ment of the guardian or trustee, made under oath, that the minor or beneficiary has no other income from which that amount may be deducted.

Persons receiving rent may deduct therefrom the amount paid for necessary repairs, insurance, and interest on incumbrances upon the property rented. The cost of new structures or improvements to buildings cannot be deducted from the income.

Income prior to Sept. 1, '62.-The tax must be levied upon all dividends declared prior to September, 1862, and upon the entire salaries of officers or payments to persons in the civil, military, naval, or other service of the United States for services rendered prior to the said date, without allowing the $600 off, as such dividends and proportions of salaries were not subject to deduction or assessment.

Interest received or due from trust companies, savings institutions, insurance, bridge, express, steamboat, ferry-boat, and railroad companies, corporations or associations, prior to the same date, must also be taxed.

Interest paid by the assessed person on incumbrances upon the dwelling-house or estate in which he resides may be deducted from income; also his payments for necessary repairs.

Farm produce which the producer has on hand on the 31st day of December, 1863, must be appraised at its marketable value on that day.

Every farmer or planter will be required to make returns of the value of the produce of his farm plantation without deduction for the labor or services of himself and family, or of any portion of such produce consumed by himself and family.

Manufacturers' profits are to be included in the income. subject to duty, notwithstanding duties have already been paid on the articles manufactured, the exemption being removed by the act of March 3, 1863 (see § 91, p. 276). Copartners return their share, or interest, in the copartnership income. Corporators pay on the amount of profits,

whether in the form of dividends or otherwise.

Timber. The commissioner, in answer to inquiries, says that the fact that the law regards timber standing as part of the realty cannot be urged as a sufficient reason for exemption from taxation of the income received from the sale of such timber. For, although timber, while standing, forms a part of the realty,

yet, when sawed or cut down, it becomes personal property, and the receipts of the owner from such sales go to increase his annual income, and, therefore, is just as much liable to the income tax as the income received from the sale of other products of the soil or mines. The farmer who keeps woodland for the express purpose of cutting and selling firewood, in greater or less quantities every year, would be requested to estimate his receipts from that source, as a part of his income, and the case is not different with the proprietor who sells to others the privilege of cutting and appropriating the timber on his land. The amount thus received for "stampage" must be treated as the income of the proprietor.

ARTICLE 2.--INCOME FROM UNITED STATES SECURITIES.

Such portion of annual incomes as is derived from interest upon United States securities of any kind is dutiable at one and one half of one per cent only. (§ 91.)

By an act of congress, entitled "An act to authorize the issue of United States notes," &c., passed February 25, 1862 (U. S. Stat. at Large, 1862, p. 345), all stocks, bonds, and other securities of the United States, held by individuals or corporations, are exempted from State taxation.

The U. S. Supreme Court has decided that a bank is not liable to State taxation in respect to that portion of its capital which consists of the securities of the Federal Government issued either before or after the exemption act of February 25, 1862; reversing People v. Comm'rs of Taxes, 23 N. Y. 92. But they are liable to a Federal taxation, under this act, of one and one half per cent on incomes from such securities.

ARTICLE 3.-TAX PAYER MAY MAKE OATH AS TO AMOUNT OF INCOME.

I A party is permitted to swear as to the amount of his income liable to assessment, and the amount thus sworn to is received as the sum upon which the duties are to be assessed and collected.

Oath of no income. It is specially provided that a party, in his own behalf or as guardian or trustee, may be permitted to declare, under oath or affirmation, that he is not possessed of an income of $600 liable to assessment, or that he has been assessed elsewhere, the same year, for an income duty under

United States authority. He is then exempt (§ 93). Of course, this does not preclude the assistant assessor from investigating into the truth of such an affidavit,

L

CHAPTER III.

PAYMENT OF THE TAX.

ARTICLE 1.

When to be paid.

2.

Returns to be rendered.

ARTICLE 1.-WHEN TO BE PAID.

The income duty is to be assessed and collected on the 1st day of May of each year, for the year ending December 31st next preceding (891). The duty must be paid on or before the 30th day of June of each year; and when not paid for thirty days after that day, and for ten days after demand thereof by the collector, five per cent on the amount of unpaid duties is levied, in addition, as a penalty (§ 92), except in the case of estates of deceased and insolvent persons. ARTICLE 2.-RETURNS TO BE RENDERED.

All persons must make returns of their yearly profits, or income, as the case may be, by the 1st of May of each year. It does not seem that these returns need to be verified. Where the income is received by guardians, or trustees, whether executors, administrators, or others acting in a fiduciary capacity, returns are to be rendered by them.

Guardians and trustees, including executors, administrators, and all others acting in a fiduciary capacity, are required to pay the tax for those in whose behalf they act. The commissioner holds that, although the law is silent, there is no reason why trustees may not divide the income arithmetically among the beneficiaries, and return to the assessor the amount held for each, in place of a separate return by each beneficiary for himself. (See Decision No. 88, p. 309, infra.)

The assistant assessor may increase the amount stated in the return, if satisfied that the same is understated (§ 93). The remedy of the tax payer is by appeal. See APPEALS, pp. 18, 23, ante. In case of neglect or refusal to make the return, the assessor, or assistant assessor, is to assess the amount, and proceed to collect the duty thereon, as provided for in the general provisions of the act. (§ 93.)

The commissioner directs that, whenever persons liable to assessment of income tax shall neglect or refuse to make the lists required by law, or when the lists made and tendered by such persons shall not be accepted by the assessor or assistant assessors as just and proper, it shall be the duty of such assessor or assistant assessor to make lists for such persons, according to the best information he can obtain. Persons so assessed may make oath or affirmation as to the amount of revenue and deduction therefrom, agreeably to section 93. For the forms of affidavit to be made on the return, see Appendix, p. 322.

CHAPTER IV.

PROCEEDINGS ON DEFAULT IN PAYMENT.

The unpaid duties, with interest, penalties and costs, are a lien in favor of the United States upon all the property, stocks, securities and debts of every description from which the taxable income may have or should have accrued.

In default of the payment of the duty for thirty days after it becomes due and is demanded, the lien must be enforced by distraint upon the property subject to income duty, by whomsoever holden; and for this purpose, the commissioner of internal revenue, upon the certificate of the collector or deputy collector that the duty is unpaid for ten days after due notice of the levy, issues a warrant, by virtue of which a further sum, stated in the warrant, may be levied, sufficient for the fees and expenses of the levy.

In cases of sale, the collector's or deputy's certificate of sale gives the purchaser title to the property, whether real or personal. Where the subject of sale is stocks, the certificate of sale is declared lawful authority, and notice to the corporation to record the same on their books or records, in the same manner as if transferred or assigned by the party holding the same, and to issue new certificates of stock therefor in lieu of the prior certificate, which is void, whether canceled or not. Where the subject of sale is securities, or other evidences of debt, the collector's or deputy's certificate is a valid receipt to the person holding the same, as against any person holding the securities and other evidences of debt. (§ 92.)

CHAPTER III.

MERATED.

STAMPS ENU

PROPRIETARY ARTICLES, MEDICINES, &c. ARTICLE 1. In general.

2. Rate of duty.

[The sections relating to stamp-duty have undergone some important changes, which will appear in this chapter. Numberless questions must necessarily arise, under these sections, which will require judicial determination. We have not attempted to incorporate here any extended citation of English or American decisions, but have confined ourselves to a simple statement of the law, and have volunteered explanations only where obviously required. The only work on the subject of the stamp laws, the validity of instruments affected by them, &c., is the treatise of Charles Edwards, Esq., published by Mr. John S. Voorhies, of New York. Such a work is an indispensable part of every lawyer's library.]

CHAPTER I.

INSTRUMENTS, PAPERS, ETC.

ARTICLE 1.-IN GENERAL- -THE ACT TAKES EFFECT. On and after October 1, 1862, certain instruments, hereafter enumerated, require to be stamped, without which they are declared invalid and of no effect. (§§ 94, 95.)