond,
Form 0. propery modfed, n the pena sum specfed n secton 182.183.
(2) Transportaton by consgnors or consgnees. consgnor or consgnee, n
order to transport undenatured ethy acoho between ndustra acoho pants,
ndustra acoho bonded warehouses, and denaturng pants, In tank trucks
controed and operated by such consgnor or consgnee, must fe appcaton on
Form 1 and procure permt, Form 1 . , authorzng such transportaton and fe
consent of surety. Form 1.133. on hs bond, Form 1 32- , e tendng the terms
thereof to be abe for the ta , together wth penates and nterest on a unde-
natured ethy acoho wthdrawn, transported, used, or sod In voaton of aws
and reguatons now or hereafter n force. If the ma mum of the present bond
s not suffcent when computed as set forth n secton 182.183, a new bond n a
suffcent pena sum must he furnshed to cover the addtona abty.
(3) Present permts and bonds. asc permts (Form 1 ) and bonds now
hed by motor carrers, and by consgnors and consgnees, whch authorze the
transportaton of ta -free and specay denatured acoho, may, on appcaton
and the fng of consents of surety, be modfed to authorze tank truck shp-
ments of undenatured ethy acoho for transfer n bond between ndustra
acoho pants, ndustra acoho bonded warehouses, and denaturng pants and
to contan an undertakng to be abe for the ta . or an amount equa to the
ta as provded n subparagraph (2) of ths paragraph. The consent of surety,
or a new bond, must be ted so that the prncpa and surety w be responsbe
to the e tent specfed n secton 182.183. (Sees. 310 , 3107, 311 (a), 312 ( a) (G),
3170. I. R. O.)
Sec. 182.183. Pena Scm of ond. Form 9. The pena sum of the bond must
be computed at the rate of not ess than 1,000 for each vehce (other than a
tank truck) to be used by the permttee, nor more than 10,000 for a such
vehces so used. The pena sum of the bond for the transportaton of specay
denatured acoho n tank trucks sha be n the pena sum of 0,000 for each
such tank tmck, and not more than 200,000 for the tota of a trucks used. The
pena sum of the bond for the transportaton of undenatured ethy acoho n
tank trucks for transfer n bond between ndustra acoho pants, ndustra
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

8

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
Regs. 3, 182.6 , etc.
160
acoho bonded warehouses, and denaturng pants sha be In the pena sum of
7 ,000 for each such tank truck, and not more than 200,000 for the tota of
a trucks used. Where a permt s obtaned authorzng the transportaton of
ta -free acoho or specay denatured acoho n vehces (other than a tank
truck), specay denatured acoho or undenatured ethy acoho In tank trucks,
and bond n the ma mum pena sum of 200,000 s fed, such bond sha be suff-
cent to cover the transportaton of a ta -free, specay denatured, and un-
denatured acoho authorzed to be transported by the permt. (Sees. 310 , 3107,
811 (a), 312 (a) (6), 3176, I. R. C.)
asc Permts
ssuance of orgna basc permts
Sec. 182.229. Lmtatons Under Permt.
(ft) Permt to transport undenatured ethy acoho n tank trucks, Form 1 .
The permt w specfy the supervsory dstrcts n whch the carrer w be
permtted to transport undenatured ethy acoho n tank trucks, for transfer
n bond between ndustra acoho pants, ndustra acoho bonded warehouses,
and denaturng pants. If the carrer s a motor carrer operatng between cer-
tan ponts and over certan courses or routes, such ponts and courses or routes
w be specfed n the permt. The ernt sha specfy the number of tank
trucks to be used by the permttee n the transportaton of undenatured ethy
acoho and the sera number and capacty of each. (Sees. 310 , 3107, 311 ,
312 (a) (6), 3176, I. R. C.)
Sec. 1M2.230. Fng of Permts. very person recevng a basc permt under
the provsons of the reguatons n ths part must fe the same, together wth
a copy of the appcaton and a quafyng documents n support of the app-
caton, n such manner, at the pace of busness covered by the basc permt,
that they may be e amned by Government offcers. Whenever ta -free or spe-
cay denatured acoho s transported other than by raroad or steamshp
company, or e press company operatng thereon, there sha b posted n or on
the vehce of transportaton, ncudng motor trucks authorzed to be used or
be n the possesson of the person n charge thereof, a copy of the basc permt
(Form 1 ) under whch such transportaton s authorzed whch has been duy
certfed as a true copy by the dstrct supervsor ssung the same, e cept that
where specay denatured acoho s transported n a tank truck the certfed
copy of the basc permt under whch such transportaton s authorzed sha be
attached to the route board of the tank truck n accordance wth secton 182.731.
Whenever undenatured ethy acoho s transported In tank trucks as authorzed
by these reguatons, a copy of the basc permt (Form 1 ) under whch such
transportaton s authorzed whch has been duy certfed as a true copy by the
dstrct supervsor ssung the same, sha be attached to the route board of the
tank truck n accordance wth secton 1S2. 1 . (Sees. 310 , 3107, 312 (a) (6),
3176, I. R. C.)
cton by Dstrct Supervsor
orgna estabshment
Sec. 182.290. uthorty to pprove. (a) y dstrct supervsor. Dstrct
supervsors are authorzed to approve appcatons for basc permts and bonds
reatng to (IT the use of ta -free acoho (e cept by the Unted States or gov-
ernmenta agency thereof), (2) deang In specay denatured acoho, (3) use
of denatured acoho (ncudng the recovery of specay or competey denatured
acoho, or artces In the form of denatured acoho), ( ) the transportaton of
ta -free or specay denatured acoho, or undenatured ethy acoho n tank
trucks for transfer n bond between ndustra acoho pants, ndustra acoho
bonded warehouses, and denaturng pants, ( ) the e portaton of acoho or
specay denatured acoho, (6) the remova of acoho to customs manufactur-
ng bonded warehouses, and (7) the wthdrawa of acoho ta -free for use on
vesses md arcraft. Dstrct supervsors are aso authorzed to approve, nsofar
as the ssuance of basc permt s concerned, appcatons on Form 1 31, for the
estabshment and operaton of ndustra acoho pants, bonded warehouses,
and denaturng pants.
(6) y Commssoner. The Commssoner w approve appcatons (e cept
as to the ssuance of basc permts) and bonds respectng (1) the estabsh-
ment and operaton of ndustra acoho pants, bonded warehouses, and denatur-
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

8

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
161
Regs. 3, 182.6 , etc.
ng pants, and (2) the use of ta -free and specay denatured acoho by the
Unted States or governmenta agency thereof. (Sees. 310 , 3107, 311 , 312 (a)
(6), 3170, 3170, I. R. C.)
Genera Requrements Regardng Operatons
Sec. 182.322. Compance Wth Requrements of Law and Reguatons.
Under no crcumstances w a person conduct any operatons n connecton wth
the producton, storage, ta payment, or denaturaton of acoho, or use ta -free
acoho or dea n or use specay denatured acoho, or transport ta -free or
specay denatured acoho, or undenatured ethy acoho n tank trucks as
authorzed by the reguatons n ths part, or recover denatured acoho, or artces
n the form of denatured acoho, unt compance wth a the requrements
of aw and these reguatons, and the appcaton, bond (f requred) and support-
ng documents have been approved and a basc permt ssued pursuant thereto,
In accordance wth the provsons of the reguatons n ths part. (Sees. 310 ,
3107, 311 , 311 , 312 (a) (6), 3176,1. R. C.)
Operaton of Industra coho Pants
ta payment, remova, and transfer op acoho from recevng room
Sec. 182. 00. uthorzed Removas. coho produced at ndustra acoho
pants, after depost n the recevng tanks, may be:
(1) Transferred by means of ppe nes to storage tanks n a bonded warehouse
on the bonded premses where produced, or to acoho storage tanks or m ng
tanks n a denaturng pant ocated on the bonded premses where produced.
(2) Drawn nto tank cars or other approved contaners or drawn nto tank
trucks and transferred to any bonded warehouse for storage theren, or to any
denaturng pant for denaturaton.
(3) Wthdrawn upon payment of ta wthout beng entered nto a bonded
warehouse.
( ) Ta -pad and transferred by ppe ne to a rectfyng pant on contguous
or nearby premses, as authorzed by sectons 182. 7 a to .s2.r 7 g.
( ) Remova for awfu ta -free purposes. (Sees. 288 , 2891, 310 , 3106, 3107,
3108, 312 (a) (6), 3176, I. R. C.; sec. 309(a), Tarff ct of 1030 (19 U. S. ( ., Supp.
, 1309(a).)
Drawng Off, Gaugng, and Remova of coho
Sec. 182. 07. Weghng coho Removed by Ppe Lne. Where acoho s to
be removed by ppe ne, the same w be weghed n a weghng tank before
remova from the recevng room, e cept that where acoho s transferred by ppe
ne from the recevng tanks to a bonded warehouse or denaturng pant on the
ndustra acoho pant premses, and no weghng tank s provded n the recev-
ng room, the acoho may be run nto weghng tanks n the bonded warehouse
or denaturng pant, respectvey, and weghed theren. The acoho must, n any
event, be weghed once n connecton wth ts transfer to the bonded warehouse
or the denaturng pant. Where acoho s transferred from recevng tanks to
tank cars or tank trucks one or more weghng tanks must be provded n the recev-
ng room and a acoho removed by ppe ne must, e weghed In such weghng
tanks, and the correct weght w he recorded by the propretor on the approprate
forms. The storekeeper-ganger w baance the scaes upon whch the weghng
tank s mounted before the acoho s run nto such tank. Scaes used for wegh-
ng acoho n ots of not over 00 gaons w be tested from tme to tme under the
supervson of the storekeeper-ganger, by means of test weghts, provded n
accordance wth secton(182.66. Such scaes w be tested by pacng the prescrbed
test weghts on the scaes and checkng the weght regstered on the beam or da
of the scaes. The test weghts w then be removed wthout dsturbng the beam
or da and the weghng tank fed wth acoho or water to the same weght,
whereupon the test weghts w agan be paced upon the scaes, the acoho or
water beng retaned n the tank and the weght regstered on the beam or da
checked. Ths operaton w be contnued unt the scaes have been checked n
00-pound notches at a weghts for whch the scaes are used. Storekeeper-
gaugers w, from tme to tme, check the gaonage ndcated by scaes used for
weghng acoho n arger ots aganst the gaonage Indcated by voumetrc
determnaton of the contents of the tank. Such voumetrc determnaton w
be made by (a) accuratey ascertanng the proof and temperature of the acoho,
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

8

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
Regs. 3, 182.6 , etc.
162
and the depth of the qud n the tank by means of a stee tape, (6) mutpyng
the depth n nches by the capacty of the tank for 1 Inch of depth, and (c)
correctng the voume to 60 degrees Fahrenhet n accordance wth tabe No. 7
of the Gaugng Manua. The corrected wne gaonage thus determned can then
be compared wth the wne gaons ndcated by the scaes. The storekeeper-
ganger w not permt the use of any scaes found to be naccurate. (Sees. 2S0S,
310 , 3107, 312 (a) (6), 3176,1. It. C.)
Sec. 182. 08. Ppe-Lne Removas. ppe ne used for the transfer of acoho
from the recevng room to storage tanks n a bonded warehouse, or to a denatur-
ng pant on the Industra acoho pant premses, or to raroad tank cars or
tank trucks for shpment, must conform to the requrements of secton 1S2.82,
e cept that acoho may be transferred nto a tank car or tnnk truck by means
of a hose connecton where the same s n fu vew of the Government offcer
throughout ts entre ength. The vaves on such ppe ne sha be kept cosed
and ocked at a tmes, e cept when necessary to be opened for the transfer
of acoho. The keys to a ocks on the vaves of ppe nes sha reman at
a tmes n the custody of the storekeeper-gauger. coho may be transferred
by ppe ne ony under the mmedate supervson of the storekeeper-gauger.
(Sees. 310 , 3107, 312 (a) (0), 3176, I. R. O.)
Operaton of Industra coho onded Warehouse
recept of acoho
Sec. 182. 01a. In Tank Trucks From an Industra coho Pant or
nother onded Warehouse. When acoho s receved n a tank truck from
an ndustra acoho pant not on the same premses or from another bonded
warehouse, the seas must be broken by the storekeeper-gauger assgned to the
recevng bonded warehouse and no undenatured ethy acoho may be removed
from the tank truck, e cept n the presence of such offcer. When the acoho
Is receved at the warehouse, the shpment w be e amned by the propretor
and the storekeeper-gauger, n accordance wth secton 182. 93a. (Sees. 3101,
310 . 3107, 3113, 312 (a) (6), 3176, I. R. C.)
Sec. 182. 98a. amnaton of Tank Truck. When a tank truck s receved,
t w he e amned, and f t bears evdence of oss by eakage, theft, or otherwse,
or f the gauge of ts contents dscoses a oss or shortage, the storekeeper-
gauger w make a report of the oss to the dstrct supervsor smar to that
requred when packages whch have sustaned a oss n transt are receved.
(Sees. 310 , 3107, 3113, 312 (a) (6), 3170, I. R. C.)
Sec. 182. 0 . Depost n Recevng Warehouse. Upon competon of the
e amnaton of the contaners, the propretor w accuratey determne the
quantty receved and w check n the recept of the acoho aganst Form
1 0 n the presence of the storekeeper-gauger and w e ecute the certfcate
of recept on both copes of the form, and w note thereon and on F. rm 1 :- ,
or Form 1 3- , any oss or defcency n the shpment. The propretor w
then fe one copy of Form 1 0 as a permanent record, as provded n secton
S2.0 3(a), and at the cose of the day w dever the other copy wth Form
1 1 to the storekeeper-gauger for transmtta to the dstrct supervsor of hs
dstrct. On the day of recept of the acoho, the storekeeper-ganger sha
f n the certfcate of recept on Form 1 39, notng any osses and dscrepances.
Where a oss n transt s sustaned the storekeeper-ganger w report the tota
oss and, n the case of packages, the oss from each package. The recepted
form sha he forwarded to the dstrct supervsor of the dstrct from whch
the acoho was shpped. Such dstrct supervsor wt cheek day, on recept,
each Form 1 39 coverng a tank truck shpment, and make any nqury whch
he deems necessary wth respect to any dscrepancy. In the event of faure
to receve a form from the storekeeper-gauger at the consgnee s premses wthn
the tme normay requred for the truck to make the shpment and the form
to be sent by ma, the dstrct supervsor w make approprate nvestgaton.
(Sees. 3101, 310 , 3107, 3113, 312 (a) (0), 3176, I. R. C.)
Sec. 1S2. 9 . Method of Depost.
(c) coho receved n tank trucks. Undenatured ethy acoho receved n
tank trucks sha be gauged and transferred mmedatey to storage tanks. The
seas must he broken by the storekeeper-gauger assgned to the bonded ware-
house and no undenatured ehv acoho may be removed from the tank truck,
e cept n the presence of such offcer. (Sees. 3101, 310 , 3107, 3113, 312 (a) (6).
8176, I. R. C.)
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

8

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
163
Regs. ::, 182.6 , etc.
MO L OF LCO OL FROM R C I ING ND STOR G T N S
Sko. 182. 98. Gauge on Wthdrawa. Where acoho s drawn nto drums,
barres, or smar contaners from recevng and storage tanks, the packages,
sha be gauged n accordance wth the provsons of the Causng Manua (26
CFR, Part 186). Where acoho s drawn nto tank cars, drawn nto tank
trucks, or s transferred by ppe ne, as authorzed by the reguatons n ths
part, such acoho sha be gauged n accordance wth the rues prescrbed n the
reguatons n ths part and n the Gaugng Manua; the weght of the acoho
w be determned by means of weghng tanks, as provded n secton 182. 07.
coho may he drawn from recevng and storage tanks ony under the mme-
date supervson of the storekee er-gauger.
( v ) Fractona parts of a gaon. fractona parts of a gaon ess than one-
tenth, shown n the Gaugng Manua, sha be dsregarded n gaugng acoho.
For e ampe, a package of 190 degrees proof acoho, weghng :26 pounds net,
sha be reported on Form 1 0 as contanng 7.90 wne gaons and 91.10 proof
gaons. package contanng 190 degrees proof acoho, weghng 1 0 pounds,
sha he reported as contanng 0 wne gaons and 9 proof gaons.
(ft) Deta of gauge. The detas of n acoho gauged n the bonded ware-
house sha be recorded by the propretor on Form 1 0, as herenafter provded.
(Sees. 3101. 310 , 3107. 312 (a) (6), 3176, I. R. C.)
Sec. 182. 02a. F nq of Tank Truck. The tank truck must be fed n the
Immedate presence of the storekeeper-gauger. Pror to fng, the storekeeper-
gauger sha determne whether the tank truck s authorzed to be used by con-
parng the sera number and the capacty of the tank as marked thereon, wth the
copy of the basc permt, and w nspect a openngs to the tank truck to de-
termne whether they may be effectvey seaed. If the tank truck does not meet
such requrements, ts use for the transportaton of undenatured ethy acoho
w not be permtted. fter fng, the storekeeper-gauger sha sea the tank
truck n such a manner as w secure a openngs nffordng access to the con-
tents of the tank. The propretor w enter on Form 1 0. coverng the gauge
of the acoho, the number of nches of undenatured ethy acoho oaded nto each
compartment and the temperature thereof at the tme of fng, the name of
the carrer, the number of the tank truck, the State cense number of the truck,
the drver s fu name, and the drver s permt number and State ssung the
same, the destnaton, the date of shpment, and the sera numbers of the cap
seas used. (Sees. 3101, 310 , 3107, 3108, 312 (a) (6). 3176, I. R. C.)
PPRO D CONT IN RS
Sec. 182. 11a. Tank Trucks.- Undenatured ethy acoho may he transported
by tank trucks ony where sutabe storage tanks nre provded on the recevng
bonded warehouse premses. The manhoe covers, outet vaves, and a other
openngs on tank trucks used for shppng undenatured ethy acoho sha be
equpped wth factes for seang so that the contents cannot be removed
wthout showng evdence of tamperng. Seray numbered cap seas for use
on such tank trucks sha he furnshed by the Government and aff ed by the
storekeeper-gauger. Immedatey after fng, the tank truck sha be seaed
In such a manner as w secure a openngs affordng access to the contents of
the tank. (Sees. 3101, 310 , 3107, 3108, 312 (a) (6), 3176, I. R. C.)
Sec. 182. 1 . Tank Trucks. Tank trucks may be used for transportng unde-
natured ethy acoho sub|ect to the provsons of the reguatons n ths part.
very tank truck used to transport undenatured ethy acoho must Conform to
the foowng requrements: The tank sha be securey and permanenty attached
to the frame or chasss of the truck or traer and sha be securey constructed.
Interor bukheads or stffeners must have proper dranage cut-outs. Manhoe
covers, outet vaves, vents or pressure reef vaves, and a other openngs sha
be equpped for seang so as to prevent unauthorzed access to the contents of the
tank. Outets of each compartment must be so arranged that devery of any
compartment w not afford access to the contents of any other compartment.
Parta devery, by meter or otherwse, w not be permtted. There sha he
but one consgnor per oad and not ess than the entre contents of any one com-
partment sha be devered to any one consgnee. Cabrated charts, prepared
or certfed by competent and recognzed authortes or engneers, showng the
capacty of ench compartment n wne gaons for each nch of depth sha be
carred n ench truck. nch tank truck sha aso be equpped wth a route board,
at east 10 by 12 nches, constructed of substanta matera and permanenty
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

8

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
Regs. 3, 182.6 , etc.
16
attached thereto by round-headed or carrage bots, nutted and rveted, battered
or weded. Provson w aso be made for protecton, aganst the weather, of the
permt and abe by the use of ceuod or equay substanta matera. copy
of the basc permt (Form 1 ) under whch transportaton s authorzed (as
requred by secton 182.230) and the prescrbed abe (as requred by secton
182. 21a) w be aff ed to such route board. Tanks sha be so constructed that
they w competey dran the contents of each compartment, even when the
ground s not perfecty eve. Sutabe adders and cat waks, permanenty
attached, must be provded n order to permt ready e amnaton of manhoes and
other openngs. Provson sha be made for the proper groundng of tank trucks
when fng or emptyng. (Sees. 3101, 310 , 3107, 3108, 312 (a)(6), 3170.
I. R. C.)
M R S. R NDS, ND ST MPS
S:r.c. 182. 21a. Tank Trucks. ach tank truck used to transport undenntured
ethy acoho must have permanenty and egby marked or panted thereon ts
number, capacty n wne gaons, and the name of the owner n etters at east
nches n heght. If the tank truck conssts of two or more compartments, each
compartment must be dentfed by a etter of the aphabet, such as , P.,
etc., and the capacty n wne gaons of each compartment must be marked
thereon. The consgnor sha securey attach to the route board of each tunk
truck, a abe showng the name, regstry number, and ocaton (cty or town and
State) of the shppng ndustra acoho pant or bonded warehouse; the name,
regstry number, and ocaton (cty or town and State) of the recevng ndustra
acoho bonded warehouse or denaturng pant, foowed by the date of shpment;
and the quantty n wne and proof gaons of undenatured ethy acoho con-
taned n each compartment. Such abe sha be destroyed upon emptyng the
tank truck. (Sees. 2808, 310 , 3107, 3108, 312 (a) (6), 3176, I. R. C.)
R MO L OF LCO OL FROM W R OUS
Sec. 1S2. 8. Transportaton. (a) In b ond. coho shpped n bond to an-
other bonded warehouse, n contaners other than tank trucks, sha be trans-
ported to the premses of the recevng warehouse by the propretor of the shppng
warehouse; or by a raroad or steamshp company, or an e press company
operatng thereon; or by a motor carrer who hods a permt to transport ta -free
or specay denatured acoho or who has quafed wth the Interstate Commerce
Commsson as a sef nsurer ; or by other carrers, ncudng motor and barge
nes, who are actvey and reguary engaged n the egtmate busness of trans-
portaton and who possess adequate factes to nsure safe devery at destna-
ton of any acoho transported by them, and who are approved by the dstrct
supervsor. coho shpped n bond to another bonded warehouse or to a dena-
turng pant n tank trucks sha be transported to the premses of the recevng
bonded warehouse or denaturng pant by the propretor of the shppng ware-
house, or by the propretor of the recevng bonded warehouse or denaturng
pant, or by a motor carrer, who hods a permt, Form 1 , to transport unde-
natured ethy acoho n tank trucks.
(6) Ta -free. coho wthdrawn free of ta for denaturaton, e port, transfer
to customs manufacturng bonded warehouse, use on vesses and arcraft, use of
the Unted States or any governmenta agency thereof, the severa States and
Terrtores or any muncpa subdvson thereof, or the Dstrct of Coumba,
hosptas, snnatornms, coeges, aboratores, scentfc purposes, etc., must be
transported to the premses of the consgnee or, f wthdrawn for e port, to
the port of e port, by the propretor of the bonded warehouse or a carrer hodng
permt on Form 1 to transport ta -free acoho: Provded, That the consgnee
may transport the acoho from the premses of the deverng carrer at the
pace of destnaton to hs own premses or, n the case of e port, or use on vesses
and arcraft, to the pont of adng.
(c) Method of transportaton. coho shpped n bond or ta -free n accord-
ance wth paragraphs (a) and (6) of ths secton must be transported by the
propretor of the bonded warehouse or the authorzed carrer personay, or by
some person reguary and e cusvey n ther empoy, and the rght to the
possesson of any vehce used for such transportaton must be vested n the
vendor or carrer.
(d) Responsbty for devery. The consgnor w be responsbe for proper
devery of acoho shpped n bond or ta -free to an authorzed carrer, or to the
premses of the consgnee when devery s made by the consgnor. The con-
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

8

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
16
Regs. 3, 182.6 , etc.
sgnee w kewse be responsbe for the proper devery to hs permt premses
of acoho shpped to hm In bond or tu -free and transported by hm from the
premses of the authorzed carrer. Faure to make such devery w be
deemed to be grounds for ctaton for revocaton of the basc permt of the person
responsbe for the proper devery of the acoho.
(e) Certfrute n b of adng, wayb, etc. When acoho s transported by
a carrer, as authorzed heren, the propretor of the shppng warehouse sha
Incude n hs b of adng, wayb, e press recept, etc., a statement to the
foowng effect: efore makng devery, the agent of the deverng carrer
at destnaton must have receved from the consgnee a certfed copy of the
wthdrawa permt authorzng ths shpment.
(1) cepton; wrtten statement. Where no b of adng s ssued, as n
the ease of devery by oca e press company, a wrtten statement to the above
effect, sgned bv the shpper, sha be devered to the carrer. (Sees. 3070(a),
310 . 3107, 3108, 311 , 312 (a) (6), 3176, I. R. C.)
TR NSF R OF LCO OL IN OND TW N OND D W R OUS S
Sec. 182.r 0. Genera. coho may be transferred n bond from any bonded
warehouse n orgna packages or other approved contaners, or n tank trucks,
after the same has been correcty weghed and proofed to determne the e act
contents of each package, uness wthdrawn on the orgna gauge, to another
bonded warehouse as herenafter provded. (Sees. 310 , 3107, 312 (a) (6), 3176.
I. R. C.)
Sec. 182. 6. Report of Gauge. Form 1 0. The propretor w prepare Form
1 0, n quadrupcate, gvng the detas of the regauge, or orgna gauge f
wthdrawn on such gauge, of the acoho. The propretor w dever a copes
of the form to the storekeeper-gauger In charge, who sha upon shpment forward
one copy to the supervsor of the dstrct n whch the shppng warehouse s
ocated, and two copes, wth one copy of Form 1 39, to the storekeeper-gauger
n charge of the recevng warehouse, and return the remanng copy to the
propretor of the shppng warehouse, who sha te the same as a permanent
wthdrawa record, as provded n secton 182.6 3(b). When shpment s made
by tank truck as authorzed by the reguatons n ths part, one copy each of
Forms 1 39 and 1 0 for the storekeeper-gauger In charge at the recevng ware-
house w be seaed n an enveope addressed to such storekeeper-gauger n charge
and handed to the person n charge of the truck for devery to the storekeeper-
gauger n charge and the remanng copy of Form 1 0 w be maed to such
storekeeper-gauger n charge. (Sees. 3101, 310 . 3107, 312 (a) (6), 3176, I. R. C.)
Sec 182. 7. Report of Shpment, Form 1 39. When acoho s transferred
n bond to another bonded warehouse, the propretor sha, at the tme of shp-
ment, prepare Form 1 39, n dupcate, f shpment s made to a warehouse
ocated wthn the same dstrct, or n trpcate, f shpment s made to a
warehouse ocated n another dstrct, and mmedatey dever a copes thereof
to the storekeeper-gauger n charge, who sha, on the same day, forward one
copy to the supervsor of the dstrct from whch the acoho s shpped, one
copy to the supervsor of the dstrct to whch the acoho s shpped (where
shpment s to another dstrct), and the remanng copy to the storekeeper-
gauger n charge of the recevng bonded warehouse, who, upon recept of the
acoho, w dspose of the form n accordance wth secton 182. 9 . When
shpment s made by tank truck n accordance wth the reguatons n ths
part, the copy of Form 1 39 for the storekeeper-gauger n charge of the recevng
bonded warehouse w be dsposed of as provded by secton 182. 6. (Sees.
3101, 310 , 3107, 312 (a) (6), 3176, I. R. O.)
wthdrawa for denatttraton
Sec. 182. 60. Shpment to Denaturng Pant Located on Other Premses.
coho may be wthdrawn from a bonded warehouse for shpment to a denaturng
pant ocated on other premses ony pursuant to wthdrawa permt, Form
1 63, authorzng such shpment. coho may be so shpped n tank cars, drums,
or other approved contaners, or n tank trucks. Such shpments may not be
made unt the propretor of the bonded warehouse has receved from the
denaturer the wthdrawa permt, Form 1 63, namng hm as vendor, and then
ony n the quantty specfed n the wthdrawa permt. Upon shpment the
propretor of the bonded warehouse w enter the shpment on the perm t and
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

8

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
Regs. 3, 182.6 , etc.
166
return t to the denaturer, uness he as been authorzed by the denaturer to
retan the permt for the purpose of makng future shpments.
(o) Form S9. When acoho s shpped to a denaturng pant ocated on
other premses, the propretor of te warehouse sha prepare Form 1 39, n
dupcate, f shpment s made to a denaturng pant ocated n the same dstrct,
or n trpcate, f shpment s made to a denaturng pant ocated n another
dstrct, and mmedatey dever a copes thereof to the storekeeper-gauger
n charge, who sha, on the same day, forward one copy to the dstrct supervsor
of the dstrct from whch the acoho s shpped, one copy to the dstrct super-
vsor of the dstrct to whch the acoho s shpped (where shpment s to
another dstrct), and the remanng copy to the storekeeper-gauger n charge
of the denaturng pant. When the shpment s made by tank truck as authorzed
by these reguatons, the copy of Form 1 39 for the storekeeper-pauper n charge
at the recevng denaturng pant w be dsposed of n accordance wth secton
182. 61(a). (Sees. 3070(a), 3101, 310 , 3107, 3108(a), 311 (a), 312 (a)(6).
3176, I. U. C.)
Sec. 182. 61. Gaugng, arkng, and Stampng Upon Wthdrawa. When
acoho s transferred by ppe ne, or shpped n tank cars or tank trucks, to a
denaturng pant, t w b run nto a weghng tank and weghed and proofed by
the propretor, n accordance wth sectons 182. 0 and 182. 07. When acoho
s transferred or shpped to a denaturng pant n other approved contaners,
the propretor w regauge the packages, uness wthdrawn on the orgna
gauge, and w mark each package n accordance wth sectons 182. 18 to
182. 2 : Provded, That where packages are transferred to a denaturng pant
on the same premses the regauged markngs prescrbed by secton 182. 22 need
not be paced upon the packages: nd provded further. That where packages
are fed from the recevng tanks of the ndustra acoho pant or from storage
tanks n the bonded warehouse for transfer to the denaturng pant ocated on
the same premses, and the acoho s to be denatured mmedatey n such
packages and the ocaton of the recevng room, bonded warehouse, and denatur-
ng pant s such that the packages are transferred from the recevng room
or bonded warehouse to the denaturng pant n the mmedate persona presence
of the storekeeper-gauger and under hs constant observaton, the dstrct super-
vsor may authorze the data, whch the reguatons n ths part requre to be
marked upon the Government head or sde of the package, to be paced upon a
abe attached to the head or sde of the contaner, n eu of beng prnted,
stenced, or cut thereon. Such abe sha be destroyed when the contents of the
package are denatured.
(a) Form U O. The propretor w prepare Form 1 0, n quadrupcate, gv-
ng the detas of the regauge, or orgna gauge f wthdrawn on such gauge, of
the acoho. The propretor w dever a copes of the form to the storekeeper-
gauger n charge, who sha upon shpment forward one copy to the supervsor
of the dstrct n whch the bonded warehouse s ocated, and two copes wth one
copy of Form 1 39 to the storekeeper-ganger n charge of the denaturng pant,
and return the remanng copy to the propretor of the warehouse, who sha fe
the same as a permanent wthdrawa record, as provded n secton 182.0 3.
When shpment s made by tank truck as authorzed by the reguatons n ths
part, one copy each of Forms 1 39 and 1 0 for the storekeeper-gauger n charge
at the recev ng denaturng pant w be seaed n an enveope addressed to such
storekeeper-gauger n charge and handed to the person n charge of the truck for
devery to the storekeeper-gauger n charge and the remanng copy of Form 1 0
w be maed to such storekeeper-gauger n charge. (Sees. 3070(a), 3101, 310 ,
3107, 3108(a), 312 (a) (6), 3176, I. R. C.)
LOSS S OF LCO OL
Sec. 182.63 . Losses n Transt. Losses n transt to bonded warehouses must
be determned at the tme acoho s receved at the warehouse, and the oss
reported on Form 1 3- when receved n tank cars or tank trucks, and on Form
1 3-11 when receved n packages. Where the quantty ost from any tank car,
tank truck, or package e ceeds 1 percent (3 percent on wooden packages) of the
quantty shpped theren, cam for remsson of ta on the entre quantty ost
from the contaner w be made by the propretor, e cept as heren provded. If
the oss does not e ceed 1 percent (3 percent on wooden packages), so cacuated,
cam for remss-on of tu w not he requred: Provded, That (a) cam for re-
msson of ta w not be requred for an amount ess than 1 proof gaon, and
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

8

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
167
Regs. 3, 182.6 , etc.
(6) there are no crcumstances ndcatng that the acoho ost, or any part there-
of, was unawfuy used or removed. (Sees. 310 . 3107, 3113, 312 (a) (G), 3176,
I. R. C.)
R CORDS ND R PORTS OF PROPRI TOR
Sec. 182.6 . Form 1 1.. The propretor of each bonded warehouse sha, at
the cose of each busness day, prepare and dever to the storekeeper-gauger n
charge Form 1 1, Day Report of Transactons, summarzng the producton,
recept, and dsposa of a acoho n such bonded warehouse. The form sha
be made n dupcate, one copy to be retaned by the propretor and one copy de-
vered to the storekeeper-gauger n charge, who w forward the same to the ds-
trct supervsor. tems of acoho entered n ths return on Form 1 1 must
be curred nto the monthy warehouse account, Forms 1 3- and 1 3- , under
the same date for whch the Form 1 1 s rendered.
(a) ntres from ndustra acoho pant. In the coumn headed Produced
and deposted n warehouse w be entered a acoho drawn from the recevng
tanks of the ndustra acoho pant on the same premses durng the day for
whch the return s rendered. ntry must be made n ths coumn of a a-
coho removed from the recevng tanks, whether removed for storage n ware-
house n tanks or packages, or whether removed for shpment n tank cars, tank
trucks, cases, packages, or by ppe ne to a denaturng pant.
(6) ntres from other warehouses. The sera numbers and proof-gaon
content of packages or tank cars and the State cense number and proof-gaon
content of tank trucks of acoho receved from other bonded warehouses w
be entered n the proper coumns under the headng Receved from other bonded
warehouses. If there s a dfference n the quantty of acoho thus receved
from the quantty shpped, speca notaton sha be made on the Form 1 1.

(Sees. 3101, 310. , 3107, 312 (a) (6), 3171, 3176, I. R. C.)
Sec. 182.6 . Form 1 3- . The propretor of every bonded warehouse sha
koep a monthy record. Form 1 3- , Report of Uncoopered coho, and render
monthy reports thereon, n trpcate, of a uncoopered acoho produced, re-
ceved, and dsposed of. efore the cose of the busness day ne t succeedng
the day on whch the transactons occur entres sha be made n the respectve
coumns of the quantty of acoho produced and deposted n the warehouse, or
receved n bond at the bonded warehouse, or packages fed, and the quanttes
wthdrawn for shpment uncoopered. Where the makng of the entres s deferred
to the ne t busness day, as authorzed heren, approprate memoranda sha be
mantaned for the purpose of makng the entres correcty.
(o) Receved from or produced by. acoho drawn from recevng tanks
n the ndustra acoho pant ocated on the same premses, whether for shpment
drect from such recevng tanks or for storage n the warehouse, w be entered
on the form. When acoho s receved from other bonded warehouses n tank
cars, the symbo and sera number of the tank car and the quantty of acoho
receved w be reported. When acoho s receved from other bonded ware-
houses n tank trucks the State cense number of the truck and the quantty
of acoho receved w be reported. The amount of acoho ost n each tank
car or tank truck n transt to the warehouse w be entered on the same ne
wth the quantty stated as receved In such tank car or tank truck. Losses n
transt w not be ncuded wth the osses reported n the summary.
(6) Packages fed. Under the headng Packages fed w be entered
the detas of a packages fed, whether from recevng tanks n the ndustra
acoho pant on the same premses or from storage tanks n the warehouse.
Tank cars and tank trucks w not be reported under ths headng.
(c) Wthdrawas. Under the headng Wthdrawa for shpment w be
entered day the quantty of acoho shpped n tank cars, or tank trucks, or
removed by ppe ne to a denaturng pant on the same premses.
(d) Speca entres. (1) Repackng and remarkng. When the contents of
packages n warehouse are repackaged, or packages receved from other ware-
houses are remarked, memorandum entry w be made n the statement of
Packages Fed on Form 1 3- , showng the sera numbers used on the new
packages.
(2) Dumpng. Where the contents of packages are dumped nto storage tanks
for storage or repackagng of a porton thereof, the quantty dumped w be
entered on Form 1 3- n the statement of Uncoopered coho Receved or
Produced, wth proper e panatory note, and any new packages therefrom
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

8

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
Regs. 3, 182.6 , eto.
168
w he entered n the statement of Packages fed on the form In the usua
manner.
(3) Other entres. If acoho s returned to an ndustra acoho pant for
redstaton, approprate entres w be made on Form 1 3- .
(c) Summary. In the approprate space on Form 1 3- there must be
entered at the end of the month a summary of the transactons reported thereon.
The actua quantty of acoho remanng n the storage tanks n the warehouse
at the end of the month w be recorded and the osses from the storage tanks
must be recorded. (Sees. 3101, 310 , 3107, 3171, 312 (a) (6), 3176, I. . C.)
Operators of Industra coho Denaturng Pants
recept of acoho
Sec. 182.696. From Industra coho Pant or ondf.d Warehouse Not
Located on the Same Premses. Upon recevng Form 1 0, wth Form 1 39,
coverng acoho shpped to the denaturng pant, the storekeeper-gauger n
charge of the denaturng pant w compare the two forms and dever Form
1 0 to the propretor of the denaturng pant. When the acoho s receved
at the denaturng pant the propretor and the storekeeper-ganger w e amne
the shpment and where packages bear evdence of havng sustaned osses n
transt or the raroad tank car or tank truck bears evdence of havng sustaned
a oss, the osses w be determned and a report of such osses and of the
e amnaton of the shpment w be made n conformty wth the provsons
of sectons 182. 92, 182. 93, and 182. 93a.
(a) Depost n denaturng pant. Upon competon of the e amnaton of
the contaners, the propretor w accuratey determne the quantty receved
and w check n the recept of the acoho aganst Form 1 0 n the presence
of the storekeeper-gauger, and w e ecute the certfcate of recept on both
copes of the form and note thereon and on Form 1 08- any oss or defcency
n the shpment. The propretor w then te one copy of Form 1 0 as a
permanent record, as provded n secton 182.788, and at the cose of the day
w dever the other copy to the storekeeper-gauger for transmtta to the
dstrct supervsor of hs dstrct. On the day of recept of the acoho, the
storekeeper-gauger sha f n the certfcate of recept on Form 1 39, notng
any osses and dscrepances. Where a oss n transt s sustaned, the store-
keeper-gauger w report the tota oss and, n the case of packages, the oss
from each package. The storekeeper-gauger w forward the recepted Form
1 39 to the dstrct supervsor of the dstrct from whch the acoho was shpped.
Such dstrct supervsor w check day, on recept, each Form 1 39 coverng
a tank truck shpment, and make any nqury whch he deems necessary wth
respect to any dscrepancy. In the event of faure to receve a form from
the storekeeper-gauger at the consgnee s premses wthn the tme normay
requred for the truck to make the shpment and the form to be sent by ma,
the dstrct supervsor w make approprate nvestgaton. (Sees. 3070, 310 ,
3107, 3108(a), 311 (a), 312 (a) (6), 3176, I. R. C.)
Sec. 182.698a. coho Receved n Tank Trucks. coho receved n tank
trucks sha bo gauged n weghng tanks and transferred mmedatey to storage
tanks or to m ng tanks for mmedate denaturaton. When acoho s receved
n tank trucks, the seas must be broken by the storekeeper-gauger assgned to
the denaturng pant and no undenatured ethy acoho removed from the tank
truck, e cept n the presence of such offcer. (Sees. 310 , 3107, 312 (a) (6),
3176, I. R. C.)
osses of ethy acoho
Sec. 182.77 . Losses n Transt. Losses n transt to denaturng pants must
be determned at the tme acoho s receved at the denaturng pant, and the
oss reported on Form 1 08- . Where the quantty ost from any tauk car, tank
truck, or meta package e ceeds 1 percent, or 3 percent n the case of any wooden
package, of the quantty shpped theren, cam for remsson of ta on the entre
quantty ost from the contaner w be made by the propretor, e cept as heren
provded. If the oss (oos not e ceed 1 percent, or 3 percent, so cacuated, cam
for remsson of ta w not e requred : Provded, That (a) cam for remsson
w not be requred for an amount e s than 1 proof gaon, and (6) there are no
crcumstances ndcatng that the acoho ost, or any part thereof, was unawfuy
used or removed. (Sees. 310 , 3107, 3113, 312 (a) (6), 317C, I. R. C.)
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

8

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
169
(Regs. 3, 182.6 , etc.
C RRI RS
Sec. 182.90 . Possesson by Unauthorzed Carrers. The transportaton of
ta -free or specay denatured acoho, or of undenntured ethy acoho n tank
trucks, by a carrer not authorzed by permt to transport the same s a voaton
of aw and renders the acoho sub|ect to forfeture. (Sees. 310 , 3107, 3108(a),
3111, 311 (a), 312 (a)(0), 3176, I. . C.)
Sec. 182.008. Restrcted Use of Contaners. (a) Tank wagons or tank
trucks. Tank wagons sha not be used for the transportaton of undenatured
ethy acoho. Tank trucks sha not be used for the transportaton of unde-
natured ethy acoho e cept for transfer n bond between ndustra acoho
pants, ndustra acoho bonded warehouses, and denaturng pants as authorzed
by these reguatons. Shpment of undenatured ethy acoho n tank trucks may
be made ony when the premses of the consgnee are equpped wth a suffcent
number of acoho storage tanks for the storage of such acoho and the consgnee
s otherwse authorzed to receve such shpment.
( ) Raroad tank cars. Shpment of acoho or denatured acoho by raroad
tank cars may be made ony when the premses of the consgnor and consgnee
are equpped wth satsfactory raroad sdng factes and the consgnee s
otherwse authorzed to receve such shpment. (Sees. 310 , 3107, 3111, 311 (a),
312 (a) (( ,), 3176, I. R. C.)
Sec. 182.909. Devry. (a) y shpper to carrer. The consgnor w be re-
sponsbe for proper devery of ta -free or specay denatured acoho, or of
undenatured acoho for transportaton n tank trucks, to a carrer hodng a
basc permt to transport.
(6) y carrer to Unted States or governmenta agency.- Where ta -free or
specay denatured acoho s shpped to any department, bureau, commsson, or
ndependent offce or agency of the Unted States Government, the same may be
devered by the carrer transportng the acoho or denatured acoho wthout
the necessty of recevng copy of permt to procure such acoho.
(1) Recept requred. In such cases, however, the person transportng the
ta -free or specay denatured acoho sha procure a recept from the con-
sgnee whch recept sha show the name and address of the consgnor and the
cousgnee, the quantty of acoho or specay denatured acoho n the shpment,
the date of devery, and the name of the person recevng the acoho as agent
for the consgnee.
(2) Fng of recept. The recept sha be fed by the carrer n the fe or
bnder contanng copes of wthdrawa permts coverng other deveres of
ta -fre or specay denatured acoho. (Sees. 310 , 3107, 3111, 311 (a),
312 (a)(6), 3176, I. R. C.)
Sec. 182.910. Devery to gent op Consgnee. Where the consgnee s other
than a natura person, a certan agent must be specay desgnated n wrtng to
receve shpments of ta -free or specay denatured acoho, or undenatured
ethy acoho n tank trucks, and the carrer transportng the ta -free or specay
denatured acoho, or undenatured ethy acoho, must receve a copy of the docu-
ment makng the desgnaton before devery. Where the consgnee s a natura
person, the ta -free or specay denatured acoho or undenntured ethy acoho
must be devered to hm personay, uness he furnshes the carrer wth an aff-
davt to the effect that t s mpractcabe for hm to receve the ta -free or spe-
cay denatured acoho or undenatured ethy acoho personay and desgnatng
some certan agent to receve the same for hm, n whch event, the carrer may
dever the ta -free or specay denatured acoho or undenatured ethy acoho to
such agent. Such affdavts sha he ffed n the same manner as recepts, n ac-
cordance wth the provsons of secton 182.909. (Sees. 310 , 3107, 3111, 3111(a),
312 (a) (6), .3176, I. R. C)
Sec. 182.911. Inabty to Dever. When ta -free or specay denatured aco-
ho, or undenatured ethy acoho n tank trucks, cannot for any reason bo dev-
ered by the carrer at the pont of destnaton, the currer sha return t to the
orgna shpper n accordance wth the reguatons of the Interstate Commerce
Commsson, uness the dstrct supervsor, upon appcaton of the consgnor,
authorzes devery of the acoho to another permttee.
(a) Notfcaton. When acoho or denatured acoho or undenatured ethy
acoho s so returned, the carrer sha notfy the orgna shpper and sha for-
ward a copy of the notfcaton to the dstrct supervsor of the dstrct n whch
the orgna shpper s ocated wth a statement of the facts. (Sees. 310 , 3107,
3111, 311 (a), 312 (a) (6), 3176,1. R. O.)
868972 0 13
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

8

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
Regs. 3, 182.122, etc.
170
Sec. 182.912. Record ook To e ept. ach person hodng a basc permt
(Form 1 ) to transport ta -free or specay denatured acoho, or undenatured
ethy acoho n tank trucks, s requred to keep at the pace of shpment a record
n book form contanng the foowng nformaton coverng such acoho receved
for transportaton:
(a) Name and address of the consgnor and consgnee:
(6) nd (ta -free, specay denatured or undenatured ethy acoho) and
quantty of acoho contaned n each package or other contaner; and
(c) Date of shpment.
(Sees. 310 , 3107, 311 , 312 (a) (6), 3176, I. R. C.)
Sec. 182.913. Change n Propretorshp, tc. Where there s a change n the
propretorshp, persons nterested n the busness, or change n the ndvdua,
frm, or corporate name, trade name or stye of a carrer hodng basc permt to
transport ta -free or specay denatured acoho, or undenatured ethy acoho
n tank trucks, the carrer must compy wth the provsons of sectons 182.6 0 to
182.6 2. ( Sees. 310 , 3107, 312 ( a ) (6), 3176, I. R. C.)
3. In order to meet the needs of the ndustry, ths Treasury Decson
sha be effectve upon pubcaton n the Federa Regster.
(Sectons 2808, 2829, 288 , 2891, 3070, 3101, 310 , 3106, 3107, 3108,
3111, 3113, 311 , 311 , 312 (a) (6), 3170, 3171, 3176, Interna Revenue
Code, and secton 309(a), Tarff ct of 1930; 26 U. S. C. 2808, 2S29,
288 , 2891, 3070, 3101, 310 , 3106, 3107, 3108, 3111, 3113, 311 , 311 ,
312 (a) (6), 3170, 3171, 3176, and 19 U. S. C. Supp. , 1309(a).)
Dane . ogh,
ctng Commssoner of Interna Revenue.
pproved September 22, 19 9.
Thomas . Lynch,
ctng Secretary of the Treasury.
(Pubshed n the Federa Regster September 28, 19 9)
Reguatons 3, Sectons 182.122, 182.270, 19 9-20-13199
and 182.272. T. D. 7 2
TITL 26 INT RN L R NU . C PT R I, SU C PT R C. P RT 182.
INDUSTRI L LCO OL
mendng Reguatons 3
Treasury Department,
Offce of Commssoner of Interna Revenue,
Washngton 86, D. C.
To Dstrct Supervsors and Others Concerned:
1. The frst paragraph of secton 182.122, the frst paragraph and
paragraph (a) of secton 182.270, and secton 182.272 of Reguatons
3 (26 CFR, Part 182), approved March 6,19 2, as amended, are hereby
further amended by strkng out the vaue 1,000, wherever such
vaue appears theren, and substtutng therefor the vaue of ,000.
2. The effect of these amendments s to e empt from ndemnty bond
requrements and, budngs, and equpment, the vaue of whch s
ess than ,000, n certan stuatons n whch an ndemnty bond n
eu of the Government s en s requred by the e stng reguatons.
These stuatons ncude (1) the addton of property to the ndustra
acoho pant premses where an ndemnty bond has been fed n eu
of the wrtten consent of the owner or en hoder, (2) the ateraton or
demoshment of budngs on whch a en for ta es e sts, and (3)
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

8

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
171
Regs. 3, 182.169, etc.
the remova of apparatus or equpment on whch a en for ta es e sts.
Indemnty bonds heretofore fed n such cases n a pena sum of ess
than ,000 may be termnated as to future abty by the dstrct
supervsor upon approprate appcaton therefor by the dster or the
surety.
3. It s found that compance wth the notce and pubc rue-
makng procedure of the dmnstratve Procedure ct s unnecessary
n connecton wth the ssuance of these reguatons for the reason that
the amendments are of a berazng nature.
. Ths Treasury Decson sha be effectve mmedatey upon ts
pubcaton n the Federa Regster.
. Ths Treasury Decson s ssued under the authorty contaned
n sectons 3103,310 ,3112(a), 312 (a) (6), and 3176,Interna Revenue
Code (U. S. C, tte 26, sectons 3103, 310 , 3112(a), 312 (a) (6), and
3176).
Geo. . Schoeneman. .
Commssoner of Interna Revenue.
pproved September 9, 19 9.
Thomas . Lynch,
ctng Secretary of the Treasury.
(Pubshed n the Federa Regster September 1 ,10 0)
Reguatons 3, Sectons 182.1C9, tc. 19 9-23-13223
T. D. 7 1
TITL 26 INT RN L R NU . C PT R I, SU C PT R C, P RT 182.
INDUSTRI L LCO OL
mendng Reguatons 3
Treasury Department,
Offce of Commssoner of Interna Revenue,
Washngton 2 , D. C.
To Dstrct Supervsors and Others Concerned:
1. Sectons 182.169. 182.29 , 182. 1(6). 182.6 3(6). 182.687(6),
182.712, 182.7 (6), 182.806(6), 182.829(6), and 182.829(6) (3) of
Reguatons 3 (26 CFR, Part 182), approved March 6, 19 2, are
amended; sectons 182.710a and 182.712a are added to such regua-
tons; and secton 182.710 of such reguatons s revoked.
Sec. 1SS.1G9. ond, Form 1 -18. very person fng an appcaton for a basc
permt to use acoho free of ta upon tng hs appcaton, Form 1 7, and before
Issuance of permt pursuant thereto, sha e ecute a bond on Form 1 8, Ta -
Free coho User s Uond, n trpcate, n conformty wth the provsons of
sectons 182.18 through 1S2.203, and fe the same; wth the dstrct supervsor:
Provded, That no bond w be requred where appcatons are fed by a State
or Terrtory, or muncpa subdvson thereof, or by the Dstrct of Coumba,
or where the quantty of acoho covered by basc permt, Form 11 7, does not
e ceed 60 wne gaons per annum and the quantty whch may be on hand, n
transt, or unaccounted for at any one tme does not e ceed wne gaons (10
proof gaons). (Sees. 310 , 3108, 312 (a) (0), 3176,1. R. C.)
Sec. 182.293. Procedure ppcabe. The foregong provsons of ths artce
respectng the acton requred of dstrct supervsors n connecton wth appca-
tons for orgna basc permts w be foowed, to the e tent appcabe, where
there s a change n the ndvdua, nn, or corporate name, or n the trade name
or stye, where the premses are to be operated ntay under a trade name or
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

8

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
Regs. 3, 182.169, etc.
172
stye, or where there s a change n the propretorshp, ocaton, premses, con-
structon, apparatus and equpment, or n the type of premses or operaton, or
where there s a change n the tte to ndustra acoho pant or bonded ware-
house property, or where such property becomes sub|ect to a mortgage, |udg-
ment, or other encumbrance, or where operatons are permanenty dscontnued:
Provded, That In the case of Industra acoho pants, bonded warehouses, or
denaturng pants, wdere there s a change n the ndvdua, frm, or corporate
name of the permttee, or where an ndustra acoho pant s to be agan operated
under a trade name or stye prevousy approved by the Commssoner, or where
an ndustra acoho pant has been operatng as a regstered dstery or as a
frut dstery and s to be agan operated as an ndustra acoho pant by the
propretor whose quafcatons were prevousy approved by the Commssoner,
the dstrct supervsor may authorze the commencement of operatons pror to
the revew of the quafyng documents by the Commssoner. In such cases,
the dstrct supervsor w notfy the permttee by etter and attach one
copy of such etter to the quafyng documents. (Sees. 310 , 312 (a)(6),
3176, I. . C.)
Sec. 182. 1(6). Wthdrawa permt. If the appcaton s approved by the
dstrct supervsor, he w ssue a wthdrawa permt on Part II of the Form
1 36: If the appcant s basc permt on Form 1 33 for hs bonded warehouse
mts the quantty of acoho that may be on hand, n transt, and unaccounted
for at any one tme, the quantty authorzed by the wthdrawa permt on Form
1 36 to be wthdrawn durng any caendar month, sha not e ceed such quantty
specfed n the appcant s basc permt. The dstrct supervsor w forward
the orgna copy of the wthdrawa permt to the appcant and w retan the
dupcate copy for hs fes. When the propretor of the recevng warehouse
desres to procure acoho, he w forward the orgna of the wthdrawa permt
to the propretor of the bonded warehouse named theren from whom he desres
to procure the acoho. Upon shpment, the propretor of the shppng warehouse
w enter the shpment on the permt and return t to the consgnee, uness he
has been authorzed by the consgnee to retan the permt for the purpose of
makng future shpments. No acoho may be shpped by a consgnor named n
the wthdrawa permt unt such permt s n hs possesson. cept as pro-
vded n paragraph ( f), further ke transfers may he made under such permt
durng the term for whch t s ssued.
Sec. 182.6 3(6). Wthdrawa permt. If the appcaton s approved by the
dstrct supervsor, he sha ssue wthdrawa permt on Part II of Form 1 0.
The permt sha specfy the quantty that may he procured durng any caendar
month and the tota quantty that may be procured durng the perod for whch
the wthdrawa permt s ssued. The tota quantty authorzed by the wth-
drawa permt sha not e ceed that f ed n the basc permt. Form 1 7, and
the tpantty that may be wthdrawn durng any caendar month sha not e ceed
one-twefth of such quantty: Provded, That f the wthdrawa permt, Form
1 0, s ssued for a perod of ess than 12 months, the quantty authorzed to be
wthdrawn n any caendar month sha be n proporton to the perod for whch
the wthdrawa permt s ssued; for e ampe, f the wthdrawa permt s ssued
for a perod of 6 months, not over one s th of the tota quantty specfed theren
may be wthdrawn durng a caendar month : nd provded further. That where
tbe wthdrawa permt s ssued for a perod ess than that covered by the ap-
pcant s basc permt, the tota quantty authorzed n the wthdrawa permt
sha be n proporton to the une pred term of the basc permt. The wthdrawa
permt sha specfy the date when the same sha be avaabe for wthdrawa
purposes. The dstrct supervsor w forward the orgna copy of the wth-
drawa permt to the permttee and w retan the dupcate copy for hs fes.
Sec. 182.6S7I ). Wthdrawa permt. If the appcaton s approved by the
dstrct supervsor, he w ssue a wthdrawa permt on Part II of the Form 1 63.
Where the appcant s basc permt mts the quantty of acoho, specay de-
natured acoho, and recovered or restored denatured acoho that may be on
hand, n transt, and unaccounted for at any one tme at the denaturng pant,
the quantty authorzed by the wthdrawa permt to be wthdrnwn durng any
caendar month sha not e ceed the quantty so mted n the basc permt.
The dstrct supervsor w forward the orgna copy of the wthdrawa permt
to the appcant and w retan the dupcate copy for hs fes. When the
propretor of the denaturng pant desres to procure acoho, he w forward
the orgna of the wthdrawa permt to the propretor of the ndustra acobo
pant or bonded warehouse named theren from whom he desres to procure
acoho. Upon shpment, the propretor of the ndustra acoho pant or ware-
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

8

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
173
Regs. 3, 182.169, etc.
house w enter the shpment on the permt and return t to the denaturer,
uness he has been authorzed by the denaturer to retan the permt for the pur-
pose of makng future shpments. No acoho may be shpped by a consgnor
named n the wthdrawa permt unt such permt s n hs possesson. cept
as provded In paragraph (d), further ke transfers may be made under such
permt durng the term for whch t was ssued.
Sec. 182.710a. Form 1 72. report of each sampe submtted by the store-
keeper-gauger for anayss sha be prepared by hm on Form 1 72, Report on
Denaturnnts, n trpcate and forwarded to the chemst. (Sees. 3070, 3102,
310 , 312 (a)(0), 3170, I. R. C.)
Sec. 182.712. Report of nayss y the Chemst. Upon competon of the
anayss of the denaturants, the authorzed chemst sha make a report of hs
anayss on the Form 1 72, n trpcate, receved from the storekeeper-gauger,
note hs approva or dsapprova of the sampes thereon, and sgn the same.
One copy of the Form 1 72 sha be returned to the storekeeper-gauger n charge
of the denaturng pant, one copy sha be forwarded to the dstrct supervsor
and the remanng copy sha be transmtted to the Commssoner. (Sees. 3070,
3102, 310 , 312 (a) (6), 3170, I. R. C.)
Sec. 182.712a. Retenton of Sampes. The chemst must hod a sampes of
denaturng grade wood acoho, methy acoho, and denaturants used for com-
petey denatured acoho for 6 months, and other sampes of denaturants for 30
days, so that they w be avaabe for future reference, f necessary. (Sees.
3070, 3102. 310 , 312 (a) (6), 317G, I. R. C.)
Sec. 182.7 (6). Wthdrawa permt. If the appcaton s approved by the
dstrct supervsor, e w ssue a wthdrawa permt on Part II of Form 1 0 .
Where the appcant s basc permt, Form 1 33, mts the quantty that may be
on hand, In transt, and unaccounted for at any one tme at hs denaturng pant,
the quantty of specay denatured acoho authorzed by the permt to be wth-
drawn durng a caendar month sha not e ceed the quantty of acoho, specay
denatured acoho, and recovered or restored denatured acoho authorzed by
the appcant s basc permt to be on hand, n transt, and unaccounted for at
any one tme at the denaturng pant, ess the quantty of ethy acoho author-
zed to be wthdrawn pursuant to wthdrawa permt, Form 1 03. The dstrct
supervsor w forward the orgna copy of the wthdrawa permt to the ap-
pcant and w retan the dupcate copy for hs fes. When the propretor of
the recevng denaturng pant desres to procure specay denatured acoho,
he w forward the orgna of the wthdrawa permt to the propretor of the
denaturng pant named theren from whom he desres to procure specay
denatured acoho. Upon shpment, the propretor of the shppng denaturng
pant w enter the shpment on the permt and return It to the recevng de-
naturer, uness he has been authorzed by the recevng denaturer to retan the
permt for the purpose of makng future shpments. No specay denatured
acoho may be shpped by a consgnor named n the wthdrawa permt unt
such permt s n hs possesson. cept as provded n paragraph (rf), further
ke transfers may be made under such permt durng the term for whch t was
ssued.
Sec. 182.800(6). Wthdrawa permt. If the appcaton s approved by the
dstrct supervsor, he sha ssue wthdrawa permt on Part II of Form 1 77.
The permt sha specfy the quantty that may be procured durng any caendar
month and the tota quantty that may be procured durng the perod for whch
the wthdrawa permt s ssued. The tota quantty authorzed by the wthdrawa
permt sha not e ceed that f ed n the basc permt. Form 1 76, and the quantty
that may be wthdrawn durng any caendar month sha not e ceed one-twefth
of such quantty: Provded, That If the wthdrawa permt. Form 1 77, s ssued
for a perod of ess than 12 months, the quantty authorzed to be wthdrawn n
any caendar month sha be n proporton to the perod for whch the wthdrawa
permt s ssued; for e ampe, f the wthdrawa permt s ssued for a perod of
6 months, not over one-s th of the tota quantty specfed theren may be wth-
drawn durng a caendar month: nd provded further. That where the wth-
drawa permt Is ssued for a perod ess than that covered by the appcant s
basc permt, the tota quantty authorzed n the wthdrawa permt sha be n
proporton to the une pred term of the basc permt. The wthdrawa permt
sha specfy the date when the same sha be avaabe for wthdrawa purposes.
The dstrct supervsor w forward the orgna copy of the wthdrawa permt
to the permttee and w retan the dupcate copy for hs fes.
Sec. 182.829(6). Wthdrawa permt. If the appcaton s approved by the
dstrct supervsor, he sha ssue wthdrawa permt on Part II of Form 1 8 .
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

9

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
Regs. 3, 182.169, etc.
17
The permt sha specfy the quantty that may e procured durng any caendar
month and the tota quantty that may be procured durng the perod for whch
the wthdrawa permt s ssued. The tota quantty of each formua author-
zed by the wthdrawa permt sha not e ceed the quantty of such formua
f ed n the basc permt. Form 1 S1, and the quantty of such formua that may
be wthdrawn durng any caendar month sha not e ceed one-twefth of such
quantty : Provded, That f the wthdrawa permt, Form 1 8 , s ssued for a
perod of ess than 12 months, the quantty authorzed to be wthdrawn n any
caendar month sha be n proporton to the perod for whch the wthdrawa
permt s ssued; for e ampe, f the wthdrawa permt s ssued for a perod
of 0 months, not over one-s th of the tota quantty specfed theren may be
wthdrawn durng a caendar month, sub|ect to the provsons of subparagraphs
(1) and (2) : nd provded further, That where the wthdrawa permt s ssued
for a perod ess than that covered by the appcant s basc permt, the tota
quantty authorzed n the wthdrawa permt sha be n proporton to the une -
pred term of the basc permt. If wthdrawas are to be made n drums or
barres, the permt sha be n mutpes of wne gaons. The wthdrawa per-
mt sha specfy the date when the same sha be avaabe for wthdrawa
purposes. The dstrct supervsor w forward the orgna copy of the wth-
drawa permt to the permttee and w retan the dupcate copy for hs fes.

(3) cepton. The dstrct supervsor may, n hs dscreton, by approprate
modfcaton or amendment of the wthdrawa permt, pursuant to appcaton
on Part I of Form 1 8 , and, n the case of (1) and (2), upon proper showng of
necessty therefor, (1) n the case of a seasona busness, authorze wthdrawa
durng any caendar month of not to e ceed a 2 months aowance, or (2) ssue
to the permttee, n eu of an annua permt, Form 1 8 , one or more wth-
drawa permts for a specfed quantty or perod, sub|ect to the restrctons n
ths secton as to the ma mum quantty that may be wthdrawn durng any one
month, or (3) where the quantty that may be wthdrawn durng a caendar
month under paragraph (6) amounts to ess than 1 drum ( wne gaons),
authorze the wthdrawa durng a caendar month of a quantty not e ceedng
1 drum ( wne gaons), or ( ) where the appcant does not have on fe a
bond and the quantty that may be wthdrawn durng a caendar month under
paragraph (b) amounts to ess than wne gaons, authorze the wthdrawa
durng a caendar month of a quantty not e ceedng wne gaons: P ovded,
That the tota quantty authorzed under (1), (2), (3), or ( ), pursuant to a
Forms 1 S ssued to any permttee, sha not e ceed the quantty specfed n
the appcant s basc permt, Form 1 81, that may be wthdrawn durng the
perod for whch t s ssued: Provded further, That such addtona wth-
drawas sha not be authorzed under (1), (2), or (3), uness the bond of the
permttee s n a suffcent pena sum to cover the ncreased quantty n addton
to the reguar wthdrawa aowance.
2. The amendment of secton 182.169 brngs ths secton nto agree-
ment wth secton 182.6 3(6) (3) n respect to bond requrements n
those cases where quanttes of ta -free acoho n e cess of wne
gaons (10 proof gaons) at one tme are procured for economc rea-
sons by permttees whose permts mt the annua wthdrawa and use
to 6(1 wne gaons.
3. The dstrct supervsor s, under the amendment of secton
182.29 , authorzed to permt the resumpton of operatons by an n-
dustra acoho pant whch has been operatng as a regstered ds-
tery or a frut dstery and whch has been prevousy approved by
the Commssoner, pror to revew of the quafyng documents by the
Commssoner.
. The requrement that the dstrct supervsor of the recevng
dstrct prepare and furnsh the dstrct supervsor of the shppng
dstrct a copy of the wthdrawa permt, n those cases nvovng nter-
dstrct shpments of acoho and specay denatured acoho, has
been deeted bv the amendment of sectons 182. 1(6), 182.6 3(6),
182.687(6), 182.77 (6), 182.806(6), and 182.829(6).
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

9

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
17
Regs. 3, 182.392, etc.
. Form 1 72 s prescrbed for use n connecton wth the subms-
son and approva of sampes of denaturants, n eu of Forms 1 70
and 1 72, under the provsons of sectons 182.710a and 182.712. Sec-
ton 182.710 reatng to Form 1 70 s revoked. Paragraph (b) of sec-
ton 182.712 has been rewrtten as secton 182.712a.
6. The amendment of secton 182.829(6) s for the purpose of n-
surng that quanttes of specay denatured acoho authorzed to be
wthdrawn and used under basc permt, Form 1 81, w be wthn the
tota authorzed by a wthdrawa permts, Form 1 8 , ssued n any
case.
7. It s found that, compance wth the notce, pubc rue-makng
procedure, and effectve date requrements of the dmnstratve Proce-
dure ct s unnecessary n connecton wth the ssuance of these regu-
atons for the reason that the amendments are of a carfyng, bera-
zng, and admnstratve nature.
8. Ths Treasury Decson sha be effectve mmedatey upon ts
pubcaton n the Federa Regster.
9. Ths Treasury Decson s ssued under the authorty contaned
n sectons 3070. 3102, 310 , 3108, 312 (a)(0), and 3176, Interna
Revenue Code (U. S. C, tte 26, sectons 3070, 3102, 310 , 3108, 312
(a)(6), and 3176).
Fred S. Martn,
ctng Commssoner of Interna Revenue.
pproved October 1 , 19 ).
Thomas . Lynch,
ctng Secretary of the Treasury.
(Pubshed n the Federa Regster October 20, 19 9)
Reguatons 3, Sectons 182.392, tc. 19 9-19-13180
T. D. 73
TITL 20 INT RN L R Y N I . Cn PT R I, SU C PT R C, P RT 182.
PRODUCTION OF INDUSTRI L LCO OL
mendng Reguatons 3
Treasury Department.
Offce of Commssoner of Interna Revenue,
Washngton 2 , D. C.
To Dstrct Supervsors and Others Concerned:
1. On une 3, 19 9, notce of proposed rue makng regardng the
wthdrawa of sampes of acoho by propretors of ndustra acoho
pants was pubshed n the Federa Regster (1 F. R. 2918).
2. No ob|ectons havng been receved to the proposa, sectons
182.392, 182.393, 182.39 , 182.39 , 182.397, 182.398, and 182.399 of
Reguatons 3 (26 CFR, Part 182), approved March 6, 19 2, reatng
to the producton of ndustra acoho, are amended to read as foows:
Sec. 182.392. Unfnshed coho. Upon approva by the storekeeper-gauger
In charge at the pant of a wrtten appcaton fed n accordance wth the pro-
vsons of secton 182.39-(a), the propretor may take sampes of acoho n the
course of dstaton and pror to ts depost n the recevng cstern. The sze of
such sampes sha not e ceed 1 quart, and the number of sampes taken must
be restrcted to the mnmum necessary to determne the quaty of the acoho
beng produced. In any case where a quart sampe s consdered nsuffcent for
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

9

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
Regs. 3, 182.392, etc.
176
the purpose for whch t s ntended, the dstrct supervsor, upon recept of a
wrtten appcaton fed n accordance wth the provsons of secton 182.39 (6),
may authorze the wthdrawa of sampes of a sze greater than 1 quart. (Sees.
310 , 312 (a) (6), and 3176, I. R. C.)
Sec. 182.393. Fnshed coho. Upon approva by the storekeeper-gauger
n charge at the pant of a wrtten appcaton fed n accordance wth the pro-
vsons of secton 182.39 (a), the propretor may take sampes of fnshed acoho
from the recevng room of the ndustra acoho pant for chemca anayss,
ncudng organoeptc e amnaton, ony. The sze of such sampes sha not
e ceed 1 quart, and the number of sampes taken must be restrcted to the mn-
mum necessary for the purpose ntended. In any case where a quart sampe s
consdered Insuffcent for the purpose for whch t s ntended, the dstrct super-
vsor, upon recept of a wrtten appcaton fed n accordance wth the pro-
vsons of secton 182.39 (b), may authorze the wthdrawa of sampes of a sze
greater than 1 quart. (Sees. 310 , 312 (a) (0), and 3176, I. R. C.)
Sec. 182.39 . pp|caton. (o) To the stmckecper-gauger. When the pro-
pretor desres to procure sampes of unfnshed acoho or of fnshed acoho,
and such sampes are of a sze not n e cess of 1 quart, he sha make appcaton,
n trpcate, to the storekeeper-ganger n charge at the pant. The appcaton
sha be gven a sera number begnnng wth 1 for the frst appcaton and
runnng consecutvey thereafter. The appcaton sha specfy the reasons why
the sampes are desred, the number and sze of the sampes to be taken, and
the pace or paces of remova. Where t s desred to take sampes from the
pant reguary for the purpose specfed, the appcaton may be made for that
purpose. No sampe may be taken unt the appcaton s approved.
(6) To the dstrct supervsor. Where the propretor desres to procure sam-
pes of unfnshed acoho or of fnshed acoho, and such sampes are of a sze
greater than 1 quart, he sha make appcaton, n trpcate, to the dstrct
supervsor. The appcaton sha be gven a sera number wthn the seres
prescrbed n subsecton (a) of ths secton, and sha show the reasons why
the sampes are desred, the number and sze of the sampes to be taken, the
pace or paces of remova, and the reasons why sampes of a sze n e cess of
1 quart are consdered necessary. No sampes may be taken unt the appcaton
s approved. (Sees. 310 , 312 (a) (6), and 3170, I. R. C.)
Sec. 182.39 . pprova of ppcaton. (a) y the storekeeper-gauffer n
charge at the pant. The storekeeper-gauger must satsfy hmsef as to the need
for the number of sampes desred and the egtmacy of the purpose for whch
they are to be used before approvng the appcaton. Upon approva or dsap-
prova, the storekeeper-gauger sha note such acton upon each copy of the
appcaton, return one copy to the propretor, forward one copy to the dstrct
supervsor, and retan the orgna copy n hs offce.
(6) y the dstrct supervsor. The dstrct supervsor must satsfy hmsef
from the facts presented as to the need for the sampes and the egtmacy of the
purpose for whch they are to be used before approvng the appcaton. Upon
approvng or dsapprovng the appcaton, he sha retan a copy n hs offce
and return the orgna and one copy to the storekeeper-gauger n charge at the
pant, who sha fe the orgna and return the copy to the appcant. (Sees.
310 , 312 (a) (6), and 3170, I. R. C.)
Sec. 182.397. Labe. t the tme of the wthdrawa of a sampe the propretor
sha prepare a abe and a copy thereof. The abe and copy sha be prepared
on paper havng appro mate dmensons of 3 nches by nches. The propretor
sha show on the abe and on the copy, n the order sted and upon separate
nes, the foowng nformaton:
(1) The word Sampe ;
(2) The sera number of the approved appcaton coverng the wthdrawa
of the sampe;
(3) The knd (fnshed or unfnshed) of acoho;
( ) The pace from whch the sampe was removed;
( ) The name of the propretor, foowed by the regstered number of the
pant;
(6) The sze of the sampe;
(7) If the sampe s to he anayzed at other than the mmedate or contgu-
ous premses of the propretor, the name and address of the aboratory or
purchaser to whch the sampe s to be sent.
Upon competon, the abe and the copy sha be presented to the storekeeper-
gauger, who sha verfy the accuracy of the data thereon, date and sgn both
copes, and supervse the aff ng of the abe to the sampe contaner. The copy
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

9

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
177
Regs. 3, 182. , etc.
of the abe sha be fed by the storekeoper-gauger n accordance wth the pro-
vsons of secton 182.398. (Sees. 310 , 312 (a) (0), and 3176, I. R. C.)
Sec. 182.398. Offce Recoup. The propretor sha furnsh suffcent fe cases
for the fng and retenton of sampe records. The copes of abes sha be kept
by the storekeeper-gauger us a record of sampes removed, and sha be fed
numercay by appcaton number and chronoogcay by date. (Sees. 810 ,
312 (a) (6), ard 3176, I. R. C.)
Sec. 182.399. Dsposton of Sampes. The sampes must be used soey for
chemca anayss, ncudng organoeptc e amnaton. They may not be fur-
nshed to saesmen and deaers for advertsng or soctng purposes. Where
acoho s sod sub|ect to approva as to quaty, a sampe taken pursuant to the
provsons of sectons 182.393 to 1S2.397, ncusve, may be furnshed the pur-
chaser. Remnants or resdues of sampes taken from the ndustra acoho
pant or recevng room remanng after anayss or e amnaton, and whch
are not desred to be retaned as aboratory specmens or further anayss or
e amnaton, must be returned to vesses n the dstng system or recevng
tanks, uness the condton of the remnants or resdues s such as to render them
umutahe for such dsposton. If such remnants or resdues of sampes are
unsutabe for return, they shoud be destroyed n the presence of the store-
keeter-gauger. (Sees. 310 , 312 (a) (6), and 3170,1. R. C.)
3. These amendments nre desgned to estabsh approprate mta-
tons and requrements for the wthdrawa by propretors of ndustra
acoho pants of sampes of acoho for aboratory anayss, ncudng
organoeptc e amnaton.
. Ths Treasury Decson sha be effectve on the thrty-frst day
foowng the date of ts pubcaton n the Federa Regster.
. Ths Treasury Decson s ssued under the authorty contaned
n sectons 810 , 812 (a)(6), and 3176. Interna Revenue Code
(U. S. C, tte 20, sectons 310 ), 312 (a) (6), and 3176).
Geo. . Scoeneman,
Commssoner of Interna Revenue.
pproved ugust 2 , 10 0.
Thomas . Lynch,
ctng Secretary of the Treasury.
(Pubshed n the Federa Regster ugust 31,19 9)
Reguatons 3, Sectons 182. . tc. 10 0-17-131 8
T. D. 71
TITL 20 INT RN L R NU . C PT R I, SU C PT R C, P RT 182.
INDUSTRI L LCO OL
mendng Reguatons 3
Treasury Department,
Offce of Commssoner of Interna Revenue,
Washngton 2 , D. C.
To Dstrct Supervsors and Others Concerned:
1. The frst paragraph of secton 182. , the frst paragraph of sec-
ton 182.6 , the frst paragraph of secton 182.6 6, secton 182.6 8(a),
(b), the frst paragraph of secton 182.787, and the frst paragraph of
secton 182.822 of Reguatons 3 (26 CFR, Part 182), approved
March 6,19 2, are amended to read as foows:
Sec. 182. 0 . Genera. The propretor of every ndustra acoho pant sha
keep a monthy record on Forms 1 2 and 1 8S (f a bonded warehouse s not
mantaned on the ndustra acoho pant promses), n trpcate, as herenafter
provded. of the nformaton caed for n each form, as ndcated by the
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

9

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
Regs. 3, 182. , etc.
178
headngs of coumns and nes of the form and the nstructons prnted thereon
or ssued n respect thereto, and as requred by these reguatons, w be gven.
ntres sha be made on the forms before the cose of the busness day ne t
succeedng the day on whch the transactons occur, e cept that summary entres
w be made at the cose of the month. Where the makng of entres s deferred
to the ne t busness day, as authorzed heren, approprate memoranda sha be
mantaned for the purpose of makng the entres correcty.

Sec. 182.6 . Form 1 3- . The propretor of every bonded warehouse sha
keep a monthy record, Form 1 3- , Report of Uncoopered coho, and render
monthy reports thereon, n trpcate, of a uncoopered acoho produced, re-
ceved, and dsposed of. efore the cose of the busness day ne t succeedng
the day on whch the transactons occur entres sha be made n the respectve
coumns of the quantty of acoho produced and deposted n the warehouse, or
receved n bond at the bonded warehouse, or packages fed, and the quanttes
wthdrawn for shpment uncoopered. Where the makng of the entres s deferred
to tho ne t busness day, as authorzed heren, approprate memoranda sha be
mantaned for the purpose of makng the entres correcty.

Sec. 182.6 6. Form 1 3- . The propretor sha keep monthy record on
Form 1 3- , Report of coho n Packages, n trpcate. There sha be en-
tered day the quantty of acoho transferred at the warehouse to packages or
receved n packages from other bonded warehouses and the quanttes wthdrawn
for shpment n packages from the warehouse. ntres of wthdrawas of acoho
for ta pnyment and depost n the ta -pad storeroom (f any) shoud show the
dsposton of such acoho to the propretor of the warehouse for such purpose.
When acoho s wthdrawn n packages drecty from recevng tanks n an n-
dustra acoho pant on the same premses, t sha be regarded, for accountng
purposes, as havng been constructvey warehoused and a records of produc-
ton, depostng, and wthdrawa of such acoho sha be made as for acoho
actuay entered nto the warehouse n orgna packages or n storage tanks.
The requred entres sha be made n the form before the cose of the busness
day ne t succeedng the day on whch the transactons occur. Where the makng
of the entres s deferred to the ne t busness day, as authorzed heren, appro-
prate memoranda sha be mantaned for the purpose of makng the entres
correcty.

Sec. 182.6 8. (a) Tme of makng entres. ntres sha be made on Record
2 and Form 2- , as ndcated by the headngs of the varous coumns and n
accordance wth nstructons prnted on the forms before the cose of the bus-
ness day ne t succeedng the day on whch the transactons occur. Where the
makng of the entres s deferred to the ne t busness day, as authorzed heren,
the propretor sha mantan a separate record, such as nvoces, of the re-
movas of acoho, showng the remova data requred to be entered on Record
2 or Form 2- , and approprate memoranda of other transactons requred
to be entered on such records, for the purpose of makng the entres correcty.
(6) Separate record of sera numbers of crses. Sera numbers of cases of
acoho dsposed of need not be entered on Record 2 or Form 2- provded
the propretor keeps n hs pace of busness a separate record approved by the
dstrct supervsor showng such sera numbers wth necessary dentfyng data,
ncudng the date of remova and the name and address of the consgnee. Such
separate record may be kept n book form (ncudng oose-eaf books) or may
consst of commerca papers, such as nvoces or bs. Such books, nvoces,
or 1 11s sha be preserved for a perod of years and n such a manner that
the requred nformaton may be ascertaned ready therefrom and durng such
perod sha he-avaabe durng busness hours for nspecton and the takng of
abstracts therefrom by revenue offcers. ntres sha be made on such separate
approved record before the cose of the busness day ne t succeedng the day
on whch the transactons occur. Where the makng of the entres s deferred
to the ne t busness day, as authorzed heren, approprate memoranda sha be
mantaned for the purpose of makng the entres correcty. The propretor
whose separate record has been approved by the dstrct supervsor sha make
a notaton on Record 2 or Form 2- n the coumn for reportng sera num-
bers as foows: Sera numbers shown on commerca records per authorty
dated

G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

9

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
179
Regs. 3, 182. , etc.
Sec. 182.787. Fobms 129 and 1 68- , , C, D, , and F. The propretor sha
keep a monthy record on Forms 129 and 1 68- , , C, D, , and F, In trpcate,
of a acoho nnd denaturants used for denaturaton, and removed (ether before
or after denaturaton) durng the month, and on hand the frst and ast of the
month. ntres sha be made on the forms before the cose of the busness ( ay
ne t succeedng the day on whch the transactons occur, e cept that summary
entres w be made at the cose of the month. Where the makng of the entres
s deferred to the ne t busness day, as authorzed heren, approprate memo-
randa sha be mantaned for the purpose of makng the entres correcty.

Sec. 1S2.S22. Record, Form 1 78. very bonded deaer hodng permt to dea
n specay denatured acoho must keep Form 1 78, n trpcate, coverng hs
transactons for each mouth. One copy of the form sha he retaned by the
bonded deaer and the two remanng copes must be forwarded by the bonded
deaer on or before the ffth day of the succeedng month to the dstrct super-
vsor. There w be entered day the detas of a specay denatured acoho
receved, and when receved from a denaturng pant the number of such pant
sha be entered n the coumn provded therefor. The amount of specay
denatured acoho ost from each ot n transt to the bonded deaer s storeroom
w be entered n the proper coumn on the same ne wth the quantty reported
receved n such ot. The quanttes reported ost n transt w not be ncuded
In the osses n the storeroom reported n the summary. Detas w be entered
day of a specay denatured acoho dsposed of to manufacturers or other
bonded deaers or any other dsposton of such specay denatured acoho.
The number of the basc permt of the manufacturer or bonded deaer to whom
specay denatured acoho s shpped sha aso be appropratey entered.
Where severa packages are shpped or devered on the same day to the same
person, the aggregate quantty so shpped or devered may be stated on one
ne. The requred entres sha be made n the form before the cose of the
busness day ne t succeedng the cay on whch the transactons occur. Where
the makng of the entres s deferred to the ne t busness day, as authorzed
heren, approprate memoranda sha be mantaned for the purpose of makng
the entres correcty.

2. These amendments are ntended for the purpose of aowng ad-
dtona tme for makng requred entres n Forms 2- , 129, 1 2,
1 3- , 1 3- , 1 G8- , , C, D, , and F, 1 78,1 88, and Record 2.
3. It s found that compance wth the notce and pubc rue-
makng procedure of the dmnstratve Procedure ct ( U. S. C.
1001 et seq.) s unnecessary n connecton wth the ssuance of these
reguatons for the reason that the changes made are of a berazng
character.
. Ths Treasury Decson sha bo effectve on the thrty-frst day
after the date of ts pubcaton n the Federa Regster.
. Ths Treasury Decson s ssued under the authorty contaned
n sectons 3070, 3101. 3103, 3121(c), 312 (a) (G), 3171, 3176, Interna
Revenue Code (U. S. C, tte 26, sees. 3070, 3101, 3103, 3121(c),
312 (a) (6), 3171, 3176).
Geo. . Schoeneman,
Commssoner of Interna Revenue.
pproved ugust 2,19 9.
Thomas . Lynch,
ctng Secretary of the Treasury.
(I ubshed n the Federa Regster ugust 9, 19 9)
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

9

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
Regs. 3, 182. 9 , 182. 9 . 180
Reguatons 3, Sectons 182. 9 and 182. 9 . 19 9-2 -132 3
T.D. 7 8
.TITL 26 INT RN L R NU . C PT R I, SU C PT R C, P RT 182.
INDUSTRI L LCO OL
mendng Reguatons 3
Treasury Department,
Offce of Commssoner of Interna Revenue,
Washngton 2 , D. C.
To Dstrct Supervsors and Others Concerned :
1. Sectons 182. 9 and 182. 9 of Reguatons 3 (26 CFR, Part 182).
approved March 6, 19 2, reatng to ndustra acoho, are hereby
amended as foows:
Opekaton op Industra coho onded Warehouses
e portaton of acoho free of ta
Sec. 182. 9 . port onds. onds coverng the e portaton of acoho may
be e ecuted by the e porter on one of the foowng forms n the pena sums
ndcated:
(a) Contnung drect e port bond. Form 1 /9 . If acoho s to be wthdrawn
from tme to tme on one bond, a contnung bond on Form 1 9 sha be fed. In
trpcate. The pena sum of such bond sha be suffcent to cover the ta at the
dsted sprts rate on the ma mum quantty of acoho that may reman un-
accounted for at any one tme, provded that the ma mum pena sum of such
bond sha not e ceed 200,000, but n no case sha the pena sum he ess than
1,000. coho wthdrawn for e portaton sha reman unaccounted for unt
satsfactory proof of andng abroad, or oss at sea or n transt to the port of
e port, has been fed wth the dstrct supervsor, n accordance wth secton
182.00 or 182.012.
(6) Contnung transportaton for e port bond. Form . f9G. If acoho s to
be wthdrawn from tme to tme on one transportaton for e port bond, a con-
tnung bond on Form 1 96 sha be e ecuted, n trpcate. The bond w be
e ecuted n a pena sum suffcent to cover the ta at the dsted sprts rate
on the ma mum quantty of acoho that may reman unaccounted for at any
tme, provded that the ma mum pena sum of such bond sha not e ceed
200,000 but n no case sha the pena sum be ess than 1,000. coho wth-
drawn for transportaton for e port sha reman unaccounted for unt sats-
factory proof of cearance of the acoho from the port of e port, or of oss n
transt to the port of e port, s fed wth the dstrct supervsor, n accordance
wth secton 1S2.60 or 182.012.
(c) Drect e port bond. Form t91. If the bond s ntended to cover a specfc
ot of acoho wthdrawn for drect e portaton t sha be e ecuted on Form
1 97, n trpcate. The pena sum of such bond sha be not ess than the ta
at the dsted sprts rate on the quantty of acoho to be wthdrawn for
e portaton, provded that the ma mum pena sum of such bond sha not e ceed
200,000.
(d) Transportaton for e port bond. Form 98. If the acoho s to be wth-
drawn for transportaton for e port and a bond s gven ony for a specfc ot of
acoho, the bond sha be e ecuted on Form 1 98, n trpcate. The pena sum
of such bond sha be not ess than the ta at the dsted sprts rate on the
quantty of acoho to be wthdrawn for e portaton, provded that the ma mum
pena sum of such bond sha not e ceed . 200,000. (Sees. 310 , 312 (a) (6), 3176,
I. R. C.)
Sec. 182. 9 . pprova op ond and Issuance of Permt. The dstrct super-
vsor w e amne the bond and f t s propery e ecuted, as provded n sectons
182.18 through 182.20 , and n the ma mum pena sum, or n a suffcent pena
sum computed as prescrbed n secton 182. 9 , to cover the ta at the dsted
sprts rate on the acoho to be e ported, he sha note hs approva thereon,
retan one copy, forward one copy to the Commssoner, and return one copy to
the prncpa. If the e porter has comped wth the aw and reguatons n
a respects, the dstrct supervsor w ssue permt on a copes of Form 1 6
for remova and transportaton of the acoho and forward them to the store-
keeper-gauger n charge of the warehouse: Provded, That f the e porter Is not
the warehouseman, the dstrct supervsor fnds that he s entted to a permt
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

9

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
181
Regs. 3, 182.928, etc.
under secton 311 , I. R. C, and secton 182.106 of these reguatons. (Sees.
288 , 2886, 310 , 312 (a) (6), 3170, 3170, I. R. C.)
2. The purpose of these amendments s to prescrbe 200,000 as the
ma mum pena sum for e port bonds fed on Forms 1 9 , 1 96, 1 97,
and 1 98.
3. It s found that compance wth the notce and pubc rue-mak-
ng procedure of the dmnstratve Procedure ct ( U. S. C. 1001 et
seq.) s unnecessary n connecton wth the ssuance of these reguatons
for the reason that the changes made are of a berazng character.
. Ths Treasury Decson sha be effectve on the thrty-frst day
after the date of ts pubcaton n the Federa Regster.
(Sectons 288 , 2886, 310 , 312 (a)(6), 3170, and 3176 of the In-
terna Revenue Code (26U. S. C, sectons 288 ,2886,310 ,312 (a) (6),
3170, and 3176).)
Geo. . Schoeneman,
Commssoner of Interna Revenue.
pproved November 3, 19 9.
Thomas . Lynch,
ctng Secretary of the Treasury,
(Pubshed n the Federa Regster November 9, 19 9)
Reguatons 3, Sectons 182.928, tc. 19 9-17-131 9
T. D. 726
TITL 2t INT RN L R NU . C PT R I, SU C PT R C, P RT 182.
INDUSTRI L LCO OL
mendng Reguatons 3
Treasury Department,
Offce of Commssoner of Interna Revenue,
Washngton 2o, D. C.
To Dstrct Supervsors and Others Concerned:
1. Sectons 182.928, 182.929, 182.930. and 182.931 of Reguatons
3, Industra coho, approved March 6,19 2 (26 CFR, Part 182),
are hereby amended.
2. The purpose of these amendments s to revse the procedure for
the recordng of Government property and the dsposton of cap
seas used and removed at ndustra acoho pants, bonded ware-
houses, and denaturng pants.
3. It s found that compance wth the notce, pubc rue-makng
procedure, and effectve date requrements of the dmnstratve Pro-
cedure ct (Pubc, No. 0 , Seventy-nnth Congress) s unnecessary
n connecton wth the ssuance of these reguatons for the reason that
the changes made are of an admnstratve nature ony.
Sec. 1S2.92S. Remova ok Cap Seas cept as provded n secton 182.927,
cap seas whch have been aff ed may be removed ony by a storekeeper-danger
or some other offcer desgnated for the purpose by the dstrct supervsor.
The offcer w destroy a removed cap seas n a manner suffcent to prevent
ther further use. (Sees. 310 , 312 (a) (6), 3170, I. R. C.)
Sec. 182.929. Stoukkeepku- auger s Record of Cap and Lock Seas. record
of cap seas receved, used, and removed, and of ock seas receved and used
at each ndustra acoho pant, bonded warehouse, or denaturng pant, as
the ease may be, w be kept by storekeeper-frauf|ers on Form 289, Government
Offcer s Record and Report of Government Property, n accordance wth the
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

9

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
Regs. 3, ppend .
182
ttes of the coumns and nes and the nstructons on the form. Form 289
w be kept n the Government cabnet when not n use. (Sees. 310 ,
312 (a) (6), 317G, I. R. C.)
Sec. 182.930. Storekeeper-Gauger s Report of Government Property. On
or before the ffth day of the month succeedng that for whch the transactons
are reported, the storekeeper-ganger w prepare a monthy report on Form
289 of a Government property at the ndustra acoho pant, bonded ware-
house, or denaturng pant, as the case may be. Form 289 w be prepared n
dupcate, n accordance wth the ttes of the coumns and nes and the nstruc-
tons on the form, e w forward the orgna to the dstrct supervsor and
retan the copy for s fes. (Sees. 310 . 312 (a) (6), 3176, I. R. C.)
Sec. 182.931. Dstrct Supervsor s Report of Locks and Gaugng Instru-
ments. Dstrct, supervsors w be hed accountabe for the Government ocks
and seas, ncudng cap seats, supped upon ther respectve requstons, and
for those receved from ther predecessors n offce. Outgong dstrct supervsors
w take recepts from ther successors n offce for the Government ocks then
n use and on hand, and for seas on hand n the dstrct. Dstrct supervsors
w keep an account of ocks and gaugng nstruments and w make return
thereof semannuay to the Commssoner on Form 1 2, Return of Locks and
Gaugng Instruments. (Sees. 310 , 312 (a) (6), 3176, I. R. C.)
. Ths Treasury Decson sha be effectve on the thrty-frst day
after the date of ts pubcaton n the Federa Regster.
. Ths Treasury Decson s ssued under the authorty contaned
n sectons 310 , 312 (a)(6), and 3176, Interna Revenue Code (26
U. S. C. 310 , 312 (a) (6), and 3176).
Geo. . Schoeneman,
Commssoner of Interna Revenue.
pproved ugust , 19 9.
Thomas . Lynch,
ctng Secretary of the Treasury.
(Pubshed n the Federa Regster ugust 10, 19 9)
Reguatons 3 ( ppend ). 19 9-17-13169
T. D. 733
TITL- 26 INT RN L R NU . C PT R I, SU C PT R C, P RT 182.
INDUSTRI L LCO OL
mendng append to Reguatons 3
Treasury Department,
Offce of Commssoner of Interna Revenue,
Washngton 2 , D. C.
To Dstrct Supervsors and Others Concerned:
1. The append to Reguatons 3, approved March 6, 19 2 (26
CFR, Part 182), s hereby amended by authorzng the foowng
formua for the manufacture of competey denatured acoho:
FORMUL NO. 1
To every 100 gaons of ethy acoho of not ess than 160 degrees proof add:
3. gaons of ST-11 or a compound smar thereto.
0.2 gaon of methy sobuty ketone.
1.0 gaon of CS- 01.
1.0 gaon of kerosene.
2. The purpose of ths amendment s to afford manufacturers of
competey denatured acoho more attude n the seecton of
denaturants.
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

9

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
183
Regs. 3, ppend .
3. It s found that compance wth the notce, pubc rue-makng
procedure, and effectve date requrements of the dmnstratve Pro-
cedure ct (Pubc Law 0 , Seventy-nnth Congress) s unnecessary
n connecton wth the ssuance of these reguatons for the reason
that the change made berazes requrements mposed upon the
ndustry by enabng t to use the new formua n eu of formuae
now prescrbed for competey denatured acoho.
. Ths Treasury Decson sha be effectve upon ts pubcaton n
the Federa Regster.
. Ths Treasury Decson s ssued under the authorty contaned
n sectons 3070(a), 310 (a), and 3176, Interna Revenue Code
(U. S. C, tte 26, sees. 3070(a), 310 (a), 3176).
Geo. . Schoeneman,
Commssoner of Interna Revenue.
pproved ugust , 19 9.
Thomas . Lynch,
ctng Secretary of the Treasury.
(Pubshed n the F dera Resstor ugust 11. 1IM0)
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

9

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
Regs. , 183.3, etc. 18
DISTILL D SPIRITS
INT RN L R NU COD
Reguatons , Sectons 183.3, tc. 19 9-20-13200
T. D. 7 7
TITL 26 INT RN L R NU . C PT R I, SU C PT R C, P RT 183.
PRODUCTION OP DISTILL D SPIRITS
mendng Reguatons
Treasury Department,
Offce of Commssoner of Interna Revenue,
Washngton 2 , D. C.
To Dstrct Supervsors and Others Concerned:
1. On une 22, 19 9, notce of proposed rue makng regardng the
wthdrawa of sampes of dsted sprts by regstered dsters was
pubshed n the Federa Regster (1 F. R. 3379).
2. fter consderaton of a such reevant matter as was presented by
nterested persons regardng the proposa, sectons 183.3(a), 183.26 .
183.26 ,183.266,183.267.183:269,183.270,183.271,183.27 ,183.277, and
183.293 of Reguatons (26 CFR, Part 183), approved February 28,
19 0, reatng to the producton of dsted sprts, are amended, and
sectons 183.3(n-) and 183.270a are added to such reguatons as
foows:
Sec. LS3.3. Defntons
(a) pproved contaners sha mean casks, barres, or smar wooden pack-
ages, or drums, or smar meta packages, havng a capacty of not ess than 10
wne gaons each, or raroad tank cars: Provded, That, for the wthdrawa of
sampes for aboratory anayss, approved contaners sha mean any contaner
of ess than 10 wne gaons capacty.

(n-1) Laboratory anayss sha mean the determnaton of the composton
of dsted sprts by chemca, physca, or organoeptc e amnaton.

Sec 183.26 . Unfnshed Sprts. Upon approva by the storekeeper-gauger
n charge at the dstery of an appcaton submtted n accordance wth the
provsons of secton 183.260, the dster may remove for aboratory anayss
sampes of dsted sprts n the course of dstaton and pror to ther
depost n the cstern room, as foows:
(a) Sampes, not e ceedng 3 pnts n the aggregate, of the product of
each st n a dstng unt n each 2 -hour perod;
(6) Where a dscontnuous or batch st, such as a gn st, s operated,
sampes, not e ceedng 3 pnts n the aggregate, of the product of each
batch dsted ;
(c) Where the dster desres to obtan spot-sampes from varous pates
of a st n the course of dstng a day s producton, sampes, not e ceedng
1 quart n the aggregate, from each of the varous pates;
(d) Where speca condtons preva, such as the necessty for determn-
ng the effcency of a new st, or for other vad reasons, whch requre
addtona sampes of unfnshed sprts for anaytca purposes durng
specfed perods, the appcaton requred by secton 183.266 sha be sub-
mtted by the storekeeper-gauger to the dstrct supervsor for hs approva
pror to the wthdrawa of the addtona sampes. The sze of such
sampes sha not e ceed 1 quart, and the number of sampes must be
restrcted to the mnmum necessary for anaytca purposes;
(e) Where the dster desres sampes n e cess of those provded for
In (a), (6), (c), and (d), he may remove such sampes: Provded, That,
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

9

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
18
Regs. , 183.3, etc.
f n contaners of ess than 1 proof gaon, such remova sha be sub|ect
to payment of ta n accordance wth the provsons of secton 183.270a( ),
and, f n contaners of 1 proof gaon or more, such remova sha be made
pursuant to ta payment n accordance wth the provsons of secton 183.293
to 183.296, ncusve. The sze and number of sampes taken must be
restrcted to the mnmum necessary for the purposes for whch ntended.
In authorzng the takng of sampes, the storekeeper-ganger w e ercse
dscreton wth the vew of aowng suffcent sampes to enabe the dster
to determne the quaty of the product. (Sec. 3176, I. R. C.)
Sec. 183.2(3 . Fnshed Sprts. The dster may take from the cstern room
of the dstery sampes of dsted sprts for aboratory anayss. Such sampes
sha not e ceed 1 quart, n the aggregate, n each 2 -hour perod from any tank
n the cstern room: Provded, That, when a tank s fed and empted and
raed agan n the same 2 -hour perod, sampes, not to e ceed 1 quart n the
aggregate, may be taken from each fng of the tank. Such sampes may be
wthdrawn upon approva by the storekeeper-gauger n charge at the dstery
of an appcaton fed n accordance wth the provsons of secton 183.266. The
takng-of sampes from the cstern room at more frequent ntervas or n greater
quanttes sha not be authorzed: Provded, That, where the dster desres
sampes n number or quanttes n e cess of these mtatons, he may remove
sampes n contaners of ess than 1 proof gaon sub|ect to payment of ta
n accordance wth the provsons of secton 183.270a(6), and n contaners of
1 proof gaon or more upon ta payment n accordance wth the provsons of
sectons 183.293 to 183.296, ncusve. (Sec. 3176, I. R. C.)
Sec. 183.266. ppcaton. When the dster desres to remove sampes of
unfnshed sprts or fnshed sprts for aboratory anayss under the provsons
of sectons 183.26 and 183.26 , respectvey, he sha make appcaton, n trp-
cate, to the storekeeper-gauger n charge at the dstery. The appcaton sha
be gven a sera number begnnng wth for the frst appcaton and runnng
consecutvey thereafter. The appcaton shoud specfy the reasons why the
sampes are desred, the number and sze of the sampes to be taken, and the pace
or paces of remova. Where t s de.sred to remove sampes reguary for the
purpose specfed, e cept sampes sub|ect to ta payment, the appcaton may be
made for that purpose. Where sampes sub|ect to ta payment are desred, app-
caton sha be submtted each day such sampes are to be procured. No sampe
may be taken unt the appcaton s approved. (Sec. 3176, I. R. C.)
Sec. 183.267. pprova of ppcaton. The storekeeper-gauger must satsfy
hmsef as to the need for the number of sampes desred and the egtmacy of
the purpose for whch they are to be used before approvng the appcaton. The
storekeeper-gauger, upon approva or dsapprova of the appcaton, sha return
one copy to the warehouseman, forward one copy to the dstrct supervsor, and
retan the orgna copy n hs offce. (Sec. 3176, I. R. C.)
Sec. 183.269. Lade. t the tme of the wthdrawa of a sampe, the propretor
sha prepare a abe and a copy thereof. The abe and copy sha be prepared
en paper havng appro mate dmensons of 3 nches by nches. The propretor
sha show on the abe and on the copy, n the order sted and upon separate
nes, the foowng nformaton:
1. The word Sampe ;
2. The sera number of the approved appcaton coverng the wthdrawa
of the sampe;
3. The knd of sprts;
. The pace from whch the sampe was removed;
. The name of the dster foowed by the regstered number of the
dstery and the name of the State n whch ocated;
6. The sze of the sampes and, n regard to sampes n contaners of ess
than 1 proof gaon taken sub|ect to payment of ta , the quantty n proof
gaons e tended to the fourth decma pace (the proof gaon content of
other sampes need not be shown on the abe) ;
7. If the sampe s to be anayzed tt other than the mmedate or contgu-
ous premses of the propretor, the name and address of the aboratory or
purchaser to whch Ihe sampe s to be sent.
Upon competon, the abe and the copy sha be presented to the storekeeper-
gauger, who sha verfy the accuracy of the data thereon, date and sgn both
copes, and supervse the aff ng of the abe to the sampe contaner. Where
the abe Is to be paced upon a contaner of a sampe taken sub|ect to payment
s ;S972 0 13
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

9

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
Regs. , 183.3, etc.
186
of ta pursuant to the provsons of secton 183.270a (6), the storekeeper-gauger
sha wrte upon the abe and the copy the words sub|ect to ta payment. The
copy of the abe sha be fed by the storekeeper-gauger n accordance wth the
provsons of secton 183.270. The dster sha not be requred to aff red
strp stamps to contaners of ta abe sampes of sprts. Contaners of sampes
of sprts n quanttes of 1 proof gaon or more taken sub|ect to payment
of ta , sha be marked, branded, and stamped, In accordance wth the provsons
of sectons 183.28 to 1S3.296, ncusve: Provded, That, where t s mpractcabe
to so mark and brand a sampe contaner, the mandatory marks and brands may
be shown on an addtona abe aff ed to the contaner. (Sec. 3176, I. It. C.)
Sec. 183.270. Offce Record. The propretor sha furnsh suffcent fe cases
for the fng and retenton of sampe records. The copes of abes sha be kept
by the storekeeper-gauger as a record of sampes removed and sha be fed
numercay by appcaton number and chronoogcay by date. If the dster
operates an Interna revenue bonded warehouse on or contguous to the ds-
tery premses, the record of sampes removed from the dstery sha be
mantaned separatey from the record of sampes removed from the warehouse.
(Sec. 3176, I. It. C.)
Sec. 183.270a. Report of Ta abe Sampes. (a) Genera. Ta abe sampes
sha be reported by the dster on Form 1 98 n accordance wth the nstruc-
tons on the form.
(6) Contaners of ess than 1 gaon. ach day-that sampes n contaners
of ess than 1 proof gaon are wthdrawn sub|ect to payment of ta , the store-
keeper-gauger sha euter on Form 161 , Ta abe Sampes of Dsted Sprts,
n quadrupcate, a record of the ta abe sampes removed. the nformaton
caed for by the form sha be furnshed. t the end of each month, the store-
keeper-gauger sha compete the report, retan one copy of the form and dever
the remanng three copes to the dster, who sha forward the three copes
to the coector wth remttance for thft ta due. The coector sha e ecute hs
certfcate of ta payment on each copy of the form, retan one copy, and return
the remanng two copes to the dster, who sha retan one copy and dever
the other copy- to the storekeeper-gauger. The storekeeper-gauger sha note
the ta payment on hs retaned copy and forward the other copy to the dstrct
supervsor. (St. 3176, I. R. C.)
Sec. 183.271. Dsposton of Sampes. The sampes must be used soey for
aboratory anayss. Thry may not he furnshed to saesmen and deaers for
advertsng or soctng purposes. Where sprts are sod sub|ect to approva as
to quaty, a sampe taken pursuant to the provsons of sectons 1S3.26 , 183.266,
and 183.267 may be furnshed the purchaser. Remnants or resdues of sampes
taken from the dstery or cstern room not sub|ect to ta payment remanng
after anayss or e amnaton and whch are not desred to be retaned as abora-
tory specmens or for further anayss or e amnaton shoud be returned to
vesses n the dstng system, uness the condton of the remnants or resdues
s such as to render them unsutabe for such dsposton. If such remnants or
resdues of sampes are unsutabe for return to the dstng system, they shoud
be destroyed. (Sec. 3176, I. R. C.)
Sec. 183.27 . Fob Sprts Under Secton 2883, I. R. C Dsted sprts pro-
duced at a proof n e cess of 1 9 degrees and reduced n the recevng csterns
to not more than 1 9 and not ess than 100 degrees of proof may be drawn from
such csterns nto casks, barres, or smar wooden packages, or nto drums, or
smar meta packages, havng a capacty of not ess than 10 wne gaons each,
or nto raroad tank cars, and ta -pad or transferred to any nterna revenue
bonded warehouse for storage theren: Provded, That sprts of any proof to be
removed for aboratory anayss may be drawn nto contaners or packages havng
a capacty of ess than 10 wne gaons each. The sprts may be drawn nto
raroad tank cars ony n case the premses of the dster and the consgnee are
equpped wth sutabe raroad sdng factes. Such raroad sdng factes
must, n the case of transfers n bond, e tend nto the recevng warehouse.
(Sees. 2883, 3176,1. R. C.)
Sec. 183.277. For Sprts Under Secton 2878, I. R. C cept as otherwse
provded heren, dsted sprts whch before reducton n the recevng csterns
are of a composte proof of not more than 1 9 degrees sha be drawn Into casks,
barres, or smar wooden packages, or nto drums, or smar meta packages,
havng a capacty of not ess than 10 wne gaons each. Such dsted sprts,
for the purpose of e portaton ony may be drawn nto wooden packages, each
contanng two or more metac cans havng a capacty of not ess than wne
gaons euch. The constructon of such wooden packages for e portaton, and
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

9

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
187
Regs. , 183.81, etc.
the fng, markng, and brandng thereof, must conform to the specfcatons set
forth n the reguatons governng the warehousng of dsted sprts (26 OFR,
Part 183). Such dsted sprts, ether before or after reducton, for the pur-
pose of aboratory anayss, may be drawn nto contaners or packages havng a
capacty of ess than 10 wne gaons each. (Sees. 2878, 3176, I. R. C.)
Se :. 183.293. ppcaton, Form 179. Whenever the dster desres to ta -
pay and remove n packages drect from the cstern room dsted sprts pro-
duced at a proof n e cess of 1 9 degrees and reduced to not more than 1 9 and
not ess than 100 degrees of proof or when, pursuant to approved appcaton,
e desres to ta -pay and remove sampes of sprts for aboratory anayss n
contaners of 1 proof gaon or more, he sha e ecute appcaton therefor on
Form 179. n quadrupcate, and dever a copes to the storekeeper-gauger.
(Sees. 2883, 3176, I. R. C.)
3. These amendments are desgned to estabsh approprate mta-
tons and requrements for the wthdrawa by regstered dsters of
sampes of dsted sprts for aboratory anayss, ncudng organo-
eptc e amnaton.
. Ths Treasury Decson sha be effectve on the thrty-frst day
foowng the date of ts pubcaton n the Federa Regster.
. Ths Treasury Decson s ssued under the authorty contaned
n sectons 2878, 2883, and 3176, Interna Revenue Code (U. S. C,
tte 26, sectons 2878, 2883, and 3176).
Geo. . Scoeneman,
Commssoner of Interna Revenue.
pproved September 1 , 19 9.
Thomas . Lynch,
ctng Secretary of the Treasury.
(Pubshed n the Federa Regster September 21, 19 9)
Reguatons , Sectons 183.81, tc. 19 9-20-13201
T. D. 7 3
TITL 26 INT RN L R NU . C PT R I. SU C PT R C, P RT 183
PRODUCTION OF DISTILL D SPIRITS
mendng Reguatons
Treasury Department,
Offce of Commssoner of Interna Revenue,
Washngton 2 , D. C.
To Dstrct Supervsors and Others Concerned:
1. Sectons 183.81, 183.1 , 183.1 6, and 183.1 8 of Reguatons
(26 CFR, Part 183), approved May 20, 19 0, as amended, are hereby
further amended by strkng out the vaue 1,000, wherever such
vaue appears theren, and substtutng therefor the vaue ,000.
2. The effect of these amendments s to e empt from ndemnty
bond requrements and, budngs, and equpment, the vaue of whch
s ess than ,000, n certan stuatons n whch an ndemnty bond
n eu of the Government s en s requred by the e stng reguatons.
These stuatons ncude (1) the addton of property to the dstery
premses where an ndemnty bond has been fed n eu of the wrtten
consent of the person possessng the rght of redempton, or other en
hoder, (2) the ateraton or demoshment of budngs on whch a en
for ta es e sts, and (3) the remova of apparatus or equpment on
whch a en for ta es e sts. Indemnty bonds heretofore fed n such
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

9

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
Regs. , 183.170.
188
cases n a pena sum of ess than ,000 may be termnated as to future
abty by the dstrct supervsor upon approprate appcaton there-
for by the dster or the surety.
3. It s found that compance wth the notce and pubc rue-
makng procedure of the dmnstratve Procedure ct s unnecessary
n connecton wth the ssuance of these reguatons for the reason
that the amendments are of a berazng nature.
. Ths Treasury Decson sha be effectve mmedatey upon ts
pubcaton n the Federa Regster.
. Ths Treasury Decson s ssued under the authorty contaned n
sectons 2800 (e), 281 ,3176, and 3180, Interna Revenue Code (U. S. C,
tte 26, sectons 2800(e), 281 , 3176, and 3180).
Geo. . Scoeneman,
Commssoner of Interna Revenue.
pproved September 9, 19 9.
Thomas . Lynch,
ctng Secretary of the Treasury.
(Pubshed n the Federa Regster September 1 , 19 9)
Reguatons , Secton 183.170: Procedure ap- 19 9-23-1322
pcabe. T. D. 7 2
TITL 20 INT RN L R NU . C PT R I, SU C PT R C, P RT 1S3
PRODUCTION OF DISTILL D SPIRITS
mendng Reguatons
Treasury Department,
Offce of Commssoner of Interna Revenue,
Washngton 2 , D. C.
To Dstrct Supervsors and Others Concerned:
1. Secton 183.170 of Reguatons (26 CFR, Part 183), approved
February 28, 19 0, reatng to the producton of dsted sprts, s
hereby amended to read as foows:
Sec. 183.170. Procedure ppcabe. The foregong provsons of ths artce
respectng the acton requred of dstrct supervsors In connecton wth the
estabshment of dsteres w be foowed, to the e tent appcabe, where
there s a change n the ndvdua, frm, or corporate name of the dster, or
n the trade name or stye, or where the dstery s to be operated ntay
under a trade name or stye, or where there s a change n the propretorshp,
ocaton, premses, constructon, apparatus and equpment of the dstery, or
n the type of pant, or n the tte to the dstery property, or where such
property becomes sub|ect to a mortgage, |udgment, or other encumbrance, or
where operatons are permanenty dscontnued: Provded, That where there
s a change n the ndvdua, frm, or corporate name of the dster, or where
the dstery s to be agan o erated under a trade name or stye prevousy
approved by the Commssoner, or where the dstery s to be operated under
aternatng propretorshps and a former propretor whose quafcatons were
prevousy approved by the Commssoner s agan to operate the dstery,
or where a regstered dstery has been operatng aternatey as a frut ds-
tery or as an ndustra acoho pant and s to be agan operated as a
regstered dstery by the propretor whose quafcatons were prevousy
approved by the Commssoner, the dstrct supervsor may authorze the com-
mencement of operatons pror to the revew of the quafyng documents by
the Commssoner. In such cases, the dstrct supervsor w notfy the ds-
ter by etter and attach one copy of such etter to the quafyng documents.
(Sec. 3176,1. R. C.)
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

9

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
ISO
Regs. , 183.313, etc.
2. The purpose of ths amendment s to deegate authorty to the
dstrct supervsor to permt the commencement of operatons by a
regstered dstery whch has been operatng as an ndustra acoho
pant or as a frut dstery, and whch has been prevousy approved
by the Commssoner, pror to revew of the quafyng documents by
the Commssoner.
3. It s found that compance wth the notce, pubc rue-makng
procedure, and effectve date requrements of the dmnstratve
Procedure ct ( U. S. C, secton 1001 et seq.) s unnecessary n con-
necton wth the ssuance of these reguatons for the reason that the
amendment s of a berazng character.
. Ths Treasury Decson sha be effectve mmedatey upon ts
pubcaton n the Federa Regster.
. Ths Treasury Decson s ssued under the authorty contaned
n secton 3176. Interna Revenue Code (U. S. C, tte 26, secton
3176).
Fred S. Martn,
ctng Commssoner of Interna Revenue.
pproved October 1 , 19 9.
Thomas . Lynch,
ctng Secretary of the Treasury.
(Pubshed n the Federa Regster October 20, 19 9)
Reguatons , Sectons 183.313, tc. 10 9-1 -1313
T. D. 712
TITL 28 INT RN L R NU . C PT R I, SU C PT R C, P RT 183.
PRODUCTION OF DISTILL D SPIRITS
mendng Reguatons
Treasury Department,
Offce of Commssoner of Interna Revenue,
Washngton 2 , D. C.
To Dstrct Supervsors and Others Concerned:
1. Sectons 183.313, 183.31 , 183.31 a, 183.31 , 183.322, 183.323,
183.326, 183.327, 183.328, 183.328a, 183.329, 183.331, 183.332, and
183.333 of Reguatons (26 CFR, Part 183), approved February 28,
19 0, reatng to producton of dsted sprts, are hereby amended as
foows:
Transfer to Warehouse Off Dstery Premses n Same Dstrct, cept
Warehouse Omra/ted dy Dster on Contguous Premses
Sec. 183.313. ppcaton, Form 236. Where sprts are to be transferred to and
entered for depost n an nterna revenue bonded warehouse ocated off the ds-
tery premses n the same supervsory dstrct, and such warehouse s not
operated by the dster on premses contguous to the dstery premses, the
propretor of the recevng warehouse sha e ecute an appcaton for the transfer
of the sprts on Form 236. The appcant sha enter a appcabe data ndcated
by the form ncudng the ma mum quantty n ta gaons to be transferred n
any one truck, raroad car, or other vehce, and the type of conveyance. The
name of the carrer sha not be specfed on Form 236. The appcant sha pre-
pare an orgna and fve copes of Form 236 and gve them to the storekeeper-
gauger In charge of the recevng warehouse. (Sees. 2878, 2S83, 3176, I. R. C)
Sec 183.31 . Storekeeper-Gauger s Certfcate of Suffcency of Warehouse
ond. Upon recept of Form 236 by the storekeeper-gauger n charge of the
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

9

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
Regs. , 183.313, etc.
190
warehouse, he w compare the pena sum of the bond as stated In the appcaton
wth hs record furnshed by the dstrct supervsor pursuant to Reguatons 10
(26 CFR, Part 18 ). If the bond s gven In the ma mum pena sum of
200,000, he w certfy to the suffcency thereof on Form 236 and return a
s copes of the form to the propretor of the warehouse. If the bond s gven n
ess than the ma mum pena sum, the storekeeper-gauger n charge w determne
from hs records whether the ta abty on the quantty of dsted sprts
represented by the Form 236, pus the quantty of dsted sprts stored n the
warehouse, pus the quantty represented by a outstandng approved Forms 236,
s wthn the mts of the pena sum of the transportaton and warehousng
bond. If so, he w certfy to the suffcency of the bond on Form 236, record such
certfcaton n hs records, and return a s copes of the form to the propretor.
If the transportaton and warehousng bond s not suffcent, he w certfy to
that fact on Form 23G and return a s copes to the propretor. The propretor
w forward a s copes of the approved Form 236 to the propretor of the
consgnor-dstery. The propretor of the warehouse w, be responsbe for a
outstandng approved Forms 236. If, at any tme, he decdes not to use one. he
w obtan a copes from the consgnor and gve them to the storekeeper-gauger
n charge of the warehouse for canceaton and return to the propretor of the
warehouse. (Sec. 3176, I. R. C.)
Sec. 183.31 a. Sprts To e Transferred. When the dster desres to make
shpment, he w gve a copy of Form 236 to the storekeeper-gauger n charge and
furnsh hm a compete descrpton of the sprts to be shpped. (Sec. 3176.
I. R. C.)
Sec. 1S3.31 . Report of Gauge. Uness prevousy packaged, the sprts desg-
nated by the propretor to be transferred w be drawn from the recevng csterns
nto casks or packages, gauged, marked and branded, or nto a weghng tank,
gauged, and run by ppe ne nto a propery equpped raroad tank car. Ony
sprts produced at a proof n e cess of 1 9 degrees and reduced n the recevng
csterns to not more than 1 9 and not ess than 100 degrees of proof may be trans-
ported n raroad tank cars. The quantty transferred sha not e ceed the
ma mum stated n the appcaton. The detas of the gauge w be entered by
the storekeeper-ganger of ve copes of Form 1 20. (Sees. 2878, 2883, 3176, 017,
I. R. C.)
Sec. 183.322. Dster s ntry for Depost. When the sprts have been
packaged, or run nto a raroad tank car and such tank car sea-ocked, the
storekeeper-gauger n charge w dever the copy of Form 236 and the fve copes
of Form 1 20 to the dster. The dster sha, on the same date that the
sprts are to be removed from the dstery, e ecute on a s copes of Form
236 the descrpton of the packages or tank car to be transferred and on a fve
copes of Form 1 20 the entry for depost. e sha mmedatey return a
copes of such forms to the storekeeper-gauger n charge who w reease the
sprts for shpment. (Sec. 2879(a), 3176, I. R C.)
Sec 183.323. Storekeeper-Gaugek s Certfcate of Remova. Upon remova
of the sprts, the storekeeper-gauger w e ecute hs certfcate of gauge and
remova on Form 236. e w retan one copy of each form, furnsh one copy
of each to the dster, forward one copy of each to the supervsor-consgnor,
and forward three copes of Form 236 and two copes of Form 1 20 to the
storekeeper-ganger n charge at the recevng warehouse. When shpment s made
by truck, one copy each of Forms 236 and 1 20 for the storekeeper-gauger n charge
at the recevng warehouse w be seaed n an enveope addressed to snch store-
keeper-gauger n charge and handed to the person n charge of the truck
for devery to hm, and the remanng two copes of Form 236 and one copy
of Form 1 20 w be maed to such storekeeper-gauger n charge. (Sees. 2S7S,
2883,3170,3176,1. R. C.)
Sec. 183.326. Stohekeepeb-Gauger s Recept of Sprts at Warehouse. fter
the sprts have been deposted n the recevng warehouse, the storekeeper-
gauger w e ecute hs recept on the three copes of Form 236, notng thereon
any osses or dscrepances reported on Form 1 20 n accordance wth sectons
183.32 and 183.32 . The storekeeper-gauger n charge w retan one copy
each of Forms 236 and 1 20, gve one copy each of Forms 236 and 1 20 to te
propretor of the warehouse, and forward one copy of Form 236 to the dstrct
supervsor. No wthdrawa or transfer n bond of sprts receved at the
warehouse w be made unt the three copes of Form 236 and the two copes
of Form 1 20 have been receved by the storekeeper-gauger In charge. (Sees.
2878, 2883, 3176, I. R. C.)
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

9

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
191
Regs. , 183.313, etc.
Transfer to Warehouse Off Dstery Premses, n Dfferent Dstrct
Sec. 183.327. ppcaton, Form 230. Where sprts are to be transferred to
and entered for depost n an nterna revenue bonded warehouse ocated n a
dfferent supervsory dstrct than the dstery, the propretor of the recevng
warehouse sha e ecute an appcaton for the transfer of the sprts on Form
230. The appcant sha enter a appcabe data ndcated by the form
ncudng the ma mum quantty n ta gaons to be transferred n any one
truck, raroad car, or other vehce, and the type of conveyance. The name
of the carrer sha not be specfed on Form 230. The appcant sha prepare
an orgna and s copes of Form 230 and gve them to the storekeeper-gauger
n charge of the recevng warehouse. (Sees. 2878, 2883, 3170, I. R. C.)
Sec. 183.328. Stobekeeper-Gauger s Certfcate of Suffcency of Warehouse
ond. Upon recept of Form 230 by the storekeeper-gauger n charge at the
warehouse, he w compare the pena sum of the bond as stated n the appcaton
wth hs record furnshed by the dstrct supervsor pursuant to Reguatons 10
(20 CFR, Part 18 ). If the bond s gven n the ma mum pena sum of
200,000, he w certfy to the suffcency thereof on Form 230 and return a
seven copes of the form to the propretor of the warehouse. If the bond s
gven n ess than the ma mum pena sum, the storekeeper-gauger u charge
w determne from hs records whether the ta abty on the quantty of
sprts represented by the Form 230, pus the quantty of sprts stored n the
warehouse, pus the quantty represented by a outstandng approved Forms 236,
s wthn the mts of the pena sum of the transportaton and warehousng
bond. If so, he w certfy to the suffcency of the bond on Form 236, record
such certfcaton n hs records, and return a seven copes of the form to the
propretor. If the transportaton and warehousng bond s not suffcent, he
w certfy to that fact on Form 230 and return a seven copes to the propretor.
The propretor w forward a seyen copes of the approved Form 236 to the
propretor of the consgnor-dstery. The propretor of the warehouse w
be responsbe for a outstandng approved Forms 236. If, at any tme, he
decdes not to use one, he w obtan a copes from the consgnor and gve them
to the storekeeper-gauger n charge of the warehouse for canceaton and
return to the propretor of the warehouse. (Sec. 3176, I. R. C.)
Sec 183.328a. Sprts To e Transferred. When the dster desres to make
shpment, he w gve a copy of Form 236 to the storekeeper-gauger n charge and
furnsh hm a compete descrpton of the sprts to be shpped. (Sec. 3176,
I. P. C.)
Sec 183.329. Report of Gauoe. Uness prevousy packaged, the sprts desg-
nated by the propretor to be transferred w be drawn from the recevng csterns
Into casks or packages, gauged, marked and branded, or nto a weghng tank,
gauged, and run by ppe ne nto a propery equpped raroad tank car. Ony
sprts produced at a proof n e cess of 1 9 degrees and reduced n the recevng
csterns to not more than 1 9 and not ess than 100 degrees of proof may be
transported n raroad tank cars. The quantty transferred sha not e ceed
the ma mum stated n the appcaton. The detas of the gauge w be entered
by the storekeeper-gauger on fve copes of Form 1 20. (Sees. 2878, 2883, 3176,
017, I. R. C.)
Sec 183.331. Dster s ntry for Depost. When the sprts have been
packaged, or run nto a raroad tank car and such tank car .sea-ocked, the
storekeeper-gauger n charge w dever the copy of Form 236 and the fve copes
of Form 1 20 to the dster. The dster sha, on the same date that the
sprts are to be removed from the dstery, e ecute on a seven copes of
Form 230 the descrpton of the packages or tank car to be transferred and on a
fve copes of Form 1 20 the entry for depost. e sha mmedatey return a
copes of such forms to the storekeeper-gauger n charge who w reease the
sprts for shpment. (Sees. 2879(a), 3176, I. R. C.)
Sec. 183.332. Storekef.per-Gauger s Certfcate of Remova. Upon remova
of the sprts, the storekeeper-gauger w e ecute hs certfcate of gauge and
remova on Form 230. e w retan one copy of each form, furnsh one copy
of each to the dster, forward one copy of each to the supervsor-consgnor,
and forward four copes of Form 236 and two copes of Form 1 20 to the store-
keeper-gauger n charge at the recevng warehouse. When shpment s made
by truck, one copy each of Forms 236 and 1 20 for the storekeeper-gauger n
charge at the recevng warehouse w be seaed n an enveope addressed to such
storekeeper-gauger n charge and handed to the person n charge of the truck for
devery to hm, and the remanng three copes of Form 236 and one copy of
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

9

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
Regs. , 183.313, etc.
192
Form 1 20 w be maed to such storekeeper-gauger n charge. (Sees. 2878,
2883, 3170, 3176, 017, I. R. C.)
Sec. 183.333. Storekeeper-Gauger s Recept of Sprts at Warehouse. The
storekeeper-gauger at the recevng warehouse w e amne the shpment upon
ts arrva and ascertan and note on both copes of Form 1 20 any osses or
dscrepances ns provded n sectons 183.32 and 183.32 . e w e ecute hs
recept on the four copes of Form 236 notng thereon any osses or dscrepances
reported on Form 1 20. The storekeeper-gauger n charge w retan one copy
each of Forms 236 and 1 20, gve one copy each of Forms 236 and 1 20 to the
propretor of the warehouse, and forward two copes of Form 236 to the supervsor
of hs dstrct. The dstrct supervsor w retan one copy of Form 236 and
forward the remanng copy of Form 236 to the supervsor of the dstrct from
whch the sprts were transferred. No wthdrawa or transfer n bond of sprts
receved at the warehouse w be made unt the four copes of Form 236 and the
two copes of Form 1 20 have been receved by the storekeeper-gauger n charge.
(Sees. 2878, 2SS3, 3176, I. R. C.)
2. It s found that compance wth the notce and pubc rue-
makng procedure of the dmnstratve Procedure ct ( U. S. C.
1001 et seq.) s unnecessary n connecton wth the ssuance of these
reguatons for the reason that the changes made are of a berazng
character.
3. The purposes of the amendments are as foows:
(1) To reduce the number of copes of reports of gauge (Form
1 20) prepared by storekeeper-gangers, by dscontnung fur-
nshng of certan copes to dstrct supervsors, whch w resut
n reducng the work of storekeeper-gaugers and audt cerks
wthout |eopardy to the revenue;
(2) To e pedte the recept by the consgnor-dster of Forms
236, Transfer of Dsted Sprts n ond, after approva of
bond coverage by the storekeeper-gauger at the consgnee-ware-
house, by provdng that the consgnee-warehouseman send them
drect to the consgnor-dster n eu of havng the storekeeper-
gauger at the warehouse send them to the storekeeper-ganger at
the consgnor-dstery for devery to the consgnor-dster;
(3) To obvate the preparaton of addtona Forms 236 by the
consgnee-warehouseman when he desres shpments made pur-
suant to approved Forms 236 after the e praton of 90 days, by
revokng the provson that Forms 236 w be canceed by the
dstrct supervsor upon the e praton of 90 days after approva
f not used wthn that perod or e tended by the dstrct
supervsor;
( ) To obvate the need for obtanng the consent of the dstrct
supervsor when the consgnor-dster desres to shp sprts by
a carrer other than the one orgnay desgnated on Form 236
by the consgnee-warehouseman, by drectng that the name of the
carrer sha not be shown on Form 236 by the consgnee-ware-
houseman ;
( ) To factate the e ecuton on a copes of Form 236 of the
storekeeper-ganger s certfcate of recept at the consgnee-ware-
house by provdng for the routng, when sprts are shpped from
the dstery, of the copes of Forms 236 and 1 20 for the con-
sgnee-warehouseman wth the copes for the storekeeper-ganger
at the consgnee-warehouse, n eu of sendng them drect to the
consgnee-warehouseman.
. Ths Treasury Decson sha be effectve on the thrty-frst day
after the date of ts pubcaton n the Federa egster.
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

9

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
193
Regs. , 183.399, etc.
. (Ths Treasury Decson s ssued under the authorty contaned
n sectons 2878. 2879(a), 2883. 3170, 3176, and 017 of the Interna
Revenue Code (U. S. C, tte 26, sectons 2878, 2879(a), 2883, 3170.
3176, and 017).)
Fred S. Martn.
ctng Commssoner of Interna Revenue.
pproved uy 1,19 9.
Thomas . Lynch,
ctng Secretary of the Treasury.
(Pubshed n the Federa Regster uy 8, 19 9)
Reguatons , Sectons 183.39 , 183. 0 , 19 9-17-131 0
and 183. 0 . T. D. 71
TITL 26 INT RN L R NU . C PT R I, SU C PT R C, P RT 183.
PRODUCTION OF DISTILL D SPIRITS
mendng Reguatons
Treasury Department,
Offce of Commssoner of Interna Revenue,
Washngton 2 , D. C.
To Dstrct Supervsors and Others Concerned:
1. Sectons 183.399, 183. 0 , and 183. 0 of Reguatons (26 CFR,
Part 183), approved February 28, 19 0, are amended to read as
foows:
Sec. 183.399. Rf.cord of Dstery Operatons, Form 1 98. The dster sha
keep a record of the dstery operatons on Form 1 98, Dster s Report of
Operatons at Dstery No. ntres sha he made as ndcated by the
headngs of the varous coumns and nes and n accordance wth the nstructons
prnted on the form, and as set forth n these reguatons, before the cose of
the busness day ne t succeedng the day on whch the transactons occur.
Where the makng of the entres s deferred to the ne t busness day, as heren
authorzed, approprate memoranda sha he kept for the purpose of makng the
entres correcty. Form 1 98 w be kept at the dstery as a permanent
record, n bound form, sub|ect to nspecton by Government offcers at any
reasonabe hour. (Sees. 28 1,3171, 3176,1. R. C.)
Sec. 183. 0 . Tme of Makno ntres. Day entres sha he made on Record
2 and Form 2- , as ndcated by the headngs of the varous coumns and n
accordance wth the nstructons on the forms before the cose of the busness
day ne t succeedng the day on whch the transactons occur. Where the pro-
pretor of a ta -pad premses defers the makng of the entres to the ne t busness
day, as authorzed heren, he sha mantan a separate record, such as nvoces,
of the removas of dsted sprts, showng the remova data requred to be
entered on Record 2 or Form 2- , and approprate memoranda of other trans-
actons requred to be entered on such records, for the purpose of makng the
en tres correcty. (Sees. 28 7, 3170,1. R. C.)
Sec. 183.10 . Separate Record of Sera Numbers of Cases. Sera numbers
of cases of dsted sprts dsposed of need not ba entered on Record 2 or Form
2- , provded the propretor keeps n hs pace of busness a separate record,
approved by the dstrct supervsor, showng such sera numbers, wth necessary
dentfyng data, ncudng the date of remova and the name and address of the
consgnee. Such separate record may be kept n book form (ncudng oose-eaf
books) or may consst of commerca papers, such as nvoces or bs. Such
books, nvoces, and bs sha be preserved for a perod of years and n such
a manner that the requred nformaton may be ascertaned ready therefrom,
and durng such perod sha be avaabe durng busness hours for nspecton
and the takng of abstracts therefrom by revenue offcers. ntres sha be made
on such separate approved record before the cose of the busness day ne t succeed-
ng the day on whch the transactons occur. Where the makng of the entres
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

9

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
egs. , 183. 28, etc. 19
s deferred to the ne t busness day, as authorzed heren, approprate memoranda
sha be mantaned for the purpose of makng the entres correcty. The
propretor whose separate record has been approved by the dstrct supervsor
sha make a notaton n the coumn for reportng sera numbers, as foows:
Sera numbers shown on commerca records per authorty dated
(Sees. 28 7, 3176, 0 1, I. R. C.)
2. These amendments are ntended for the purpose of aowng
addtona tme for makng requred entres n Forms 1 98, ecord 2,
and Form 2- .
3. It s found that compance wth the notce and pubc rue-
makng procedure of the dmnstratve Procedure ct ( U. S. C. 1001
et seq.) s unnecessary n connecton wth the ssuance of these regu-
atons for the reason that the changes made are of a berazng
character.
. Ths Treasury Decson sha be effectve on the thrty-frst day
after the date of ts pubcaton n the Federa Regster.
. Ths Treasury Decson s ssued under the authorty contaned
n sectons 28 1, 28 7, 3171, 3176, 0 1, Interna Revenue Code
(U. S. C, tte 26, sectons 28 1, 28 7,3171,3176, 0 1).
Geo. . Schoeneman,
Commssoner of Interna Revenue.
pproved ugust 2,19 9.
Thomas . Lynch,
ctng Secretary of the Treasury.
(Pubshed n the Federa Regster ugust 9, 19 0)
Reguatons , Sectons 183. 28, tc. 19 9-17-131 1
T. D. 727
TITL 26 INT RN L R NU . C PT R I, SU C PT R C, P RT 183.
PRODUCTION OF DISTILL D SPIRITS
mendng Reguatons
Treasury Depaktbent,
Offce of Commssoner of Interna Revenue,
Washngton 2o, D. C.
To Dstrct Supervsors and Others Concerned:
1. Sectons 183. 28, 183. 29, 183. 30, and 183. 31 of Reguatons ,
Producton of Dsted Sprts, approved February 28, 19 0 (26
CFR, Part 183), are hereby amended.
2. The purpose of these amendments s to revse the procedure for
the recordng of Government property, and the dsposton of cap
seas used and removed at regstered dsteres.
3. It s found that compance wth the notce, pubc rue-makng
procedure, and effectve date requrements of the dmnstratve Pro-
cedure ct (Pubc, No. 0 , Seventy-nnth Congress) s unnecessary
n connecton wth the ssuance of these reguatons for the reason that
the changes made are of an admnstratve nature ony.
Sec. 183. 2S. Remova of Cap Seas. cept as provded n secton 183. 27,
cap seas whch have been aff ed may be removed ony by a storekeeper-gau er
or some other offcer desgnated for the purpose by the dstrct supervsor. The
offcer w destrov a removed eap seas n a manner suffcent to prevent ther
reuse. (Sees. 2821, 2822, 28 1, and 3176, I. R. C.)
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

9

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
19
Regs. . 18 .67d, etc.
Sec. 183. 29. Stobekeeper-Gauger s Record of Cap and Lock Seas. rec-
ord of cap seas receved, used, and removed, and of ock seas receved and
used at each regstered dstery w be kept by storekeeper-gaugers on Form
2289, Government Offcer s Record and Report of Government Property, n ac-
cordance wth the ttes of the coumns and nes and the nstructons on the
form. Form 28 ) w be kept n the Government cabnet when not n use. (Sec.
3176, I. It. C.)
Sec. 183. 30. Storekeeper-Gauger s Report of Government Property. On or
before the ffth day of the month succeedng that for whch the transactons are
reported, the storekeeper-gauger w prepare a monthy report on Form 289
of a Government property at the regstered dstery Form 289 w be pre-
pared n dupcate, n accordance wth the ttes of the coumns and nes and
the nstructons on the form. e w forward the orgna to the dstrct super-
vsor and retan the copy for hs fes. (Sec. 317( , I. R. C.)
Sec. 183. 31. Dstrct Supervsor s Report of Locks and Gaugng Instru-
ments. Dstrct supervsors w be hed accountabe for the Government ocks
and seas, ncudng cap seas, supped upon ther respectve requstons, and
for those receved from ther predecessors n offce. Outgong dstrct super-
vsors w take recepts from ther successors n offce for the Government ocks
then n use and on hand, and for seas on hand n the dstrct. Dstrct super-
vsors w keep an account of ocks and gaugng nstruments, and w make
return thereof semannuay to the Commssoner on Form 1 2, Return of Locks
and Gaugng Instruments. (Sec. 3176, I. R. C.)
. Ths Treasury Decson sha be effectve on the thrty-frst day
after the date of ts pubcaton n the Federa egster.
. Ths Treasury Decson s ssued under the authorty contaned n
sectons 2821, 2822, 28 1, and 3176, Interna Revenue Code (U. S. C,
tte 26, sectons 2821, 2822, 28 1,-and 3176).
Geo. . Schoeneman,
Commssoner of Interna Revenue.
pproved ugust , 19 9.
Thomas . Lynch,
ctng Secretary of the Treasury.
(Pubshed n the Federa Regster ugust 10, 19 9)
Reguatons , Sectons 18 .67d, tc. 19 9-20-13202
T. D. 7
TITL 26 INT RN L R NU . C PT R I, SU C PT R C, P RT 18 .
PRODUCTION OF R NDY
mendng Reguatons
Treasury Department,
Offce of Commssoner of Interna Revenue,
Washngton 2 , D. 0.
To Dstrct Supervsors and Others Concerned:
1. Sectons 18 .67d, 18 .67e, 18 .130,18 .131, and 18 .133 of Regua-
tons (26 CFR, Part 18 ), approved May 20, 19 0, as amended, are
hereby f urther amended by strkng out the vaue 1,000, wherever
such vaue appears theren, and substtutng therefor the vaue
,000.
2. The effect of these amendments s to e empt from ndemnty bond
requrements and, budngs, and equpment, the vaue of whch s ess
than ,000, n certan stuatons n whch an ndemnty bond n eu
of the Government s en s requred by the e stng reguatons. These
stuatons ncude (1) the addton of property to t e dstery prem-
ses where an ndemnty bond has been ted n eu of the wrtten
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

9

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
Regs. , 18 .1 1.
196
consent of the owner or en hoder, (2) the ateraton or demoshment
of budngs on whch a en for ta es e sts, and (3) the remova of
apparatus or equpment on whch a en for ta es e sts. Indemnty
bonds heretofore fed n such cases n a pena sum of ess than ,000
may be termnated as to future abty by the dstrct supervsor
upon approprate appcaton therefor by the dster or the surety.
3. It s found that compance wth the notce and pubc rue-
makng procedure of the dmnstratve Procedure ct s unnecessary
n connecton wth the ssuance of these reguatons for the reason
that the amendments are of a berazng nature.
. Ths Treasury Decson sha be effectve mmedatey upon ts
pubcaton n the Federa Regster,
. Ths Treasury Decson s ssued under the authorty contaned n
sectons 2800(e), 281 (b), and 3176, Interna Revenue Code (U. S. C,
tte 26, sectons 2800(e), 281 (b), and 3176).
Geo. . Schoeneman,
Commssoner of Interna Revenue.
pproved September 9, 19 9.
Thomas . Lynch,
ctng Secretary of the Treasury.
(Pubshed In the Federa Regster September 1 , 19 9)
Reguatons , Secton 18 .1 1: Procedure ap- 19 9-23-1322
pcabe. T. D. 7 3
TITL 20 INT RN L R NU . C PT R I, SU C PT R C, P RT 18 .
PRODUCTION OF R NDY
mendng Reguatons
Treasury Department,
Offce of Commssoner of Interna Revenue,
Washngton 2 , D. C.
To Dstrct Supervsors and Others Concerned:
1. Secton 18 .1 1 of Reguatons (26 CFR, Part 18 ), approved
February 28, 19 0, reatng to the producton of brandy, s hereby
amended to read as foows:
Sec. 18 .1 1. Procedure rruc - . The foregong provsons of ths artce
respectng the acton requred of dstrct supervsors n connecton wth the
orgna estabshment of dsteres w be foowed, to the e tent appcabe,
where there s a change n the ndvdua, frm, or corporate name, or n the trade
name or stye, where the premses are to be operated ntay under a trade name or
stye, or where there s a change n the propretorshp, ocaton, premses, construc-
ton, apparatus and equpment, or n the type of pant, or n the tte to the ds-
tery property, or where such property becomes sub|ect to a mortgage, |udgment,
en, or other encumbrance, or where operatons are permanenty dscontnued:
Provded, That where there s a change n the ndvdua, frm, or corporate name
of the dster, or where a dstery s to be agan operated under a trade name
or stye prevousy approved by the Commssoner, or where the dstery s
operated under aternatng propretorshps and a former propretor whose qua-
fcatons were prevousy approved by the Commssoner s agan to operate the
dstery, or where a frut dstery as been operated aternatey as a regstered
dstery or as an ndustra acoho pant and s to be agan operated as a frut
dstery by the propretor whose quafcatons were prevousy approved by the
Commssoner, the dstrct supervsor may authorze the commencement of
operatons pror to the revew of the quafyng documents by the Commssoner.
In such cases, the dstrct supervsor w notfy the dster by etter and attach
one copy of such etter to the quafyng documents. (Sec. 3176, I. R. C.)
S
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

9

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
197 Regs. , 18 .2 2, 18 .2 .
2. The purpose of ths amendment s to deegate authorty to the
dstrct supervsor to authorze the commencement of operatons of the
dstery pror to the revew of the quafyng documents by the Com-
mssoner, (1) where the frut dstery s operated under aternatng
propretorshps and a former propretor whose quafcatons were
prevousy approved by the Commssoner s agan to operate the ds-
tery, and (2) where the frut dstery has been operatng as an
ndustra acoho pant or as a regstered dstery and s agan to
be operated as a frut dstery.
3. It s found that compance wth the notce, pubc rue-makng
procedure, and effectve date requrements of the dmnstratve Pro-
cedure ct ( U. S. C, secton 1001 et seq.) s unnecessary n connecton
wth the ssuance of these reguatons for the reason that the changes
made are of a berazng character.
. Ths Treasury Decson sha be effectve mmedatey upon ts
. Ths Treasury Decson s ssued under the authorty contaned
n secton 3176, Interna Revenue Code (U. S. C, tte 26, secton 3176).
Fred S. Martn,
ctng Commssoner of Interna Revenue.
pproved October 1 ,19 9.
Thomas . Lynch,
ctng Secretary of the Treasury.
TITL 26 INT RN L R NU . C PT R I. SU C PT R C, P RT 18 .
PRODUCTION OF RR NDY
mendng Reguatons
Treasury Department,
Offce of Commssoner of Interna Revenue,
Washngton 2 , D. C.
To Dstrct Supenns ors and Others Concerned:
1. On March 23, 19 9, notce of proposed rue makng, regardng
the producton of brandv, was pubshed n the Federa Regster (1
F.R. 1301).
2. fter consderaton of a such reevant matter as was presented
by nterested persons, sectons 18 .2 2 and 18 .2 of Reguatons (26
CFR, Part 18 ), approved February 28, 19 0, are hereby amended as
foows:
Sec. 18 .2 2. Sweetenng Propertes.- The burnt sugar or carame added to
brandy sha not contan any substanta quantty of sugar whch has not been
caramezed, or possess any matera sweetenng propertes. (Sees. 3030, 3176,
I. R. C.)
Sec. 18 .2 . udton to Packages n Warehouse. urnt sugar or carame
may be added to packages of brandy n warehouse ony where the brandy s
unmerchantabe by reason of beng defcent n coor and t s shown that the
faure to propery coor the brandy pror to the fng of the packages was
due to no neggence or faut of the dster. In such cases, appcaton must he
fed wth the dstrct supervsor by the dster or warehouseman, showng the
sera numbers of the barres, the name of the producng dster, and the neces-
sty for the addton of the burnt sugar or carame to the brandy. The dstrct
(Pubshed n the Federa Regster October 20, 19 9)
Reguatons , Sectons 18 .2 2 and 18 .2 .
19 9-20-13203
T. D. 7 IS
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

9

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
Regs. , 18 .2 , etc. 198
supervsor may permt the addton, under the Immedate supervson of the
storekeeper-gauger, of burnt sugar or carame, conformng wth secton 18 .2 2,
to each of the barres, after the brandy has been regauged for ta payment and
pror to the purchase and aff ng of the ta -pad stamps to the barres. (Sees.
3030 and-3176, I. R. C.)
3. The purpose of these amendments s to smpfy the procedure
reatng to the addton of burnt sugar or carame to brandy at frut
dsteres and nterna revenue bonded warehouses.
. Ths Treasury Decson sha become effectve on the thrty-frst
day after the date of ts pubcaton n the Federa Regster.
. Ths Treasury Decson s ssued under the authorty contaned
n sectons 3036 and 3176, Interna Revenue Code (26 U. S. C. 3036
and 3176).
Geo. . Schoeneman,
Commssoner of Interna Revenue.
pproved September 12, 19 9.
Thomas . Lynch,
ctng Secretary of the Treasury.
(Pubshed n the Federa Regster September 16, 19 9)
Reguatons , Sectons 18 .2 , tc. 19 9-19-13181
T. D. 73
TITL 26 INT RN L R NU . C PT R I, SU C PT R C, P RT 18 .
PRODUCTION OF R NDY
mendng Reguatons
Treasury Department,
Offce of Commssoner of Interna Revenue,
Washngton.2 , D. C.
To Dstrct Supervsors and Others Concerned:
1. On une 1, 19 ), notce of proposed rue makng, regardng the
wthdrawa of sampes of brandy by propretors of frut dsteres,
was pubshed n the Federa Regster (1 F. R. 28 6).
2. fter consderaton of a such reevant matter as was presented
by nterested persons, sectons 18 .2 , 18 .2 6, 18 .2 7, 18 .2 8,
18 .2 9, 18 .260, 18 .261. 18 .262, 18 .263, and 18 .26 of Reguatons
(26 CFR, Part 18 ), approved February 28, 19 0, reatng to the
producton of brandy, are amended and paragraph ()a s added to
secton 18 .3, as foows:
Sec. 18 .3. Defntons.
()a. Laboratory anayss sha mean the determnaton of the composton
of brandy or frut sprts by chemca, physca, or organoeptc e amnaton.

T -F S MPL S FOR L OR TORY N LYSIS
Sec. 18 .2o . Unfnshed Sprts. Upon approva by the storekeeper-gauger
n charge at the dstery, or by the dstrct supervsor when no storekeeper-
gauger s assgned to the dstery, of an appcaton submtted n accordance wth
the provsons of secton 18 .2 9, the dster may remove for aboratory anayss
sampes of brandy or frut sprts n the course of dstaton and pror to the
depost n recevng tanks as foows:
( ) S|n| s, not e ceedng 3 pnts n the aggregate, of the product of
each st n a dstng unt n each 2 -hour perod;
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

9

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
199
Regs. , 18 .2 , etc.
(6) Where a dscontnuous or batch st s operated, sampes not e ceed-
ng 3 pnts n the aggregate, of the product of each batch dsted;
(c) Where the dster desres to obtan spot-sampes from varous pates
of a st n the course of dstng a day s producton, sampes, not e ceed-
ng 1 quart n the aggregate, from each of the varous pates.
The sze and number of sampes must be restrcted to the mnmum necessary
for the purpose for whch ntended. The wthdrawa of ta -free sampes of
unfnshed sprts n e cess of these mtatons for aboratory anayss sha not
be permtted, uness t s shown that such sampes are nsuffcent and the Com-
mssoner, upon recept of a wrtten appcaton fed n accordance wth the
provsons of secton 18 .2 9(c), authorzes the takng of addtona sampes.
(Sees. 3037 and 3176, I. R. C.)
Sec 18 .2 6. Fnshed Sprts. Upon approva by the storekeeper-gauger n
charge at the dstery, or by the dstrct supervsor when no storekeeper-gauger
s assgned to the dstery, of a wrtten appcaton fed n accordance wth the
provsons of secton 18 .2 9, the dster may remove for aboratory anayss
sampes of brandy or frut sprts from recevng tanks and tanks or packages
n the brandy depost room. Such sampes sha not e ceed: (a) 1 quart n
the aggregate, n any 2 -hour perod from any recevng tank; (6) 1 quart from
any fng of a tank n the brandy depost room; and (c) 1 pnt from any pack-
age stored n the brandy depost room: Provded, That, when a recevng tank s
fed and empted and fed agan n the same 2 -hour perod, sampes, not to
e ceed 1 quart n the aggregate, may be taken from each fng of such recev-
ng tank. The sze and number of sampes must be restrcted to the mnmum
necessary for the purpose for whch ntended. The wthdrawa In e cess of
these mtatons of ta -free sampes of brandy or frut sprts for aboratory
anayss sha not be permtted uness t s shown that such sampes are nsuffcent
for the purpose ntended and the Commssoner, upon recept of a wrtten appca-
ton fed n accordance wth the provsons of secton 18 .2 9(c), authorzes the
takng of addtona sampes. (Sees. 3037 and 3176, I. R. C.)
Sec. 18 .2 7. Dsposton of Sampes. Ta -free sampes must be used soey
for aboratory anayss. Such sampes may not be furnshed to saesmen and
deaers for advertsng or soctng purposes. Where brandy or frut sprts are
sod sub|ect to approva as to quaty, a sampe taken pursuant to the provsons
of sectons 18 .2 6, 18 .2 9, 18 .260, 18 .261, and 18 .262 may be furnshed the
purchaser. Remnants or resdues of ta -free sampes remanng after anayss
and whch are not desred to be retaned as aboratory specmens or for further
annyss or e amnaton shoud be returned to the vesses n the dstng system,
uness the condton of the remnants or resdues s such as to render them un-
sutabe for such dsposton. If such remnants or resdues of snmpes are un-
sutabe for return to the dstng system, they shoud be destroyed. (Sees.
3037 and 3176, I. R. C.)
T -P ID S MPL S FOR OT R T N L ROR TORY N LYSIS
Sec. 18 .2 8. Unfnshed and Fnshed Sprts. Upon approva by the store-
keeper-gauger n charge at the dstery of an appcaton submtted n accordance
wth the provsons of secton 18 .2 9(a), the dster may take sampes of
brandy or frut sprts n the course of dstaton n the dstery, or from the
recevng tanks, or from tanks or packages n the brandy depost room, for other
than aboratory anayss, sub|ect to payment of ta on the quantty so removed.
Such sampes must be used strcty for sampe purposes, and the number and sze
of the sampes must be restrcted to that necessary for bona fde sampe purposes.
(Sees. 3037 and 3176, I. R. C.)
G N R L R UIR M NTS
Sec. 18 .2 9. ppcaton. (a) To the storekeeper-gauger n charge. When
the dster desres sampes of brandy or frut sprts whch, under the provsons
of sectons 18 .2 , 18 .2 6, and 1S .2 8, may be authorzed by a storekeeper-
gauger and one s assgned to the premses, appcaton, n trpcate, sha be
submtted to that offcer. The appcaton sha be gven a sera number be-
gnnng wth 1 for the frst appcaton and runnng consecutvey thereafter.
The appcaton shoud specfy whether the sampes are desred for aboratory
anayss ta -free or for other purposes sub|ect to payment of ta , the reasons
why the sampes are desred, the number and sze of the sampes to be taken,
and the pace or paces of remova. Where t s desred to take sampes from
the dstery reguary for aboratory anayss, e cept spot-sampes from the
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

9

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
Regs. , 18 .2 . etc.
200
pates of a st, the appcaton may be made for that purpose. Where spot-
sampes from the pates of a st or sampes sub|ect to payment of ta are de-
sred, the appcaton sha be submtted each day such sampes are to be pro-
cured. No sampes may be taken unt the appcaton s approved.
(6) To the dstrct supervsor. When smar sampes are desred and no
storekeeper-gauger s assgned to the premses the dster sha make appca-
ton. In trpcate, to the dstrct supervsor. The appcaton sha be gven a
sera number wthn the seres prescrbed n paragraph (a) of ths secton and
sha show the nformaton requred theren. No sampes may be taken unt
the appcaton s approved.
(c) To the Commssoner. When the dster desres sampes other than those
whch, under the provsons of sectons 18 2 , 18 .2 6, and 18 .2 8, may be
authorzed by the storekeeper-gauger he sha make appcaton, n quadrupcate,
through the dstrct supervsor, to the Commssoner. The appcaton sha
be gven a sera number wthn the seres prescrbed n paragraph (a) of ths
secton and sha show the nformaton requred theren. The appcaton must
show the necessty for sampes n number or quanttes n e cess of those whch
may be authorzed by the storekeeper-gauger. The dstrct supervsor sha
satsfy hmsef as to the need for sampes, note hs recommendatons on each copy
of the appcaton and forward a copes to the Commssoner. No sampe may
be taken unt the appcaton s approved. (Sees. 3037 and 3176, I. R. C.)
Sec. 18 .260. pprova of ppcaton. (a) y the storekeeper-ganger n
charge at the dster /. Upon recept of an appcaton submtted n accordance
wth the provsons of secton 18 .2 9(a), the storekeeper-gauger must satsfy
hmsef as to the need for the number of sampes desred and the egtmacy
of the purpose for whch they are to be used before approvng the appcaton.
The storekeeper-gauger upon approva or dsapprova of an appcaton, sha re-
turn one copy to the dster, forward one copy to the dstrct supervsor, and
retan the orgna copy n hs offce.
(b) y the dstrct supervsor. Upon recept of an appcaton submtted
n accordance wth the provsons of secton 18 .2 9(6), the dstrct supervsor
must satsfy hmsef as to the need for the number of sampes desred and the
egtmacy of the purpose for whch they are to be used before approvng the ap-
pcaton, and sha note upon each copy hs approva or dsapprova. If the
appcaton s approved he sha fe a copy and furnsh the orgna and reman-
ng copy to the Government offcer assgned to supervse the wthdrawa of the
sampes. t the tme sampes are wthdrawn the Government offcer sha fe
the orgna copy of the appcaton at the dstery and furnsh the dster the
remanng copy. If the appcaton s dsapproved, the dstrct supervsor sha
fe the orgna copy and return the remanng copes to the dster.
(c) y the. Commssoner. Upon approva or dsapprova of an appcaton
by the Commssoner, the orgna and two-copes sha be returned to the dstrct
supervsor. If the appcaton s approved, the dstrct supervsor sha fe a
copy and furnsh the orgna and remanng copy to the Government offcer as-
sgned to supervse the wthdrawa of the sampes. t the tme sampes are
wthdrawn, the Government offcer sha fe the orgna copy of the appcaton
at thedstery and furnsh the dster the remanng copy. If the appcaton
s dsapproved, the dstrct supervsor sha fe the orgna copy and return the
remanng copes to the dster. (Sees. 3037 and 3170, L R. C.)
Sec. 18 .201. Remova Under Supervson. sampes must be taken unde
the mmedate supervson of the storekeeper-gauger assgned to the dstery or a
Government offcer assgned to supervse the remova of such sampes. When
there s no Government offcer assgned to the dstery and the appcaton s
transmtted to the dstrct supervsor pursuant to the provsons of secton
182.2 9(6), the dstrct supervsor sha authorze the takng of the sampes at
such tme as offcers vst the dstery to gauge brandy, make nspectons, etc., un-
ess n hs opnon, the crcumstances are such as to warrant the detang of an
offcer especay to permt the dster to obtan sampes. (Sees. 3037 and 3176,
I. R. C.)
Sec 1S .262. Labe. t the tme of the wthdrawa of a sampe the propretor
sha prepare a abe and a copy thereof. The abe and the copy sha be prepared
on paper havng appro mate dmensons of 3 nches by nches. The propretor
sha show on the abe and on the copy, n the order sted and upon separate
nes, the foowng nformaton:
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

9

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
201
Regs. 6, 18 .2 , etc.
(1) The word Sampe ;
(2) The sera number of the approved appcaton coverng the wth-
drawa of the sampe;
(3) The knd of sprts;
( ) The pace from whch the sampe was removed ;
( ) The name of the dster foowed by the regstered number of the
dstery and the name of the State n whch ocated;
(G) statement showng the purpose for whch the sampe s ntended;
(7) The sze of the sampe and the quantty n proof gaons e tended to
the fourth decma pace; and
(8) If the sampe s to be anayzed or used at other than the mmedate
or contguous premses of the propretor, the name and address of the
aboratory or purchaser to whch the sampe s to be sent.
Upon competon, the abe and the copy sha be presented to the storekeeper-
gauger, who sha verfy the accuracy of the data thereon, date and sgn both
copes, and supervse the aff ng of the abe to the sampe contaner. Where
the abe s to be paced upon a contaner of a sampe taken sub|ect to payment
of ta for other than aboratory purposes, the storekeeper-gauger sha wrte
upon the copy of the abe the words sub|ect to ta payment. The dster sha
not be requred to aff red strp stamps to contaners of ta abe sampes of
brandy. The copy of the abe sha be fed by the storekeeper-gauger n accord-
ance wth the provsons of secton 18 .263. (Sees. 3037 and 3176, I. R. C.)
Sec. 18 .263. Offce Recobd. The propretor sha furnsh suffcent fe cases
for the fng and retenton of sampe records. The copes of abes sha be
kept by the storekeeper-gauger as a record of sampes removed, and sha be
fed numercay by appcaton number and chronoogcay by date. If the
dster operates an nterna revenue bonded warehouse on or contguous to the
dstery premses, the record of sampes removed from the dstery sha ba
mantaned separatey from the record of sampes removed from the warehouse.
(Sees. 3037 and 3176, I. R. C.)
Sec. 18 .26 . Report of Ta abe Sampes. ac day ta abe sampes of
brandy or frut sprts are wthdrawn, the storekeeper-gauger sha enter on
Form 161 , Ta abe Sampes of Dsted Sprts, n quadrupcate, a record
of the ta abe sampes removed. the nformaton caed for by the form
sha be furnshed. t the end of each month, the storekeeper-gauger sha
compete the report, retan one copy of the form, and dever the remanng
three copes to the dster, who sha forward the three copes to the coector
wth remttance for the ta due. The coector sha e ecute hs certfcate of
ta payment on each copy of the form, retan one copy, and return the re-
manng two copes to the dster, who w retan one copy and dever the
other copy to the storekeeper-gauger. The storekeeper-gauger sha note the
ta payment on hs retaned copv and forward the other copy to the dstrct
supervsor. (Sees. 3037 and 3176, I. R. C.)
3. These amendments are desgned to estabsh approprate mta-
tons and requrements for the wthdrawa of ta -free sampes of
brandy and frut sprts for aboratory anayss, ncudng organo-
eptc e amnaton, and the wthdrawa of sampes of brandy and
frut sprts for other bona fde sampe purposes sub|ect to ta -
payment, as provded by aw.
. Ths Treasury Decson sha be effectve on the thrty-frst day
after the date of ts pubcaton n the Federa Regster.
. Ths Treasury Decson s ssued under the authorty contaned
n sectons 3037 and 3176, Interna Revenue Code (U. S. G, tte 26,
sectons 3037 and 3176).
Geo. . Schoeneman,
Commssoner of Interna Revenue.
pproved ugust 2 , 19 9.
Thomas . Lynch,
ctng Secretary of the Treasury.
(Pubshed n the Federa Regster ugust 31,19 9)
868972 60 1
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

9

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
Regs. , 18 .31 , etc.
202
Reguatons , Sectons 18 .31 , tc. 19 9-1 -13136
T. D. 710
TITL 26 INT RN L R NU . C PT R I, SU C PT R C. P RT 18 .
PRODUCTION OF R NDT
mendng Reguatons
Treasury Department,
Offce of Commssoner of Interna Revenue,
Washngton , D. C.
To Dstrct Supervsors and Others Concerned:
1. Sectons 18 .31 , 18 .31 , 18 .31 a, 18 .316, 18 .323. 18 .32 .
18 .327, 18 .328, 18 :329, 18 .329a, 18 .330, 18 .332, 18 .333. and
18 .33 of Reguatons (26 CFR, Part 18 ), approved February 28,
19 0, reatng to producton of brandy, are hereby amended as foows:
Transfer to Wakehouse Off Dstery Premses n Same Dstrct, cept
Warehouse Operated by Dster on Contguous Premses
Sec. 18 .31 . ppcaton, Form 236. Where brandy s to be transferred to and
entered for depost n an nterna revenue bonded warehouse ocated off the
dstery premses In the same supervsory dstrct, and such warehouse s not
operated by the dster on premses contguous to the dstery premses, the
propretor of the recevng warehouse sha e ecute an appcaton for the transfer
of the brandy on Form 236. The appcant sha enter a appcabe data ndcated
by the form ncudng the ma mum quantty n ta gaons to be transferred
n any one truck, raroad car, or other vehce, and the type of conveyance. The
name of the carrer sha not be specfed on Form 236. The appcant sha
prepare an orgna and fve copes of Form 236 and gve them to the storekeeper-
gauger n charge of the recevng warehouse. (Sees. 2878, 2883, 3176, I. It. C.)
Sec. 18 .31 . Storekeeper-Gauoeu s Certfcate of Suffcency of Wareho-se
ond. Upon recept of Form 236 by the storekeeper-ganger n charge of the
warehouse, he w compare the pena sum of the bond as stated n the appcaton
wth hs record furnshed by the dstrct supervsor pursuant to Reguatons
10 (26 CFR, Part 18 ). If the bond s gven In the ma mum pena sum of
200,000, he w certfy to the suffcency thereof on Form 236 and return a s
copes of the form to the propretor of the warehouse. If the bond s gven n
ess than the ma mum pena sum, the storekeeper-gauger n charge w
determne from hs records whether the ta abty on the quantty of brandy
represented by the Form 236, pus the quantty of dsted sprts stored n the
warehouse, pus the quantty represented by a outstandng approved Forms 236.
s wthn the mts of the pena sum of the transportaton and warehousng bond.
If so, he w certfy to the suffcency of the bond on Form 236, record such certf-
caton n hs records, and return a s copes of the form to the propretor. If
the transportaton and warehousng bond s not suffcent, he w certfy to that
fact on Form 236 and return a s copes to the propretor. The propretor w
forward a s copes of the approved Form 236 to the propretor of the consgnor-
dstery. The propretor of the warehouse w be responsbe for a outstand-
ng approved Forms 236. If, at any tme, he decdes not to use one, he w
obtan a copes from the consgnor and gve them to the storekeeper-gauger n
charge of the warehouse for canceaton and return to the propretor of the
warehouse. (Sec. 3176, I. R. C.)
Sec. 18 .31 a. randy To e Transferred. When the dster desres to make
shpment, e w gve a copy of Form 236 to the storekeeper-gauger n charge and
furnsh hm a compete descrpton of the brandy to be shpped. (Sec. 3176.
I. R. C.)
Sec. 18 .316. Report of Gauge. Uness prevousy packaged, the brandy desg-
nated by the propretor to be transferred w be drawn from the recevng or
storage tanks nto packages, gauged, marked and branded, or nto a weghng
tank, gauged, and run by ppe ne nto a propery equpped raroad tank car.
The quantty transferred sha not e ceed the ma mum stated n the appca-
ton. The detas of the gauge w be entered by the storekeeper-gauger on fve
copes of Form 1 20. If the packages to be transferred were prevousy fed,
the storekeeper-gauger w nspect them but w not regauge the same, uness
the crcumstances are such as to make a regauge advsabe. Where packages
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

9

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
203
Regs. , 18 .31 , etc.
prevousy fed are removed on the fng gauge, the storekeeper-gauger w
prepare fve copes of Form 1 20, copyng the detas from the report of the
fng gauge. (Sees. 2878, 2883, 317( , 017, I. R. C.)
Sec. 18 .323. Dster s ntry for Depost. When the brandy has been
packaged, or run nto a raroad tank car and such tank ear sea-ocked, the store-
keeper-gauger n charge w dever the copy of Form 236 and the fve copes of
Form 1 20 to the dster. The dster sha, on the same date that the brandy
s to be removed from the dstery, e ecute on a s copes of Form 236 the
descrpton of the packages or tank car to t e transferred and on a fve copes
of Form 1 20 the entry for depost. e sha mmedatey return a copes of
such forms to the storekeeper-gauger n charge who w reease the brandy for
shpment. (Sees. 2879(a), 3176, I. R. C.)
Sec. 18 .32 . Stobekeeper-Uauger s Certfcate of Remova. Upon remova
of the brandy, the storekeeper-gauger w e ecute hs certfcate of gauge and
remova on Form 236. e w retan one copy of each form, furnsh one copy
of each to the dster, forward one copy of each to the supervsor-consgnor, and
forward three copes of Form 236 and two copes of Form 1 20 to the storekeeper-
gauger n charge nt the recevng warehouse. When shpment s made by truck,
one copy each of Forms 236 and 1 20 for the storekeeper-gauger n charge at the
recevng warehouse w be seaed n an enveope addressed to such storekeeper-
gauger n charge and handed to the person n charge of the truck for devery to
hm, and the remanng two copes of Form 236 and one copy of Form 1 20 w
be maed to such storekeeper-gauger n charge. (Sees. 2878, 2883, 3170, 3176,
I. R. C.)
Sec. 18 .327. Stohekeeper-Uauger s Recept of randy at Warehouse. fter
the brandy has been deposted n the recevng warehouse, the storekeeper-gaer
w e ecute hs recept on the three copes of Form 230, notng thereon any osses
or dscrepances reported on Form 1 20 n accordance wth sectons 18 .32 and
18 .326. The storekeeper-gauger n charge w retan one copy each of Forms
236 and 1 20, gve one copy each of Forms 236 and 1 20 to the propretor of the
warehouse, and forward one copy of Form 236 to the dstrct supervsor. No wth-
drawa or transfer In bond of sprts receved at the warehouse w be made unt
the three copes of Form 2;W and the two copes of Form 1 20 have been receved
by the storekeeper-gauger In charge. (Sees. 2878, 2883, 3170, I. R. C.)
Transfer to Warehouse Off Dstery Premses n Dfkk.rknt Dstrct
Sec. 18 .328. ppcaton, F rm 236. Where brandy s to be entered for depost
n an nterna revenue bonded warehouse ocated n a dfferent supervsory dstrct
than the dstery, the propretor of the recevng warehouse sha e ecute an
appcaton for the transfer of the brandy on Form 236. The appcant sha enter
a appcabe data ndcated by the form ncudng the ma mum quantty n ta
gaons to be transferred n any one truck, raroad car, or other vehce, and
the type of conveyance. The name of the carrer sha not be specfed on Form
236. The appcant sha prepare an orgna and s copes of Form 236 and gve
them to the storekeeper-gauger n charge of the recevng warehouse. (Sees. 2878,
2883, 3176, 1. R. C.)
Sue. 18 .329. Storekeepek-Gaugek s Certfcate of Suffcency of Ware-
house ond. Upon recept of Form 236 by the storekeeper-gauger n charge of
the warehouse, he w compare the pena sum of the bond as stated n the app-
caton wth hs record furnshed by the dstrct supervsor pursuant to Regu-
atons 10 (26 CFR, Part 18 ). If the bond s gven n the ma mum pena sum
of 200,000, he w certfy to the suffcency thereof on Form 236 and return a
seven copes of the form to the propretor of the warehouse. If the bond s
gven n ess than the ma mum pena sum, the storekeeper-gauger n charge w
determne from hs records whether the ta abty on the quantty of brandy
represented by the Form 230, pus the quantty of sprts stored n the warehouse,
pus the quantty represented by a outstandng approved Forms 236, s wthn
the mts of the pena sum of the transportaton and warehousng bond. If so,
he w certfy to the suffcency of the bond on Form 236, record such certfcaton
n hs records, and return a seven copes of the form drect to the propretor.
If the transportaton and warehousng bond s not suffcent, he w certfy to
that fact on Form 236 and return a seven copes to the propretor. The pro-
pretor w forward a seven copes of the approved Form 236 to the propretor
of the consgnor-dstery. The propretor of the warehouse w he responsbe
for a outstandng approved Forms 236. If, at any tme, he decdes not to use
one, he w obtan a copes from the consgnor and gve them to (he storekeeper-
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

9

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
Regs. , 18 .31 , etc.
20
gauger In charge of the warehouse for canceaton and return to the propretor of
the warehouse. (Sec. 3176,1. R. 0.)
Sec. 18 .329a. bandy To e Transferred. When the dster desres to make
shpment, he w gve a copy of Form 236 to the storekeeper-gauger n charge and
furnsh hm a compete descrpton of the brandy to be shpped. (Sec. 3176,
I. It. C.)
Sec. 18 .330. Report of Gauge. Uness prevousy packaged, the brandy desg-
nated by the propretor to be transferred w be drawn from the recevng or
storage tanks nto casks or packages, gauged, marked and branded, or nto a
weghng tank, gauged, and run by ppe ne nto a propery equpped raroad tank
car. The quantty transferred sha not e ceed the quantty stated n the app-
caton. The detas of the gauge w be entered by the storekeeper-gauger on
fve copes of Form 1 20. If the packages to be transferred were prevousy fed,
the storekeeper-gauger w nspect them but w not regauge the same, uness the
crcumstances are such as to make a regauge advsabe. Where prevousy fed
packages are removed on the fng gauge, the storekeeper-gauger w prepare
fve co|es of Form 1 20, copyng the detas from the report of the fng gauge.
(Sees. 2878, 2883, 3176, 017,1. R. C.)
Sec. 18 .332. Dster s ntry for Depost. When the brandy has been
packaged, or run nto a raroad tank car and such tank car sea-ocked, the
storekeeper-gauger n charge w dever the copy of Form 236 and the ve
copes of Form 1 20 to the dster. The dster sha, on the same date that
the brandy s to be removed from the dstery, e ecute on a seven copes of
Form 236 the descrpton of the packages or tank car to be transferred and on
a fve copes of Form 1 20 the entry for depost. e sha mmedatey return
a copes of such forms to the storekeeper-gauger n charge who w reease the
brandy for shpment. (Sees. 2879(a), 3176, I. R. C.)
Sec. 18 .333. Storekeeper-Gauoer s Certfcate of Remova. Upon remova
of the brandy, the storekeeper-gauger w e ecute hs certfcate of gauge and
remova on Form 236. e w retan one copy of each form, furnsh one copy
of each to the dster, forward one copy of each to the supervsor-consgnor,
and forward four copes of Form 236 and two copes of Form 1 20 to the store-
keeper-gauger n charge at the recevng warehouse. When shpment s made
by truck, one copy each of Forms 236 and 1 20 for the storekeeper-gauger n charge
at the recevng warehou.se w be seaed n an enveope addressed to such store-
keeper-gauger n charge and handed to the person n charge of the truck for de-
very to hm, and the remanng three copes of Form 236 and one copy of Form
1 20 w be maed to such storekeeper-gauger n charge. (Sees. 2878, 28S3, 3176,
I. R. C.)
Sec. 18 .33 . Storekeeper-Gavgkr s Recept of randy at Warehouse. The
storekeeper-gauger at the recevng warehouse w e amne the shpment upon
ts arrva and ascertan and note on both copes of Form 1 20 any osses or ds-
crepances as provded n sectons 18 .32 and 18 .32o. fter the brandy has
been deposted, the storekeeper-gauger w e ecute hs recept on the four copes
of Form 236, notng thereon any osses or dscrepances reported on Form
1 20. The storekeeper-ganger n charge w retan one copy each of Forms
236 and 1 20, gve one copy each of Forms 236 and 1 20 to the propretor of
the warehouse, and forward two copes of Form 236 to the supervsor of hs
dstrct. The dstrct supervsor w retan one copy of Form 236 and forward
the remanng copy of Form 236 to the supervsor of the dstrct from whch
the brandy was transferred. No wthdrawa or transfer n bond of brandy
receved at the warehouse w be made unt the four copes of Form 236 and
the two copes of Form 1 20 have been receved by the storekeeper-gauger
n charge. (Sees. 2878, 2883, 3170, 3170, I. R. C.)
2. It s found that compance wth the notce and pubc rue-
makng procedure of the dmnstratve Procedure ct ( U. S. C.
1001 et seq.) s unnecessary n connecton wth the ssuance of these
reguatons for the reason that the changes made are of a berazng
character.
3. The purposes of these amendments are as foows:
(1) To reduce the number of copes of reports of gauge (Form
1 20) prepared by storekeeper-gangers, by dscontnung furnsh-
ng of certan copes to dstrct supervsors, whch w resut n
reducng the work of storekceper-gaugers and audt cerks wthout
|eopardy to the revenue;
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

9

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
20
Regs. , 18 .336, etc.
(2) To e pedte the recept by the consgnor-dster of Forms
236, Transfer of Dsted Sprts n ond, after approva of
bond coverage by the storekeeper-gauger at the consgnee-ware-
house, by provdng that the consgnee-warehouseman send them
drect to the consgnor-dster n eu of havng the storekeeper-
gauger at the warehouse send them to the storekeeper-gauger at
the consgnor-dstery for devery to the consgnor-dster;
(3) To obvate the preparaton of addtona Forms 236 by the
consgnee-warehouseman when he desres shpments made pursu-
ant to approved Forms 236 after the e praton of 90 days, by re-
vokng the provson that Forms 236 w be canceed by the dstrct
supervsor upon the e praton of 90 days after approva f
not used wthn that perod or e tended by the dstrct supervsor;
( ) To obvate the need for obtanng the consent of the dstrct
supervsor when the consgnor-dster desres to shp brandy by a
carrer other than the one orgnay desgnated on Form 236 by the
consgnee-warehouseman, by drectng that the name of the car-
rer sha not be shown on Form 236 by the consgnee-warehouse-
man;
( ) To factate the e ecuton on a copes of Form 236 of the
storekeeper-gauger s certfcate of recept at the consgnee-ware-
house by provdng for the routng, when brandy s shpped from
the dstery, of the copes of Forms 236 and 1 20 for the con-
sgnee-warehouseman wth the copes for the storekeeper-gauger
at the consgnee-warehouse, n eu of sendng them drect to the
consgnee-warehouseman.
. Ths Treasury Decson sha be effectve on the thrty-frst day
after the date of ts pubcaton n the Federa Regster.
. (Ths Treasury Decson s ssued under the authorty contaned
n sectons 2878, 2879(a), 2883, 3170, 3176, and 017 of the Interna
Revenue Code (U. S. C, tte 26, sectons 2878, 2879(a), 2883, 3170,
3176, and 017).)
Fred S. Martn,
ctng Commssoner of Interna Revenue.
pproved uy 1, 19 9.
Thomas . Lynch,
ctng Secretary of the Treasury.
(Pubshed n the Federa Regster uy 8, 19 9)
Reguatons , Sectons 18 .336, tc. 19 9-19-13182
T. D. 739
TITL 20 INT RN L R NU . Cn PT R I, SU C PT R C, P RT 18 .
PRODUCTION OP R NDY
mendng Reguatons
Treasury Department,
Offce of Commssoner of Interna Revenue,
Washngton 2 , D. C.
To Dstrct Supervsors and Others Concerned:
1. Sectons 18 .336, 18 .337, 18 .338, 18 .3 1, 18 .3 3, and 18 .3 8
of Reguatons (26 CFR, Part 18 ), approved February 28, 19 0,
reatng to producton of brandy, are hereby amended as foows:
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

9

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
Regs. , 18 .336, etc.
20(3
R MO L O R NDT IN P C G S FOR FORTIFIC TION OF WIN
Sec. 18 .336. ppcaton. Form 2T 7. Where It s desred to remove brandy
n packages from a frut dstery for the fortfcaton of wne, appcaton
w be made by the wnemaker on Form 2r 7. ppcaton for the Remova of
randy for Fortfcaton of Wne from Frut Dsteres and Interna Revenue
onded Warehouses. The wnemaker sha state n the appcaton the pena
sum of the bond, Form 700- . The same appcaton may not ncude brandy
from more than one dstery, nor two or more ots to be removed from the
same dstery at dfferent tmes, e cept where the dstery s contguous to
the wnery, as provded n secton 18 .3 1. The appcaton sha be fed n
trpcate where the wnery and the dstery are n the same supervsory
dstrct, and In quadrupcate where they are n dfferent dstrcts. Where the
premses are ocated n the same supervsory dstrct and the bond of the wne-
maker s gven n the ma mum pena sum of 0,000, Form 2 7 w be sub-
mtted to the storekeeper-gauger f one s ocated at the wnery, or at a
contguous frut dstery or nterna revenue bonded warehouse, as the case
may be. If no storekeeper-gauger s ocated at such premses, the appcaton
w be submtted, at the dscreton of the dstrct supervsor, to a desgnated
storekeeper-gauger n the vcnty of the bonded wnery. The dstrct super-
vsor w notfy each storekeeper-gauger desgnated to approve Forms 2 7 and
advse hm that the wnemaker s bond s gven n the ma mum pena sum of
0,000. e w notfy each wnemaker concerned where Forms 2 7 are to
be submtted to a storekeeper-gauger. other Forms 2 7, that s, (1) those
coverng ntradstrct removas where the bond of the wnemaker Is n the
ma mum pena sum but no storekeeper-gauger has been desgnated to approve
Forms 2 7, (2) those coverng ntradstrct removas where the bond of the
wnemaker s not n the ma mum pena sum, and (3) those coverng nter-
dstrct removas, w be submtted drect to the supervsor of the dstrct n
whch the wnery s ocated. (Sees. 3031(a), 3033, 3170, I. R. C.)
Sec. 18 .337. cton on ppcaton, Form 2 7. (a) y dstrct supervsor.
If the appcaton s n proper order, the quantty of brandy to be wthdrawn
s not n e cess of the appcant s current needs or of the storage capacty of
the fortfyng room (see secton 178. 21 of Reguatons 7), and the bond of the
wnemaker s suffcent to cover the brandy to be procured, the dstrct super-
vsor w (1) where the dstery s n the same dstrct, e ecute hs certfcate
on the form and send a three copes to the propretor of the frut dstery;
and (2) where the dstery s ocated In another supervsory dstrct, e ecute
hs certfcate on the form and send a four copes to the supervsor of such ds-
trct, who w dever a four copes to the propretor of the frut dstery. If
a storekeeper-gauger s not ocated at the frut dstery, the supervsor of the
dstrct n whch the frut dstery s ocated w desgnate a storekeeper-gauger
to gunge the brandy. If the appcaton s not n order, the supervsor of the
dstrct n whch the bonded wnery s ocated w return a copes to the
wnemaker.
(6) y storckceprr-gaufer. Upon recept of Form 2 7 by the storekeeper-
gauger, he w compare the pena sum of the bond as stated n the appcaton
wth the statement furnshed by the dstrct supervsor pursuant to secton
18 .336. If the bond of the wnemaker s gven n the ma mum pena sum of
0,000, the appcaton s n proper order, and the quantty of brandy to be
wthdrawn s not n e cess of the appcant s current needs or of the storage
capacty of the fortfyng room (see secton 178. 21 of Reguatons 7), he w
certfy to the suffcency thereof on Form 2 7. e w send a copes of Form
2 7 to the propretor of the frut dstery. If the appcaton s not n order, he
w return a copes to the wnemaker. (Sees. 3031 (n). 8033, 3176, I. R. C.)
Sec. 18 .338. Gauge of Rrandy. The propretor, upon recept of Form 2 7, w
e ecute hs descrpton of the brandy to be gauged, on a copes of the form.
e w refer them to the storekeeper-gauger assgned to the dstery, or to the
storekeeper-ganger desgnated by the dstrct supervsor pursuant to secton
18 .337(a), as the case may be. Where the certfcate of suffcency of the wne-
maker s bond was e ecuted by a storekeeper-gauger pursuant to secton 18 .337(6)
and no storekeeper-gauger s assgned (o the frut dstery, the propretor w
request the dstrct supervsor to desgnate one to gauge and reease the brandy.
If the brandy to be removed s contaned n tanks, the desgnated packages w
be fed, gauged, and marked and branded n accordance wth the Gaugng Mauu.
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

9

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
207
Regs. , 18 .336, etc.
If the packages were prevousy fed, they w be marked ns requred, and
removed on the orgna gauge, uness a regauge s deemed advsabe. The
storekeeper-gauger w prepare four copes of the report of gauge, Form 1 20,
where the brandy Is to be removed at one tme to the fortfyng room of a con-
tguous wnery, fve copes n a other nstances where brandy s removed to a
wnery ocated n the same supervsory dstrct, and s copes where the
wnery s ocated n another dstrct. The storekeeper-gauger w attach one
copy of Form 1 20 to each copy of Form 2 7 and w note on the e tra copes of
Form 1 20 the name, regstered number, and address of the wnery to whch the
brandy s to be shpped. No greater quantty of brandy may be gauged or
wthdrawn than stated n the appcaton. (Sees. 2878, 3031(a), 3033, 3176,
I. . C.)
Sec. 18 .3 1. Gaugng Offcer s Certfcate of Monthy Deposts n Con-
tguous Wnery. If the dstery and wnery are ocated on contguous premses
and brandy s to be transferred to the wnery from tme to tme durng the
month under the supervson of a storekeeper-gauger, the wnenaker s app-
caton on Form 2 7 may cover a brandy to be transferred to the wnery durng
the month. If the storekeeper-gauger gaugng the brandy supervses ts transfer
to and depost n the fortfyng room, he w certfy to the depost on each copy
of Form 1 20 as the brandy s deposted, attach one copy thereof to each copy
of Form 2 7, forward one of the e tra copes of Form 1 20 to the dstrct super-
vsor, and dever one copy to the dster. t the cose of the month the store-
keeper-gauger w e ecute hs certfcates of gauge and remova and recept on
Form 2 7, retan one copy thereof, wth a copy of each Form 1 20 attached, at
the dstery as a permanent record, and one copy, smary competed, at the
wnery tor the same purpose, and forward the other copy to the dstrct super-
vsor. (Sees. 3031(a), 3033, 3170, 3176, 017, I. R. C.)
R MO L OF R NDY Y PIP LIN FOR T FORTIFIC TION OF WIN
Sec. 18 .3 3. ppcaton, Form 2 7. Where t s desred to transfer brandy
from the recevng tanks or from storage tanks n the brandy depost room by
ppe ne to the fortfyng rooms of wneres on contguous premses, appcaton
w be made by the wnemaker on Form 2 7, n trpcate, n the same manner
as when brandy s to be transferred n packages, as prescrbed n secton 18 .330.
The dstrct supervsor, or the storekeeper-gauger, as the case may be, w e ecute
hs certcate on the form as prescrbed n secton 181.337, the dster w nd-
cate the brandy to be gauged, as prescrbed n secton 18 .338, and the storekeeper-
ganger desgnated to gauge the brandy w make hs report of gauge and e ecute
us certfcates of gauge and remova and recept, and compete and dspose of
Forms 2 7 and Forms 1 20, as herenbefore prescrbed n the case of remova n
packages. Notaton of transfer by ppe ne w be made by the storekeeper-
gauger on each Form 1 20. (Sees. 3031(a), 3033, 3170, 3170, 017, I. R. C.)
R MO L OF R NDY IN T N C RS FOR FORTIFIC TION OF WIN
Sf,c. 18 8. ppcaton, Form 2 7. Where t Is desred to remove brandy
n raroad tank cars to the fortfyng room of a wnery, appcaton w be made
by the wnemaker on Form 2 7 n the same manner as when brandy s removed n
packages, as prescrbed n secton 18 .336. The dstrct supervsor, or the store-
keeper-gauger, as the case may be, w e ecute hs certfcate on the form as
prescrbed n secton 18 .337, the dster w ndcate the brandy to be gauged,
s prescrbed n secton 18 .338, and the storekeeper-gauger desgnated to gauge
the brandy w make hs report of gauge and e ecute hs certfcate of gauge and
remova and dspose of Forms 2 7 and Forms 1 20, as herenbefore prescrbed n
the case of remova n packages. The wnemaker w state on hs appcaton
that the brandy Is to be transported by raroad tank car. (Sees. 3031(a), 3033,
3170, 3176, 017, I. R. C.)
2. The purposes of the amendments are as foows:
(1) To e pedte the approva of Forms 2 7, ppcaton for the
Remova of randy for Fortfcaton of Wne from Frut Dsteres
and Interna Revenue onded Warehouses, by authorzng the store-
keeper-gauger ocated at the bonded wnery, or at a contguous frut
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

0

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
Regs. , 18 . 18, etc.
208
dstery or nterna revenue bonded warehouse, or ocated n the m-
medate vcnty of the bonded wnery f desgnated by the dstrct
supervsor, to certfy to the suffcency of the wnemaker s bond to
cover such remova, n eu of the dstrct supervsor, provded the
wnemaker s bond s gven n the ma mum pena sum and the wnery
and the frut dstery or nterna revenue bonded warehouse as the
case may be are ocated n the same supervsory dstrct.
(2) To emnate unnecessary work on the part of the dstrct super-
vsor by dscontnung the e ecuton by hm on Form 2 7 of an order
to a storekeeper-ganger to gauge and reease the brandy descrbed n
the appcaton. The e ecuton of the certfcate of bond coverage s
suffcent ndcaton to the storekeeper-gauger at the frut dstery or
the nterna revenue bonded warehouse that the brandy descrbed n
the appcaton may be gauged and reeased. If a storekeeper-gauger
s not assgned to the frut dstery or the nterna revenue bonded
warehouse, the dstrct supervsor w desgnate a storekeeper-gauger
to go to such premses to gauge and reease the brandy.
3. It s found that compance wth the notce and pubc rue-mak-
ng procedure of the dmnstratve Procedure ct ( U. S. C. 1001
et seq.) s unnecessary n connecton wth the ssuance of these regu-
atons for the reason that the changes made are of a berazng
character.
. Ths Treasury Decson sha be effectve on the thrty-frst day
after the date of ts pubcaton n the Federa Regster.
. (Ths Treasury Decson s ssued under the authorty contaned
n sectons 2878, 3031(a), 3033, 3170, 3176, and 017 of the Interna
Revenue Code (U. S. C, tte 26, sectons 2878, 3031(a), 3033, 3170,
3176, and 017).)
Geo. . Schoeneman,
Commssoner of Interna Revenue.
pproved September 1, 19 9.
Thomas . Lynch,
ctng Secretary of the Treasury.
(Pubshed n the Federa Regster September 8, 19 9)
Reguatons , Sectons 18 . 18,18 . 23, 19 9-17-131 2
and 18 . 2 . T. D. 716
TITL 26 INT RN L R NU . C PT R I, SU C PT R C, P RT 18 .
PRODUCTION OF R NDY
mendng Reguatons
Treasury Department,
Offce of Commssoner of Interna Revenue,
Washngton 2 , D. C.
To Dstrct Supervsors and Others Concerned:
1. Sectons 18 . 18,18 . 23, and 18 . 2 of Reguatons (26 CFR,
Part 18 ), approved February 28, 19 0, are amended to read as
foows:
Sec. 1S . 18. Record ok Dst.eby Operatons, Form 1 . The dster sha
keep a record of the dstery operatons on Form 1 , Monthy Return of Frut
Dster. ntres sha be made as Indcated by the headngs of the varous
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

0

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
209
Regs. , 18 . 18, etc.
coumns and nes and In accordance wth the nstructons prnted on the form,
and as set forth n these reguatons. cept as provded n secton 18 . 19,
the entres sha be made before the cose of the busness day ne t succeedng the
day on whch the transactons occur. Where the makng of the entres s
deferred to the ne t busness day, as authorzed heren, approprate memoranda
sha be mantaned for the purpose of makng the entres correcty. Form 1
w be kept at the dstery as a permanent record, In bound form, sub|ect to
nspecton by Government offcers at anv reasonabe hour. (Sees. 28 1, 3171,
3176, I. It. C.)
Skc. 1S . 23. Tme of Makng ntres. Day entres sha be made on Record
2 and Form 2 , as ndcated by the headngs of the varous coumns and n
accordance wth nstructons prnted thereon before the cose of busness of the
day ne t succeedng the day on whch the transactons occur. Where the pro-
pretor of a ta -pad premses defers the makng of entres to the De t busness
day, as heren authorzed, he sha mantan a separate record, such as nvoces,
of the removas of dsted sprts showng the remova data requred to be
entered on Record 2 or Form 2 and approprate memoranda of other trans-
actons requred to be entered on such records, for the purpose of makng the
entres correcty. (Sees. 2807, 3176, I. R. C.)
Sec. 18 . 2 . Separate Record of Sera Numbers of Cases. Sera numbers
of cases of dsted sprts dsposed of need not be entered on Record 2 or Form
2 , provded the propretor keeps n hs pace of busness a separate record,
approved by the dstrct supervsor, showng such sera numbers, wth necessary
dentfyng data, ncudng the date of remova and the name and address of the
consgnee. Such separate record may be kept n book form (ncudng oose-
eaf books) or may consst of commerca papers, such as nvoces or bs. Such
books, nvoces, and bs sha be preserved for a perod of years and n such a
mnner that the requred nformaton may be ascertaned ready therefrom,
and durng such perod sha be avaabe durng busness hours for nspecton and
the takng of abstracts therefrom by revenue offcers. ntres sha be made on
such separate record before the cose of the busness day ne t succeedng the day
on whch the transactons occur. Where the makng of the entres s deferred
Ut the ne t busness day, as authorzed heren, approprate memoranda sha be
mantaned for the purpose of makng the entres correcty. The propretor
whose separate record has been approved by the dstrct supervsor sha make a
notaton n the coumn for reportng sera numbers, as foows: Sera numbers
shown on commerca records per authorty dated (Sees. 28 7,
3176, 0 1, I. R. C.)
2. These amendments are ntended for the purpose of aowng add-
tona tme for makng requred entres n Forms 1 98, Record 2, and
Form 2 .
3. It s found that compance wth the notce and pubc rue-
makng procedure of the dmnstratve Procedure ct ( U. S. C.
1001 et seq.) s unnecessary n connecton wth the ssuance of these
reguatons for the reason that the changes made are of a berazng
character.
. Ths Treasury Decson sha be effectve on the thrty-frst day
after the date of ts pubcaton n the Federa Regster.
. Ths Treasury Decson s ssued under the authorty contaned n
sectons 28 1, 28 7, 3171, 3176, 0 1, I. R. C. (U. S. C, tte 26,
sectons 28 1, 28 7, 3171, 3176, 0 1).
Geo. . Schoe eman,
Commssoner of Interna Revenue.
pproved ugust 2, 19 9.
Thomas . Lynch,
rtnq Secretary of the Treasury.
(Pubshes n the Federa Regster ugust 9, 19 ;))
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

0

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
Regs. , 18 . , etc.
210
Reguatons , Sectons 18 . , tc. 19 9-17-131 3
T. D. 728
TITL 20 INT RN L R NU . C PT R I, SU C PT R C, P RT 18
PRODUCTION OF R NDY
mendng Reguatons
Treasury Department,
Offce of Commssoner of Interna Revenue,
Washngton 2 , D. C.
To Dstrct /Supervsors and Others Concerned:
1. Sectons 18 . , 18 . 6, 18 . 7, and 18 . 8 of Reguatons ,
approved February 28,10 0 (26 CFR, Part 18 ), are hereby amended.
2. The purpose of these amendments s to revse the procedure for
the recordng of Government property and the dsposton of cap
seas used and removed at frut dsteres.
3. It s found that compance wth the notce, pubc rue-makng
procedure, and effectve date requrements of te dmnstratve
Procedure ct (Pubc, No. 0 , Seventy-nnth Congress) s unneces-
sary n connecton wth the ssuance of these reguatons for the
reason that the changes made are of an admnstratve nature ony.
Sec. 18 . . Remova of Cap Seas. cept as provded n secton 18 . ,
cap seas whch have been aff ed w be removed ony by a storekeeper-gauger
or some other offcer desgnated for the purpose by the dstrct supervsor.
The off or w destroy a removed cap seas n a manner suffcent to prevent
ther reuse. (Sees. 28 1 and 3176, I. R. C.)
Sec. 18 . 0. Storekkeper-Gaugf.r s Record of Cap and Lock Seas. record
of cap seas receved, used, and removed, and of ock seas receved and used
at each frut dstery w be kept by storekeeper-gaugers on Form 2S9, Gov-
ernment Offcer s Record and Report of Government Property, n accordance
wth the ttes of the coumns and nes and the nstructons on the form. Form
289 w be kept n the Government cabnet when not n use. (Sec. 3176, I. R. C.)
Sec. 18 . 7. Storekeeper-Gauger s Report ok Government Property. On or
before the ffth day of the month succeedng that for whch the transactons are
reported, the storekeeper-gauger w prepare a monthy report on Form 289 of
a Government property at the frut dstery. Form 289 w be prepared n
dupcate, n accordance wth the ttes of the coumns and nes and the nstruc-
tons on the form. e w forward the orgna to the dstrct supervsor and
retan the copy for hs fes. (Sec. 3176, I. R. C.)
Sec. 18 . 8. Dstrct Supervsor s Report of Locks and Gaugng Instru-
ments. Dstrct supervsors w be hed accountabe for the Government ocks
and seas, ncudng cap seas, supped upon ther respectve requstons, and
for those receved from ther predecessors n offce. Outgong dstrct super-
vsors w take recepts from ther successors n offce for the Government ocks
then n use and on hand, and for seas on hand n the dstrct. Dstrct super-
vsors w keep an account of ocks and gaugng nstruments, and w make
return thereof semannuay to the Commssoner on Form 1 2, Return of
Locks and Gaugng Instruments. (Sec. 3176, I. R. C.)
. Ths Treasury Decson sha be effectve on the thrty-frst day
after the date of ts pubcaton n the Federa Regster.
. Ths Treasury Decson s ssued under the authorty contaned
n sectons 28 1 and 3176, Interna Revenue Code (U. S. C, tte 26,
sectons 28 1 and 3176).
Geo. . Scoeneman,
Commssoner of Interna Revenue.
pproved ugust , 19 9.
Thomas . Lynch,
ctng Secretary of the Treasury.
(Pubshed n the Federa Regster ugust 10, 19 9)
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

0

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
211
Regs. 7, 178.390, 178. 01
Reguatons 7, Sectons 178.390 and
178. 01.
19 9-17-131
T. D. 717
TITL 26 INT RN L R NU . C PT R I, SU C PT R C, P RT 178. WIN
Treasury Department,
Offce of Commssoner of Interna Revenue,
Washngton 2 , D. C.
To Dstrct Supervsors and Others Concerned:
1. Sectons 178.390 and 178. 01 of Reguatons 7 (26 CFR, Part
178), approved September 21, 19 , are amended to read as foows:
Sec. 178.390. Compete Records Requred the nformaton caed for n
Forms 701, 702, 702- , 702- , and 702-C, as ndcated by the headngs of the
coumns and nes of the forms and the nstructons prnted thereon or ssued
In respect thereto, and as requred by these reguatons, must be reported.
operatons and transactons must be entered on the forms before the cose of the
busness day ne t succeedng the day on whch the transactons occur. Where
the makng of the entres s deferred to the ne t busness day, as heren author-
zed, approprate memoranda sha bo mantaned for the purpose of makng the
entres correcty. The entres must be made by the propretor, or by hs agent
from persona knowedge or from data furnshed by the propretor. The entres
must be made from day to day durng the month (1) on a three copes of each
form, or (2) on one copy of each form, from whch two addtona copes must
be prepared at the cose of the month, or (3) on a rough copy of each form, from
Whch a three copes must be prepared at the cose of the month. When a rough
copy s kept, the entres sha be made thereon wth Indebe penc, nk, or
typewrter, and the rough copy sha be fed wth the copy (prepared there-
from) retaned at the wnery or storeroom. When the entres are made from
memoranda furnshed by the propretor, such memoranda sha be fed at the
wnery or storeroom, ( are must be used to nsure the keepng of accurate and
compete records. ach report shoud be carefuy checked before beng for-
warded to the dstrct supervsor. Reports prepared by persons who have no
knowedge of the wnery or storeroom operatons and who are not furnshed
wth the necessary data by the propretor w not be accepted. Where forms
are rendered n bank they shoud bear the notaton No transactons. Upon
dscontnuance of a bonded wnery or bonded storeroom, the ast reports shoud
be marked Fna. (Sees. 3171, 3176, 3901, I. R. C.)
Sec. 178. 01. Preparaton of the Report. Form 261 sha be prepared n
accordance wth the requrements of secton 178.390, respectng the preparaton
of Forms 701, 702, 702- , and 702- . The entres must be made by the wne-
maker, or by hs agent from persona knowedge or data furnshed by the wne-
maker, before the cose of the busness day ne t succeedng the day the brandy
or sweetenng agents are receved or used. Where the makng of the entres s
deferred to the ne t busness day, as authorzed heren, approprate memoranda
sha be mantaned for the purpose of makng the entres correcty. The report
sha be subscrbed and sworn to by the wnemaker or hs duy authorzed agent.
Where the form s sgned by an agent, proper power of attorney authorzng
the agent to e ecute the reports for the wnemaker must be fed wth the dstrct
supervsor. (Sees. 3031(a), 3032, 3033, 3171, 3176, 3901, I. R. C.)
2. These amendments are ntended for the purpose of aowng ad-
dtona tme for makng requred entres n Forms 261, 701, 702,
702- , 702- , and 702-C.
3. It s found that compance wth the notce and pubc rue-
makng procedure of the dmnstratve Procedure ct ( U. S. C.
1001 et seq.) s unnecessary n connecton wth the ssuance of these
reguatons for the reason that the changes made are of a berazng
character.
. Ths Treasury Decson sha be effectve on the thrty-frst day
after the date of ts pubcaton n the Federa Regster.
mendng Reguatons 7
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

0

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
Regs. 7, 178. 0, etc.
212
. Ths Treasury Decson s ssued under the authorty contaned
n sectons 3031(a). 3032, 3033, 3171, 3176, 3901, I. R. C. (U. S. C,
tte 26, sectons 3031(a), 3032, 3033, 3171, 3176, 3901).
Geo. . Schoeneman,
Commssoner of Interna Revenue.
pproved ugust 2, 19 9.
Thomas . Lynch,
ctng Secretary of the Treasury.
(Pubshed n the Federa Regster ugust 9, 19 9)
Reguatons 7, Sectons 178. 0,178. 1, 19 9-19-13183
and 178. . T. D. 738
TITL 26 INT RN L R NU . C PT R 1, SU C PT R C. P RT 178.
WIN
mendng Reguatons 7
Treasury Department,
Offce of Commssoner of Interna Revenue,
Washngton 2 , D. C.
To Dstrct Supervsors and Others Concerned;
1. Sectons 178. 0,178. 1, and 178. of Reguatons 7 (26 CFR,
Part 178), approved September 21,19 , reatng to wne, are amended
as foows:
M NN R OF PROCURING R NDY FROM FRUIT DISTILL RI S ND INT RN L R NU
OND D W R OUS S
Sec. 178. 0. ppcaton, Form 2 7. Where It s desred to procure brandy
for the fortfcaton of wne, ether from a frut dstery or from an nterna
revenue bonded warehouse, appcaton w be made by the wnemaker on Form
2 7. The wnemaker sha specfy n the appcaton whether the brandy s to
be procured n packages or raroad tank cars, or by ppe ne, and (1) f the
brandy s to be procured n raroad tank cars, whether both the wnery and
dstery or warehouse from whch the brandy s to be procured are equpped
wth sutabe raroad sdng factes and weghng tanks for gaugng the brandy,
and (2) f the brandy s to be procured by ppe ne, whether the wnery and the
dstery or warehouse from whch the brandy s to be procured are ocated on
contguous premses and are equpped wth a sutabe weghng tank and whether
the ppene has been nspected and approved, as requred by secton 178. 7. e
sha state n the appcaton the pena sum of the bond, Form 70O- . The same
appcaton may not ncude brandy from more than one dstery or warehouse
or from both a dstery and a warehouse, nor two or more ots to be removed
from the same dstery or warehouse at dfferent tmes, e cept where the dst-
ery or warehouse s contguous to the wnery, as provded n secton 17S. .
The appcaton sha be ted n trpcate where the wnery and the dstery or
warehouse are n the same supervsory dstrct, and n quadrupcate where they
are n dfferent dstrcts. Where the premses are ocated n the same super-
vsory dstrct and the bond of the wnemaker s gven n the ma mum pena
sum of (1,000, Form 2 7 w be submtted to the storekeeper-gauger f one s
ocated at the wnery, or at a contguous frut dstery or nterna revenue
bonded warehouse, as the case may be. If no storekeeper-gauger s ocated at
such premses, the appcaton w be submtted, at the dscreton of the dstrct
supervsor, to a desgnated storekeeper-gauger n the vcnty of the bonded
wnery. The dstrct supervsor w notfy eac storekeeper-gauger desgnated
to approve Forms 2 7 and advse hm that the wnemaker s bond s gven n the
ma mum pena sum of 0,000. o w aso notfy each wnemaker concerned
where Forms 2 7 are to be submtted to a storekeeper-gauger. other Forms
2 7, that s, (1) those coverng ntradstrct removas where the bond of the
wnemaker s n the ma mum pena sum hut no storekeeper-gauger has been
desgnated to approve Forms 2 7, (2) those coverng ntradstrct removas
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

0

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
213
Regs. 7, 178. 0, etc
where the bond of the wnemaker s not n the ma mum pena sum, and (3)
those coverng nterdstrct removas, w be submtted drect to the supervsor
of the dstrct u whch the wnery s ocated. (Sees. 3031, 3033, 3171, 3176,
3901. I. R. C )
Sec. 178. 1. cton on ppcaton, Form 2 7. (a) y dstrct supervsor.
If the appcaton s n order, the quantty of brandy to be wthdrawn s not n
e cess of the appcant s current needs or of the storage capacty of the fortfyng
room (see secton 178. 21), and the bond of the wnemaker (where not n the
ma mum pena sum) s suffcent to cover the ta on the brandy to be procured,
n addton to the ta on the wne and brandy then on hand at the wnery, the
dstrct supervsor w (1) where the dstery or warehouse s n the same
dstrct, e ecute hs certfcate on the form and send a three copes to the
propretor of the frut dstery or nterna revenue bonded wnrehouse, as the
case may he, from whch the brandy s to be removed, and (2) where the dstery
or warehouse s ocated n another supervsory dstrct, e ecute hs certfcate on
the form and send a four copes to the supervsor of such dstrct, who w send
a four copes to the propretor of the frut dstery or nterna revenue bonded
warehouse, as the case may be. If a storekeeper-gauger s not ocated at the
frut dstery or nterna revenue bonded warehouse, the supervsor of the
dstrct n whch such premses are ocated w desgnate a storekeeper-gauger to
gauge the brandy. If the appcaton s not n order, the supervsor of the dstrct
n whch the bonded wnery s ocated w return a copes to the wnemaker.
(6) y storckecper-gauger. I pon recept of Form 2 7 by the storekeeper-
gauger, he w compare the pena sura of the bond as stated n the appcaton
wth the statement furnshed by the dstrct supervsor pursuant to secton
178. 0. If the bond of the wnemaker s gven n the ma mum pena sum of
0,000, the appcaton s n order, and the quantty of brandy to be wthdrawn
s not n e cess of the appcant s current needs or of the storage capacty of the
fortfyng room (see secton 17S. 21), he w certfy to the suffcency thereof
on Form 2 7. e w send a copes of Form 2 7 to the propretor of the frut
dstery or nterna revenue bonded warehouse, as the case may be. If the
appcaton s not n order, he w return a copes to the wnemaker. (Sees.
3031, 303.3. 3176, 3901, I. R. C.)
Sec. 17S. . One ppcaton for Monthy Removas From Contguous Ds-
teky or Warehouse. If the dstery or warehouse and the wnery are o-
cated on contguous premses and brandy s to be transferred to the wnery from
tme to tme durng the month under supervson of a storekeeper-gauger, the
wnemaker s appcaton on Form 2 7 may cover a brandy to be transferred to the
wnery durng the month. In such case, f the bond of the wnemaker s not In
the ma mum pena sum, the wnemaker sha specfy on Form 2 7 the ma mum
quantty of brandy that w be removed from the dstery or warehouse on any
one day, ess the quantty on hand unused at the begnnng of the day. The store-
keeper-gauger supervsng (he remova of the brandy from the dstery or ware-
house w see that ths day quantty s not e ceeded. s provded n secton
178. 99(a), dstrct supervsors w use such day quantty n determnng the
suffcency of the wnemaker s bond.
(a) Same offcer at dstery or warehouse, and wnery. If the offcer gaugng
the brandy supervses ts transfer to and depost n the fortfyng room, he w
certfy to such depost on each copy of Form 1 20 as the brandy s deposted, and
attach one copy thereof to each copy of Form 2 7. t the cose of the month,
the offcer w e ecute hs certfcates on each copy of Form 2 7, retan one copy
thereof, wth a copy of each Form 1 20 attached, at the wnery as a permanent
record, and one copy smary competed, at the dstery or warehouse for the
same purpose, and forward the other copy to the dstrct supervsor.
( ) Separate offcers at dstery or warehouse and trnery. When an offcer
Is separatey assgned to duty at the wnery, the offcer at the dstery or ware-
house w retan one copy of Form 2 7 and dever the other two copes to the
offcer at the wnery. ach tme brandy s transferred to the wnery, the offcer
at the dstery or warehouse w attach one copy of Form 1 20, coverng the
brandy so transferred, to hs copy of Form 2 7, and dever two copes of the
Form 1 20 to the offcer at the wnery, who w certfy to depost on each
Form 1 20, as the brandy s receved and deposted n the fortfyng room, and
attach a copy of Form 1 20 to each copy of Form 2 7. t the cose of the month
the offcer at the dstery or warehouse w e ecute hs certfcate of gauge on
a three copes of Form 2 7 and the offcer at the wnery w e ecute hs certfcate
of recept on a copes of the form. The forms w then be dsposed of as
provded n paragraph (a). (Sees. 3031, 3033, 3176, 3901, I. R. C.)
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

0

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
Regs. 10, 18 .1 , etc.
21
2. The purpose of the amendments are as foows:
(1) To e pedte the approva of Forms 2 7, ppcaton for the
Remova of randy for Fortfcaton of Wne from Frut Dsteres
and Interna Revenue onded Warehouses, by authorzng the store-
keeper-gauger ocated at the bonded wnery, or at a contguous frut
dstery or nterna revenue bonded warehouse, or ocated n the m-
medate vcnty of the bonded wnery f desgnated by the dstrct
supervsor, to certfy to the suffcency of the wnemaker s bond to
cover such remova, n eu of the dstrct supervsor, provded the
wnemaker s bond s gven n the ma mum pena sum and the wnery
and the frut dstery or nterna revenue bonded warehouse as the
case may be are ocated n the same supervsory dstrct.
(2) To emnate unnecessary work on the part of the dstrct super-
vsor by dscontnung the e ecuton by hm on Form 2 7 of an order
to a storekeeper-gauger to gauge and reease the brandy descrbed n
the appcaton. The e ecuton of the certfcate of bond coverage s
suffcent ndcaton to the storekeeper-gauger at the frut dstery
or the nterna revenue bonded warehouse that the brandy descrbed
n the appcaton may be gauged and reeased. If a storekeeper-gauger
s not assgned to the frut dstery or the nterna revenue bonded
warehouse, the dstrct supervsor w desgnate a storekeeper-gauger
to go to such premses to gauge and reease the brandy.
3. It s found that compance wth the notce and pubc rue-
makng procedure of the dmnstratve Procedure ct ( U. S. C.
1001 et seq.) s unnecessary n connecton wth the ssuance of these
reguatons for the reason that the changes made are of a berazng
character.
. Ths Treasury Decson sha be effectve on the thrty-frst day
after the date of ts pubcaton n the Federa Regster.
. (Ths Treasury Decson s ssued under the authorty contaned
n sectons 3031, 3033, 3171, 3176. and 3901 of the Interna Revenue
Code (U. S. C, tte 2C, sectons 3031, 3033, 3171, 3176, and 3901).)
Geo. . Schoeneman,
Commssoner of Interna Revenue.
pproved September 1, 19 9.
Thomas . Lynch,
ctng Secretary of the Treasury.
(Pubshed n the Federa Regster September 8,19 9)
Reguatons 10, Sectons 18 .1 , tc. 19 9-1 -13137
T.D. 713
TITL 26 INT RN L R NU . C PT R I, SU C PT R C, P RT 18 .
W R OUSING OF DISTILL D SPIRITS
mendng Reguatons 10
Treasury Department,
Offce of Commssoner of Interna Revenue,
Washngton 2 , D. C.
To Dstrct Supervsors and Others Concerned:
1. Sectons 18 .1 , 18 .298, 18 .298a, 18 .298b, 18 .299. 18 .300,
18 .301, 18 .302, 18 .310, 18 .311, 18 .312, 18 .312a, 18 .312b, 18 .312c,
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

0

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
21
Regs. 10, 18 .1 , etc
18 .313, and 18 .31 of Reguatons 10 (26 CFR, Part 18 ), approved
May 20, 19 0, reatng to warehousng of dsted sprts, are hereby
amended as foows:
Depost of Sprts n Warehouse
sprts receved n casks or otheb approved contaners
Sec. 18 .1 . Dsposton of Depost Forms. Where sprts are receved from
a dstery operated by tte propretor on the same or contguous premses, the
storekeeper-gauger n charge at the recevng warehouse w retan the copy
of Form 1 20 coverng the depost of the sprts. Upon the depost of sprts
receved from a dstery not operated by the propretor of the warehouse on
the same or contguous premses, or from another bonded warehouse, the store-
keeper-gatgm1 at the recevng warehouse w foow the procedure prescrbed
by secton 18 .311 for transfers between warehouses n the same dstrct and
secton 18 .31 for transfers between warehouses n dfferent dstrcts. (Sec.
3176, I. R. C.)
Transfers n ond etween Interna Revenue onded Warehouses
transfers between warehouses n same dstrct
Sec 18 .298. pp|caton, Form 236. Where the transfer s to be made between
bonded warehouses n the same supervsory dstrct, the propretor of the recev-
ng warehouse sha e ecute an appcaton for the transfer of the sprts on
Form 236. The appcant sha enter a appcabe data Indcated by the form
ncudng the ma mum quantty n ta gaons to be transferred n any one
truck, raroad car or other vehce, and the type of conveyance. The name of
the carrer sha not be specfed on Form 230. The appcant sha prepare
an orgna and fve copes of Form 236 and gve them to the storekeeper-gauger
In charge of the recevng warehouse. (Sees. 287 , 3176, I. R. C.)
Sec. 18 .298a. Storekeeper-Gauger s Certfcate of Suffcency of ond.
Upon recept of Form 236 by the storekeeper-gauger n charge, he w compare
the pena sum of the bond as stated n the appcaton wth hs record furnshed
by the dstrct supervsor pursuant to secton 18 .112a. If the warehouse bond
s gven n the ma mum pena sum of 200,000, he w certfy to the suffcency
thereof on Form 236, and return a s copes of the form to the propretor of
the warehouse. If the warehouse bond s gven n ess than the ma mum pena
sum, the storekeeper-gauger n charge w determne from hs records whether
the ta abty on the quantty of dsted sprts represented by the Form 236,
pus the quantty of dsted sprts stored n the warehouse, pus the quantty
represented by a outstandng approved Forms 230, s wthn the mts of the
pena sum of the transportaton and warehousng bond. If so, he w certfy
to the suffcency of the bond on Form 236, record such certfcaton n hs records,
and return a s copes of the form to the propretor. If the transportaton
and warehousng bond s not suffcent, he w certfy to that fact on Form 236
and return a s copes to the propretor. The propretor w forward a
s copes of the approved Form 236 to the propretor of the consgnor-warehouse.
The propretor of the consgnee-warehouse w be responsbe for a outstandng
approved Forms 236. If, at any tme, he decdes not to use one, he w obtan
a copes from the consgnor and gve them to the storekeeper-gauger n charge
of the warehouse for canceaton and return to the propretor of the consgnee-
warehouse. (Sees. 287 , 3176, I. R. C.)
Sec. 18 .298b. Sprts To e Transferred. When the propretor of the shp-
png warehouse desres to make shpment, he w gve a copy of Form 236 to the
storekeeper-gauger n charge and furnsh hm a compete descrpton of the
sprts to he shpped. (Sees. 287 , 3176. I. R. C.)
Sec. 18 .299. Transfers n Packages. If the sprts to be transferred are n
orgna packages or n packages fed from warehouse storage tanks, or are
bended brandes n packages fed n the brandy-bendng department, the
storekeeper-gauger sha nspect the packages desgnated by the propretor to be
transferred and supervse the weghng thereof as provded n the Gaugng
Manua. e w prepare an orgna and four copes of Form 1619 coverng ony
the packages to be shpped. The quantty to be transferred sha not e ceed the
ma mum stated n the appcaton. In the case of bended brandes the store-
keeper-gauger sha aso show on Form 1619 the date and sera number of the
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

0

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
Regs. 10, 18 .1 , etc.
216
Form 168 coverng the bendng of the brandes, the date of orgna entry of
the odest brandy n the bend and the date of orgna entry of the youngest
brandy In the bend. The storekeeper-gauger n charge w gve the copy of
Form 236 and the fve copes of Form 1619 to the propretor, who sha, on the
same date that the sprts are to be transferred, e ecute on the s copes of
Form 236 the descrpton of the packages to be transferred. e sha mmedatey
return a copes of such forms to the storekeeper-gauger n charge. Immed-
atey after the packages are weghed for transfer n bond, the propretor may,
If he so desres, take the proof of the sprts, provded such s done e pedtousy
and addtona storekeeper-gaugers w not be requred to supervse the operaton.
The takng of average or actua tare w not be permtted. If the warehouse-
man prepares a record of such commerca gauge, two copes thereof w be gven
to the storekeeper-gauger, who w retan one copy and forward the other to
the storekeeper-gauger at the recevng warehouse, as provded n secton 18 .310
for reference f cam s fed for oss by theft, accdent, or otherwse than by
eakage or evaporaton, or where cam s fed under secton 2801(e) ( ), Interna.
Revenue Code, for osses from packages of bended brandes. Upon wthdrawa
for transfer the packages w be marked as provded n the Gaugng Manua.
Forms 236 and 1619 w be dsposed of n accordance wth secton 18 .310.
(Sees. 2801(e) ( ), 287 , 3176, I. R. C.)
Sec. 18 .300. Transfers n Cases. If the sprts to be transferred were botted
In bond before ta payment, the storekeeper-gauger w nspect the cases desg-
nated by the propretor to be transferred. e w prepare an orgna and four
copes of Form 16:20 coverng ony the cases to be shpped. The quantty to be
transferred sha not e ceed the ma mum stated n the appcaton. The store-
keeper-gauger n charge w gve the copy of Form 236 and the fve copes of
Form 1620 to the propretor who sha, on the same date that the sprts are to
be transferred, e ecute on the s copes of Form 236 the descrpton of the cases
to be transferred. e sha Immedatey return a copes of such forms to the
storekeeper-gauger n charge. Upon wthdrawa for transfer, the word Trans-
ferred foowed by the date of transfer, the word To, the number of the recev-
ng warehouse, and the State n whch such warehouse s ocated, w be pany
and duraby stenced or stamped upon the Government sde of each ease n
etters and fgures not ess than three-eghths nch n heght. These marks may
be abbrevated as foows:
Trans. 3-29-1938
To I. R. . W. 2 N. Y.
Where there s nsuffcent space on the Government sde of the case, these
marks may be paced upon another sde of the case. Forms 236 and 1620 w be
dsposed of n accordance wth secton 18 .310. (Sees. 287 , 3176, I. R. C.)
Sue. 18 .301. Transfer n Tank Cabs. If the sprts to be transferred are n
a prevousy fed tank car desgnated by the propretor to be transferred, the
storekeeper-gauger w nspect the car and prepare an orgna and four copes
of Form 1 -_ 0, copyng the detas from the entry Form 1 20, e cept that f the
contents of the tank car were prevousy regauged owng to evdence of oss of
sprts therefrom by theft, accdent, or otherwse than by eakage or evaporaton,
the transfer Form 1 20 w show both the orgna contents and the contents
dscosed by the regauge. The quantty to be transferred sha not e ceed the
ma mum stated n the appcaton. The storekeeper-gauger n charge w gve
the copy of Form 23( and the fve copes of Form 1 20 to the propretor who sha,
on the same date that the sprts are to be transferred, e ecute on the s copes
of Form 236 the descrpton of the tank car to be transferred. e sha mmed-
atey return a copes of the forms to the storekeeper-gauger n charge. When
the tank car s reeased, the key of each sea ock thereon w be forwarded on
the date of shpment by the storekeeper-gauger n charge at the transferrng
warehouse to the storekeeper-gauger n charge at the recevng warehouse. Forms
236 and 1 20 w be dsposed of n accordance wth secton 18 .310. (Sees.
287 . 3176, I. R. C.)
Sec. 1S .302. Transfers From Storage Tanks, n Packages or Tank Cars.
If the sprts desgnated by the propretor to be transferred are n storage tanks
they w be drawn nto packages, gauged, marked, and branded, or run nto a
weghng tank, gauged, and conveyed by ppe ne nto a raroad tank car,
constructed and marked as herenafter provded. The storekeeper-gauger w
prepare a report of the gauge on an orgna and four copes of Form 1 20, and
note on each copy of the form the proof at whch the sprts were dsted. The
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

0

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
217
Regs. 10, 18 .1 , etc.
quantty to be transferred sha not e ceed the ma mum stated In the app-
caton. The storekeeper-gauger n charge w gve the copy of Form 236 and
the fve copes of Form 1 20 to the propretor, who sha, on the same date that
the sprts are to be transferred, e ecute on the s copes of Form 236 the
descrpton of the packages or tank car to be transferred. e sha mmedatey
return a copes of the forms to the storekeeper-gauger n charge. Forms 236 and
1 20 w be dsposed of In accordance wth secton 18 .310. (Sees. 287 , 3176.
L R. C.)
Sec. 18 .310. Storekeepeb-Gaugeb s Certfcate of Remova. Upon remova
of the sprts, the storekeeper-gauger w e ecute hs report of nspecton or
gauge and remova on the s copes of Form 236. The storekeeper-gauger n
charge w retan one copy of Forms 236 and 1 20, 1619, or 1620, as the ease
may be, furnsh one copy each of such forms to the propreter of the shppng
warehouse, forward one copy of each form to the supervsor-consgnor, and
forward three copes of Form 236 and two copes of Form 1 20, 1619, or 1620
to the storekeeper-gauger n charge of the recevng warehouse, wth a copy
of the propretor s commerca gauge (f any) of packages. Where shpment of
packages or cases s made by truck, one copy each of Forms 236 and 1 20, 1619,
or 1620, for the storekeeper-gauger n charge at the recevng warehouse w be
seaed n an enveope addressed to such storekeeper-gauger n charge and handed
to the person n charge of the truck for devery to hm, and the remanng two
copes of Form 236 and one copy of Form 1 20, 1619, or 1620 w be maed to
such storekeeper-gauger In charge. (Sees. 287 , 3170, 3176, I. R. C.)
Sec. 18 .311. Storekeepeb-Gaugeb s Recept of Sprts at Warehouse. Upon
recept of the sprts at the recevng warehouse, the storekeeper-gauger w
e amne the shpment and w ascertan and note on F orm 1 20, 1619, or 1620,
as the case may be, osses or dscrepances, as provded n sectons 18 .1 1,
18 .1 2, and 18 .1 3. The propretor may wegh and take the proof of the sprts,
f desred, under the condtons specfed In secton 18 .1 0. The storekeeper-
gauger w e ecute hs certfcate of recept on each copy of Form 236, notng
thereon any osses or dscrepances reported on the correspondng Form 1 20,
1619, or 1620. The storekeeper-gauger n charge w retan one copy each of
Forms 236 and 1 20, 1619, or 1620, gve one copy of each form to the propretor
of the warehouse, and forward one copy of Form 236 to the dstrct supervsor.
No wthdrawa or transfer n bond of sprts receved at the warehouse w be
made unt the three copes of Form 236 and the two copes of Form 1 20, 1619,
or 1620, as the case may be, have been receved by the storekeeper-gauger In
charge. The storekeeper-gauger w report on Form 1 13 the orgna ta
gaons contaned n a packages receved regardess of any osses n transt.
owever, any package ost n transt w not be reported on Form 1 13 but w
be reported by the dstrct supervsor n the warehouse account, Form 1 1 , for
the State n whch the recevng warehouse s ocated, n the manner Indcated by
the form. (Sees. 287 , 3176, I. R. C.)
Transfers n ond etween Interna Revenue onded Warehouses n
Dfferent Dstrcts
Sec. 18 .312. ppcaton, Form 206. Where the transfer s to be made between
bonded warehouses n dfferent supervsory dstrcts, the propretor of the re-
cevng warehouse sha e ecute an appcaton for the transfer of the sprts on
Form 23G. The appcant sha enter a appcabe data ndcated by the form
Incudng the ma mum quantty n ta gaons to be transferred n any one truck,
raroad car or other vehce, and the type of conveyance. The name of the
carrer sha not be specfed on Form 236. The appcant sha prepare an
orgna and s copes of Form 236 and gve them to the storekeeper-gauger n
charge of the recevng warehouse. (Sees. 287 , 3176, I. U. C.)
Sec. 18 .312a. Certfcate of Suffcency of ond. Upon recept of Form 236
by the storekeeper-ganger n charge, e w compare the pena sum of the bond
as stated n the appcaton wth hs record furnshed by the dstrct supervsor
pursuant to secton 18 .112a. If the warehouse bond s gven n the ma mum
pena sum of 200,000, he w certfy to the suffcency thereof on Form 230, and
return a seven copes of the form to the propretor of the warehouse. If the
warehouse bond s );ven n ess than the ma mum pena sum, the storekeeper-
gauger n charge w determne from hs records whether the ta abty on
the quantty of dsted sprts represented by the Form 236, pus the quantty
of dsted sprts stored In the warehouse, pus the quantty represented by a
868972 0 1
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

0

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
Regs. 10, 18 .1 , etc.
218
outstandng approved Forms 236, s wthn the mts of the pena sum of the
transportaton and warehousng bond. If so, he w certfy to the suffcency
of the bond on Form 236, record such certfcaton n hs records, and return a
seven copes of the form to the propretor. If the transportaton and ware-
housng bond s not suffcent, he w certfy to that fact on Form 236 and
return a seven copes to the propretor. The propretor w forward a seven
copes of the approved Form 236 to the propretor of the consgnor-warehouse.
The propretor of the consgnee-warehouse w be responsbe for a outstandng
approved Forms 236. If, at any tme, he decdes not to use one, he w obtan
a copes from the consgnor-warehouseman and gve them to the storekeeper-
gauger n charge of the warehouse for canceaton and return to the propretor
of the consgnee-warehouse. (Sees. 287 , 317G, I. R. C)
Sec. 18 .312b. Spbts To e Transferred. When the propretor of the shp-
png warehouse desres to make shpment, he w gve a copy of Form 236 to
the storekeeper-gauger n charge and furnsh hm a compete descrpton of the
sprts to be shpped. (Sees. 287 , 3176, I. It. C.)
Sec. 18 .312c. Transfers n Packages, Cases, and Tank Car. Sprts n org-
na packages, or n packages fed from warehouse storage tanks, w be trans-
ferred n accordance wth the provsons of secton 18 .299. Sprts n cases,
botted n bond before ta payment, w e transferred n accordant wth the
provsons of secton 18 .300. Sprts n a prevousy fed tank car w be trans-
ferred n accordance wth the provsons of secton 18 .301. If sprts to be
transferred are n storage tanks, they w be drawn nto packages or nto a
tank car and then transferred n accordance wth the provsons of secton
18 .302. Forms 236 and 1 20,1619, or 1620 w te dsposed of n accordance wth
secton 18 .313. (Sees. 2S7 . 3176. I. R. C.)
Sec. 18 .313. Storekeeper-Gauof.r s Certfcate of Remova. ITpon remova
of the sprts, the storekeeper-gauger w e ecute hs report of nspecton or
gauge and remova on the seven copes of Form 236. The storekeeper-gauger n
charge w retan one copy of Forms 236 and 1 20, 1619, or 1020, as the case may
be, furnsh one copy each of such form to the propretor at the shppng ware-
house, forward one copy to the supervsor-consgnor, and forward four copes of
Form 236 and two copes of Form 1 20, 1619, or 1620 to the storekeeper-gauger
In charge of the recevng warehouse, wth a copy of the propretor s cnnmenn
gauge (f any) of packages. Where shpment of packages or cases s made by
truck, one copy each of Forms 236 and 1619 or 1620 for the storekeeper-gauger
n charge at the recevng warehouse w be seaed n an enveope addressed to
such storekeeper-gauger n charge and handed to the person n charge of the truck
for devery to hm, and the remanng three copes of Form 236 and one copy of
Form 1619 or 1620 w be maed to such storekeeper-gauger n charge. (Sees.
287 , 3176, I. R. C.)
Sec. 18 .31 . Stobekf.eper-Gauoer s Recept of Sprts at Recevng Ware-
house. Upon recept of the sprts at the recevng warehouse, the storekeeper-
gauger w e amne the shpment and w ascertan and note on Form 1 20,
1619, or 1620, as the case may be, osses or dscrepances, as provded n sectons
18 .1 1, 18 .1 2, and 18 .1 3. The propretor may wegh and take the proof of
the sprts, f desred, under the condtons specfed n secton 18 .1 0. The
storekeeper-gauger w e ecute hs certfcate of recept on each copy of Form
236, notng thereon any osses or dscrepances reported on the correspondng
Form 1 20, 1619, or 1620. The storekeeper-gauger n charge w retan one copy
each of Forms 236 and 1 20, 1619, or 1620, gve one copy of each form to the pro-
pretor of the warehouse, and forward two copes of Form 236 to the supervsor
of hs dstrct. The dstrct supervsor w retan one copy of Form 236 am for-
ward the remanng copy of Form 236 to the supervsor of the dstrct from whch
the sprts were transferred. No wthdrawa or transfer n bond of sprts
receved at the warehouse w be made unt the four copes of Form 236 and
the two copes of Form 1 20, 1619, or 1620, as the case may be, have been receved
by the storekeeper-gauger n charge. The storekeeper-gauger w report on Form
1 13 the orgna ta gaons contaned n a packages receved regardess of any
osses n transt. owever, any package ost n transt w not be reported on
Form 1 13 but w he reported by the supervsor-consgnee n the warehouse ac-
count, Form 1 1 , for the State n whch the recevng warehouse s ocated n
the manner ndcated by the form. (Sees. 287 , 3176, I. R. C.)
2. It s found that compance wth the notce and pubc rue-
makng procedure of the dmnstratve Procedure ct ( U. S. C.
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

0

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
219
IRegs. 10, 18 .1 , etc.
1001 et seq.) s unnecessary n connecton wth the ssuance of these
reguatons for the reason that the changes made are of a berazng
character.
3. The purposes of the amendments are as foows:.
(1) To reduce the number of copes of reports of tank cars
of dsted sprts transferred to an nterna revenue bonded
warehouse (Form 1 20) and reports of packages and cases trans-
ferred between nterna revenue bonded warehouses (Forms 1619
and 1620) prepared by storekeeper-gaugers, by dscontnung
furnshng of certan copes to dstrct supervsors, whch w
resut n reducng the work of storekeeper-gaugers and audt
cerks wthout |eopardy to the revenue;
(2) To e pedte the recept by the consgnor-warehouseman
of Forms 236, Transfer of Dsted Sprts n ond, after
approva by the storekeeper-gauger at the consgnee-warehouse,
by provdng that the consgnee-warehouseman send them drect
to the consgnor-warehouseman n eu of havng the storekeeper-
gauger at the consgnee-warehouse send them to the storekeeper-
gauger at the consgnor-warehouse for devery to the consgnor-
warehouseman ;
(3) To obvate the preparaton of addtona Forms 236 by
the consgnee-warehouseman when he desres shpments made
pursuant to approved Forms 236 after the e praton of 90 days,
by revokng the provson that Forms 236 w be canceed by
the dstrct supervsor upon the e praton of 90 days after
approva f not used wthn that perod or e tended by the dstrct
supervsor;
( ) To obvate the need for obtanng the consent of the dstrct
supervsor when the consgnor-warehouseman desres to shp
sprts by a carrer other than the one orgnay desgnated on
orm 236 by the consgnee-warehouseman, by drectng that the
name of the carrer sha not be shown on Form 236 by the con-
sgnee-warehouseman ;
( ) To factate the e ecuton on a copes of Form 236 of
the storekeeper-gauger s certfcate of recept at the consgnee-
warehouse by provdng for the routng, when sprts are shpped
from the consgnor-warehouse, of the copes of Forms 236 and
1619 or 1620 for the consgnee-warehouseman wth the copes
for the storekeeper-gauger at the consgnee-warehouse, n eu of
sendng them drect to the consgnee-warehouseman.
. Ths Ireasury Decson sha be effectve on the thrty-frst day
after the date of ts pubcaton n the Federa Regster.
. (Ths Treasury Decson s ssued under the authorty contaned
n sectons 2801(e)( ), 287 . 2879, 3170, and 3176 of the Interna
Revenue Code (U. S. C, tte 26, sectons 2801(e) ( ), 287 , 2879, 3170,
and37G).)
Fred S. Martn,
ctng Commssoner of Interna Revenue.
pproved uy 1,19 9.
Thomas . Ltnch,
ctng Secretary of the Treasury.
(Pubshed In the Federa Regster uy 8, 19 9)
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

0

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
Regs. 10, 18 .217, etc.
220
Reguatons 10, Sectons 18 .217, tc. 19 9-1 -13123
T. D. 70
TITL 26 INT RN L R NU . C PT R I, SD C PT R C, P RT 18 .
W R OUSING OF DISTILL D SPIRITS
mendng Reguatons 10
Treasury Department,
Offce of Commssoner of Interna Revenue,
Washngton 2 , D. C.
To Dstrct Supervsors and Others Concerned:
1. On March 3, 19 9, notce of proposed rue makng, regardng
the wthdrawa of sampes of dsted sprts by propretors of n-
terna revenue bonded warehouses, was pubshed n the Federa Reg-
ster (1 F. R. 9 9).
2. fter consderaton of a such reevant matter as was presented
by nterested persons, secton 18 .237 of Reguatons 10 (26 CFR.
Part 18 ), approved May 20, 19 0, reatng to the warehousng of
dsted sprts, s revoked, and sectons 18 .217, 18 .23 , 18 .238,
18 .239,18 .2 0,18 .2 1,18 .2 3,18 .2 ,18 .2 7, and 18 .2 8 of such
reguatons are amended to read as foows:
Sec. 18 .217. Remsson of Ta . If the entre contents of a contaner are
ost by theft, accdent, or otherwse than by eakage or evaporaton, and a cam
for remsson of the ta s aowed, the dstrct supervsor w take credt for
the aowance upon recept of notce from the Commssoner of the aowance.
If the ta s remtted on a porton of the contents of a contaner st n bond,
the dstrct supervsor w nstruct the storekeeper-gauger to aff to the con-
taner a abe showng the number of proof gaons on whch the ta has been
remtted, the date of aowance, and bearng the sgnature and tte of the
storekeeper-gauger. The storekeeper-gauger w, upon abeng the contaner,
note such data on the Form 1 20, 1019, or 1620, coverng the depost of the sprts
n the warehouse. In the event any such contaner s transferred n bond to
another warehouse, the data reatng to remsson of the ta w be tran-
scrbed by the storekeeper-gauger to Form 1C19 or 1020, coverng the transfer.
(Sees. 3170, 3170, and 39 3(a), I. R. C.)
S:cc. 18 .231. Number and Sze. Sampes of brandy or frut sprts for abora-
tory anayss (ncudng organoeptc e amnaton) must be taken from pack-
ages desgnated as sampe packages or from storage tanks. cept upon au-
thorty of the dstrct supervsor or the Commssoner, not more than one
sampe may be removed from any sampe package or from the same ot of brandy
or frut sprts n a storage tank n a perod of 0 months. The number of pack-
ages that may be desgnated as sampe packages sha be mted, as to each
knd of brandy or frut sprts and each type of cooperage (as desgnated by
the mandatory marks and brands on the packages), to not more than 1 n each
2 packages of any such ot of brandy or frut sprts of the same entry gauL-e
on storage n the warehouse: Provded, That where ess than 2 packages of any
such ot of brandy or frut sprts are on storage, 1 package In the ot may be
desgnated as a sampe package. Sampes for organoeptc e amnaton ony
may not e ceed one-haf pnt. Sampes for aboratory anayss may not e ceed
1 pnt. Such sampes may be wthdrawn upon approva by the storekeeper-
gauger n charge at the warehouse of a wrtten appcaton fed n accordance
wth the provsons of secton 1S .2 0. In any nstance where a 1-pnt sampe
s found to be an nsuffcent quantty for aboratory anayss, the dstrct super-
vsor, upon recept of a statement showng the necessty for an addtona quan-
tty, may authorze the wthdrawa of an addtona sampe, not to e ceed 1 pnt,
from any desgnated sampe package or storage tank. The wthdrawa n e cess
of these mt at ons of ta -free sampes of brandy or frut sprts sha not be
permtted, uness t s shown that such sampes are Insuffcent for the purpose
ntended, and the Commssoner authorzes the wthdrawa of addtona sampes.
(Sees. 3037, 3170, I. R. C.)
Sec. 18 .238. Lmtaton on Numper, Sze, and Use of Sampes of Dsted
Sprts Other Than randy or Frut Sprts. Sampes of dsted sprts other
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

0

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
221
Regs. 10, 18 .217, etc.
than brandy or frut sprts may be taken ony for organoeptc e amnaton or
anaytca purposes from packages desgnated as sampe packages and from
storage tanks. cept upon authorty of the dstrct supervsor or the Comms-
soner, not more than one sampe may be removed from any sampe package or
from the same ot of sprts n a storage tank n a perod of 6 months. The num-
ber of packages that may be desgnated as sampe packages sha be mted, as
to each knd of sprts and each type of cooperage (as desgnated by the manda-
tory marks and brands on the packages), to not more than 1 n each 2 packages
of any ot of sprts of the same day s producton on storage In the warehouse:
Provded, That where ess than 2 packages of any such ot of sprts are on
storage, 1 package n the ot may be desgnated as a sampe package. Sampes
for organoeptc e amnaton may not e ceed one-haf pnt from any package or
storage tank. Sampes for aboratory anayss may not e ceed 1 pnt from any
package or storage tank. Such sampes may he wthdrawn upon approva by the
storekeeper-gauger n charge at the warehouse of a wrtten appcaton fed n
accordance wth the provsons of secton 18 .2 0. In any Instance where a
1-pnt sampe s found to be an nsuffcent quantty for aboratory anayss, the
dstrct supervsor, upon recept of a statement showng the necessty for. an add-
tona quantty, may authorze the wthdrawa of an addtona sampe, not to
e ceed 1 pnt, from any desgnated sampe package or storage tank. The wth-
drawa of sampes n e cess of these mtatons sha not be authorzed uness
t s shown that such sampes are nsuffcent for the purpose ntended, and the
Commssoner authorzes the wthdrawa of addtona sampes. (Sec. 3176,
1. R. C.)
Sec. 18 .239. Dsposton of Sampes. Sampes of dsted sprts other than
brandy or frut sprts must be used soey for chemca anayss or organoeptc
e amnaton. They may not be furnshed to saesmen and deaers for advertsng
or soctng purposes. Where sprts are sod sub|ect to approva as to quaty,
a sampe taken pursuant to the provsons of sectons 18 238, 18 .2 0, and
18 .2 1 may be furnshed the purchaser. Remnants of resdues of sampes re-
manng after anayss or e amnaton and whch are not desred for retenton as
aboratory specmens or for further anayss or e amnaton, shoud be returned
to vesses n the dstng system contanng smar sprts where the warehouse
s on or contguous to the dstery premses, uness the condton of the remnants
or resdues s such as to render them unsutabe for such dsposton. If such
remnants or resdues of sampes are not returned to the dstng system, they
shoud be destroyed. (Sec. 3176, I. R. C.)
Sec. 18 .2 0. ppcaton. (a) Sampes for organoeptc e amnaton or ab-
oratory anayss, and ta -pad sampes of brandy for other purposes. When the
warehouseman desres to procure sampes for organoeptc e amnaton, sampes
not n e cess of 1 pnt for aboratory anayss, or ta -pad sampes of brandy or
frut sprts for other purposes, he sha make appcaton n trpcate to the
storekeeper-gauger n charge at the warehouse. The appcaton sha be gven a
sera number, begnnng wth 1 for the frst appcaton and runnng consecu-
tvey thereafter. The appcaton sha show (1) the knd of sprts, (2) the
name of the dster, (3) the regstered number of the dstery and the State n
whch ocated, ( ) the sera numbers of the packages or storage tanks from
whch the sampes are to he removed, ( ) the dates of entry for depost, (6) the
type of cooperage, (7) f the sampes are to be removed from sampe packages,
the dates the packages were receved n the warehouse, (8) whether, n the case
of brandy or frut sprts, the sampes are desred for organoeptc e amnaton
or aboratory anayss ta -free, or for other purposes sub|ect to payment of ta ,
(9) whether, n the case of sprts other than brandy or frut sprts, the sampes
are requred for organoeptc e amnaton or for aboratory anayss, (10) the
reasons whv the sampes are desred, and (11) the sze of each sampe to he taken.
(6) ddtona sampes for aboratory anayss. Where the warehouseman
has found a pnt sampe to have been an nsuffcent quantty for anayss, and
desres an addtona 1-pnt sampe, he sha make appcaton n trpcate,
through the storekeeper-ganger n charge at the warehouse, to the dstrct super-
vsor. The appcaton sha be gven a sera number wthn the seres prescrbed
n subsecton (a) of ths secton. The appcaton sha show the nformaton
caed for n tems 1 through 11 of subsecton (a).
(c) Other sampes. Where the warehouseman desres sampes n e cess of
the number or quanttes whch may be authorzed by the storekeeper-gauger
or the dstrct supervsor, he sha make appcaton, n quadrupcate, through
the storekeeper-gauger n charge at the warehouse, to the Commssoner. The
appcaton sha be gven a sera number wthn the seres prescrbed n sub-
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

0

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
Regs. 10, 18 .217, etc.
222
secton (a) of ths secton and sha show the nformaton caed for n Items 1
through 11 of subsecton (a). (Sees. 3037, 3176, I. R. C.)
Sec. 18 .2 1. ppbova of ppcaton. (a) y the storekeeper-gauger n
charge at the warehouse. Upon recept of an appcaton for the wthdrawa of
sampes n quanttes not to e ceed one-haf pnt for organoeptc e amnaton or
n quanttes not to e ceed 1 pnt for aboratory anayss, or for the wthdrawa
of ta -pad sampes of brandy or frut sprts from any package or storage tank,
the storekeeper-ganger sha determne from hs records whether, n the case of
packages, the desgnated packages are egbe for sampng or, n the case of
sprts n storage tanks, the ot of sprts contaned n a tank Is egbe for sam-
png. If e sha fnd the number and quanttes of sampes to be taken do not
e ceed the number and quanttes permtted under sectons 18 .23 , 18 .236, or
18 .238, as the case may be, he may authorze the wthdrawa of the sampes.
In the case of sampes for aboratory anayss, the storekeeper-gauger shoud
assure hmsef of the proprety of the request. If he nds upon e amnaton of
hs records that the number or quanttes desred are n e cess of the number or
quanttes permtted, he sha wrte upon each copy of the appcaton a state-
ment dscosng the reasons why the sampes may not be removed. The store-
keeper-ganger, upon approva or dsapprova of the appcaton, sha return one
copy to the warehouseman, forward one copy to the dstrct supervsor, and
retan the orgna copy n hs ofce.
(6) y the dstrct supervsor. Upon recept of an appcaton for an add-
tona sampe for aboratory anayss, the storekeeper-gauger sha determne
from hs records whether an addtona sampe may be authorzed under the
mtatons of secton 18 .23 or 18 .238, as the case may be. If he fnds the
addtona sampe may not be authorzed under the mtatons, he sha wrte
upon each copy of the appcaton, over hs sgnature, a statement showng the
reasons why the sampe may not be wthdrawn. In such case, he sha return
one copy to the propretor, forward one copy to the dstrct supervsor, and retan
the orgna n hs ofce. If he fnds the addtona sampe may be authorzed, he
sha note such fact upon the appcaton, over hs sgnature, and sha forward the
appcaton to the dstrct supervsor wth hs recommendaton. The dstrct
supervsor sha determne from the facts presented whether the addtona
sampe s necessary for the proposed type of aboratory anayss and sha there-
upon approve or dsapprove the appcaton. e sha retan a copy n hs offce
and return the orgna and one copy to the storekeeper-ganger at the warehouse,
who sha fe the orgna and return the copy to the appcant.
(c) y the Commssoner. Upon recept of an appcaton to the Comms-
soner for authorzaton to wthdraw sampes, the storekeeper-ganger sha note
upon each copy of the appcaton the number and quanttes of sampes whch
have been removed from each package and from each ot represented. The
storekeeper-gauger sha thereupon forward a copes of the appcaton to the
dstrct supervsor, who sha transmt a copes to the Commssoner wth hs
recommendaton. Upon approva or dsapprova of the appcaton, three copes
sha be returned to the dstrct supervsor, who sha retan a copy and return
the orgna and one copy to the storekeeper-gauger at the warehouse. The
storekeeper-gauger sha fe the orgna and return the remanng copy to the
appcant. (Sees. 3037, 3176, L R. C.)
Sec. 18 .2 3. Labe. t the tme of the wthdrawa of a sampe the propre-
tor sha prepare a abe and a copy thereof. The abe and copy sha be pre-
pared on pa T havng appro mate dmensons of 3 nches by nches. The
propretor sha show on the abe and on the copy, In the order sted and upon
separate nes, the foowng nformaton:
1. The word Sampe ;
2. The sera number of the approved appcaton coverng the wthdrawa
of the sprts;
3. The knd of sprts;
. The sera number of the contaner from whch removed ;
. The name of the dster, foowed by the regstered number of the ds-
tery and the name of the State n whch ocated ;
6. The purpose for whch the sampe s ntended; and, f for aboratory
anayss, the name and address of the aboratory or person makng the
anayss (uness the anayss s to be made by the warehouseman at the
warehouse premses, or premses contguous thereto) ;
7. The sze of the sampe and, n regard to frut sprts and brandy, the
quantty n proof gaons e tended to the fourth decma pace (the proof
gaon content need not be shown on sampes of other sprts) ;
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

0

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
223 Regs. 10, S 18 .217, etc.
8. The name of the warehouseman, foowed by the regstered number of
the warehouse and the name of the State In whch ocated.
Upon competon, the abe and the copy sha be presented to the storekeeper-
ganger, who sha verfy the accuracy of the data thereon, date and sgn both
copes, and supervse the afd ng of the abe to the sampe contaner. Where
the sampe s taken from a contaner of frut sprts or brandy, the storekeeper-
ganger sha wrte upon the copy of the abe a statement showng whether the
sampe was procured ta -free or sub|ect to payment of ta . The copy of the
abe sha be fed by the storekeeper-gauger n accordance wth the provsons
of secton 18 .2 . (Sees. 8087, 3176,1. R. 0.)
Sec. 18 .2 . Offce Record. The propretor sha furnsh suffcent fe cases
for the fng and retenton of sampe records. The copes of the abes sha be
kept by the storekeeper-gauger as a record of sampes removed and sha be fed
numercay by package or tank sera number under the name and number of
the producng dster. The record sha be mantaned as an actve fe for
each sampe package and for each storage tank from whch sampes are wth-
drawn, durng the perod such packages or sprts contaned n such storage tanks
are on storage n the warehouse. t the tme of preparng Form 1 20 or Form
1619 coverng the remova of a sampe package, or upon the emptyng of a storage
tank from whch sampes had been taken, the copes of abes coverng sampes
removed from such package or storage tank sha be removed from the actve fe
to an nactve fe for storage. (Sees. 3037, 3176, I. R. O.)
Sec. 18 .2 7. Credt Upon Wthdrawa of randt or Frut Sprts. Upon
the wthdrawa from bond of a package of brandy or frut sprts from whch
sampes have been removed, the storekeeper-gauger sha Interne n approprate
paces on the wthdrawa appcaton, Forms 179, 206, 2 7, 6 , or 1 18, or permt,
Form 1 08, and n the oss aowed coumn of the report of wthdrawa gauge,
Form 1 20, the tota quantty (fractons of ess than one-tenth gaon beng
dsregarded) of the ta abe sampes and, separatey, the tota quantty (frac-
tons of ess than one-tenth gaon beng dsregarded) of ta -free sampes removed
from the package foowed by the words sampes ta -pad and sampes ta -
free, respectvey. The tota quantty of a sampes taken from the package
sha be deducted wth the aowabe oss n cacuatng (1) the ta abe gaons
If the package Is wthdrawn upon payment of ta , or (2) the ta abe oss, f
any, If the package s wthdrawn wthout payment of ta . Shoud the package
be transferred In bond to another warehouse the storekeeper-gauger sha make
ke entres on Form 1619 n order that smar ad|ustments may be made when
the package s wthdrawn from the recevng warehouse. Upon the remova vt a
package from bond, the quantty wthdrawn as sampes sha aso be entered by
the storekeeper-gauger on Form 1 13 as wthdrawn ta -pad or ta -free, as the
case may be. Credt sha be gven smary upon the emptyng of a storage
tank from whch sampes of brandy or frut sprts were taken. (Sees. 3037,
SI 76, I. R. C.)
Sec. 18 .2 8. Report of Ta abe Samp-es. ach day ta abe sampes of
brandy or frut sprts are wthdrawn the storekeeper-gauger sha enter on
Form 161 , n quadrupcate, a record of the ta abe sampes removed. the
nformaton caed for by the form sha be furnshed. t the end of each
month the storekeeper-gauger sha compete the report, retan one copy of the
form and dever the remanng three copes to the warehouseman, who sha for-
ward the three copes to the coector wth remttance for the ta due. The
coector sha e ecute hs certfcate of ta payment on each copy of the form,
retan one copy, and return the remanng two copes to the warehouseman, who
w retan one copy and dever the other copy to the storekeeper-gnuser. The
storekeeper-gauger sha note the ta payment on hs retaned copy and forward
the other copy to the dstrct supervsor. (Sees. 3037, 3176, I. R. C.)
3. The amendment of secton 18 .217 s for the purpose of requrng
the storekeeper-gauger to note the records coverng the transfer of
packages n bond to show, for credt purposes, the quantty of ds-
ted sprts aowed pursuant to a cam for remsson of ta where
a oss has been sustaned. The remanng amendments are desgned
to estabsh approprate mtatons and requrements for the wth-
drawa by propretors of sampes of dsted sprts stored n nterna
revenue bonded warehouses n packages and tanks for aboratory
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

0

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
Regs. 10, 18 . 3 , etc.
22
anayss (ncudng organoeptc e amnaton), and for other purposes
n the case of brandy and frut sprts as provded by aw.
. Ths Treasury Decson sha be effectve on the thrty-frst day
foowng the date of ts pubcaton n the Federa Regster.
. Ths Treasury Decson s ssued under the authorty contaned
n sectons 3037, 3170, 3176, and 39 3(a), Interna Revenue Code (26
U. S. C. 3037, 3170, 3176, and 39 3(a)).
Geo. . Schoeneman,
Commssoner of Interna Revenue.
pproved une 16, 19 9.
Thomas . Lynch,
ctng Secretary of the Treasury.
(Pubshed In the Federa Regster une 22, 19 9)
Reguatons 10, Sectons 18 . 3 , tc. 19 9-19-1318
T. D. 737
TITL 26 INT RN L R NU . C PT R I, SD C PT R C, P RT 183.
W R OUSING OF DISTILL D SPIRITS
mendng Reguatons 10
Treasury Department,
Offce of Commssoner of Interna Revenue,
Washngton 2 , D. C.
To Dstrct Supervsors and Others Concerned:
1. Sectons 18 . 3 ,18 . 36,18 . 37,18 . 1,18 . 3, and 18 . 8 of
Reguatons 10 (2C CFR, Part 18 ), approved May 20, 19 0, reatng
to warehousng of dsted sprts, are hereby amended as foows:
WIT DR W L OF NDY. FO FORTIFIC TION OF W.N
WIT DR W L IN P C G S
Sec. 18 . 3 . ppcaton, Form 2 7. Where t s desred to remove brandy
n packages from an nterna revenue bonded warehouse for the fortcaton of
wne, appcaton w be made by the wnemaker on Form 2 7. ppcaton for
the Remova of randy for Fortfcaton of Wne from Frut Dsteres and In-
terna Revenue onded Warehouses. The wnemaker sha state n the app-
caton the pena sum of the bond. Form 700- . The same appcaton may not
ncude brandy produced by dfferent dsters, nor two or more ots to be remove.
from the same bonded warehouse at dfferent tmes, e cept where the warehouse
Is contguous to the wnery as provded n secton 18 . 1. The appcaton sha
be fed n trpcate where the wnery and the bonded warehouse are n the same
supervsory dstrct, and In quadrupcate where they are n dfferent dstrcts.
Where the premses are ocated n the same supervsory dstrct and the bond
of the wnemaker s gven n the ma mum pena sum of 0,000, Form 2 7 w
he submtted to the storekeeper-gauger f one s ocated at the wnery, or at a
contguous frut dstery or nterna revenue bonded warehouse, as the case
may be. If no storekeeper-gauger s ocated at such premses, the appcaton
w be submtted, at the dscreton of the dstrct supervsor, to a desgnated
storekeeper-gauger n the vcnty of the bonded wnery. The dstrct supervsor
w notfy each storekeeper-gauger desgnated to approve Forms 2 7 and advse
hm that the wuenaker s bond s gven n the ma mum pena sum of 0,000.
e w notfy each wnemaker concerned where Forms 2 7 are to be submtted
to a storekeeper-gauger. other Forms 2 7, that s, (1) those coverng ntra-
dstrct removas where the bond of the wnemaker s n the ma mum pena sum
but no storekeeper-gauger has been desgnated to approve Forms 2 7, (2) those
coverng ntrad strct removas where the bond of the wnemaker s not n the
ma mum pena sum, and (3) those coverng nterdstrct removas, w be
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

0

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
22
Regs. 10, 18 . 3 , etc.
submtted drect to the supervsor of the dstrct n whch the wnery s ocated.
(Sees. 3031(a), 3033. 3176, I. R. O.)
Sec. 18 . 36. cton on ppcaton, Fork 2 7. (a) y dstrct supervsor.
If the appcaton s n order, the quantty of brandy to be wthdrawn s not n
e cess of the appcant s current needs or of the storage capacty of the fortfyng
room (see secton 178. 21 of Reguatons 7), and the bond of the wnemaker s
suffcent to cover the brnndy to be procured, the dstrct supervsor w (1) where
the warehouse s n the same dstrct, e ecute hs certfcate on the form and send
a three copes to the propretor of the nterna revenue bonded warehouse; and
(2) where the warehouse s ocated n another supervsory dstrct, e ecute hs
certfcate on the form and send a four copes to the supervsor of such dstrct,
who w send a four copes to the propretor of the Interna revenue bonded
warehouse from whch the brandy Is to be removed. If a storekeeper-gauger s
not ocated at the Interna revenue bonded warehouse, the supervsor of the
dstrct n whch the warehouse s ocated w desgnate a storekeeper-gauger to
gauge the brandy. If the appcaton s not n order, the supervsor of the
dstrct n whch the bonded wnery s ocated w return a copes to the wne-
maker.
(6) y storekerprr-gauger. Upon recept of Form 2 7 by the storekeeper-
gauger, he w compare the pena sum of the bond as stated In the appcaton
wth the statement furnshed by the dstrct supervsor pursuant to secton
18 . 3 . If the bond of the wnemaker s gven n the ma mum pena sum of
0,000, the appcaton s In proper order, and the quantty of brandy to be
wthdrawn s not n e cess of the appcant s current needs or of the storage
capacty of the fortfyng room (see secton 178. 21 of Reguatons 7), he w
certfy to the suffcency thereof on Form 2 7. e w send a copes of Form
2 7 to the propretor of the nterna revenue bonded warehouse from whch the
brandy Is to be removed. If the appcaton s not n order he w return a
copes to the wnemaker. (Sees. 3031 (a), 3033, 3176, I. R. C.)
S . 18 . 37. Gauge of randy. The propretor, upon recept of Form 2 7,
w e ecute hs descrpton of the brandy to be gauged on a copes of the form.
e w refer them to the storekeeper-gauger assgned to the warehouse, or to
the storekeeper-gauger desgnated by the dstrct supervsor pursuant to secton
18 . 30( /), as the case may be. Where the certfcate of suffcency of the wne-
maker s bond was e ecuted by a storekeeper-gauger pursuant to secton 18 . 30(6)
and no storekeeper-gauger s assgned to the warehouse, the propretor w re-
quest the dstrct supervsor to desgnate one to gauge and reease the brandy. If
the brandy to be removed s contaned In storage tanks, the desgnated packages
w be fed, gauged, seray numbered, and marked and branded In accordance
wth the Gaugng Manua and these reguatons. If the packages were pre-
vousy fed they w he regauged uness wthdrawn on the orgna gauge, as
provded n the Gaugng Manua, and marked as requred. The storekeeper-
ganger w prepare four copes of the report of gauge, Form 1 20, where the
brandy s to he removed at one tme to the fortfyng room of a contguous wnery,
fve copes n a other Instances where brandy Is to be removed to a wnery
ocated n the same supervsory dstrct, and s copes where the wnery s o-
cated n another dstrct. The storekeeper-gauger w attach one copy of Form
1 20 to each copy of Form 2. 7 and w note on the e tra copes of Form 1 20 the
name, regstered number, and address of the wnery to whch the brandy Is to
be shpped. No greater quantty of brandy may be gauged or wthdrawn than
stated n the appcaton. (Sees. 3031 (a), 3033, 3170. 1. R. C.)
Sec. 18 . 1. Gauhno Offcer s Certfcate of Monthy Deposts n Con-
tguous Wneres.- If the warehouse and wnery are ocated on contguous
premses and brandy s to be transferred to the wnery from tme to tme durng
the month under the supervson of n storekeeper-gauger, the wnemaker s appca-
ton on Form 2 7 may cover a brandy to be transferred to the wnery durng
the month. If the storekeeper-gauger gaugng the brandy supervses ts transfer
to and depost n the fortfyng room, he w certfy to the depost on each copy
of Form 1 20 as the brandy Is deposted, attach one copy thereof to each copy of
Form 2 7, forward one of the e tra copes of Form 1 20 to the dstrct supervsor,
and dever one copy to the warehouseman. t the cose of the month the store-
keeper-gauger w e ecute hs certfcates of gauge and remova and recept
on Form 2 7, retan one copy thereof, wth a copy of each Form 1 20 attached, at
the warehouse as a permanent record, and one copy, smary competed, at the
wnery for the same purpose, and forward the other copy to the dstrct super-
vsor. (Sees. 3031 (a), 3033, 3170. 3176, I. R. C.)
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

0

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
ReSs. 10, 18 . 3 , etc.
226
WIT DR W L Y PIP LIN
Sec. 18 . 3. ppcaton, Form 2 7. Where t Is desred to transfer brandy
by ppe ne from storage tanks n an nterna revenue bonded warehouse on the
dstery premses to the fortfyng rooms of wneres on contguous premses,
appcaton w be made by the wnemaker on Form 2 7, In trpcate, n the
same manner as when brandy s to be transferred n packages, as prescrbed n
secton 18 . 3 . The dstrct supervsor, or the storekeeper-gauger, as the case
may be, w e ecute hs certfcate on the form as prescrbed n secton 1S . 36, the
warehouseman w ndcate the brandy to be gauged; as prescrbed n secton
18 . 37, and the storekeeper-ganger desgnated to gauge the brandy w make
hs report of gauge and e ecute hs certfcates of gauge and remova and recept
am compete and dspose of Forms 2 7 and Forms 1 20, as herenbefore pre-
scrbed n the case of remova n packages. Notaton of transfer by ppe ne
w be made by the storekeeper-gauger on each Form 1 20. (Sees. 2883, 3031(a),
3170, 1. R. C.)
WIT DR W L fok remova n tank cars
Sec. 1S . S. ppcaton, Fokm - 7. Where t s desred to wthdraw brandy
from warehouse storage tanks for remova n raroad tank cars to the fortfyng
room of a wnery, appcaton w be made by the wnemaker on Form 2 7 n
the same manner as when brandy s removed n packages, as prescrbed n secton
18 . 3 . The dstrct supervsor, or (he storekeeper-gauger, as the case may be,
w e ecute hs certfcate on the form as prescrbed by secton 18 . 30, the
warehouseman w ndcate the brandy to be gauged, as prescrbed n secton
18 . 37, and the storekeeper-gauger desgnated to gauge the brandy w make hs
report of gauge and e ecute hs certfcate of gauge and remova and dspose of
Forms 2 7 and Forms 1 20, as herenbefore prescrbed n the case of remova
n packages. The wnemaker w state on hs appcaton that the brandy s to
be transported by raroad tank car. (Sees. 3031(a), 3170, I. R. C.)
2. The purposes of the nmencmonts (re as foows:
(1) To e pedte the approva of Forms 2 7, ppcaton for the
Remova of randy for Fortfcaton of Wne from Frut Dsteres
and Interna Revenue onded Warehouses, by authorzng the store-
keeper-gauger ocated at the bonded wnery, or at a contguous frut
dstery or nterna revenue bonded warehouse, or ocated n the
mmedate vcnty of the bonded wnery f desgnated by the dstrct
supervsor, to certfy to the suffcency of the wnemaker s bond to
cover such remova, n eu of the dstrct supervsor, provded the
wnemaker s bond s gven n the ma mum pena sum and the wnery
and the frut dstery or nterna revenue bonded warehouse as the
case may be are ocated n the same supervsory dstrct.
(2) To emnate unnecessary work on the. part of the dstrct super-
vsor by dscontnung the e ecuton by hm on Form 2 7 of an order
to a storekeeper-gauger to gauge and reease the brandy descrbed n
the appcaton. The e ecuton of the certfcate of bond coverage s
sufcent ndcaton to the storekeeper-gauger at the frut dstery
or the nterna revenue bonded warehouse that the brandy descrbed
n the appcaton may be gauged and reeased. If a storekeeper-
gauger s not assgned to the frut dstery or the nterna revenue
bonded warehouse, the dstrct supervsor w desgnate a storekeeper-
gauger to go to such premses to gauge and reease the brandy.
3. It s found that compance wth the notce and pubc rue-
makng procedure of the dmnstratve Procedure ct ( U. S. C.
1001 et seq.) s unnecessary n connecton wth the ssuance of these
reguatons for the reason that the changes made are of a berazng
character.
. Ths Treasury Decson sha be effectve on the thrty-frst day
after the dae of ts nubeaton n the Federa Recdster.
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

0

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
227 Regs. 10, 18 . 76, 18 . 77.
. (Ths Treasury Decson s ssued under the authorty contaned
n sectons 2883,3031 (a), 3033, 3170, and 3176 of the Interna Revenue
Code (U. S. C, tte 26, sectons 2883, 3031(a), 3033, 3170, and 3176).)
Geo. . Schoeneman,
Commssoner of Interna Revenue.
pproved September 1, 19 9.
Thomas . Lynch,
ctng Secretary of the Treasury.
(Pubshed n the Federa Regster September 8,19 9)
Reguatons 10, Sectons 18 . 76 and 19 9-17-131
18 . 77. T. D. 718
TITL 26 INT RN L R NU . C PT R I, SU C PT R C, P RT 18 .
W R OUSING OF DISTILL D SPIRITS
mendng Reguatons 10
Treasury Department,
Offce of Commssoner of Interna Revenue,
Washngton 2 , D. G.
To Dstrct Supervsors and Others Concerned:
1. Sectons 18 . 76 and 18 . 77 of Reguatons 10 (26 CFR, Part
18 ) are amended to read as foows:
Sec. 18 . 70. Tmk of Makno ntres. Day entres sha be made on
Record 2 and Forms 2C and 2 , as ndcated by the headngs of the varous
coumns and n accordance wth nstructons prnted on the forms before the
cose of the busness day ne t succeedng the day on whch the transactons occur.
Where the propretor of a ta -pad premses defers the makng of entres to the
ne t busness day, as authorzed heren, he sha mantan a separate record,
such as nvoces, of the removas of dsted sprts showng the remova data
requred to be entered on Record 2 or Form 2 , and approprate memoranda
of other transactons requred to be entered on such records for the purpose of
correcty makng the entres. Where the makng of the entres on Form 20 s
deferred to the ne t busness day, as authorzed heren, the propretor of the
nterna revenue bonded warehouse sha mantan approprate memoranda for
the purpose of makng the entres correcty. (Sees. 28 7, 28 9, 3170, I. R. C.)
Sec. 18 . 77. Separate Record of Sera Numbers ok Cases. Sera numbers
of cases of dsted sprts dsposed of need not be entered on Record 2 or
Form 2 , provded the propretor keeps n hs pace of busness a separate
record, approved by the dstrct supervsor, showng such sera numbers, wth
necessary dentfyng data, ncudng the date of remova and the name and
address of the consgnee. Such separate record may be kept n book form
(ncudng oose-eaf books) or may consst of commerca papers, such as
nvoces or bs. Such books, nvoces, and bs sha be preserved for a perod
of years and n such a manner that the requred nformaton may be ascer-
taned ready therefrom, and durng such perod, sha be avaabe durng
busness hours for nspecton and the takng of abstracts therefrom by nterna
revenue offcers. ntres sha be made on such separate approved record before
the cose of the busness day ne t succeedng the day on whch the transactons
occur. Where the makng of the entres s deferred to the ne t busness day, as
authorzed heren, approprate memoranda sha e mantaned for the purpose
of makng the entres correcty. The propretor, whose separate record has been
approved by the dstrct supervsor, sha make a notaton n the coumn for
reportng sera numbers, as foows: Sera numbers shown on commerca
records per authorty, dated (Sees. 2S 7. 3176, I. R. C.)
2. These amendments are ntended for the purpose of aowng
addtona tme for makng requred entres n Record 2, and n
Forms 2C and 2 .
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

0

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
Regs. 10, 18 . 93, etc. 228
3. It s found that compance wth the notce and pubc rue-mak-
ng procedure of the dmnstratve Procedure ct ( U. S. C. 1001
et seq.) s unnecessary n connecton wth the ssuance of these regua-
tons for the reason that the changes made are of a berazng
character.
. Ths Treasury Decson sha be effectve on the thrty-frst day
after the date of ts pubcaton n the Federa Regster.
. Ths Treasury Decson s ssued under the authorty contaned n
sectons 28 7,28 9, and 3176,1. R. C. (26 U. S. C. 28 7,28 9,3176).
Geo. . Schoeneman,
Commssoner of Interna Re venue.
pproved ugust 2, 19 9.
Thomas . Lynch,
ctng Secretary of the Treasury.
(Pubshed n the Federa Regster ugust 9, 19 9)
Reguatons 10, Sectons 18 . 93, tc. 19 9-17-131 6
T. D. 729
TITL 26 INT RN L R NU . C PT R I, SU C PT R C, P RT 18
W R OUSING OF DISTILL D SPIRITS
mendng Reguatons 10
Treasury Department,
Offce of Commssoner of Interna Revenue,
Washngton 2 , D. C.
To Dstrct Supervsors and Others Concerned:
1. Sectons 18 . 93,18 . 9 , 18 . 9 , and 18 . 96 of Reguatons 10,
approved May 20, 19 0 ( 26 CFR, Part 18 ), are hereby amended.
2. The purpose of these amendments s to revse the procedure for
the recordng of Government property and the dsposton of cap
seas used and removed at nterna revenue bonded warehouses.
3. It s found that compance wth the notce, pubc rue-makng
procedure, and effectve date requrements of the dmnstratve Pro-
cedure ct (Pubc, No. 0 , Seventy-nnth Congress) s unnecessary
n connecton wth the ssuance of these reguatons for the reason
that the changes made are of an admnstratve nature ony.
Sec. 18 . 93. Remova of Cap Seas. cept as provded In secton 18 . 92,
cap seas whch have been aff ed w be removed ony by a storekeeper-gauger
or some other offcer desgnated for the purpose by the dstrct supervsor. The
offcer w destroy a removed cap seas In a manner suffcent to prevent ther
reuse. (Sec. 3176, I. R. O.)
Sec. 18 . 9 . Storekeeper-Gauger s Record of Cap and Lock Seas. record
of cap seas receved, used, and removed, and of ock seas receved and used
at each Interna revenue bonded warehouse w be kept by storekeeper-gangers
on Form 289, Government Offcer s Record and Report of Government Property,
In accordance wth the ttes of the coumns and nes and the nstructons on
the form. Form 289 w be kept In the Government cabnet when not n use.
(Sec. 8176, I. R. O.)
Sec. 18 . 9 . Storekeeper-Gauger s Report ok Government Property. On or
before the ffth day of the month succeedng that for whch the transactons are
reported, the storekeeper-gauger w prepare a monthy report on Form 289
of a Government property at the warehouse. Form 289 w be prepared n
dupcate, n accordance wth the ttes of the coumns and nes and the Instruc-
tons on the form. e w forward the orgna to the dstrct supervsor and
retan the copy for hs fes. (Sec. 3176, I. R. C.)
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

0

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
229
Regs. 11, 189.22, etc.
Sec. 18 . 96. Dstrct Supervsor s Report of Locks and Gaugng Instru-
ments. Dstrct supervsors w be hed accountabe for the Government ocks
and seas, ncudng cap seas, supped upon ther respectve requstons, and
for those receved from ther predecessors n offce. Outgong dstrct supervsors
w take recepts from ther successors n offce for the Government ocks then
n use and on hand, and for seas on hand n the dstrct. Dstrct supervsors
w keep an account of ocks and gaugng nstruments, and w make return
thereof semannuay to the Commssoner on Form ,1 2, Return of Locks and
Gaugng Instruments. (Sec. 3176, I. R. 0.)
. Ths Treasury Decson sha be effectve on the thrty-frst day
after the date of ts pubcaton n the Federa Regster.
. Ths Treasury Decson s ssued under the authorty contaned
n secton 3176, Interna Revenue Code (U. S. C, tte 26, secton 3176).
Geo. . Schoeneman,
Commssoner of Interna Revenue.
pproved ugust , 19 9.
Thomas . Lynch,
ctng Secretary of the Treasury.
(Pubshed n the Federa Regster ugust 10, 19 9)
Reguatons 11, Sectons 189.22, tc. 19 9-26-13260
T. D. 761
TITL 26 INT RN L R NU . C PT R I, SU C PT R C, P RT 189.
OTTLING OF T -P ID DISTILL D SPIRITS
mendng Reguatons 11
Treasury Department,
Offce of Commssoner of Interna Revenue,
Washngton 8 , D. C.
To Dstrct Supervsors and Others Concerned:
1. Sectons 189.22,189.72,189.73,189.7 ,189.7 , and 189.90 of Regu-
atons 11 (26 CFR, Part 189), reatng to the bottng of ta -pad
dsted sprts, are amended to read as foows:
Sec. 189.22. I pe Lnes. Ppe nes used for the conveyance of ta -pad sprts
from bottng tanks n a contguous rectfyng pant to bottng tanks In the
ta -pad bottng house must be constructed, secured, panted, and marked In
accordance wth the requrements of Reguatons 1 (26 CFR, Part 190). Ppe
nes used for the conveyance of ta -pad dsted sprts from the cstern room
of a dstery to the bottng tanks or storage tanks n the ta -pad bottng house
must be constructed, secured, panted, and marked n accordance wth the re-
qurements of Reguatons (26 CFR, Part 183). Ppe nes used for the convey-
ance of dsted water to contguous estabshments operated under the nterna
revenue aws and reguatons must be ndependent ones, wthout any connecton
wth any other ppe, tank, vesse, or utens on the ta -pad bottng house
premses, e cept the dsted water storage tank: Provded, That, where ds-
ted waor s to be so conveyed from two or more dsted water storage tanks,
the ppe ne may be connected wth such tanks by permanent manfod connec-
tons. Such ppe nes must be constructed of meta, and e posed to vew
throughout ther entre engths. The meta ppe nes In the ta -pad bottng
house used for conveyng the foowng substances sha be kept panted n the
coors Indcated:
ack Sprts.
Whte Water.
umnum Steam.
Orange r.
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

0

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
Regs. 11, 189.22, etc. 230
These coors are Intended for such ppe nes ony, and are prescrbed for the
purpose of dstngushng such ppe nes from each other, and from a other
ppe nes on the premses whch are panted, but for whch coors are not pre-
scrbed. The pantng n one of the prescrbed coors, or a coor smar thereto,
f a ppe ne for whch a coor Is not prescrbed, s prohbted. Ppe nes for
Whch coors are not prescrbed may be panted n sectons of contrastng coors.
(Sees. 2829, 2871, 8176, L R. C.)
Sko. 189.72. Sprts Receved by Ppe Lne. Where a rectfyng pant and a
ta -pad bottng house are operated on contguous premses, the dstrct super-
sor may, n hs dscreton, authorze the transfer of sprts, on whch the rect-
fcaton ta (f any Is due) has been pad, from the bottng tanks n the rectfyng
pant to the bottng tanks n the ta -pad bottng house by ppe ne, constructed
In accordance wth the provsons of Reguatons 1 (26 OFR, Part 190) and
secton 189.22 of these reguatons. (Sees. 2803, 2871, S176, I. It. C.)
Seo. 189.73. tra Form 237 or Form 230. When rectfed sprts are author-
zed to be transferred by ppe ne from a rectfyng pant to a ta -pad bottng
bouse on contguous premses, an e tra copy of Form 237 w be prepared by
the rectfer and the same w be fuy e ecuted n the same manner as the org-
na Form 237, ncudng the storekeeper-gauger s certfcate of ta -payment, f
the sprts are sub|ect to the rectfcaton ta ; or the storekeeper-gauger s cer-
tfcate of e empton from the rectfcaton ta . If the sprts are not sub|ect to
such ta . When sprts other than rectfed sprts are to be so transferred, an
e tra copy of Form 230 w be fuy e ecuted n the same manner as the orgna
Form 230. (Sees. 2803, 2871, 3176, I. R. C.)
Sec. 189.7 . Competon and Dsposton of Form 237 or Form 230. Upon
competon of the transfer of sprts to the ta -pad bottng house, there sha be
entered under the certfcate of cases fed on a copes of Form 237 or Form 230
a statement that the sprts descrbed on the reverse sde of the form have been
transferred by ppe ne to bottng tank No. n the contguous ta -pad
bottng house operated by , together wth the date of transfer.
When Form 230 authorzng the bottng of such sprts has been approved, as
herenafter provded, the sera number of such Form 230 w be noted on a
copes of Form 237 or Form 230, as the case may be. The e tra copy of Form 237
or Form 230 w be securey Rttached by means of a stape, eyeet, or smar
devce to the orgna Form 230 as evdence that the proper ta on the sprts
descrbed theren has been pad. (Sees. 2803, 2871, 3176, I. R. C.)
Sec. 189.7 . pprova by Storekeeper-Gauger. The propretor w submt
both copes of Form 230 for the approva of the storekeeper-gauger assgned to
supervse operatons at the ta -pad bottng house. The storekeeper-gauger
w e amne the packages descrbed n the appcaton and the scaped portons
of ta -pad stamps, or the affdavt or statement n eu thereof, or Form 237 or
Form 230, as the case may be (as provded In secton 189.7 ), attached to the
orgna copy of Form 230, and If he fnds that the sprts to be botted are as
descrbed and have been awfuy ta -pad, and the forms are propery prepared,
he w e ecute hs certfcate and the authorzaton for bottng, and return both
copes to the propretor. (Sees. 2S03, 2871, 3176. I. R. C.)
Sec. 189.90. Dsposton of Form 230. Immedatey after the competon of
the bottng and the proper competon of Form 230, the propretor w forward
the orgna copy of the form, wth the cut-out portons of the ta -pad stamps,
or the affdavt or statements requred n eu thereof, to the dstrct supervsor,
and w fe the remanng copy as a permanent record at the pant, avaabe
for Inspecton by Government offcers. Where Form 237 or Form 230 s attached
to one copy of Form 230 as evdence that the proper ta on the sprts transferred
from a rectfyng pant has been pad, as provded In secton 180.7 , such copy
of Form 230 wth Form 237 or Form 230 attached w be forwarded to the dstrct
supervsor. (Sees. 2803, 2871, 317G, I. R. C.)
2. The purpose of these amendments s to authorze the transfer of
tmrectfed sprts by ppe ne from a rectfyng pant to a contguous
ta -pad bottng house for bottng, n the same manner as rectfed
sprts are permtted to be transferred for bottng.
3. It s determned that compance wth the notce and pubc rue-
makng procedure of the dmnstratve Procedure ct ( U. S. C.
1001 et seq.) s unnecessary n connecton wth the ssuance of these
reguatons for the reason that the changes made are of a berazng
character.
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

0

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
231
Regs. 11, 189.133, 189.13
. Ths Treasury Decson sha be effectve mmedatey upon the
date of ts pubcaton n the Federa Regster.
. Ths Treasury Decson s ssued under the authorty contaned
n sectons 2803,2829,2871, and 3176, Interna Revenue Code (U. S. C,
tte 26, sectons 2803, 2829, 2871, and 3176).
Geo. . Schoeneman,
Commssoner of Interna Revenue.
pproved November 23, 19 9.
ohn S. Graham, .
ctng Secretary of the Treasury.
(Pubshed In the Federa Regster December 1, 19 9)
Reguatons 11, Sectons 189.133 and 189.13 . 19 9-17-131 7
T. D. 719
TITL 26 INT RN L R NU . C PT R I, SU C PT R C, P RT 189.
OTTLING OF T -P ID DISTILL D SPIRITS
mendng Reguatons 11
Treasury Department,
Offce of Commssoner of Interna Revenue,
Washngton 2 , D. 0.
To Dstrct Supervsors and Others Concerned:
1. Sectons 189.133 and 189.13 of Reguatons 11 (26 CFR, Part
189), approved May 20, 19 0, are amended to read as foows:
Sec. 180.133. Tme of Makng ntkes. Day entres sha be made on
Form 2D and Record 2 as ndcated by the headngs of the varous coumns
and n accordance wth the nstructons prnted thereon, before the cose of the
busness day ne t succeedng the day on whch the transactons occur. Where
the propretor of a ta -pad bottng house defers the makng of the entres to
e ne t busness day, as authorzed heren, he sha keep a separate record, such
as nvoces, of the removas of dsted sprts, showng the remova data re-
qured to be entered on Form 62D and Record 2, and approprate memoranda
of other transactons requred to be entered n such records, for the purpose of
makng the entres correcty. (Sees. 2871, 3176, 0 1, I. R. C.)
Sec. 189.13 . Separate Record or Sera Numbers of Cases. Sera numbers
of cases of dsted sprts dsposed of by the propretor of a ta -pad bottng
house need not be entered on Form r 2D and Record 2, provded the propretor
keeps n hs pace of busness a separate record, approved by the dstrct super-
vsor, showng such sera numbers wth necessary dentfyng data, ncudng the
date of remova and the name and address of the consgnee. Such separate
record may be kept n book form (ncudng oose-eaf books) or may consst
of commerca papers, such as nvoces or bs. Such books, nvoces, and bs
sha be preserved for a perod of years and n such a manner that the requred
Informaton may be ascertaned ready therefrom, and durng such perod sha
be avaabe durng busness hours for nspecton and the takng of abstracts
therefrom by revenue offcers. ntres sha be made on such separate approved
record before the cose of the busness day ne t succeedng the day on whch the
transactons occur. Where the makng of the entres s deferred to the ne t
busness day, as authorzed heren, approprate memoranda sha be mantaned
for the purpose of makng the entres correcty. The propretor whose separate
record has been approved by thf dstrct supervsor sha make a notaton n the
coumn on Form 2D and Record 2 for reportng sera numbers as foows:
Sera numbers shown on commerca records per authorty dated
(Sees. 28,-)7, 2871, 3176, 0 1, I. R. C.)
2. These amendments are ntended for the purpose of aowng add-
tona tme for makng requred entres n Form 2D and Record 2.
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

0

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
Regs. 11, 189.138a, 189.139a. 232
3. It s found that compance wth the notce and pubc rue-
makng procedure of the dmnstratve Procedure ct ( U. S. C.
1001 et seq.) s unnecessary n connecton wth the ssuance of these
reguatons for the reason that the changes made are of a berazng
character.
. Ths Treasury Decson sha be effectve on the thrty-frst day
after the date of ts pubcaton n the Federa Regster.
. Ths Treasury Decson s ssued under the authorty contaned
n sectons 28 7, 2871, 3176, 0 1, Interna Revenue Code (U. S. C,
tte 26, sectons 28 7, 2871, 3176, 0 1).
Geo. . Schoeneman,
Commssoner of Interna Revenue.
pproved ugust 2,19 9.
Thomas . Lynch,
ctng Secretary of the Treasury.
(Pubshed n the Federa Regster ugust 9, 19 9)
Reguatons 11, Sectons 189.138a and 189.139a. 19 9-17-131 8
T. D. 730
TITL 26 INT RN L R NU C PT R I, SU C PT R C, P RT 189.
OTTLING OF T -P ID DISTILL D SPIRITS
mendng Reguatons 11
Treasury Department,
Offce of Commssoner of Interna Revenue,
Washngton 2 , D. C.
To Dstrct Supervsors and Others Concerned:
1. Sectons 189.138a and 189.139a are hereby added to Reguatons
11, approved May 20, 19 0 (26 CFR, Part 189). The tte of rtce
I of such reguatons s changed to Storekeeper-Gauger s
Records and Reports, and the tte of rtce II s changed to
Dstrct Supervsor s Reports.
2. The purpose of these amendments s to provde a record for the
recordng of Government property used at ta -pad bottng pants.
3. It s found that compance wth the notce, pubc rue-makng
procedure, and effectve date requrements of the dmnstratve Pro-
cedure ct (Pubc, No. 0 , Seventy-nnth Congress) s unnecessary
n connecton wth the ssuance of these reguatons for the reason
that the changes made are of an admnstratve nature ony.
Sec. 189.138a. Storekeepeu-Gabgkr s Report of Government Property.
record of ocks and ock seas receved and used at each ta -pad bottng pant
w be kept by storekeeper-gaugers on Form 289, Government Offcer s Record
and Report of Government Property, n accordance wth the ttes of the coumns
and nes and the Instructons on the form. In any case where cap seas are used,
they w aso be reported on Form 289. The storekeeper-gauger w destroy a
removed cap seas n a manner suffcent to prevent ther reuse. Form 289 w
be kept n the Government cabnet when not n use. On or before the ffth day
of the month succeedng that for whch the transactons are reported, the store-
kee| r-gauf. er w prepare hs monthy report, on Form 289, of a Government
property at the ta -pad bottng house. Form 289 w be prepared n dupcate,
n accordance wth the ttes of the coumns and nes and the nstructons on the
form. The offcer w forward thf orgna to the dstrct supervsor and retan
one copy for hs fes. (Sees. 3176 and 0 1(a), I. R. C.)
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

0

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
233
Regs. 1 , 190.12, etc.
Sec. 189.139a. Dstrct Supervsor s Report of Locks and Gaugng Instru-
ments, Form 1 2. Dstrct supervsors w be hed accountabe for the Govern-
ment ocks and seas, Incudng cap seas, supped upon ther respectve
requstons, and for those receved from ther predecessors n offce. Outgong
dstrct supervsors w take recepts from ther successors In offce for the
Government ocks then n use and on hand, and for seas on hand, n the
dstrct. Dstrct supervsors w keep an account of ocks and gaugng nstru-
ments, and w make return thereof semannuay to the Commssoner on Form
1 2, Return of Locks and Gaugng Instruments. (Sees. 3176 and 0 1(a),
I. R. C.)
. Ths Treasury Decson sha be effectve on the thrty-frst day
after the date of ts pubcaton n the Federa Regster.
. Ths Treasury Decson s ssued under the authorty contaned
n sectons 3176 and 0 1(a), Interna Revenue Code (2G U. S. C. 3176
and 0 1(a)).
Geo. . Schoeneman,
Commssoner of Interna Revenue.
pproved ugust , 19 9.
Thomas . Lynch,
ctng Secretary of the Treasury.
(Pubshed In the Federa Regster ugust 10,19 9)
Reguatons 1 , Sectons 190.12, tc. 19 9-26-13261
T. D. 762
TITL 20 INT RN L R NU . C PT R I, SU C PT R C, P RT 190.
R CTIFIC TION OF SPIRITS ND WIN S
mendng Reguatons 1
Treast|hy Department,
Offce of Commssoner of Interna Revenue,
Washngton , D. G.
To Dstrct Supervsors and Others Concerned:
1. Sectons 190.12, 190.33, 190. 2, 190. ( ), 190.100, 190.332,
190.333, 190.33 , 190.336, 190.3 0, 190.3 , and 190.3 7 of Reguatons
1 (26 CFR, Part 190), reatng to the rectfcaton of sprts and wnes,
and the tte of rtce LI of such reguatons are amended, and
secton 190.3 9a s added to read as foows:
Seo. 190.12. Restrctons. Rectfyng pants for the rectfcaton of ds-
ted sprts or wne may not be ocated on board of any vesse or boat, or
wthn 000 feet n a drect ne of a vnegar factory usng the vaporzng process,
or, e cept as provded by the reguatons n ths part, wthn 600 feet n a drect
ne of a dstery or voate frut-favor concentrate pant. The provsons of
sectons 190.13, 190.1 , 190.17, 190. 9, 190.96, and 190.119, reatng to the carry-
ng on of the busness of rectfyng sprts or wne at a dstance of ess than 600
feet n a drect ne from a dstery, sha appy equay to the carryng on of
such busness at a dstance of ess than 600 feet n a drect ne from a voate
frut-favor concentrate pant. (Sees. 2801(e)(1), 2819, 2832, 283 , 3170, 3176,
8182,1. R. C.)
Sec. 190.33. Storage Tanks. If sprts are receved n tank cars, or by ppe
ne from the cstern room of a contguous dstery or dstery n the mmedate
vcnty of the rectfyng pant, or by ppe ne from a contguous bonded ware-
house or bonded warehouse In the mmedate vcnty of the rectfyng pant,
sutabe storage tanks must be provded n the recevng room wthn whch to
store such sprts, e cept that such storage tanks w not be requred n the
868972 0 16
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

0

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
Regs. 1 , 190.12, etc.
23
case of sprts receved In tank cars whch are transferred drecty to processng
and bottng tanks n accordance wth secton 190.170(a). ach storage tank
sha be constructed of meta and be of unform dmensons from top to bottom.
ach such tank sha be equpped wth a sutabe measurng devce, or mounted
on scaes, whereby the actua contents w be correcty ndcated. There sha
be panted on each tank the words, Storage Tank, foowed by ts sera number
and capacty n wne gaons. sutabe board sha be provded on each storage
tank for the attachment of Forms 1 20 and 1 0, as herenafter provded.
Manheads, nets, and outets of the tanks must be provded wth factes for
ockng wth Government ocks. Stopcocks must be provded and so arranged as
to contro competey the fow of sprts, both nto and out of the tank.. The
constructon of tte vaves must be such that they can be secured wth Government
ocks. The ppe connectons contanng such stopcocks or vaves must be brazed,-
weded, or otherwse secured, to the tanks n such a manner that they cannot be
detached or atered wthout showng evdence of tamperng. Storage tanks may
be permanenty connected wth ppe nes for the conveyance thereto of ar and
dsted water, but the dsted water ppe ne must be aff ed to the top of the
tank. Such ppe nes must be equpped wth a contro vave whch may be ocked
wth a Government ock. Ppe nes used for the conveyance of ar must aso be
equpped wth a check vave ocated near the pont of entry to the tank n order
to effectvey prevent any abstracton of sprts from the tank. Other ppe nes,
e cept those used for the conveyance of sprts, may not be permanenty con-
nected wth such tanks. (Sees. 2801 (e)(1), 2829, 3176, I. R. C.)
Sec. 190. 2. Sts. sts n the rectfyng pant sha be ocated n the
rectfyng room and sha be of substanta constructon and must have a cear
space of not ess than 1 foot around them. very st must have pany and
egby panted thereon words Indcatng ts use, or uses, as Gn St, Corda
St, Water St, etc., foowed by ts sera number and capacty n wne
gaons. sts, e cept corda sts of not more than 2 )0-wne-gaon capacty
and water sts, sha be connected wth the recevng tanks by contnuous perma-
nent ppe nes: Provded, That, where such recevng tank s mounted on scaes,
the ppe ne may be connected wth the tank by means of fe be connectons
wth the ends permanenty attached and secured by means of Government cap
seas, or by brazng or wedng, to the net of the tank and to the ppe ne. If
the gn st s equpped wth a ppe ne to bypass the berry basket, such ppe
ne must he equpped wth a vave for ockng wth a Government ock. (Sees.
2801(e) (1), 3176, I. R. C.)
Sec. 190. . Ppe Lnes. (a) Connectng bottng tank and bottng ma-
chne.
(6) To contguous ta -pad bottng house or rectfyng pant. Ppe nes used
for the conveyance of sprts to a contguous ta -pad bottng house or rectfyng
pant for bottng, as provded n sectons 190.332-190.336, sha be of a f ed and
permanent character, constructed of meta and so arranged as to be e posed to
vew throughout ther entre engths, and a connectons, vaves, fanges, unons,
etc., sha be brazed, weded, or otherwse secured. separate and permanent
ppe ne must be nstaed to connect the bottng tank n the rectfyng pant
wth the bottng tank n the contguous ta -pad bottng house or rectfyng
pant, from and to whch sprts are to be transferred, and each such ppe ne
must be equpped wth a vave, n the transferrng rectfyng pant, capabe of
beng ocked wth a Government ock: Provded, That, where sprts are to be
conveyed from two or more bottng tanks n the rectfyng pant or to two or
more bottng tanks n the contguous ta -pad bottng house or rectfyng pant,
the ppe ne may be connected wth the bottng tanks by manfod connec-
tons so arranged as to contro the fow of sprts from or nto each tank. There
sha be panted on each ppe ne e tendng from the manfod to the bottng
tanks a number correspondng wth the sera number of the bottng tank wth
whch the ppe ne s connected, uness the arrangement of the ppe ne s such
that the dentty of the tank wth whch t Is connected Is apparent. Where the
bottng tank s mounted on scaes, the ppe ne may be connected therewth by
menns of short, detachabe hose connectons If the end of the ppe ne s
equpped wth a vave whch may be ocked wth a Government ock.
Sec. 190.100. Ppe Lnes to Contguous Ta -Pad oTTLrNO ouse ob
Rectfyng Pant. The pans sha show ppe nes used to transfer sprts
to a contguous ta -pad bottng house or rectfyng pant for bottng, the
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

0

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
23
Regs. 1 , 190.12, etc.
reatve ocaton of the rectfyng pant and the contguous ta -pad bottng
house or rectfyng pant, and the bottng tanks to whch such ppe nes are
connected. (Sees. 2801(e) (1), 8176, I. . 0.)
htce II. Transfer or Sprts by Ppe Lne From Rectfyng Pant to
Contguous Ta -Pad ottng ouse or Rectfyng Pant for ottng
Sec. 190.332. Dstrct Supervsor May uthorze. The dstrct supervsor
may, n hs dscreton, authorze the nstaaton of a ppe ne for the transfer
of sprts from the bottng tanks n the rectfyng pant to bottng tanks n a
contguous ta -pad bottng house or rectfyng pant for bottng. (Sees.
2801(e) (1),3176,1. R. O.)
Sec. 190.333. ppcaton. rectfer who desres to transfer sprts by ppe
ne to a contguous ta -pad bottng house or rectfyng pant for bottng, must
fe appcaton, n trpcate, wth the dstrct supervsor, showng the reatve
poston of the pants and the ownershp thereof, and gvng a descrpton of the
proposed ppe ne and the reasons why It Is desred to transfer sprts to the
contguous ta -pad bottng house or rectfyng pant for bottng. (Sees.
2801(e)(1), 3176, I. R. O.)
Sec. 190.33 . Request for Transfer of Sprts. Where the transfer of
sprts by ppe ne from bottng tanks In the rectfyng pant to bottng tanks
n the contguous ta -pad bottng house or rectfyng pant s authorzed, the
rectfer w, whenever he desres to so transfer sprts, submt Form 237 or
Form 230 to the Government offcer and request hm to unock the vave n the
ppe ne and to supervse the transfer of the sprts. Where the sprts to be
transferred are sub|ect to ta , the offcer w not permt the transfer thereof to
the bottng tanks n the contguous ta -pad bottng house or rectfyng pant
uness a ta due has been pad. (Sees. 2801(e) (1), 3176, I. R. C.)
Sec. 190.336. Transfer of Sprts. When sprts are to be so transferred, the
Government offcer w see whether the contents of the bottng tank agree wth
the Form 237 or Form 230, and If found n agreement, and If a ta es due on
the sprts have been pad, he w unock the vave or vaves n the ppe ne
controng the fow of sprts to the bottng tanks n the contguous ta -pnd
bottng house or rectfyng pant and permt the rectfer to transfer the sprts
under hs supervson. Immedatey the sprts have been transferred, the pro-
pretor w cose the ppe ne vave or vaves and the Government offcer w
appy the Government ocks thereto. Form 237, prepared as requred by ap-
pcabe reguatons n ths part, w be competed and dsposed of as provded n
sectons 190.298 and 190.307. Form 230, kewse prepared, w be competed
and dsposed of as provded n secton 190.3 9a. (Sees. 2801 (e) (1), 3176,1. R. C.)
rtce I . ottno of Unrectfed Sprts and Wnes
Sec. 190.3 0. ppcaton, Form 230. Propretors of rectfyng pants desrng
to botte ta -pad dsted sprts or wnes wthout rectfcaton w e ecute
appcaton on Form 230, In dupcate, or n trpcate f the sprts are to be
transferred for bottng, gvng a of the data caed for by the form, as ndcated
by the headngs of the coumns and nes and the nstructons prnted thereon.
ach Form 230 w be gven a sera number begnnng wth 1 for the 1st day
of anuary of each year and runnng consecutvey thereafter to December 31.
(Sees. 2801(e) (1), (2), 3176, I. R. C.)
Sec 190.3 . pprova by Offcer. copes of Form 230 w be submtted to
the Government offcer assgned to the pant for approva, wth a request to unock
and ock the stopcocks on the bottng tank. The Government offcer w e amne
the contaners descrbed on the form and the cut-out portons of the ta -pad
Stamps, or the affdavt or statement n eu thereof, attached to one copy of the
form, or, n the case of sprts transferred for bottng from a contguous rectfy-
ng pant, the e tra copy of Form 230, or Form 237, as the ease may be, and If
he fnds that the sprts to be botted have been awfuy ta -pad, and the forms
are propery prepared, he w e ecute hs certfcate and the authorzaton for
bottng and return a copes to the rectfer. (Sees. 2S01(e) (1), 3176, I. R. O.)
Sec. 190.3 9a. Dsposton of Form 2:u Transfer. Upon competon of trans-
fer of the sprts to the ta -pad bottng house or rectfyng pant, there sha be
entered on a copes of Form 230 a statement that the sprts descrbed on
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

0

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
Regs. 1 , 190.12, etc. 236
such form have been transferred by ppe ne to ottng Tank No.
In the contguous ta -pad bottng house or rectfyng pant operated by
, together wth the date of such transfer and the sera
number of the Form 230 to whch the e tra copy of Form 230 s to be attached
In the bottng house. fter e ecuton of such statement, the rectfer w sub-
mt the form to the Government offcer, who w, after proper verfcaton, sgn
and date the verfcaton n the space provded therefor. The rectfer w
retan hs bottng tank copy of the form at the rectfyng pant, avaabe for
Inspecton by Government offcers, and w mmedatey forward the orgna
copy of Form 230, wth the cut-out portons of the ta -pad stamps, or the state-
ments, or affdavt and statement requred n eu thereof, to the dstrct super-
vsor who w determne that such stamps, etc., are attached to the form. (Sees.
2S01(e) (1), 3170, I. , C.)
Sec. 190.3 7. Dsposton of Form 230 ottng. Immedatey after the
competon of the bottng and the proper competon of Form 230, the rectfer
w forward the orgna copy of the form, wth the cut-out portons of the ta -
pad stamps, or the statements, or affdavt and statement, requred n eu thereof,
to the dstrct supervsor, and w fe the remanng copy as a permanent record
at the pant avaabe for nspecton by Government offcers. Upon recept of
Form 230, the dstrct supervsor w see that the requste scaped stamps, or
statements, or affdavt and statement, n eu thereof, are attached to the form.
Where the sprts were transferred to the rectfyng pant for bottng from a
contguous rectfyng pant, the e tra copy of Form 230 or Form 237, attached to
the bottng Form 230 as evdence of the ta -pad status of the sprts, as provded
by sectons 190.298, 190.307, and 190.3 9a, w be forwarded to the dstrct
supervsor wth the bottng Form 230. (Sees. 2801(e) (1), 3176, I. R. C.)
2. The prncpa purpose of these amendments s to authorze the
transfer of unrectfed sprts by ppe ne from a rectfyng pant to a
contguous ta -pad bottng pant or rectfyng pant for bottng, n
the same manner as rectfed sprts are permtted to be transferred
for bottng. The purpose of the amendment of secton 190.12 s to
make provson whereby a rectfyng pant may be ocated ess than
600 feet from a voate frut-favor concentrate pant, n the same man-
ner as from a dstery, pursuant to the provsons of secton 3182,
I. R. C. The purpose of the amendments of sectons 190.33 and 190. 2
s to carfy the sectons by removng the mtatons as to ar and
dsted water nes beng permanenty connected to storage tanks and
as to capacty wth respect to water sts.
3. It s found that compance wth the notce and pubc rue-
makng procedure of the dmnstratve Procedure ct ( U. S. C.
1001 et seq.) s unnecessary n connecton wth the ssuance of these
reguatons for the reason that the changes made are of a berazng
and carfyng character.
. Ths Treasury Decson sha be effectve mmedatey upon the
date of ts pubcaton n the Federa Regster.
. Ths Treasury Decson s ssued under the authorty contaned
n sectons 2801(e) (1), (2), 2819, 2829. 2832, 283 , 3170, 3176, and
3182,1. R. C. (U. S. C tte 26, sectons 2801(e) (1), (2), 2819, 2829,
2832, 281 , 3170, 3176, and 3182).
Geo. . Schoeneman,
Commssoner of Interna Revenue.
pproved November 23,19 9.
ohn S. Graham,
ctng Secretary of the Treasury.
(Pubshed n the Federa Regster December 1, 19 9)
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

0

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
237
Regs. 1 , 190.186, etc.
Reguatons 1 , Sectons 190.186,190. 30, 19 9-17-131 9
and 190. 31. T. D. 720
TITL 26 INT RN L R NU . C PT R I, SU C PT R C, P RT 190.
R CTIFIC TION OF SPIRITS ND WIN S
mendng Reguatons 1
Treasury Department,
Offce of Commssoner of Interna Revenue,
Washngton 2 , D. C.
To Dstrct Supervsors and Others Concerned:
1. Sectons 190.186,190. 30, and 190. 31 of Reguatons 1 (26 CFR,
Part 190), approved May 20, 19 0, are amended to read as foows:
Sec. 190.186. pprova of Offcer. The rectfer w submt both copes of
Form 122 to the Government offcer. The offcer w nspect the sprts de-
scrbed n the appcaton and verfy the entres. If he Is satsfed that the
sprts are ta -pad and that the entres are correct, he w authorze the rec-
tfer to dump the sprts descrbed n the form by sgnng the approva statement
on both copes, and w return the same to the rectfer. (Sees. 2801(e) (1), 3176,
I. R. C.)
Sf.c 190. 30. Tme of Makng nwes. Day entres sha be made on Form
and Record 2, as ndcated by the headngs of the varous coumns and n
accordance wth the nstructons prnted thereon, before the cose of the busness
day ne t succeedng the day on whch the transactons occur. Where the pro-
pretor defers the makng of the entres to the ne t busness day, as authorzed
heren, he sha keep a separate record, such as nvoces, of the removas of
dsted sprts, showng the remova data requred to be entered on Form
or Record 2, respectvey, and approprate memoranda of other transactons
requred to be entered on such records, for the purpose of makng the entres
correcty. (Sees. 2801 (e) (1), 28 , 28 7, 3171, I. R. C.)
Sec. 190. 31. Separate Record of Sera Numbers of Cases. Sera numbers
of cases of dsted sprts dsposed of need not be entered on Form or Record
2, provded the propretor keeps n hs pace of busness a separate record,
approved by the dstrct supervsor, showng such sera numbers, wth necessary
Identfyng data, ncudng the date of remova and the name and address of
the consgnee. Such separate record may be kept n book form (ncudng oose-
eaf books) or may consst of commerca papers, such as nvoces or bs. Such
books, nvoces, or bs sha be preserved for a perod of years and n such a
manner that the requred nformaton may be ascertaned ready therefrom, and
durng such perod, sha be avaabe durng busness hours for nspecton and
the takng of abstracts therefrom by revenue offcers. ntres sha be made on
such separate approved record before the cose of the busness day ne t suc-
ceedng the day on whch the transactons occur. Where the makng of the
entres s deferred to the ne t busness day, as authorzed heren, approprate
memoranda sha be mantaned for the purpose of makng the entres correcty.
The propretor whose separate record has been approved by the dstrct super-
vsor sha make a notaton n the coumn for reportng sera numbers, as
foows: Sera numbers shown on commerca records per authorty dated (Sees. 2801(e)(1), 28 , 28 7, 3176, I. R. C.)
2. These amendments are for the purpose of (1) smpfyng ap-
Srova of Forms 122 by the Government offcer and (2) aowng ad-
tona tme for makng requred entres n Form and Record 2.
3. It s found that compance wth the notce and pubc rue-
makng procedure of the dmnstratve Procedure ct ( U. S. C.
1001 et seq.) s unnecessary n connecton wth the ssuance of these
reguatons for the reason that the changes made are of a berazng
character.
. Ths Treasury Decson sha be effectve on the thrty-frst day
after the date of ts pubcaton n the Federa Regster.
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

0

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
Regs. 1 , 300. 81, 190. 82.
238
. Ths Treasury Decson s ssued under the authorty contaned
n sectons 2801(e) (1), 28 , 28 7, 3171, 3176, Interna Revenue Code
(U. S. C, tte 26, sectons 2801(e) (1), 28 , 28 7, 3171, 3176).
Geo. . Schoeneman,
Commssoner of Interna Revenue.
pproved ugust 2,19 9.
Thomas . Lynch,
ctng Secretary of the Treasury.
(Pubshed n the Federa Regster ugust 9, 19 9)
Reguatons 1 , Sectons 190. 81 and 190. 82. 19 9-17-13160
T. D. 731
TITL 28 INT RN L R NU . C PT R I, SU C PT R C, P RT 190.
R CTIFIC TION OF SPIRITS ND WIN S
mendng Reguatons 1
Treasury Department,
Offce of Commssoner of Interna Revenue,
Washngton 2 , D. G.
To Dstrct Supervsors and Others Concerned:
1. Sectons 190. 81 and 190. 82 of Reguatons 1 , approved Ma|r
20, 19 0 (26 CFR, Part 190), are hereby amended.
2. The purpose of these amendments s to provde approprate n-
structons for the recordng of Government property used at rectfy-
ng pants.
3. It s found that compance wth the notce and pubc rue-mak-
ng procedure of the dmnstratve Procedure ct ( U. S. C. 1001
et seq.) s unnecessary n connecton wth the ssuance of these regu-
atons for the reason that the changes made are of an admnstratve
nature.
Sec. 190. 81. Storekeeper-Gaugeh s Repoet of Government Property. rec-
ord of ocks and ock seas receved and used at each rectfyng pant w be
kept by storekeeper-gangers on Form 289, Government Offcer s Record and Re-
port of Government Property, n accordance wth the ttes of the coumns
and nes and the nstructons on the form. In any case where cap seas are
used n eu of ocks, the cap seas w aso be reported on Form 289. The store-
keeper-ganger w destroy a removed cap seas n a manner suffcent to pre-
vent ther reuse. Form 289 w be kept n the Government cabnet when not n
use. On or before the ffth day of the month succeedng that for whch the
transnctons are reported, the storekeeper-gauger w prepare hs monthy
report on Form 289 of a Government property at the rectfyng pant. Form
289 w be prepared n dupcate, n accordance wth the ttes of the coumns
and nes and the nstructons on the form. The offcer w forward the orgna
to the dstrct supervsor and retan the copy for hs fes. (Sees. 2801(e)( ),
3176, I. R. C.)
Sec. 190. 82. Dstrct Supervsor s Report or Locks and Gaugng Instru-
ments, Form 1 2. Dstrct supervsors w be hed accountabe for the Govern-
ment ocks and seas, ncudng cap seas, supped upon ther respectve requ-
stons, and for those receved from ther predecessors n offce. Outgong ds-
trct supervsors w take recepts from ther successors n offce for the Govern-
ment ocks then n use and on hand, and for seas on hand, In the dstrct.
Dstrct supervsors w keep an account of ocks and gaugng nstruments, and
w make return thereof semannuay to the Commssoner on Form 1 2, Re-
turn of Locks and Gaugng Instruments. (Sees. 2801(e) ( ), 3176, I. R. C.)
. Ths Treasury Decson sha be effectve on the thrty-frst day
after the date of ts pubcaton n the Federa Regster.

G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

0

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
239
Regs. 16, 187. 3, etc.
. Ths Treasury Decson s ssued under the authorty contaned
n sectons 2801(e)( ) and 3176, Interna Revenue Code (U. S. C,
tte 26, 2801(e) ( ) and 3176).
Geo. . Schoeneman,
Commssoner of Interna Revenue.
pproved ugust , 19 9.
Thomas . Lynch,
ctng Secretary of the Treasury.
(Pubshed n the Federa Regster ugust 10, 19 9)
Reguatons 16, Sectons 187. 3, 187. , 1919-26-13206
and 187. 6. T. D. 766
TITL 20 INT RN L R NU . C PT R I, SU C PT R C, P RT 187.
D N TUR TION OF RUM
mendng Reguatons 16
Treasury Department,
Offce of Commssoner of Interna Revenue,
Washngton 2 , D. C.
To Dstrct Supervsors and Others Concerned:
1. Sectons 187. 3, 187. , and 187. 6 of Reguatons 16 (20 CFR,
Part 187), approved May 20, 19 0, are amended and secton 187. 6a
s added to such reguatons, to read as foows:
Sec. 187. 3. Contaner To e Seaed. fter takng the sampe the store-
keeper-gauger w securey cose and sea the tank or package from whch It
was obtaned, and no part of the contents of such tank or package may he used
unt the sampe has been offcay tested and approved, and report on Form 1 72
of such test s receved by the storekeeper-gauger n charge of a pant. tSecs.
3070, 3170, I. R. C.)
Sec. 187. . Shpment of Sampes to uthokzed Chemst. The sampes of
denaturants, after beng securey packed and seaed, sha be sent to the most
convenent authorzed chemst for e amnaton and report. Dstrct supervsors
w furnsh propretors of denaturng bonded warehouses and storekee|er-
gnugers wth the names and addresses of authorzed chemsts. e penses n
connecton wth the forwardng and testng of sampes must be borne by the
propretor. report of each sampe submtted by the storekeeper-ganger for
anayss sha be prepared by hm on Form 1 72, Report on Denaturants, In
trpcate, and forwarded to the authorzed chemst. (Sees. 3070. 3176, I. R. C.)
Sec. 187. 6. Report of nayss by the CmMST. Upon competon of the
anayss of the denaturants, the authorzed chemst sha make a report of hs
anayss on the Form 1 72, n trpcate, receved from the storekeeper-gauger,
note hs approva or dsapprova of the sampes thereon, and sgn the same. One
copy of the Form 1 72 sha be returned to the storekeeper-gauger n charge of
the denaturng bonded warehouse, one copy sha be forwarded to the dstrct
supervsor of the dstrct n whch the warehouse s ocated, and the remanng
copy sha be transmtted to the Commssoner. (Sees. 3070, 3176,1. R. C.)
Sec. 187. 6a. Retenton of Sampes. The authorzed chemst must retan
a sampes of rum denaturants for a perod of 30 days so that they w be ava-
abe for reference. (Sees. 3070, 3170, I. R. C.)
2. These amendments are for the purpose of prescrbng Form 1 72
for use n connecton wth the submsson and approva of sampes of
denaturants n eu of Forms 1 70 and 1 72. The ast sentence of sec-
ton 187. 0 pror to ths amendment has been rewrtten as secton
187. 0a.
3. It s found that compance wth the notce, pubc rue-makng
procedure, and effectve date requrements of the dmnstratve Pro-
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

0

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
Regs. 16, 187 20.
2 0
cedure ct s unnecessary n connecton wth the ssuance of these
reguatons for the reason that the amendments merey smpfy e st-
ng requrements.
. Ths Treasury Decson sha be effectve mmedatey upon ts
pubcaton n the Federa Regster.
. Ths Treasury Decson s ssued under the authorty contaned
n sectons 3070 and 3176, Interna Revenue Code (U. S. C, tte 26,
sectons 3070 and 3176).
G O. . Sc O N M N,
Commssoner of Interna Revenue.
pproved December 8, 19 9.
Thomas . Lynch,
ctng Secretary of the Treasury.
(Pubshed In the Federa Regster December 13, 19 9)
Reguatons 16, Secton 187.120: Record 19 9-17-13161
No. 129. T. D. 721
TITL 26 INT RN L R NU . C PT R I, SU C PT R C, P RT 187
D N TUR TION of rum
mendng Reguatons 16
Treasury Department,
Offce of Commssoner of Interna Revenue,
Washngton 2 , D. C.
To Dstnct Supervsors and Others Concerned:
1. Secton 187.120 of Reguatons 16 (26 CFR, Part 187), approved
May 20,19 0, s amended to read as foows:
Sec. 187.120. ecobd No. 129. The propretor of every dstery denaturng
bonded warehouse sha keep a monthy record on Record No. 129 of a dena-
turants receved and used at such bonded warehouse or remova therefrom, of a
sampes of denaturants forwarded to the authorzed chemst for anayss, and of
the chemst s reports of a anayses. Day entres sha be made on Record No.
129 as ndcated by the headngs of the coumns and nes of the form before
the cose of the busness day ne t succeedng the day on whch the transactons
occur. Where the makng of the entres s deferred to the ne t busness day,
as authorzed heren, approprate memoranda sha be kept for the purpose of
makng the entres correcty. monthy summary of the denaturants receved
and used or removed sha be made on such record at the end of the month.
Record No. 129 sha be bound by the propretor as a permanent record and kept
avaabe for nspecton by Government offcers. (Sees. 3070, 3171, and 3170,
I. R. C.)
2. These amendments are ntended for the purpose of aowng
addtona tme for makng requred entres n Record No. 129.
3. It s found that compance wth the notce and pubc rue-
makng procedure of the dmnstratve Procedure ct ( U. S. C.
1001 et seq.) s unnecessary n connecton wth the ssuance of these
reguatons for the reason that the changes made are of a berazng
character.
. Ths Treasury Decson sha be effectve on the thrty-frst day
after (e date of ts pubcaton n the Federa Regster.
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

0

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
2 1 Regs. 18, 192.227.
. Ths Treasury Decson s ssued under the authorty contaned
n sectons 3070, 3171, 3176, Interna Revenue Code (U. S. C, tte 26,
sectons 3070, 3171, 3176).
Geo. . Scoeneman,
Commssoner of Interna Revenue.
pproved ugust 2, 19 9.
Thomas . Lynch,
ctng Secretary of the Treasury.
(Pubshed In the Federa Regster ugust 9, 19 9)
Reguatons 18, Secton 192.227: Sgnng of 19 9-19-1318
andng certfcate. T. D. 736
TITL 26 INT RN L R NU C PT R I, SU C PT R C, P RT 92.
F RM NT D M LT LI UOR
mendng Reguatons 18
Treasury Department,
Offce of Commssoner of Interna Revenue,
Washngto-n 2 , . C.
To Dstrct Supervsors and Others Concerned:
1. Secton 192.227 of Reguatons 18, approved May 20, 19 0 (26
CFR, Part 192), s hereby amended.
2. The purpose of ths amendment s to beraze the requrement
regardng the sgnng of andng certfcates coverng beer e ported
free of ta .
3. It s found that compance wth the notce, pubc rue-makng
procedure, and effectve date requrements of the dmnstratve
Procedure ct (Pubc Law 0 , Seventy-nnth Congress) s unneces-
sary n connecton wth the ssuance of these reguatons for the reason
that the change made berazes a requrement mposed upon the
ndustry.
Sec. 192.227. Sgnng of Landng Certfcate. The andng certfcate sha
be sgned by a revenue offcer of the foregn country to whch the merchandse
Is e ported, by the master of the vesse, or by the vesse s agent at the pace of
andng. The certfcate must be ted wthn ( months from the date of e porta-
ton of the merchandse. (Sees. 31 3(b), 3176, I. R. C.)
. Ths Treasury Decson sha be effectve upon pubcaton n the
Federa Regster.
. Ths Treasury Decson s ssued under the authorty contaned
n sectons 31 3(b) and 3176, Interna Revenue Code (IT. S. C., tte
26, sectons 31 3(b) and 3176).
Geo. . Schoeneman,
Commssoner of Interna Revenue.
pproved ugust 31, 19 9.
Thomas . Lynch,
ctng Secretary of the Treasury.
(Pubshed n the Federa Regster September 7, 19 9)
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

0

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
Regs. 19, 19 .88.
2 2
Reguatons 18, Secton 192.2 6: Saght 19 9-17-131G2
ocks for conduts and tunnes. T. D. 732
TITL 26 INT RN L R NU . C PT R I, SU C PT R C, P RT 192.
F RM NT D M LT LI UOR
mendng Reguatons 18
Treasury Department,
Offce of Commssoner of Interna Revenue,
Washngton 2 , D. G.
To Dstrct Supervsors and Others Concerned: -
1. Secton 192.2 6 of Reguatons 18, Fermented Mat Lquor,
approved May 20, 19 0 (26 CFR, Part 192), s hereby amended.
2. The purpose of ths amendment s to requre the reportng of
Government ocks used at breweres on Form 1 2 by dstrct super-
vsors semannuay nstead of quartery n accordance wth an appro-
prate revson of such form.
3. It s found that compance wth the notce, pubc rue-makng,
and effectve date requrements of the dmnstratve Procedure ct
(Pubc, No. 0 , Seventy-nnth Congress) s unnecessary n connecton
wth the ssuance of these reguatons for the reason that the changes
made are of an admnstratve nature ony.
Sec. 192.2 8. Saoht Locks fob Conduts and Tunnes. Saght sea ocks
are prescrbed for use n securng the doors of conduts and tunnes through
whch ppes carry beer from the brewery to the bottng house. Requston
for such ocks and seas w be addressed to the Commssoner by the supervsor.
The supervsor sha keep a record of the ocks receved and make return thereof
semannuay to the Commssoner on Form 1 2, Return of Locks and Gaugng
Instruments. Seas w be used consecutvey n the order n whch they are
numbered. (Sees. 31 7(a), 3176, I. R. C.)
. Ths Treasury Decson sha be effectve on the thrty-frst day
after the date of ts pubcaton n the Federa Regster.
. Ths Treasury Decson s ssued under the authorty contaned n
sectons 31 7(a) and 3176, Interna Revenue Code (26 U. S. C.
81 7(a) and 3176).
Geo. . Schoeneman,
Commssoner of Interna Revenue.
pproved ugust ,19 9.
Thomas . Lynch,
ctng Secretary of the Treasury.
(Pubshed In the Federa Regster ugust 10,19 9)
Reguatons 19, Secton 19 .88: Genera. 19 9-17-13163
T. D. 722
TITL 26 INT RN L R NU . C PT R I, SU C PT R C, P RT 19
PRODUCTION OF IN G R
mendng Reguatons 19
Treasury Department,
Offce of Commssoner of Interna Revenue,
Washngton 26, D. C.
To Dstrct Supervsors and Others Concerned:
1. Secton 19 .88 of Reguatons 19 (26 CFR, Part 19 ), approved
November ,1910, s amended to read as foows:
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

1

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
2 3 Regs. 20, 19 .7 , 19 .76.
Sec. 19 .88. Genera. The propretor of every vnegar factory sha keep
monthy records and render reports on Form 1623 as herenafter provded. n-
tres sha be made as ndcated by the headngs of the varous coumns and nes,
and In accordance wth the nstructons on the form and as set forth n these
reguatons. The entres sha be made before the cose of the busness day ne t
succeedng the day on whch the transactons occur. Where the makng of the
entres s deferred to the ne t busness day, as authorzed heren, approprate
memoranda sha be mantaned for the purpose of makng the entres correcty.
t the cose of the month, but n no case ater than the ffth day of the succeedng
month, the propretor sha prepare and forward two copes of Form 1023 to the
dstrct supervsor. (Sees. 3176, 0 1, I. R. C.)
2. These amendments are ntended for the purpose of aowng add-
tona tme for makng requred entres on Form 1623.
3. It s found that compance wth the notce and pubc rue-
makng procedure of the dmnstratve Procedure ct ( U. 8. C.
1001 et seq.) s unnecessary n connecton wth the ssuance of these
reguatons for the reason that the changes made are of a berazng
character.
. Ths Treasury Decson sha be effectve on the. thrty-frst day
after the date of ts pubcaton n the Federa Regster.
. Ths Treasury Decson s ssued under the authorty contaned
n sectons 3176, 0 1, Interna Revenue Code (U. S. C, tte 26. sec-
tons 3176, 0 1).
Geo. . Scoeneman,
Commssoner of Interna Revenue.
pproved ugust 2,19 9.
Thomas . Lynch,
ctng Secretary of the Treasury.
(Pubshed n the Federa Regster ugust 9, 19 9)
Reguatons 20, Sectons 19 .7 and 19 .76. 19 9-17-131(
T. D. 723
TITL 20 INT RN L R NU C PT R I, SU C PT R C, P RT 19 .
W OL S L D R T IL D L RS IN LI UORS
mendng Reguatons 20
Treasury Department,
Offce of Commssoner of Interna Revenue,
Washngton 2 , D. C.
To Dstrct Supervsors and Others Concerned:
1. Paragraph (a) of secton 19 .7 and paragraph (d) of secton
19 .76 of Reguatons 20 (26 CFR, Part 19 ), approved une 6, 19 0,
are amended to read as foows:
Skc 10 .7 . R Ct ns To e ept by Whoesae Lquor Dea.khs. (a) cept
as provded n paragraph (c) of ths secton, every whoesae deaer n quors
who ses dsted sprts sha keep Record 2, Whoesae Lquor Deaer s
Record, and render monthy transcrpts, Forms 2- and 2- , Whoesae
Lquor Deaer s Monthy Report. and Form 338. Whoesae Lquor Deaer s
Monthy Report (Summary of Forms 2- and 2-1 ), of the physca recept
am dsposton of dsted sprts by hm. Day entres sha be made on
Record 2 of a dsted sprts receved and dsposed of as ndcated by the
headngs of the coumns and ne.s of the form and the nstructons prnted
thereon or ssued n respect thereto, as requred by these reguatons, before the
cose of the busness day ne t succeedng the day on whch the transactons
occur. Where the whoesae deaer defers the makng of the entres to the ne t
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

1

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
Regs. 20, 19 .79a, 19 .80. 2
busness day, as authorzed heren, he sha keep a separate record such as n-
voces, of the removas of dsted sprts, showng the remova data requred to
be entered on Record 2, and approprate memoranda of other transactons re-
qured to be entered on such record, for the purpose of makng the entres
correcty.
Sec. 19 .76. Separate Records.
(d) The separate records prescrbed by paragraphs (6) and (c) of ths secton
may be kept n book form (ncudng oose-eaf books) or may consst of com-
merca papers, such as nvoces or bs. Such books, nvoces, and bs sha
be preserved for a perod of years and n such manner that the requred
nformaton may be ready ascertaned therefrom, and, durng such perod,
sha be avaabe durng busness hours for nspecton and the takng of abstracts
therefrom by nterna revenue offcers. If a record n book form s kept, entry
sha be made on such separate record before the cose of the busness day ne t
succeedng the day on whch the transactons occur. Where the makng of the
entres s deferred to the ne t busness day, as authorzed heren, approprate
memoranda sha be mantaned for the purpose of makng the entres correcty.
The deaer sha note on Record 2, and on Form 2-F, n the coumn for report-
ng sera numbers, Sera numbers shown on commerca record per authorty,
dated (Sees. 28 7, 28 8, 3176, 32 , I. R. C.)
2. These amendments are ntended for the purpose of aowng add-
tona tme for makng requred entres n Record 2 and Form 2-F.
3. It s found that compance wth the notce and pubc rue-
makng procedure of the dmnstratve Procedure ct ( U. S. C.
1001 et seq.) s unnecessary n connecton wth the ssuance of these
reguatons for the reason that the changes made are of a berazng
character.
. Ths Treasury Decson sha be effectve on the thrty-frst day
after the date of ts pubcaton n the Federa Regster.
. Ths Treasury Decson s ssued under the authorty contaned
n sectons 28 7,28 8,3176, and 32 , Interna Revenue Code (U. S. C,
tte 26, sectons 28 7, 28 8, 3176, and 32 ).
Geo. . Schoeneman,
Commssoner of Interna Revenue.
pproved ugust 2, 19 9.
Thomas . Lynch,
ctng Secretary of the Treasury.
(Pubshed n the Federa Regster ugust 9, 19 9)
Reguatons 20, Sectons 19 .79a and 19 .80. 19 9-23-13226
T. D. 7
TITL 20 INT RN L R NU . C PT R I, SU C PT R C, P RT 19 .
W OL S L ND R T IL D L RS IN LI UORS
mendng Reguatons 20
Treasury Department,
Offce of Commssoner of Interna Revenue,
Washngton o, D. G.
To Dstrct Supervsors and Others Concerned:
1. On ugust 12, 19 9, notce of proposed rue makng regardng
the preparaton of Record 2, Whoesae Lquor Deaer s Record,
by persons engaged n the busness of seng dsted sprts prmary
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

1

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
2 Regs. 20, 19 .79a, 19 .80.
at reta but aso seng occasonay n whoesae quanttes, was pub-
shed n the Federa Regster (1 F. R. 98 ).
2. No ob|ectons to the rue havng been receved, Reguatons 20
(26 CFR, Part 19 ), approved une 6, 19 0, are hereby amended by
addng secton 19 .79a and amendng secton 19 .80, as foows:
Sec. 19 .79a. Reta Lquor Deaers Mantanng a Whoesae Depart-
ment. (a) quor deaer engaged n the busness of seng prmary at
reta, who at the same premses aso makes occasona saes of dsted sprts
n quanttes of wne gaons or more In hs capacty of a whoesae quor
deaer, need not enter n Record 2 a dsted sprts receved at the premses
as requred by secton 19 .79. s used heren, the term seng prmary at
reta sha mean that saes at reta must normay represent at east 90 per-
cent of the voume of dsted sprts sod durng a month. Where a quor
deaer s engaged n such busness, a dsted sprts at the premses may be
consdered as havng been receved n the reta department. When a sae
of wne gaons or more s made, the dsted sprts nvoved n the trans-
acton must be shown In Record 2 as receved from the reta department and
as dsposed of. ntres w be made n the varous coumns of the record
pursuant to the provsons of sectons 19 .7 and 19 .77. The provsons of sec-
tons 19 .76,19 .80(a), and 19 .80a, reatve respectvey to separate records, the
day fng of transcrpts of Record 2 and certan addtona requrements are
not appcabe to such quor deaers.
(6) The whoesae department need not be mantaned In a separate room
or be parttoned off from the reta department, but saes at whoesae must be
, made n a part of the premses desgnated as the whoesae department. (Sec.
28 7, I. R. C.)
Sec. 19 .80. Reports.

(6) If there were no recepts and dsposas of dsted sprts by a whoe-
sae quor deaer durng a month, t w not be necessary to prepare Forms 2
and 2 . owever, a summary on Form 338 must be prepared and forwarded to
the dstrct supervsor, showng the quantty on hand the frst day of the month
and the quantty on hand the ast day of the month and marked No trans-
actons durng month. Whoesae quor deaers mantanng records In the
smpfed manner prescrbed by ecton 19 .79a shoud show In the summary
on Form 338 that no dsted sprts were on hand the frst day and the ast day
of the month. When a whoesae quor deaer dscontnues busness as such,
he sha render monthy reports, Forms 2 and 2 and the summary report on
Form 338, coverng transactons for the month n whch busness s dscontnued,
and mark such reports Fna. Record 2 sha be preserved by the deaer for
a perod of years. (Sec. 28 7, I. R. C.)
3. These amendments are desgned to smpfy the preparaton of
Record 2, Whoesae Lquor Deaer s Record, by persons engaged
n the busness of seng dsted sprts prmary at reta but aso
seng occasonay n whoesae quanttes.
. Ibs Treasury Decson sha be effectve on the thrty-frst day
after the date of ts pubcaton n the Federa Regster.
. Ths Treasury Decson s ssued under the authorty of secton
28 7, Interna Revenue Code (26 U. S. C. 28 7).
Fred S. Martn,
ctng Commssoner of Interna Revenue.
pproved October 1 ,19 9.
Thomas . Lynch,
ctng Secretary of the Treasury.
(Pubshed n the Federa Regster October 20,19 9)
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

1

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
egs. 21, 191. 9, 191.60.
2 (
Reguatons 21, Sectons 191. 9 and 19 9-17-1316
191.60. T. D. 72
TITL 26 INT RN L R NU C PT R L SU C PT R C, P RT 191.
IMPORT TION OP DISTILL D SPIRITS ND WIN S
mendng Reguatons 21
Treasury Department.
Offce of Commssoner of Interna Revenue,
Washngton , D. C.
To Dstrct Supervsors and Others Concerned:
1. Sectons 191. 9 and 191.60 of Reguatons 21 (26 CFR, Part 191),
approved October 16,19 0, are amended to read as foows:
Sec. 191. 9. Tme of Makng ntres. Day entres sha be made on Record
2 and Form 2 , as ndcated by the headngs of the varous coumns, and n
accordance wth nstructons prnted thereon, before the cose of the busness
day ne t succeedng the day on whch the transactons occur. Where the
mporter defers the makng of the entres to the ne t busness day, as authorzed
heren, he sha keep a separate record, such as nvoces, of the removas of
dsted sprts showng the remova data requred to be entered on Record 2
and Form 2 , and approprate memoranda of other transactons requred to
be entered on such records, for the purpose of makng the entres correcty.
(Sees. 28 7, 28 8, 3171, 3176, 32 , I. R. O.)
Sec. 191.60. Separate Record of Sera Numbers of Cases. Sera numbers of
cases of dsted sprts dsposed of need not be entered on Record 2 or Form
2 , Monthy fecord and Report of Importer or Propretor of Ta -Pad
Premses, provded the respectve propretor keeps n hs pace of busness a
separate record, approved by the dstrct supervsor, showng such sera numbers,
wth necessary dentfyng data, ncudng the date of remova and the name and
address of the consgnee. Such separate record may be kept n book form
(ncudng oose-eaf books) or may consst of commerca papers, such as nvoces
or bs. Such books, nvoces, and bs sha be preserved for a perod of years
and n such a manner that the requred nformaton may be ascertaned ready
therefrom, and durng such perod, sha be avaabe durng busness hours for
nspecton and the takng of abstracts therefrom by nterna revenue offcers.
ntres sha be made on such separate approved record before the cose of the
busness day ne t succeedng the day on whch the transactons occur. Where
the makng of the entres s deferred to the ne t busness day, as authorzed
heren, approprate memoranda sha be mantaned for the purpose of makng
the entres correcty. The mporter, whose separate record has been approved
by the dstrct supervsor, sha note n the coumn for reportng sera numbers
that, Sera numbers shown on commerca records per authorty, dated 1 (Sees. 28 7, 28 8, 3171, 3176, 32 , I. R. C.)
2. These amendments are ntended for the purpose of aowng add-
tona tme for makng requred entres n Record 2 and Form 2 .
3. It s found that compance wth the notce and pubc rue-mak-
ng procedure of the dmnstratve Procedure ct ( U. S. C. 1001
et seq.) s unnecessary n connecton wth the ssuance of these regua-
tons for the reason that the changes made are of a berazng
character.
. Ths Treasury Decson sha be effectve on the thrty-frst day
after the date of ts pubcaton n the Federa Regster.
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

1

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
2 7
Regs. 2 , 180.00, etc.
. Ths Treasury Decson s ssued under the authorty contaned n
sectons 28 7, 28 8, 3171, 3176, 32 , Interna Revenue Code (U. S. C,
tte 26, sectons 28 7, 28 8, 3171, 3176, 32 ).
Geo. . Schoeneman,
Commssoner of Interna Revenue.
pproved ugust 2. 19 9.
Thomas . Lynch,
ctng Secretary of the Treasury.
(Pubshed n the Federa Regster ugust 9, 19 9)
Reguatons 2 , Sectons 180.90, tc. 19 9-17-13106
T. D. 72
TITL 26 INT RN L R NU . C PT R I, SU C PT R C, P RT 180.
LyUO S ND RTICL S FROM PU RTO RICO ND T IRGIN ISL NDS
mendng Reguatons 2
Treasury Department.
Offce or Commssoner of Interna Revenue.
Washngton 2 , D. C.
To Dstrct Supervsors and Others Concerned:
1. Sectons 180.90, 180.91, 180.1 2, and 180.1 3 of Reguatons 2
26 CFR, Part 180), approved une 16, 19 1, are amended to read as
o|ows:
SU P RT I
Products Comng Into thk Unted Staes From Puerto Rco
artce . records and reports
Sec. 180.00. Tme of Makng ntres. Day entres sha be made on Record
f 2 and Form r 2 . as ndcated by the headngs of Ihe varous coumns, and n
accordance wth Instructons prnted thereon, before the cose of the busness
day ne t succeedng the day on whch the transactons occur. Where the makng
of the entres s deferred to the ne t busness day, as authorzed heren, a separate
record, such as nvoces, sha be kept, of the removas of dsted sprts, showng
the remova data requred to he entered on Record r 2 and Form 2 , and appro-
prate memoranda of other transactons requred to be entered on such records,
for the purpose of makng the entres correcty. (Sees. 2S. 7, 28r 8, 3171, 3176,
32 , 3 00, I. R. C.)
ec. 180.91. Separate Record or Sera Numbers of Cases. Sera numbers of
cases of dsted sprts dsposed of need not be entered on Form 2 , provded
the respectve propretor keeps In hs pace of busness a separate record, a -
proved by the dstrct supervsor, showng such sera numbers, wt necessary
dentfyng data, ncudng the date of remova and the name and address of the
consgnee. Such separate record may be kept n ook form (Incudng oose-eaf
books) or may consst of commerca papers, such as nvoces or bs. Such
books, Invoces, and bs sha he preserved for a perod of years and n such
a manner that the requred nformaton may he ascertaned ready therefrom,
and, durng such perod, sha be avaabe durng busness hours for nspecton
and the takng of abstracts therefrom by nterna revenue offcers. ntres sha
be made on such separate approved record before the cose of the busness day
ne t succeedng the day on whch the transactons occur. Where the makng of
the entres s deferred to the ne t busness day, as authorzed heren, approprate
memoranda sha be mantaned for the purpose of makng the entres correcty.
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

1

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
Regs. 2 , 180.90, etc.
2 8
Where a separate record has been approved by the dstrct supervsor, notaton
sha be made In the coumn for reportng sera numbers that Sera numbers
shown on commerca records per authorty, dated (Sees.
28 7, 2S 8, 3171, 3176, 32 , 3360, 0 1, I. R. C.)
subpart
Products Comng Into the Unted States Fbom the rgn Isands
artce v. records and reports
Sec. 180.1 2. Tme of Makng ntres. Day entres sha be made on Record
2 and Form 2 , as Indcated by the headngs of the varous coumns, and In
accordance wth nstructons prnted thereon, before the cose of the busness
day ne t succeedng the day on whch the transactons occur. Where the makng
of the entres s deferred to the ne t busness day, as authorzed heren, a sepa-
rate record, such as nvoces, sha be kept, of the removas of dsted sprts,
showng the remova data requred to be entered on Record 2 and Form 2 .
and approprate memoranda of other transactons requred to be entered on such
records for the purpose of makng the entres correcty. (Sees. 28 7, 28 8, 3171,
3176, 32 , 3300, 0 1, I. R. C.)
Sec. 180.1 3. Separate Record op Sera Numbers of Cases. Sera numbers
of cases of dsted sprts dsposed of need not be entered on Form 2 , provded
the respectve propretor keeps n hs pace of busness a separate record, ap-
proved by the dstrct supervsor showng such sera numbers, wth necessary
Identfyng data, ncudng the date of remova and the name and address of the
consgnee. Such separate record may be kept In book form (ncudng oose-
eaf books) or may consst of commerca papers, such as nvoces or bs. Such
books, nvoces, and bs sha be preserved for a perod of years and n such a
manner that the requred nformaton may be ascertaned ready therefrom,
and, durng such perod, sha be avaabe durng busness hours for nspecton
and the takng of abstracts therefrom by nterna revenue offcers. ntres
sha be made on such separate approved record before the cose of the busness
day ne t succeedng the day on whch the transactons occur. Where the
makng of the entres s deferred to the ne t busness day, as authorzed heren,
approprate memoranda sha be mantaned for the purpose of makng the
entres correcty. Where a separate record has been approved by the dstrct
supervsor, notaton sha be made n the coumn for reportng sera numbers
that Sera numbers shown on commerca records per authorty, dated (Sees. 28 7, 28 8, 3171, 32 , 33 0, 0 1, I. R. C.)
2. These amendments are ntended for the purpose of aowng ad-
dtona tme for makng requred entres n Record 2 and Form 2 .
3. It s found that compance wth the notce and pubc rue-
makng procedure of the dmnstratve Procedure ct ( U. S. C.
1001 et seq.) s unnecessary n connecton wth the ssuance of these
reguatons for the reason that the changes made are of a berazng
character.
. Ths Treasury Decson sha be effectve on the thrty-frst day
after the date of ts pubcaton n the Federa Regster.
. Ths Treasury Decson s ssued under the authorty contaned
n sectons 28 7, 28 8, 3171, 317C, 32 , 33 0, 3360, 0 1, Interna
Revenue Code (U. S. C, tte 26, sectons 28 7, 28 8, 3171, 3176,
32 , 33 0,3360, 0 1).
Geo. . Sohoeneman,
Commssoner of Interna Revenue.
pproved ugust 2, 19 9.
Thomas . Lynch,
ctng Secretary of the Treasury.
(Pubshed n the Federa Regster ugust 9, 19 9)
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

1

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
2 9
Regs. 2 , 180.93a.
Reguatons 2 , Secton 180.93a: Requrements. 19 9-1 -1312
T. D. 706
TITL 26 INT RN L R NU . C PT R I, SU C PT R C. P RT 180.
LI UORS ND RTICL S FROM PU RTO RICO ND T IRGIN ISL NDS
mendng Reguatons 2
Treasury Department,
Offce of Commssoner of Interna Revenue,
Washngton 2 , D. C.
To Dstrct Supervsors, Coectors of Customs, and Others Concerned:
1. On February 10, 19 9, notce of proposed rue makng regardng
the ta payment of dsted sprts n Puerto Rco for shpment to the
Unted States was pubshed In the Federa Regster (1 -FR- 96).
2. fter consderaton of a such reevant matter as was presented
by nterested persons regardng the proposa, Reguatons 2 (26
CFR, Part 180), approved une 16, 19 1, are amended by addng to
subpart I thereof a new artce, numbered and tted I- Ta -
payment n Puerto Rco Upon Wthdrawa fter Rectfcaton or
ottng and a new secton numbered 93a, as foows:
rtce I- . Ta payment n Puerto Rco Upon Wthdrawa fter
Rectfcaton or ottng
Sec. 180.93a. Requrements. (a) ppcabe procedure. Dsted sprts of
ess than 190 degrees of proof, wnes and fermented mat quor (herenafter
referred to as quors, uness otherwse ndcated) ntended for shpment to
the Unted States, whch are wthdrawn from producng or storage premses
for entry nto bonded rectfcaton sectons, bottng sectons, or bonded ware-
houses, n accordance wth the Sprts and cohoc everages ct, as amended,
of Puerto Rco, sha be sub|ect to the requrements of ths secton, and sectons
180.1 to 180.93, Incusve, nsofar as such sectons may be appcabe.
(6) Formua. Foowng entry nto a bonded rectfcaton or bottng secton
for rectfcaton or bottng, a quors sha be rectfed and/or botted n accord-
ance wth an approved formua prescrbed by sectons 180.13 to 180.17, ncusve.
(c) auyng. The acohoc consttuents of a quors consttutng a specfc
bottng ot sha be ascertanabe from records mantaned n accordant wth
nsuar requrements. In gaugng quors for ta payment, the nsuar nterna
revenue agent w prepare Form 1 20 to show separatey a dsted sprts and
wnes accordng to ta abe gaonage. See paragraph ( /) hereof, and sectons
180.31, 180.32, and 180. 3. The formua number under whch the quors were
produced or manufactured for shpment to the Unted States w aso be
shown on the Form 1 20.
(d) ass for ta payment. The ta es on dsted sprts sha be pad on the
bass of wne gaons, f beow proof, or proof gaons, f 100 proof or above,
n accordance wth the proof ascertaned by the nsuar gauger pror to entry
of the sprts nto the bonded rectfcaton secton, or bonded bottng secton,
pursuant to approprate entres In records prescrbed by the nsuar authortes.
(e) Ta payment. Ta payment sha be made at the rate prescrbed by aw.
The prescrbed ta es sha be pad at the tme of wthdrawa of the quors pur-
suant to ssuance of the approprate nsuar permt. copy of the Form 1 20
coverng the gaugng of the quors sha accompany the nsuar permt, Form
87 , when presented to the deputy coector for ta payment. See sectons 180.32,
180.36, 180.39, and 180. .
(/) Red strp stamps. Unted States nterna revenue red strp stamps w
be procured from the deputy coector for aff ng to bottes of sprts ntended
for shpment to the Unted States. Where the ta s pad n accordance wth
paragraph (e), such stamps may be aff ed to the bottes pror to ta pay-
ment. The provsons of sectons 180.66 to 180.78, ncusve, sha govern the
purchase, overprntng, aff ng, reportng, etc., of red strp stamps procured
and used under ths secton.
(g) Wthdrawa for shpment to Unted States. Wthdrawa of quors for
shpment to the Unted States may be made ony after ta payment, f so
808972 0 17
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

1

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
Regs. 2 , 180.93b, etc.
2 0
requred by the Insuar wthdrawa permt, Form 87 . ny quors, upon
whch the Unted States nterna revenue ta es have not been pad, ntended
for shpment to the Unted States, must be wthdrawn, shpped, and ta -pad
upon arrva n the Unted States, n accordance wth appcabe provsons
of sectons 180.1 to 180.93, ncusve. (Sees. 2800, 2803, 3030, 3176, 3360, and
0 1, I. R. C.)
3. These amendments are desgned to estabsh a procedure for
the ta payment of dsted sprts and other acohoc beverages n
Puerto Rco after wthdrawa for rectfcaton or bottng, n order
to make stocks of such quors avaabe for shpment to the Unted
States under the Puerto Rcan aw as amended.
. Ths Treasury Decson sha be effectve on the thrty-frst day
after the date of ts pubcaton n the Federa Regster.
. Ths Treasury Decson s ssued under authorty contaned n
sectons 2800, 2803, 3030, 3176, 33G0, and 0 1, Interna Revenue
Code (U. S. C, tte 26, sectons 2800, 2803, 3030, 3176, 3360, and
0 1).
Geo. . Scoeneman,
Commssoner of Interna Revenue.
pproved une 21, 19 9.
Thomas . Lynch,
ctng Secretary of the Treasury.
(Pubshed n the Federa Regster une 2 , 10 9)
Reguatons 2 , Sectons 180.93b, tc. 19 9-26-13263
T. D. 76
TITL 26 INT RN L R NU . C PT R I, SU C PT R C, P RT ISO.
LI UORS ND RTICL S FROM PU RTO RICO ND T IRGIN ISL NDS
mendng Reguatons 2
Treasury Department,
Offce of Commssoner of Interna Revenue,
Washngton, US, D. O.
To Dstrct Supervsors and Others Concerned:
1. Reguatons 2 (26 CFR, Part 180), approved une 16, 19 1, as
amended, are hereby further amended by addng to subpart I thereof
sectons 180.93b, 180.93c, 180.93d, and 180.93e, as foows:
Ta -Payment by Cfbtfcate
Sec. 180.93b. Ta -Pad Cektfcate n Leu of Stamps. ( ) Sprts to be
ta -pad. Where botted dsted sprts are to be ta -pad upon wthdrawa n
cases as provded by secton 180.93a, or where dsted sprts to be botted before
shpment to the Unted States are to be ta -pad pror to bottng as permtted by
secton 180.21 or 180.32, the deputy coector of nterna revenue sha coect the
ta pursuant to approprate appcaton, and sha ssue a ta -pad certfcate
In eu of ta -pad stamps, as provded by paragraphs (6) and (c) hereof.
(6) ppcaton, Form 1 9 . The ta payer, when submttng Form 87- ,
ppcaton and Permt to Ta -Pay Lquors for Shpment to the Unted States,
and Form 1 20, as provded by secton 180.21, or secton 180.32, sha prepare and
forward wth such appcaton, an appcaton on Form 1 9 , ppcaton for
Coector s Certfcate of Ta -Payment of Dsted Sprts for Shpment n Tank
Cars, n trpcate. The appcaton, Form 1 9 , sha be appropratey mod-
fed to show that the sprts are to be ta -pad n Puerto Rco (n eu of For
shpment n tank cars ), and sha show, n addton to a appcabe data, the
sern) number and date of the Form 87- . Request shoud be made n the
appcaton that the certfcate be forwarded to the treasurer. The appcaton,
Form r 9 , sha be accompaned by proper remttance for the ta . The deputy
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

1

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
2 1
Regs. 2 , 180.93b, etc.
coector may, tn hs dscreton, accept uncertfed checks In payment of the
ta where certfcates are ssued In eu of stamps.
(c) Issuance of certfcate Form 169 . The deputy coector w ssue Form
1 0 , Certfcate of Ta -Payment of Dsted Sprts for Shpment n Tank
Cars, appropratey modfed to show that the sprts are ta -pad n Puerto
Rco n eu of For shpment n tank cars, and sha show the sera number
and date of the Form 87- . The deputy coector w f n a appcabe
data n the bank spaces on the certfcate and date and sgn the certfcate In
the same manner as a ta -pad stamp s requred by secton 180.22 to be fed n,
dated, and sgned. Ths certfcate s not negotabe and sha not refect ta -
payment of any dsted sprts e cept those descrbed theren and n the
accompanyng Forms 87- and 1 20. The deputy coector w enter on the
orgna-and the copes of Form 1 9 , In the space provded,-the sera number,
date, and amount of the certfcate ssued. The deputy coector w retan one
copy each of .Form 87- , and Form 1 20 and the orgna of Form 1 9 . e
w ma or dever the certfcate, Form 1 9 , and one copy each of Form
87- and Form 1 20 to the treasurer, and w return one copy of the appcaton,
Form 1 9 , to the ta payer. The deputy coector w forward the remanng
copy of Form 1 9 to the Coector of Interna Revenue, atmore, Md. (Sees.
3300(a), 3360, and 0 1, I. R. C.)
Sec. 180.93c. Dsposton of Certfcates by Treasurer. Upon recept of ta -
pnd certfcates ssued n accordance wth secton 180.93b, the treasurer
w cance such certfcates by perforatng theren or stampng thereon the word
canceed. The canceed certfcate w be securey attached to the Forms
87- and 1 20 coverng the regauge and wthdrawa of the packages or cases
represented by the certfcate and fed In the offce of the treasurer. These certf-
cates and forms w be avaabe for Inspecton by Unted States Interna revenue
offcers. (Sees. 3360 and 0 1, I. R. C.)
Sec. 180.93d. Notce of Ta -Payment by Treasurer. When the ta -pad
certfcate has been canceed as provded In secton 180.93c, the treasurer w
notfy the proper nsuar nterna revenue agent of the ta -payment of the sprts
and authorze ther wthdrawa for bottng or shpment as the case may be. The
notce to the nsuar nterna revenue agent must descrbe fuy the quors to be
reeased. Thereafter, the sprts w be reeased for bottng or wthdrawa n-
accordance wth the procedure prescrbed n the reguatons n ths part n respect
of sprts upon whch the ta has been pad. (Sees. 3360 and 0 1, I. R. C.)
Sec. 180.93e. Use of Certfcates. The use of certfcates In respect of pay-
ment of the rectfcaton ta or wne ta , or the ta on dsted sprts to be wth-
drawn and shpped to the Unted States n packages, s not authorzed and ta -
pad stamps therefor w contnue to be Issued n the manner provded by the
reguatons n ths part. (Sees. 3360 and 0 1, I. R. C.)
2. The purpose of these amendments s to provde for the ssuance of
certfcates, n eu of ta -pad stamps by the deputy coector to con-
note ta -payment of dsted sprts n Puerto Rco to be botted, or
wthdrawn, for shpment to the Unted States.
3. It s found that compance wth the notce and pubc rue-mak-
ng procedure of the dmnstratve Procedure ct ( U. S. C. 1001
et seq.) s unnecessary n connecton wth the ssuance of these amend-
ments for the reason that the amendments reate bascay to agency
pocv and practce.
. Ths Treasury Decson sha be effectve on the thrty-frst day
after the date of ts pubcaton n the Federa Regster.
. Ths Treasury Decson s ssued under the authorty contaned
n sectons 8300(a), 3360, and 0 1, Interna Revenue Code (U. S. C,
tte 26, sectons 3300(a), 3360, and 0 1).
Geo. .1. Schoeneman,
Comm s oner of Interna Revenue.
pproved December 2,19 9.
ohn S. Graham,
ctng Secretary of the Treamry.
(Pubshed n the Federa Regster December 9, 19 9)
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

1

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
Regs. No. . 2 2
MISC LL N OUS
INTO IC TING LI UORS
Reguatons No. ( coho Ta ct). 19 9-1 -1312
T. D. 707
TITL 27 INTO IC TING LI UORS C PT R 1, P RT . L LING ND
D RTISING OF DISTILL D SPIRITS
mendng Reguatons No. under the Federa coho dmns-
traton ct. .
Treasury Department,
Offce of Commssoner of Interna Revenue,
Washngton 2 , D. C.
To Dstrct Supervsors and Others Concerned:
Notces of pubc hearngs to be hed n Washngton, D. C, on
October 18 and 2 , 19 8, and n San Francsco, Caf., on October 6,
19 8, wth respect to certan proposas to amend Reguatons No. ,
Reatng to Labeng and dvertsng of Dsted Sprts, were pub-
shed n the Federa Regster on ugust 2 , 19 8 (13 F. R. 92 and
926).
Upon the concuson of the sad hearng and after consderaton
of a reevant matera submtted by nterested persons n connecton
therewth regardng proposas numbered 1-1 , ncusve, of the notce
of hearng on the proposas wth respect to Scotch, Irsh, and Cana-
dan whskes and types thereof and to other matters and proposas
numbered 1-12, ncusve, of the notce of hearng wth respect to
prescrbng a standard of dentty for vodka and for other purposes,
the foowng amendments to secton 21, casses 1, 2(n), 2(o), 6, 8.
and 9(a), secton 3 ( ), (cZ), (e), and (/), secton 38(a ), secton
39 (a), (c). and (e), and secton ( (c) of sad Reguatons No.
are hereby adopted, to become effectve as stated:
1. In order to permt the abeng of bended Scotch type whsky
wth an unquafed age statement, nstead of a statement of storage,
for any whsky theren whch was stored n reused cooperage, even
though such whsky was produced n the Unted States, and to permt
a statement of the age and percentage of each of the component
whskes, the fna unnumbered paragraph of secton 39(a) (27 CFR
.39(a)) s amended by changng the perod at the end thereof to a
coon and addng the foowng provso:
rrm drd, That ths paragraph sha not appy to bended Scotch type whsky
or to any whsky propery contaned theren.
Secton 39(c) (1) (27 CFR .39(c) (1)) s amended by deetng the
frst two sentences and nsertng n eu thereof the foowng:
(1) In the case of bended Scotch type whsky, there sha be stated
the age of the mat whsky (or f there e two or more mat whskes, the
youngest thereof) and the age of the other whsky (or f there be two or
more other whskes, the youngest of such other whskes) together wth
the percentages by voume of the mat whsky and of the other whsky theren.
The statement of ages and percentages sha be n the foowng form: The
mat whsky n ths product s (years and/or months) od;
percent mat whsky, percent whsky, (years and/or months)
od or, f more than one mat whsky or more than one other whsky s
n the bend, the reevant porton of such statement sha read The mat
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

1

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
2 3
Regs. No. .
whskes n ths product are
and percent whsky
(years and/or months) or more od
(years and/or months) or more od,
as the case may be.
and secton 39(c) (1) (27 CFR .39 (c) (1)) s aso further amended
by addng the foowng paragraph thereto:
In addton (but not as a substtute for the foregong statement) a state-
ment may be made of the ages and percentages of a of the mat whskes
and whskes n the product. Such statement, f made, sha be n the fo-
owng form: percent mat whsky, years od; per-
cent mat whsky, years od; percent whsky, years
od: and percent whsky. years od. The age and percentage
banks sha be fed wth the respectve ages and percentages of each
of the nat whskes and whskes n the product.
These amendments reeve restrctons formery contaned n the regu-
atons and sha become effectve on the date of ther pubcaton n
the Federa Regster.
2. In order to requre that bended Scotch type whsky be com-
posed entrey of whskes by emnatng the present provsons per-
mttng the use of not more than 80 percent by voume of neutra sprts
and to requre that a of the whsky n bended Scotch type whsky
be aged for not ess than 3 vears n new pan, or reused, oak contaners,
secton 21, cass 2(n) (27 CFR .21(b) (1 )) s amended to read:
( ) ended Scotch type whsky (Scotch type whsky a bend) s u m ture
made outsde Great rtan and eom sed of
(1) Not ess than 20 percent by voume of 100 proof mat whsky or
whskes dsted n pot sts at not more than 160 proof (whether or
not such proof s subsequenty reduced pror to bottng to not ess than
80 proof) soey from a fermented mash of mated barey dred over peat
fre and aged for not ess than 3 years n new pan, or reused, oak contaners,
and
(2) Not more than 80 percent by voume of whsky dsted at. more than
180 proof (whether or not such proof s subsequenty reduced pror to
bottng to not ess than 80 proof) aged for not ess than 3 years n new
pan, or reused, oak contaners.
and secton 39(c)(1) (27 CFR .39(c)(1)) s further amended by
deetng the thrd and fourth sentences thereof.
These amendments sha become effectve 3 years and 6 months after
the date of pubcaton n the Federa Regster.
3. In order to remove from the standards of dentty the standard
for bended Irsh type whsky (Irsh type whsky a bend), and to
remove from the reguatons any recognton of ths product as a type
of whsky, secton 21, cass 2 (27 CFR .21 (b)) s amended by deetng
subparagraph (o) (27 CFR .21(b) (1 )) thereof, secton 3 (/) (27
CFR, Cum. Supp., .3 (f)) s amended by changng the parenthet-
ca phrase n the thrd sentence thereof to read:
(other than mercan type whsky and bended Scotch type whsky)
and secton 39(c) (27 CFR .39(c)) s amended by deetng the words
and bended Irsh type whsky from the headng of ths subsecton
and deetng paragraphs numbered (2) and (3) thereof.
These amendments sha become effectve 6 months after the date
of pubcaton n the Federa Regster.
. In order to requre, where any of the specfed types of whsky
s composed of whsky or whskes whch were produced n a country
other than that ndcated by the requred type desgnaton, that there
be stated on the Government abe the country of orgn of such whsky
or whskes and the percentage thereof n the product, secton 21,
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

1

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
Regs. No. . 2
cass 9(a) (27 CFR .21 ()()) s amended by addng the foowng
at the end thereof:
If whsky of any of these types s composed n part of whsky or whskes pro-
duced n a foregn country there sha be stated, on the Government abe, the
percentage of such whsky and the country of orgn thereof. Such statement
sha appear as a part of, or In drect con|uncton wth, any age or percentage
statement whch may be requred under secton 39 (27 CFR .39).
and secton 3 (/) (27 CFR, Cum. Supp., .3 (f)) s further amended
by nsertng the foowng between the second and thrd sentences
thereof:
In the case of any of the types of whsky defned n any of the subsectons of
secton 21, cass 2 (27 CFR r .21(b)) whch contans any whsky or whskes pro-
duced n a country other than that ndcated by the type desgnaton, there sha
be stated on the Government abe the percentage of such whsky and the country
of orgn thereof. If any age or percentage statement s requred under secton
39 (27 CFR .39) the statement heren requred sha appaar as a part of, or n
drect con|uncton wth, such age and percentage statement. .
These amendments sha become effectve 6 months after the date of
pubcaton n the Federa Regster.
. In order to specfcay prohbt the use of the words Scotch or
ghands and smar words to desgnate products, other than
Scotch type whsky, whch were not produced n Scotand, secton 21,
cass 8 (27 CFR .21(h)) s amended by addng thereto a new sub-
secton (d) as foows:
(d) The words Scotch, Scots, ghand, or ghands and smar
words connotng, ndcatng, or commony assocated wth Scotand, sha not
(e cept for the use of the word Scotch n the type desgnaton b ended Scotch
type whsky ) be used to desgnate any product not whoy produced n Scotand.
Ths amendment sha become effectve 6 months after the date of
pubcaton n the Federa Regster.
6. In order to provde a standard of dentty for vodka secton 21,
cass 1 (27 CFR, Cum. Supp., .21(a)) s amended by addng thereto
a new subsecton (a) to read as foows:
(a) odka s neutra sprts dsted from any matera at or above 190
proof, reduced to not more than 110 proof and not ess than 80 proof and, after
such reducton n proof, so treated by one of the foowng methods as to be
wthout dstnctve character, aroma,- or taste:
(1) y causng the dstate to fow contnuousy through a tank or
a seres of tanks contanng at east 1 pounds of charcoa for each gaon
of dstate contaned theren at any one tme so that the dstate s n
ntmate contact wth the charcoa for a perod of not ess than 8 hours, not
ess than 10 percent of the charcoa beng repaced by new charcoa at the
e praton of each 0 hours of operaton, at a rate whch w repace at
east 6 pounds of charcoa for every 100 gaons of sprts treated;
(2) y keepng the dstate n constant movement by mechanca means
n contact for not ess than 8 hours wth at east 6 pounds of new charcoa
for every 100 gaons of dstate;
(3) y purfyng or refnng the dstate by any other method whch
the Deputy Commssoner fnds w resut n a product equay wthout ds-
tnctve character, aroma, or taste, and whch has been approved by hm.
fter such treatment the dstate s stored n meta, porcean or gass con-
taners or paraffn-ned tanks, and botted at not ess than 80 proof. If any
favorng matera s added to the dstate t sha be desgnated favored vodka
and may be further quafed wth the name of the favorng matera used.
Ths amendment sha become effectve 1 year after date of pubcaton
n the Federa Regster,
7. In order to prescrbe standards of dentty for bourbon and rye
queurs and for rock and rye, rock and bourbon, rock and rum,
and rock and brandy, secton 21, cass 6 (27 CFR .21 (f)) s amended
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

1

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
2
IRpf|s. No. .
by addng at the end thereof the foowng two new subsectons (e)
and (/) :
(e) Rye queur, bourbon queur. ye queur, bourbon queur (rye,
bourbon corda) are queurs, botted at not ess than 60 proof, In whch not ess
that 1 percent, on a proof bass, of the dsted sprts used are, respectvey,
rye or bourbon whsky, straght rye or straght bourbon whsky, or whsky
dsted from a rye or bourbon mash, and whch possess a predomnant
characterstc bourbon or rye favor derved from such whsky.
(/) Rock and rye, rock and bourbon, rock and brandy, rock and rum. Rock
and rye, rock and bourbon, rock and brandy, rock and rum are queurs,
botted nt not ess than S proof, n whch, n the case of rock and rye and rock
and bourbon, not ess than 1 percent, on a proof bass, of the dsted sprts
used are, respectvey, rye or bourbon whsky, straght rye or straght bourbon
whsky, or whsky dsted from a rye or bourbon mash, and, n the case of
rock and brandy and rock and rum, the dsted sprts used are a grape brandy
dsted at not n e cess of 170 proof or rum, respectvey; contanng rock
candy or sugar srup, wth or wthout the addton of frut, frut |uces, or
other natura favorng materas, and possessng, respectvey, a predomnant
characterstc rye, bourbon, brandy, or rum favor derved from the dsted
sprts used.
Ths amendment sha become effectve 6 months after date of pubca-
ton n the Federa Regster.
8. In order to prohbt a botted hghba, cockta, or other prepared
specaty from bearng a desgnaton ndcatng that t s composed of
a certan cass or type of dsted sprts uness t s n fact so com-
posed, secton M(b) (27 CFR, Cum. Supp., .3 (b)) s amended by
addng the foowng sentence at the end thereof:
No hghba, cockta, or other prepared specaty sha bear a desgnaton,
whether through trade understandng or otherwse, whch ndcates that t s
composed of a certan cass or type of dsted sprts, uness, n fact, the dsted
sprts used n ts preparaton conform to such cass or type.
Ths amendment sha become effectve 6 months after date of pubca-
ton n the Federa Regster.
9. In order to requre that, as to dsted sprts treated wth wood
chps or stored n reused cooperage n the future, the statements
coored and favored wth wood chps and dsted from rye (or
bourbon, wheat, mat, or rye mat) mash, now requred by sectons
3 Id) and 3 (e) (27 CFR, Cum. Supp., .3 (d) and 27 CFR .3 (e))
to be stated n drect con|uncton wth the cass and type desgnatons
of certan dsted sprts, be stated as a part of such cass and type
desgnaton, secton M(d) (27 CFR, Cum. Supp., .3 (d)) and secton
3 (e) (27 CFR .3 (e)) are amended by deetng the words n drect
con|uncton wth appearng n each of these subsectons n the
phrase there sha be stated n drect con|uncton wth the
cass and type desgnaton and nsertng n eu thereof
the words as a part of .
Ths amendment sha become effectve 1 month after date of pub-
caton n the Federa Regster but sha have no effect upon the abe-
ng of e stng stocks of dsted sprts so treated or stored pror
to that date.
10. In order to permt, ony n the case of such whskes and brandes
as may be, but are not requred to be, abeed wth an age statement,
genera nconspcuous references to age and maturty regardess of
whether or not the abes of the products contan the optona age
statement, secton 39(e)( ) (27 CFR .39(e)( )) s amended by
changng the perod at the end of the frst sentence to a coon and
addng the foowng provso:
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

1

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
Regs. No. .
2 6
Provded, That the abes of such whskes and brandes as are not requred to
bear a statement of age on the abe may contan genera nconspcuous age.
maturty or other smar representatons even though the abe does not bear
the optona age statement.
and secton 6 (c) (27 CFR .6 (c)) s amended by addng at the end
thereof the foowng sentence:
n advertsement for any whsky or brandy whch s not requred to bear a
statement of age on the abe may, however, contan genera Inconspcuous age.
maturty or other smar representatons even though the optona age statement
does not nppear on the abe of the advertsed product and n the advertsement
tsef.
These amendments reeve restrctons prevousy contaned n the
reguatons and sha become effectve on the date of pubcaton n the
Federa Regster.
11. In order to permt the emnaton of the word other, as apped
to whskes other than straght whskes, n the age and percentage
statement requred to appear on the abes of bended whskes, secton
39(a)(3) (27 CFR .39(a)(3)) s amended by deetng the word
other from the requred age and percentage statements set forth n
quotaton marks n the second paragraph thereof.
Ths amendment reeves a restrcton prevousy contaned n the
reguatons and sha become effectve on the date of pubcaton n the
Federa Regster.
12. In order to permt a statement of the predomnant type of
straght whsky n the desgnaton of bends of straght whskes whch
are composed of 1 percent or more of one type of straght whsky, f
the percentage of ths type n the bend appears on the back abe, sec-
ton 39(a)( ) (27 CFR .39(a)( )) s amended by changng the
perod at the end of the second sentence thereof to a coon and addng
the foowng provso to that sentence:
Provded, That, f the product s composed of 1 percent or more, but ess than
100 percent, of one type of straght whsky and the cass and type desgnaton con-
tans a reference to ths predomnant typ , the requred statement sha contan
a statement of the percentage of ths predomnant type n the product as foows:
The straght whskes n ths product are (years and/or months) or more
od, percent straght whsky, the banks to be fed n wth the
approprate age, percentage, and type statements.
Ths amendment conforms to the present admnstratve nterpretaton
of the reguatons, mposes no new restrctons, and sha become effec-
tve on the date of pubcaton n the Federa Regster.
13. In order to permt the statement certfed coor added n eu
of the statement artfcay coored upon the abes of dsted
sprts where the atter statement woud be requred soey because
the product contans coorng materas whch have been certfed as
sutabe for use n foods by the Food and Drug dmnstraton, secton
38(rf) (27 CFR, Cum. Supp., .38(d)) s amended by changng the
perod at the end thereof to a coon and addng the foowng further
provso:
nd provded further. That where such statement woud be requred soey by
reason of the use of coorng materas whch have been certfed as sutabe
for use n foods by the Food and Drug dmnstraton, there may be stated, n
eu of artfcay coored, the phrase certfed coor added.
Ths amendment reeves a restrcton presenty contaned n the regu-
atons and sha become effectve on the date of pubcaton n the
Federa Regster.
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

1

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
2 7
Re s. No. 7.
(Ths Treasury Decson s ssued pursuant to and under the author-
ty contaned n secton (e) and (f) of the Federa coho dmn-
straton ct, as amended (27 U. S. C. 20 (e) and (f)), Reorganza-
ton Pan No. I, paragraph 2 ( Stat. 1232), secton 3170 of the
Interna Revenue Code ( 3 Stat. 373) and secton 161 of the Revsed
Statutes ( U.S. C. 22).)
Carro . Meaky.
Deputy Commssoner of Interna Revenue.
pproved une 22, 19 9.
Fred S. Martn,
ctng Commssoner of Interna Revenue.
Thomas . Lynch,
ct/Tff Secretary of the Treasury.
(Pubshed n the Federa Regster une 29, 19 9)
Reguatons No. 7 ( coho Ta ct) . 19 9-23-13227
T. D. 7
TITL 27 INTO IC TING LI UORS. C PT R 1, P RT 7. L LING ND
D RTISING OF M LT R G S
mendng Reguatons No. 7 under the Federa coho dmn-
straton ct.
Treasury Department.
Offce of Commssoner of Interna Revenue,
Washngton 2 , D. C.
To Dstrct Supervsors and Others Concerned:
In vew of the amendment of secton 31 7(a) of the Interna Reve-
nue Code by Pubc Law 261, approved ugust 23,19 9 page 270, ths
uetn , provdng for the bottng of mat beverages on brewery
remses before the ta thereon s pad, secton 22 of Reguatons No. 7,
deatng to the Labeng and dvertsng of Mat everages (27 CFR,
secton 7.22), s amended as foows:
1. Paragraph (a) s amended by strkng out subparagraph ( )
thereof and by renumberng subparagraph ( ) as ( ) . Labes or
contaners bearng the data heretofore prescrbed by subparagraph
( ) may be used unt March 1.19 0, the effectve date of the amend-
ment of secton 31 7(a) of the Interna Revenue Code.
2. It s found that compance wt the notce and pubc rue-mak-
ng procedure of secton of the Federa coho dmnstraton ct
(27 U. S. C. 20 ) and of the dmnstratve Procedure ct ( U. S. C.
1001 et seq.) s unnecessary n connecton wth the ssuance of ths
amendment, snce the change s requred to conform the reguatons
to changes n the appcabe aw.
3. Ths reguaton sha be effectve on the date of ts pubcaton
n the Federa Regster.
W. . ennedy,
ctng Deputy Commssoner of Interna Revenue.
pproved October 17, 19 9.
Dane . Ro.ch,
ctng Commssoner of Interna Re venue.
Thomas . Lynch,
ctng Secretary of the Treasury.
(Pubshed n the Federa Regster October 21, 19 9)
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

1

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
Msc.
2 8
OL OM RG RIN
19 9-1 -13126
MS. 336
Schedue of oeomargarne produced and materas used durng the month of ay,
191/9, as compared wth May, 19 8
May, 19 9
Tota producton of uncoored oeomargarne
Tota wthdrawn ta -pad
Pounds
9,18 ,173
Ingredent schedue of oneoored ooouarRarnc:
utter favor
Coconut o -
Corn o -
Cottonseed o -
Dervatve of gycern ---
Dacct y -
ecthn - -
Mk
Monostearno
Neutra ard
Ooo o
O o stearue -
Ooo stock -
Peanut o
Sat
Soda (bonzoate of)
Soybean fakes-- -
Soyean o
Sodum stdpno acetate --
Soybean stearne -
tamn concentrate
Tota.
Tota producton of coored oeomargarne.
Tota wthdrawn ta -pad
Ingredent schedue of coored oeomargarne:
utter favor
Coconut o
Coor
Corn o -
Cottonseed o -
Dervatve of gycern
Dacety -
I cthn
Mk -
Monostearne
Neutra ard - ---
Ooo o -
Ooo stock -
Peanut o
Sat.. - -
Soda (benzoate of)
Soybean o -
Soyean stearne -
tamn concentrate
Toa-
SO, 362,9 0
7,6 2
, 0
2 , 686.672
71,0 1
7
88,068
8,296,118
.1,3 1
33 .1 9
27 , 7 3
270,011
67,7 0
1, 213
1, S1, 3
3 ,810
80
13, 93,17
,191
7. 73
0,167.96
10, 27, 86
10,0 2, 7
,901
, 8
,873, 71
1 , 262
12
19, 138
1,7 9.9 8
, 21
16, 20
2 ,986
9.1 0
1, 66
319. 291
6,01
3, 28,703
1, 90
10, 80, 737
fgures are sub|ect to revson unt pubshed n the Commssoner s annua report.
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

1

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
2 9
Msc.
19 9-17-13167
MS. 337
Schedue of oeomargarne produced and materas used durng the month of
une, 19 9, as compared wth une, 19 8
Tota producton of uncoored oeomargarne.
Tota wthdrawn ta -pad .
ngredent schedue of uncoored oeomargarne:
favor
utter f
Coconut o. ...
Corn o ,
Cottonseed o -.
Dervatve 0 gycerne.
Daocty....:.
Lecthn..
MUk
Monostcarne
Neutra ard
Oeo o
Oeo stearne
Oeo stock
Peanut o
Sat. --
Soda (henroat of)
Soya bean fakes
Soya bean o
Sodum supho acetate..
Tota
Tota producton of coored oeomarearne.
Tota wthdrawn ta -pad
Ingredent schedue of coo:
utter favor
Coconut o
Coor
Cottonseed o..
Dervatve of gycerne.
Dacety
Lecthn
MUk -
Monostcarne
Neutra ard.._
Oeo o..
Oeo stock
Peanut o
Sat...
Soda (benzoate of)
Soya bean o
Soya bean stearne
) fakes.
ronccntrate
Tota.
une, 19 9
Pounds
1, 3 ,111)
.792
9,932
27,023,180
76,990
97
92, 77
8, 6 8, 708
6,221
33 .962
278. 09
298, 11
6,9 0
91
1, 9.77
38. 89
2
13,728,7 0
8.320
2, 199,092
12, 1 ,163
II, 1. 1,736
, 01
7,13
,70 ,1 2
It, 933
3
22.329
.MU . 2
9
28,2 3
3,826
16,200
2.112
37 ,033
8,910
,061, 8
1,790 I
12,318, 20
une, 19 8
Pounds
69, 8 , 3 2
2,0 6
1 6,8.10
76, 8
28,981, 101
109,286
3 3
98,82
11,719.072
9,916
0.9 0
316, 7
300,790
6,8 7
2.377, 38
2, 23 , 3
1.937
9
21,76 ,1 0
6,793
100
10,670
70,8 6,027
6,38 ,0 2
,971.279
169
68,09
, 27
2,368. 20
11,8 7
8.128
1,066,880
2,172
,8 1
,27
100
1 ,132
198. 2
3,3 8
2. 9, 7 3
12
2,80
1,1
t. .2M

G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

1

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
Msc.
260
19 9-19-13186
MS. 33S
Schedue of oeomargarne produced and materas used durng the month of
uy, 19 9, as compared wth uy, 19 8
uy, 19 9
Tota producton of uncoored oeomargarne.
Tota wthdrawn ta -pad
Ingredent schedue of uncoored oeomargarne:
utter favor
Coconut o
Com o
Cottonseed o
Dervatve of gycerne
Dacety
Lecthn -
Mk
Monostcarne
Neutra ard
Oeo o
Oeo stearn . _
Oeo stock
Peanut o
Sat --
Soda (henoateoD -
Sodum supho acetate
Soya bean fakes
Soya bean o
tamn concentrate
Tota
Tota producton of coored oeomargarne.
Tota wthdrawn ta-pad
Ingreden schedue of coored oeomargarne:
utter favor
Coconut o
Coor
Com o -
Cottonseed o
Dervatve of gycerne
Dacety
Lecthn
Mk
Monostcarne
Neutra ard
Oeo o
Oeo stock -
Peanut o
Sat
Soda (henoatc of)
Soya bean o
Soya bean fakes
tamn concentrate
Pounds
. 26, 122
. 97 , 6 8
, 81
12, 2
2 ,093, 90
6 ,82
36
82. 0
7, 60 . 9
0. 21
22 ,2
18 .082
176.922
2,900
10. 80
1,379, 7S8
33,9 1
33
12,1 7, 787
7,617
6.123, 2
10. 691, 97
10. 391, 62
2,729
, 9 8
100
, 788, 762
1 , 676
1
20, 2
. 760.073
6,03
8.170
11,78
3.200
1,222
332,123
6, 6
t, 860, 997
1,677
Tota.
10, 82 , 28
8, 07, S2
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

1

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
261
Msc.
19 9-21-13212
MS. 339
Schedue of oeomargarne produced and materas used durng the month of
ugust, 191(9, as compared wth ugust, 19 8
ugust, 19 9
Tota producton of uncoorcd oeomargarne
Tota wthdrawn ta -pad
Ingredent schedue of uncoorcd oeomargarne:
utter favor
Coconut o
Corn o
Cottonseed o
Dervatve of gycerne
Dacoty
Lecthn
Mk
Monostearne -
Neutra ard
Oeo o
Oeo stearne - -
Oeo stock
Peanut o
6at
Soda (benr.oate of)
Sodum supho acetate
8oya bean fakes
Soya bean o
tamn coneontruto
Tota.
Tota producton of coored oeomargarne.
Tota wthdrawn ta -pad
Ingredent schedue of coorod oeomargarne:
utter favor
Coconut o
Coor
Corn o _
Cottonseed oU._
Dervatve of gycerne.
Dacety
Lecthn
Mk
Monostearne
Neutra ard
Oeo o
Oeo stock
Peanut o
8at -.
Soda (benoate or)
Soya bean fakes
Soya bean o
tamn concentrate
Tota.
6 . .13 .8
3. 0
30. 2ft. 210
97,2
m
11 , 109
10, 7 ,621
122,363
00,960
313.028
26 , 7 0
71,360
236
1.97 ,80t
0,9
7
19,6 3, 788
10.30
6 ,217,61
1 ,011, 00
3.132
9, 79
3,21
7,003,811
21,996
2
27,930
2, 7 , 8
11, 1 1
28,87
,962
16,6 0
3 9
0 .277
10, 70
1,09
6,779, 7
2, 00
1 ,9 , 9 6
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

1

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
Msc.
262
19 9-23-13228
MS. 3 0
Schedue of oeomargarne produced and materas used durng the month of
October, 19//9, as compared wth October 191,8
September,
19 9
September,
19 8
Pounds
6,987,83
Pounds
71.071,081
Tota wthdrawn ta -pad _
.6 8.782
68,163, 66
Ingredent schedue of uncoored oeomargarne:
utter favor.
6, 3
1. 78
1,90
32. 72
3 .771,20
119, SSI
377
10 ,379
11,8 9.2 1
63. 17
276.9 2
228,892
30 .01
36,2
38 .633
2. 17 , 31
1. 0S
,22
28
Mk
27,027
2 , 78. 9
9 ,73
138
108.191
9, 37,. 2
, 68
2 .817
217,9M
27 ,286
9. 10
6 2
1, 71 . 6
, 0S
Oeo stock...
Peanut o
Sat
Soda (benzoate of)
Sova bean fakes _
86
Soya bean o __ ._
20,977,032
9,31
20, 36. 0
10, 1
Tota
7,8 2, 09
72,006.7 3
Tota producton of coored oeomargarne
17, 0,0
9,362,2 2
Tota wthdrawn ta -pad
1 . 23.237
7,693, 8
Ingredent schedue of coored oeomargarne:
utter favor _ _
3,313
2 6
2 8, 0
7, 78
,20
3.706,OW
16,803
33
13, 30
1,6 7, 83
,3 7
16,07
11,886
2,100
11, 98
289, 6
.067
3, 86,322
3, 870
1,273
Coor
9. 61
7
7, 97, 820
Dacetv _

33.731
2, 9 3,89
13,003
13,920
20.986
7,6 0
193
2, 77
12.83
6, 763, 93
Mk
Oeo o
Sat
2.817
Tota-
17,996,3 2
9, 77,30
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

1

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
263
Msc.
19 9-2 -132 6
MS. 3 1
Schedue of oeomargarne produced and materas used durng the month of
October, 19 9, as compared wth October, 19 8
October, 10 9 October, 19 8
Tota producton of uncoored oeomargarne.
Tota wthdrawn ta -pad
Pounds
6. 10 ,
Ingredent schedue of uncoored oeomargarne:
utter favor
Coconut o - - -
Corn o -
Cottonseed o -
Dervatve of gycerne.. --
Dacety
Lecthn -
Mk
Monostcarne -
Neutra ard --
Oeo o .
Oeo stearne - -
Oeo stock
Peanut o -
Sat
Soda (henoate of)
Sodum supho acetate
Soya bean fakes
Soya bean o
tamn concentrate
.283
12. 7
23. 3 1
26, 22. 06
9 . 61
138
109.373
9, 622. 070
,873
299.1 2
229.369
2 2. 70
27, 20
3 2
1. 729. 89
0. 708
380
19,171.029
9. 0 9
Tota
8. 08 , 062
Tota producton of coored oeomargarne.
Tota wthdrawn ta -pad
18. 236. 7 6
17.83 .1 0
Ingredent schedue of coored o
utter favor.
Coconut o
Coor
Com o.
3. 30
10, 92
Cottonseed o
Dervatve of gycerne.
Dacety...
Lecthn
Mk
Monostearnc.--
Neutra ard
Oeo o
Oeo stock - --
Peanut o
Sat --
Soda (benoateof)
Soya bean fakes
Soya bean o. _
tamn c
9.30 , 1. 8
2 .231
33
33,273
3. 0 3. 9
1 .097
2 . 769
33. 060
7,2 0
2,27
6 . 087
13. 91
Tota...
, 9, 911
3.011
18,6 , 32
Pounds
69,691, 93
1.6 9
,330
1,908
0. 3 , 028
108.
3 8
110, 3
11,6 7,762
61.327
328.069
231.687
1 7.80
30, 17
9.881
2.129. 98
0. 9 6
,136
30
1 , 830.828
10, 198
71,196, 121
9.3 0, 777
8,630, 7 2
127
9. 362
. MM
911
. 291, 36
13. 8 0
2
13.720
1. 83,077
. 677
3, 100
.700
2,200
2,326
287, 87
,260
3. 39
2.19 , 36
1,219
9, 66. 080
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

1

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
Msc. 26
TO CCO0
19 9-16-131 1
T. 239
Manufactured tobacco produced and removed for consumpton, by casses, durng
the months anuary through May, 19 9, compared wth the same months of
19 8
Producton
Ta -pad
Removed
Ta -free
anuary,
19 (1
anuary,
19 8
anuary,
19 9
anuary,
anuary,
19 9
anuary,
19 8
19 S
Pounds
3,107,866
7 ,696
227,891
3, 06,116
7,38 ,82
3, 27, 86
Pounds
Pounds
3,6 2, 3 9
0, 7S9
213,219
3, 216,838
7, 260, 3
3, 3 ,81
Pounds
3,633.832
6 .9
326,7
3,20 , 622
7,930,3 1
3, 81,393
Pounds
163.63
7,006
Pounds
12 .822
6,7 0
Pug
3, 16,378
6 ,117
363.3
3,383,002
8,016, 03
3, 88,97
Twst
Fne cut
1.3 9
1, 01
1 3,38
6 8
Snuff
130,3S6
Tota
18,030,877
19,232.328
18,217,
19,2 7,798
3 2.37
338,096
February,
19 9
February,
19 8
February,
1919
February,
19 8
February,
19 9
February.
19 8
Pug
3,009, 3
,286
3, 21,797
3,913
33 ,30
3,183, 326
7,791,083
3, 26 ,989
2,83 ,062
372,0 0
208,867
2,92 ,28
7,203,171
3,268, 807
3,219,060
13, 23
297, 19
3,001,699
7, 7 , 367
3,227, 77
179, 3
68,660
118,9 8
36,88
Twst..-
Pno cut
206,868
3,097.003
7, 8,300
3,260,101
1,76
1 0,7 8
1, 68
79
313,608
1,377
17, 76,0 2
18, 9, 13
16,872,8 1
17,693,8 2
392,0
71,299
March,
19 9
March,
19 8
March,
19 9
March,
19 8
March,
19 9
March,
19 8
ne cut
3, 729,133
3 ,368
213.076
3,1 1. 23
9, 67, 237
3, 69 .19
3,910, 307
73, 297
322,188
3, 60,1 0
8,910, 08
3,878,937
3, 09, 7
32, 3 2
222, 7
3,36 ,290
9,382,388
3,0S6,211
3,622, 2
21,302
39 ,988
3, 92, 91
8,819,1 3
3,83 , 96
111,306
69,01
188,713
33,10
Scra chewng T._
1,930
191, 78
2.119
1,0
227,962
670
Tota -
20,880, 32
21,0 ,287
20, 97,279
20, 8 ,071
37 ,8 8
1,703
pr.
19 9
pr,
19 8
pr,
19 9
-
S -
pr,
19 8
Pug
3,366,920
7, 8
201.689
2,91 ,108
8, 3 , 807
3,2 3, 6
,199, 37
61,687
220,18
3,376, 808
9,692, 91
3.389, 62
3,211,36
390,628
211, 9
2,939,733
8,318,901
3,27 , 723
3,663,186
396,277
220,633
3,323, 23
9, 02,168
3, 9,623
337,133
66,2 2
213, 26
7,8
Fne cut
Scrap chewng
818
260,003
621
1,333
267,2 1
1,707
nuff
18. 728, 66
21,3 0,269
18,3 6,798
20, , 09
6 3,817
6 1, 8
May, 19 9
May, 19 8
May, 19 9
May, 19 8
May, 19 9
May, 19 8
Fne cut
3,6 .07
90, 2
2 0.088
3, 1 ,89
3,319
217,318
3,270,11
9.01 ,972
3,17 , 719
3, 19,0 8
392,900
2 .226
2, 93 ,16
9,777.307
3,3 0,061
3,389.0 1
07.710
228,93
3,361,0 0
9,081,710
3,213,778
30.808
103,380
138,369
3,260
2,82 , 76
10,119, 7
967
18 , 00
1,660
1.380
237,6
7 6
3,2 , 867
Tota
20, 91, 17
19, 30,337
20,118, 707
19,682,239
321,21
31, 20
fgucs arc sub|ect to revson unt pubshed n the Commssoner s annua report.
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

1

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
26
Msc.
19 9-17-13168
T. 2 1
Manufactured tobacco produced and removed for consumpton, by casses, durng
the month of une, 19 9, compared wth une, 19 8
Producton
Ta -pad
Removed
Ta -free
une. 19 9
une, 19 8
une, 19 9
une, 19 8
une, 19 9
une, 19 8
Pounds
Pounds
3, 70 . 0 9
81,163
2 0,6 7
3,733,302
9. 2 1. 2 0
3. 10, 79
Pounds
3,72 ,808
21, 98
2 1.99
3, 707,9
9. 0 0. 896
3,378, 80
Pounds
Pounds
Pounds
Pug _
, nno,so
3,691,869
26,009
268,377
3. 7 3, 771
9, 12 ,8 0
3, 37, 86
1 0,336
80, 179
220, 190
76,980
Fne-cut chewng
M ). 9 7
2 0.812
3.80 .800
9,7 0,9 7
3, 3 ,133
1, 09
180,807
1,210
701
1 9, 89
1,099
Snuf
Tota
21, 7 0,1
20.937,200
21,18 , 781
20,782,962
20,001
6 ,771
19 9-19-13187
T. 2 3
Manufactured tobacco produced and removed for consumpton, by casses, durng
the month of uy, 19 9, compared wth uy, 19 8
Producton
Ta -pad
Removed
Ta -free
uy, 19 9
uy, 19 8
uy, 19 9
uy,19 8
uy,19 9
uy, 19 8
Pounds
Pounds
3, 91,297
6 .17
229,830
3.116,039
7. 8. 210
2, 9 9,70
Pounds
3, 91,198
328. t
199. 88
3, 286, 9
7, 202,132
2, 18,030
Pounds
3,81 ,8
39 ,376
222,616
3,127.0 1
7,3 9,300
2,9 2,030
Pounds
132, 238
.000
Pounds
1 0, 9
2 ,670
Pug
3.300.073
388.61
207,231
2, 901, 287
7.311.200
2.39 .732
Twst
1,817
197.093
1,01
97
138,980
3 7
Tota
16,02 ,697
17,880,326
16,92 ,902
17,861,208
330,102
31 ,963
19 9-21-13213
T. 2
Manufactured tobacco produced and removed for consumpton, by casses, durng
the month of ugust, 19 9, compared u th ugust, 19 8
Producton
Ta -pad
Removed
Ta -free
ugust,
19 9
ugust,
19 8
ugust,
19 9
ugust,
19 8
ugust,
19 9
urust,
19 8
Pounds
Pounds
,21 .93
3. 889
2 1, 11
Pounds
Pounds
3,88 . 09
30,97
2 ,030
3.877, 02
R. 997, 91
3,2 1,81
Pounds
0 n f
283.3 1
26. 6
Pug
,019.008
0, 3SU
26 ,0 1
3,83 , 138
389, 03
270. 2
,028.889
9,796,806
3,798,008
31,028
79,28
Twst
Scrap chewng-
.098,
10. 308. 102
3, 9 7,930
0.389. 07
3, 3 2, 382
7.978
27 , 38
2, 30
1, 10
21 .139
1,012
3,838,167
Tota
22, 98 ,731
21, 610, 221
22,118,988
20,717, 1
39 ,96
20,868
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

1

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
Msc.
266
19 9-23-13233
T.2 7
Manufactured tobacco produced and removed for consumpton, by casses, durng
the month of September, 19 9, compared wth September, 19 8

Producton
Ta -pad
Removed
Ta -free
September,
19 0
September,
19 8
September,
19 9
September,
19 8
September,
19 9
September,
19 8
Pound
Pounds
Pound
3,81 .998
387,1 0
2 9,891
3.673,312
10, 70,020
3,667,320
Pound -
Pound
. 13 , 33
8 ,87
Pound
1 ,167
81. 39
Pug-
3,8 0,000
70, 10
2 9,280
3,76 ,3 7
10, 79, 289
3, 0. 6
,167,330
86,20
2 , 71
,129, 60
39,8
2 6,981
Twst
Fne-cut chewng
Scrap chewng .
3. 780.3 8
10, 66 , 700
3,79 ,37
10, 2 , 26
,332
211, 9
1,187
1.139
Smokn
3. 71.09
3, 6 .872
18 ,961
6.291
Tota
22, 6 , 971
22,816,1 7
22, 262, 691
22,611,0 9
38, 21
29.997
19 9-26-1326
T. 2 9
Manufactured tobacco produced and removed for consumpton, by casses, durng
the month of October, 19 9, compared wth October, 19 8
- - - -
Producton
Ta -pad
Removed
Ta -free
October,
19 9
October,
19 8
October,
19 9
October,
19 8
October,
19 9
October,
19 8
Pound
Pound
Pound
Pound
3, 826, 130
6,963
Pound
18,926
9 ,693
Pou n
179,066
38,600
Fne-cut chewng
3, 66, 702
62, 73
237.679
. 112. 1
31,627
237.0 0
3, 2 0, 72
37 .603
232 807
Scrap chewng..
3, 06, 7 9
10,996, 71
3,92 .3 1
11,7 3,38
3, 282 96
10, 617, 2
3,91 ,987
11, 0,182
3, 33,788
2302
200, 8
28 1
30
277,20S
863
Smokng _.
3,663,8 7
3, 0,
3, 632 38
Tota
22, 3 , 293
23,999,372
21,391, 8
23,30 , 3
320,3 6
96,167
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

1

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
267
Msc.
CIG R TT S
19 9-1 -131 2
T. 2 0
Premnary statement of sma cgarettes removed for consumpton durng the
month of une, 19 9, as compared wth removas for the same month of 19|8
Removas
une, 19 9
une, 19 8
Ta -free _ -
Number
32. 8 8, 798. 80S
3,236, 117,002
Numher
31,268,730,7118
3,2 9, 18. 01
Tota
30,08 ,916, 07
3 , 18,26 ,206
19 9-18-1317
T.2 2
Premnary statement of sma cgarettes produced and removed for consump-
ton durng the months anuary through uy, 19 9, compared wth the same
months of 19 8
anuary. 1919 .
anuary. 19 8..
February. 19 9-
February, 19 8.
Mareh. 19-19....
Mareh, 19 IS....
pr, 19 9
pr, 19 8
Mav, 19 9
May, 19 8
une, 19 9
une, 19 8
uy, 1 9
uy, 19 8
Manufactured
30, 12, 7 , 97
30,007, 938. 611
27, 78.99 . 09
27. 12 .027. 1 1
3 . 820. 63, 727
32. 2 .811, 012
30, 69 , 62 . 130
3 , 173,80S 291
33, 9 9, 338, 6 9
31,31 , 77, 73
30,112,881, 30
3 ,613,3 . 720
27. 80 . 0.3 3
0,30 , 7 0, 722
Removed
Ta -pad
27.907, 1 9.23
27. 273, 180. 8 1
2 ,02 .281,200
23, 172, 8 , 8 1
31. 7. 90S, 0O0
29,2 2, 180,770
27.307.0 0.21
31,617,079. 2
30.090, ,811
29,091,602,976
32, 8 8. 798, 80
31,268,736.70
2 .806. 12. 3
27, 20 , 9 , 9
Ta -free
2, 2117. 0). 007
I , 212. 77,867
2, 70. 16. 70
3, 677, 822, 0
3,168.313.697
3, 106, 672. 680
3, 667,8S0,110
2, 22.121,631
3, 172, 0 ,3 7
2, 303. 2.608
3,236,117.602
3, 2 9. 18. 01
2, 1 1,0 1, 8
3, 007,83 . 196
19 9-20-1320
T. 2
Premnary statement of sma cgarettes produced and removed for consumpton
durng the month of ugust, 19 9, compared wth the same month of 19 8
Manufactured
Removed
Ta -pad
Ta -free
ugust, 19 9
38, 17, 321, 29
37, 788,909, 676
3 , 3 6, 6 ,08
3 , 192, 166, 92
3, 0 1,178, 716
3, 6 6, 731,368
ugust, 19 8
fgures arc sub|ect to revson unt pubshed In the Commssoner s annua report.
868972 0 18
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

1

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
Msc.
268
19 9-22-13220
T. 2 6
Premnary statement of sma cgarettes vrodueed and removed for consumpton
durng the month of September, 19 9, compared wth the same month of 19-e
Manufactured
Removed
Ta -pad
Ta -free
September, 10 9
3 . 38, 23. 967
3 , 12 , 03,92
31,7 2, 06,231
29, 983,1 6, 21
2, 680, 30 . 3S
, 103, 393, 13-
September, 19 8
19 9-2 -132 7
T. 2 8
Premnary statement of sma cgarettes produced and removed for consumpton
durng the month of October, 19 9. compared wth the same month of 19 8
Manufactured
Removed
Ta -pad
Ta -free
October, 19 8
31, 963, 981, 23
3 ,961,811,0 9
29,19 .0 ,767
31,079.228,801
toasMew
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

1

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
L GISL TION
19 9-1 -13138
. . R S. 276. PU LIC L W 137, IG TY-FIRST CONGR SS
C PT R 2( 8, FIRST S SSION
ont Resouton Grantng certan e tensons of tme for ta
purposes.
Resoved by the Senate and I ouse of Representatves of the Unted
States of merca n Congress assembed That sectons 03(d)(3)
and 2(c) of the Revenue ct of 19 2 (reatng to reease of certan
powers of appontment n the case of the estate and gft ta es) are
hereby amended by strkng out 19 9 wherever appearng theren
and nsertng n eu thereof 19 0 .
Sec. 2. (a) Subsecton (|) of the Renegotaton ct, as amended
(U. S. C, 19 6 edton, Supp. I, tte 0 pp., sec. 1191(|)), s hereby
amended bv strkng out une 30, 19 9 and nsertng n eu thereof
une 30, 19 0 .
(b) Secton 283 of tte IS of the Unted States Code s hereby
amended by nsertng after the frst paragraph thereof a new para-
graph as foows:
Retred offcers of the armed forces of te Unted States, whe not on actve
duty, sha not by reason of ther status as such be sub|ect to the provsons of
ths secton. Nothng heren sha b8 construed to aow any such retred offcer
wthn two years ne t after hs retrement to act as agent or attorney for prose-
cutng or assstng n the prosecuton of any cam aganst the Unted States
Invovng the department n whose servce he hods a retred status, or to aow
any such retred offcer to act as agent or attorney for prosecutng or assstng
In the prosecuton of any cam aganst the Unted States Invovng any sub|ect
matter wth whch he was drecty connected whe he was n an actve-duty
Status.
pproved une 28, 19 9.
19 9-19-13188
. R. 831. PU LIC L W 2 0, IG TY-FIRST CONGR SS
C PT R 3, FIRST S SSION
n ct To e empt certan voate frut-favor concentrates from
the ta on quors.
e t enacted by the Senate and ouse of Representatves of the
Unted States of merca n Congress assembed, That subchapter
of chapter 26 of the Interna Revenue Code (msceaneous genera
provsons reatng to the ta on quors) s hereby amended by addng
at the end thereof the foowng new secton:
S C. 3182. OL TIL FRUIT-FL OR CONC NTR T S.
(a) empton. The provsons of ths chapter (other than sectons 2810,
2810, and 2823 and other than sectons 2827 to 2830, both Incusve) sha not be
appcabe wth respect to the manufacture, by any process whch Incudes evap-
(269)
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

1

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
270
oratons from the mash or |uce of any frut, of any voate frut-favor con-
centrate f
(1) such concentrate, and the mash or |uce from whch t s produced,
contans no more acoho than s reasonaby unavodabe In the manufacture
of such concentrate; and
(2) such concentrate s rendered unft for use as a beverage before remova
from the pace of manufacture; and
(3) the manufacturer thereof keeps such records, renders such reports,
fes such bonds, and compes wth such other rues and reguatons wth
respect to the producton, remova, sae, transportaton, and use of such con-
centrate and of the mash or |uce from whch such concentrate s produced
as the Commssoner, wth the approva of the Secretary, may prescrbe as
necessary for the protecton of the revenues mposed by ths chapter.
(b) Contro fter Ta -Free Manufacture. any voate frut-favor con-
centrate (or any frut mash or |uce from whch such concentrate Is produced)
contanng one-haf of 1 per centum or more of acoho by voume, whch s manu-
factured free from ta under the provsons of subsecton (a), s sod, transported,
or used by any person n voaton of the provsons of ths chapter or reguatons
promugated thereunder, such person and such concentrate, mash, or |uce sha
be sub|ect to a provsons of ths chapter pertanng to dsted sprts and
wnes, ncudng those requrng the payment of ta thereon; and the person so
seng, transportng, or usng such concentrate, mash, or |uce sha be requred
to pay such ta .
pproved ugust 17, 19 9.
19 9-19-13189
. R. 11 . PU LIC L W 261, IG TY-FIRST CONGR SS
C PT R 98, FIRST S SSION
n ct To amend the Interna Revenue Code to permt the use of
addtona means, ncudng stamp machnes, for payment of ta on
fermented mat quors, provde for the estabshment of brewery
bottng house on brewery premses, and for other purposes.
e t enacted by the Senate and ouse of Representatves of the
Unted States of merca n Congress assembed, That secton
31 0(b) of the Interna Revenue Code s amended by changng the
desgnaton of paragraph (2) to ( ) and by the nserton of two
new paragraphs desgnated (2) and (3) to read as foows:
(2) Method of payment. The ta on fermented mat quor brewed
or manufactured and sod, or removed for consumpton or sae, wthn the
Unted States, sha be pad by stamp, under such rues and reguatons,
permts, bonds, records, and returns, and wth the use of such ta -stamp
machnes or meterng or other devces and apparatus, as the Commssoner
wth the approva of the Secretary sha prescrbe.
(3) Penates. Whoever manufactures, procures, possesses, uses or tam-
pers wtt a tu -stamp machne whch may be requred under ths secton
wth ntent to evade the nterna-revenue ta mposed upon fermented mat
quors, and whoever, wth ntent to defraud, makes, aters, smuates, or
counterfets any stamp of the character mprnted by such stamp machne,
or who procures, possesses, uses, or ses any forged, atered, counterfeted,
or smuated ta stamp or any pate, de, or devce ntended for use n forg-
ng, aterng, counterfetng, or smuatng any such stamp, or who otherwse
voates the provsons of ths secton, or the reguatons ssued pursuant
thereto, sha pay a penaty of ,000 and sha be fned not more than 10;000
or be mprsoned not more than fve years, or both, and any machne, devce,
equpment, or materas used n voaton of ths secton sha be forfeted to
the Unted States and after condemnaton sha be destroyed. ut ths
provson sha not e cude any other penaty or forfeture provded by aw.
Skc. 2. Secton 31 2 of the Interna Revenue Code s amended by
strkng out subsectons (a) and (c) and by reetterng subsectons
(b) , (d) , (e) , (f) and (g) as (a) , (b) , 8(c) , (d) ,
and (e) , respectvey.
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

1

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
271
Sec. 3. Secton 31 7(a) of the Interna Revenue Code s amended to
read as foows:
(a) Requrements. very person who wthdraws any fermented mat quor
from any hogshead, barre, or keg upon whch the proper stamp has not been
aff ed for the purpose of bottng the same, or who carres on or attempts to carry
on the busness of bottng fermented mat quor n any brewery or other pace n
whch fermented mat quor s made, or upon any premses havng communca-
ton wth such brewery, or any warehouse, sha be abe to a fne of 00, and the
property used In such bottng or busness sha be abe to forfeture: Provded,
however, That ths secton sha not be construed to prevent the transfer of any
unfermented, partay fermented, or fermented mat quors from any of the
vats or tanks n any brewery by way of a ppe ne or other condut to another
budng or pace on the brewery premses tor the soe purpose of bottng the
same, such ppe ne or condut to be constructed and operated n such man-
ner and wth such csterns, vats, tanks, vaves, cccks, faucets, meters, and
gages, or other utenss or apparatus, ether n the brewery or n the bottng
house, and wth such changes of or addtons thereto, and such ocks, seas,
or other fastenngs, and under such rues and reguatons as sha be from tme
to tme prescrbed by the Commssoner, sub|ect to the approva of the Secretary:
Provded further. That the ta mposed by aw on fermented mat quor sha be
pad on a botted fermented mat quor at the tme of remova for consumpton
or sae, n such manner as may be prescrbed by reguatons pursuant to secton
31. 0(b) (2). nd any voaton of the rues and reguatons prescrbed by the
Commssoner, wth the approva of the Secretary, n pursuance of these pro-
vsons sha he sub|ect to the penates above provded by ths secton. very
owner, agent, or superntendent of any brewery or bottng house who removes,
or connves at the remova of, any fermented mat quor through a ppe ne
or condut, wth the ntent to defraud the revenue, sha forfet a the quors
made by and for hm, and a the vesses, utenss, and apparatus used n makng
the same.
Sec. . Secton 31 8 of the Interna Revenue Code s amended to
read as foows:
The brewery premses sha consst of the and and budngs descrbed n the
brewer s notce and sha be used soey for the purpose of manufacturng beer,
ager beer, ae, porter, and smar fermented mat quors, cerea beverages con-
tanng ess than one-haf of 1 per centum of acoho by voume, vtamns, ce,
mat, mat srup, and other byproducts; of bottng fermented mat quors and
cerea beverages as herenafter provded; of dryng spent gran from the brew-
ery ; of recoverng carbon do de and yeast; and of storng bottes, packages, and
suppes necessary or ncdenta to a such manufacture: Provded, That unde-
vered ta -pad fermented mat quor n stamped barres or kegs returned to a
brewery may be temporary stored theren, sub|ect to such condtons and under
such reguatons as the Commssoner, wth the approva of the Secretary, sha
prescrbe. The bottng of fermented mat quors and cerea beverages on the
brewery premses sha be conducted ony n the brewery bottng house whch
sha he ocated on such premses. The brewery bottng house sha be separated
from the brewery n such manner as the Commssoner, wth the approva of the
Secretary, may by reguatons prescrbe. The brewery bottng house sha be
used soey for the purpose of bottng beer, ager beer, ae, porter, and smar
fermented mat quors, and cerea beverages contanng ess than one-haf of
1 per centum of acoho by voume; and for the storage of bottes, toos, and
suppes necessary or ncdenta to the manufacture or bottng of fermented mat
quor and cerea beverages. Notwthstandng the foregong provsons, where
any such brewery premses or brewery bottng house was, on une 20, 19. 6,
b:;ng used by any brewer for purposes other than those heren descrbed, or the
brewery bottng house was, on such date, beng used for the bottng of soft
drnks, the use of the brewery and bottng-house premses for such purposes may
be contnued by such brewer. The brewery bottng house of any brewery sha
not be used for the bottng of the product of any other brewery. ny brewer
who uses hs brewery or bottng house contrary to the provsons of ths sub-
secton sha be fned not uore than f 0 wt respect to each day upon whch any
such use occurs.
Sec. . Secton 31 9 of the Interna Revenue Code s amended by
reetterng subsectons (|) , (k) , and (1) as (k) , (1) , and
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

1

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
272
(n) and by the nserton of a new subsecton desgnated ( ) to
read as foows:
(|) Frauduent Remova of otted Fermented Mat Lquors. ny brewer
or other person who removes or n any way ads n the remova from any brewery
or brewery bottng house of any botted fermented mat quors on whch the
requred ta has not been pad sha be fned 100 and mprsoned for not more
than one year.
Sec. 6. Secton 31 1, the frst sentence of the second paragraph of
secton 31 3(a), and secton 31 of the Interna Revenue Code are
repeaed: Provded, That secton 31 sha contnue n effect as to any
cam accrung thereunder pror to the effectve date of ths ct.
Sec. 7. The amendments made by ths ct sha take effect on the
frst day of the frst month whch begns s months or more after
the date of the enactment of ths ct.
pproved ugust 23, 19 9.
19 9-19-13177
. R. 086. PU LIC L W 271, IG TY-FIRST CONGR SS
C PT R 17, FIRST S SSION
n ct To accord prveges of free mportaton to members of
the armed forces of other natons, to grant certan e tensons of
tme for ta purposes, and to factate ta admnstraton.
e t enacted by the Senate and ouse of Representatves of the
Unted States of merca n Congress assembed, That (a) artces
entered, or wthdrawn from warehouse, for consumpton n the Unted
States, ts Terrtores, or possessons for the offca use of persons who
are on duty n the Unted States, ts Terrtores, or possessons as
members of the armed forces of any foregn country, or for the per-
sona use of any such person or of any member of hs mmedate famy,
sha be admtted free of a dutes and nterna revenue ta es mposed
upon or by reason of mportaton (ncudng ta es mposed by sectons
33 0 and 3360 of the Interna Revenue Code) and of a customs
charges and e actons: Provded, That f the Secretary of the Treasury
sha fnd that any such foregn country does not accord smar treat-
ment wth respect to members of the armed forces of the Unted
States or members of ther mmedate fames, the prveges heren
granted sha, after coectors of customs have been offcay advsed
of such fndng, be accorded wth respect to members of the armed
forces of such foregn country, or members of ther mmedate fam-
es, ony to the e tent that smar treatment s accorded by that
country wth respect to members of the armed forces of the Unted
States or members of ther mmedate fames.
(b) The e emptons from dutes, ta es, charges, and e actons pro-
vded for by ths secton sha be sub|ect to compance wth such
reguatons as the Secretary of the Treasury sha prescrbe.
(c) Ths secton sha be effectve as to artces entered for con-
sumpton or wthdrawn from warehouse for consumpton on or after
the day foowng the date of enactment of ths ct.
S C. 2. T NSION OF TIM FOR CL IMING R FUND WIT R SP CT
TO W R LOSS S.
The |ont resouton of une 29, 19 8 (Pubc Law 828, ghteth
Congress), s hereby amended by strkng out 19 9 wherever appear-
ng theren and nsertng n eu thereof 19 0 .
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

1

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
273
S C. 3. T NSION OF TIM IN T C S OP DISC RG OF IN-
D T DN SS.
Secton 22(b)(9) and secton 22(b) (10) of the Interna Revenue
Code are hereby amended by strkng out 19 9 and nsertng n eu
thereof 19 0 .
S C. . RIFIC TION OF R TURNS.
(a) Chapter 38 of the Interna Revenue Code s hereby amended
by nsertng at the end thereof the foowng new secton:
S C. 3809. RIFIC TION OF R TURNS; P N LTI S OF P R URY.
(a) Penates. ny person who wfuy makes and subscrbes any return,
statement, or other document, whch contans or s verfed by a wrtten decara-
ton that t s nad; under the penates of per|ury, and whch he does not beeve
to be true and correct as to every matera matter, sha be guty of a feony, and,
upon convcton thereof, sha be fned not more than 2,000 or mprsoned not
more than fve years, or both.
(b) Sgnature Presumed Correct. The fact that an ndvdua s name s
sgned to a return, statement, or other document fed sha be prma face evdence
for a purposes that the return, statement, or other document was actuay
sgned by hm.
(e) erfcaton n Leu of Oath. The Commssoner, under reguatons
prescrbed by hm wth the approva of the Secretary, may requre that any return,
statement, or other document requred to be fed under any provson of the
Interna revenue aws sha contan or be verfed by a wrtten decaraton that
t s made under the penates of per|ury, and such decaraton sha be n eu
of any oath otherwse requred.
(b) Sectons 1(d), 1 (c), and 1630 of such code are hereby
repeaed.
(c) The amendments made by ths secton sha be appcabe wth
respect to any return, statement, or document fed after the date of
the enactment of ths ct.
S C. . R PORTS OF COMP NS TION.
Secton 1 8(f) of the Interna Revenue Code (reatng to reports
of compensaton of corporate offcers and empoyees e ceedng 7 ,000)
s hereby repeaed.
S C. 6. F ILUR TO FIL R TURN OR P Y T .
Secton 1626(c) of the Interna Revenue Code s hereby repeaed,
and secton 1631 of such code s hereby amended to read as foows:
S C. 1631. F ILUR OF MPLOY R TO FIL R TURN OR P Y T .
In case of a faure to make and fe any return, or a faure to pay any ta ,
requred by ths chapter, or both, wthn the tme prescrbed by aw or prescrbed
by the Commssoner n pursuance of aw, uness t s shown that such faure s
due to reasonabe cause and not due to wfu negect, the addton to the ta sha
nc t be ess than .
S C. 7 R TURNS ND P YM NT OF CIS T S.
(a) Secton 3310 of the Interna Revenue Code (reatng to returns
and payment of ta ) s hereby amended by addng at the end thereof
(f) Dscreton owed Commssoner.
(1) Returns and payment of ta . Notwthstandng any other provson
of aw reatng to the fng of returns or payment of any ta Imposed by
chapter 9, 9 . 10, 12, 19, 21, 30, 32, subchapter of chapter 2 , or subchapter
of chapter 20, the Commssoner may by reguatons approved by the
Secretary prescrbe the perod for whch the return for such ta sha be
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

1

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
27
fed, the tme for the fng of such return, the tme for the payment of such
ta , and the number of copes of the return requred to be fed.
(2) Use or Government depostames. The Secretary may authorze
Federa Reserve banks, and ncorporated banks or trust companes whch
are depostares or fnanca agents of the Unted States, to receve any ta
mposed by ths tte, n such manner, at such tmes, and under such condtons
as he may prescrbe; and he sha prescrbe the manner, tmes, and cond-
tons under whch the recept of such ta by such banks and trust companes
s to be treated as payment of such ta to the coector.
(b) Secton 8 of the Second Lberty ond ct, as amended (31
U. S. C, sec. 771), s hereby amended by strkng out ncome and
e cess profts ta es and nsertng n eu thereof nterna revenue
ta es .
S C. 8. D L G TION OF SS SSM NT UT ORITY.
Chapter .3 of the Interna Revenue Code s hereby amended by
addng at the end thereof the foowng new secton:
S C. 36 7. D L G TION OF SS SSM NT UT ORITY.
The Commssoner, under reguatons approved by the Secretary, s authorzed
to deegate to any offcer or empoyee of the ureau of Interna Revenue, ncudng
the fed servce, any authorty, duty, or functon whch the Commssoner Is
authorzed or requred to e ercse or perform under secton 36 0, 36 1, or 36 2.
S C. 9. CR DIT OR R FUND OF O RP YM NT OF T .
(a) Secton 3770(a) of the Interna Revenue Code s hereby
amended by renumberng paragraph ( ) as paragraph (6), and by
amendng paragraph ( ) to read as foows:
( ) Credt of overpayment of one cass of ta aganst another cass
of ta due. Notwthstandng any provson of aw to the contrary, the Com-
mssoner may, n hs dscreton, n eu of refundng an overpayment of ta
mposed by any provson of ths tte, credt such overpayment aganst any
ta due from the ta payer under any other provson of ths tte.
( ) Deegaton of authorty to coectors to make refunds. The Com-
mssoner, wth the approva of the Secretary, s authorzed to deegate to
coectors any authorty, duty, or functon whch the Commssoner s author-
zed or requred to e ercse or perform under paragraph (1), (2), (3), or
( ) of ths subsecton, or under secton 322 or 1027, where the amount nvoved
(e cusve of nterest, penates, addtons to the ta , and addtona amounts)
does not e ceed 10,000.
(b) Secton 3772 of such Code s hereby amended by addng at the
end thereof the foowng new subsecton:
(e) Credt Treated as Payment. The credt of an overpayment of any ta
In satsfacton of any ta abty sha, for the purpose of any sut for refund
of such ta abty so satsfed, be deemed to be a payment n respect of such
ta abty to the coector n offce at the tme such credt s aowed.
S C. 10. R PORTS TO CONGR SS OF R FUNDS.
(a) Secton 3776 of the Interna Revenue Code (reatng to reports
to Congress of refunds) s hereby repeaed.
(b) Secton 3777 of such Code (reatng to revew of refunds and
credts by the ont Commttee on Interna Revenue Ta aton) s
herebv amended by strkng out 7 ,000 wherever appearng theren
and nsertng n eu thereof 200,000 .
S C. 11. COLL CTORS S L RI S.
Secton 39 (b) of the Interna Revenue Code (reatng to ad|ust-
ment and mt of coectors saares) s hereby amended to read aa
foows:
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

1

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
27
(b) d|ustment and Lmt or Saares. The saares of coectors may be
read|usted and Increased under such reguatons as may be prescrbed by the
Commssoner, sub|ect to the approva of the Secretary, but no coector sha
receve a saary n e cess of the hghest schedued rate of compensaton estab-
shed by the Cassfcaton ct of 1023, as amended, or by any aw hereafter
enacted supersedng such ct.
S C. 12. P NS S OF D T CTION OF FR UDS.
Secton 3792 of the Interna Revenue Code s hereby amended by
nsertng after the words The Commssoner, the foowng under
reguatons prescrbed by hm .
pproved ugust 27,19 9.
19 9-23-13229
. R. 268. PU LIC L W 378, IG TY-FIRST CONGR SS
C PT R 720, FIRST S SSION
n ct To amend certan provsons of the Interna Revenue Code
e t enacted by the Senate and ouse of Representatves of the
Unted States of merca n Congress assembed,
S CTION L F RM RS R TURNS S D CL R TIONS OF STIM T D
T .
Secton GO (a) of the Interna Revenue Code (reatng to decaraton
of estmated ta by farmers) s hereby amended by strkng out the
perod at the end thereof and nsertng n eu thereof the foowng:
; and f such an ndvdua fes a return on or before anuary 31
of the succeedng ta abe year, and pays n fu the amount computed
on the return as payabe, such return sha have the same effect as that
prescrbed n secton 8(d) (3) n the case of a return fed on or before
anuary 1 .
S C. 2. FOR IGN T CR DIT.
(a) Secton 131(c) of the Interna Revenue Code (reatng to ad-
|ustments on payment of accrued ta es) s hereby amended by addng
at the end thereof the foowng new sentences: In such redeter-
mnaton by the Commssoner of the amount of ta due from the
ta payer for the year or years affected by a refund, the amount of the
ta es refunded for whch credt has been aowed under ths secton
sha be reduced by the amount of any ta descrbed n subsecton (a)
mposed by the foregn country or possesson of the Unted States wth
respect to such refund; but no credt under ths secton, and no deduc-
ton under secton 23, sha bs aowed for any ta abe year wth respect
to such ta mposed on the refund. No nterest sha be assessed or
coected on any amount of ta due upon any redetermnaton by the
Commssoner, resutng from a refund to the ta payer, for any perod
pror to the recept of such refund, e cept to the e tent nterest was
pad bv the foregn country or possesson of the Unted States on such
refund for such perod.
(b) The amendment made by subsecton (a) sha be appcabe wth
respect to ta abe years begnnng after December 31, 1938. If the
aowance of a credt or refund of any overpayment of ta resutng
from the appcaton of the amendment made by subsecton (a) s pre-
vented on the date of the enactment of ths ct, or wthn one year
from such date, by the operaton of any aw or rue of aw (other than
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

1

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
276
secton 3761 of the Interna Revenue Code, reatng to compromses),
credt or refund of such overpayment may, nevertheess, be aowed
or made f cam therefor s fed wthn one year from the date of the
enactment of ths ct.
S C. 3. f RIT L CONTRI UTIONS Y CORPOR TIONS ON CCRU L
SIS.
(a) Secton 23(q) of the Interna Revenue Code (reatng to char-
tabe and other contrbutons) s hereby amended by addng at the end .
thereof the foowng:
In the case of a corporaton reportng ts net ncome on the accrua bass, at
the eecton of the ta payer any contrbuton or gft payment of whch s made
after the cose of the ta abe year and on or before the 1 th day of the thrd
month foUowng the cose of such year sha, for the purposes of ths subsecton,
be consdered as pad durng such ta abe year f, durng such year, the board
of drectors authorzed such contrbuton or gft. Such eecton sha be made
ony at the tme of the fng of the return for the ta abe year, and sha be
sgnfed n such manner as the Commssoner, wth the approva of the Secretary,
sha by reguatons prescrbe.
(b) Secton 102(d)(1)( ) of the Interna Revenue Code (reat-
ng to secton 102 net ncome), secton 336(a) (2) of such Code (reat-
ng to net ncome of foregn persona hodng companes), and secton
0 (a) (2) of such Code (reatng to net ncome of domestc persona
hodng companes) are each amended by addng at the end thereof
the foowng new sentence: For the purposes of the precedng sen-
tence, payment of any contrbuton or gft sha be consdered as made
wthn the ta abe year f and ony f t s consdered for the purposes
of secton 23(q) as made wthn such year. .
(c) The amendments made by ths secton sha be appcabe wth
respect to ta abe years begnnng after December 31, 19 2. If the
eecton provded for n such amendments s made for any ta abe
year begnnng before anuary 1, 19 9
(1) the eecton for such year may be made (n eu of at the
tme of the fng of the return for such year) at any tme, wthn
one year after the date of the enactment of ths ct; but
(2) such eecton sha not be aowed uness the ta payer, n
accordance wth reguatons prescrbed by the Commssoner wth
the. approva of the Secretary, consents n wrtng to the assessment,
(wthn such perod as may be agreed upon) of any defcency, to
the e tent resutng from such eecton, for any other ta abe year
of the ta payer, even though on the date of the fng of such con-
sent such assessment s otherwse prevented by the operaton of
any aw or rue of aw.
S C. . TR NSF RS OF STOC TW N CORPOR TION ND NOM-
IN .
(a) Secton 1802(b) of the Interna Revenue Code (reatng to
stamp ta es on saes and transfers of stock) s hereby amended by
strkng out the perod at the end of cause (2) and nsertng n eu
thereof a semcoon, and by nsertng after cause (2) the foowng
new cause:
(3) From a corporaton to a regstered nomnee of such corporaton, or
from one such nomnee to another such nomnee, f n ether case the shares
or certfcates contnue to be hed by such nomnee for the same purpose for
whch they woud be hed f retaned by such corporaton; or from such
nomnee to such corporaton.
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

1

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
277
(b) In the case of the death before the date of the enactment of ths
ct of a nomnee of a corporaton (whether or not such nomnee
was regstered), the ta under secton 1802(b) of the Interna Revenue
Code sha not be mposed upon any devery or transfer of stock from
the e ecutor or admnstrator of such nomnee to such corporaton f
such devery or transfer s made on or before the date of the enact-
ment of ths ct or wthn one year after such date.
S C. . MPLOY NNUITY CONTR CTS.
(a) Secton 16 of the Interna Revenue Code (reatng to em-
poyees trusts) s hereby amended by addng at the end thereof the
foowng new subsecton:
(d) Certan mpoyees nnutes. Notwthstandng subsecton (c) or any
other provson of ths chapter, a contrbuton to a trust by an empoyer sha
not be ncuded n the ncome of the empoyee n the year n whch the contr-
buton Is made f
(1) such contrbuton s to be apped by the trustee for the purchase of
annuty contracts for the beneft of such empoyee;
(2) such contrbuton s made to the trustee pursuant to a wrtten agree-
ment entered nto pror to October 21, 19 2, between the empoyer and the
trustee, or between the empoyer and the empoyee; and
(3) under the terms of the trust agreement the empoyee s not entted
durng hs fetme, e cept wth the consent of the trustee, to any payments
under annuty contracts purchased by the trustee other than annuty
payments.
The amount so contrbuted by the empoyer sha not consttute consderaton
pad by the empoyee for such annuty contract n determnng the amount of
annuty payments requred to be ncuded n hs gross ncome under secton
22(b) (2) ; e cept that f the ta mposed by ths chapter for any ta abe year
begnnng before anuary 1, 19 9, has been pad by the empoyee wth respect
to such contrbuton for such year, and not credted or refunded, the amount so
contrbuted for such year sha consttute consderaton pad by the empoyee
for such annuty contract. Ths subsecton sha have no appcaton wth
respect to amounts contrbuted to a trust after une 1, 19 9, f the trust on such
date was e empt under subsecton (a). For the purposes of ths subsecton,
amounts pad by an empoyer for the purchase of annuty contracts whch are
transferred to the trustee sha be deemed to be contrbutons made to a trust or
trustee and contrbutons apped by the trustee for the purchase of annuty
contracts; the term annuty contracts purchased by the trustee sha ncude
annuty contracts so purchased by the empoyer and transferred to the trustee;
and the term empoyee sha ncude ony a person who was n the empoy
of the empoyer, and was covered by the agreement referred to n paragraph
(2), pror to October 21, 19 2.
(b) The amendment made by subsecton (a) sha be appcabe to
ta abe years begnnng after December 31,1938.
S C. 6. R LIN UIS M NT OF POW RS IN C S OF R CIPROC L
TRUSTS.
(a) Secton 1000 of the Interna Revenue Code (reatng to mpos-
ton of gft ta ) s hereby amended by addng at the end thereof the
foowng new subsecton:
(g) Cebtan Recproca Trusts. In the case of property n a trust created
pror to anuary 1, 19 0, f and to the e tent that such property may be deemed
to have been transferred to such trust by a person other than the nomna grantor
of such property (by reason of the fact that such person has made a recproca
transfer of property n trust), then a renqushment by such person on or before
December 31, 19 0, of any power over such property or over the Income there-
from sha not be deemed a transfer of property for the purposes of ths chap-
ter. In the event of such renqushment, the recproca transfer made by the
person renqushng such power sha be deemed, for the purposes of ths
chapter, to have been a competed gft at the tme such recproca transfer was
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

1

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
278
made. Ths subsecton sha appy ony f, at the tme such person made the
aforesad recproca transfer of property, a aw was n effect mposng a ta
upon the transfer of property by gft and a gft ta was pad wth respect to such
recproca transfer, and not credted or refunded.
. (b) Secton 01 of the Revenue ct of 1932 (mposng a gft ta )
s hereby amended by addng at the end thereof the foowng new
subsecton:
(d) Certan Recproca Trusts. In the case of property transferred n trust
pror to anuary 1, 19 0, If and to the e tent that such property may be deemed
to have been so transferred by a person other than the nomna grantor of snctr
property (by reason of the fact that such person has made a.recproca transfer
of property n trust), then a renqushment by such person of any power over
such property or over the ncome therefrom sha.not be deemed a transfer of
property for the purposes of ths tte. In the event of such renqushment on
or before December 31, 19 0, the recproca transfer made by the person ren-
qushng such power sha be deemed, for the purposes of ths tte, to have been
a competed gft at the tme such recproca transfer was made. Ths subsec-
ton sha appy ony f, at the tme such person made the aforesad recproca
transfer of property, a aw was n effect mposng a ta upon the transfer of
property by gft and a gft ta was pad wth respect to such recproca transfer,
and not credted or refunded.
(c) In the case of a decedent who renqushed on or before Decem-
ber 31, 19 0, a power descrbed n secton 1000(g) of the Interna
Revenue Code, such renqushment sha, for the purposes of secton
811(d) of such Code, be deemed not to have been made n contempa-
ton of the death of such decedent f such renqushment, by vrtue
of the enactment of ths secton, s not deemed a transfer of property
for the purposes of the gft ta . The provsons of ths subsecton
sha be appcabe wth respect to estates of decedents dyng after
February 10, 1939. .
S C. 7. TR NSF RS T ING FF CT T D T .
(a) Secton 811(c) of the.Interna Revenue Code (reatng to trans-
fers m contempaton of or takng effect at death) s hereby amended
to read as foows:
(c) Transfers n Contempaton of, or Takng ffect at. Death.
(1) Genera rue. To the e tent of any nterest theren of whch the
decedent has at any tme made a transfer (e cept n case of a bona fde
sae for an ndequnte and fu consderaton n money or money s worth), by
trust or otherwse
( ) n contempaton of hs death. ny transfer of a matera part
of hs property n the nature of a fna dsposton or dstrbuton
thereof, made by the decedent wthn two years pror to hs death
wthout such consderaton, sha, uness shown to the contrary, be
deemed to have made In contempaton of death wthn the meanng
of ths subchapter; or
( ) under whch he has retaned for hs fe or for any perod not
ascertanabe wthout reference to hs death or for any perod whch
does not n fact end before hs deat () the possesson or en|oyment
of, or the rght to the ncome from, the property, or () the rght,
ether aote or n con|uncton wth any person, to desgnate the persons
who sha possess or en|oy the property or the ncome therefrom; or
(C) ntended to take effect n possesson or en|oyment at or after hs
death.
(2) Transfers takng effect at death transfers pror to October 8,
19 9. n nterest n property of whch the decedent made a transfer, on or
before October 7, 19 9, ntended to take effect n possesson or en|oyment
at or after hs death sha not be ncuded n hs gross estate under paragraph
(1) (C) of ths subsecton uness the decedent has retaned a reversonary
nterest n the property, arsng by the e press terms of the nstrument of
transfer and not by operaton of aw, and the vaue of such reversonary
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

1

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
279
nterest mmedatey before the death of the decedent e ceeds per centum
of the vaue of such property. For the purposes of ths paragraph, the term
reversonary nterest ncudes a possbty that property transferred by the
deeedent ( ) may return to hm or hs estate, or ( ) may be sub|ect to a
power of dsposton by hm, but such term does not ncude a possbty
that the ncome aone from such property may return to hm or become
sub|ect to a power of dsposton by hm. The vaue of a reversonary
nterest mmedatey before the death of the decedent sha be determned
(wthout regard to the fact of the decedent s death) by usua methods of
vauaton, ncudng the use of tabes of mortaty and actuara prn-
cpes, pursuant to reguatons prescrbed by the Commssoner wth the
approva of the Secretary. In determnng the vaue of a possbty that
property may be sub|ect to a power of dsposton by the decedent, such
possbty sha be vaued as f t were a possbty that such property may
return to the decedent or hs estate.
(3) Transfers takng effect at death transfers after ootoher ,
19 9. n nterest n property transferred by the decedent after October 7,
ISM ), sha be ncuded n Is gross estate under paragraph (1)(C) of ths
subsecton (whether or not the decedent retaned any rght or nterest n
the property transferred) f and ony f
( ) possesson or en|oyment of the property can, through ownershp
of such nterest, be obtaned ony by survvng the decedent; or
( ) under aternatve contngences provded by the terms of the
transfer, possesson or en|oyment of the property can, through owner-
shp of such nterest, he obtaned ony by survvng the earer to occur
of () the decedent s deat or () some other event; and such oter
event dd not n fact occur durng the decedent s fe.
Notwthstandng the foregong sentence, an nterest so transferred sha
not be ncuded n the decedent s gross estate under paragraph (1)(C) of
ths subsecton f possesson or en|oyment of the property coud have been
obtaned by any benefcary durng the decedent s fe through the e ercse
of a power of appontment (as dened n secton 81(fM2)) whch n
fact was e ercsabe mmedatey pror to the decedent s death.
(b) The amendment made by subsecton (a) sha be appcabe wth
respect to estates of decedents dyng after February 10, 1939. The
provsons of secton 811 (c) of the Interna Revenue Code, as amended
by subsecton (a), sha (e cept as otherwse specfcay provded n
such secton or n the foowng sentence) appy to transfers made on,
before, or after February 26, 1926. The provsons of secton 811
(c) (1) ( ) of such Code sha not, n the case of a decedent dyng pror
to anuary 1,19 0, appy to
(1) a transfer made pror to March ,1931; or
(2) a transfer made after March 3, 1931, and pror to une 7,
1932, uness the property transferred woud have been ncudbe
n the decedent s gross estate bv reason of the amendatory anguage
of the |ont resouton of March 3, 1931 ( 6 Stat. 1 16).
No nterest sha be aowed or pad on any overpayment resutng
from the appcaton of subsecton (a) wth respect to any payment
made pror to the date of the enactment of ths ct.
(c) If refund or credt of any overpayment resutng from the
appcaton of subsectons (a) and (b) s prevented on the date of
the enactment of ths ct, or wthn one year from such date, by the
operaton of any aw or rue of aw (other than secton 3760 of the
Interna Revenue Code, reatng to cosng agreements, and other
than secton 3761 of such Code, reatng to compromses), refund or
credt of such overpayment may, nevertheess, be made or aowed f
cam therefor s fed wthn one year from the date of enactment
of ths ct. Ths subsecton sha not appy wth respect to a transfer
of property n case the decedent retaned for hs fe or for any perod
not ascertanabe wthout reference to hs death or for any perod
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

1

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
280
whch dd not n fact end before hs death (1) the possesson or en-
|oyment of, or the rght to the ncome from, the property, or (2) the
rght, ether aone or n con|uncton wth any person, to desgnate
the persons who shoud possess or en|oy the property or the ncome
therefrom.
S O. 8. T FR R L S OF C RT IN LIF ST T S.
In the case of a transfer of property made pror to une 7, 1932,
under whch the grantor retaned (1) the possesson or en|oyment of,
or the rght to the ncome from, the property, or (2) the rght, ether
aone or n con|uncton wth any person, to desgnate the persons who
sha possess or en|oy the property or the ncome therefrom, then an
assgnment by the grantor of such possesson, en|oyment, or rght to
ncome, or a renqushment by hm of such rght of desgnaton, sha,
f made n 19 9 or 19 0, not be deemed a transfer of property for the
purposes of chapter of the Interna Revenue Code, and sha, f
made pror to 19 1, not be deemed to have been made n contempaton
of death wthn the meanng of chapter 3 of such Code. The fore-
gong provsons sha not appy
( ) f the transfer was made after March 3,1931, and pror to
une 7, 1932, and f the property transferred woud have been
ncudbe n the grantor s gross estate upon hs death by reason
of the amendatory anguage of the |ont resouton of March 3,
1931 ( Stat. 1 16); or
( ) f the property transferred woud have been ncudbe n
the grantor s gross estate under secton 811(d) of the Interna
Revenue Code had he ded on October 7,19 9.
Sec. 9. Paragraph 1798 of the Tarff ct of 1930, as amended, s
hereby amended by strkng out the fgure 100 n the thrd provso
and nsertng n eu thereof the fgure 200 .
S C. 10. MPTION FROM T DDITION L ST T T FOR C R-
T IN M M RS OF RM D FORC S.
(a) Subchapter of chapter 3 of the Interna Revenue Code (reat-
ng to addtona estate ta ) s amended by addng at the end thereof
the foowng new secton:
S C. 939. C RT IN M M RS OF RM D FORC S.
The ta mposed by secton 93 sha not appy to the transfer of the net estate
of a ctzen or resdent of the Unted States dyng on or after December 7, 19 1,
and before anuary 1, 19 7, whe n actve servce as a member of the mtary
or nava forces of the Unted States or of any of the other Unted Natons f such
decedent
(1) was ked n acton; or
(2) ded as a resut of wounds or other n|ures, or of dsease, suffered
whe n ne of duty by reason of a hazard to whch he was sub|ected as an
Incdent of mtary or nava servce.
(b) If the refund of any overpayment resutng from the appca-
ton of ths secton s prevented on the date of the enactment of ths
ct, or wthn one year from such date, by the operaton of any aw
or rue of aw (other than secton 3761 of the Interna Revenue Code,
reatng to compromses), refund of such overpayment may, neverthe-
ess, bo made f cam therefor s fed wthn one year from the date
of the enactment of ths ct. No nterest sha be pad on any over-
payment resutng from the appcaton of ths secton.
pproved October 2 , 19 9.
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

2

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
281
19 9-2 -132
. . 1 6. PU LIC L W 3 , IG TY-FIRST CONGR SS
C PT R 787, FIRST S SSION
n ct Makng appropratons for the Natona Securty Counc,
the Natona Securty Resources oard, and for mtary functons
admnstered by the Natona Mtary stabshment for the fsca
year endng une 30, 19 0, and for other purposes.
e t enacted by the Senate and ouse of Representatves of the
Unted States of merca n Congress assembed, That the foowng
sums are approprated, out of any money n the Treasury not other-
wse approprated, for the fsca year endng une 30, 19 0, for the
Natona Securty Counc, the Natona Securty Resources oard,
and for mtary functons admnstered by the Natona Mtary
stabshment, and for other purposes, namey:

Sec. 622. (a) negotated contracts for procurement n e cess of
1,000 entered nto durng the fsca year 19 0 by or on behaf of the
Department of Defense (ncudng the Department of the rmy,
Department of the Navy, and Department of the r Force), and a
subcontracts thereunder n e cess of 1,000, are hereby made sub|ect
to the Renegotaton ct of 19 8 n the same manner and to the same
e tent as f such contracts and subcontracts were requred by such
ct to contan the renegotaton artce prescrbed n subsecton (a)
of such ct. ach contract and subcontract made sub|ect to the
Renegotaton ct of 19 8 by ths secton sha contan an artce stat-
ng that t s sub|ect to the Renegotaton ct of 19 8. In determnng
whether the amounts receved or accrued to a contractor or subcon-
tractor durng hs fsca year from contracts and subcontracts sub|ect
to the Renegotaton ct of 19 8 amount n the aggregate to 100,000,
recepts or accruas from contracts and subcontracts made sub|ect to
such ct by ths secton sha be added to recepts or accruas from a
other contracts and subcontracts sub|ect to such ct.
(b) Notwthstandng any agreement to the contrary, the proft
mtaton provsons of the ct of March 27,193 ( 8 Stat. 03, 0 ),
as amended and suppemented, sha not appy to any contract or
subcontract whch s sub|ect to the Renegotaton ct of 19 8.

Sec. 63 . Ths ct may be cted as the Natona Mtary stab-
shment ppropraton ct, 19 0 .

pproved October 2 ,19 9.
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

2

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
COMMITT R PORTS
19 9-19-13179
R CIPROC L PRI IL G S OF FR IMPORT TION TO M M RS OF
T RM D FORC S OF OT R N TIONS
Senate Report No. 68 , ghty-frst Congress, Frst Sesson. Caendar No. 687
uy 1 (egsatve day, une 2), 19 9
Mr. George, from the Commttee on Fnance, submtted the foowng report
(to accompany . R. 080) :
The Cotnmttee on Fnance, to whom was referred the b ( . R. 086) to
accord prveges of free mportaton to members of the armed forces of other
natons, havng consdered the same, report favoraby thereon wth amendments
and recommend that the b as amended do pass.
I. ouse
S CTION 1. R CIPROC L PRI IL G S OF FR IMPORT TION TO M M RS
OF T RM D FORC S OF OT R N TIONS
The purpose of the frst secton of ths b s to e tend to members of the armed
forces of any foregn country on duty n the Unted States, ts Terrtores or
possessons (of whom there are now ess than GOO) e empton from dutes and
nterna-revenue ta es mposed upon or by reason of the mportaton or wth-
drawa from warehouse of artces, for the offca use of a member of the armed
forces of a foregn country, or for the persona use of hmsef or any member of
hs mmedate famy. The e empton s condtoned upon recproca treatment
beng accorded to members of the armed forces of the Unted States (of whom
there are now appro matey 7,100 servng n foregn countres other than occuped
terrtory) and members of ther mmedate fames.
Personne of the armed forces of the Unted States and members of ther
mmedate fames are n most, f not a, cases accorded e emptons by the
foregn country n whch they are statoned comparabe to those provded n the
b, but the contnuaton of such prveges s |eopardzed by the termnaton on
une 30, MS, of a wartme statute (Pubc Law 03 , 7 th Cong.. 0 Stat. 62)
mted to members of the armed forces of the Unted Natons statoned In ths
country.
Subsecton (a) of ths secton woud e empt from dutes and Interna revenue
ta es mposed upon or by reason of mportaton or wthdrawa from warehouse
(ncudng ta es mposed by sees. 33 0 and 33( 0 of the Interna Revenue Code
upon artces comng nto the Unted States from the rgn Isands and Puerto
Rco), and from a customs charges and e actons, mported artces whch are
(1) for the offca use of persons who are on duty n the Unted States,
ts Terrtores, or possessons as members of the armed forces of any foregn
country, or
(2) for the persona use of such persons or members of ther mmedate
fames.
Ths subsecton contans a provso that, when the Secretary of the Treasury sha
fnd and offcay advse coectors of customs that members of the armed forces
of the Unted States, or members of ther mmedate fames, are not beng
accorded recproca prveges by a foregn country, the prveges granted by
the Unted States sha thereafter be accorded to members of the armed forces
of such foregn country, or to members of ther Immedate fames, ony to the
e tent that smar treatment s beng accorded by that country to members of
the armed forces of the Unted States or members of ther mmedate fames.
Subsecton (b) of ths secton provdes that the e emptons from dutes, ta es,
charges, and e actons sha be sub|ect to compance wth such reguatons as
the Secretary of the Treasury sha prescrbe, and subsecton (c) provdes that
the act sha ba effectve as to artces entered for consumpton, or wthdrawn from
warehouse for consumpton, on or after the day foowng the date of ts enactment.
282
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

2

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
283
The Secretary of Defense ncuded ths egsaton In the egsatve program
of the Natona Mtary stabshment. The measure has been coordnated wth
the Departments of the rmy, Navy, and r Force, and wth the Treasury
Department.
The Department of State n a communcaton to the Secretary of the Navy
recommended that egsaton of ths character be sought. The ureau of the
udget has nterposed no ob|ecton to ts enactment.
II. Fnance Commttee mendments
Your commttee has amended the b by addng the foowng new sectons
to grant certan e tensons of tme for ta purposes, and to provde certan
admnstratve amendments desgned to factate and mprove the operatons
of the ureau of Interna Revenue. These amendments do not provde for
genera ta revson snce they do not change ta abty. The amendments
have the approva of the Treasury Department and staff of the ont Commttee
on Interna evenue Ta aton. The Treasury Department s partcuary
an ous that the admnstratve amendments be enacted as soon as possbe.
S CTION 2. T NSION OP TIM FOR CL IMING R FUND WIT R SP CT TO
W R LOSS S
Ths secton e tends to December 31, 19 0, the tme for fng cams for credt
or refund wth respect to war osses sustaned n ta abe years begnnng n
19 1 and 19 2. smar e tenson, provded ast year, e pres December 31,
19 9. The treatment of war-oss recoveres as been under study for severa
years and may requre egsaton. Unt the treatment of recoveres s fnay
determned upon, the proposed e tenson for the takng of deductons seems
approprate.
S CTION 3. T NSION OF TIM IN T C S OF DISC RG OF
IND T DN SS
Ths secton e tends for 1 year the appcaton of sectons 22(b) (9) and (10) of
the Interna Revenue Code, whch permt a corporaton to e cude from ncome
amounts attrbutabe to dscharge of ndebtedness. The appcaton of these
two subsectons was n 19 7 e tended to December 31, 19 9, because t was con-
sdered that the whoe probem of the ta treatment of ncome reazed from
the canceaton of ndebtedness shoud be studed n connecton wth a genera
ta revenue b.
S CTION . RIFIC TION OF R TURNS
Ths secton gves the Commssoner authorty to emnate the oath n the
case of corporate, fducary, partnershp, estate, and gft-ta returns, and other
returns or statements. The present aw emnates the oath n the case of
ndvdua ncome-ta returns and empoyment-ta returns. These changes w
not ony reeve the ta payers of the burden of notarzng ther returns but w
e pedte the processng by the ureau of returns whch mght otherwse have
to be sent back for compance wth the oath requrement.
S CTION . R PORTS OF COMP NS TION
Ths secton woud repea secton 1 8(f) of the Interna Revenue Code. Under
secton 1 8(f) the Commssoner s requred to prepare an annua st, to be made
avaabe to the pubc, of compensaton pad by corporatons to a ndvduas
whose compensaton e ceeds 7 ,000. The st for 19 ( ncuded names of 96
ndvduas. The statutory requrement for the compaton of the annua st
nvoves the e amnaton of over 600,000 corporate returns, and represents an
admnstratve burden whch does not seem commensurate wth the vaue of the
nformaton obtaned. Much of ths nformaton s aready avaabe to the
pubc through reports requred to be fed wth the Securtes and change
Commsson. Informaton wth respect to saares of corporate offcers s requred
to be shown on corporate returns and s avaabe to congressona commttees
under secton (d) of the Code.
SUCTION 6. F ILUR TO FIL R TURN OR P Y T
t present, In the event of faure to fe return or pay over the ncome ta
wthhed at source, secton 1626(c) provdes that the addton to the ta sha
not be ess than 10. There s no comparabe provson wth respect to the Soca
Securty ta es and the Raroad Retrement ta . The ureau of Interna
868972 . - O 19
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

2

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
28
Revenue s pannng to combne admnstratvey the ncome-ta wthhodng
return wth the return under the Federa Insurance Contrbutons ct. Ths
combned form w resut n some addtona convenence for the empoyers and
ess e pense for the Government. When these returns are combned, t s desrabe
to have a unform mnmum addton for each of the two casses of ta .
owever, the present 10 mnmum addton n respect to wthhodng appears
to be hgh n reaton to the many sma amounts of ta , partcuary under the
Federa nsurance Contrbutons ct. Therefore, ths mnmum shoud be re-
duced to o for wthhodng and shoud be adopted aso as mnmum for the other
empoyment ta es. The provson has consderabe advantage n that t com-
pensates to some e tent the e pense of the deputy coector In gong out and
obtanng the return form.
ccordngy, ths secton woud provde n mnmum addton to the ta of |
for each empoyment ta (ncudng the ncome ta wthhed on wages).
S CTION 7. R TURNS ND P YM NTS OF CIS T S
Many of the e cse ta es are specfcay requred by statute to be returned on
a monthy bass. The fng of the returns at ess frequent Intervas woud reduce
the admnstratve work n the coector s offces and ease the ta payer s burden
of compance. Wth respect to certan e cses, such as the admssons ta , the
Commssoner has the authorty to determne the perod for whch ta returns
shoud be made. Ths secton woud gve to the Commssoner smar authorty
wth respect to those e cses as to whch monthy returns are now requred by
statute. Ths woud permt the shftng from a monthy to, for e ampe, a
quartery return bass for a partcuar e cse ta .
In order to assure current coecton of these e cse ta es and n the nterest of
effcency and protecton of the revenue, the amendment woud aso authorze the
Commssoner to requre the use of Government depostares as he may now do
n connecton wth the payment of empoyment ta es.
S CTION 8. D L G TION OF SS SSM NT UT ORITY
Ths secton of the b woud grant to the Commssoner the authorty to
deegate to any offcer or empoyee of the ureau of Interna Revenue, ncudng
the fed servce, the power under sectons 36 0, 36 1, and 36 2 of the Interna
Revenue Code reatng to the makng of assessments. Ths woud permt assess-
ment sts to be sgned n the fed by duy authorzed offcers and thus emnate
the admnstratve burdens and deays ncdent to the processng of a assessment
schedues n Washngton. The buk of the work s handed n the fed, and the
proposed deegaton to offcers n the fed woud be consstent wth the decen-
trazed ta admnstraton now n effect.
S CTION 9. CR DIT OR R FUND OF O RP YM NT OF T
Ths secton woud add to the Interna Revenue Code a provson authorzng
the Commssoner of Interna Revenue to credt the overpayment of one cass
of ta aganst ta es of other casses then due. Such credtng s not now possbe
under the Code. y recognzng the over-a ta abty of ta payers, the
amendment w| factate the coecton of ta es and e pedte the ad|ustment
of cases nvovng overpayments and underpayments of ta . Ths secton woud
aso amend secton 3772 to provde that the credt of an overpayment of any ta
sha for the purpose of any sut for refund he deemed to be a payment of ta
to the coector n offce at the tme the credt s aowed.
It woud aso amend secton 3770(a)( ) of the Interna Revenue Code to
factate the makng of abatements, credts, and refunds by rasng the present
mtaton of 1,000 to 10,000 on the amount of abatements, credts, and refunds
of nterna revenue ta es whch may be made by coectors, when so authorzed by
the Commssoner. Secton 3770(a) ( ) was added by secton (c) of the current
Ta Payment ct of 10 3 when a arge ncrease n the number of ncome-ta
refunds was antcpated. The e perence of the ureau under ths secton n
the makng of credts and refunds n the fed n ncome ta cases nvovng ess
than 1,000 has been satsfactory. It woud appear to be n the nterest of admn-
stratve effcency, wthout adversey affectng the revenue, to rase the mtaton
from 1,000 to 10,000.
S CTION 10. R PORTS TO CONGR SS OF R FUNDS
Secton 3776 of the Interna Revenue Code requres the Commssoner to make
report to Congress, at the begnnng of each reguar sesson, by nterna-revenue
dstrcts and aphabetcay arranged, of a refunds In e cess of 00. The
preparaton of the report mposes a consderabe admnstratve burden whch
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

2

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
28
woud be emnated by repeang ths provson, as provded by ths secton.
Durng the fsca year 19 8 there were some 180,000 refunds n e cess of 00,
the stng of whch requred the e amnaton of some 30,000,000 returns.
Under present aw (sec. 3777 of the Interna Revenue Code) the Commssoner
of Interna Revenue s prohbted from makng any refund or credt of ncome,
estate, or gft ta es n e cess of 7 ,000 unt 30 days after a report on such
refund or credt s made to the ont Commttee on Interna Revenue Ta aton.
Ths requres the Commssoner to prepare a speca report on each such case
and mposes upon the |ont commttee the responsbty of e amnng each of
these refunds and credts. Ths procedure nvovng revews at varous eves
necessary occasons consderabe deay n the cosng of cases and resuts n
unnecessary and e cessve nterest charges. Such addtona revew and deay
s not warranted n the smaer refund cases. ccordngy, the amendment rases
the report requrement from 7 ,000 to 200,000. Ths woud emnate consder-
abe work n the ureau of Interna Revenue and woud aow the staff of the
|ont commttee more tme to concentrate on the arge refunds.
S CTION 11. COLL CTORS S L RI S
Secton 39 (b) of the Interna Revenue Code mposes a mtaton of 7, 00
on saares of coectors of nterna revenue. The poston of Coector of Interna
Revenue was admnstratvey cassfed as grade C F-1 under secton 13 of the
Cassfcaton ct of 1923, whch paces a ma mum mtaton of 7, 00 on saares
wthn the grade uness a hgher rate s specfcay authorzed by aw. Co-
ectors are now recevng the pay ncreases provded by secton 0 , Federa
mpoyees Pay ct of 19 , and secton 2(a). Federa mpoyees Pay ct of 19 6.
owever, the 7, 00 mtaton contaned In secton 39 (b) prevents the poston
of coector from beng reaocated beyond grade C F-1 .
ccordngy, the amendment woud emnate the 7, 00 mtaton so as to
permt coectors of nterna revenue to be gven compensaton commensurate
wth the saares pad other offcers n the cassfed servce such as, for e ampe,
nterna revenue agents n charge, speca agents n charge, technca staff heads,
and dvson counse.
S CTION 12. P NS S OF D T CTION OF FR UDS
Under secton 3792 of the Interna Revenue Code the grantng of each n-
former s rewyrd must be approved by the Secretary of the Treasury. To permt
a smpfcaton of admnstratve procedures, ths secton woud amend secton
3792 of the Code to substtute for the requrement of approva of each reward by
the Secretary a rue that such rewards are to be made by the Commssoner of
Interna Revenue under reguatons approved by the Secretary.
19 9-23-13230
M NDING C RT IN PRO ISIONS OF T INT RN L R NU COD
ouse of Representatves Report No. 920, ghty-frst Congress, Frst Sesson
une 27,19 9
Mr. Camp, from the Commttee on Ways and Means, submtted the foowng
report to accompany . R. 208 :
The Commttee on Ways and Means, to whom was referred the b ( . R.
208) to amend certan provsons of the Interna Revenue Code, havng had the
same under consderaton, report favoraby thereon and recommend that the
b do pass.
I. G N R L ST T M NT
. R. 268 contans s provsons whch, n the opnon of your commttee,
remove certan nequates or hardshps n the present Federa ta aws. Fve
of the s were n the ta -revson b ( . R. 6712) passed by the ouse n the
second sesson of the ghteth Congress. The remanng provson (sec. )
has been caed to the attenton of your commttee snce that tme.
II. D T IL D DISCUSSION OF T ILL
I. Farmers returns. Present aw does not requre farmers to fe a decaraton
of estmated ta under the current ta -payment system unt anuary 1 of the
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

2

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
286
year foowng the year In whch the abty Is ncurred. The reason for ths
Is that ther ncome s more uncertan and sub|ect to greater fuctuaton than the
ncome of most other ta payers, and thus more dffcut to estmate before the
cose of the ta abe year. so, snce many farmers reaze reatvey tte
ncome before the atter part of the year, t woud be a rea fnanca hardshp
to them to requre the advance payment of part of ther ta n the forepart of
the year.
Snce the anuary 1 date Is reatvey cose to the March 1 date, when fna
returns must be fed, many farmers have preferred to fe ther fna returns by
anuary 1 In eu of makng a separate decaraton of estmated ta . ecause
farmers often nsst on fng fna returns, or precse estmates, by anuary 1 ,
the accountants, awyers, and other ta advsers n the towns and smaer ctes
who customary ad farmers n makng out ther returns have been deuged
wth work durng the frst 1 days of anuary.
In an effort to reeve ths stuaton, secton 1 of the b amends secton 60(a)
of the Interna Revenue Code to provde that f a farmer on a caendar-year
bass tes hs ncome-ta return on or before anuary 31 foowng the cose
of the year, and pays n fu the amount computed on the return as payabe, such
return and payment sha aso be consdered as the decaraton and payment of
estmated ta now requred to be made on or before anuary 1 . The present rght
of fanners to fe a decaraton of estmated ta by anuary 1 and a fna return
by March 1 s unchanged. Under present aw, farmers aso have the aternatve
of fng a fna return by anuary 1 , whch return s aso consdered as the
necessary decaraton of estmated ta . The b berazes ths aternatve by
e tendng ths fna fng date to anuary 31. Comparabe treatment s aso
accorded farmers makng returns on a fsca-year bass.
2. d|ustment to foregn ta credt n case of refund of foregn ta es.
Secton 2 of the b amends secton 131 of the Interna Revenue Code reatng
to credts for ta es of foregn countres and possessons of the Unted States.
Secton 131 provdes, sub|ect to mtatons, that there sha be credted aganst
Unted States ncome ta the amount of any ncome and e cess profts ta es
pa d or accrued durng the ta abe year to any foregn country or to any posses-
son of the Unted States. Secton 131 further provdes that, f any foregn
ta pad s refunded, the amount of the Unted States ta for the year or years
affected sha be redetermned, wth an ad|ustment n the credt to refect the
amount of the foregn ta refunded. Ths resuts n a defcency n the Unted
States ta payabe by the ta payer.
In some countres, however, a ta refund may Itsef (for reasons pecuar
to the ta structure of the partcuar country) be sub|ect to a ta for the year
n whch the refund s made. For e ampe, assume a ta payer has receved
credt aganst the Unted States ta n the year 19 for 1,000, the ncome ta
pad to a foregn country. In 10 7 the foregn country aows a refund of the
1,000 ta pad n 39 , but mposes for the year 19 7 a 300 ta on the amount
of the refund. It s not cear under secton 131 whether the Unted States foregn
ta credt for 19 shoud be reduced by the gross amount of the refund ( 1,000)
or by the net amount ( 700). Secton 2 of the b carfes the probem by pro-
vdng, n ad|ustng the foregn ta credt, that ony the net amount be con-
sdered as havng been refunded.
Secton 2 of ths b accordngy provdes that, In ths redetermnaton of the
amount due to the Unted States from the ta payer for the year or years affected
by a refund, the amount of ta es refunded (for whch credt has been aowed)
sha be reduced by the amount of any ta mposed by the foregn country or
possesson on such refund. owever, no foregn ta credt and no deducton
for any ta abe year sha be aowed wth respect to the ta mposed on the
refund by the foregn country or possesson. Ths s done to prevent the doube
aowance of the ta pad the foregn country on the refund, snce, under ths
provson the credt s n effect aowed for the earer year.
Your commttee s attenton has aso been drected to the fact that some foregn
countres ether do not pay nterest on refunds of ncome and e cess-profts ta es
or ther nterest rates are ower than the rate of nterest on a defcency de-
termned under Unted States aw. When a refund s made by a foregn country
wth respect to a ta for whch credt has been aowed under secton 131 of the
Code, nterest must be pad on the resutng defcency n Unted States ta . Ths
may resut n the ta payer payng more nterest to the Unted States wth respect
to the defcency than ho has receved from the foregn country on the refund
whch gave rse to the defcency. Your commttee beeves that t s ony equtabe
to mt the amount of nterest due on a defcency resutng from such refund.
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

2

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
287
ccordngy, secton 131 has been amended to provde that no nterest sha be
coected for any perod pror to the recept of the refund e cept to the e tent
nterest for such perod was pad by the foregn country or possesson on the
amount of such refund.
Secton 2 aso provdes that both of these amendments sha be appcabe to
ta abe years begnnng after December 31, 1938, and f the appcaton of these
amendments resuts n a refund to the ta payer such refund sha be made rre-
spectve of any provson or rue of aw f a cam for refund s fed wthn the
perod prescrbed by secton 322 of the Code or wthn 1 year from the enactment
of the b, whchever s ater.
S. Deducton of chartabe contrbutons by corporatons.
Secton 3 of the b amends secton 23 (q) of the Interna Revenue Code,
whch aows (sub|ect to the percent of net ncome mtaton) a deducton for
chartabe, etc., contrbutons pad by corporatons. Secton 23(q) of the Code
now aows ths deducton ony where payment Is actuay made wthn the
ta abe year.
The amendment berazes the rue respectng tme for payment by addng
a rue that any such contrbuton w, n the case of a corporaton on the
accrua bass, and at the eecton of the ta payer, made at the tme the return
s fed, be consdered as pad durng the ta abe year f payment s actuay made
on or before the ffteent day of the thrd month foowng the cose of the ta abe
year, and f the contrbuton has durng the ta abe year been authorzed by the
board of drectors.
Your commttee beeves ths amendment s desrabe because corporatons
ntendng to make the ma mum chartabe contrbutons aowabe as deductons
have e perenced dffcuty In determnng before the end of the ta abe year what
consttutes percent of ther net ncome.
Secton 3 aso amends secton 102(d) (1) ( ) of the Code (reatng to secton
102 net ncome) ; secton 336(a) (2) (reatng to net ncome of foregn persona
hodng companes) ; and secton 0 (a) (2) (reatng to net ncome of domestc
persona hodng companes), so as to ntegrate provsons of these sectons
reatng to chartabe contrbutons wth the amendment to secton 23(q).
The amendments made by ths secton are appcabe wth respect to ta abe
years begnnng after December 31, 19 2. In the case of any ta abe year be-
gnnng before anuary 1, 19 9, the eecton for such year may be made (n eu
of at the tme of the fng of the return for such year) at any tme wthn 1 year
after the date of the enactment of ths b, but not uness the ta payer consents n
wrtng to the assessment of any resutng defcency for any other ta abe year.
f. empton from stock transfer ta es.
Secton of the b amends secton 1802(b) of the Interna Revenue Code
(reatng to stamp ta es on transfers of stock) to e empt from ta transfers from
a corporaton to a regstered nomnee of such corporaton, or from one such
nomnee to another such nomnee, provded the shares of certfcates are hed by
the nomnee for the same purpose for whch they woud be hed f retaned by the
corporaton. Transfers by the nomnee back to the corporaton are aso e empted
from ta .
The provson s consdered desrabe because, athough the transfers descrbed
above represent changes n ega tte, they do not represent a rea change of
nterest. Corporatons frequenty fnd t convenent to make use of nomnees n
order to factate stock transfers. The use of nomnees makes t unnecessary
to obtan the vote of the board of drectors before makng a sae or transfer of
stock. Ths method of achevng fe bty n handng nvestments s beeved to
be desrabe snce no rea change n nterest occurs.
Secton aso provdes that n the case of the death before the date of the
enactment of ths b of a nomnee of a corporaton, no ta sha be mposed upon
any transfer of stock from hs e ecutor or admnstrator to the corporaton,
f such transfer s made on or before the date of the enactment of ths b or
wthn 1 year after such date.
. Contrbutons to certan trusteed pans provdng empoyee annutes.
Secton of ths b adds a new subsecton (d) to secton 16 of the Interna
Revenue Code to provde that contrbutons to certan empoyee annuty trusts by
empoyers sha not be ncuded n the ncome of the empoyees n the year n
whch the contrbutons were made, despte the fact that such trusts are not
quafed under secton 16 (a). The appcaton of the provson s mted to
trust agreements entered nto pror to October 21, 19 2, the effectve date of the
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

2

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
2S8
Revenue ct of 19 2, whch specfed the present quafcatons for empoyees
trusts under whch contrbutons by empoyers are not ta abe to empoyees as
ncome n the year n whch acqured by the trust The appcaton of the pro-
vson s further mted to trusts under whch (1) the contrbutons are to be
apped by the trustee for the purchase of annuty contracts for the beneft of
empoyees, and (2) the empoyee, e cept wth the consent of the trustee, s not
entted to any payments under the annuty contracts e cept annuty payments.
Thus, under ths provson, the empoyees are gven essentay the same treat-
ment as those covered by pans quafyng under secton 16 (a). Your com-
mttee beeves ths s desrabe, snce these contrbutons are not currenty
avaabe, wthout the consent of the trustee, to the empoyee (makng t neces-
sary for hm to ook to other sources for funds to pay the ta on the empoyer s
contrbuton), and snce the empoyee mght not have been on notce at the
tme of enterng nto such a contract that empoyer contrbutons under the pan
woud represent ncome currenty ta abe to hn.
Ths secton of the b aso contempates that the empoyer s contrbutons to
such a trust w be ta abe to the empoyee, when receved n ater years, as an
annuty (pursuant to secton 22(b) (2) of the Code). To ths end t s provded
that the amount contrbuted to such a trust by an empoyer sha not consttute
consderaton pad by the empoyee for such annuty contract n determnns
the amount of annuty payments requred to be ncuded n hs gross ncome
under secton 22(b) (2). n e cepton to ths rue w be appcabe n cases
where ncome ta for any ta abe year begnnng before anuary 1, 19 9, has
been pad by the empoyee wth respect to a contrbuton made by the empoyer
for such year and such ta s not credted or refunded to the empoyee. In such
event, the amount contrbuted by the empoyer for such year sha consttute
consderaton pad by the empoyee for such annuty contract n determnng the
empoyee s ta abty under secton 22(b) (2).
The amendments are appcabe to ta abe years begnnng after December 31.
1938, but have no appcaton wth respect to amounts contrbuted to a trust
after une 1, 19 9, f the trust on that date was e empt under secton 16 (a)
of the Code. Ths atter provson s to prevent empoyers who have pans whch
have been amended to meet the requrements of secton 16 (a) from removng
the amendments and permttng the pans to revert to ther former status.
6. Recproca trusts.
Pror to 19 0 certan recproca trusts were estabshed wth the apparent
ntent of mnmzng estate ta es by what were then consdered effectve means.
For e ampe, an ndvdua mght estabsh a trust provdng that the corpus of
the trust woud be payabe to hs chdren upon hs death. Under the genera
pan foowed, certan rghts n the trust were aso gven to hs wfe. These
rghts mght consst of a genera power to nvade the corpus, to change the bene-
fcares or to change the amount whch they woud receve. t the same tme
or a short tme after the husband set up the trust, hs wfe woud aso estabsh
a trust wth assets of a smar amount, vestng n hm powers equvaent to
those he had vested n her. y ths recproca devce t was thought that two
persons coud transfer property to ther hers wthout dmnshng effectve
contro durng fe but st payng the gft ta rather than the estate ta .
The acceptance by the Treasury, pror to 1939, of the gft ta es pad (and, t
s camed, the asserton of occasona defcences) caused some ta payers to
beeve ths was a egtmate devce.
In 19 0 n the Lehman case, however, the Crcut Court of ppeas for the
Second Crcut hed that where trusts are found to have been created each n
consderaton of the other, the nomna grantors are to be nterchanged for ta
purposes. Thus, n the type of case dscussed above, the husband woud be
consdered the grantor of the trust created by the wfe, and vce versa. Ths
means that the husband s consdered to have reserved powers n the trust
nomnay set up by hs wfe. Ths, under present aw, s suffcent to requre
ncuson of the entre trust corpus n hs gross estate upon hs death.
The court decsons n 19 0 and subsequent years put ta payers on notce as
to the probabe ta consequences of recproca trusts n the future. owever,
the stuaton s dfferent wth respect to trusts created before 19 0, the year of
the Lehman decson. If ta payers reease ther powers, they become sub|ect to
the gft ta , athough one gft ta may aready have been pad. If they retan
the powers, the trust property w be ncuded n the gross estate upon ther
death, even though a gft ta may have been pad.
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

2

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
289
Secton 6 of ths b removes hardshp by e tendng reef to persons who
created recproca trusts, vestng powers In each other, before anuary 1, 19 0.
It provdes that the renqushment of such a power on or before December 31,
19 0, w (1) not be sub|ect to the gft ta , and (2) not be consdered, for the
purpose of the estate ta , as havng been made n contempaton of death. ow-
ever, the reef provded from the estate ta woud appy ony f the person who
renqushed the power ded after December 31, 1939. Secton 6 aso provdes
that, f ether grantor renqushes hs power, the other recproca trust created
by hm must, for a gft ta purposes, be treated as a competed gft when made.
Secton 6 does not appy, however, to a renqushment by a person who made
hs recproca transfer whe a gft ta aw was n effect uness (1) gft ta was
pad upon such recproca transfer and not credted or refunded, or (2) a tmey
gft ta return was made by such person on account of such recproca transfer
but no gft ta was pad upon such transfer because of deductons and e cusons
camed on the return. It aso does not appy to the assgnment of a fe estate
or other nterest (as dstngushed from the renqushment of a power) whch
has been created n a recproca trust.
19 9-23-13231
M NDING C RT IN PRO ISIONS OF T INT RN L R NU COD
Senate Report No. 831, ghty-frst Congress, Frst Sesson. Caendar No. 838
ugust 3 (egsatve day, une 2), 19 9
Mr. George, from the Commttee on Fnance, submtted the foowng report
to accompany . R. 208 :
The Commttee on Fnance, to whom was referred the b ( . R. 268)
amendng certan provsons of the Interna Revenue Code, havng consdered
the same, report favoraby thereon wth amendments and recommend that the
b as amended do pass.
I. G N R L ST T M NT
. R. 268 contans nne provsons whch n the opnon of your commttee,
remove certan nequtes or hardshps n the present Federa ta aws. S of
the nne (a but sectons , 7, and 9) were In the revenue revson b ( . R.
6712) passed by the ouse but not e onsdered by your commttee n the second
sesson of the ghteth Congress. Your commttee aSded the ast three sectons
of the b and amended sectons and 6. The remanng sectons are the same
as they were n the b as t passed n the ouse.
II. D T IL D DISCUSSION OF T ILL
1. Farmers returns.
Present aw does not requre farmers to fe a decaraton of estmated ta
under the current ta -payment system unt anuary 1 of the year foowng
the year n whch the abty s ncurred. The reason for ths s that ther
Income s more uncertan and sub|ect to greater fuctuaton than the Income of
most other ta payers, and thus more dffcut to estmate before the cose of Ihe
ta abe year. so, snce many farmers reaze reatvey tte ncome before
the atter part of the year, t woud be a rea fnanca hardshp to them to
requre the advance payment of part of ther ta n the forepart of the year.
Snce the anuary 1 date s reatvey cose to the March 1 date, when fna
returns must be fed, many farmers have preferred to fe ther fna returns by
anuary 1 n eu of makng a separate decaraton of estmated ta . ecause
farmers often nsst on fng fna returns, or precse estmates, by anuary 1 ,
the accountants, awyers, and other ta advsers n the towns and smaer ctes
who customary ad farmers n makng out ther returns have been deuged wth
work durng the frst 1 days of anuary.
In an effort to reeve ths stuaton, secton 1 of the h amends secton 60(a)
of the Interna Revenue Code to provde that f a farmer on a caendar-year bass
fes hs ncome-ta return on or before anuary 31 foowng the cose of the
year, and pays n fu the amount computed on the return as payabe, such
return and payment sha aso be consdered as the decaraton and payment of
estmated ta now requred to be made on or before anuary 1 . The present
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

2

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
290
rght of farmers to fe a decaraton of estmated ta by anuary 1 and a fna
return by March 1 s unchanged. Under present aw, farmers aso have the
aternatve of fng a fna return by anuary 1 , whch return s aso consdered
as the necessary decaraton of estmated ta . The b berazes ths aternatve
by e tendng ths fna fng date to anuary 31. Comparabe treatment s aso
accorded farmers makng returns on a fsca-year bass.
2. d|ustment to foregn ta credt n case of refund of foregn ta es.
Secton 2 of the b amends secton 131 of the Interna Revenue Code reatng
to credts for ta es of foregn countres and possessons of the Unted States.
Secton 131 provdes, sub|ect to mtatons, that there sha be credted aganst
Unted States ncome ta the amount of any ncome and e cess profts ta es pad
or accrued durng the ta abe year to any foregn country or to any possesson
of (he Unted States. Secton 131 further provdes that, f any foregn ta pad
s refunded, the amount of the Unted States ta for the year or years affected
sha 1) redetermned, wth an ad|ustment n the credt to refect the amount of
the foregn ta refunded. Ths resuts n a defcency n the Unted States ta
payabe by the ta payer.
In some countres, however, a ta refund may tsef (for reasons pecuar
to the ta structure of the partcuar country) be sub|ect to a ta for the year
n whch the refund s made. For e ampe, assume a ta payer has receved credt
aganst the Unted States ta n the year 19 for 1,0(10, the ncome ta pad to a
foregn country. In 10 7 the foregn country aows a refund of the 1,000 ta
pad n 19 , but mposes for the year 19 7 a . 00 ta on the amount of the refund.
It s not cear under secton 131 whether the Unted States foregn ta credt for
19 shoud be reduced by the gross amount of the refund ( 1,000) or by the net
amount ( 700). Secton 2 of the b carfes the probem by provdng, n ad|ust-
ng the foregn ta credt, that ony the net amount be consdered as havng been
refunded.
Secton 2 of ths b accordngy provdes that, n ths redetermnaton of the
amount due to the Unted States from the ta payer for the year or years affected
by a refund, the amount of ta es refunded (for whch credt has been aowed)
sha be reduced by the amount of any ta mposed by the foregn country or pos-
sesson on such refund. owever, no foregn ta credt and no deducton for
any ta abe year sha be aowed wth respect to the ta mposed on the refund
by the foregn country or possesson. Ths s done to prevent the doube aow-
ance of the ta pad the foregn country on the refund, snce, under ths provson
the credt s n effect aowed for the earer year.
Your commttee s attenton has aso been drected to the fact that some foregn
countres ether do not pay nterest on refunds of ncome and e cess profts ta es
or ther nterest rates are ower than the rate of nterest on a defcency deter-
mned under Unted States aw. When a refund s made by_a foregn country
wth respect, to a ta for whch credt has been aowed under secton 131 of the
Code, nterest must be pnd on the resutng defcency n Unted States ta . Ths
may resut n the ta payer payng more nterest to the Unted States wth respect
to the defcency than he has receved from the foregn country on the refund
whch gave rse to the defcency. Your commttee beeves that t s ony equ-
tabe to mt the amount of nterest due on a defcency resutng from such
refund. ccordngy, secton 131 has been amended to provde that no nter-
est sha be coected for any perod pror to the recept of the refund e cept to
the e tent nterest for such perod was pad by the foregn country or possesson
on the amount of such refund.
Secton 2 aso provdes that both of these amendments sha be appcabe to
ta nbe years begnnng after December 31, 1938, and f the appcaton of these
amendments resuts In a refund to the ta payer such refund sha be made
rrespectve of any provson or rue of aw If a cam for refund s fed wthn
the perod prescrbed by secton 322 of the Code or wthn 1 year from the enact-
ment of the b, whchever Is ater.
S. Deducton of chartabe contrbutons by corporatons.
Secton 3 of the b amends secton 23(q) of (he Interna Revenue Code,
whch aows (sub|ect to the percent of net ncome mtaton) a deducton for
chartabe, etc., contrbutons pad by corporatons. Secton 23(q) of the Code
now aows ths deducton ony where payment s actuay made wthn the
ta abe year.
The amendment berazes the rue respectng tme for payment by addng
a rue that any such contrbuton w, n the case of a corporaton on the
accrua bass, and at the eecton of the ta payer, made at the tme the return
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

2

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
291
Is fed, be consdered as pad durng the ta abe year f payment s actuay
made on or before the ffteenth day of the thrd month foowng the cose of
the ta abe year, and f the contrbuton has durng the ta abe year been author-
zed by the board of drectors.
Your commttee beeves ths amendment s desrabe because corporatons n-
tendng to make the ma mum chartabe contrbutons aowabe as deductons
have e perenced dffcuty n determnng before the end of the ta abe year what
consttutes percent of ther net ncome.
Secton 3 aso amends secton 102(d) (1) ( ) of the Code (reatng to secton
102 net ncome) ; secton 336(a) (2) (reatng to net ncome of foregn persona
hodng companes) ; and secton 0 (a) (2) (reatng to net ncome of domes-
tc persona hodng companes), so as to ntegrate provsons of these sectons
reatng to chartabe contrbutons wth the amendment to secton 23 (q).
The amendments made by ths secton are appcabe wth respect to ta abe
years begnnng after December 31, 19 2. In the case of any ta abe year begn-
nng before anuary 1, 19 9, the eecton for such year may be made (n eu of
at the tme of the fng of the return for such year) at any tme wthn 1 year
after the date of the enactment of ths b, but not uness the ta payer consents
n wrtng to the assessment of any resutng defcency for any other ta abe
year.
empton from stock transfer ta es.
Secton of the b amends secton 1802(b) of the Interna Revenue Code
(reatng to stamp ta es on transfers of stock) to e empt from ta transfers
from a corporaton to a regstered nomnee of such corporaton, or from one such
nomnee to another such nomnee, provded the shares or certfcates are hed
by the nomnee for the same purpose for whch they woud be hed f retaned
by the corporaton. Transfers by the nomnee back to the corporaton are aso
e empted from ta .
The provson s consdered desrabe because, athough the transfers descrbed
above represent changes n ega tte, they do not represent a rea change of
nterest. Corporatons frequenty fnd t convenent to make use of nomnees n
order to factate stock transfers. The use of nomnees makes t unnecessary
to obtan the vote of the board of drectors before makng a sae or transfer of
stock. Ths method of achevng fe bty n handng nvestments s beeved
to be desrabe snce no rea change n nterest occurs.
Secton aso provdes that n the case of the death before the date of the
enactment of ths b of a nomnee of a corporaton, no ta sha be mposed upon
any transfer of stock from hs e ecutor or admnstrator to the corporaton, f
such transfer s made on or before the date of the enactment of ths b or wthn
1 year after such date.
. Contrbutons to certan trusteed pans provdng empoyee annutes.
Secton of ths b as passed by the ouse adds a new subsecton (d) to sec-
ton 16 of the Interna Revenue Code to provde that contrbutons to certan
empoyee annuty trusts by empoyers sha not be ncuded n the ncome of the
empoyees n the year n whch the contrbutons were made, despte the fact
that such trusts are not quafed under secton 16 (a). The appcaton of the
provson s mted to trust agreements entered nto pror to October 21, 19 2,
the effectve date of the Revenue ct of 19 2, whch specfed the present quaf-
catons for empoyees trusts under whch contrbutons by empoyers are not
ta abe to empoyees as ncome n the year n whch acqured by the trust. The
appcaton of the provson s further mted to trusts under whch (1) the con-
trbutons are to be apped by the trustee for the purchase of annuty contracts for
the beneft of empoyees, and (2) the empoyee, e cept wth the consent of the
trustee, s not entted to any payments under the annuty contracts e cept an-
nuty payments. Thus, under ths provson, the empoyees are gven essentay
the same treatment as those covered by pans quafyng under secton 16 (a).
Your commttee beeves ths s desrabe, snce these contrbutons are not cur-
renty avaabe, wthout the consent of the trustee, to the empoyee (makng t
necessary for hm to ook to other sources for funds to pay the ta on the empoy-
er s contrbuton), and snce the empoyee mght not have been on notce at the
tme of enterng nto such a contract that empoyer contrbutons under the pan
woud represent ncome currenty ta abe to hm.
s ndcated above ths secton as passed by the ouse woud have postponed
the ta ng to empoyees of contrbutons by empoyers for annuty contracts (un-
der the condtons specfed) ony where the empoyer made the contrbutons to
the trust, and the trustee purchased the annuty contracts for the beneft of the
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

2

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
292
empoyees. Your commttee has amended ths secton of the b to e tend
smar treatment to amounts whch the empoyer hmsef used to purchase the
annuty contracts subsequenty transferred to the trust. Your commttee beeves
that there s no sgnfcant dfference between these two types of cases and pro-
poses, therefore, that the prospectve annutants n these cases be gven the
same ta treatment. The secton was aso amended to requre that the empoye
be n the empoy of the empoyer and covered by an agreement pror to October
21, 19 2. Otherwse t woud be possbe to brng under ths provson empoyees
who were on notce at the tme of enterng nto such a contract (after the passage
of the Revenue ct of 19 2) that empoyer contrbutons under the pan woud rep-
resent ncome currenty ta abe to them. The Ways and Means Commttee report
ndcated that ths was not the ntent of the ouse. Snce your commttee
agrees that ths s one of the prncpa reasons for proposng ths provson, t
has amended ths secton to mt the appcaton of ths provson as outned
above.
Ths secton of the b aso contempates that the empoyer s contrbutons to
such a trust, or for the purchase of annuty contracts turned over to the trust, w
be ta abe to the empoyee, when receved n ater years, as an annuty (pursu-
ant to secton 22(b) (2) of the Code). To ths end t s provded that the amount
so contrbuted by an empoyer sha not consttute consderaton pad by the
empoyee for such annuty contract n determnng the amount of annuty pay-
ments requred to be ncuded n hs gross ncome under secton 22(b) (2). n
e cepton to ths rue w be appcabe n cases where ncome ta for any ta abe
year begnnng before anuary 1,19 9, has been pad by the empoyee wth respect
to a contrbuton made by the empoyer for such year and such ta s not credted
or refunded to the empoyee. In such event, the amount contrbuted by the em-
poyer for such year sha consttute consderaton pad by the empoyee for such
annuty contract n determnng the empoyee s ta abty under secton
22(b)(2).
The provsons of ths secton are appcabe to ta abe years begnnng after
December 31, 1938, but have no appcaton wth respect to amounts contrbute
to a trust after une 1, 19 9, f the trust on that date was e empt under secton
16 (a) of the Code. Ths atter provson s to prevent empoyers who have
pans whch have been amended to meet the requrements of secton 16 (a) from
removng the amendments and permttng the pans to revert to ther former
status. In the case of empoyer-purchased annuty contracts whch are trans-
ferred to the trustee, the tme of the purchase of the annuty contract, rather than
the tme of transfer to the trustee, w govern the determnaton of whether or not
the contrbuton was made to the trust before or after une 1,19 9.
6. Recproca trusts.
Pror to 19 0 certan recproca trusts were estabshed wth the apparent ntent
of mnmzng estate ta es by what were then consdered effectve means. For
e ampe, nn ndvdua mght estabsh a trust provdng that the corpus of the
trust woud be payabe to hs chdren upon hs death. Under the genera pan
foowed, certan rghts n the trust were aso gven to hs wfe. These rghts
mght consst of a genera power to nvade the corpus, to change the benefcares
or to change the amount whch they woud receve. t the same tme or a short
tme after the husband set up the trust, hs wfe woud aso estabsh a trust
wth assets of a smar amount, vestng n hm powers equvaent to those he had
vested In her. y ths recproca devce t was thought that two persons coud
transfer property to ther hers wthout dmnshng effectve contro durng fe
but st payng the gft ta rather than the estate ta .
The acceptance by the Treasury, pror to 1939, of the gft ta es pad (and, t
s camed, the asserton of occasona defcences) caused some ta payers to
beeve ths was a egtmate devce.
owever, n 19 0 n Lehman v. Commssoner, 109 Fed. (2d) 99, the Crcut
Court of ppeas for the Second Crcut hed that where trusts are found to
have been created each n consderaton of the other, the nomna grantors are
to be nterchanged for ta purposes. Thus, n the type of case dscussed above,
the husband woud be consdered the grantor of the trust created by the wfe,
and vce versa. Ths means that the husband s consdered to have reserved
powers n the trust nomnay set up by hs wfe. Ths, under present aw, to
suffcent to requre Incuson of the entre trust corpus n hs gross estate upon
hs death.
The court decsons In 19 0 and subsequent years put ta payers on notce as
to the probabe ta consequences of recproca trusts n the future. owever,
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

2

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
293
the stuaton s dfferent wth respect to trusts created before 19 0, the year of
the Lehman decson. If ta payers reease ther powers, they become sub|ect
to the gft ta , athough one gft ta may aready have been pad. If they re-
tan the powers, the trust property w be ncuded n the gross estate upon ther
death, even though a gft ta may have been pad.
Secton 6 of ths b removes hardshp by e tendng reef to persons who
created recproca trusts, vestng powers n each other, before anuary 1, 19 0.
Ths secton amends secton 1000 of the Interna Revenue Code and correspond-
ng provsons of pror aw to provde that the renqushment of such a power
on or before December 31, 19 0, w not be sub|ect to the gft ta . Ths secton
aso provdes that such a renqushment s not to be consdered, for the purpose
of the estate ta , as havng been made n contempaton of death, but ony f
the person who made the renqushment ded after February 10, 1939. Ths
ast date was substtuted for December 31, 1939, to concde wth the date of the
enactment of the Interna Revenue Code. If ether grantor renqushes hs
power, the other recproca trust created by hm must, for a gft-ta purposes,
be treated as a competed gft when made.
Ths secton does not appy, however, to the assgnment of a fe estate or other
nterest (as dstngushed from the renqushment of a power) whch has been
created n a recproca trust.
Ths secton as amended by your commttee appes ony to a renqushment
by a person who made a recproca transfer upon whch gft ta was pad and
not credted or refunded. Ths secton as passed by the ouse aso apped
where the recproca transfer was made (1) whe no gft-ta aw was n effect,
or (2) whe a gft-ta aw was n effect but no gft ta was pad because of
deductons and e cusons camed on the return. Your commttee has mted
the scope of the provsons to cases where a pror gft ta was pad, snce ony
n such cases woud there be a doube gft ta under present aw as the resut
of the renqushment of the trust powers.
7. Transfers pror to March , 19S1, wth fe estate retaned.
Secton 7, whch your commttee has added to the ouse b, amends secton
811(c) of the Interna Revenue Code (reatng to the estate ta treatment of
transfers n contempaton of, or ntended to take effect n possesson or en|oy-
ment at or after, the decedent s death) to provde that property transferred be-
fore March ,1931, sha not be ncuded n the transferor s gross estate by reason
of the fact that he retaned an estate for hs fe n the transferred property.
Ths amendment s made necessary by the recent decson of the Supreme
Court, by a dvded Court, n the case of Commssoner v. Church (33 U. S. ( 32
( anuary 17, 19 9)), hodng property transferred by the decedent pror to 1931
to be ncudbe n hs gross estate because he retaned the ncome from the prop-
erty for fe. Ths resut was reached by overrung May v. ener (281 U. S.
238 (1930)), and three per curam opnons handed down on March 2, 1931, n
whch the Court had hed that transfers n whch the decedent retaned a fe
estate were not ta abe. The Congress n enactng a |ont resouton on March 3,
1931, to overcome the effect of May v. ener and reated cases dd not ntend
to appy the egsaton retroactvey. In fact, Mr. Garner, n e panng on
March 3, 1931, the |ont resouton reported by the Ways and Means Commttee,
stated:
We dd not make t retroactve for the reason that we were afrad that the
Senate woud not agree to t.
The Supreme Court tsef hed, n assett v. Wech (303 . S. 303 (193S)), that
the an ua ;e of the |ont resouton and ts subsequent reenactment was not meant
to appy retroactvey to transfers made before ts enactment.
Despte the fact that Congress has not seen ft to mt the effect of May v.
ener wth respect to transfers before .March , 1931, the present Supreme Court
had, after eghteen years, decded that ts statutory constructon n May v. chrr
was ncorrect. In the words of Mr. ustce eed s dssent from the Church
decson:
In reance upon a ong setted course of egsatve and |udca constructon,
donors have made property arrangements that shoud not now be upset summary
wth no stronger reasons for dong so than that former courts and the Congress
dd not nterpret the egsaton n the same way as ths Court now does.
In the |ont resouton of March 3, 1931, Congress created a new estate a
rue wth respect to transfers after March 3. It eft unchanged the rue n effect
for transfers before that date. It s the opnon of your commttee that the od
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

2

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
29
rue shoud have been contnued In effect wth respect to such transfers unt
changed by egsaton. Snce the rue has been changed by the Supreme Court
n the Church opnon, your commttee beeves that the Congress shoud act to
restore the estate ta aw to what t was pror to the Church opnon.
Some persons mght have surrendered ther fe estates after 1931 had they
not reed on the nterpretaton of the estate ta aw whch has now been over-
rued and n some cases consderabe hardshp may resut from appcaton of
the new nterpretaton presented n the Church case. It s the opnon of your
commttee that after a of these years these persons are entted to rey upon
the ong standng nterpretaton n May v. cner. and the proposed amendment
Is accordngy ntended to assure that resut. Whe the Treasury has proposed
reguatons whch woud reeve, n some cases, the hardshp arsng from app-
caton of the Church opnon, t woud be beyond the power of the Treasury to
aevate the fu effects of ths opnon, and egsaton s necessary to accompsh
ths.
The operaton of the amendment made by ths secton may be ustrated by
the foowng e ampe: , n 1928, transferred property n trust retanng a fe
estate and gvng the remander ndefeasby to and hs hers. Snce the
transfer was made before March , 1931, and the ony rght or nterest retaned
by the decedent In the property conssts of an estate for hs fe, the transfer s
not ntended to take effect n possesson or en|oyment at or after hs death
wthn the meanng of secton 811(c) as am ndod by ths secton of the b.
ence, the property s not ncudbe n the gross estate uness the transfer was
made n contempaton of death or uness the property fas wthn some other
subdvson of secton 811.
The amendment made to secton 811 (c) by ths secton of the b does not,
however, smary change the estate-ta treatment of a transfer made before
March , 1931, n case the decedent retaned both a fe estate and some other
rght or nterest n the transferred property. Thus, assume that , n 192S, trans-
ferred property n trust retanng a fe estate and gvng the remander to f
vng at s death. In ths case, snce the property w revert to by operaton
of aw f he shoud survve , has retaned more than a fe estate. ccord-
ngy, ths secton of the b does not reeve s estate from abty under the
estate ta wth respect to ths property.
The amendment made by ths secton s appcabe wth respect to estates of
decedents dyng after February 10,1939, the date of the enactment of the Interna
Revenue Code.
8. Reverters under the estate ta .
Under the present Interpretaton of the estate-ta aw, the fu vaue of property
transferred by the decedent durng hs fetme s ncuded n hs gross estate f
the foowng two condtons coe st: (1) Possesson and en|oyment of the trans-
ferred nterest can be obtaned ony by benefcares who must survve the dece-
dent ; and (2) the decedent or hs estate possesses a rght or nterest n the prop-
erty. It has been hed by the courts that the second of these condtons s sats-
fed where the decedent s nterest s ony a rght of reverter. Ths s ustrated
n a recent Supreme Court decson ( state of Spege v. Commssoner, 33 U. S.
701). In ths case Spege estabshed a trust when he was 7 years od and
hs three chdren were aged 2 , 1 , and 13. t hs death 20 years ater the
chdren were st vng and there were three grandchdren. Despte the fact
that the corpus of the trust woud revert to Spege ony f he survved a of hs
chdren and grandchdren, the entre vaue of ths property was ncuded n hs
gross estate. One of the |ustces n a dssentng opnon ponted out that, gven
the facts of the Spege case, the vaue to a settor |ust pror to death of a reverter
on a 1,000,000 trust fund (the Spege trust fund was about 1,1 0,000) woud
be about 70. s he phrased t: The reaton of 70 to 1,000,000 ordnary
woud be de mnms and certany not one whch woud nduce Congress to permt
the assessment of a ta of over 0,000 because of ts e stence.
Secton 8, whch your commttee has added to the ouse b, further amends
secton 811(c) of the Interna Revenue Code, to provde that the amount of
the transferred property to be ncuded n the gross estate sha not e ceed the
actuara vaue of the decedent s reversonary nterest mmedatey before hs
death. It appes ony n case the property transferred by the decedent woud not
be ncudbe under secton 811(c) n determnng the vaue of hs gross estate
e cept by reason of the fact that he retaned a reversonary Interest In the prop-
erty. The term reversonary nterest s defned so as to ncude both a pos-
sbty that the transferred property or a porton thereof may return to the dece-
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

2

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
29
dent or hs estate and a possbty that the transferred property or a porton
thereof may pass under the e ercse of a power by the decedent. The atter pos-
sbty may be ustrated by assumng that transferred property n trust to
accumuate the ncome unt hs death and then to pay the accumuated fund to
f vng; but f shoud predecease , then the fund Is to be pad to whomsoever
sha appont by w. Under the e stng constructon of secton 811(c), the
entre fund s ncudbe n s gross estate n the event of hs death durng s
fetme. The effect of ths secton of the b s to mt the amount ncudbe
to the vaue, mmedatey before s death, of the nterest whch he can appont
by w; e cept where the transfer was made n contempaton of death or where
the property fas wthn some other subdvson of secton 811.
The amendment made by ths secton s appcabe ony wth respect to estates
of decedents dyng after the date of enactment of the b.
9. Percentage depeton for perte and datomaceous earth.
Secton 9, whch was not contaned n the ouse b, amends secton 11 (b)
of the Interna Revenue Code to provde a dfferent bass for aowance of depe-
ton n the case of mnes or deposts of perte and datomaceous earth. The
effect of te amendments made by ths secton of the b s to add mnes or
deposts of perte and datomaceous earth to the st of nonmetac mnes or
deposts whch are aowed depeton n the amount of 1 percent of the gross
Income derved therefrom, and to make nappcabe to these mnes or deposts
the aowance of depeton upon the bass of dscovery vaue. It s proposed to
aow percentage depeton ony wth respect to perte and datomaceous earth
n the dred crude mnera form, before grndng or any other preparaton for any
partcuar market. Perte s a vocanc gass, and datomaceous earth, a chak-
ke, or cay-ke matera whch s the scfed skeeton remans of coona
agae.
The Drector of the ureau of Mnes reports that athough the ureau does
not have a detaed statstca record whch woud competey defne the degree
of competton of these mneras wth those now accorded percentage depeton,
such competton s known to e st. e further reports:
For e ampe, datomaceous earth s used as a heat-nsuatng matera and as
such competes wth vermcute n some appcatons. Datomaceous earth s
aso used as a fer n a wde varety of products, and therefore competes n vary-
ng degree wth other mneras that serve ths market, such as chna cay, bento-
nte, tac, and barte, a of whch are aowed percentage depeton.
Smary, perte competes wth vermcute n the ghtweght aggregate
market.
Other reports ndcate that perte or datomaceous earth, or both are aso
compettve wth ba and sagger cay, fedspar, mca, and pyrophyte. Snce a
of these mneras, as we as those mentoned above by the Drector of Mnes,
receve percentage depeton, your commttee beeves that the benefts of per-
centage depeton shoud aso be e tended to perte and datomaceous earth to
remove any ta dfferenta whch mght prevent them from competng on an
equa bass wth these other mneras.
It s not proposed to aow percentage depeton wth respect to the vaue added
as the resut of grndng or other speca preparaton because many of the e trac-
tors do not themseves carry on ths process, but rather se these mneras n
crude form and et others carry on any processng requred. Thus to aow per-
centage depeton wth respect to ths added vaue woud dscrmnate aganst
those seng these mneras n crude form, snce percentage depeton s not a-
owabe to processors.
The amendments made by ths secton are appcabe wth respect to ta abe
years begnnng after December 31, 19 8.
19 9-23-13232
INT RN L R NU COD M NDM NTS
ouse of Representatves Report No. 1 12, ghty-frst Congress, Frst Sesson
October 11, 19 9
Mr. Doughton, from the commttee of conference, submtted the foowng
conference report to accompany II. R. 268 :
The commttee of conference on the dsagreeng votes of the two ouses on
the amendments of the Senate to the b ( . R. 208) to amend certan provsons
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

2

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
296
of the Interna Revenue Code, havng met, after fu and free conference, have
agreed to recommend and do recommend to ther respectve ouses as foows:

ST T M NT OF T M N G RS ON T P RT OF T OUS
The managers on the part of the ouse at the conference on the dsagreeng
votes of the two ouses on the amendments of the Senate to the b ( . R. 268)
to amend certan provsons of the Interna Revenue Code, submt the foowng
statement n e panaton of the effect of the acton agreed upon by the conferees
and recommended n the accompanyng conference report :
mendment No. 1: The ouse b amended secton 16 of the Interna Revenue
Code to provde that contrbutons made by an empoyer to a trust to be apped
by the trustee for the purchase of annuty contracts for the benet of an em-
poyee sha not be ncuded, under certan condtons, n the ncome of the
empoyee n the year n whch the contrbuton s made, even though the trust
s not quafed under secton 16 (a). The Senate amendment e tends the
appcaton of ths provson of the ouse b to cases where the empoyer
purchased an annuty contract and transferred t to the trustee. The ouse b
mted the appcaton of the amendment to secton 16 to contrbutons made
pursuant to a wrtten agreement entered nto pror to October 21, 19 2. The
Senate amendment further mts the appcaton of the provson by provdng
that the term empoyee sha ncude ony a person who was n the empoy of
the empoyer, and was covered by the wrtten agreement, pror to October 21,19 2.
The ouse recedes.
mendments Nos. 2 and 3: The ouse b provded, wth respect to certan
recproca trusts, for the renqushment free of gft ta of any power over the
property n trust or over the ncome therefrom, f the renqushment s made
on or before December 31, 19 0. The ouse provson was not to appy f at
the tme of the transfer n trust a aw was n effect mposng a gft ta uness (1)
a gft ta was pad or (2) a gft ta return was made but no gft ta was pad
because of deductons and e cusons. The Senate amendments mt the appca-
ton of the ouse b to cases where the orgna transfer n trust was made at
a tme when a aw was n effect mposng a gft ta and a gft ta was pad
wth respect to the transfer. The ouse recedes.
mendment No. : Ths s a cerca amendment and the ouse recedes.
mendment No. : The ouse b provded, n connecton wth ts provsons
for renqushment free of gft ta of a power over a recproca trust, that the
renqushment of the power sha be deemed not to have been made n contempa-
ton of death for the purposes of the estate ta . Ths provson n the ouse b
was appcabe wth respect to decedents dyng after December 31, 1939. The
Senate amendment makes the provson appcabe to decedents dyng after
February 10, 1939, the date of the enactment of the Interna Revenue Code.
The ouse recedes.
mendments Nos. 6 and 7: These Senate amendments, for whch there are no
correspondng provsons n the ouse b, amend secton 811(c) of the Interna
Revenue Code to change the estate-ta treatment of transfers of property durng
fe whch are ntended to take effect n possesson or en|oyment at or after the
transferor s death. mendment No. 6 provdes that property so transferred be-
fore une 7, 1932, sha not be ncuded n the transferor s gross estate for estate-
ta purposes by reason of the fact that he retaned a fe estate or smar rghts
n the ncome from the property uness the transfer was made after March 3,1931,
and before une 7, 1932, and s ncudbe In hs gross estate by reason of the
amendatory anguage of the |ont resouton of March 3, 1931 ( 6 Stat. 1 16).
mendment No. 7 provdes that property so transferred sha not be ncuded n
the transferor s gross estate, by reason of the fact that he retaned a reversonary
nterest n the property, e cept to the e tent of the vaue of such reversonary n-
terest mmedatey before hs death. oth amendments appy ony to estates of
decedents dyng after February 10, 1939, the date of enactment of the Interna
Revenue Code. In certan cases affected ony by amendment No. 7, a 1-year perod
s provded for fng cams for refunds whch woud otherwse be barred. The
ouse recedes wth amendments.
The conference amendments make two changes n the Senate amendments
reatng to transfers of property made before March ,1931, n whch the decedent
reserved a fe estate or other ncome nterest. Under the Senate amendments,
such transfers are not, by reason of such reservaton, ncudbe n the decedent s
gross estate. Under the conference amendments, such transfers are e cuded
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

2

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
297
from the decedent s gross estate ony f hs death occurs hefore anuary 1, 19 0.
If the transferor des after December 31, 19 9, the property w be ncudbe,
under the conference amendments, n hs gross estate under subparagraph ( )
of secton 811(c) (1) of the Code; but such a transferor s gven certan ta -free
prveges f he dsposes of hs ncome nterest pror to 19 1. Specfcay, the
conference amendments provde that persons who made such transfers pror to
March , 1931, may assgn or renqush ther ncome nterests durng 19 9 and
19 0 free of gft ta , and aso provde that such assgnments or renqushments
sha, f made at any tme pror to 19 1, not be deemed to have been made n con-
tempaton of death. Ths prvege of ta -free assgnment or renqushment s
avaabe wthout regard to whether the transferor aso has a reversonary nter-
est n the property, but s not avaabe where the transferor had on October 7,
19 9, a power over the transferred property, and not over the ncome nterest ony,
whch woud requre the ncuson of the property under secton 811(d) of the
Code. In the case of recproca trusts whch were created each n consderaton
of the other, these ta -free prveges are avaabe to a fe tenant of a trust
whch he constructvey created. The ta mmuntes provded by these conference
amendments aso appy to a transfer made after March 3, 1931, and before une
7, 1932, wth reservaton by the transferor of an ncome nterest whch woud not
render the transferred property ncudbe n hs gross estate by reason of the
amendatory anguage n the |ont resouton of March 3, 1931.
The Senate amendments provde that f property transferred by the decedent
woud be ncudbe n hs gross estate ony by reason of the retenton by hm of
a reversonary nterest n the property, the amount to be ncuded sha not
e ceed the vaue of such nterest mmedatey before hs death. Whe the
Senate amendments appy to transfers whenever made, the conference amend-
ments provde one rue for transfers made pror to October 8, 19 9, and a dfferent
rue for subsequent transfers.
Wth respect to the transfer before October 8, 19 9, of an nterest ntended to
take effect n possesson or en|oyment at or after the decedent s death, the con-
ference amendments retan the present rue that the entre vaue of the nterest
s ncuded n the decedent s gross estate, but restrcts the appcaton of such
rue to cases n whch the decedent e pressy retaned a reversonary nterest
havng a vaue Immedatey before the decedent s death n e cess of percent
of the vaue of the transferred property. Where the reversonary nterest has a
vaue of not more than percent of the vaue of the transferred property, or
where t arses by operaton of aw (regardess of ts vaue), t w not cause the
property to be ncuded n the decedent s gross estate to any e tent.
The term reversonary nterest ncudes a possbty, whether vested or
contngent, that transferred property may return to the decedent or hs estate
or that transferred property may become sub|ect to a power of dsposton by
the decedent. The term does not, however, ncude rghts to ncome ony, such
as the rght to receve the ncome from a trust after the death of another person.
In determnng whether the vaue of the reversonary nterest e ceeds percent,
t s to be compared wth the entre vaue of the transferred property, ncudng
nterests whch are not dependent upon survvorshp of the decedent. Thus f
transferred property n trust wth the ncome payabe to for s fe wth
remander to uness predeceases , n whch event the property sha return
to , and des durng s fe, the vaue of s reversonary nterest mme-
datey before hs death sha be compared wth the entre vaue of the trust
corpus, wthout deducton of the vaue of s outstandng fe estate. rever-
sonary nterest whch, for e ampe, e sts n ony one-haf of the corpus of a
trust sha be computed as a percentage of the vaue of such one-haf. The vaue
s to be computed as of the moment mmedatey pror to the decedent s death
wthout regard to whether hs e ecutor eects to have the gross estate vaued as
provded under secton 811(|) of the Code. possbty that the decedent may
be abe to dspose of property under certan condtons sha be deemed to be
as vauabe as a rght to the return of the property to hm under those condtons.
The decedent s reversonary nterest s to be vaued by recognzed vauaton
prncpes, pursuant to reguatons prescrbed by the Commssoner of Interna
Revenue wth the approva of the Secretary of the Treasury, and, of course,
wthout regard to the fact of the decedent s death. The vaue sha be ascertaned
as though the decedent were, mmedatey before hs death, makng a gft of the
property and retanng the reversonary nterest. The rue of obnctte v. c-
verng (318 U. S. 18 ), under whch a reversonary nterest not havng an ascer-
tanabe vaue under recognzed vauaton prncpes s consdered to have a
vaue of zero, s to appy. Thus, f a reversonary nterest consstng of a rght
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

2

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
298
enforceabe n equty to compe a trustee to appy trust corpus for the support and
mantenance of the grantor woud be consdered to have a vaue of zero for gft
ta purposes were t beng retaned under a transfer by gft, t s to be smary
vaued for the purpose of the conference amendments.
The amendments ast descrbed appy ony where possesson or en|oyment of the
transferred nterest cannot be obtaned e cept by benefcares who must survve
the decedent. The e stng rue that a transfer of a property nterest s not
ntended to take effect n possesson or en|oyment at or after the decedent s death
uness the benefcares must survve the decedent to obtan possesson or en|oy-
ment s not dsturbed.
The foowng e ampes ustrate the appcaton of the conference amend-
ments to transfers made pror to October 8, 19 9:
ampe (1) : The decedent, pror to October 8, 19 9, transferred property n
trust, gvng the ncome therefrom to hs son for fe and the remander to hs
son s survvng ssue. It was further provded that f no ssue survved the son.
the property was to revert to the decedent or hs estate. In ths case, nether the
son nor hs ssue need survve the decedent In order to obtan possesson or en|oy-
ment of the property. Therefore, the transfer s not ta abe to any e tent under
secton 811(c) as amended n conference (nor under the e stng rue), the vaue
of the reversonary nterest beng mmatera for ths purpose.
ampe (2) : The decedent, pror to October 8, 19 9, transferred property n
trust to accumuate the ncome durng hs fe, and at hs death to pay the prnc-
pa and accumuated ncome to hs son f vng; f not, to the decedent or hs
estate. In ths case the son cannot obtan possesson or en|oyment of the prop-
erty uness e survves the decedent. Under the conference amendments the
entre vaue of the transferred property s, therefore, ncudbe n the decedent s
gross estate f the vaue of hs reversonary nterest mmedatey before hs death
e ceeds percent of the vaue of the trust property.
ampe (3) : The decedent n 1929 transferred property n trust reservng to
hmsef the ncome for hs fe, wth the remander to those fve named grand-
chdren who survve hm. The trust nstrument specfcay provded that f
none of the grandchdren survves hm, the property s to return to hm. The
decedent ded n 19 8 survved by the fve grandchdren. Under the conference
amendments the transferred property s not ncudbe (under secton
811(c) (1) ( )) n the decedent s gross estate by reason of hs fe estate snce he
ded pror to 19 0. Nor s the property ncudbe (under secton 811(c) (1) (C))
by reason of hs reversonary nterest snce ts vaue mmedatey before hs death
was ess than percent of the vaue of the trust property.
Under the conference amendments, the test of whether possesson or en|oy-
ment must awat the transferor s death w aso appy to transfers made after
October 7,19 9. The ta abty of such transfers s, however, not dependent upon
the retenton by the transferor of an nterest n the property, thus renderng
nappcabe the contrary rue enuncated by the Supreme Court n Rencrke v.
Northern Trust Co. (278 U. S. 339) that the property must pass from the pos-
sesson or contro of the transferor at hs death.
twofod rue appes to transfers made after October 7, 19 9, for the purpose
of determnng whether the transfer s ntended to take effect n possesson or
en|oyment at or after the decedent s death. The frst of these rues s that an
nterest n property transferred by the decedent s ncudbe n hs gross estate
f possesson or en|oyment of the property can, through ownershp of such nterest,
be obtaned ony by survvng the decedent. Where separate nterests are trans-
ferred to each of severa benefcares the above rue s to be separatey apped
to each nterest. Thus, f benefcary receves an nterest whch enabes hm
to obtan possesson or en|oyment of the property wthout survvng the decedent
and benefcary obtans an nterest whch enabes hm to obtan possesson
or en|oyment of the property ony by survvng the decedent, t s ony the transfer
of the nterest to benefcary whch s ntended to take effect In possesson or
en|oyment at or after the decedent s death. Lkewse, f the transferor gves
hs son the mmedate rght to receve the ncome from the property unt
years after the transferor s death, and the rght to the corpus upon the e pra-
ton of such term, t s ony the transfer of the atter nterest whch s ntended
to take eTect n possesson or en|oyment at or after the transferor s death.
The second rue s that an nterest n property transferred by the decedent
after October 7, 19 9, sha be ncuded n hs gross estate f, under aternatve
contngences provded by the terms of the transfer, possesson or en|oyment
of the property can, through ownershp of such nterest, be obtaned ony by
survvng the earer to occur of (1) the decedent s death or (2) some other
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

2

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
299
event; and such other event dd not n fact occur durng the decedent s fe.
Ths rue, ke the frst rue, s to be apped n the ght of the crcumstances
e stng mmedatey pror to the decedent s death. The e presson some
other event s ntended to ncude the e praton of a term of years or the
happenng or faure to happen of a certan or uncertan event (ncudng the
possbe e ercse of a power whch Is not a ta abe power of appontment as
denned n secton 811(f) (2) of the Code).
Nether of the above rues, however, draws nto the decedent s gross estate
an nterest n property transferred by hm f possesson or en|oyement of the
property was obtanabe durng the decedent s fe through the e ercse of a
power of appontment as defned n secton 811(f)(2) of the Code and such
power was n fact e ercsabe mmedatey pror to decedent s death.
The foowng e ampes ustrate the appcaton of the conference amendments
to transfers made after October 7, 19 9:
ampe (1) : The decedent, after October 7, 19 9, transferred property n
trust, provdng for an estate for fe n hs daughter, and a remander to the
chdren of the daughter. No part of the property s ncudbe. The daughter
can possess and en|oy the property through ownershp of the fe estate wthout
survvng the decedent. The same s true of the daughter s chdren wth respect
to ther remander nterest.
ampe (2) : The decedent, after October 7, 19 9, transferred property n
trust, to pay the ncome to hs wfe durng her fe, and at her deat to pay the
corpus to the decedent f vng, and f not, to hs chdren. The decedent was
survved by hs wfe. The transferred property, ess the outstandng fe estate
n the wfe, s ncudbe n the decedent s gross estate snce the chdren cannot
obtan possesson or en|oyment of the propery, through ownershp of ther
nterest, e cept by survvng the decedent.
ampe (3) : The decedent, after October 7, 19 9, transferred property n
trust to accumuate the ncome durng hs fe and at hs death to dstrbute the
prncpa and accumuated ncome to hs son or the son s estate. Whe the
decedent has retaned no rght or nterest n the property, the transfer s ta abe
snce possesson or en|oyment of the property cannot be obtaned e cept by
survvng the decedent.
ampe ( ) : The decedent, after October 7, 19 9, transferred property n
trust provdng for payment of the ncome to hs wfe unt her death, at whch
tme the son woud receve the corpus. If the son predeceased the wfe the
corpus was to revert to t decedent f vng at hs wfe s death : and f the
decedent was not then vng, t was to pass to or s estate. The decedent
was survved by hs wfe, hs son. and . Nether the nterest transferred to
the wfe nor to the son s ncudbe n the decedent s gross estate snce each
coud, through ownershp of hs nterest, obtan possesson or en|oyment of
the property even though the decedent was vng. The nterest transferred
to , however, s ncudbe under secton 811(c)(3)( ) (to the e tent of the
vaue of s nterest mmedatey after the decedent s death) snce s possesson
or en|oyment of the property, f t materazes, coud be obtaned ony by survv-
ng the decedent. Secton N (c)(3)( ) has no appcaton to ths e ampe
ampe ( ): The decedent, after October 7, 19 9, transferred property n
trust, to accumuate the ncome unt hs son reached the aw of 30, or unt the
decedent s pror deat. Upon the frst to occur of these events the son was to
receve the corpus. The decedent s death n fact occurred before hs son attaned
the age of 30. The transfer s ta abe under secton 811(c)(3)( ) snce the
son coud obtan possesson or en|oyment ony by survvng the earer to occur
of the decedent s death or the son s attanng age 30, and snce the decedent s
death n fact occurred frst.
ampe (6) : The decedent, after October 7, 19 9, transferred property In
trust provdng for accumuaton of the ncome durng hs fe, and at hs death
to pay the entre fund to hs chdren or ther ssue. s wfe was gven the
unrestrcted power to ater, amend, or revoke the trust. The wfe survved the
decedent and dd not n fact e ercse her power durng the decedent s fe. Under
the ast sentence of secton 811(c) (3) the transfer s not ta abe snce possesson
or en|oyment of the property was obtanabe durng the decedent s fe through
the e ercse of the wfe s power, whch was a power of appontment as defned
n secton 811(f) (2) of the Code, and was n fact e ercsabe mmedatey pror
to the decedent s death.
In order to effectuate the changes made by the conference amendments such
amendments subdvde secton 811(c) of the Code nto three paragraphs. Para-
808972 0 20
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

2

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
300
graph (1) merey states the e stng genera rue that transferred property s
ncudbe n the decedent s gross estate f made ( ) n contempaton of death,
( ) wth reservaton of an ncome nterest, or (C) f ntended to take effect n
possesson or en|oyment at or after hs death. Paragraph (2) provdes a mtng
requrement (the percent rue e paned above) n the case of transfers ntended
to tke effect n possesson or en|oyment at or after the decedent s death f made
before October 8, 19 9. Paragraph (3) contans the rues, heretofore e paned,
under whch a transfer sha be consdered to be ntended to take effect n
possesson or en|oyment at or after the decedent s death f made after October 7,
19 9.
Paragraph (1) ( ) of secton 811(c), as thus subdvded, contans the amenda-
tory anguage enacted nto the estate ta aw by secton 803(a) of the Revenue
ct of 1932, reatng to transfers n whch an ncome nterest s retaned. Pror
to Commssoner v. Church (33 U. S. 632) the Supreme Court had hed n the
case of ussett v. Wech (303 U. S. 303) that such amendatory 1932 anguage dd
not appy to transfers made pror to ts enactment. owever, the Church dec-
son hed that ths same type of transfer was ta abe wthout regard to the tme
of the transfer under the ntended to take effect n possesson or en|oyment
cause. For the sake of carty, the conference amendments make appcabe the
amendatory anguage of the 1932 act to transfers whenever made n cases of
decedents dyng after 19 9, thus retanng the resut of the Church decson for
the future. t the same tme the conference amendments aso provde certan
reef aganst hardshp as aready e paned.
The ncome nterests descrbed by secton 811(c)(1)( ) and by smar an-
guage esewhere n the conference amendments ncude reserved rghts to the
ncome from transferred property and rghts to possess or en|oy non-ncome-
producng property. Such nterests aso ncude a reserved power to desgnate
the persons who sha, durng the decedent s fe or durng any esser perod de-
scrbed n secton 811(c) (1) ( ), receve the ncome from transferred property or
who sha, durng any such perod, possess or en|oy non-ncome-producng prop-
erty. Such nterests do not, however, ncude powers over the transferred prop-
erty tsef not affectng the en|oyment of the ncome durng the decedent s fe.
The e presson not ascertanabe wthout reference to hs death as used n
secton 811(e) (1) ( ) and esewhere n the conference amendments ncudes the
rght to receve the ncome from transferred property after the death of another
person who n fact survved the transferor; but n such a case the amount to be
ncuded under secton 811(c)(1)( ) n the transferor s gross estate does not
Incude the vaue of the outstandng ncome nterest n such other person.
The conference amendments, n conformty wth the Senate amendments, do
not appy to decedents who ded on or before February 10,1939. No nterest sha
be aowed or pad on any overpayment resutng from the enactment of the con-
ference amendments wth respect to any payment made pror to the date of such
enactment.
The conference amendments, ke the Senate amendments, provde a rue for
cases n whch the refund or credt of an overpayment resutng from the enact-
ment of the amendments s prevented on the date of such enactment, or wthn one
year from such date, by the operaton of any aw or rue of aw (ncudng a
|udca determnaton, but not ncudng secton 3760 or 3761 of the Code). The
refund or credt s, nevertheess, to be made or aowed f It resuts from the
appcaton of the amendments to a transfer of property n whch the decedent
dd not retan any ncome Interest descrbed n secton 811(c)(1)( ), f cam
therefor s fed wthn one year from the date of the enactment of the b. ow-
ever, a refund or credt whch s so prevented may not be aowed f t resuts from
the appcaton of the amendments to a transfer of property n whch the decedent
retaned any such ncome nterest.
mendment No. S: The Senate amendment added a new secton to the ouse
b amendng: secton 11 (h) of the Code to provde percentage depeton at the
rate of 1 percent n the case of perte, datomaceous earth, trpo. grante,
marbe, bora mnes and deposts, sand, grave, stone, cacum and magnesum
carbonates, and a other nonmetac cays and mneras. The conferees agreed
to emnate ths amendment wth the understandng that the entre matter of
percentage depeton w be consdered eary ne t year after fu study and
hearngs. The Senate recedes.
mendment No. 9: The Senate amendment added a new secton to the ouse
b amendng paragraph 1798 of the Tarff ct of 1930 whch now provdes that
100 In vaue of artces may he brought nto ths country free of duty by a res-
dent of the Unted States returnng from abroad f such artces are for persona
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

3

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
301
use and other restrctve condtons are met. The Senate amendment ncreases to
200 the e stng e empton of 100. The ouse recedes wth a change In secton
number.
mendment No. 10: The Senate amendment added a new secton to the b to
provde that f stock n a corporaton was e changed after March 11, 19 1, and
pror to uy 1, 19 .1, by a testamentary trust for stock and other securtes n
such corporaton n pursuance of a recaptazaton under State aw of that cor-
poraton, and f the stock and securtes so receved by the trust are surrendered
pror to anuary 1, 19 0, to the corporaton soey n e change for stock dentca
n character and amount wth that prevousy hed by the trust, no gan, proft,
ncome, oss or deducton from such e change or ree change sha be recognzed,
for ncome ta purposes, to the corporaton or the trust. The Senate recedes.
mendment No. 11: The Senate amendment added a new secton to the ouse
b to provde that where a new corporaton s formed, pursuant to a pan of
reorganzaton, by usng part of the assets of an e stng corporaton, and the
stock of the new corporaton s dstrbuted to the stockhoders of the e stng
corporaton wthout surrender of the stock n the e stng corporaton, no ta
effect s recognzed wth respect to the stockhoder as a resut of the reorganza-
ton. The Senate recedes.
mendment No. 12: The Senate amendment added a new secton to the ouse
b amendng subchapter of Chapter 3 of the Interna Revenue Code to provde
that the addtona estate ta mposed by secton 93 does not appy n the case of
a ctzen or resdent dyng between December 6, 19 1, and anuary 1, 19 7, whe
n mtary servce of the Unted States or any of the Unted Natons, f the dece-
dent was ked n acton or ded as the resut of n|ures or of dsease suffered
In ne of duty by reason of a hazard to whch he was sub|ected as an ncdent of
mtary or nava servce. No nterest s to be pad on any refnnd resutng from
the amendment. The amendment further provdes that f the makng of a refund
resutng from the amendment s barred on the date of the enactment of the b,
or wthn 1 year from such date, by the operaton of any aw or rue of aw (ncud-
ng a udca determnaton but not ncudng secton 3761 of the Code) the refund
sha, nevertheess, be made f cam therefor s fed wthn 1 year from the date
of the enactment of the b. The ouse recedes wth a change In secton number.
R. L. Doro TON,
ere Cooper,
Wbur D. Ms,
. Sdney Camp,
Wat . Lynch,
Roy O. Woodruff,
Rchard M. Smpson,
N. M. Mason,
a omes,
Managers on the Part of the ouse.
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

3

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

3

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
IND

ccountng methods, accrua of retroactve ncrease n tem-

porary ar ma rates
d|usted gross ncome, e pendtures by Coumbus, Oho, poce
offcers from cash aowance for purchase and mantenance of
unforms
ffated corporatons, dena of eecton to fe separate caen-
dar year 19 0 returns
greements, cosng, pocy and procedure
r ma rates, temporary, accrua of retroactve ncrease
abama, county gasone cense ta , by whom deductbe
mendments:
Reguatons 116
Sectons 0 .102(M, 0 . 01(c), 0 .601, 0 .602,
0 .701, 0 .80 (a)
Sectons 0 .107, 0 ,60 , 0 .606 (added)
Reguatons 111
Sectons 29.22(d)- and 29.22(d)-2
Sectons 29.1 3-1, 29.1 3 3, 29.1 - 2, 29.1 8-1,
29.211- 7, 29.231-1, 29.2 1-1 -
Reguatons 108
Sectons 80.1 and 86.2(6)
Reguatons 106
Sectons 02.201 (t), 02. 01, 02.607a (added)
Sectons 02. 01. 02. 0 , 02.001, 02.603, 02.607,
02.702, 02.703, 02.70
Reguatons 10
Sectons 81.17, 81.18, 81.19
Secton 81.2 (6)
Reguatons 103
Sectons 19.22(d)- and 19.22(d)-2
Reguatons 2 (19 2)
Secton 130.6
Reguatons 2
Sectons 180.90, 180.91, 180.1 2, 180.1 3
Secton 180.93a (added)
Sectons 180.93b (added , 180.93c (added), 180.93d
(added), 180.93e (added)
Reguatons 21
Sectons 191. 9, 191.60
Reguatons 20
Sectons 19 .7 , 19 .76
Sectons 19 .79a (added), 19 .80
Reguatons 19
Secton 19 .88
Reguatons 18
Secton 192.227
Secton 192.2 6
Reguatons 16
Sectons 187. 3, 187. , 187. 6, 187. 6a (added)
Secton 187.120
Rung No.
13122
13236
13238
132 0
13122
13129
132
132
1323
13131
13219
132
132
1319
13218
1323
13133
13166
1312
13263
1316
1316
13226
13163
1318
13162
13266
13161
rafrc
3
2

100
3
2
119
123
21
6
117
123
119
11
11
21
130
2 7
2 9
2 0
2 6
2 3
2
2 2
2 1
2 2
239
2 0
(303)
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

3

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
30
mendments Contnued
Reguatons 1
Sectons 190.12, 190.33, 190. 2, 190. (6), 190.100,
190.332, 190.333, 190.33 , 190.336, 190.3 0, 190.3 ,
190.3 7
Sectons 190.186, 190. 30, 190. 31
Sectons 190. 81, 190. 82
Reguatons 11
Sectons 189.22, 189.72, 189.73, 189.7 , 189.7 , 189.90.
Sectons 189.133, 189.13
Sectons 189.138a, 189.139a
Reguatons 10
Sectons 18 .1 , 18 .298, etc
Sectons 18 .217, 18 .23 , 18 .237 (revoked), 18 .238,
18 .239, 18 .2 0, 18 .2 1, 18 .2 3, 18 .2 , 18 .2 7,
18 .2 8
Sectons 18 . 3 , 18 . 36, 18 . 37, 18 . 1, 18 . 3,
18 . 8
Sectons 18 . 76, 18 . 77
Sectons 18 . 93, 18 . 9 , 18 . 9 , 18 . 96...
Reguatons 8 (193 )
rtces 7, 76 --
Reguatons 7
Sectons 178.390, 178. 01
Sectons 178. 0, 178. 1, 178.
Reguatons No. 7 ( coho Ta ct)
Reguatons
Sectons 18 .3()a (added), 18 .2 , 18 .2 6, 18 .2 7,
18 .2 8, 18 .2 9, 18 .260, 18 .261, 18 .262, 18 .263,
18 .26
Sectons 18 .67d, 18 .67e, 18 .130, 18 .131, 18 .133..
Secton 18 .1 1
Sectons 18 .2 2, 18 .2
Sectons 18 .31 , 18 .31 , etc
Sectons 18 .336, 18 .337, 18 .338, 18 .3 1, 18 .3 3,
18 3 8
Sectons 18 . 18 Y8 23, 8 2 .
Sectons 18 . , 18 . 6, 18 . 7, 18 . 8
Reguatons No. , coho Ta ct
Reguatons
Sectons 183.3(n), 183.3(n 1) (added), 183.26 ,
1S3.26 , 183.266, 183.267, 1S3.269, 183.270,
183.270a (added), 183.271, 183.27 , 183.277,
183 293
Sectons 183 .81 183.1 , 183 6, 183. 1 8
Secton 183.170
Sectons 183.313, 183.31 , etc
Sectons 183.399, 183. 0 , 183. 0
Sectons 183. 28, 183. 29, 183. 30, 183. 31
Reguatons 3
ppend ...
Sectons 182.12, 182.13, etc
Sectons 182.6 , etc
Sectons 182.122, 182.270, 182.272
Sectons 182.169, etc
Sectons 182.392, 182.393, 182.39 , 182.39 , 182.397,
182.398, 182.399
Sectons 182. , 182.6 , 182.6 6, 182.618 (a), (6),
182.787, 182. S22
Sectons 182. 9 and 182. 9
Sectons 182.928, 182.929, 182.930, 182.931
Treasury Decson 6 6 0. R. 19 8-2, 19 ).
nnua eave, compensaton, Federa empoyee separated and
reempoyed durng ta abe year
Rung o.
13261
131 9
13160
13260
131 7
131 8
13137
13123
1318
131
131 6
1320
131
13183
13227
13181
13202
1322
13203
13136
13182
131 2
131 3
1312
13200
13201
1322
1313
131 0
131 1
13169
1313
13211
13199
13223
13180
131 8
132 3
131 9
13262
13192
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

3

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
30
IRung o.
nnutes, reguar and addtona, payments receved by retred
Federa cv servce empoyee
rmed forces of the Unted States, chapans, servce pay and
retrement pay, wthhodng of ta at source
rmed forces of other natons, accordng prveges of free m-
portaton, etc

anks:
Saes of property n satsfacton of debts, capta gans and
osses
Use n connecton wth payment of Federa Insurance Con-
trbutons ct ta es and ncome ta wthhed at source
on wages
orrowed capta, advances by factor
randy, producton, Reguatons amended.
usness e penses:
Purchase and mantenance of unforms, Coumbus, Oho,
poce offcers
Traveng, nonresdent aen fufng performance contracts
n Unted States and Canada
C
Caforna:
Contrbutons by empoyees under vountary pan for pay-
ment of unempoyment compensaton dsabty benefts.
Contrbutons made to State pursuant to Caforna Un-
empoyment Insurance ct
Canada, ncome ta conventon, e tenson to Newfoundand,
wthhodng
Capta gan, testamentary trust, used to pay pecunary egaces
to chartabe organzatons, deductbty
Capta gans and osses:
odng perod of securtes, wash saes
Sae of farm by fe tenant and remandermen
Saes of property by banks, etc., n satsfacton of debts..
Chapans, Unted States armed forces, servce pay and retre-
ment pay, .wthhodng of ta at source
Chartabe contrbutons, capta gan used by testamentary
trust to pay pecunary egaces
Cgarettes:
Reguatons 8 (193 ) amended
Statement of producton and remova
anuary through uy, 19 9 and 19 8
Statement of remova of, for consumpton
une, 19 9 and 19 8
ugust, 19 9 and 19 8
September, 19 9 and 19 8
October, 19 9 and 19 8
Cosng agreements, pocy and procedure
Coast Guard reserve offcer, compensaton for servce rendered
as cv servce empoyee :
Coconut o, termnaton of suspenson, under Phppne Trade
ct, of addtona ta upon frst domestc processng
Coorado, rea and persona property ta es, accrua
1321
13217
13177
13237 I
132
13210
13136
131 2
131 3
13181
13182
13202
19
13203
197
1322
196
13236
2
131 0
76
13172
33
13171
27
131 6
8
13209
9
132 1
1
13216
8
13237
0
13217
90
13209
9
1320
133
1317
267
131 2
267
1320
267
13220
268
132 7
268
132 0
100
132 7
19
13197
131
132 0

G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

3

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
306
Commttee reports:
ghty-frst Congress
Conference ( ouse Rept. 1 12)
ouse of Representatves Report No. 920
Senate Report No. 68
Senate Report No. 831
Compensaton:
ccrued annua eave, Federa empoyee separated and
reempoyed durng ta abe year
Coast Guard reserve offcer renderng servce as cv servce
empoyee
Ross ssay Prze awarded by mercan ar ssocaton...
Concentrates, voate frut-favor, e empton from ta on
quors
Constructve recept of ncome, endowment nsurance proceeds-
Contrbutons:
mpoyees, Caforna vountary pan for payment of un-
empoyment compensaton dsabty benefts
mpoyers and empoyees n New ersey, unempoyment
compensaton and nonoccupatona sckness dsabty
benefts
Made to State pursuant to Caforna Unempoyment
Insurance ct
Corporatons:
ccrua of 19 9 ncrease n New York State franchse ta _
ccrua of New York State franchse ta for transtona
perod
ffated, dena of eecton to fe separate caendar year
19 9 returns
Court decsons:
rewster Shrt Corp. v. Commssoner
Commssoner; rewster Shrt Corp. v
Commssoner v. Conney et u
Commssoner v. Cubertson
Commssoner v. Wodehouse
Conney et u .; Commssoner v
Cubertson; Commssoner v
Wodehouse; Commssoner v
Credt, e cess profts, borrowed capta, advances by factor
Credts aganst ta , foregn ta based on earned ncome
D
Damages, n|ures or sckness, dsabed seamen, wthhodng
ta at source on mantenance and cure (care)
Death beneft, receved by wdow of empoyee of awaan
Government
Decaraton under penates of per|ury, verfcaton of re-
turns, statements, and documents
Denmark, ncome ta conventon, Reguatons 111 amended
Department stores empoyng the reta nventory and eectve
nventory methods, prce ndces for uy, 19 9
Dsted sprts:
ottng of ta -pad, Reguatons 11 amended
Labeng and advertsng, Reguatons No. , coho Ta
ct, amended
Producton, Reguatons amended
Rung No.
13232
29
13230
28
13179
282
13231
289
13192
13
132 7
19
13121
13
13188
269
13130
36
13172
33
13193
28
13171
27
13173
0
1319
1
13238

13210
80
13210
80
132 7
19
13139

13132
62
132 7
19
13139

13132
62
13210
80
131 7
110
13222
92
13207
1
132 2
138
13131
6
132 8
22
131 7
231
131 8
232
13260
229
1312
2 2
1313
189
131 0
193
131 1
19
13200
18
13201
187
1322
188
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

3

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
307
Dsted Rprts Contnued
Sprts and wnes
Importaton of, Reguatons 21 amended..
Rectfcaton of, Reguatons 1 amended.
Warehousng, Reguatons 10 amended.

ectve nventory method, Reguatons 103 and 111 amended

mpoyment ta es:
Federa Insurance Contrbutons ct
Form 9 1, changes effected by use of
Identfcaton numbers to be shown on Form 9 1
Use of Government depostares n connecton wth
payment of empoyment ta es, Reguatons 106
amended
state ta :
Gross estate of nonresdent aen not engaged n busness
n Unted States, ncuson of Unted States bonds ssued
after March 1, 19 1
Reease of powers of appontment, Reguatons 10 amended
Transfer ntended to take effect at or after decedent s death,
Reguatons 10 amended
cess profts ta , borrowed capta, advances by factor
cess Profts Ta Counc:
Norma earnngs n cases nvovng standard-ssue base
perods other than the four caendar years 1936 through
1939
Treatment of abnormates attrbutabe to e traordnary
effect of preparaton for the war, etc
tenson of tme, annua reports of proft under nson ct, as
amended
F
Famy partnershp:
Father and sons, ntent of partes
Treatment of members as reated ta payers
Farm, sae by fe tenant and remandermen, gan or oss
Federa cv servce empoyee, retred, payments receved from
reguar and addtona annuty
Federa empoyee separated from servce and reempoyed dur-
ng ta abe year, compensaton for accrued annua eave
Federa Trade Commsson, nspecton of corporaton ncome
ta ret urns
Frearms, deaers records of transactons
Forda, prvege ta es on rentas, admssons, and saes of tan-
gbe persona property
Foregn ta es, based on earned ncome, credt aganst Unted
States ncome ta
Form W-2, Wthhodng Statement 19 0, rues for reproduc-
ng
a
Gan or oss, sae of farm by fe tenant and remandermen
Gasone cense ta , abama countes, by whom deductbe
Gft ta :
Reease of powers of appontment, Reguatons 108
amended
Rung No.
1316
/ 131 9
13160
13123
13137
131
131 6
1318
1323
132
132
132
132 1
13218
1319
13210
132 2
13127
13198
13139
132 9
13216
1321
13192
1326
13262
132 9
131 7
13178
13216
13129
13219
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

3

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
308
Gross estate, nonresdent aen not engaged n busness n
Unted States, ncuson of Unted States bonds ssued after
March 1, 19 1
Gross ncome:
Compensaton, Coast Guard reserve offcer renderng
servce as cv servce empoyee
Incusons
Cash aowance receved by Coumbus, Oho, poce
offcers for purchase and mantenance of unforms..
Death beneft receved by wdow of empoyee of
awaan Government
Retroactve ncrease n temporary ar ma rates,
accrua
Ross ssay Prze awarded by mercan ar ssoca-
ton
Partner, sources wthn and wthout Unted States pos-
sessons
Ta refunds
When ncuded, endowment nsurance proceeds

awa, death beneft receved by wdow of government em-

poyee
Income from sources wthn Unted States:
Nonresdent aen author, ump-sum advance payments
for e cusve pubcaton rghts
Nonresdent aen, traveng e penses reatng to per-
formance contracts n Unted States and Canada
Industra acoho, Reguatons 3 amended-
Inspecton of corporaton ncome ta returns, Federa Trade
Commsson
Inspecton of returns, Mtary Renegotaton Pocy and Re-
vew oard
Insurance, endowment pocy, eecton to receve proceeds n
nstaments
Inventores:
ectve method
Prce ndces for uy, 19 9, for use by department
stores
Reguatons 103 and 111 amended
L
Legsaton:
ghty-frst Congress
Pubc Law No. 137
Pubc Law No. 2 0
Pubc Law No. 261
Pubc Law No. 271
Pubc Law No. 378
Pubc Law No. 3
Rung No.
132 1
132 7
13236
13207
13122
13121
13239
132 6
132 3
13130
13207
13132
131 0
I 1313
131 8
131 9
131S0
13199
13211
13223
132 3
1326
13190
13130
132 8
1323
13138
13188
13189
13177
13229
132
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

3

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
309
Lquors and artces from Puerto Rco and the rgn Isands,
Reguatons 2 amended
Lquors:
Fermented mat, Reguatons 18 amended
Whoesae and reta deaers n, Reguatons 20 amended
M
Mat beverages, abeng and advertsng, Reguatons No. 7
amended
Maryand, Montgomery County, accrua of rea estate ta es..
Medca e penses, contrbutons by empoyees n New ersey for
nonoccupatona sckness dsabty benefts
Mtary Renegotaton Pocy and Revew oard, nspecton of
returns
Msceaneous e cse ta es:
Coconut o, termnaton, under Phppne Trade ct, of
suspenson of addtona ta
Stamp ta , ssuance of corporate securtes termed proms-
sory notes
Stamp ta , ssue of stock to ndvdua partners, appca-
ton of ta on transfers of rghts to receve
Transportaton of persons, e empton from the ta on
foregn trave
Mtgaton of effect of mtaton, famy partnershps, treat-
ment of members as reated ta payers
N
Natona Mtary stabshment ppropraton ct, 19 0
(Pubc Law No. 3 )
Netherands, ncome ta conventon, Reguatons 111 amended..
Newfoundand, appcaton of Unted States-Canada ncome ta
conventon, wthhodng
New ersey, contrbutons by empoyers and empoyees for
unempoyment compensaton and nonoccupatona sckness
dsabty benefts
New York, accrua of State franchse ta on busness corpora-
tons for transtona perod
New York Cty rea estate ta es, accrua
New York State franchse ta , accrua by corporatons of 19 9
ncrease
Nonresdent aens:
Lump-sum advance payments for e cusve pubcaton
rghts
Traveng e penses ncurred n fufng performance con-
tracts n Unted States and Canada
O
Oeomargarne:
Statstcs of producton and materas used
May, 19 9 and 19 8 L
une, 19 9 and 19 8..
uy, 19 9 and 19 8
ugust, 19 9 and 19 8
September, 19 9 and 19 8
October, 19 9 and 19 8-
Rung No.
Pa o
f 1312
219
13166
2 7
I 132G3
2 0
/ 13162
2 2
1 1318
2 1
/ 1316
2 3
13226
2
13227
13208
13193
13190
13197
13196
1317
13133
132 9
132
13131
131 6
13193
1319
/ 131
131
13173
13132
131 0
13126
13167
13186
13212
13228
132 6
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

3

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
310
P
Partnershps:
Famy
Intent of partes
Treatment of members as reated ta payers
Gross ncome of partner from sources wthn and wthout
Unted States possessons
Persona e penses:
Contrbutons by empoyees n New ersey for nonoccupa-
tona sckness dsabty benefts
Contrbutons by empoyees under Caforna vountary
pan for payment of unempoyment compensaton ds-
abty benefts
Phppnes, termnaton of suspenson of addtona ta upon frst
processng of certan coconut o
Pocemen, purchase and mantenance of unforms
Possessons of Unted States:
Income from, form of return
Income of partner from sources wthn and wthout
Prvege ta es, Forda, rentas, admssons, and saes of
tangbe persona property
Pubc aws:
ghty-frst Congress
No. 137, grantng certan e tensons of tme for ta
purposes
No. 2 0, e emptng certan voate frut-favor con-
centrates from the ta on quors
No. 261, amendng Interna Revenue Code to permt
use of addtona means, ncudng stamp machnes,
for payment of ta on fermented mat quors, etc
No. 271, accordng prveges of free mportaton to
members of the armed forces of other natons, etc
No. 378, amendng certan provsons of the Interna
Revenue Code
No. 3 , makng appropratons for the Natona
Securty Counc, etc
R
Rea estate ta es, New York Cty, accrua
Refunds, ta es, ta abe status
Reguatons. (See mendments: Reguatons.)
Reated ta payers, members of famy partnershps
Reports of profts, annua, e tenson of tme for fng under the
nson ct, as amended
Reproducton of Form W-2, Wthhodng Statement 19 0...
Returns:
ffated corporatons, caendar year 19 9, dena of eecton
to fe separate
Corporaton ncome ta , nspecton by Federa Trade
Commsson
Federa Insurance Contrbutons ct ta es and ncome ta
wthhed at source on wages
Informaton, e tensons of tme for fng
Inspecton by Mtary Renegotaton Pocy and Revew
oard
erfcaton, decaraton under penates of per|ury
Ross ssay Prze awarded by mercan ar ssocaton, ta abe
status
Royates, nonresdent aen author, ump-sum advance pay-
ments for e cusve pubcaton rghts
Rum, denaturaton, Reguatons 16 amended
Rung No.
13139
132 9
13239
13193
13172
13197
13236
13131
13239
132 9
13138
13188
13189
13177
13229
132
131
131
132 6
132 3
132 9
13198
13178
13238
1326
132
13131
13190
132 2
13121
13132
13161
13266
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

3

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
311
8
Saes, banks, etc., satsfacton of debts
Seamen, dsabed, wage payments and mantenance and cure
(care), wthhodng of ta at source
Securtes, wash saes, determnaton of hodng perod
Sprts and wnes, rectfcaton, Reguatons 1 amended
Stamp ta . (See Msceaneous e cse ta es.)
T
Ta Court of the Unted States, The:
Decsons of, st of acquescences and nonacquescences. _
Ta es:
Coorado rea and persona property, accrua
Contrbutons made to State pursuant to Caforna Un-
empoyment Insurance ct
Contrbutons to New ersey unempoyment compensaton
fund and to State dsabty benefts fund
Forda prvege, rentas, admssons, and saes of tangbe
persona property
Montgomery County, Md., rea estate, accrua
New York Cty rea estate, accrua
New York State franchse, accrua by corporatons of 19 9
ncrease
New York State franchse, busness corporatons, trans-
tona perod, accrua
Refunds, ta abe status
Tobacco:
Reguatons 8 (193 ) amended
Statement of manufactured, produced and removed, by
casses
anuary through Mav, 19 9 and 19 8
une, 19 9 and 19 8
uy, 19 9 and 19 8 __
ugust, 19 9 and 19 8
September, 19 9 and 19 8
October, 19 9 and 19 8
Transportaton of persons, e empton from the ta on foregn
trave
Traveng e penses, nonresdent aen fufng performance
contracts n Unted States and Canada
Trusts, testamentary, capta gan used to pay pecunary
egaces to chartabe organzatons, deductbty
U
Unforms, purchase and mantenance, amounts receved by and
amounts e pended by Coumbus, Oho, poce offcers

erfcaton of returns, decaraton under penates of per|ury.

negar, producton, Reguatons 19 amended
nson ct, as amended, e tenson of tme for fng annua
reports of proft .
oate frut-favor concentrates, e empton from ta on quors
W
Wash saes, determnaton of hodng perod of securtes
Wne, Reguatons 7 amended
Rung No.
13237
13222
132. 1
13261
132 8
132 0
13171
13193
132 9
1321)8
131
131
13173
1319
132 0
132 3
1320
131 1
13108
13187
13213
13233
1320
13133
131 0
13209
13230
132 2
13103
13198
131S8
132 1
131
131 S3
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

3

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g

e
312
Rung No.
Wthhodng of ta at source:
Cash aowance receved by Coumbus, Oho, poce offcers
for purchase and mantenance of unforms
Dsabed seamen, wage payments and mantenance and
cure (care)
tenson of Unted States-Canada ncome ta conventon
to Newfoundand
Servce pay and retrement pay of chapans n Unted
States armed forces
Use of banks n connecton wth ncome ta coected at
source on wages, Reguatons 116 amended
Wages, returns, Reguatons 116 amended
Wthhodng Statement 19 0, Form W-2, rues for repro-
ducng
13236
2
13222
92
131 6
8
13217
90
132
132
123
119
13178
93
o
G
e
n
e
r
a
t
e
d

f
o
r

L

n

Z
h
a
n
g

(
N
e
w

Y
o
r
k

U
n

v
e
r
s

t
y
)

o
n

2
0
1
3
-
0
1
-
2
1

2
1
:

3

G
M
T


/


h
t
t
p
:
/
/
h
d

.
h
a
n
d

e
.
n
e
t
/
2
0
2
7
/
u
c
1
.
b
3
2
9
6
8
1
2
P
u
b

c

D
o
m
a

n
,

G
o
o
g

e
-
d

z
e
d


/


h
t
t
p
:
/
/
w
w
w
.
h
a
t
h

t
r
u
s
t
.
o
r
g
/
a
c
c
e
s
s
_
u
s
e
#
p
d
-
g
o
o
g