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Digitized by Microsoft® INTERNAL - REVENUE LAWS IN FORCE MARCH 4, 1911 WITH AN APPENDIX CONTAINING LAWS OF A GENERAL NATURE AND MISCELLANEOUS PROVISIONS APPLICABLE TO THE ADMINISTRATION OF THE INTERNAL-REVENUE LAWS COMPILED UNDER THE DIRECTION OF COMMISSIONER OP INTERNAL REVENUE COMPILATION OF 1911 WASHINGTON GOVERNMENT PRINTING OFFICE 1911 Digitized by Microsoft® ■O .!? &l(c'L Treasury Department, • Document No. 2601. Internal Revenue. 2 Digitized by Microsoft® CONTENTS. INTRODUCTION. Page. List of Commissioners of Internal Revenue (1862-1910) 9 List of acts of Congress relating to internal revenue (1861-1910) 17 Schedule of articles and occupations subject to tax 33 Table of special taxes and 50 per cent penalties 36 List of internal-revenue collection districts 37 List of internal-revenue regulations 39 Table of sections 41 INTERNAL-REVENUE LAWS. Organization of Office of Internal Revenue 45 Chapter 1. Officers of internal revenue 57 2. Assessments and collections 85 3. Special taxes 125 4. Distilled spirits 147 5. Fermented liquors 243 6. Tobacco and snuff 256 7. Cigars 278 8. Opium 290 9. Oleomargarine, etc 292 10. Filled cheese 305 11. Mixed flour 310 12. Legacies and distributive shares" 315 13. Excise tax on corporations 320 14 . Stamps 329 15. Playing cards 343 16. Banks and bankers 348 17. Provisions common to several objects of taxation 353 APPENDIX. (Containing miscellaneous provisions and laws of a general nature applicable to the administration of the internal-revenue laws.) Chapter 1. Suits and prosecutions, jurisdiction, practice, evidence, liens, lim- itations, compromises, remissions ; United States attorneys, duties as to prosecutions, reports; clerks of courts, reports of, etc 383 2. Duties of officers charged with receiving or disbursing public moneys, penalties for embezzlement and official misconduct, proceedings against delinquent officers, etc 404 3. Penalties for perjury, obstructing process, resisting officers, res- cuing prisoners or property, falsely assuming to be an officer, bribery, conspiracy, destroying public records, stealing public property, receiving stolen Government property, counterfeiting, interstate shipments of liquors, etc 414 4. Payment to persons in arrears, set-offs, credits, priority of Gov- ernment, appropriations, claims, attorneys before departments, duplicate checks, penalty envelopes, telegrams, etc 422 5. Officers, clerks, and employees, extra services, holding two offices, prohibition as to business, fees, perquisites, political contribu- tions, presents to superiors, etc 431 Index 439 3 Digitized by Microsoft® Digitized by Microsoft® INTRODUCTION. This compilation contains the internal-revenue laws in force March 4, 1911. The last compilation was published in 1900. Since that date many changes have been made in the law. and new legislation enacted, rendering much of the matter contained in that compilation obsolete and making a new compilation very desirable. The most important measures relating to internal revenue passed since the last compilation was issued are as follows : I. War-revenue repeal act. — The act entitled "An act to repeal war-revenue taxation, and for other purposes," approved April 12, 1902, which, so far as it related to internal revenue, took effect July 1, 1902. II. Oleomargarine law. — The act of May 9, 1902, established a new rate of tax on oleomargarine. A tax of 10 cents per pound was imposed also on adulterated butter and one-fourth of 1 cent per pound on process or renovated butter. New special taxes were also imposed on manufacturers of adulter- ated butter, and of process or renovated butter, and on wholesale and retail dealers in adulterated butter. III. Denatured alcohol act. — The act of June 7, 1906, pro- vided for free alcohol for use in the arts and industries, and was amended by the act of March 2, 1907. IV. Fortification of wines. — The act of June 7, 1906, amended the law relative to the fortification of pure sweet wines. V. a. Special excise tax on corporations. — The Payne-Aldrich tariff act entitled "An act to provide revenue, equalize duties, and encourage the industries of the United States, and for other purposes, " approved August 5, 1909, contained important internal-revenue legis- lation. The act imposed on corporations, joint-stock companies, associations, and insurance companies with certain exceptions a special excise tax equivalent to 1 per cent of their net income in excess of $5,000. V. b. New rate of tax on tobacco and cigars. — This act also amended the law in regard to tobacco and cigars. The body of this work consists of Title XXXV of the Revised Statutes, with amendments, and subsequent acts incorporated in their appropriate places, the obsolete and repealed sections being omitted. 5 Digitized by Microsoft® 6 INTRODUCTION. Where portions of sections are printed in italics, it indicates that the words so printed are amendments. The feature in previous compila- tions of introducing section numbers in brackets for convenience of reference is retained; for instance [sec. 3153a]. This indicates that a new provision of law has been enacted since the Revised Statutes, amendatory of, or additional to, section 3153, which seems to belong, in its proper order, immediately after it. The references, in previous compilations, to decisions of the courts, and the opinions of the Attorneys General, and of this office, bearing upon the construction of the sections which they follow, and explana- tory thereof, are retained whefe applicable, with additions, as are also the references made in notes at the close of sections to other sections of the law relating to the same matter or which modify or affect the sec- tions which they follow. The plan adopted in previous compilations in the arrangement of the Appendix — viz, that of grouping the sections and acts relating to the same subject, instead of preserving the sequence according to the enumeration in the Revised Statutes — is followed in the present com- pilation. The publication of decisions in the Internal Revenue Record (United States revenue journal) was discontinued after December, 1897. The publication of internal-revenue decisions and circulars com- mencing January 1, 1898, have been published in Treasury Decisions weekly by the Treasury Department (T. D. 18758). Royal E. Cabell, Commissioner. Digitized by Microsoft® ABBREVIATIONS. Abb. (U.S.) Abbott's United States Circuit and District Court Reports. Am. Eng. Ency. Law. .American and English Encyclopedia of Law. App. D. C Court of Appeals Reports, District of Columbia. Ben Benedict's United States District Court Reports. Bias. (U. S.) Bissell's, United States Circuit and District Court Reports. Blatchf Blatchford's United States Circuit Court Reports. Bond (U. S.) Bond's United States Circuit and District Court Reports. Cal California Reports. Cliff. (U. S.) Clifford's United States Circuit Court Reports. Conn' Connecticut Reports. Comp. Dec Comptroller's Decisions. Ct. Clms United States Court of Claims Reports. Cranch (U. S.) Cranch's United States Supreme Court Reports. Dall (U. S.) Dallas' United States Reports. Deady (U. S.) Deady's United States Circuit and District Court Reports. Dill. (U. S.) Dillon's United States Circuit Court Reports. Fed. Cas Federal Cases United States Circuit and District Courts. Fed. Rep The Federal Reporter. Ga Georgia Reports. Gray (Mass.) Gray's Massachusetts Reports. Hughes (U. S.) Hughes' United States Circuit Court Reports. Int. Rev. Rec Internal Revenue Record. Lawrence Dec Decisions of William Lawrence, First Comptroller of the Treasury. Low Lowell's United States District Court Reports. Mackey (D. C.) Mackey's District of Columbia Reports. Mass Massachusetts Reports. N. C North Carolina Reports. N. Y New York Reports. Op. Atty. Gen United States Attorney General's Opinions. Otto (U. S.) Otto's United States Supreme Court Reports. Penn Pennsylvania Reports. Pet. (U. S.) Peter's United States Supreme Court Reports. Saw. or Sawy. (U. S.). .Sawyer's United States Circuit and District Court Reports. Reg Internal Revenue Regulations. R. S United States Revised Statutes. Stat United States Statutes at Large. T. D Treasury Decisions. U. S United States Supreme Court Reports. Wall . (U. S.) Wallace's United States Supreme Court Reports. Wash. Law Rep Washington Law Reporter. W. Va West Virginia Reports. Wheat Wheaton's United States Supreme Court Reports. Wood (U. S.) .Wood's United States Circuit Court Reports. Woolw Wool worth's United States Circuit Court Reports. 7 Digitized by Microsoft® Digitized by Microsoft® COMMISSIONERS OF INTERNAL REVENUE SINCE THE ORGANIZATION OF THE INTERNAL-REVENUE OFFICE IN 1862. George S. Boutwell, of Massachusetts, from July 17, 1862, to March 3, 1863, both dates inclusive. Joseph J. Lewis, of Pennsylvania, from March 18, 1863, to June 30, 1865. William Orton, of New York, from July 1, 1865, to October 31, 1865. Edward A. Rollins, of New Hampshire, from November 1, 1865, to March 10, 1869. Columbus Delano, 1 of Ohio, from March 11, 1869, to January 2, 1871. John W. Douglass, of Pennsylvania, was Acting Commissioner from November 1, 1870, to January 2, 1871. Alfred Pleasonton, of New York, from January 3, 1871, to August 8, 1871. John W. Douglass, of Pennsylvania, from August 9, 1871, to May 14, 1875. Daniel D. Pratt, of Indiana, from May 15, 1875, to July 31, 1876. Green B. Raum, of Illinois, from August 2, 1876, to April 30, 1883. Henry C. Rogers, of Pennsylvania (Acting Commissioner), from May 1, 1883, to May 10, 1883. John J. Knox, of Minnesota (Acting Commissioner), from May 11, 1883, to May 20, 1883. Walter Evans, of Kentucky, from May 21, 1883, to March 19, 1885. Joseph S. Miller, of West Virginia, from March 20, 1885, to March 20, 1889. John W. Mason, of West Virginia, from March 21, 1889, to April 18, 1893. Joseph S. Miller, of West Virginia, from April 19, 1893, to November 26, 1896. William St. John Forman, of Illinois, from November 27, 1896, to December 31, 1897. Nathan Bay Scott, of West Virginia, from January 1, 1898, to February 28, 1899. George W. Wilson, of Ohio, from March 1, 1899, to November 27, 1899. Robt. Williams, jr., of Ohio (Acting Commissioner), from November 28, 1899, to December 19, 1900. John W. Yerkes, of Kentucky, from December 20, 1900, to April 30, 1907. John G. Capers, of South Carolina, from June 5, 1907, to August 31, 1909. Royal E. Cabell, of Virginia, from September 1, 1909. 1 Mr. Delano was appointed and commissioned Secretary of the Interior November 1, 1870. He did not resign the office of Commissioner of Internal Revenue, and therefore became the legal holder of two offices, Commissioner of Internal Revenue and Secretary of the Interior, as he might legally do, for the duties of the two offices are distinct and compatible. (Converse v. United States, 21 How., 468; United States v. Saun- ders, 120 U. S., 126.) He continued to hold the office of Commissioner of Internal Revenue until his successor was appointed and qualified, but was absent from the internal-revenue office and discharged the duties and received the salary of the office of Secretary of the Inteiror and of that office only. Deputy Commissioner Douglass was Acting Commissioner of Internal Revenue in the absence of Commis- sioner Delano (15 Stat., 168), and continued to be so until Alfred Pleasonton was commissioned as Commis- sioner of Internal Revenue, January 3, 1871. 9 Digitized by Microsoft® Digitized by Microsoft® INTERNAL-REVENUE TAXATION. The Congress shall have power to lay and collect taxes, duties, imposts, and excises, to pay the debts and provide for the common defense and general welfare of the United States; but all duties, imposts, and excises shall be uniform throughout the United States. (Constitution of the United States, art. 1 , sec. 8 ; McGuire v. The Com- monwealth, 3 Wall., 387; Pervear v. The Commonwealth, 5 Wall., 533; The Collector v. Day, 11 Wall., 113, 13 Int. Rev. Rec, 141; United States v. Singer, 15 Wall., Ill, 17 Int. Rev. Rec, 9; Scholey v. Rew, 23 Wall., 331.) A general power is given to Congress to lay and collect taxes of every kind or nature without any restraint, except only on exports; but two rules are prescribed for their government, namely, uniformity and apportionment. Three kinds of taxes, to wit, duties, imposts, and excises by the first rule, and capitation, or other direct taxes, by the second rule. (Hylton v. The United States, 3 Dall., 171-173.) The power of Congress to tax is a very extensive power. It is given in the Constitution with only one exception, and only two qualifications. Congress can not tax exports, and it must impose direct taxes by the rule of apportionment, and indirect taxes by the rule of uniformity. Thus limited, and thus only, it reaches every subject, and may be exercised at discretion. (License tax cases, 5 Wall., 463, 6 Int. Rev. Rec, 36.) Subject to the limitations in the Constitution the taxing power of Congress extends to all usual objects of taxation. (Knowlton v. Moore (1900), 178 U. S., 41; T. D. 129.) Direct taxes must be apportioned, while indirect taxes must be uniform throughout the United States. (Income tax cases, 157 U. S., 429; 158 id., 601; Nicol v. Ames, 173 U. S., 509.) A tax on bank circulation is not a direct tax, and may be laid with- out apportionment. (Springer v. United States, 102 U. S., 586; 27 Int. Rev. Rec, 78; Veazie Bank v. Fenno, 8 Wall., 533, 10 Int. Rev. Rec, 195.) A tax upon the business of an insurance company is not a direct tax, but a duty or excise. (Pacific Insurance Company v. Soule, 7 Wall., 433.) The tax imposed by the act of June 13, 1898 (war-revenue act), on sugar refining companies was not a direct tax but a "special excise tax." (192 U. S., 397; T. D., 760.) No State court can by injunction or otherwise prevent Federal officers from collecting Federal taxes. The Government of the United States within its sphere is independent of State action. (Keely v. Sanders, 99 U. S., 443.) The same principle which denies to a State power to raise a revenue by taxation on Federal property, or sources of revenue, or means of Digitized by Microsoft® 12 INTERNAL-REVENUE TAXATION. carrying on its duties, forbids taxation of State revenue for Federal purposes. (12 Op. Atty. Gen., 282; Collector v. Day, 11 Wall., 113; Ambrosini v. U. S., 187 U. S., 1; T. D. 593.) As the States can not tax the powers, the operations, or the property of the United States, nor the means which they employ to carry their powers into execution, so it has been held the United States have no power under the Constitution to tax either the instrumentalities or the property of a State. (Pollock v. Trust Co., 157 U. S., 584.) A municipal corporation is a portion of the sovereign power of the State, and is not subject to taxation by Congress upon its municipal revenues. (United States v. Eailroad Co., 17 Wall., 322.) The exemption of State agencies does not extend to those used by the State in carrying on an ordinary private business. (South Caro- lina v. U. S., 199 U. S., 437; T. D. 961.) CONSTRUCTION OP STATUTES. Statutes in pari materia are to be construed together, and repeals by implication are not favored if the acts can reasonably stand together. (Harrington's Distilled Spirits, 11 Wall., 356, 13 Int. Rev. Rec, 193; United States v. 100 Barrels of Spirits, 12 ibid., 153; United States v. Cook County National Bank, 25 ibid., 266.) In construing statutes the fundamental rule is to get at the inten- tion of the legislature. (In re Matthews, 109 Fed. Rep., 603.) Legislative intention is the guide to true judicial interpretation. (United States v. 100 Barrels of Spirits, 12 Int. Rev. Rec, 153.) A well-settled rule of interpretation is that a legislative act is to be interpreted according to the intention of the legislature apparent upon its face. (Wilkinson v. Deland, 2 Pet., 627.) A statute may be construed contrary to its literal meaning when a literal construction would result in an absurdity or inconsistency, and the words are susceptible of another construction which carries out the manifest intention. (Sutherland on Statutory Construction, par. 323.) Revenue laws are not, like penal acts, to be construed strictly in favor of the defendants. They are rather to be regarded as remedial in their character, passed to promote the public good, and should be so construed as to carry out the intention of the legislature in passing them. (Cliquot's Champagne, 3 Wall., 114; 4 Int. Rev. Rec, 58; United States v. 28 Casks of Wine, 7 Int. Rev. Rec, 4; United States v. 36 Barrels of High Wines, 12 ibid., 40; United States v. 100 Barrels of Spirits, 12 ibid., 153; United States v. Stowell 133 U. S., 1; 36 Int. Rev. Rec, 30.) As a general rule the construction of these statutes must be such as is most favorable to their enforcement. There is no liberal inter- pretation in favor of the individual to be indulged in. (18 Op. Atty. Gen., 246; 31 Int. Rev. Rec, 246.) Revenue laws are to be con- strued liberally to carry out the purposes of their enactment (Smythe v. Fiske, 23 Wall, 380; Taylor v. United States, 3 How., 197; United States v. Breed, 24 Fed. Cas., 1222) , and the rule of construction appli- cable to statutes generally, that what is implied in them is as much a part of the enactment as what is expressed, holds in regard to them. (United States v. Hodson (1870), 10 Wall., 395.) They should be construed with reasonable fairness to the citizen, (United States v. ™%f0$rfy $<$§$& 428.) INTEKNAL-REVENUE TAXATION. 13 Statutes should receive a sensible construction, such as will effect- uate the legislative intention, and avoid, if possible, an unjust or absurd construction. (In re Chapman, 166 U. S., 661.) Internal-revenue acts should be interpreted in harmony with the tariff legislation of the country. (Taylor v. Treat (1907), 153 Fed. Rep., 656.) The laws providing for forfeiture by violators of revenue laws are not to be governed by the rule of strict construction applied to penal statutes in general, but are to have a reasonable construction. U. S. v. 246^ Pounds Tobacco, 103 Fed Rep., 791.) Statutes are to receive a reasonable construction, and doubtful words and phrases are to be construed, if possible, so as not to produce mischievous results. But when the words are plain and unambigu- ous, there is no room for construction, and nothing is left for the court but to give them their full effect. (The Samuel E. Spring (1886), 27 Fed. Rep., 776.) Statutes should be so construed, if practicable, that one section will explain and support and not defeat or destroy another section. (Bernier v. Bernier, 147 U. S., 242.) It is a settled rule that where there are two consistent acts relating to the same subject, effect is to be given to both of them. (Chicago, etc., v. United States, 127 U. S., 406; Landram v. United States, 118 U. S., 81; 32 Int. Rev. Rec, 151.) The words of the statute are to be taken in the sense in which they will be understood by that public in which they are to take effect. Science and skill are not required in their interpretation, except where scientific or technical terms are used. The liability of an instrument to stamp duty, as well as the amount of such duty, is determined by the form and face of the instrument, and can not be affected by proof of facts outside of the instrument itself. (United States v. Isham, 17 Wall, 496; 19 Int. Rev. Rec, 84.) Laws of doubtful or double meaning should not be too harshly con- strued. (United States v. 1,412 Gallons of Distilled Spirits, 17 Int. Rev. Rec, 86.) Courts are not at liberty, by construction or legal fiction, to include subjects of taxation not within the terms of the law. (United States v. Watts, 1 Bond, 580; 1 Int. Rev. Rec, 17.) Duties are never imposed on the citizens upon vague or doubtful interpretations. (Hartranft v. Weigmann, 121 U. S., 609, and cases there cited.) Punctuation no part of the statute. (Hammock v. Loan and Trust Company, 105 U. S., 77, 84, 85.) It is the duty of the court to study the whole statute, its policy, its spirit, its purpose, its language, and, giving to the words used their oDvious and natural import, to read the act with these aids in such way as will best effectuate the intention of the legislature. (United States v. 100 Barrels Spirits, 12 Int. Rev. Rec, 154.) Words spoken by members in debate, or the motives of members, not to be considered in construing statutes; but courts in construing a statute may, with propriety, recur to the history of the times when it was passed. (United States v. Union Pacific Railroad Company, 91 U. S., 72-79.) Debates in Congress as sources of information for construction of statutes. (27 Op. Atty. Gen., 68.) Digitized by Microsoft® 14 INTERNAL-REVENUE TAXATION. The courts may look to the history of the legislation upon the sub- ject of which the statute treats, and the history of the times in which it was enacted, as well as the general history of the country, to determine the purpose that the Government sought to accomplish. (Church of the Holy Trinity v. United States, 143 U. S., 457.) In case of ambiguity in a statute contemporaneous and uniform executive construction is regarded as decisive. (Brown v. United States, 113 U. S., 568; also decisions cited by Attorney General in letter to Secretary of Treasury, Nov. 17, 1885, 31 Int. Eev. See, 382; Nunn v. Gerst Brewing Co., 99 Fed. Rep., 941.) Where the language of a series of statutes is dubious, and open to different interpretations, the construction put upon them by the executive department charged with their execution has great and generally controlling force with the court. (St. Paul, Minneapolis, etc., Railway Co. v. Phelps, 137 U. S., 528; see 19 Op. Atty. Gen., 177.) A construction of a doubtful or ambiguous statute by the executive department charged with the execution, in order to be binding upon the courts, must be long continued and unbroken. (Merritt v. Cam- eron, 137 U. S., 542.) It is a rule well established that the construction given to a statute by those charged with the duty of executing it will be given great weight by the courts if the true construction be doubtful (United States v. Hill, 120 U. S., 169, and cases cited, p. 182); but this rule has no application where the statute is not ambiguous or where it will not bear the interpretation put upon it by the executive officers. (Swift Companv v. United States, 105 U. S., 691, 695; United States v. Graham, 110 U. S., 219; United States v. Tanner, 147 U. S., 661; United States v. Alger, 152 U. S., 384, 397.) _ The same statute may be in part constitutional and in part uncon- stitutional; and if the parts are wholly independent of each other, that which is constitutional may stand while that which is uncon- stitutional will be rejected. Unless it be impossible to avoid it, a general revenue statute should never be declared inoperative in all its parts because a particular part relating to a distinct subject may be invalid. (Field v. Clark (1892), 143 U. S., 649; 38 Int. Rev. Rec, 285.) When an act of Congress is claimed to be unconstitutional, the pre- sumption is in favor of its validity, and it is only when the question is free from any reasonable doubt that courts should hold an act in violation of that fundamental instrument upon which all the powers of the Government rest. (Nicol v. Ames, 173 U. S., 509.) TIME WHEN AN ACT TAKES EFFECT. A law of Congress which contains no provision as to the time when it shall take effect commences and takes effect as a law from the moment it. receives the approbation of the President. As a general rule, it is not competent to go into the division of a day. (3 Op. Atty. Gen., 82.) For most purposes the law regards the entire day as an indivisible unit . But when the priority of one legal right over another, depending on the order of events occurring on the same day, is involved, this rule is necessarily departed from. (National Bank v. Burkhardt, 100 U. S., 686.) Digitized by Microsoft® INTERNAL-REVENUE TAXATION. 15 In the absence of proof there is a presumption that an act was signed on the first minute of the day when it took effect, but it is com- Eetent to show by proof the exact time when the law was approved y the President, and when this is made to appear the law can only be given effect from that time. (Carriage Company v. Stengel, 37 C. C. A., 210; 95 Fed. Rep., 637; Nunn v. William Gerst Brewing Co., 99 Fed. Rep., 939.) The case of United States v. Iselin (87 Fed. Rep., 194) contains a very full discussion of the subject by the Board of General Appraisers. When necessary to determine conflicting rights courts of justice will take cognizance of the fractions of a day. (Louisville v. Savings Bank (1881), 104 U. S., 469.) The act of March 3, 1875, took effect from the time it was approved and not at the commencement of the day. (Salmon v. Burgess, 97 U. S., 381; 25 Int. Rev. Rec, 31.) When the act of August 28, 1894, went into effect. (Burr v. United States, 159 U. S., 78.) The act of July 24, 1897, became a law only from the moment of its approval by the President, which was 6 minutes past 4 o'clock p. m. (Washington time) on July 24, 1897. (United States v. Iselin, 87 Fed. Rep., 194; United States v. Stoddard, 89 Fed. Rep., 699.) Affirmed by the United States circuit court of appeals (91 Fed. Rep., 1005; 34 C. C. A., 175). The Government, on the advice of the Attorney General, acquiesced in said decisions without seekingto prosecute any appeal to the United States Supreme Court. (T. D., 20627; T. D., 20700.) The act of June 13, 1898, known as the "war-revenue act, "took effect on the day next succeeding the day of its passage — that is, on June 14, 1898, except as otherwise provided for. (Sec. 51.) The act of April 12, 1902 (war-revenue repeal act), took effect July 1, 1902, except as otherwise specially provided for in section 10. The act of August 5, 1909 (Payne- Aldrich tariff act), took effect, unless otherwise specially provided, on the day following its passage. Digitized by Microsoft® Digitized by Microsoft® INTERNAL-REVENUE LEGISLATION. The Revised Statutes were compiled under an act of June 27, 1866 (14 Stat., 74). A list of acts respecting internal-revenue duties, from the first act (act of March 3, 1791) to April 28, 1828, is published in United States Statutes at Large, volume 1. ACTS OF CONGRESS RELATING TO INTERNAL REVENUE ENACTED SINCE JULY 4, 1861. ' [Not including private acts, nor appropriation acts passed prior to the enactment of the Revised Statutes, June 22, 1874.] Revised Statutes, Title XXXV, Sections 3140-3465. No reference can be had to the original statutes to control the construction of any section of the Revised Statutes when its meaning is plain, but where there is a substantial doubt as to the meaning of the language used in the revision the old law is a valuable source of information. (United States v. Bowen, 100 U. S., 508, 513; "United States v. Lacher, 134 U. S., 624.) In construing any part of the Revised Statutes it is admissible and often necessary to recur to its connection in the act of which it was originally a part. (United States v. Hirsch, 100 U. S., 35.) In case of ambiguous language in the Revised Statutes or uncertainty as to the true construction to be given to the words of any section, previous acts on the same subject may be referred to and examined for light on the object and intent of Congress aB shown by the course of legislation, in the same manner as statutes in pari materia relating to the same subject may always be taken, compared, and construed together. (Wright v. United States, 15 Ct. Cls., 87. See also United States v. Claflin, 97 U. S., 546, and opinion of First Comptroller Porter in Kansas claim for 5 per cent net proceeds of public lands, 1 Lawrence Dec, 43.) No inference or presumption of a legislative construction is to be drawn by reason of the title under which any particular section is placed. (Sec. 5600, R. S.) An act to provide increased revenue from imports, to pay interest on the public debt, and for other purposes, approved August 5, 1861 (12 Stat., 292). Direct tax and income. The act of March 2, 1891 (26 Stat., 822), authorized the return to the States of the direct tax collected. An act to provide internal revenue to support the Government and to pay interest on the public debt, approved July 1, 1862 (12 Stat., 432). Office of Internal Revenue created. Income fax.— Under this act the tax was 3 per cent on incomes over $600 and not over $10,000; over $10,000, 5 per cent. Act of March 3, 1865, over $600 and not over $5,000, 5 per cent; over $5,000, 10 per cent on excess over $5,000. Act of March 2, 1867, over $1,000, 5 per cent. Act of July 14, 1870, over $2,000, 24 percent. Income tax expired by limitation December 31, 1871. Noincome tax was collected under the act of June 30, 1864, as it was amended by the act of March 3, 1865, before it was collectible. Imposed tax on cotton. i On this date Congress convened in its first (extraordinary) session after the commencement of the War of the Rebellion, at which session was commenced the legislation which has since produced the present system of internal revenue taxation. 72170°— 11 2 17 Digitized by Microsoft® 18 INTERNAL-REVENUE LAWS. An act increasing temporarily the duties on imports, and for other purposes, approved July 14, 1862 (12 Stat., 543, 560). Sections 24 and 25 relate to internal revenue. An act to impose an additional duty on sugars produced in the United States, approved July 16, 1862 (12 Stat., 588). _ _ Joint resolution to amend section 77 of "An act to provide internal revenue to support the Government and to pay interest on the public debt," and for other purposes, approved July 17, 1862 (12 Stat., 627). An act to amend an act entitled "An act to provide internal revenue to support the Government and to pay interest on the public debt," approved July 1, 1862. Approved December 25, 1862 (12 Stat., 632). An act to provide ways and means for the support of the Govern- ment, approved March 3, 1863 (12 Stat., 709). Section 7, bank circulation. An act to amend an act entitled "An act to provide internal revenue to support the Government and [to] pay interest on the public debt," approved July 1, 1862, and for other purposes. Approved March 3, 1863 (12 Stat., 713). An act to prevent and punish frauds upon the revenue, to provide for the more certain and speedy collection of claims in favor of the United States, and for other purposes, approved March 3, 1863 (12 Stat., 737). Joint resolution to provide for the printing annually of the report of the Commissioner of Internal Revenue, approved January 13, 1864 (13 Stat., 400). An act to increase the internal revenue, and for other purposes, ap- proved March 7, 1864 (13 Stat., 14). An act to provide internal revenue to support the Government, to Say interest on the public debt, and for other purposes, approved une 30, 1864 (13 Stat., 223). Inspection stamps required on cigars. No money value. Joint resolution imposing a special income duty [for the year ending December 31 next preceding October 1, 1864], approved July 4, 1864 (13 Stat., 417). An act to amend an act entitled "An act to provide internal revenue to support the Government, to pay interest on the public debt, and for other purposes, " approved June 30, 1864. Approved December 22, 1864 (13 Stat., 420). An act to amend an act entitled "An act to provide internal revenue to support the Government, to pay interest on the public debt, and for other purposes," approved June 30, 1864. Approved March 3, 1865 (13 Stat., 469). Inspection stamps required on tobacco and snuff. No money value. An act amendatory of certain acts imposing duties upon foreign importations, approved March 3, 1865 (13 Stat., 491). An act authorizing the Secretary of the Treasury to appoint assist- ant assessors of internal revenue, approved January 15, 1866 (14 Stat., 2). An act to declare the meaning of certain parts of the internal- revenue act, approved June 30, 1864, and for other purposes. Ap- proved March 10, 1866 (14 Stat., 4), Digitized by Microsoft® INTEBET AD-REVENUE LAWS. 19 An act to reduce internal taxation and to amend an act entitled "An act to provide internal revenue to support the Government, to pay in- terest on the public debt, and for other purposes," approved June 30, 1864, and acts amendatory thereof. Approved July 13, 1866 (14 Stat., 98). First act reducing taxation. Stamps first required on fermented liquors. Changing "Licenses" to "Special taxes." An act to authorize the refunding of certain taxes, approved July 27, 1866 (14 Stat., 301). An act amendatory of section 13 of an act entitled "An act to amend an act entitled 'An act to provide internal revenue to support the Government, to pay interest on the public debt, and for other pur- poses,' approved June 30, 1864," approved March 3, 1865. Approved July 27, 1866 (14 Stat., 301). Joint resolution to prevent the further enforcement of the joint reso- lution (No. 77) approved July 4, 1864, against officers and soldiers of the United States who have been honorably discharged, so as to relieve them from the further payment of the special 5 per cent income tax imposed thereby, approved July 28, 1866 (14 Stat., 371). Joint resolution to amend existing laws relating to internal revenue, approved February 5, 1867 (14 Stat., 565). A resolution to provide in certain cases for the removal of alcohol from bonded warehouses free from internal tax, approved February 18, 1867 (14 Stat., 565). An act to amend existing laws relating to internal revenue, and for other purposes, approved March 2, 1867 (14 Stat., 471). Reduced taxes. An act to exempt wrapping paper made from wood or cornstalks from internal tax, and for other purposes, approved March 26, 1867 (15 Stat., 6). An act to prevent frauds in the collection of the tax on distilled spirits, approved January 11, 1868 (15 Stat., 34). Prohibits removal of spirits from warehouse for the purpose of transportation, redistillation, or rectification, change of package, or for any other purpose, until the full tax has been paid. An act to provide for the exemption of cotton from internal tax, approved February 3, 1868 (15 Stat., 34). Reduced taxes by repealing cotton tax. Joint resolution to provide for a commission to examine and report on meters for distilled spirits, approved February 3, 1868 (15 Stat., 246). An act to exempt certain manufactures from internal tax, and for other purposes, approved March 31, 1868 (15 Stat., 58). Reduced taxes. An act for the relief of certain exporters of rum, approved June 25, 1868 (15 Stat., 78). Joint resolution to correct an act entitled "An act for the relief of certain exporters of rum." Approved July 6, 1868 (15 Stat., 256). An act imposing taxes on distilled spirits and tobacco, and for other purposes, approved July 20, 1868 (15 Stat., 125). Stamps first required on distilled spirits. Revised the entire law relative to spirits and tobacco. Reduced taxation. Tax on cigars and tobacco payable by stamps. Inspectors abolished except inspectors of tobacco. Supervisors and detectives authorized. Digitized by Microsoft® 20 INTERNAL-REVENUE LAWS. An act to correct an error in the enrollment of the "Act imposing taxes on distilled spirits and tobacco, and for other purposes." Approved July 27, 1868 (15 Stat., 238). An act to amend an act entitled "An act imposing taxes on distilled spirits and tobacco, and for other purposes," approved July 20, 1868. Approved December 22, 1868 (15 Stat., 266). An act to allow deputy collectors of internal revenue, acting as collectors, the pay of collectors, and for other purposes, approved March 1, 1869 (15 Stat., 282)._ An act to amend an act entitled "An act to exempt certain manu- factures from internal tax, and for other purposes," approved March 31, 1868. Approved March 3, 1869 (15 Stat., 336). "Joint resolution to supply omissions in the enrollment of certain appropriation acts, approved March third, eighteen hundred and sixty-nine," approved March 29, 1869 (16 Stat., 52). An act to amend an act entitled "An act imposing taxes on distilled spirits and tobacco, and for other purposes," approved July 20, 1868. Approved-April 10; 1869 (16 Stat., 41). Joint resolution in relation to female clerics in the Internal Revenue Bureau, approved June 29, 1870 (16 Stat., 382). An act to define the intent of an act entitled "An act to allow deputy collectors of internal revenue, acting as collectors, the pay of collectors], and for other purposes," approved March 1, 1869. Approved July 1, 1870 (16 Stat., 179). A resolution to determine the construction of an act to provide internal revenue to support the Government, [to pay interest on the public debt,] and for other purposes, approved June 30, 1864. Ap- proved July 13, 1870 (16 Stat.,. 387). An act to reduce internal taxes, and for other purposes approved July 14, 1870 (16 Stat., 256). Repealed taxes on gross receipts, legacies and successions, passports, and special taxes, except those relating to spirits, fermented liquors, and tobacco, also taxes on sales. Income tax to expire December 31, 1871. An act to amend existing laws relating to internal revenue, approved July 14, 1870 (16 Stat., 274). An act to amend section 4 of the act of March 31, 1868, approved July 14, 1870 (16 Stat., 277). Joint resolution to construe the act of March 31, 1868, approved July 14, 1870 (16 Stat., 388). An act relating to internal taxes, approved March 3, 1871 (16 Stat._, 475). Joint resolution to amend section 4, act of July 20, 1868, approved March 3, 1871 (16 Stat., 601). An act to repeal the paragraphs of Schedule C of the internal-revenue acts imposing taxes on canned meats, fish, and certain other articles, approved March 5, 1872 (17 Stat., 36). An act to provide for the abatement or repayment of taxes on dis- tilled spirits in bond destroyed by casualty, approved Mav 27, 1872 (17 Stat., 162). An act to reduce duties on imports and to reduce internal taxes, and for other purposes, approved June 6, 1872 (17 Stat., 238), taking effect October 1, 1872. Stamp duties on instruments, except bank checks, repealed. Moieties abol- ished. Uniform rate of 20 cents per pound on tobacco instead of the two rates, 16 and 32 cents. Ta^^r^TO^nt^g^lon. INTERNAL-REVENUE LAWS. 21 An act for the reduction of officers and expenses of the internal revenue, approved December 24, 1872 (17 Stat., 401). Assessors abolished. Reduces collection districts. An act to remit the excise taxes upon alcohol used by universities and colleges for scientific purposes, approved February 21, 1873 (17 Stat., 468). An act to amend an act entitled "An act to reduce duties on imports and to reduce internal taxes, and for other purposes," approved June 6, 1872, and for other purposes. Approved March 3, 1873. Section 5 of this act amends section 55 of the act of July 20, 1868, as amended by the act of June 6, 1872 (17 Stat., 559). An act to amend an act entitled "An act to prevent smuggling, and for other purposes," approved July 18, 1866. Approved March 3, 1873 (17 Stat., 580). An act relating to the fractional parts of a barrel containing fer- mented liquors, approved March 3, 1873 (17 Stat., 586). An act to place at the disposal of the Commissioner of Internal Revenue certain copies of the new compilation of internal-revenue laws. Approved March 3, 1873 (17 Stat., 621). Reprint of internal-revenue laws from August 5, 1861, to March 3, 1873. Submitted in response to order of the Senate of May 16, 1898, for use in consid- eration of House bill 10100, to provide ways and means to meet war expendi- tures. Senate Report No. 1123 55th Cong., 2d sess. ACTS, ETC., SINCE DECEMBER 1, 1873, THE DATE TO WHICH THE RE- VISED STATUTES OF THE UNITED STATES RELATE. (See sec. 5595, R. S.) [Supplement No. 1, Revised Statutes, contains legislation of 1874-1891, Forty-third to Fifty-first Congresses, inclusive. Supplement No. 2 (parts 1 to 9) contains legis- lation of 1892-1901, Fifty-second to Fifty-sixth Congresses, inclusive.] Forty-third Congress. An act to so amend the laws relative to internal revenue as to allow distillery warehouses to be continued in use after changes have occurred in the management of the business, approved January 8, 1874 (18 Stat., 2). [Sec. 3271a.] An act to abolish the office of Deputy Commissioner of Internal Revenue, approved January 29, 1874 (18 Stat., 6). Note to section 322, R. S. An act to facilitate the exportation of distilled spirits, and amenda- tory of the acts in relation thereto, approved June 9, 1874 (18 Stat., 64). [Sec. 3330.] An act explanatory of the act of June 30, 1864. Became law June 18, 1874 (18 Stat., 80). _ An act for the relief of savings institutions having no capital stock and doing business solely for the benefit of depositors, approved June 22, 1874 (18 Stat., 194). An act to provide for the stamping of unstamped instruments, docu- ments, or papers, approved June 23, 1874 (18 Stat., 250). An act to amend existing customs and internal-revenue laws, and for other purposes, approved February 8, 1875 (18 Stat., 309). Digitized by Microsoft® 22 INTERNAL-REVENUE LAWS. An act to correct errors and to supply omissions in the Revised Statutes of the United States, approved February 18, 1875 (18 Stat., 316). The changes made by this act were incorporated into the second edition, Revised Statutes, in their proper place. An act to further protect the sinking fund and provide for the exi- gencies of the Government, approved March 3, 1875 (18 Stat., 339). Increased tax on spirits to 90 cents per gallon and tobacco to 24 cents per pound; cigars to $6 per thousand. An act making appropriations for the legislative, executive, and judicial expenses of the Government for the year ending June 30, 1876, and for other purposes, approved March 3, 1875 (18 Stat., 352). Section 12 of "An act making appropriations to supply deficiencies in the appropriations for fiscal years ending June thirtieth, eighteen hundred and seventy-five, and prior years, and for other purposes," approved March 3, 1875 (18 Stat., 419). An act to amend section numbered 3342 of the Revised Statutes of the United States, in relation to affixing stamps on brewers' casks, approved March 3, 1875 (18 Stat., 484). An act to authorize the Secretary of the Treasury to adjust and remit certain taxes and penalties claimed to be due from mining and other corporations, and for other purposes, approved March 3, 1875 (18 Stat., 507). Forty-fourth Congress. An act to extend the time for stamping unstamped instruments, ap- proved February 25, 1876 (19 Stat., 5). Time extended to January 1, 1877. Joint resolution concerning special-tax stamps, approved May 8, 1876 (19 Stat., 213). [Sec. 3233a.] An act to define the tax cm fermented or malt liquors, approved May 13, 1876 (19 Stat., 53). [Sec. 3337a.] An act relative to the redemption of unused stamps, approved July 12, 1876 (19 Stat., 88). An act making appropriations for the legislative, executive, and judicial expenses of the Government for the year ending June 30, 1877, and for other purposes, approved August 15, 1876 (19 Stat., 152). Supervisors abolished. Reduced number of collection districts. An act to perfect the revision of the statutes of the United States, and of the statutes relating to the District of Columbia, approved February 27, 1877 (19 Stat., 240). Changes made by this act were incorporated in the second edition Revised Statutes. An act making appropriatians for the legislative, executive, and judicial expenses of the Government for the year ending June 30, 1878, and for other purposes, approved March 3, 1877 (19 Stat., 303). Reduced number of collection districts. An act relating to the production of fruit brandy and to punish frauds connected with the same, approved March 3', 1877 (19 Stat., 393). Digitized by Microsoft® IN TEENAL-BE VENUE LAWS. 23 Forty-fifth Congress. Joint resolution declaring that a reduction of the tax on distilled spirits is inexpedient, approved February 18, 1878 (20 Stat., 248). _ Joint resolution to prescribe the time for the payment of the tax on distilled spirits, and for other purposes, approved March 28, 1878 (20 Stat., 249). Repealed by the act of May 28, 1880. An act to extend the provisions of section 3297 of the Revised Stat- utes to other institutions of learning, approved May 3, 1878 (20 Stat.. 48). [Sec. 3297a.] An act making appropriations for the legislative, executive, and judicial expenses of the Government for the fiscal year ending June 30, 1879, and for other purposes, approved June 19, 1878 (20 Stat., 187). [Sees. 3157a, 3463a.] An act to amend section 5497 of the Revised Statutes, relating to embezzlement by officers of the United States, approved Februarv 3, 1879 (20 Stat., 280). [Sec. 5497, Sec. 96, Criminal Code, Appendix.] An act to amend the laws relating to internal revenue, approved March 1, 1879 (20 Stat., 327). Reduced tax on tobacco and many important changes made. Forty-sixth Congress. An act relating to vinegar factories established and operated prior to March 1, 1879, approved June 14, 1879 (21 Stat., 20). [Sec. 3282.] An act making appropriations for the legislative, executive, and judicial expenses of the Government for the fiscal year ending June 30, 1880, and for other purposes, approved June 21. 1879 (21 Stat., 23). Salary of storekeepers limited. An act providing for the binding of the Internal-Revenue Laws and Manual, approved June 27, 1879 (21 Stat., 35). An act authorizing an allowance for loss by leakage or casualty of spirits withdrawn from distillery warehouses for exportation, ap- proved December 20, 1879 (21 Stat., 59). An act to amend the laws in relation to internal revenue, approved May 28, 1880 (21 Stat., 145). "Carlisle bill." Repealed provision charging 10 cents for stamps other than tax-paid or export. An act to amend sections 3385 and 3357 of the Revised Statutes of the United States, approved June 9, 1880 (21 Stat., 167). An act to amend the sixth subdivision of section 3244 of the Revised Statutes of the United States, approved June 16, 18S0 (21 Stat., 291). Forty-seventh Congress. An act to repeal so much of section 3385 of the Revised Statutes as imposes an export tax on tobacco, approved August 8, 1882 (22 Stat., 372). An act to amend section 3362 of the Revised Statutes relating to the tax on perique tobacco, approved January 9, 1883 (22 Stat., 401). Digitized by Microsoft® 24 INTEBNAL-KEVENTJE LAWS. An act relating to exportation of tobacco, snuff, and cigars, in bond, free of tax to adjacent foreign territory, approved January 13, 1883 (22 Stat., 402). An act to reduce internal-revenue taxation, and for other purposes, approved March 3, 1883 (22 Stat., 488). Reduced tax on tobacco to 8 cents per pound and repealed stamp taxes on bank checks, matches, perfumery, medicinal preparations, and other articles imposed by Schedule A following section 3437, Revised Statutes. Forty-eighth Congress. An act to limit the time within which prosecutions may be instituted against persons charged with violating internal-revenue laws, ap- proved July 5, 1884 (23 Stat., 122). An act making appropriations fo executive, and judicial appropriation act, 1900.)] ***** No honorary Tho establishment of a civd pension roll or an honorable service rou. service roll, or the exemption of any of the officers, clerks, and persons in the public service from the existing laws respecting employment in such service, is hereby pro- Thirty days' hibited: Provided,, That the thirty days' annual leave of abs n eme. leave of absence with pay in any one year to clerks and employees in the several Executive Departments authorized by exist- ing law shall be exclusive of Sundays and legal holidays. Dept. Cir. No. 66, December 12, 1910. Regulations relative to leaves of absence promulgated; effective January 1, 1911. Digitized by Microsoft® ORGANIZATION OP OFFICE. 53 Sec. 3. [Extract from the legislative, executive, and judi- Temporary ^appropriation act for the fiscal year ending June SO, todLified tS£ 1903 approved Apr. 28, 1902. (32 Stat., 120, 171.)] ice - That the additional clerks on the temporary rolls and other employees rendered necessary because of increased work incident to the war with Spain, and under the Act ol June thirteenth, eighteen hundred and ninety-eight, providing for war expenditures and for other pur- poses, heretofore appointed and who are now employed m the several departments of the Government, are hereby transferred to the classified service as of their present grade or rate of compensation, respectively, and shall be continued in the several departments where now employed, without further examination, subject, however, to trans- fer, promotion, or removal the same as other clerks and employees in the classified service. ***** Previous laws providing for temporary clerics. Section 3, act of June 13, 1898 (30 Stat., 448). Act of July 7, 1898, deficiency appropriation bill (30 Stat., 696, 705). This act provided for an appropriation of $500,000 for additional temporary force in the Internal-Revenue Service, to be available during the fiscal year 1899, the office force in the Internal-Reveune Bureau to be appointed by the Secretary of the Treasury on the recommendation of the Commissioner of Internal Revenue. Act of February 24, 1899, legislative, executive, and judicial appropriation act for 1900 (30 Stat., 865). Appropriation act for 1901, legislative, executive, and judicial, approved April 17, 1900 (31 Stat., 107, 133). Appropriation act for 1902, legislative, executive, and judicial, approved March 3, 1901 (31 Stat., 982, 1009). Sec. 4. [Extract from the legislative, executive, and judicial appropriation act for the fiscal year ending June 30, 1909, approved May 22, 1908. (35 Stat., 2U.)] It Travel ex- shall be the duty of the head of each executive ment s employees department and other government establishment atj^^^JjjyV" Washington to submit to Congress at the beginning ofp° rtec i- each regular session a statement showing in detail what officers or employees (other than special agents, inspec- tors, or employees, who in the discharge of their regular duties are required to constantly travel) of such execu- tive department or other government establishment have traveled on official business from Washington to points outside of the District of Columbia during the preceding fiscal year, giving in each case the full title of the official or employee, the destination or destinations of such travel, the business or work on account of which the same was made, and the total expense to the United States charged in each case. to re- Digitized by Microsoft® fleers as witnesses \ 54 ORGANIZATION OF OFFICE. APPROPRIATION FOR COLLECTING INTERNAL REVENUE. [Extract from the legislative, executive, and judicial appro- priation act for the fiscal year ending June SO, 1911, ap- proved June 17, 1910 (86 Stat, 494)]. «j» $ !f» yfi t* For salaries and expenses of collectors of internal reve- nue, and deputy collectors, and surveyors, and clerks, messengers, and janitors in internal-revenue offices, two million one hundred and thirty-five thousand dollars: Provided, That no part of this amount be used in defray- ing the expenses of any officer, designated above, sub- Expenses^ofof-posnaed by .the United States courts to attend any trial ° s before a United States court or preliminary examination before any United States commissioner, which expenses shall be paid from the appropriation for "Fees of wit- nesses, United States courts." For salaries and expenses of forty revenue agents pro- vided for by law, and fees and expenses of gaugers, sala- Forty revenue ries and expenses of storekeepers and storekeeper-gaugers, two million four hundred and twenty thousand dollars. For rent of offices outside of the District of Columbia, telephone service, and other miscellaneous expenses inci- dent to the collection of internal revenue, and for the Miscellaneous purchase of necessary books of reference and periodicals expenses. j or ^ e chemical laboratory and law library, at a cost not to exceed five hundred dollars, and reasonable expenses for not exceeding sixty days immediately following the injury of field officers or employees in the internal-revenue service while in line of duty, of medical attendance, surgeon's and hospital bills made necessary by reason of such injury, and cei'v , el U in i i e ine r of/ or ' horses crippled or killed while being used by officers in duty. making raids, not exceeding one hundred and fifty dollars for any horse so crippled or Mlled, one hundred thousand dollars. The portion italicized was in the legislative, executive, and judicial appropriation act for 1910 (act of Mar. 4, 1909; 35 Stat., 845, 871; T. D., 1363; T. D. 1640). The Act making appropriations for the legislative, executive, and judicial expenses of thn government for the fiscal year end- ing June 30, 1912, contained the same provisions as above, except the amount appropriated for salaries and expenses of collectors, etc., was $2,150,000, and the amount for salaries and expenses of 40 revenue agents, etc., was $2,520,000. (36 Stat., 1196.) For expenses of collecting the corporation tax, see p. 328. That hereafter law books, books of reference, and periodicals for use of any Executive Department, or other Government establishment not under an Executive Department, at the seat of government, shall not be purchased or paid for from any appropriation made for contingent expenses or for any specific or general purpose unless such purchase is authorized and payment therefor specifically provided in the law granting the appropria- tion. [Sec. 3, legislative, executive, and judicial appropriation act, approved Mar. 15, 1898 (30 Stat., 277).] Books of reference denned. (VI Comp. Dec, 227, 312.) Digitized by Microsoft® ORGANIZATION OF OFFICE. 55 Sec. 7. [Act of Mar. IS, 1898; 80 Stat., 316. {Legis- lative, executive, and judicial appropriation act for 1899.)] * * * Hereafter it shall be the duty of the head of each Executive Department to require monthly reports to Monthly re- be made to him as to the condition of the public business P^s^on^onm- in the several bureaus or offices of his Department at Washington ; and in each case where such reports disclose that the public business is in arrears, the head of the Department in which such arrears exist shall require, as provided herein, an extension of the hours of service to such clerks or employees as may be necessary to bring up such arrears of public business. Hereafter it shall be the duty of the head of each Executive Department, or other Government establish- ment at the seat of government, not under an Executive Department, to make at the expiration of each quarter Q Uarterly re _ of the fiscal year a written report to the President as to ports, the condition of the public business in his Executive Department or Government establishment, and whether any branch thereof is in arrears. Sec. 239. Separate accounts shall be kept at the Account of re- Department of the Treasury of all moneys received fromJ£*^ u ° f interDal internal duties or taxes in each of the respective States, Territories, and collection-districts, and of the amount of each species of duty and tax that shall accrue; so as to exhibit, as far as may be, the amount collected from each source of revenue, with the moneys paid as compensation and for allowances to the collectors and deputy collectors, inspectors, and other officers employed in each of the respective States, Territories, and collection districts. Sec. 261. The Secretary of the Treasury shall annu- ^jfjij^ ?* t ™" ally, in the month of December, lay before Congress an naPtaxes™ "'" ' abstract, in tabular form, of the separate accounts of moneys received from internal duties or taxes in each of the respective States, Territories, and collection-districts, required by section two hundred and thirty-nine, to be kept at the Treasury. Annual detailed report of receipts and expenditures. Section 15, act of July 31, 1894 (28 Stat., 210). Sec. 196. The head of each Department, except the j- 4 ? 11 "? 1 f ep ^ rt Department of Justice, shall furnish to the Congressional partment. Printer copies of the documents usually accompanying his annual report, on or before the first day of November in each year, and a copy of his annual report on or before the third Monday in November in each year. Provided, That of the reports of * * * the Commissioner of Internal Revenue, * * * the usual number only shall be printed. Act of January 12, 1895 (28 Stat., 601, 616); Supp., R. S., vol. 2, p. 356. No head of any Executive Department, or of any bureau, branch, or office of the Government, shall cause to be printed, nor shall the Public Printer print, any document or matter except that which is authorized by law and necessary to the public business; and executive officers, before transmitting their annual reports, shall carefully examine the same and all Digitized by Microsoft® 56 ORGANIZATION OF OFFICE. accompanying documents, and exclude therefrom all matter, including engravings, maps, drawings, and illustrations, except such as they shall certify in their letters transmitting such reports are necessary and relate entirely to the transaction of the public business. Section 94, act of January 12, 1895 (28 Stat., 601) ,_ No printing and binding shall be done by the Public Printer for the several Executive and Judicial Departments of the Gov- ernment in any fiscal year in excess of the amount of the allot- ment for such Departments. Heads of Executive Departments shall direct whether reports made to them by bureau chiefs and chiefs of divisions shall be printed or not. Act of Aug. 5, 1892 (27 Stat., 388). No report, document, or publication of any kind distributed by or from an Executive Department or Bureau of the Govern- ment shall contain any notice that same is sent with "the com- pliments-" of an officer of the Government, or with any special notice that it is so sent, except that notice that it has been sent, with a request for an acknowledgment of its receipt, may be given. Act of January 12, 1895. (28 Stat., 601, 620.) Digitized by Microsoft® Title XXXV— INTERNAL REVENUE. REVISED STATUTES. Chapter One. OFFICERS OF INTERNAL REVENUE. 3140 (amended). Definitions. 3141. Collection districts. 3142. Collectors. 3143 (amended). Collectors' bonds. 3144 (amended). Collectors to be disburs- ing agents. 3145. (Obsolete.) 3146. Accounts of collectors adjusted ac- cording to fiscal year. 3147. Apportionment of compensation of collectors. [3148]. Sees. 12 and 13, act February 8, 1875, as amended. Collectors' compensation and allowances. Deputy collectors and their sal- aries. 3149 (amended). Disability or vacancy in office of collector. [3149a]. Authority to detail deputy col- lectors. 3150. Deputy collector, when entitled to collector's salary. 3151. Repealed. 3152 (amended). Internal-revenue agents. [3152a]. Additional agents. 3153. Storekeepers; salaries and bonds. Office of storekeeper and gauger. [3153a]. Compensation and bond. [31536]. Storekeepers at distilleries that mash less than 60 bushels of grain per day. [3153c]. Storekeepers at distilleries whose registered capacity is 20 bushels orless. [3153d]. Assignment of storekeeper and gauger. 3154. Assignment and transfer of store- keepers. [3154a.] Sec. 63, act Aug. 28, 1894 (amended). Compensation of store - keepers and gaugers. Transfers and details. 3155. Temporary storekeepers. 3156. Gaugers. [3156a] Assignment of gaugers. 3157. Gaugers' fees. [3157a]. Same. [31576]. Gaugers only paid for actual service. Gaugers' Sec. [3157c]. Act July 7, 1898. pensation. [3157 n j_* p ± agents. ury lor the paj r ment of all expenses of collection of taxes and other expenditures for the internal revenue service within their respective districts, under regulations and instructions from the Secretary of the Treasury, on giving good and sufficient bond, with such sureties, in such form, and in such penal sum, as shall be prescribed * * * and approved by the Secretary of the Treasury, for the faithful performance of their duties as such dis- bursing agents; but no additional compensation shall be paid to collectors for such services. The words "by the First Comptroller of the Treasury " omitted in view of the following act: Hereafter all bonds of * * * collectors of internal revenue, * * * either as such officers or as disbursing officers of the Treasury, * * * and all such bonds now on file in the Office of the Comptroller of the Treasury shall be transmitted to the Secretary of the Treasury and filed as he may direct; and the duties now required by law of the Comptroller of the Treasury in regard to such bonds, as the successor of the * * * First Comptroller of the Treasury, shall hereafter be performed by the Secretary of the Treasury, * * *. [Sec. 5, act of Mar. 2, 1895, (28 Stat., 807).] As to duties of disbursing officers, see Appendix, section 3620 et seq., page 404. Disbursing officers are responsible for the identity of the parties to whom they are authorized to pay money and for the genuineness of signatures to the vouchers returned by them. (Hartson v. United States, 21 Ct. Cls., 451.) The bond required from the collector as disbursing agent is separate from and additional to his borid as collector. (Hall v. United States, 17 Ct. Cls., 39. See Chadwick v. United States, 3 Fed. Rep., 750.) Bond of collector as disbursing agent held to cover disburse- ments to storekeepers, although the office of storekeeper was created by a law passed subsequent to date of bond. (United States v. McCartney and others, 1 Fed. Rep., 104; 26 Int. Rev. Rec, 28.) The sureties on this bond (if individuals) must be other than those on bond as collector; but a corporate surety, duly quali- fied, may be accepted as surety on both bonds. This bond must not be executed until after the collector has fully qualified as such by executing his bond as collector and taking the oath of office. (Dept. Cir. No. 191, Oct. 12, 1897; 43 Int. Rev. Rec, 438.) Digitized by Microsoft® OFFICERS OF INTERNAL REVENUE. 63 Sec. 3145 [as to collector's salary and allowances. ] J^£°wcm£nl (Obsolete.)] Superseded by sections 12 and 13, act of to fiscal year. February 8, 1875, as amended. [Sec. 3148.] Sec. 3146. In adjusting the accounts of collectors (accruing after June thirtieth, eighteen hundred and sixty-four) and in the payment of their compensation for services, the fiscal year of the Treasury shall be observed. Collectors' revenue accounts to be rendered quarterly, page 108. Collectors' disbursing accounts to be rendered monthly, page406 . See section 237, Revised Statutes, commencement of fiscal year. (34 Int. Rev. Rec, 197.) Sec. 3147. When any part of the compensation of the of a pp^™?°^ collector of any district is by commission upon assess- of collectors. ments or* collections, and, in consequence of a new appointment, is due to more than one collector -within the same year, such commissions shall be apportioned between such collectors; but in no case shall a greater amount of the commissions be allowed to two or more collectors in the same district than shall have been author- ized by law to be allowed to one collector, and the same rules shall apply to the salaries and commissions of asses- sors and collectors heretofore earned and accrued. But no payment shall be made to collectors, on account c £££"^1;;}** r °' of salaries or commissions, without the certificate of the quired. Commissioner of Internal Eevenue that all reports required by law or regulation have been received, or that a satis- factory explanation has been rendered to him. of the cause of delay. See section 12, act of July 31, 1894, page 405. As to certificate of due diligence, see section 3218, page 113. Circular No. 275, Februaiy 15, 1884 (30 Int. Rev. Rec, 53), no payments to be made to a collector on account of salaries, etc. , until all reports required by the regulations are received or the failure to render same satisfactorily explained. [Sec. 3148.] [Sec. 12, act of Feb. 8, 1875 (18 Stat., 309), as amended by sec. 2, act of Mar. 1, 1879 (20 Stat., 327).] That each collector of internal revenue shall be authorized to appoint, by an instrument in writing under his hand, as many deputies as he may think proper, to be com- or ^ eputy coUect - pensated for their services by such allowances as shall be made by the Secretary of the Treasury, upon the recom- mendation of the Commissioner of Internal Eevenue. Allowances shall also be made in like manner for salary ut f e a s la ^ ° c ! j£%. and office expenses of collectors, all of which shall be inors. lieu of the salary and commissions heretofore provided by law: Provided, however, That the salaries of collectors shall be fixed at two thousand dollars each per annum where the annual collections amount to twenty-five thousand dollars or less, and shall, by the Secretary, on the recom- mendation of the Commissioner, be graduated up to the *This word "or" is erroneously printed "of" in the Revised Statutes, edition of 1878. Digitized by Microsoft® ity. 64 OFFICERS OF INTERNAL REVENUE. maximum limit of four thousand five hundred dollars; which latter sum shall be allowed in all cases where the collections amount to one million of dollars or upward; and the collector shall have power to revoke the appoint- ment of any such deputy, giving such notice thereof as the Commissioner of Internal Revenue may prescribe, and to require and accept bonds or other securities from any deputy; and actions upon such bonds may be brought in any appropriate district or circuit court of the United States ; which courts are hereby given jurisdiction of such actions concurrently with the courts of the several States. or? e aut y ho C r 1 fty Each such deputy shall have the like authority in every and responsibif- respect to collect the taxes levied or assessed within the portion of the district assigned to him which is by law vested in the collector himself; but each collector shall, in every respect, be responsible, both to the United States and to individuals, as the case may be, for all moneys collected, and for every act done or neglected to be done, by any of his deputies while acting as such. The right of collectors to commissions on taxes collected by the sale of tax-paid spirit stamps (sec. 3314, p. 208) was not taken from them by the act of March 1, 1879. But the total net com- pensation of collectors can not in any case exceed $4,500 per annum. (United States v. Landram, 32 Int. Rev. Rec, 151; 118 U. S., 81.) As to compensation for duties performed before taking oath. (United States v. Flanders, 112 U. S., 88; 30 Int. Rev. Rec, 397.) Additional allowance of salary to collectors. (Utah case, 2 Lawrence Dec, 559; 28 Int. Rev. Rec, 293.) An action by a collector of internal revenue against a deputy collector on his official bond may be removed from the State court to the Federal court under the act of March 3, 1875. (Orner v. Saunders, 3 Dillon, 284.) The act of August 5, 1909, page 372, does not apply to bonds given by deputy collectors to the collector. (28 Op. Atty. Gen., 28.) A deputy collector is authorized to act as such when his com- mission has been signed and placed in the mail and he is notified thereof by telegram. (United States v. Sykes, 58 Fed. Rep., 1000.) No appeal lies from the decision of the Secretary as to making further allowances. Compensation of collectors can not be revised by the courts. (United States v. Hall, 2 Dillon, 426; 91 U. S., 559.) Deputy collectors of internal revenue are appointed under section 3148, Revised Statutes, and the power of removal rests with the appointing power, the collector, subject to such require- ments as to notice as the Commissioner of Internal Revenue may prescribe, and such action can not be reviewed by an appeal to the courts. (Page v. Moffett, collector, U. S. circuit court, district of New Jersey, 85 Fed. Rep., 38; T. D. 19027, 1898.) Court of equity will not, by injunction, restrain a collector from making a removal of a subordinate employee. (Morgan v. Nunn, collector, United States circuit court, middle district of Tennessee, 84 Fed. Rep., 551; T. D. 19027, 1898; White, col- lector, v. Berry (1898), 170 U. S., 366.) Civil-service law, power of removal. (26 Op. Atty. Gen., 363.) Appointment and dismissal of deputy collectors. (Cir. No. 717, Mar. 24, 1908; T. D. 1328.) Deputy collectors included in the classified service. Execu- tive order, November 7, 1906. (T. D. 1091.) Digitized by Microsoft® OFFICERS OF INTERNAL REVENUE. 65 Power and duties of deputy collectors. (Landram v. U. S., 16 Ct. Cls., 74.) Assignment of deputy collectors of internal revenue to special or general duty. (Circular letter May 12, 1899, T. D. 21150.) Deputy collectors' diary report and monthly account for services. (T. D., 269, Jan. 21, 1901; T. D., 1471, Mar. 20, 1909; T. D., 1590, Jan. 28, 1910; T. D., 1G30, May 21, 1910.) For pay purposes all months in the year are reckoned as containing thirty days. (XIII Comp. Dec, 1.) Entire time of deputy collectors must be devoted to official duties. (Circular No. 532, May 11, 1899, T. D., 21149.) Transfer of deputy collector as storekeeper-gauger. (T. D., 1331.) Sec. 13. [Act of Feb. 8, 1875 (18 Stat, 307), as amended by sec. 2, ad of Mar. 1, 1879 (20 Stat, 327).] That there shall be further paid, after the account thereof has been rendered to and approved by the proper officers of the Treasury, to each collector, his necessary and reasonable charges for advertising, stationery, and blank books Tf £°*¥ ctors ' t a a d - used in the performance of his official duties, and fortionery, 8 etc. s postage actually paid on letters and documents received or sent and exclusively relating to official business, but no such account shall be approved or allowed unless it states the date and the particular items of every such expenditure, and shall be verified by the oath of the collector: Provided, That the Secretary of the Treasury, Further aiiow- on the recommendation of the Commisisoner of Internal ances ' Revenue, be authorized to make such further allowances, from time to time, as may be reasonable, in cases in which, from the territorial extent of the district, or from the amount of internal duties collected, it may seem just to make such allowances; but no such allow- ance shall be made if more than one year has elapsed since the close of the fiscal year in which the services were rendered. But the total net compensation of a collector shall J*^ n of not in any case exceed four thousand five hundred dol- collector. lars a year; and no collector shall be entitled to any portion of the salary pertaining to the office unless such collector shall have been confirmed by the Senate, ex- cept in cases of commissions to fill vacancies occurring during the recess of the Senate. Deputy collector's pay. (Herndon's claim, 26 Int. Rev. Rec, 314; Herndon v. United States, 15 Ct. Cls., 446; 26 Int. Rev. Rec, 198; Wilson's case, 2 Lawrence Dec, 206.) Salary of deputy collector. Are deputy collectors officers? (Landram v. United States, 16 Ct. Cls., 74; 27 Int. Rev. Rec, 80; Opinion of Attorney Gen. Bonaparte; 26 Op. Atty. Gen., 363.) See note under section 3169, page 81. Questions of salary are questions of contract, and the Gov- ernment can be sued in Court of Claims when it fails to pay collector his salary. (Patton v. United States, 7 Ct. Cls., 362.) Compensation of collectors and deputy collectors (Reg. No. 2, revised, pp. 64-68.) The salary of an officer begins from date of taking oath and entering on duty. (IV Comp. Dec, 59.) Collectors of internal revenue shall render their revenue accounts quarterly. (Act of May 27, 1908; 35 Stat., 317, p. 108.) 72170°— 11 5 Digitized by Microsoft® 66 OFFICERS OF INTERNAL REVENUE. Freight and express bills to be paid by direct settlement. (T. D., 1372.) Instructions relative to shipments of property by officers of the Internal Revenue Service, and payment of transportation charges on same. (T. D., 1562.) ™ b y u in y off,™ Sec. 3149 [as amended oy sec. 2, act of Mar. 1, 1879 (20 of collector. Stat., 327).] In case of the sickness or absence of a col- lector, or in case of his temporary disability to discharge his duties, they shall devolve upon his senior deputy, unless he shall have devolved them upon another of his deputies; and for the official acts or defaults of such deputies the collector and his sureties shall be held responsible to the United States. s™ior deputy In case of a vacancy occurring in the office of collector, charge. "' in the deputies of such collector shall continue to act until his successor is appointed; and until a successor is ap- pointed, the deputy of such collector senior in service shall discharge all the duties of collector, and also the duties of disbursing agent; and of two or more deputies appointed on the same day, the one residing nearest the residence of the collector when the vacancy occurred shall discharge the said duties until another collector is appointed. When it appears to the Secretary of the Treasury that the interest of the Government so requires, he may, by his order, direct the said duties to be performed by such other one of the said deputies as he may designate. iab°ie eC o or dep°it d ^ or *^ e officii acts and defaults of the deputy upon acting. whom said duties are devolved remedy shall be had on the official bond of the collector, as in other cases; and for the official acts and defaults of such deputy as acting disbursing agent, remedy shall be had on the official bond of the collector as disbursing agent. secltan p ^i«T '^ J1C ^ an ^ ^ond or secur ity taken from a deputy by a "' " collector, pursuant to section twelve of 'An act to amend existing customs and internal-revenue laws, and for other purposes,' approved Februarv eight, eighteen hundred and seventy -five, shall be available to his legal representa- tives and sureties to indemnify them for loss or damage accruing from any act or omission of duty by the deputy so continuing or succeeding to the duties of such collector. Suspension of Collector Francis Widmer on charges of fraud by supervisor. Deputy performing duties of collector entitled to compensation. (United States v. Farden, 99 U. S., 10, affirm- ing, 13 Ct. Cls., 347; 25 Int. Rev. Rec, 55.) Commissioner's power to suspend collectors. (Sec. 3163a.) Death, resignation, or removal of collector: accounts. (Sec. 3219, p. 113.) Offices of Deputy Collectors vacated by appointment of new Collector. 26 Op. Atty. Gen., 363. (T. D. 1328.) detaii thorlty t0 ^ec. [3149a.] [Extract from the legislative, executive, and judicial appropriation act for the fiscal year ending June 80, 1901, approved April 17, 1900 (81 Stat., 107).] Provided, That the Commissioner of Internal Revenue is authorized to detail deputy collectors of internal revenue in one district for special duty in other dis- Digitized by Microsoft® OFFICERS OF INTERNAL REVENUE. 67 tricts, and the deputy collectors so detailed shall be paid by the collector of internal revenue and disbursing agent for the district for which they are appointed and for which the allowance for their salary and expenses is made, the same as if all their services had been performed and expenses incurred in that district. * * * Act of June 29, 1906 (34 Stat., 620), provides for a deputy col- lector in Porto Rico, page 374. Sec. 3150. Anv deputv collector who has performed or Deputy coiiect- i. i j i •, e i j.i 1 i • e or, when entitled may perform, under authority of law, the duties ol any to collector's sai- collector in consequence of a vacancy in the office of said ary - collector, shall be entitled to receive the salary and com- missions allowed by law to such collector, or the allowance in lieu of said salary and commissions allowed by the Sec- retary of the Treasury to such collector, and the Secretary of the Treasury may make to such deputy collector such allowance in lieu of salary and commissions as he might lawfully make to such collector. And such deputy shall not be debarred from receiving such salary and commis- sions, or allowances in lieu thereof, by reason of the holding of another Federal office by said collector during the time for which such deputy acts as collector. But all payments to such deputy collector shall be upon duly audited vouchers. Sec. 3151. [relative to inspectors of tobacco and cigars, repealed by act of Aug. 4, 1886 (24 Stat, 218).] Sec. 3152. [as amended by sec. 2, act of Mar. 1, 1879 (20 * n £™f: reve Stat., 327); act ofJulyJ, 1884 (23 Stat, 172) .] The Com- * ' missioner of Internal Kevenue may, whenever in his judg- ment the necessities of the service so require, employ competent agents, not exceeding at any time twenty in number, to be paid such compensation as he may deem proper, not exceeding in the aggregate any appropriation made for that purpose; and he may, at his discretion, assign any such agent to duty under the direction of any officer of internal revenue, or to such other special duty as he may deem necessary; and no general or special agent or inspector, by whatever designation he may be known, of the Treasury Department, in connection with the internal revenue, * * * eX cept as provided for in this title, shall be appointed, commissioned, employed, or continued in office. The agents whose employment is authorized by this sec- tion shall be known and designated as internal-revenue agents, and they shall have all the powers of entry and examination conferred upon any officer of internal reve- nue, by sections thirty-one hundred and seventy-seven, ^ecs^m, 3277, thirty-two hundred and seventy-seven, thirty-two hun- dred and eighty-six, and thirty-three hundred and eighteen of the Revised Statutes; and all the provisions of said sections, including those imposing fines, forfeitures, penalties, or other punishments for the enforcement thereof, are hereby made applicable to the action of in- Digitized by Microsoft® 68 OFFICERS OF INTERNAL REVENUE. ternal-revenue agents, in the same manner as if such agents were specially named in each of said sections. 3i69°3i7 3 i 67 ' 3168 ' -^d a ^ *^ e P roy i s i° ns °f sections thirty-one hundred and sixty-seven, thirty-one hundred and sixty-eight, thirty-one hundred and sixty-nine, and thirty-one hun- dred and seventy-one of the Revised Statutes shall apply to internal-revenue agents as fully as to internal-revenue officers. The legislative, executive, and judicial appropriation act, approved July 7, 1884 (23 Stat., 172), provided that there shall not be employed .exceeding 20 agents, in lieu of the number then authorized by law. Before this act the number authorized was 35. Ten additional internal-revenue agents were authorized by section 3, act of June 13, 1898 (30 Stat., 450). Twenty additional clerks and agents authorized by sectiin 47, act of June 13, 1898 (30 Stat., 450). Revenue agents may be designated to examine books of cor- porations when they fail to make return. (Sec. 38, act of Aug. 5, 1909.) Examination of carriers. — Carriers are prohibited from giving information concerning shipments handled by them, except in response to legal process from the court or proper State or United States officer. (Sec. 12, act of June 18, 1910, 36 Stat., 551.) [Sec. 3152 a.] [Extract from the legislative, executive, and judicial appropriation act approved April 28, 1902, Twenty addi- (32 Stat, 120, 1 J,.2) .] * * * and for salaries and ex- tionai agents. p enses f twenty additional internal revenue agents to be appointed and employed by the Commissioner of Internal Revenue, and these twenty agents to be in lieu of the agents provided for and appointed under the provisions of sections three and forty-seven of the Act of June thir- teenth, eighteen hundred and ninety-eight, providing for war revenue expenditures and other purposes, and these to be the only internal revenue agents employed in addi- tion to those provided for in section three thousand one hundred and fifty-two of the Revised Statutes. The existing provisions of law with regard to internal revenue agents shall apply to the duties, compensation, and ex- penses of these twenty additional agents, * * * Forty agents were provided for in the legislative, executive, and judicial appropriation act for the year 1911. (Act of June 17, 1910; 36 Stat., 494, p. 54.) Additional agents were provided for by the act of June 25, 1910, deficiency appropriation act (36 Stat., 780), to be employed by the Commissioner of Internal Revenue, with the approval of the Secretary of the Treasury, for carrying out the provisions of section 38 of the act of August 5, 1909 (corporation excise tax), page 320. Nothing in section 4, act of August 5, 1882 (22 Stat., 255), shall be construed to prevent the Commissioner of Internal Revenue from detailing one revenue agent for duty in his office. (Ap- pendix, p. 432.) [Sec. 3152 b.] [Extract from legislative, executive, and judicial appropriation act approved March 3, 1885, (23 compensation. Stat., JfiJf)^\ * * * Provided further, That the com- pensation of the chief of the internal-revenue agents shall not exceed ten dollars per day, and of the other Digitized by Microsoft® OFFICERS OF INTERNAL REVENUE. 69 agents not exceeding seven dollars per day each; and for per diem in lieu of subsistence, while traveling on duty, said agents shall receive at a rate to be fixed by the Secretary of the Treasury, not exceeding three dollars per day. * * * [Extract from the legislative, executive, and judicial appropriation act for the year ending Juno 30, 1906, approved February 3, 1905 (33 Stat., 631, 652).) cxam- Provided, That internal-revenue agents assigned to ^ i^fa'counts duty of examining accounts of collectors of internal revenue shall receive for per diem in lieu of subsistence, when absent from their legal residences on duty, a sum, to be fixed by the Commissioner of Internal Revenue, approved by the Secre- tary of the Treasury, not to exceed four dollars. Internal-revenue agents and inspectors are not entitled to compensation nor per diem in lieu of subsistence when sick; neither can they be allowed annual leave. (T. D. 1580.) Salaries not to be paid until after close of the month. (T. D. 1202.) Sec. 3153. [as amended by act of Aug. 15, 1876 (19 Stat., ^'S 152)]. There shall be appointed by the Secretary of the Treasury such number of internal revenue store-keepers as may be necessary, who shall each receive such compen- sation, not exceeding four dollars a day, to be paid monthly by the United States, as may be determined by the Commissioner of Internal Revenue. No store-keeper shall be engaged in any other business while in the service of the United States, without the written permission of the Commissioner of Internal Revenue. Every store- keeper shall take an oath faithfully to perform the duties of his office, and shall give a bond, to be approved by the Bond. Commissioner of Internal Revenue, for the faithful dis- charge of his duties, in such form and for such amount as the Commissioner may prescribe. Bonds of gaugers, storekeepers, and storekeeper-gaugers fixed at $5,000, Rules, Circular 576, July 2, 1900 (T. D. 171). To be renewed every four years. (T. D. 697.) Storekeeper's bond. Form 50 revised. Additional bonds. (T. D. 548.) [Sec. 3153 a.] Extract from legislative, executive, and judicial appropriation act approved August 15, 1876, (19 Stat., 152).] Hereafter no store-keeper shall receive a compensation greater compensation than four dollars per day; and said limited ' gaugers and store-keepers respectively shall only receive compensation when rendering actual service. Henry B. McNeil v. The United States. (35 Int. Rev. Rec, 15; 23 Ct. Cls., 413.) That the Secretary of the Treasury may, upon the rec- office of "store- ommendation of the Commissioner of Internal Revenue, g^?" and gau " impose the duties of storekeeper and gauger upon one officer, where the amount of spirits produced at the dis- tillery to which such officer may be assigned, is not suffi- cient in the judgment of the Commissioner to warrant the employment of two officers to perform the separate duties of storekeeper and gauger. Digitized by Microsoft® 70 OFFICERS OF INTERNAL REVENUE. compensation. The Secretary of the Treasury may issue a commission to such officer as storekeeper and gauger, but the com- Eensation for his services as storekeeper and gauger shall e that of storekeeper only. Bond. And the said officer shall before entering upon the dis, charge of such duties give a bond in the penal sum of not less than five thousand dollars for the faithful perform- ance of the combined duties of storekeeper and gauger. storekeeper [Sec. 3153&.] [Sec. 64, act of 'Aug. 28 ',1894(28 Stat., 509).] s5nmlnt g o?' ^ That the officer holding the combined office of storekeeper and gauger, under the provisions of the legislative, execu- tive, and judicial appropriation act, approved August fif- teenth, eighteen hundred and seventy-six (Nineteenth Statutes, page one hundred and fifty-two), may be as- signed by the Commissioner of Internal Revenue to per- form the separate duties of a storekeeper at any distillery, or at any general or special bonded warehouse, or to per- form any of the duties of a gauger under the internal- revenue laws. Bond. And the said officer, before entering upon the discharge of such separate duties, shall give a bond to be approved by the Commissioner of Internal Revenue for the faithful discharge of his duties in such form and for such amount as the Commissioner may prescribe. Gaugers, storekeepers, and storekeeper-gaugers were covered into the classified civil service by Executive Order, May 6, 1896. Storekeeper-gauger's bond. Form 50J revised. (T. D. 1260.) Under the old form of bond of a storekeeper-gauger, condi- tioned solely for the faithful discharge of his duties, recovery may be had only for damages actually sustained by the Gov- ernment. Such bond did not cover fines and costs imposed in a criminal prosecution of such officer. April 12. 1909. (T. D. 1482.) [Sec. 3153c] [Extract from sec. 2ofthe legislative, execu- tive, and judicial appropriation act, approved June 21, compensation 1879 (21 Stat, 28).] Hereafter storekeepers at distill- at small distill- .-. , i i j i • j -i -i i fi • ^ eries. enes that mash less than sixty bushels or grain per day shall be allowed not exceeding fifty dollars per month. But when one person acts as storekeeper and gauger, his salary shall not exceed four dollars per day for the time actually employed. Storekeepers are not assigned to distilleries of this capacity, but storekeeper-gaugers are so assigned. AN ACT To amend the provisions of the act of March third, eighteen hundred and eighty-five, limiting the compensation of storekeepers, gaugers, and storekeeper-gaugers in certain places to two dollars a day, and for other purposes, approved February 24, 1911. (36 Stat., 928.) Be it enacted, etc., That the provisions of the legislative, executive, and judicial appropriations Act for the fiscal year ending June thirtieth, eighteen hundred and eighty- six (Twenty-third Statutes, page four hundred and four), approved March third, eighteen hundred and eighty-five, which limits to two dollars per day the compensation of storekeepers, gaugers, and storekeeper-gaugers assigned to Digitized by Microsoft® OFFICERS OF INTERNAL REVENUE. 71 distilleries whose registered capacity is twenty bushels or less, be, and the same is hereby, amended, so as to read as follows : "Hereafter storekeepers, gangers, and storekeeper-gaugers who are assigned to distilleries with a registered capacity of twenty bushels or less, or who are assigned to other places where the compensation is now less than three dollars a day, compensation. shall receive three dollars a day for services." (T. D. 1680.) Storekeepers' and storekeeper-gaugers' monthly bills. Reg. No. 2, revised, p. 85. Assignments of storekeepers and gaugers must be made by the Commissioner of Internal Revenue upon the recommenda- tion of the collector. (Treas. Dec. (1899), No. 20695.) Assignment of storekeeper-gaugers. Cir. No. 712. (T. D. 1280); Regulations No. 7, revised, page 43. Transfer of storekeeper-gaugers. (T. D. 1331.) [Sec. 3153d] That the internal-revenue officer holding the 19 4 ct lm%tot.', combined office of storekeeper and ganger shall hereafter be ^ 2 ) known and denominated as a storekeeper-ganger, and when performing the combined duties of storekeeper-gauger, or when assigned by the Commissioner of Internal Revenue to perform the duties of a storekeeper only at any distillery, or at any general or special bonded warehouse, he shall receive for his services the compensation of storekeeper only; but when assigned by the Commissioner of Internal Revenue to perform the duties of ganger only, under the internal-revenue taws, as provided by those laws, he shall receive only the compensation for his services and the traveling expenses which are allowed by law to United States gaugers. Act June 28, 1902. (32 Stat., 492.) Sec. 3154. One or more storekeepers shall be assigned an V transfer 6 of by the Commissioner of Internal Revenue to every bonded storekeepers. or distillery warehouse established by law; and any store- keeper may be transferred * * * by the Commis- sioner of Internal Revenue, from one warehouse to an- 18 £, ct Au s- 15 - other. In the original section power was given to supervisors of internal revenue to transfer storekeepers, but those offices (super- visors) were abolished by the act of August 15, 1876. (19 Stat., 143.) Transfer of storekeepers. (Sec. 3163, p. 75.) [Sec. 3154a.] [Sec. 63, act of Aug. 28, 1894 (®8 Stat., 509), amended by act of May IS, 1910. (36 Stat, 369.)] That storekeepers, storekeeper-gaugers, and gaugers, compensation, when traveling to or from assignments, or when trans- ferred from one assignment to another, either in the same district or in different districts, shall receive the same compensation per day during the time necessarily occu- pied in traveling that they would be entitled to if on duty at the place to which assigned or transferred, or from which relieved, together with actual and necessary trav- eling expenses. Compensation and traveling expenses of storekeepers, store- keeper-gaugers, and gaugers. (T. D. 1632.) Digitized by Microsoft® 72 OFFICERS OF INTERNAL REVENUE. [Extract from the legislative, executive, and judicial appropriation act for the fiscal year ending June 30, 1901, approved April 17, 1900 (31 Stat., 107).] gauge?" n store- Provided further, That the Commissioner of Internal lee per-gaugers, Revenue is authorized to detail gaugers, storekeeper- deteued. rekeepers gaugers, and storekeepers, appointed in one district for special or regular duty in other districts, and the accounts or gaugers, storekeeper-gaugers, and storekeepers so de- tailed shall be adjusted and paid in the district where they are appointed the same as if assigned to regular duty, without regard to the number of districts in which they may have been employed in any one month, the same as if all their services had been performed and expenses incurred in the district in which appointed, and the order of the Commissioner of Internal Kevenue transferring gaugers, storekeeper-gaugers, or storekeepers to special work shall be accepted by the accounting officers of the Treasury Department as full authority for proper expenses incurred by said gaugers, storekeeper-gaugers, or storekeepers, while so assigned. Temporary g EC . 3155. I n case of the absence of any internal-reve- storekeeper. . , , . . J , nue storekeeper by reason or sickness or other cause, the collector having control of the warehouse may designate a person to have temporary charge thereof, who shall, dur- ing such absence, perform the duties and receive the pay of the storekeeper for the time he may be so employed, and shall for any violation of the law be subject to the same punishment as storekeepers. Storekeepers' duties. (Sees. 3267, 3271, 3273, 3274, 3287, 3295, 3301, 3302.) Penalties prescribed in case of storekeepers. (Sec. 3300, p. 199.) Concerning designations during temporary absence of store- keepers or storekeeper-gaugers. (Circular letter, Oct. 29, 1895; 41 Int. Rev. Rec, 445.) (Regulations No. 7, revised, p. 39.) Gaugers. Sec. 3156. The Secretary of the Treasury shall appoint in every collection district where they may be necessary, one or more internal-revenue gaugers, who shall each take an oath faithfully to perform his duties, and shall give bond, with one or more sureties, satisfactory to the Com- missioner of Internal Revenue, for the faithful discharge of the duties assigned to him by law or regulations ; and the penal sum of said bond shall not be less than five thousand dollars, and said bond shall be renewed or strengthened as the Commissioner of Internal Revenue may require. The duties of every such gauger shall be performed under the supervision and direction of the col- lector of the district to which he may be assigned, or of the collector in charge of exports at any port of entry to which he may be assigned. Gauger's bond. Form 39 revised. Compromise of gauger's bond. (Decision of Secretary Sher- man, adverse; 23 Int. Rev. Rec. (1877), 139.) New bonds can not be accepted from gaugers so as to release old bondsmen from responsibility. (30 Int. Rev. Rec. (1884), 197.) The right of action on the bond prescribed by section 3156 is reserved to the Government, notwithstanding an indictment, Digitized by Microsoft® OFFICERS OF INTERNAL REVENUE. 73 conviction, and sentence under section 3169, unless there is an averment of satisfaction of the latter. (United States v. Culler- ton, 8 Biss., 166; 24 Int. Rev. Rec, 68.) The offices of gauger, storekeeper, and storekeeper-gauger, where the compensation does not exceed $3 per day, or shall not exceed in the aggregate $500 per annum, are not subject to com- petitive examination or registration, but persons appointed to said offices are subject to an examination to be prescribed by the Secretary of the Treasury, and to be taken before appoint- ment, when possible. (Circular No. 538, revised; 21397.) For instructions as to the duties of gaugers, see Regulations, No. 11, revised, Gaugers' Manual (1906); Gaugers' Weighing Manual (1906); and Reg. No. 7, revised (1908). [Sec. 3156a.] [Sec. 65, act of Aug. 28, 1894 @8 Stat., 509) .] That internal- revenue gaugers may be assigned to a s s i g n m ent duty at distilleries, rectifying houses, or wherever gauging gaugers - is required to be done, and transferred from one place of duty to another, by the Commissioner of Internal Reve- nue, in like manner as storekeepers and storekeepers and gaugers are now assigned and transferred. Gaugers' returns. (Sec. 3291, p. 181.) Penalties prescribed in case of gaugers. (Sees. 3290, 3292, p. 181.) Gauging instruments to be prescribed by the Commissioner. (Sec. 3249, p. 149.) Transfer of gaugers. (Sec. 3163 amended.) Sec. 3157. Gaugers shall be entitled to receive such fees. Gaugers' tees. to be determined by the quantity gauged, as may be pre- scribed by the Commissioner of Internal Revenue; and said fees, together with their actual and necessary travel- ing expenses, shall be verified by their oaths, and shall be paid by the United States monthly. [Sec. 3157a.] [Extract from the legislative, executive, and judicial appropriation act, approved June 19, 1878 {20 Stat., 178).] * * * And hereafter the compensation compensation of gaugers shall not exceed five dollars per day while ogau actually employed. Compensation of gauger at winery. Sec. 3, act of June 7, 1906, page 233. [Sec. 31576.] [Extract from legislative, executive, and judicial appropriation act of Aug. 15, 1876 (19 Stat., 14%)-] * * * gaugers * * * shall only receive compen- sation when rendering actual service. [Sec. 3157c] [Act of July 7, 1898 (30 Stat., 656) . sp « ^ j . for Extract from the deficiency appropriation act, for the fiscal year ending June 30, 1898.] That gaugers employed in gauging fruit brandy, and gaugers specially detailed for special duty under the direc- tion of the Commissioner of Internal Revenue, may be paid, at the discretion of the Commissioner of Internal compensation. Revenue, either by fees to be determined by the quantity gauged, or by a daily compensation not to exceed five ^any h ^g}; dollars per diem while actually employed; and in cal- cuiatea. culating the daily compensation of all gaugers paid by fees, the quantity gauged for which fees are paid may be de- termined by dividing the aggregate gallons of spirits Digitized by Microsoft® 74 OFFICERS OF INTERNAL REVENUE. gauged by the number of days on which the gauger was actually employed during the month. Gaugers' fees, Circular No. 205. Regulations, No. 2, revised, p. 88. Gauger's Manual (1906). See T. D. 1632, May 20, 1910, as to compensation and traveling expenses. False claims. (United States v Bittinger, 21 Int. Rev. Rec, 342.) Section 3169, Revised Statutes (second paragraph), makes it an offense for a United States gauger to receive any compensa- tion except as by law prescribed for the performance of his duty. Rectifiers are entitled to have gaugers do their work promptly and accurately without any other pay than the pay received from the Government. Violation of law on the part of a United States gauger in receiving money from rectifiers for gauging spirits. (U. S. v. Brunjes, 36 Int. Rev. Rec, 47.) A gauger's pay being fixed by a general regulation, his case comes within the prohibition of section 1765, and he can not receive pay for another service rendered at the same time. (Hedrick v. United States, 16 Ct. Cls., 88.) Unofficial gauging for distillers and others (Reg. No. 2, revised, p. 92). Leave of ab- sence. AN ACT Granting cumulative annual leave of absence to storekeepers, gaugers, and storekeeper-gaugers, with pay, approved June 23, 1910. (36 Stat., 592.) [Sec. 3157<2.] That storekeepers, gaugers, and store- keeper-gaugers shall he, and are hereby, granted a cumulative annual leave of absence, with pay, not to exceed in the aggre- gate fifteen days for any one year: Provided, That said leave of absence is so computed as not to exceed one and one-quarter days for each twenty-six days said storekeepers, gaugers, and storekeeper-gaugers are actually assigned to duty: Provided further, That such leave shall be operative under such rules and regulations as the Commissioner of Internal Revenue, with the approval of the Secretary of the Treasury, may prescribe. [Extract from legislative, executive, and judicial appropriation act lor 18S5, act of July 7, 1884 (23 Stat., 172).] mSsTonSot'to'ex- And no collector in any district shall recommend, nor ceed is per cent in shall there be appointed or commissioned, more deputy excess of the n . . r > l i r j number e m- collectors, storekeepers, storekeepers and gaugers, gaug- pioyed. erg) inspectors, or other officers, or allowed to remain m commission more of any of said officers, at any one time, than fifteen per cent in excess of the number engaged in performing duty at the time, and indispensably necessary for the performance of said duty. See also legislative, executive, and judicial appropriation act for fiscal year ending June 30, 1886 (act of Mar. 3, 1885; 23 Stat., 404; Supp. R. S., vol. 1, p. 484; Commissioner's report, 1886, p. cxn). Circular No. 310, limiting the number of relatives permitted to hold position in the Internal-Revenue Service in each district (33 Int. Rev. Rec, 101.) faSfrtT"' ° f Sec - 3158 - Evei 7 internal-revenue officer, whose pay- ment, charges, salary, or compensation are composed, wholly or in part, of fees, commissions, allowances, or re- wards, from whatever source derived, shall be required to Digitized by Microsoft® OFFICERS OF INTERNAL, REVENUE. 75 render to the Commissioner of Internal Revenue, under regulations to be approved by the Secretary of the Treas- ury, a statement under oath setting forth the entire amount of such fees, commissions, emoluments, or rewards of whatever nature, or from whatever source received, during the time for which said statement is rendered ; and any false statement knowingly and willfully rendered un- der the requirements of this section, or regulations estab- lished in accordance therewith, shall be deemed willful perjury, and punished in the manner provided by law for the crime of perjury. And any neglect or omission to Penalty. render such statement when required shall be punished is^ ct (it b stat!; by a fine of not less than two hundred dollars, nor more 319 -' than five hundred dollars, in the discretion of the court. Punishment for perjury. (Sec. 125, Criminal Code, appendix' p. 414.) [Secs. 3159 and 3160.] [Repealed by legislative, execu- tive, and judicial appropriation act of Aug. 15, 1876 (19 Stat., US).] Office of supervisor abolished. Sec. 3161 . In any port of the United States where there is more than one collector of internal revenue, the Secre- officers in tary of the Treasury may designate one of them to have tatkms anddraw- charge of all matters relating to the exportation of articles backs - subject to tax under the internal-revenue laws; and at any port where he may deem it necessary, there shall be appointed by him an officer to superintend all matters of exportation and drawback, under the direction of the collector. The compensation of the officers last named shall be prescribed by the Secretary of the Treasury, but shall not exceed, in any case, an annual rate of two thou- sand dollars, excepting at New York, where such compen- sation shall be at the annual rate of three thousand dollars. At any port where there is no superintendent of exports, all the duties and services required of such officers shall be performed by the collector of internal revenue desig- nated to have charge of exportation. All the books, papers, and documents in the bureau of drawbacks in the respective ports, relating to the drawback of taxes paid under the internal-revenue law, shall be delivered to the collector of internal revenue in charge of exportation. Sec. 3162. Every collector of internal revenue and every superintendent of exports and drawbacks is sl f ^j^ r | e ^ authorized to administer such oaths and to certify toents of exports such papers as may be necessary under any regulation SSL. admmister prescribed under the authority of the internal-revenue laws. See section 3165 in regard to general authority of collector to administer oaths. Sec. 3163 [as amended by sec. 2, act of Mar. 1, 1879 Duties of coi- (20 Stat, 327).] Every collector within his collection le e c ^ re a ^ n j^ district and every internal-revenue agent shall see that agents, all laws and regulations relating to the collection of internal taxes are faithfully executed and complied with, Digitized by Microsoft® 76 OFFICERS OF INTERNAL REVENUE. and shall aid in the prevention, detection, and punish- ment of any frauds in relation thereto. And it shall be the duty of every collector and of every internal-revenue agent to report to the Commissioner in writing any neglect of duty, incompetency, delinquency, or mal- feasance in office of any internal-revenue officer or agent of which he may obtain knowledge, with a statement of all the facts in each case, and any evidence sustaining the same, commissioner The Commissioner may also transfer any inspector, may transfer cer- -. , J , . J p tain officers. gauger, storekeeper, or storekeeper and gauger, from one distillery, or other place of duty, or from one collection district, to another. Duty of collector to collect taxes. (Sec. 3183, p. 94.) Injunction will not lie against an executive officer to pre- vent his performance of acts directed by law. (Opinion of Solicitor of Treasury in the case of Sidenburg&Co., 27 Int. Rev. Rec, 47.) Proper course to be pursued by a disbursing officer of the United States who is enjoined by a State court from paying money. (Op. Atty. Gen., 25 Int. Rev. Rec, 53; 16 Op. Atty. Gen., 257.) Courts will not interfere by injunction with the exercise by the executive officers of duties requiring judgment or discretion. (Gaines v. Thompson, 7 Wall., 347; Litchfield v. Register and Receiver, 9 Wall., 575.) As to injunctions against collectors. (See under sec. 3224, p. 120; also Haffin v. Mason, 15 Wall., 671; 17 Int. Rev. Rec, 118; 16 Op. Atty. Gen., 257; 25 Int. Rev. Rec, 53.) Trespass will not lie against a collector for seizure unless the act was tortious or unauthorized. (Averill v. Smith, 17 Wall., 82; 17 Int. Rev. Rec, 171.) Powers requiring judgment and discretion conferred upon executive officers must be exercised with reason. When clearly reasonable the courts will not interfere with officers acting under discretionary powers. When found to be clearly unreasonable such action will be held void. (Woolner v. Rennick, 170 Fed. Rep., 662, T. D., 1425.) An officer or agent of the United States engaged in the per- formance of a duty arising under the laws and authority of the United States is not liable to a criminal prosecution in the courts of a State for acts done by him in his official capacity. (In re Waite, 81 Fed. Rep., 359.) The collection by internal-revenue officers of a tax erroneously assessed does not constitute a tort. (Armour v. Roberts, 151 Fed. Rep., 846.) Execution not to issue against officers in case of probable cause. (Sec. 989, p. 398, Appendix.) unto tai s a ec p01 3i63 [Sec. 3163a..] [Extract from legislative, executive, and v 7l d ner n 0om ~ judical appropriation act, approved Aug: 15, 1876 (19 m certainJpowers,Staf., 152). ,] * * * The powers of transfer, and of 3163', inferred suspension, of officers conferred upon supervisors by sec- upoi collectors, tion thirty-one hundred and sixty-three of the Revised Statutes, are hereby vested in the Commissioner of Internal Revenue; and all other powers conferred, and duties imposed, by said section upon supervisors, are hereby conferred and imposed upon collectors of internal revenue within their respective districts. In case of the commissionersupervision [suspension] of a collector, under the power do^o^coStor! hereby conferred, the Commissioner of Internal Revenue Digitized by Microsoft® OFFICERS OF INTERNAL, REVENUE. 77 shall, as soon thereafter as practicable, report the case to the President through the Secretary of the Treasury for such action as he may deem proper. * * * The powers and duties specified in section 3163, Revised Statutes, as that section was at the time of the above enactment of August 15, 1876, are as follows: "Sec. 3163. Every supervisor, under the direction of the Com- missioner, shall see that all laws and regulations relating to the collection of internal taxeB, are faithfully executed and com- plied with; and shall aid in the prevention, detection, and punishment of any frauds in relation thereto, and examine into the efficiency and conduct of all officers of internal revenue; and for such purposes he shall have power to examine all persons, books, papers, accounts, and premises, to administer oaths, and to summon any person to produce books and papers, or to appear and testify under oath before him, and to compel a compliance with such summons in the same manner as collectors may do. He shall report in writing to the Commissioner of Internal Revenue any neglect of duty, incompetency, delinquency, or malfeasance in office of any internal-revenue officer of which he may obtain knowledge, with a statement of all the facts in each case, and any evidence sustaining the same. He may, by notice in writing, suspend from duty any inspector, gauger, or store- keeper, and he may suspend any collector for fraud, or gross neglect of duty, or abuse of power. In case of the suspension of any inspector, gauger, or storekeeper, he shall immediately notify the collector of the proper district and the Commissioner of Internal Revenue, and within three days thereafter report his action and his reasons therefor, in writing, to the Commis- sioner. In case of the suspension of any collector, he shall immediately report his action to the Commissioner, with his reasons therefor, in writing, and the Commissioner, in all cases of suspension, shall thereupon take such action as he may deem proper. Every supervisor may also transfer any inspector, gauger, or storekeeper from one distillery, or other place of duty, or from one collection district, to another." Suspension of collector. (18 Op. Atty. Gen., 318.) Charges against subordinate officers or employees by collectors or agents. (T. D., 56.) The extent and limitation of the authority of supervisors to compel the production of books and papers under section 3163 were discussed in the decision rendered by Judge Treat, in the United States district court, district of Missouri, in the case wherein Frederick Becker refused to obey the order of Super- visor Meyer to produce certain books and papers, and wherein an attachment was asked by the supervisor to compel obedience to his subpoena. (21 Int. Rev. Rec, 243.) Law not unconstitutional in giving these officers the right to examine books, etc. (Stanwoodii. Green, Hint. Rev. Rec, 134.) The authority given to the supervisor to enter without warrant and examine the premises of parties was valid as a civil pro- ceeding, and not in conflict with the fourth amendment to the Constitution, nor was his authority to compel parties to attend and produce books and testify, in conflict with the fifth amend- ment to the Constitution. (In re Meadow & Brothers (1869), 10 Int. Rev. Rec, 74. See also Perry v. Newsome, 10 Int. Rev. Rec, 20; Stanwood v. Fordyce, 13 id., 77.) Sec. 3164. It shall be the duty of every collector of in- or ° ^'.J.f^: ternal revenue to report within ten days to the district lations of law to attorney of the district in which any fine, penalty, or for- district attorney ' feiture may be incurred for the violation or any law of the United States relating to the revenue, a statement of all the facts and circumstances of the case within his knowl- edge, together with the names of the witnesses, and which Digitized by Microsoft® 78 OFFICERS OF INTERNAL REVENUE. may come to his knowledge from time to time, stating the provisions of the law believed to be violated, and on which a reliance may be had for condemnation or conviction; and if any collector shall in any case fail to report to the proper district attorney as prescribed in this section, his right to any compensation, benefit, or allowance in such case shall be forfeited to the United States, and the same may, in the discretion of the Secretary of the Treasury, be awarded to such persons as may make complaint and pros- ecute the same to judgment or conviction. Section 838, Revised Statutes, provides that it is the duty of the district attorney to whom any collector of internal revenue shall report any case in which any fine, penalty, or forfeiture has been incurred for violation of the internal-revenue law, to cause the proper proceedings to be commenced and prosecuted without delay, for the fines, penalties, and forfeitures provided, unless, upon inquiry and examination, he shall decide that such proceed- ings can not properly be sustained, or that the ends of public jus- tice do not require that proceedings should be instituted; in which case he shall report the facts to the Commissioner of Inter- nal Revenue for his direction. (Appendix, p. 401.) Under the provisions of section 3460, Revised Statutes, page 363, when any property (except real estate) seized by the col- lector for violation of internal-revenue laws does not exceed $500 in value it should be proceeded against by the collector, instead of being reported to the district attorney, unless a bond for costs is given as provided. (See Regulations, No. 12, revised, p. 25; Reg. No. 2, revised, p. 46.) Under existing law collectors receive no allowance from cases to be reported to United States attorneys. Reports to United States attorneys of violatiens of the internal- revenue law should in all cases give sufficient data to enable them to form an opinion as to whether or not the public interests require prosecution. (T. D. 1597.) Instructions to collectors and district attorneys relative to prosecution for violations of internal-revenue laws. (T. D . 1605 . ) United States attorneys instructed to furnish copies of their reports on Form 112 to the collectors of the districts in all cases where the violation of law was not reported by the collector. (T. D. 1443.) Violations of law to be promptly reported. (T. D. 176; July 12, 1900.) Course to be pursued by revenue agents and collectors in cases of technical violations of law, compromises, etc. (27 Int. Rev. Rec, 397.) Circular letter to United States attorneys relative to unneces- sary prosecutions. (T. D. 1336.) Cases to be carefully examined before proceedings are insti- tuted. (Regulations No. 12, p. 26.) Duty of collectors to look after cases in suit. (T. D. 937.) Prosecution not commenced before indictment. (Virginia v. Paul, 148 U S., 107.) ceS whomayl SE °- 3165 ^ S amended ^V SeC - ®> act °f Mar - 1> 18 ^ 9 (?° minister oaihsStat, 329).] Every collector, deputy collector, and in- dence. take evi "spector is authorized to administer oaths and to take evi- dence touching any part of the administration of the internal-revenue laws with which he is charged, or where such oaths and evidence are authorized by law or regula- tion authorized by law to be taken. See section 3162, page 75. Inspectors appointed under the denatured-alcohol act not authorized to administer oaths. (T. D. 1103.) Digitized by Microsoft® OFFICERS OF INTERNAL REVENUE. 79 Deputy collectors have authority to administer oaths to sureties on distiller's bonds. (U. S. v. Hardison, 135 Fed. Rep., (1905.) 419.) Sec. 183. Any officer or clerk of any of the Departments law- fully detailed to investigate frauds, or attempts to defraud, on the Government, or any irregularity or misconduct of any offi- cer or agent of the United States, shall have authority to admin- ister an oath to any witness attending to testify or depose in the course of such investigation. The act imposing excise tax on corporations, act of August 5, 1909, page 325, authorizes revenue agents in certain cases to administer oaths. Sec. 3166. Any officer of internal revenue may be spe- ce ^ eve °™ hori ° z ^ cially authorized by the Commissioner of Internal Reve- to make seizures, nue to seize any property which may by law be subject to seizure, and for that purpose such officer shall have all the power conferred by law upon collectors ; and such special authority shall be limited in respect of time, place, and kind and class of property, as the Commissioner may specify: Provided, That no collector shall be detailed or authorized to discharge any duty imposed by law upon any other collector. Seizure may be made by any unofficial person, but at the peril of responsibility in damages in case the seizure is not adopted by the Government and the property is not condemned. (13 Op. Atty. Gen., 253.) A seizure implies an actual caption of the thing seized. (17 Op. Atty. Gen.,, 82.) As to seizure of stocks see Miller v. United States. (11 Wall., 268.) Where a lot of ale, within the brewery in which it was made, was seized under process emanating from a State court as a for- feiture to the State and is in the custody of the sheriff awaiting judgment of the court, possession of the sheriff can not be legally interfered with by internal-revenue or other officers of the United States. (15 Op. Atty. Gen., 370.) See section 3453 in regard to seizures, page 359. Revenue officers to cooperate with State officers in the sup- pression of certain violations of law. (T. D. 1327; Int. Rev. Cir- cular No. 716.) Sec. 3167 [as amended by sec. 34, act of Aug. 28, 1894 Reven ™ ° ffl - {28 Stat., 509).] That it shall be unlawful for any collector, operations"? deputy collector, agent, clerk, or other officer or employe m e a ; n p"nafty. rers ' of the United States to divulge or to make known in any manner whatever not provided by law to any person the operations, style of work or apparatus of any manufac- turer or producer visited by him in the discharge of his official duties, or the amount or source of income, profits, losses, expenditures, or any particular thereof, set forth or disclosed in any income return by any person or cor- poration, or to permit any income return or copy thereof or any book containing any abstract or particulars thereof, to be seen or examined by any person except as provided by law; and it shall be unlawful for any person to print or publish in any manner whatever not provided by law, any income return or any part thereof or the amount or source of income, profits, losses, or expendi- tures appearing in any income return; and any offense against the foregoing provision shall be a misdemeanor Digitized by Microsoft® 80 OFFICERS OF INTERNAL REVENUE. and be punished by a fine not exceeding one thousand dollars or by imprisonment not exceeding one year, or both, at the discretion of the court ; and if the offender be an officer or employ^ of the United States he shall be dis- missed from office and be incapable thereafter of holding any office under the Government. This section applies to revenue agents. (Sec. 3152, p. 67.) Furnishing statistical information to private persons. (34 Int. Rev. Rec., 117.) Circular letter of August 18, 1897; information from official records. (43 Int. Rev. Rec, 318.) Regulations prohibiting the giving out by collectors of records in their offices, or copies thereof, for purposes not contemplated by the internal-revenue laws. (Regulations No. 12, revised, pp. 45, 46; T. D. 18847, Jan. 21, 1898.) Circular No. 583 (T. D. 226); Circular No. 651 (T. D. 727). Circular No. 354 (36 Int. Rev. Rec, 397). Collectors may furnish for publication monthly statements of the aggregate receipts from sale of stamps for tobacco, snuff, cigars, and cigarettes, but any information that would disclose the business done by or the value of stamps issued to any individual manu- facturer must be withheld. (T. D. 263.) Copies of special tax returns can not be furnished for use in ■ trial of persons indicted for violation of State laws. (T. D. 766.) Data from returns made by distiller not to be furnished for use of private litigants. (T. D. 224.) Instructions as to giving testimony in State courts: Revenue officers are prohibited from testifying in cases not arising under the laws of the United States as to facts that come to their knowl- edge in their official capacity. (T. D. 1218. Aug. 21, 1907.) Instructions to collector as to obeying subpoena and producing records. (34 Int. Rev. Rec, 261.) A collector of internal revenue refusing to testify or furnish copies of official papers, acting under instructions from Depart- ment. (Decision of Judge Evans, United States district court, district of Kentucky, discharging the collector; in re David N. Comingore, collector (1899), 96 Fed. Rep., 552; T. D., No. 21584; Boske v. Comingore, 177 U. S., 459; T. D. 104; in re Lamberton, 124 Fed. Rep., 446; T. D. 689; Stegall v. Thurman, 175 Fed. Rep., 813, T. D. 1616.) See section 882, page 391. Collectors can send, in obedience to a subpoena duces tecum issued for the purpose of having in court certain documents or records, any clerk who can give the necessary testimony. (T. D. 1113.) be°Sr!sted £ Sec. 3168. Any internal-revenue officer who is or shall certain manuiac- become interested, directly or indirectly, in the manuf ac- tU Act P Fet> lty 27 * ure °^ to b acco > snuff, or cigars, or in the production, rec- i877(i?stat.,20)!tification, or redistillation of distilled spirits, shall be dis- error 0ting ve rnissed from office; and every officer who becomes so interested in any such manufacture or production, recti- fication, or redistillation, or in the production of fermented liquors, shall be fined not less than five hundred dollars nor more than five thousand dollars. See section 3152, page 67. See sections 1788 and 1789, pages 412, as to prohibitions against officers in respect to certain kinds of business. See section 244, page 436, as to certain business forbidden to clerks in Treasury Department. Circular No. 456, May 5, 1896; Government officer not author- ized to fill in or date blank requests of distillers for regauge. Circular No. 456 should be construed as prohibiting internal- revenue officers from acting as agents for distillers in any capacity . (42 Int. Rev, Rec, 354.) Digitized by Microsoft® OFFICERS OF INTERNAL REVENUE. 81 Circular No. 665, as to the prohibition of revenue officers acting as agents for the sale of books to distillers, brewers, and others, denounces the practice as detrimental to the public service and against the interests of the Government. (T. D. 831, Oct. 6, 1904.) Sec. 3169. Every officer or agent appointed and acting officers of fo- under the authority of any revenue law of the United frnty oFll'to?- StateS t i o n receiving _ First. Who is guilty of any extortion or willful oppres-and of other of- sion under color of law; or, fenses ' Second. Who knowingly demands other or greater sums than are authorized by law, or receives any fee, compensa- tion, or reward, except as by law prescribed, for the per- formance of any duty; or, Third. Who willfully neglects to perform any of the duties enjoined on him by law; or, Fourth. Who conspires or colludes with any other per- son to defraud the United States; or, Fifth. Who makes opportunity for any person to de- fraud the United States; or, Sixth. Who does or omits to do any act with intent to enable any other person to defraud the United States ; or, Seventh. Who negligently or designedly permits any violation of the law by any other person ; or, Eighth. Who makes or signs any false entry in any book, or makes or signs any false certificate or return, in any case where he is by law or regulation required to make any entry, certificate, or return; or, _ Ninth. Who, having knowledge or information of the violation of any revenue law by any person, or of fraud committed by any person against the United States under any revenue law, fails to report, in writing, such knowl- edge or information to his next superior officer and to the Commissioner of Internal Kevenue; or, Tenth. Who demands, or accepts, or attempts to col- lect, directly or indirectly, as payment or gift, or other- wise, any sum of money or other thing of value for the compromise, adjustment, or settlement of any charge or complaint for any violation or alleged violation of law, except as expressly authorized by law so to do, shall be dismissed from office, and shall be held to be guilty of a misdemeanor, and shall be fined not less than one thou- sand dollars nor more than five thousand dollars, and be imprisoned not less than six months nor more than three years. The court shall also render judgment against the said officer or agent for the amount of damages sustained in favor of the party injured, to be collected by execution. One-half of the fine so imposed shall be for the use of the United States, and the other half for the use of the in- former, who shall be ascertained by the judgment of the court. Section 3152 makes this section applicable to internal-revenue agents. 72170°— 11 6 Digitized by Microsoft® 82 OFFICERS OF INTERNAL REVENUE. Who are officers? (United States v. Hartwell, 6 Wall., 385; United States v. Germaine, 99 U. S., 508; 26 Op. Atty. Gen., 363; 27 ibid., 219.) In United States v. Mouat (124 U. S., 303, 307), the court, fol- lowing the decision in United States v. Germaine (99 U. S., 508), said that "under the Constitution of the United States all its officers were appointed by the President, by and with the con- sent of the Senate, or by a court of law or the head of a Depart- ment" (members of the Cabinet), and that unless so appointed they are not, "strictly speaking, " officers of the United States. Congress may use the word "officer" in a more popular sense and the courts in construing an act of Congress must ascertain its meaning. (United States v. Hendee, 124 U. S., 309.) It would seem to be clear that the recognition in a Federal Statute of a person in the public employ as an officer of the United States constitutes the person such officer. 26 Op. Atty. Gen., 363. Extortion is defined as "the unlawful taking by an officer, under color of his office, of any money or thing of value that is not due to him or more than his due, or before it is due." (4 Blacks. Com., 141. See also United States v. Deaver, 14 Fed. Rep., 595.) Knowingly demanding greater sums than are authorized by_ law. (United States v. Highleyman, 22 Int. Rev. Rec, 138.) United States v. Peter O. Brunjes. Violation of law on the part of a United States gauger in receiving money from a recti- fier for gauging spirits. (36 Int. Rev. Rec, 47.) Conspiracy. Officers who conspire with others to defraud the United States may be prosecuted under section 3169 or section 5440, now section 37 of the Criminal Code (act of Mar. 4, 1909, p. 418) . Section 37 requires proof of some overt act which is not required under section 3169. (Grunberg v. United States, 145 Fed. Rep., 81.) Indictment of storekeeper -'gauger for negligently permit- ting a violation of law. Intent not necessarily an ingredient. (Mason v. U. S., 162 Fed. Rep., 23; T. D., 1408.) Officer of the United States guilty of extortion. (Sec. 85, act Mar. 4, 1909, Criminal Code, 35 Stat., 1088.) Extortion by internal-revenue informers. (Sec. 145, act Mar. 4, 1909, p. 417.) Bribery. (Sees. 5451, 5501, 39 and 117, act Mar. 4, 1909, pp. 416-417.) Embezzlement. (Sees. 86, 87, 89, 90, 91, 93, 94. Act Mar. 4, lfe09, 35 Stat., 1088, pp. 409-411.) Penalty for failure to make reports. (Sec. 1780; superseded by sec. 101, Criminal Code, act Mar. 4, 1909, 35 Stat., 1088; Appen- dix, p. 412.) False acknowledgements. (Sec. 31, act Mar. 4, 1909, Criminal Code, 35 Stat., 1094.) Penalty for making false certificate, etc. (Sec. 106, act Mar. 4, 1909, Criminal Code, 35 Stat., 1107.) No limitation of suits against officers. (See "Statute of Limi- tations," Appendix, p. 398.) Officers forbidden to aid violators of internal-revenue laws in preparing statements or affidavits. (T. D. 1607.) An officer of internal revenue, named as such in the indict- ment, can not be jointly indicted, for a conspiracy, to defraud the revenue, with private persons. (United States v. McDonald, 3 Dill., 543; Fed. Cas. No. 15,670.) Two offenses constituting substantially one offense joined in the same indictment; a separate sentence rendered on the verdict of each count illegal. (Ex parte Joyce, 23 Int. Rev. Rec, 297; 13 Fed. Cas., 1175, No. 7556.) coiiector^o., [Sec. 3169a.] [Sec. 1, act of Mar. 1, 1879(20 Stat., 327).] before 8 paySmt? s That any collector of internal revenue, or any deputy collector or other employee of, or person acting for, such Digitized by Microsoft® OFFICERS OF INTERNAL REVENUE. 83 collector, who shall issue any stamp or stamps indicating the payment of any internal revenue tax, before pay- ment in full therefor has been made to the officer or per- son issuing the same, shall be deemed guilty of a misde- Penalt y- meanor, and shall be fined for each stamp thus issued an amount equal to the face value thereof, m addition to the liability of the collector on his official bond on account of such stamp; and such collector, deputy collector, or employee shall be dismissed from office. Issuing stamps for distilled spirits to any other person than as provided by law. (Sec. 3316, p. 209.) Receipt in lieu of stamp prohibited. (Sec. 3183, p. 94.) [Sec. 31696.] [Sec. 23, act of Feb. 8, 1875 (18 Stat. , i a A |f c ?m%ng 307).] That all acts and parts of acts imposing fines, P n u t °i!^ n J; °" -. . , , _ J- „ „, J- iJ . » lniBrnai - revenue penalties, or other punishment lor offenses committed officers to certain by an internal-revenue officer or other officer of the pe^ons Classes ° f Department of the Treasury of the United States, or under any bureau thereof, shall be, and are hereby, applied to all persons whomsoever, employed, appointed, or acting under the authority of any internal-revenue or customs law, or any revenue provision of any law of the United States, when such persons are designated or acting as officers or deputies, or persons having the cus- tody or disposition of any public money. Sec. 3170. Every district attorney or marshal who n ey iS or ict marshai demands, or accepts, or attempts to collect, directly or accepting or de- indirectly, as payment or gift or otherwise, any sum of tMng m for mm- money or other property of value for the compromise, ^^j ? nt emai- adjustment, or settlement of any charge or complaint for revenue laws. any violation or alleged violation of any provision of the internal-revenue laws, except as expressly authorized by law to do so, shall be held to be guilty of a misdemeanor, and shall be fined in double the sum or value of the money or property received or demanded, and be impris- oned for not less than one nor more than ten years. Accepting illegal fees, etc. (Sec. 18, act of May 28, 1896, 29 Stat., 140.) Sec. 3171 [, as amended by sec. 2, act of Mar. 1, 1879 (20 ing tajuries SU mly Stat., 327).] If any officer appointed under and by virtue ^^ 5Uit for of any act to provide internal revenue, or any person acting under or by authority of any such officer, shall receive any injury to his person or property, in the dis- charge of his duty, under any law of the United States for the collection of taxes, he shall be entitled to maintain suit for damage therefor, in the circuit court of the United States, in the district wherein the party doing the injury may reside or shall be found. U. S. v. Patrick, 54 Fed. Rep., 338. Penalties for obstructing officers. (Sees. 3177, p. 90; 3276, p. 170; sees. 65 and 140, Criminal Code, act Mar. 4, 1909, 35 Stat., 1088, pp. 415, 416.) For rescuing prisoners or property. (Sec. 3177, p. 90; sees. 71 and 143, act Mar. 4, 1909, p. 415.) Digitized by Microsoft® 84 OFFICERS OF INTERNAL REVENUE. Conspiracy to prevent persons from accepting office. (Sec. 5518; sec. 21, act Mar. 4, 1909, p. 417.) Penalty for falsely assuming to be an officer. (Sec. 5448, act of Apr. 18, 1884; reproduced in sec. 32, Criminal Code, act Mar. 4, 1909; 35 Stat., 1088, p. 416.1 Reimbursement for medical attendance, surgeon's and hos- pital bills made necessary by injuries received in line of duty, and for horseB crippled or killed. (Act June 17, 1910, 36 Stat., 494, p. 54.) Digitized by Microsoft® Sec. 3172 Chapter Two. OF ASSESSMENTS AND COLLECTIONS. Sec. Canvass of districts for objects of taxation. 3173 (amended). Beturns of persons liable to tax. 3174. Summons. 3175. Failure to obey summons; proceed- ings. 3176 (amended). When collector may en- ter premises and make returns. One hundred per cent penalty; 50 per cent penalty. 3177. Officers may enter premises where taxable articles are kept. Ob- structing officers; penalty. 3178. (Obsolete.) 3179. Making false returns, or failing to obey summons; penalty. 3180. Taxable property owned by non- residents. 3181. Lists or returns. 3182. Commissioner to make assessments; correction of incomplete or imper- fect lists within 15 months. 3183 (amended). Duty of collectors to col- lect taxes; not to issue receipts in lieu of stamps. [3183a] (act of August 28, 1894). Receipts to be given upon payment of tax ; separate receipts to be given in certain cases. 3184. Notice and demand of taxes. 3185. Returns; when tax payable; 5 per cent penalty and interest. 3186 (amended). Lien for taxes. 3187. Distraint. 3188. Mode of levying distraint. 3189. Delinquents must exhibit evidence relating to property distrained. 3190. Proceedings on distraint. 3191. When property sold under distraint is subject to tax, and tax not paid. 3192. When property sold under distraint may be purchased for United States, etc. 3193. Property distrained to be restored on payment before sale. Effect of certificate of sale. When property distrained is not divisible. When real estate may be sold to satisfy taxes. 3197 (amended). Proceedings for seizure and sale of real estate. Regulating the manner in which personal or real property may be sold under orders and decrees of sale. 3198. Certificate of purchase; deed. 3199. Collector's deed prima facie evi- dence, etc. 3200. Collector may seize lands of delin- quent in any district of same state. Digitized by Microsoft® 3194. 3195. 3196. [3197a.; 3201. Redemption prior to sale. 3202. Redemption after sale. 3203 (amended). Record of sales. 3204. Redemptions to be entered on rec- ord. 3205. Successive seizures may be made, when. 3206. Fees and charges in seizure cases. 3207. Proceedings in chancery to Bubject real estate to payment of tax. 3208 (amended). Commissioner to have charge of real estate acquired under internal-revenue laws. 3209. When list to be sent to district where the party taxed resides or has property. 3210. Collections to be paid into Treasury daily. 3211. Depositories. Act of March 2 1911. Certified checks receivable for taxes. 3212. Collectors' monthly statement; ac- counts. 3213. Suits for fines, penalties, forfeit- ures, and taxes. 3214. Suits for taxes, etc., not to be brought without sanction of Com- missioner. 3215. Regulations for government of dis- trict attorneys, marshals, etc. Moneys recovered to be paid to col- lectors. Delinquent collectors; proceedings by distraint. Collectors to be charged with what; due diligence. Death, etc., of collector; uncol- lected balances. Remission and refunding of taxes, penalties, etc. 3221 (amended). Taxes on spirits acci- dentally destroyed. 3222. Retrospective effect of preceding section. 3223 (amended). When tax on lost spirits is indemnified by insurance. 3224. Suits to restrain assessment or col- lection of taxes prohibited. _ 3225. Suits to recover taxes collected un- der second assessment; burden of proof as to fraud, etc. 3226. Suits for recovery of taxes wrong- fully collected. 3227. Limitation of suits for recovery of taxes wrongfully collected. 3228. Claims for refunding; limitation. 3229. Compromises. 3230. Discontinuances of certain prosecu- tions. 3231. Continuances of cases. 85 3216. 3217. 3218. 3219. 3220. 86 ASSESSMENTS AND COLLECTIONS. trict s n to S o bieits Sec - 3172 C as amended by sec. 34, act of Aug. 28, 1894 of taxation. {28 Stat., 509)]. Every collector shall, from time to time, cause his deputies to proceed through every part of his district and inquire after and concerning all persons therein who are liable to pay any internal revenue tax, and all persons owning or having the care and management of any objects liable to pay any tax, and to make a list of such persons and enumerate said objects. The list referred to should be on Form 24 and should contain nothing but taxes which should be reported for assessment. The report of the deputy should be made so as to reach the col- lector on or before the 5th day of the month succeeding that for which the report is made. — Regulations No. 1, revised, page 9. Instructions to collectors with reference to special-tax returns, Circular No. 561, June 18, 1907; T. D. 92. For methods employed in ascertaining names of persons liable to pay special taxes as rectifiers, wholesale liquor dealers, and retail liquor dealers, see 22 Int. Rev. Rec, 109; 24 ibid., 241; 26 ibid., 193; 29 ibid., 409. Sec. 3173 [as amended by sec. 34, act of Aug. 28, 1894 (28 Stat., 509)]. That it shall be the duty of any person, partnership, firm, association, or corporation, made liable to any duty, special tax, or other tax imposed by law, when not otherwise provided for, in case of a special other" returns 3 * ax > on or before the thirty-first day of July in each when to be made! year, (in case of income tax on or before the first Monday s e , e p S 96- 3185 ' '°f March in each year), and in other cases before the day on which the taxes accrue, to make a list or return, veri- fied by oath or affirmation, to the collector or a deputy collector of the district where located, of the articles or objects, including the amount of annual income, charged with a duty or tax, the quantity of goods, wares, and merchandise made or sold, and charged with a tax, the several rates and aggregate amount, according to the forms and regulations to be prescribed by the Commis- sioner of Internal Revenue, with the approval of the Sec- retary of the Treasury, for which such person, partnership, firm, association, or corporation is liable : Provided, That if any person liable to pay any duty or tax, or owning, possessing, or having the care or management of property, goods, wares, and merchandise, articles or objects liable to pay any duty, tax, or license, shall fail to make and exhibit a list or return required by law, but shall consent to dis- close the particulars of any and all the property, goods, wares, and merchandise, articles and objects liable to pay any duty or tax, or any business or occupation liable to m W ?bem r ad™byPay any tax as aforesaid, then, and in that case, it shall or e ?oUector oUector ° e tb ® dut y °^ tlie c °Uector or deputy collector to make such list or return, which, being distinctly read, consented to, and signed and verified by oath or affirmation by the person so owning, possessing, or having the care and management as aforesaid, may be received as the list of such person: Provided further, That in case no annual list or return has been rendered by such person to the collector or deputy collector as required by law, and the Digitized by Microsoft® ASSESSMENTS AND COLLECTIONS. 87 person shall be absent from his or her residence or place of business at the time the collector or a deputy collector ca f e r of licence in shall call for the annual list or return, it shall be the duty of such collector or deputy collector to leave at such place of residence or business, with some one of suitable age and discretion, if such be present, otherwise to deposit in the nearest post-office a note or memorandum addressed to such person, requiring him or her to render to such col- lector or deputy collector the list or return required by law, within ten days from the date of such note or memo- randum, verified by oath or affirmation. And if any per- or ^fmakiD g e ffi son on being notified or required as aforesaid shall refuse returns. or neglect to render such list or return within the time required as aforesaid, or whenever any person who is re- quired to deliver a monthly or other return of objects subject to tax fails to do so at the time required, or de- livers any return which, in the opinion of the collector, is false or fraudulent, or contains any undervaluation or understatement, it shall be lawful for the collector to summons to . ' ,, i produce books summon such person, or any other person having posses- and testily, sion, custody, or care of books of account containing en- tries relating to the business of such person, or any other person he may deem proper, to appear before him and produce such books, at a time and place named in the summons, and to give testimony or answer interroga- tories, under oath, respecting any objects liable to tax or the returns thereof. The collector may summon any person residing or found within the State in which his district lies ; . and when the person intended to be sum- moned does not reside and can not be found within such State, he may enter any collection district where such person may be found, and there make the examination herein authorized. And to this end he may there exer- cise all the authority which he might lawfully exercise in the district for which he was commissioned. The words, "in case of income tax on or before the first Mon- day of March in each year," have no application at present, as they relate to the income tax which was imposed by the act of August 28, 1894, and declared unconstitutional. See page 26. Returns of taxes assessable under internal-revenue laws to be made in duplicate. (Cir. No. 140, Int. Rev. No. 548; T. D. 21801, 1899.) The returns (Form 11, revised) of special taxpayers must be made under oath or affirmation, whether covering the whole year or a fractional part of the year. (26 Int. Rev. Rec, 89; Ibid., 69.) A person intending to engage in business for which special tax is required must himself sign and swear to the return (Form 11). The return will not be accepted when signed and sworn to by some other person as "agent." (T. D. 49, Feb. 27, 1900.) The return authorized to be made by the collector or deputy refers to the return on the prescribed form. (Reg. No. 1 revised, p. 99.) Return on Form 11 in the case of an unincorporated club, association, or copartnership may be signed and verified by a responsible or managing officer or member of the firm. (T. D. 1552.) Digitized by Microsoft® 88 ASSESSMENTS AND COLLECTIONS. A written request by a person liable to a special tax for infor- mation concerning such tax is not a disclosure of the particulars within the meaning of this section. (VI Comp. Dec, 760.) Request for prescribed blanks for making return is a disclosure. (VIII Comp. Dec, 663.) This section clothes collectors of internal revenue with super- visory power over and authorizes them to investigate all ac- counts, lists, or returns made or required to be made to them by any and all classes of persons liable to pay taxes upon any property, trade, or business. (United States v. Hodson, 14 Int. Rev. Rec, 100.) The collector is not authorized to require the production of the books of a corporation in which the taxpayer is a share- holder, such books in the meaning of that provision not being books relating to the trade or business of the shareholder. (Lee, assessor, v. Chadwick, 11 Int. Rev. Rec, 133; 1 Lowell, 439.) After the right of assessment has been lost a collector has no legal authority to require the production of a person's private books and papers for the purpose of ascertaining his liability to tax. (In the matter of 0. H. P. Archer, 24 Int. Rev. Rec, 110; 9 Ben., 427.) It was held that it is no defense that the answers of the person summoned would tend to criminate him. (In re Phillips, 10 Int. Rev. Rec, 107.) The examination of books under this section is not an infringe- ment of the Constitution. (In re Strouse, 11 Int. Rev. Rec, 182; 1 Sawyer, 605.) Summons to produce books and attachment by court for re- fusal. (Lippman's case, 3 Ben., 95; 9 Int. Rev. Rec, 1; Land- ram v. United States, 16 Ct. Cls., 74, 85; in re Brown, 3 Int. Rev. Rec, 134; in re Kearns, 64 Fed. Rep., 481.) Meaning of the words "objects charged with internal-revenue tax." (Wells, Fargo and Co. v. Shook, 8 Blatch., 254; Fed. Cas. No. 17406; in re Kinney, 102 Fed. Rep., 468.) The decision in Boyd v. The United States (116 U. S., 617; 32 Int. Rev. Rec, 62) was, in effect, that a compulsory produc- tion of a man's private papers, to be used as evidence against him in a proceeding to forfeit his property for alleged fraud against the revenue laws, is an "unreasonable search and seizure" within the meaning of the fourth amendment of the Constitution. That decision relates to criminal proceedings, and does not apply to proceedings to recover taxes. See act of June 22, 1874, relative to production of books, papers, etc., in suits other than criminal, page 390, Appendix. summons, form Sec. 3174. Such summons shall in all cases be served serviceS™ 6 ' ° by a deputy collector of the district where the person to whom it is directed may be found, by an attested copy delivered to such person in hand, or left at his last and usual place of abode, allowing such person one day for each twenty-five miles he may be required to travel, computed from the place of service to the place of exami- nation; and the certificate of service signed by such deputy shall be evidence of the facts it states on the hear- ing of an application for an attachment. When the sum- mons requires the production of books, it shall be suffi- cient if such books are described with reasonable cer- tainty. In re Becker, Fed. Cas., No. 1208. (21 Int. Rev. Rec, 243.) uSmons t0 ° h ?l ^ EC- 3^5. Whenever any person summoned under the ceedings on. two preceding sections neglects or refuses to obey such summons, or to give testimony, or to answer interroga- Digitized by Microsoft® ASSESSMENTS AND COLLECTIONS. 89 tories as required, the collectors may apply to the judge of the district court or to a commissioner of the circuit court of the United States for the district within which the person so summoned resides for an attachment against him as for a contempt. It shall be the duty of the judge or commissioner to hear the application, and, if satisfactory proof is made, to issue an attachment, directed to some proper officer, for the arrest of such person, and upon his being brought before him to pro- ceed to a hearing of the case; and upon such hearing the judge or commissioner shall have power to make such order as he shall deem proper not inconsistent with existing laws for the punishment of contempts, to enforce obedience to the requirements of the summons and to punish such person for his default or disobedience. Penalty for failure to obey summons. (Sec. 3179, p. 91.) The judge may issue a rule to show cause why an attachment should not issue. The application of the collector in these cases is a proceeding in a civil cause, and may be amended. (Lee, assessor, v. Chadwick, 11 Int. Rev. Rec, 133.) In the matter of Oliver H. P. Archer, Judge Blatchford denied a collector's application for a writ of attachment, as the com- missioner was barred by the 15 months' limitation in section 3182 from assessing. (24 Int. Rev. Rec, 110; 9 Ben., 427.) Sec. 3176 [as amended by sec. 34, act of Aug. 28, 1894 ^™ e *\%& (28 Stat., 509)]. When any person, corporation, com-ismade. pany, or association refuses or neglects to render any return or list required by law, or renders a false or fraudu- lent return or list, the collector or any deputy collector shall make, according to the best information which he can obtain, including that derived from the evidence elicited by the examination of the collector, and on his own view and information, such list or return, according to the form prescribed, of the income, property, and objects liable to tax owned or possesed or under the care or management of such person, or corporation, company, or association and the Commissioner of Internal Revenue shall assess all taxes not paid by stamps, including the amount, if any, due for special tax, income or other tax, and in case of any return of a false or fraudulent list or valuation intentionally he shall add one hundred per cen- per cent penalty. turn to such tax; and in case of a refusal or neglect, except in cases of sickness or absence, to make a list or return, or to verify the same as aforesaid, he shall add fifty per penalty. per centum to such tax. In case of neglect occasioned by sickness or absence as aforesaid the collector may allow such further time for making and delivering such list or return as he may deem necessary, not exceeding thirty days. The amount so added to the tax shall be collected C on™tfbief' w en at the same time and in the same manner as the tax unless the neglect or falsity is discovered after the tax has been paid, in which case the amount so added shall be collected in the same manner as the tax; and the list or return so made and subscribed by such collector or deputy collector Digitized by Microsoft® 90 ASSESSMENTS AND COLLECTIONS. shall be held prima facie good and sufficient for all legal purposes. The 100 per centum to be added to the tax to be assessed applies to that tax not disclosed by the taxpayer in his return. (Cir. 543, Aug. 12, 1899. T. D. No. 21517.) No penalty accrues where parties consent to disclose their liability to special tax within the calendar month. (T. D. 239, Nov. 3, 1900; 6 Comp. Dec, 686.) The absence contemplated by section 3176 as relieving a special-tax payer from the 50 per cent additional is temporary, not continuous, absence. (T. D. 891, Apr. 22, 1905.) See Circular 701, T. D. 1181, June 17, 1907, for table of 50 per cent penalties where fractions of a cent are involved, p. 36. If a person is sick or absent during the whole calendar month in which he commences or continues business, or that part thereof elapsing from the time he commences business to the end of the month, he may make his return (Form 11) at any time within 30 days after the close of such month without incurring the 50 per cent penalty, provided the collector, after being satisfied of such continued sickness or absence, excuses him from making the return for such period as is necessary, not exceeding 30 days. (Reg. No. 1 revised, p. 99.) As to the term "false," meaning willfully false (German Sav- ings Bank v. Archbold, 15 Blatch., 398, 24 Int. Rev. Rec, 414); Supreme Court Decision (28 Int. Rev. Rec, 175; 104 U. S. (14 Otto), 708). The court did not hold that the return must be willfully false, but intimated that such would have been its decision if it had been necessary to pass upon the question in the case decided. As to 100 per cent penal duty. (11 Op. Atty. Gen., 280.) In case of neglect or refusal to make returns, in case of false or fraudulent ones, and in case of returns in which there is any omission or understatement, collectors will proceed as provided in section 3176. (34 Int. Rev. Rec, 93.) The act which imposes an addition of 100 per cent to the tax as a penalty for the "return of a false or fraudulent list or valua- tion is constitutional. (Doll v. Evans, 15 Int. Rev. Rec, 143.) As to authority of Secretary to remit the 50 per cent addition. (17 Op. Atty. Gen., 433; 23 ibid., 398.) Concerning assessable penalties of 50 per cent and 100 per cent. (Circular No. 543, Aug. 12, 1899; T. D. 21517 and T. D. 21536, 1899.) Reporting delinquent special-tax payers for assessment. (See note under Sec. 3238, p. 128.) Course to be pursued by collectors where no return is filed. (T. D. 1560.) en?e? cer premL y s Sec - 3177 : ^Y collector, deputy collector, or inspector where taxable ar- may enter, in the daytime, any building or place where e P . an y art j c j es or objects subject to tax are made, produced, or kept, within his district, so far as it may be necessary for the purpose of examining said articles or objects. And any owner of such building or place, or person having the agency or superintendence of the same, who refuses to admit such officer, or to suffer him to examine such article or articles, shall, for every such refusal, forfeit five hun- dred dollars. And when such premises are open at night, such officers may enter them while so open, in the per- flce°rs st teS forn ?ance of their official duties. And if any person shall property. Pen- forcibly obstruct or hinder any collector, dupty collector, a ty ' or inspector, in the execution of any power and authority vested in him by law, or shall forcibly rescue or cause to Digitized by Microsoft® ASSESSMENTS AND COLLECTIONS. 91 be rescued any property, articles, or objects after the same shall have been seized by him, or shall attempt or endeavor so to do, the person so offending, excepting in cases otherwise provided for, shall, for every such offense, forfeit and pay the sum of five hundred dollars, or double the value of the property so rescued, or be imprisoned for a term not exceeding two years, at the discretion of the court. This section is made applicable to revenue agents by section 3152 as amended (p. 67). Seized property irrepleviable. (Sec. 934, p. 399.) Whosoever shall forcibly assault, resist, or interfere with any officer of internal revenue, or his deputy, or any person assisting him in his duties, or shall rescue, or attempt to rescue, or cause to be rescued, property seized, is liable to a fine of not more than $2,000, or imprisonment, or both. (Sec. 65, Criminal Code, Appendix, p. 415.) Distiller or person in his employ obstructing officer. (Sec. 3276, p. 170.) Wholesale liquor dealer or rectifier hindering revenue officer from examining book. (Sec. 3318, p. 211.) Search warrants. (Sec. 3462, p. 365.) The right conferred by section 3177 is limited to the purpose described. (United States v. Mann, 95 U. S. (5 Otto), 580; 24 Int. Rev. Rec, 20.) Officers must have free and peaceable egress as well as ingress to the places where they are authorized to make examination, and the proprietors have no right to eject them. (United States v. Mosely, 15 Int. Rev. Rec, 8.) The authority of such officers to make examinations can not be delegated to their clerks. (United States v. Rhawn, 22 Int. Rev. Rec, 235.) Indictments under this section. (United States v. Ford, 34 Fed. Rep., 26.) United States v. Fears (3 Woods, 510; Fed. Cas. No. 15080). (Indictment defective in not showing the authority under which the officer was acting.) Sec. 3178 [requires returns to show whether amounts are valued in coin or currency .] Although the provision is not expressly repealed, it has been obsolete since the resumption of specie payments, January 1, 1879. Sec. 3179. Whenever any person delivers or discloses Making false to the collector or deputy any false or fraudulent list, [IcSSg °t "obly return, account, or statement, with intent to defeat or 8 ™ 10115 ; pen- evade the valuation, enumeration, or assessment intended a 7 ' to be made, or, being duly summoned to appear to testify, or to appear and produce such books as aforesaid, neglects to appear or to produce said books, he shall be fined not exceeding one thousand dollars, or be imprisoned not exceeding one year, or both, at the discretion of the court, with costs of prosecution. United States v. McGinnis and Mountjoy (1 Abb. U. S., 120; 3 Int. Rev. Rec, 159.) Sec. 3180. Whenever there are in any district any arti- Taxable prop- cles not owned or possessed by or under the care or con- SeSs. y trol of any person within such district, and liable to be taxed, and of which no list has been transmitted to the collector, as required by law, the collector or one of his Digitized by Microsoft® 92 ASSESSMENTS AND COLLECTIONS. deputies shall enter the premises where such articles are situated and shall take such view thereof as may be neces- sary, and make lists of the same, according to the form prescribed. Said lists, being subscribed by such collector or deputy, shall be taken as sufficient lists of such articles for all purposes. Lists, when Sec. 3181. The lists or returns aforesaid shall, where denomtaated how not otherwise especially provided for, be taken with refer- ence to the day fixed for that purpose by this Title as aforesaid; and where duties accrue at other and different times, the list shall be taken with reference to the time ^Act Feb - 18, when said taxes become due, and shall be denominated annual, monthly, and special lists or returns. There is now no annual list. There has been no list denomi- nated annual since the act abolishing assessors and requiring special taxes to be paid by stamps. (Act Dec. 24, 1872, 17 Stat., 401.) Regular ana Corporation-tax lists. (T. D. 1639.) See in- structions on Assessment List of Corporations (Special Form 23). commissioner Sec. 3182. The Commissioner of Internal Revenue is to make assess- i i j_i • i i i j. i j.i • • ments. come- here by authorized and required to make the inquiries, piete ot ^£^1 determinations, and assessments of all taxes and pen- iect lists •within alties imposed by this Title, or accruing under any former internal-revenue act, where such taxes had not been duly . paid by stamp at the time and in the manner provided by law, and shall certify a list of such assessments when made to the proper collectors respectively, who shall proceed to collect and account for the taxes and penalties so certified. Whenever it is ascertained that any list which has been or shall be dehvered to any collector, is imperfect or incomplete in consequence of the omission of the name of any person liable to tax, or in consequence of any omission, or understatement, or undervaluation, or false or fraudulent statement contained in any return made by any person liable to tax, the Commissioner of Internal Revenue may, at any time within fifteen months from the time of the delivery of the list to the collector as aforesaid, enter on any monthly or special list the name of such person so omitted, together with the amount of tax for which he may have been or shall become liable, and also the name of any such person in respect to whose return, as aforesaid, there has been or shall be any omis- sion, undervaluation, understatement, or false or fraud- ulent statement, together with the amount for which such person may be liable, above the amount for which he may have been or shall be assessed upon any return made as aforesaid; and he shall certify and return such list to the collector as required by law. And all provi- sions of law for the ascertainment of liability to any tax, or the assessment or collection thereof, shall be held to apply, so far as may be necessary, to the proceedings herein authorized and directed. Assessors abolished. (Act Dec. 24, 1872, 17 Stat., 401.) April list, 1873, was the last list made by assessors. (Special No. 128.) Digitized by Microsoft® ASSESSMENTS AND COLLECTIONS. 93 The authority to make assessments of taxes due is limited to the 15 months next succeeding the delivery to the collector of the list upon which the assessment might have been made, but from which it was omitted, except in cases where it is otherwise provided. (Regulations, No. 1, revised, p. 6.) Assessment can not be made of part of a special-tax liability. When the list on which a special tax should have first been assessed (but from which the same was omitted) has been delivered to a collector for a period of more than 15 months, the special tax incurred becomes unassessable. (T. D. 1364, May 26, 1908.) Reassessmentwithinl5months. (Dandeleti;. Smith, 18 Wall., 642; Barker v. White, 19 Int. Rev. Rec, 117; 11 Blatch., 445; Daniels v. Tarbox, 9 Blatch., 176; Bergdoll v. Pollock, 95 U. S., 337; U. S. v. O'Neil, 30 Int. Rev. Rec, 127; 19 Fed. Rep., 567.) Commissioner to make assessments of taxes and penalties (sec. 3176, p. 89); of taxes on property sold under distraint (sec. 3191, p. 99); on spirits removed without deposit in warehouse (sec. 3253, p. 155); on spirits in case of excessive loss (sec. 3293 as amended, p. 181); on distillers for deficiency, etc. (sec. 3309, p. 202); on distillers in case of failure concerning spirits re- moved for deposit in a general bonded warehouse (sec. 58, act Aug. 28, 1894, p. 191); for export stamps issued (sec. 3314, p. 208); on tobacco, snuff, and cigars removed without being stamped (sec. 3371, p. 268); of stamps taxes within two years (sec. 3437, p. 337); on fruit brandy removed without compliance with law (act Mar. 3, 1877, p. 194); on oleomargarine removed without be- ing stamped (act Aug. 2, 1886, p. 296); on playing cards removed without being stamped (sec. 47, act Aug. 28, 1894, p. 347); on filled cheese removed without being stamped (sec. 10, act June 6, 1896, p. 307); tax on mixed flour removed without pay- ment of tax (sec. 41, act June 13, 1898, p. 312); tax on corpo- rations, special excise tax (sec. 38, act Aug. 5, 1909, p. 325). As to when an assessment is conclusive. (United States v. Black, 11 Blatch., 538; 19 Int. Rev. Rec, 116. United States v. Hodson et al., 14 Int. Rev. Rec, 100.) Legal effect of assessments as evidence. Letter of Commis- sioner Raum reviewing the decisions on the subject. (23 Int. Rev. Rec, 5.) The assessment is prima facie evidence of the amount due. (U. S. v. Rindskopf, 105 U. S., 418; 28 Int. Rev. Rec, 141. Clinkenbeard v. United States, 21 Wall., 65; 21 Int. Rev. Rec, 37. United States v. Cole, 134 Fed. Rep., 697; T. D. 786. United States v. Black, 11 Blatch., 538; Fed. Cas. No. 14600; 19 Int. Rev. Rec, 116. United States v. Hodson, 14 Int. Rev. Rec, 100; Fed. Cas. No. 15376. Schmitt v. Trowbridge, 24 Int. Rev. Rec, 381; Fed. Cas. No. 12468. United States v. Butler, 18 Int. Rev. Rec, 164; Fed. Cas. No. 14702. Charge to the jury in Brown v. Harkins. T. D. 662. Western Express Co. v. U. S., 141 Fed. Rep., 28; T. D. 965.) Obligation to pay tax does not depend upon an assessment. ^Dollar Savings Bank v. United States, 19 Wall., 227; 19 Int. Rev. Rec, 89; 22Id.,310. King v. United States, 99 U. S., 229. United States v. Tilden, 9 Benedict, 368; 24 Int. Rev. Rec, 99. United States v. Little Miami Railroad, 26 Ibid., 101; 1 Fed. Rep., 700.) An assessment no bar to a suit for an amount due over and above the amount assessed and paid. (United States v. Hazard, 22 Int. Rev. Rec, 309; United States v. Tilden, 24 Ibid., 99.) The papers upon which an assessment is made are privileged, and courts have no authority to require their production. (16 Op. Atty. Gen., 24; 24 Int. Rev. Rec, 178.) See notes under section 882 Appendix, page 391. The assessment, though made after the owner of the distillery, who had consented in writing that the premises should be used as a distillery and that the taxes and penalty should be a first lien on the premises (see sec. 3262, p. 162), had sold it to another party, Digitized by Microsoft® 94 ASSESSMENTS AND COLLECTIONS. was held to be valid and could not be attacked collaterally, and the sale under distraint was valid. (United States circuit court, northern district Illinois, Freysinger case; Milan Distilling Co. v. Tillson, collector, 26 Int. Rev. Rec, 5.) If the assessment is illegal, all proceedings under it are void and may be attacked collaterally. (Runkle v. Citizens' Insur- ance Co., United States circuit court, southern district of Ohio; 28 Int. Rev. Rec, 74; 6 Fed. Rep., 143.) Receipts of the collector on Form 23J for the alphabetical list showing taxes due are competent evidence. (United States v. Hunt, 105 U. S. (15 Otto), 183; 28 Int. Rev. Rec, 134.) Allegations in a bill that an assessment is irregular and void do not constitute any ground for an injunction to restrain collec- tion of the assessment. (Alkan and Swenger v. Bean, collector, 23 Int. Rev. Rec, 351.) See notes under section 3224, page 120. Resort may be had to the instructions of the Internal Revenue Office in regard to the preparation of assessment lists to show the meaning of the abbreviations in those liBts. (Snyder v. Marks, 109 U. S., 189; 29 Int. Rev. Rec, 403.) Assessments based on estimates are legal. (U. S. v. U. S. Fidelity & Guaranty Co., 144 Fed. Rep., 886; T. D. 975.) The authority confided to the assessor in making assessments is in itB nature judicial, and not ministerial. (U. S. v. Hodson, Fed. Cas. 15376; 14 Int. Rev. Rec, 100.) In making an assessment officers act in a quasi-judicial capac- ity. The presumption is that they proceed regularly. (Western Express Co. v. United States, 1905 (C. C. A.), 141 Fed. Rep., 28; T. D.965. Assessments. — Taxpayers to be notified in case of doubtful liability. (T. D. 1275.) Character of evidence to be submitted by revenue agents when reporting persons for assessment. (T. D. 1407.) Revenue agents when they recommend assessments should state sufficient facts to sustain the charge. (T. D. 250.) The fact that, for the time being, a tax is not collectible be- cause the party liable has removed to foreign territory, or is insolvent, is not sufficient in itself to warrant omission of the assessment. (T. D. 1553, Oct. 25, 1909.) Circular letter (No. 4), March 27, 1874, course to be taken to recover taxes due, but unassessable (without waiver). Internal-revenue circular, No. 567, instructs collectors as to course to be taken to recover taxes due, but unassessable (with- out waiver) because of the 15 months' limitation. (T. D. Ill, Apr. 25, 1900.) For instructions relative to assessment of taxes on distilled spirits overdue under provisions of section 3293, see notes under that section, and on assessments generally, see Regulations, No. 1, revised. o I ?to y ? f o C ne e c t t Sec - 3183 l as amended by sec. 8, act of Mar. 1, 1879 {20 taxes. Stat., S27\ It shall be the duty of the collectors, or their deputies, in their respective districts, and they are Not to issue re- au thorized, to collect all the taxes imposed by law how- ceipts in' iieu ofever the same may be designated. And every collector stamps. an( j (j e p U ty collector shall give receipts for all sums col- lected by him, excepting only when the same are in pay- ment for stamps sold and delivered; out no collector or deputy collector shall issue a receipt in lieu of a stamp representing a tax. Circular 595 Mar. 11, 1901 (T. D. 297), contains instructions to collectors relative to the unlawful issue of receipts for money in payment of special taxes. Collectors are advised that it is their duty to use the same dili- gence to collect a tax after it has been abated as uncollectible, or as in suit, as before abatement. (T. D. 60, Mar. 6, 1900.) Digitized by Microsoft® ASSESSMENTS AND COLLECTIONS. 95 Protection afforded a collector in collecting an assessment. (Erskine v. Hohnbach, 14 Wall., 613; 17 Int. Rev. Rec, 19. Haffln v. Mason, 15 Wall., 671; 17 Int. Rev. Rec, 118. Harding v. Woodcock, 137 TJ. S., 43.) Where an assessment is made, it is the collector's duty ordi- narily to proceed with the collection of the tax without ques- tioning the legality of the same. (T. D. 621; Jan 20, 1903.) The collector has no authority to question the validity of assessments. The assessment lists constitute his warrant to collect. (Haffin v. Mason, 15 Wall., 675; 17 Int. Rev. Rec, 118.) [Sec. 3183a.] Section 37, act of August 28, 1894 (®8 Stat, 509). That it shall be the duty of every collector of internal revenue, to whom any payment of any taxes . Receipts to be other than the tax represented by an adhesive stamp or ml™ of tax. pay ' other engraved stamp is made under the provisions of this Act, to give to the person making such payment a full written or printed receipt, expressing the amount paid and the particular account for which such payment was made; and whenever such payment is made such collector shall, if required, give a separate receipt for separate re- each tax paid by any debtor, on account of payments ta?ie- tenth day of each month, and the tax assessed or due thereon shall be returned by the Commissioner of Inter- nal Revenue to the collector on or before the last day of each month. All returns for which no provision is other- wise made shall be made on or before the tenth day of the month succeeding the time when the tax is due and liable to be assessed, and the tax thereon shall be re- turned as herein provided for monthly returns, and shall be due and payable on or before the last day of the month in which the assessment is so made. When the said tax is not paid on or before the last day of the month, as aforesaid, the collector shall add a penalty of five per centum, together with interest at the rate of one per centum per month, upon such tax from the time the same became due; but no interest for a fraction of a month shall be demanded: Provided, That notice of the time when such tax becomes due and payable is given in such manner as may be prescribed by the Commissioner of Internal revenue. It shall then be the duty of the collector, in case of the non-payment of said tax on or before the last day of the month, as aforesaid, to demand Five per cent payment thereof, with five per centum added thereto, ter^sfat the rate an d interest at the rate of one per centum per month, as on per cent per aforesaid ; i n the manner prescribed by law; and if said tax, penalty, and interest, are not paid within ten days after such demand, it shall be lawful for the collector or his deputy to make distraint therefor, as provided by law. Instructions to collectors in regard to notices to taxpayers; Circular No. 311 (33 Int. Rev. Rec, 109; included in Regula- tions No. 2, Revised p. 39). No power to remit penalty and interest if legally incurred. (9 Int. Rev. Rec, 188; 14 ibid., 58). If spirits are exported without payment of tax after it has> been assessed, the distiller is not relieved from the 5 per cent penalty. (Clay & Co. v. Swope, collector, 38 Fed. Rep., 396;. 35 Int. Rev. Rec, 136.) Digitized by Microsoft® ASSESSMENTS AND COLLECTIONS. 97 _ Interest at the rate of 1 per cent per month is recoverable as interest and not as penalty. (United States v. Guest (1906) 143 Fed. Rep., 456; T. D. 979.) Relative to 5 per cent penalty and interest at 1 per cent per month when claims for abatement have been filed and rejected- See first note under Sec. 3184. Sec. 3186 [as amended ly sec. S, act of Mar. 1, 1879 Lien for taxes. (20 Stat., 827).] If any person liable to pay any tax neglects or refuses to pay the same after demand, the amount shall be a lien in favor of the United States from the time when the assessment-list was received by the collector, except when otherwise provided, until paid, with the interest, penalties, and costs that may accrue in addition thereto, upon all property and rights to prop- erty belonging to such person. Because of the special provision for a lien for the tax upon spirits (sec. 3251, p. 150) there is rarely occasion for calling in the provisions of section 3186 in the case of taxes on spirits. Lien in case of deficiency when spirits are withdrawn for exportation. (See 16 Op. Atty. Gen., 634; 25 Int. Rev. Rec, 342.) In order to support and enforce a statutory lien for taxes, all the prerequisites of the law granting the lien must be strictly complied with. (United States v. Allen, 14 Fed. Rep., 263.) A lien for taxes does not Btand upon the footing of an ordinary incumbrance, and is not displaced by a sale under a preexist- ing judgment or decree, unless otherwise directed by statute. It attaches to the res without regard to individual ownership, and when it is enforced by sale pursuant to the statute prescrib- ing the mode of assessing and collecting them, the purchaser takes a valid and unimpeachable title. (Osterberg v. Union Trust Co., 93 U. S. (3 Otto), 424; 23 Int. Rev. Rec, 146.) The Pacific Railroad Co. appeared not to have paid all taxes due on dividends. It was succeeded by the Atlantic and Pacific Railroad. Demand was made by the collector of the first dis- trict of Missouri on the Atlantic and Pacific Railroad. Held that the demand did not create a lien in favor of the United States. Demand must be for specific amount. All the steps required by law must be pursued strictly. (Decision by Judge Miller, 23 Int. Rev. Rec, 384.) A lien for taxes created by the act takes effect only upon property belonging to the delinquent at the time the demand for the payment of the tax is made. The lien requires an assess- ment, a notice that the tax is due, and a specific demand upon the individual taxpayer. There is a distinction between the liability of a taxpayer under the common law and the creation and enforcement of a lien. (Decision of Circuit Judge McCrary, United States v. Pacific Railroad et al., 26 Int. Rev. Rec, 100; 1 McCrarv, 1; 1 Fed. Rep., 97; Brown v. Goodwin, 75 N. Y., 409.) See on this section United States v. Snyder (149 U. S., 210; 39 Int. Rev. Rec, 189). Sec. 3187. If any person liable to pay any taxes neg- b Jb^distraint"" lects or refuses to pay the same within ten days' after notice and demand, it shall be lawful for the collector or his deputy to collect the said taxes, with five per centum additional thereto, and interest as aforesaid, by distraint and sale, in the manner hereafter provided, of the goods, chattels, or effects, including stocks, securi- ties, and evidences of debt, of the person delinquent as 72170°— 11 7 Digitized by Microsoft® 98 ASSESSMENTS AND COLLECTIONS. empt° p lrom ^1 aforesaid : Provided, That there shall be exempt from traint. distraint and sale, if belonging to the head of a family, the school-books and wearing apparel necessary for such family; also arms for personal use, one cow, two hogs, five sheep and the wool thereof, provided the aggre- gate market-value of said sheep shall not exceed fifty dollars; the necessary food for such cow, hogs, and sheep, for a period not exceeding thirty days; fuel to an amount not greater in value than twenty-five dollars; provisions to an amount not greater than fifty dollars; household furniture kept for use to an amount not greater than three hundred dollars; and the books, tools, or imple- ments, of a trade or profession, to an amount not greater than one hundred dollars shall also be exempt; and the officer making the distraint shall summon three disin- terested householders of the vicinity, who shall appraise and set apart to the owner the amount of property herein declared to be exempt. Collectors in accepting sureties on bonds will be careful to see that no portion of the property described in the surety's affidavit is exempt from distraint under this section or under the laws of the State in which the surety resides. State exemption laws do not apply to distraint under this sec- tion. (To Collector Wheeler, Dec."l2, 1884.) State exemption laws inapplicable to debts due the United States. (United States v. Howell, 9 Fed. Rep., 674.) A sale of property under a distraint warrant is clearly distin- . guishable from a sale of property seized and condemned in forfeiture proceedings. A sale under a distraint warrant does not cut off the title of a third person who does not owe the tax. (Sheridan v. Allen etal., 153 Fed. Rep., 568.) The issuance of "Omnibus '' warrants of distraint is prohibited. Distraint warrants should be separate, and prompt returns should be made by deputies in every case, in pursuance of directions from collectors. (T. D. 135," May 28, 1900.) Only persons who are the heads of families are entitled to exemp- tions. — Merchants not entitled to exemption as persons engaged in a trade or profession. (T. D. 1499.) Taxes can be collected by distraint and by suit on the bond at the same time. (Harding v. Woodcock, 137 U. S., 43; United States v. Barrowcliff, 3 Ben., 519, Fed. Cas., No. 14528.) Procedure when property is in hands of receiver. (T. D. 667.) di^r°a d int onevylng ^ EC ' 3 1 88 ' ^ n suc ^ case °^ ne gl ect or refusal, the collector ""'" may levy, or by warrant may authorize a deputy col- lector to levy, upon all property and rights to property, except^ such as are exempt by the preceding section, belonging to such person, or on which the said lien exists, for the payment of the sum due as aforesaid, with interest and penalty for non-payment, and also of such further sum as shall be sufficient for the fees, costs, and expenses of such levy. Delinquents Sec. 3189. All persons, and officers of companies or cor- Sl e rdattog to porations, are required, on demand of a collector or deputy &ataed erty dis " couec tor about to distrain or having distrained on any property, or rights of property, to exhibit all books con- taining evidence or statements relating to the subject of distraint, or the property or rights of property liable to distraint for the tax due as aforesaid. Digitized by Microsoft® ASSESSMENTS AND COLLECTIONS. 99 Sec. 3190. When distraint is made, as aforesaid, the Proceedings on officer charged with the collection shall make or cause to be made an account of the goods or effects distrained, a copy of which, signed by the officer making such distraint, shall be left with the owner or possessor of such goods or effects, or at his dwelling or usual place of business, with some person of suitable age and discretion, if any such can be found, with a note of the sum demanded, and the time and place of sale ; and the said officer shall forthwith cause a notification to be published in some newspaper within the county wherein said distraint is made, if a newspaper is published in said county, or to be publicly posted at the post-office, if there be one within five miles, nearest to the residence of the person whose property shall be distrained, and in not less than two other public places. Such notice shall specify the articles distrained, and the time and place for the sale thereof. Such time shall not be less than ten nor more than twenty days from the date of such notifica- tion to the owner or possessor of the property and the publication or posting of such notice as herein provided, and the place proposed for the sale shaU not be more than five miles distant from the place of making such distraint. Said sale may be adjourned from time to time by said officer, if he deems it advisable, but not for a time to exceed in all thirty days. Collectors enjoined against unnecessary delays in making sales, providing against postponement beyond the statutory period, and as to making reports promptly. (T. D. 623, Jan. 23, 1903.) Sec. 3191. When property subject to tax, but upon when property which the tax has not been paid, is seized upon distraint sold under dis- and sold, the amount of such tax shall, after deducting the to* 'tax^and J tax expenses of such sale, be first appropriated out of the notpaid - proceeds thereof to the payment of the tax. And if no assessment of such tax has been made upon such property, the collector shall make a return thereof in the form re- quired by law, and the Commissioner of Internal Revenue shall assess the tax thereon. As taxes are now paid by stamps, assessments under the last' clause are rarely necessary. (See sec. 3458, p. 362.) Sec. 3192. When any property advertised for sale when property under distraint, as aforesaid, is of a kind subject to tax, f°atat un may d i» and the tax has not been paid, and the amount bid forgjj?** 86 ^ £» g r such property is not equal to the amount of the tax, the etc. collector may purchase the same in behalf of the United States for an amount not exceeding the said tax. All property so purchased may be sold by the collector, under such regulations as may be prescribed by the Commis- sioner of Internal Revenue. The collector shall render to the Commissioner a distinct account of all charges incurred in such sales, and, in case of sale, shall pay into the Treasury the surplus, if any there be, after defraying all lawful charges and fees. Digitized by Microsoft® 100 ASSESSMENTS AND COLLECTIONS. trSnto y be d r£ ^ec. 3193. In any case of distraint for the payment of stored on pay- the taxes aforesaid, the goods, chattels, or effects so ment before sale, distrained shall be restored to the owner or possessor, if, prior to the sale, payment of the amount due is made to the proper officer charged with the collection, together with the fees and other charges; but in case of nonpay- ment as aforesaid, the said officer shall proceed to. sell the said goods, chattels, or effects at public auction, (and shall retain from the proceeds of such sale the amount demanclable for the use of the United States, and a com- mission of five per centum thereon for his own use, with the fees and charges for distraint and sale, rendering the overplus, if any there be, to the person who may be en- titled to receive the same.) The clause in parenthesis is obsolete in view of subsequent legislation. Section 3193 was amended by the act of May 27, 1908, to the extent that overplus can not be returned to legal owner by a collector, but must be deposited as internal-revenue collections. (Int. Eev. Cir. No. 725; T. D. 1373.) Allowances for salary and office expenses of collectors are in lieu of salary and commissions formerly provided by law, except a commission of one-half of one per centum on sales of tax-paid spirit stamps is allowed where the office is less than maximum. See sees. 3148, p. 63, and 3314, p. 208. Effect of certifl- s EC . 3194. I n a ll cases of sale, as aforesaid, the certifi- cate of such sale shall be prima-f acie evidence of the right of the officer to make such sale, and conclusive evidence of the regularity of his proceedings in making the sale, and shall transfer to the purchaser all right, title, and interest of such delinquent in and to the property sold ; and where such property consists of stocks, said certificate shall be notice, when received, to any corporation, company, or association of said transfer, and shall be authority to such corporation, company, or association to record the same on their books and records in the same manner as if trans- ferred or assigned by the party holding the same, in lieu of any original or prior certificates, which shall be void, whether canceled or not. And said certificates, where the subject of sale is securities or other evidences of debt, shall be good and valid receipts to the person holding the same, as against any person holding, or claiming to hold, possession of such securities or other evidences of debt. disYrafneSTnot Sec ; 3195. When any property liable to distraint for divisible. taxes is not divisible, so as to enable the collector by a sale of part thereof to raise the whole amount of the tax, with all costs, charges, and commissions, the whole of such property shall be sold, and the surplus of the proceeds of the sale, after satisfying the tax, costs, and charges, shall be paid to the person legally entitled to receive the same; or, if he can not be found, or refuses to receive the same, shall be deposited in the Treasury of the United States, to be there held for his use until he makes application therefor to the Secretary of the Treasury, who, upon such application and satisfactory proofs in support thereof, Digitized by Microsoft® ASSESSMENTS AND COLLECTIONS. 101 shall, by warrant on the Treasury, cause the same to be paid to the applicant. The act of May 27, 1908 (35 Stat., 325), in effect amends this section by providing that the gross amount of proceeds shall be deposited in the Treasury. Surplus proceeds of sales can not in any case be returned to legal owner by a collector, but must be deposited as internal- revenue collections. Claims for surplus proceeds in cases where persons entitled to receive same are not known at time of sale, will be made and paid as heretofore. (Cir. 725; T. D. 1373.) Sec. 3196. When goods, chattels, or effects sufficient fo> when real es- , ■ j. , i , l j. £ i tate may be sold satisfy the taxes imposed upon any person are not round to satisfy taxes. by the collector or deputy collector, lie is authorized to collect the same by seizure and sale of real estate. Sec. 3197 [as amended by sec. 3, act of Mar. 1, 1879 (20 ? r °f e ^ gs s £jg Stat., 327)]. The officer making the seizure mentioned in f real estate for the preceding section shall give notice to the person whose taxes - estate it is proposed to sell by giving him in hand, or leav- ing at his last or usual place of abode, if he has any such within the collection-district where the said estate is situated, a notice, in writing, stating what particular estate is to be sold, describing tl^e same with reasonable certainty, and the time when and place where said officer proposes to sell the same; which time shall not be less than twenty nor more than forty days from the time of giving said notice. The said officer shall also cause a notification to the same effect to be published in some newspaper within the county where such seizure is made, if any such there be, and shall also cause a like notice to be posted at the post-office nearest to the estate seized, and in two other public places within the county; and the place of said sale shall not be more than five miles dis- tant from the estate seized, except by special order of the Commissioner of Internal Revenue. At the time and place appointed, the officer making such seizure shall pro- ceed to sell the said estate at public auction, offering the same at a minimum price, including the expense of making such levy, and all charges for advertising and an officer's fee of ten dollars. When the real estate so seized con- sists of several distinct tracts or parcels, the officer making sale thereof shall offer each tract or parcel for sale sepa- rately, and shall, if he deem it advisable, apportion the expenses, charges, and fees aforesaid to such several tracts or parcels, or to any of them, in estimating the mini- mum price aforesaid. If no person offers for said estate the amount of said minimum price, the officer shall declare the same to be purchased by him for the United States; , otherwise the same shall be declared to be sold to the And in case the same shall be declared to be purchased uSSes.** for the United States, the officer shall immediately trans- mit a certificate of the purchase to the Commissioner of Internal Revenue, and, at the proper time, as hereafter provided, shall execute a deed therefor, after its prepara- tion and the indorseme^ ap^val^o its form by 102 ASSESSMENTS AND COLLECTIONS. the United States district attorney for the district in which the property is situate, and shall without delay cause the same to be duly recorded in the proper registry of deeds, and immediately thereafter shalf transmit such deed to the Commissioner of Internal Revenue. Adjournment oi And said sale may be adjourned from time to time by sale ' said officer for not exceeding thirty days in all, if he shall think it advisable so to do. If the amount bid shall not be then and there paid, the officer shall forthwith proceed to again sell said estate in the same manner. Deeds. And it is hereby provided, That all certificates of pur- chase, and deeds of property purchased by the United States under the internal-revenue laws, on sales for taxes, or under executions issued from United States courts, which now are, or hereafter may be, found in the office of any collector, United States marshal, or United States district attorney, shall be immediately transmitted by such officers respectively to the Commissioner of Internal Revenue. (1) Seizure of real property. — Unless required by statute, a levy or seizure of real property for the purpose of sale to sat- isfy a debt or tax may be made without going upon the premises, by making a memorandum upon the warrant of the description of the premises for the purpose of a levy and sale. (2) Sale of real property. — A deputy collector of internal reve- nue, to whom a warrant was directed for the collection of a delin- quent tax due from A, levied upon 330 acres of land belonging to A, when said tax became due, by entering upon said warrant a correct description of the premises, by metes and bounds, but at the same time incorrectly stated therein that they were in the occupation of B, who lived over 2 miles distant from the prem- ises, and afterwards offered the premises which said B lived on for sale upon the erroneous assumption that they were the prem- ises of A, upon which he levied as above, and there being no bid- ders, declared the same purchased for the United States, for the amount of the tax, interest thereon, and charges. Held that there was no valid sale of the premises, and that the United States took nothing by the subsequent conveyance to it from the col- lector. (United States v. Hess, 5 Sawyer, 533; 25 Int. Rev. Rec, 201, 240.) When real estate is offered for sale under warrant of distraint and is bid in for the United States, the amount bid should be for no larger sum than is necessary to prevent the sale for an inade- quate price. (T. D. 1654.) If property is bid in for an amount equal to the tax it extin- guishes the debt, and suit can not be maintained on the bond. (United States v. Triplett, 22 Int. Rev. Rec, 207.) Bill in equity by party not in possession to remove cloud from title to land purchased by United States not authorized unless State Statutes authorize it. (Wilson v. United States, 118 U. S., 86.) It is a general rule that in the execution of a power to sell lands for nonpayment of taxes a strict compliance with all the material requirements of the statute authorizing the sale is required. Regarding the seizure and sale of real estate for taxes. (Reg. No. 12, Rev., p. 41; United States v. Mackoy, 2 Dill., 299; Mansfield v. Excelsior Refining Co., 135 U. S., 326; 36 Int. Rev. Rec, 165.) Digitized by Microsoft® ASSESSMENTS AND COLLECTIONS. 103 Offers for real estate to bo deposited as internal-revenue col- lections. (Act May 27, 1908; T. D. 1373.) The officer's fee of $10 for making the sale of real estate under distraint proceedings is no longer allowed. (See sec. 3206; T. D. 1373.) Sec. 3197a. [An act to regulate the manner' in which prop- erty shall be sold under orders and decrees of any United States courts (act of Mar. 3, 1893, 27 Stat., 751).] That all real estate or any interest in land sold under any order or decree of any United States Court shall be sold at pub- lic sale at the Court-house of the county, parish, or city in which the property, or the greater part thereof, is lo- cated, or upon the premises, as the court rendering such order or decree of sale may direct. Sec. 2. That all personal property sold under any order sale of personal or decree of any Court of the United States shall be sold proper y ' as provided in the first section of this act, unless in the opinion of the court rendering such order or decree, it would be best to sell it in some other manner. Sec. 3. That hereafter no sale of real estate under any no P^ u ^ a n e ° f f order, judgment, or decree of any United States Court real estate, shall be had without previous publication of notices of such proposed sale being ordered and had once a week for at least four weeks prior to such sale in at least one newspaper printed, regularly issued and having a general circulation m the county and State where the real estate proposed to be sold is situated, if such there be. If said property shall be situated in more than one county or State, such notice shall be published in such of the coun- ties where said property is situated, as the court may direct. Said notice shall, among other tilings, describe the real estate to be sold. The court may, in its discre- tion, direct the publication of the notice of sale herein pro- vided for to be made in such other papers as may seem proper. Bill for advertising must be made on Form 153 approved by the Comptroller December 29, 1909. (Regulations No. 2, rev., p. 48.) Sec. 3198. Upon any sale of real estate, as provided pu c r ^f e c % ee ° f in the preceding section, and the payment of the purchase money, the officer making the seizure and sale shall give to the purchaser a certificate of purchase, which shall set forth the real estate purchased, for whose taxes the same was sold, the name of the purchaser, and the price paid therefor; and if the said real estate be not redeemed in the manner and within the time hereafter provided, the said collector or deputy collector shall execute to the said purchaser, upon his surrender of said certificate, a deed of the real estate purchased by him as aforesaid, reciting the facts set forth in said certificate, and in accordance with the laws of the State in which such real estate is situate upon the subject of sales of real estate under exe- cution. Digitized by Microsoft® 104 ASSESSMENTS AND COLLECTIONS. to°te prima fade Sec. 3199. The deed of sale given in pursuance of the evidence, etc. preceding section shall be prima facie evidence of the facts therein stated; and if the proceedings of the officer as set forth have been substantially in accordance with the pro- visions of law, shall be considered and operate as a con- veyance of all the right, title, and interest the party delin- quent had in and to the real estate thus sold at the time the lien of the United States attached thereto. In case of a distillery, although consent is given that the Gov- ernment has a prior lien, only interest of distiller is transferred to purchaser. (Mansfield v. Excelsior Refining Co., 36 Int. Rev. Rec, 165; 135 U. S., 326.) Relative to deeds. (Brown v. Goodwin, 75 N. Y., 409; Fox v. Stafford, 90 N. C, 296; Flemister v. Flemister, 83 Ga., 79.) sePzeSs o™l Sec - 32 00. Any collector or deputy collector may, for d^t" 6 ?' 1° ™e *^ e couec ti° n or taxes imposed upon any person, and com- stat". mitted to him for collection, seize and sell the lands of such person situated in any other collection district within the State in which such officer resides ; and his proceedings in relation thereto shall have the same effect as if the same were had in his proper collection district. iand ed riOTto°°aie f Sec. 3201. Any person whose estate may be proceeded against as aforesaid shall have the right to pay the amount due, together with the costs and charges thereon, to the collector or deputy collector at any time prior to the sale thereof, and all further proceedings shall cease from the time of such payment. laMafte^saie 1 of ^ EC " 3202 - The owners of any real estate sold as afore- said, their heirs, executors, or administrators, or any per- son having any interest therein, or a lien thereon, or any person in their behalf, shall be permitted to redeem the land sold, or any particular tract thereof, at any time within one year after the sale thereof, upon payment to the purchaser, or, in case he can not be found in the county in which the land to be redeemed is situate, then to the col- lector of the district in which the land is situate, for the use of the purchaser, his heirs or assigns,. the amount paid by the said purchaser and interest thereon at the rate of ... twenty per centum per annum. Sec. 3203 [as amended by sec. 8, act of Mar. 1, 1879 (20 Stat., 327)]. It shall be the duty of every collector to keep a record of all sales of land made in his collection district, whether by himself or his deputies, or by another collector, in which shall be set forth the tax for which any such sale was made, the dates of seizure and sale, the name of the party assessed, and all proceedings in making said sale, amount of fees and expenses, the name of the purchaser and the date of the deed; and said record shall be certified by the officer making the sale. And on or before the fifth day of each succeeding month he shall transmit a copy of such record of the preceding month to the Commissioner of Internal Revenue. And it shall be the duty of every deputy making sale, as aforesaid, to return a statement of all his proceedings to Digitized by Microsoft® ASSESSMENTS AND COLLECTIONS. 105 the collector, and to certify the record thereof. In case of the death or removal of the collector, or the expiration of his term of office from any other cause, said record shall be delivered to his successor in office; and a copy of every such record, certified by the collector, shall be evidence in any court of the truth of the facts therein stated. Record of sales, Book No. 21. Report on Form 128. Sec. 3204. When any lands sold, as aforesaid, are re- Red ™ptionsto deemed as heretofore provided, the collector shall make record, entry of the fact upon the record mentioned in the preced- ing section, and the said entry shall be evidence of such redemption. Sec. 3205. Whenever any property, personal or real, successive which is seized and sold by virtue of the foregoing provi- nSfwhe'n 7 be sions, is not sufficient to satisfy the claim of the United . States for which distraint or seizure is made, the collector may, thereafter, and as often as the same may be neces- sary, proceed to seize and sell, in like manner, any other property liable to seizure of the person against whom such claim exists, until the amount due from him, together with all expenses, is fully paid. Sec. 3206. The Commissioner of Internal Revenue shall ch J r e c ^ s jn a s °^ by regulation determine the fees and charges to be allowed SiSs™ in all cases of distraint and other seizures; and shall have power to determine whether any expense incurred in mak- ing any distraint or seizure was necessary. Regulations, No. 2, revised, page 48; T. D. 1373; T. D. 1521. Sec. 3207. In any case where there has been a refusal or Proceedings in t . , J , i ■ , i i i chancery to sub- neglect to pay any tax, and it has become necessary to ject real estate to seize and sell real estate to satisfy the same, the Commis- paymentotta3i: - sioner of Internal Revenue may direct a bill in chancery to be filed, in a district or circuit court of the United States, to enforce the lien of the United States for tax upon any real estate, or to subj ect any real estate owned by the delinquent, or in which he has any right, title, or interest, to the payment of such tax. All persons having liens upon or claiming any interest in the real estate sought to be subjected as aforesaid, shall be made parties to such proceedings, and be brought into court as provided in other suits in chancery therein. And the said court shall, at the term next after the parties have been duly notified of the proceedings, unless otherwise ordered by the court, proceed to adjudicate all matters involved therein, and finally determine the merits of all claims to and liens upon the real estate in question, and, in all cases where a claim or interest of the United States therein is established, shall decree a sale of such real estate, by the proper officer of the court, and a distribution of the proceeds of such sale according to the findings of the court in respect to the interests of the parties and of the United States. "The Judicial Code," Act of March 3, 1911 (36 Stat. 1087), which goes into effect January 1, 1912, abolishes Circuit Courts and imposes the powers and duties thereof on District Courts. 1 Digitized Dy Microsoft® 106 ASSESSMENTS AND COLLECTIONS. The provision for suit in equity to enforce a lien for taxes does not supersede the remedy by distraint but is cumulative. (Blackfock v. United States, 208 U. S. 75, affirming 40 Ct. Cls., 90; (Alkan v. Bean, 8 Biss., 83; 23 Int. Rev. Rec, 351.) Bill under section 3207 to subject real estate to payment of assessment on distilled spirits. (United States v. Rindskopf, 8 Biss., 507.) _ Bill in equity to enforce lien on distillery. (United States v. Mackoy, 2 Dill., 229.) The Government loses none of its remedies to collect its reve- nue unless there is an express repeal or abrogation of some exist- ing remedy. (18 Op. Atty. Gen., 248.) toha™ aX^S Sec - 3208 [ ftS amended oy sec. 8, act of Mar. 1, 1879 (20 ffl-mefnm The Commissioner of Internal Revenue shall have laws, etc. charge of all real estate which is now or shall become the property of the United States by judgment of for- • feiture under the internal-revenue laws, or which has been or shall be assigned, set off, or conveyed by purchase or otherwise to the United States in payment of debts or penalties arising under the laws relating to internal reve- nue, or which has been or shall be vested in the United States by mortgage or other security for the payment of such debts, and of all trusts created for the use of the United States in payment of such debts due them; and, with the approval of the Secretary of the Treasury, may at public vendue, and upon not less than twenty days' notice, sell and dispose of all real estate owned or held by the United States as aforesaid; and until such sale the Commissioner of Internal Revenue, with the approval of the Secretary of the Treasury, may lease such real estate owned as aforesaid on such terms and for such period as they shall deem expedient. And in cases where real estate has or may become the property of the United States by conveyance or otherwise, in payment of or as security for a debt arising under the laws relating to internal revenue, and such debt shall have been paid, together with the interest thereon, at the rate of one per centum per month, to the United States, within two years from the date of the acquisition of such real estate, it shall be lawful for the Commissioner of Internal Revenue, with the approval of the Secretary of the Treas- ury, to release by deed, or otherwise convey such real estate to the debtor from whom it was taken, or to his heirs or other legal representatives. Solicitor of the Treasury to have charge of real estate owned by United States in certain cases. (Sec. 3750.) Sec. 3470. At every sale, on execution, at the suit of the United States, of lands or tenements of a debtor, the United States may, by such agent as the Solicitor of the Treasury shall appoint, become the purchaser thereof; but in no case shall the agent bid in behalf of the United States a greater amount than that of the judgment for which such estate may be exposed to sale and the costs. Whenever Buch purchase is made, the mar- shal of the district in which the sale is held shall make all needful conveyances, assignments, or transfers to the United Digitized by Microsoft® ASSESSMENTS AND COLLECTIONS. 107 Section 3470 does not apply to cases arising under the internal- revenue laws. (To United States Attorney Stripling, Oct. 8, 1898.) Commissioner not authorized to take charge of lands acquired in satisfaction of judgments recovered on the official bonds of collectors of internal revenue. (16 Op. Atty. Gen., 143.) Real estate purchased by the Government is not subject to State taxation after it has become the property of the United States. (Van Brocklin v. State of Tennessee, 117 U. S., 151.) Regulations No. 12, revised, page 35. Sec. 3209. Whenever a collector has on any list duly when list to be returned to him the name of any person not within his where t the d p t arty collection district who is liable to tax, or of any person so £^ ro p e S rty S or liable who has, in the collection district in which he re- sides, no sufficient property subject to seizure or distraint, from which the money due for tax can be collected, such collector shall transmit a statement containing the name of the person liable to such tax, with the amount and nature thereof, duly certified under his hand, to the col- lector of any district to which said person shall have removed, or in which he shall have property, real or per- sonal, liable to be seized and sold for tax. And the col- lector to whom the said certified statement is transmitted shall proceed to collect the said tax in the same way as if the name of the person and objects of tax contained in the said certified statement were on any list of his own collection district; and he shall, upon receiving said cer- tified statement as aforesaid, transmit his receipt for it to the collector sending the same to him. Sec. 3210. The gross amount of all taxes and revenues collections to received or collected by virtue of this title, or of any law^^y^y* hereafterenactedproviding internal revenue, shall be paid, by the officers receiving or collecting the same, daily into the Treasury of the United States, under the instructions of the Secretary of the Treasury, without any abatement or deduction on account of salary, compensation, fees, costs, charges, expenses, or claims of any description; and a certificate of such payment, stating the name of the depositor and the specific account on which the deposit was made, signed by the Treasurer, assistant treasurer, designated depositary, or proper officer of a deposit bank shall be transmitted to the Commissioner of Internal Revenue : Provided, That in districts where, from the dis- tance of the officer, collector, or agent receiving or col- lecting such taxes and revenues from a proper Govern- ment depository, the Secretary of the Treasury may deem it proper, he may extend the time for making such pay- ment, not exceeding, however, in any case a period of one month. Digitized by Microsoft® 108 ASSESSMENTS AND COLLECTIONS. [Sundry civil appropriation act tor the fiscal year ending June 30, 1909, approved May 27, 1908 (35 Stat., 325).] collections to be After June thirtieth, nineteen hundred and eight, col- tne Treasury! 11 ° lectors of internal revenue shall pay daily into the Treas- ury of the United States, under instructions of the Secre- tary of the Treasury, the gross amounts of all collec- tions of whatever nature made, by authority of law, and the same shall be covered into the Treasury as internal-revenue collections. (T. D. 1373, Circular No. 725.) Co 1 1 e o t o r s to Collectors of internal revenue shall render their revenue render accounts . . , quarterly. accounts quarterly. Money receivable for internal revenue: (Sec. 3473, R. S., aa amended by act Feb. 28, 1878, 20 Stat., 25, and act of March 2, 1911, 36 Stat., 965.) Instructions to officers (Regulations No. 2, revised, p. 10.) See section 3216, page 111. The standard silver dollar and silver certificates authorized by the act of February 28, 1878 (20 Stat., 25), are legal tender to any amount. Silver coins less than $1 legal tender to amount of $10, act June 9, 1879 (21 Stat., 7). Gold coins (sec. 3511). Silver certificates for $1, $2, and $5, act March 3, 1887. (24 Stat., 515.) Standard of value fixed — gold dollar. Act of March 14, 1900 (31 Stat., 45). An act relating to Hawaiian silver coinage and silver certifi- cates. (Act Jan. 14, 1903, 32 Stat., 770.) Regulations on deposit of funds see Reg. No. 2, revised, pp. 13-16. Miltenberger v. Cooke (18 Wall., 421) decided that a collector in accepting a draft in payment of a tax acts at his own risk and does not bind the United States. But see Act of March 2, 1911, below. American Brewing Co. v. U. S. (33 Ct. Cls., 348). Sec. 3211. The Secretary of the Treasury is authorized to designate one or more depositories in each State, for the deposit and safe-keeping of the money collected by virtue Depositories. f the internal-revenue laws ; and the receipt of the proper officer of such depository to a collector for the money deposited by him shall be a sufficient voucher for such col- lector in the settlement of his accounts at the Treasury Department. See section 89, Criminal Code, page 410. Any form of exchange, which designated depositories will receive as cash, issuing therefor certificates of deposit, under the provisions of sec. 3211, Revised Statutes, may be received in payment of taxes. re^ivabf/fr Act of March 2,1911 (36 Stat. 965) . That it sJwIl be law- taxes, falfor collectors of customs and of internal revenue to receive for duties on imports and internal taxes certified checks drawn on national and State banks, and trust companies during such time and under such regulations as the Secretary of the Treasury may prescribe. No person, however, , who may be indebted to the United States on account of duties on im- ports or internal taxes who shall have tendered a certified check or checks as provisional payment for such duties or Digitized by Microsoft® ASSESSMENTS AND COLLECTIONS. 109 taxes, in accordance with the terms of this Act, shall be re- leased from the obligation to make ultimate payment thereof until such certified check so received has been duly paid; and if any such check so received is not duly paid by the bank on which it is drawn and so certifying, the United States shall, in addition to its right to exact payment from the party originally indebted therefor, have a lien for the amount of such check upon all the assets of such bank; and such amount shall be paid out of its assets in preference to any or all other claims whatsoever against said bank, except the necessary costs and expenses of administration and the reimbursement of the United States for the amount ex- pended in the redemption of the circulating notes of such bank. Dept. Cir. No. 25, April 18, 1911. (T. D. 31513.) Sec. 2. That this Act shall be effective on and after June first, nineteen hundred and eleven. Sec. 3212. Every collector shall, at the expiration of^Vhiy'statt each month after he commences his collections, transmit ment ; accounts. to the Commissioner of Internal Revenue a statement of the collections made by him within the month. And every collector shall complete the collection of all sums assigned to him for collection, and shall pay over the same into the Treasury, and shall render his accounts to the Treasury Department as often as he may be required. See provisions of law in Appendix as to penalty for using public funds, failing to render accounts, etc. See section 12, act July 31, 1894, Appendix, page 406. Collectors are required to render disbursing accounts monthly and revenue accounts quarterly. Act of May 27, 1908 (35 Stat., 325). They will render accounts upon giving new bonds; disbursing account upon giving new disbursing officer's bond and revenue account upon giving new collector's bond, and final account upon separation from the service. The Auditor for the Treasury Department shall receive and examine all accounts for salaries and incidental expenses of the office of the Secretary of the Treasury, and all bureaus and offices under his direction, all accounts relating to * * * internal revenue * * *. (Sec. 7, act July 31, 1894; Supp. U. S. Rev. Stat., vol. 2, p. 213. "Dockery bill.") Sec. 3213. It shall bethe duty of the collectors, in their to ^ ta 'pS£y tI *£ respective districts, subject to the provisions of this title, ana ' forfeitures^ to prosecute for the recovery of any sums which may be*™ 3 " forfeited by law. All suits for fines, penalties, and for- feitures, where not otherwise provided for, shall be brought in the name of the United States, in any proper form of action, or by any appropriate form of proceeding, qui tarn or otherwise, before any circuit or district court of the United States for the district within which said fine, penalty, of i forfeiture may have been incurred, or before any other court of competent jurisdiction; and taxes may be sued for and recovered in the name of the United States, in any proper form of action, before any circuit or district court of the United States for the dis- Digitized by Microsoft® 110 ASSESSMENTS AND COLLECTIONS. trict within which the liability to such tax is incurred, or where the party from whom such tax is due resides at the time of the commencement of the said action. "The Judicial Code ", Act of March 3, 1911 (36 Stat. 1087), which goes into effect January 1, 1912, abolishes Circuit Courts and imposes the powers and duties thereof on District Courts. See section 733, in Appendix, page 385; section 838, page 401; section 3164, page 77. Suits for the recovery of taxes can be brought at any time, whether the taxes have been assessed or not, and whether they are assessable or not. (Dollar Savings Bank v. United States, 19 Wall., 227; 19 Int. Rev. Rec, 89. King v. United States, 99 U. S., 229. United States v. Little Miami Co. and X. R. R. Co., 1 Fed. Rep., 700. United States v. Tilden, 9 Ben., 368; 24 Int. Rev. Rec, 99, T. D. 676.) Suits commenced in a criminal case on filing an indictment; in a civil case on filing a declaration. (T. D., 18941, 1898.) A civil action upon a bond grows out of a contract. The penal sum named in a bond is not a penalty within the statute of limitations. (Raymond v. United States, 14 Blatchf., 451.) Interest. — Interest on taxes sued for runs from time taxes were due. (United States v. Erie Railroad, 106 U. S., 327; 29 Int. Rev. Rec, 58.) In the case of taxes not assessed, where no special law applies, interest should be claimed from the commencement of the suit, if no previous demand has been made, or from date of demand, if demand can be proved. Interest due under the general principle of law on the subject. (Young v. Golbe, 15 Wall., 562. Bonnafon v. United States, 14 Ct. Cls., 484.) Partners civilly liable for violation of law committed by co- partner. (United States v. Thomasson, 4 Biss., 99.) Indictment — recovery of fines and penalties. (United States v. Craft, 43 Fed. Rep., 374; 36 Int. Rev. Rec, 360.) A penalty may be recovered by indictment or by civil action in the form of an action for debt. (Lees v. United States, 150 U. S., 479. U. S. v. Foster, 2 Biss., 453; 19 Int. Rev. Rec, 5.) But in case of alternative punishment see U. S. v. Morin, 4 Biss. 93. The term penalty involves the idea of punishment and its character is not changed by the mode in which it is inflicted, whether by civil action or a criminal prosecution. (U. S. v. Chouteau, 102 U. S., 603; 27 Int. Rev. Rec, 49.) Cumulative penalties. (Case of Leszynsky, 25 Int. Rev. Rec, 71.) A judgment in a criminal case must conform to the require- ments of the statute, and any variation therefrom, either in the character or extent of the punishment inflicted, avoids the judgment. (Woodruff v. United States, 58 Fed. Rep., 768.) A court has no authority to impose a fine only in a case where the law requires fine and imprisonment. (U. S. v. Braun and Fitts, 158 Fed. Rep., 456.) It was held by the Supreme Court in ex parte Karstendick (93 U. S., 396) that in cases where the statute makes hard labor a part of the^ punishment it is imperative upon the court to include that in the sentence. (In re Johnson, 46 Fed. Rep., 481.) All participants in misdemeanors are liable as principals. (U. S. v. Sykes, 58 Fed. Rep., 1000. U. S. v. White & Paller, T. D. 1334.) Section 332 of the act of March 4, 1909 (35 Stat., 1152), Criminal Code. — Whoever directly commits any act consti- tuting an offense defined in any law of the United States, or aids, abets, counsels, commands, induces, or procures its commission, is a principal. Felonies defined. (See p. 388.) Digitized by Microsoft® ASSESSMENTS AND COLLECTIONS. Ill Sec. 3214. No suit for the recovery of taxes, or of any et f uit ^ r ^^ fine, penalty, or forfeiture, shall be commenced unless the brought without Commissioner of Internal Kevenue authorizes or sanctions S£w? f ° 0m * the proceedings^ Provided, That in case of any suit for penalties or forfeitures brought upon information received from any person, other than a collector or deputy collector, the United States shall not be subject to any costs of suit. Section 969, Appendix, page 392, has a similar provision to that contained in the above proviso. For the recovery of taxes, see Regulations, No. 2, revised, page 36; Regulations, No. 14, revised, page 9. Circular 319, relative to suits for taxes (34 Int. Rev. Rec. , 333) ; Circular 331, relative to suits for taxes, June 21, 1889 (35 Int. Rev. Rec, 197). Right of the United States to sue for taxes. Set-offs growing out of independent claims can not be pleaded. (United States v. Pacific R. R., 4 Dill., 66; see sec. 951, p. 36.) A party claiming a credit which was not presented to the accounting officers of the Treasury can not set it up in an action brought by the United States against him for the recovery of a debt. (Railroad Co. v. United States, 101 U. S., 543; 26 Int. Rev. Rec, 165.) Sec. 3215. It shall be the duty of the Commissioner of to R s X lat foT|o^ Internal Revenue, with the approval of the Secretary of eminent of offl- the Treasury, to establish such regulations, not incon- cers ' sistent with law, for the observance of revenue officers, district attorneys, and marshals, respecting suits arising under the internal-revenue laws in which the United States is a party, as may be deemed necessary for the just responsibility of those officers and the prompt collection of all revenues and debts due and accruing to the United States under such laws. Regulations, No. 12, revised. The Solicitor of the Treasury is authorized to establish regu- lations for the observance of district attorneys and marshals in suits in which the United States is a party, other than those arising under the internal-revenue laws. (Sees. 377 and 379, R.S.) Duties of district attorneys as to prosecutions, etc., section 838 R. S., Appendix, p. 401.) Duty of collectors to look after suits. (T. D. 702.) United States attorneys are instructed that there should be no unnecessary delay in proceedings to enforce collection of judgments. (T. D. 348, May 23, 1901.) Sec. 3216. All judgments and moneys recovered or^o^ys^ecoT- received for taxes, costs, forfeitures, and penalties, shall be paid to coiiee- be paid to collectors as internal taxes are required to be tors ' paid. The gross amount of all moneys received for the use of the United States is required to be paid by the officer or agent receiving the same into the Treasury at as early a day as practi- cable, without any abatement or deduction on account of salary, fees, costs, charges, expenses, or claim of any description what- ever. (Sec. 3617, p. 404, Appendix. See also sec. 3210, p. 107, and act of May 27, 1908, p. 108.) See section 3621, as amended by act of May 28, 1896, page 405. Instructions to clerks of courts as to disposition of moneys in the registry of the court. (Regulations, No. 12, revised, p. 21.) Taxed costs payable to the collector. (United States v. Wolters (1892), 51 Fed. Rep., 896.) Digitized by Microsoft® 112 ASSESSMENTS AND COLLECTIONS. Costs, as well as all other moneys collected in cases arising under the internal-revenue laws, are required by the law to be paid over by the court clerks to the collectors of the districts in which these cases arise. (T. D. (1898), No. 19306.) See notes under section 797, as amended, p. 403. Dues from deiin- Sec. 3217. When any collector fails either to collect or quent collector to, i i • , , ,i Be collected by to render his account, or to pay over in the manner or slie. traint and within the times provided by law, the (First) Comptroller of the Treasury shall, immediately after evidence of such delinquency, report the same to the Solicitor of the Treasury, who shall issue a warrant of distress against such delinquent collector, directed to the marshal of the district, expressing therein the amount with which the said collector is chargeable, and the sums, if any, which have been paid over by him, so far as the same are ascer- tainable. And the said marshal shall, himself, or by his deputy, immediately proceed to levy and collect the sum which may remain due, with five per centum thereon, and all the expenses and charges of collection, by distress and sale of the goods and chattels, or any personal effects of the delinquent collector, giving at least five days' notice of the time and place of sale, in the manner pro- vided by law for advertising sales of personal property on execution in the State wherein such collector resides. And the bill of sale of the officer of any goods, chattels, or other personal property, distrained and sold as afore- said, shall be conclusive evidence of title to the purchaser, and prima-facie evidence of the right of the officer to make such sale, and of the correctness of his proceedings in selling the same. And for want of goods and chattels, or other personal effects of such collector, sufficient to satisfy any warrant of distress, issued as aforesaid, the real estate of such collector, or so much thereof as may be necessary for satisfying the said warrant, after being advertised for at least three weeks next before the time of sale, in not less than three public places in the collection district, and in one newspaper printed in the county or district, if any there be, shall be sold at public auction by the marshal or his deputy. Upon such sale, the marshal shall make and deliver to the purchaser of the premises sold a deed of conveyance thereof, to be executed and acknowledged in the manner and form prescribed by the laws of the State in which said lands are situated, and said deed so made shall invest the purchaser with all the title and interest of the defendant named in said warrant, existing at the time of the seizure thereof. And all moneys that may remain of the proceeds of such sale of personal or real property, after satisfying the said warrant of distress, and paying the reasonable costs and charges of sale, shall be returned to the proprietor of the property sold as aforesaid. See sections 3624 and 3625, in Appendix, pages 407, 408, as to proceedings against officers failing to account for public moneys. * * * The First Comptroller of the Treasury shall hereafter be known as Comptroller of the Treasury. Digitized by Microsoft® ASSESSMENTS AND COLLECTIONS. 113 He shall perform the same duties and have the same powers and responsibilities (except as modified by this act) as those now performed by or appertaining to the First and Second Comptrollers of the Treasury and the Commissioner of Customs; and all provisions of law not inconsistent with this act, in any way relating to them or either of them, shall hereafter be con- strued and held as relating to the Comptroller of the Treasury. * * * (Sec. 4, act July 31, 1894; Supp. U. S. R. S., vol. 2, p. Sec. 3218. Every collector shall be charged with the collectors to it>e whole amount of taxes, whether contained in lists trans- what Ei- erroneously or illegally assessed or collected, or of any leotecr - penalty claimed to have been collected without authority, or of any sum alleged to have been excessive or in any manner wrongfully collected, until appeal shall have been duly made to the Commissioner of Internal Revenue, ac- cording to the provisions of law in that regard, and the regulations of the Secretary of the Treasury established in pursuance thereof, and a decision of the Commissioner has been had therein: Provided, That if such decision is delayed more than six months from the date of such ap- peal, then the said suit may be brought, without first having a decision of the Commissioner at any time within the period limited in the next section. In Hicks v. James' Administratrix, 48 Fed., 542, the plaintiff brought suit to recover certain taxes which it was claimed had been illegally exacted, and the question as to whether there had been a proper appeal made to the commissioner before the suit was instituted was raised, and the difference between an appeal taken under Forms 46 and 47 clearly shown. The case was later affirmed by the Supreme Court. (James' Administratrix v. Hicks, 110 U. S., 272; Hastings v. Herold, 184 Fed. Rep., 759.) In extending jurisdiction to United States courts by the act of March 3, 1887, the provisions of sections 3226 and 3227, Re- vised Statutes, were not abrogated. (Christie Street Commis- sion Co. v. U. S., 126 Fed. Rep., 991; affirmed 129 Fed. Rep., 506.) A suit against the collector for the recovery of taxes is in reality a suit against the United States upon an implied con- tract to pay that which has been unlawfully taken. (Armour v. Roberts (1907), 151 Fed. Rep., 846). As the right to sue the United States through its collectors, to recover taxes alleged to have been illegally collected, is only a remedy given by statute, no such right exists unless the con- ditions prescribed by sections 3226, 3227 are strictly complied with. (Commissioners of the Sinking Fund of Louisville v. Buckner, 48 Fed. Rep., 533; Schmitt v. Trowbridge, collector, 24 Int. Rev. Rec, 381.) The common-law right to sue a revenue officer for the recovery of taxes illegally exacted has been superseded by statute, and the remedy accorded thereby is deemed to be exclusive. (Snyder v. Marks, 109 U. S., 189; Schoenfeld v. Hendricks, 152 IT. S., 691.) In the absence of a statutory rule to the contrary, the defense of a statute of limitations, which is not raised either in plead- ing or on the trial, or before judgment, can not be availed of. (Retzer v. Wood, collector, 109 U. S., 185.) A promise on the part of a collector of taxes to repay a tax illegally collected and paid only under protest can not be implied where statute makes it the duty of such officer to pay into the public Treasury without any deduction on account of claims of any description the gross amount that" he received. The prohibition that no suit shall be maintained in any court to recover a tax illegally assessed, except on certain condi- tions stated in the section, operates on all suits brought subse- quently to the time fixed by the act for it to take effect, and on suits brought in State courts as well as in Federal. (The Col- lector v. Hubbard, 12 Wall., 1.) Digitized by Microsoft® 122 ASSESSMENTS AND COLLECTIONS. Upon an application by the United States for an order upon a receiver to pay an assessment, the receiver may show that the assessment was erroneous or illegal, without regard to the lapse of time or to whether there has been an appeal to the Commis- sioner of Internal Revenue. (United States v. Nebraska Distil- ling Co. (1897), circuit court of appeals, 80 Fed. Rep., 285.) Limitation as Sec. 3227. No suit or proceeding for the recovery of any covery of "taxes internal tax alleged to have been erroneously or illegally Ject"l. fuUy co1 " assessed or collected, or of any penalty alleged to have been collected without authority, or of any sum alleged to have been excessive or in any manner wrongfully collected, shall be maintained in any court unless the same is brought within two years next after the cause of action accrued: Provided, That actions for such claims which accrued prior to June six, eighteen hundred and seventy-two, may be brought within one year from said date; and that where any such claim was pending before the Commissioner, as Erovided in the preceding section, an action thereon may e brought within one year after such decision and not after. But no right of action which was already barred by any statute on the said date shall be revived by this section. The words ' ' cause of action " mean the right of action . (Wright v. Blakeslee, 101 U. S., 174; 26 Int. Rev. Rec, 179.) As to claim pending before commissioner June 6, 1872. (James ?). Hicks, 110 U. S., 272.) Jurisdiction. (City of Philadelphia v. Collector, 5 Wall., 720.) State statute of limitations as affected by the Federal statute of limitations. (Braun v. Sauerwein, 10 wall., 218.) A person can not recover from an internal-revenue collector taxes paid which were in fact due, even though the manner of their assessment and collection was unauthorized. (Schafer v. Craft, 144 Fed. Rep., 907.) Suits must be' brought within two years after the cause of action accrued. (Cheatham v. United States, 92 U. S., 85; 22 Int. Rev. Rec, 30; Kings County Savings Institution v. Blair, 116 U. S., 200; 32 Int. Rev. Rec, 30; Commissioners of the Sinking Fund of Louisville v. Buckner, 48 Fed. Rep., 533; Coblens v. Abel, Woolw. 293, Fed. Cas. No. 2926; Christie-Street Commission Co. v. United States, C. C. A. 136 Fed. Rep. 326, affirming 129 Fed. Rep., 506; Farrell v. United States, 167 Fed. Rep., 639.) The right of action accrues at the expiration of six months after an appeal without action thereon and becomes barred in two years thereafter. (Schwartzchild & Sulzerbergeri). Rucker, collector (1906), U. S. Circuit Court, northern district of Ga., 143 Fed. Rep., 656; T. D., 974.) No officer of the Government is authorized to waive the statute of limitations imposed in favor of the Government. (Christie- Street Commission Co. v. United States, 129 Fed. Rep., 506.) claims for re- Sec. 3228. All claims for the refunding of any internal tion! ms ' Iimita "tax alleged to have been erroneously or illegally assessed or collected, or of any penalty alleged to have been col- lected without authority, or of any sum alleged to have been excessive or in any manner wrongfully collected, must be presented to the Commissioner of Internal Revenue within two years next after the cause of action accrued: Provided, That claims which accrued prior to June six, eighteen hundred and seventy-two, may be presented to the Commissioner at any time within one Digitized by Microsoft® ASSESSMENTS AND COLLECTIONS. 123 year from said date. But nothing in this section shall be construed to revive any right of action which was already barred by any statute on that date. Informal application regarded as a claim within the meaning of this section. (14 Op. Atty. Gen., 615.) When this section does not apply. This limitation does not apply to claims for the redemption of stamps. (15 Op. Atty. Gen., 426.) This limitation does not apply to claims under section 3221, page 117. Section 3228 does not apply to claims for refund of legacv taxes under section 3, act of June 27, 1902. (13 Comp. Dec, 707.) Claims for taxes recovered by judgments should be presented within two years after date of judgment. Sec. 3229. The Commissioner of Internal Revenue, Com P romises - with the advice and consent of the Secretary of the Treas- ury, may compromise any civil or criminal case arising under the internal-revenue laws instead of commencing suit thereon; and, with the advice and consent of the said Secretary and the recommendation of the Attorney- General, he may compromise any such case after a suit thereon has been commenced. Whenever a compromise is made in any case there shall be placed on file in the office of the Commissioner the opinion of the Solicitor of Internal Revenue, or of the officer acting as such, with his reasons therefor, with a statement of the amount of tax assessed, the amount of additional tax or penalty im- posed by law in consequence of the neglect or delinquency of the person against whom the tax is assessed, and the amount actually paid in accordance with the terms of the compromise. Compromises after judgment, remissions, and pardons. (See sec. 3469, p. 399.) Officers compromising offenses except as authorized by law; penalty. (Sec. 3169, p. 81, and sec. 3170, p. 83.) District attorney or marshal compromising cases illegally; penalty. (Sec. 3170, p. 83.) Opinion of the Attorney General as to the limitation of the power to compromise vested in the Secretary of the Treasury under sections 3229 and 3469, page 399. (17 Op. Atty. Gen., 213; 27 Int. Rev. Eec, 334.) Compromises, course of proceedings indicated. The functions of the Secretary of the Treasury and the Attorney General are advisory. (12 Op. Atty. Gen., 472; 8 Int. Rev. Rec, 86.) Power to compromise ceases as soon as judgment is rendered. (13 Op. Atty. Gen., 479.) No power to compromise proceedings against officer's. (14 Op. Atty. Gen., 8, 43.) The right to compromise is understood to embrace the crim- inal as well as the civil liability of the defendant. (13 Op. Atty. Gen., 480.) Can not compromise taxes legally due from a solvent taxpayer. T. D. 18854; 16 Op. Atty. Gin., 249; 25 Int. Rev. Rec, 14. United States v. Roelle et al., 24 Int. Rev. Rec, 332; Fed. Cas. No. 16186.) See also Dorsheimer v. IT. S., (7 Wall., 166; 10 Int. Rev. Rec, 131), as to power to remit a tax. Relative to compromise of liability of obligors on an export bond. (13 Op. Atty. Gen., 115.) Canadian bank notes paid out by banks in the United States, tax on, compromise. (21 Op. Atty. Gen., 557.) Digitized by Microsoft® 124 ASSESSMENTS AND COLLECTIONS. No power to compromise a suit brought against a collector of internal revenue for the recovery of tax claimed to have been illegally collected. (Coca Cola "Co. v. Rucker; 23 Op. Atty. Gen., 507.) Money deposited for compromise can not be held or set off against tax due. (Boughton v. United States, 12 Ct. Cls., 330; 13 ibid., 284.) When party complies with terms of compromise it is conclu- sive. (Sweeny v. United States, 17 Wall., 75; United States v. Child & Co., 12 ibid., 232; Mason v. United States, 17 ibid., 67.) Discontinuance on payment of costs a compromise. (Op. Atty. Gen. (Hoar), 11 Int. Rev. Rec, 98; 12 Op. Atty. Gen. (Evarts), 536.) Commissioner may direct an unconditional dismissal of a suit without recommendation of Attorney General. (12 Op. Atty. Gen., 553.) The Attorney General exercises superintendence and direc- tion over United States attorneys and general supervision over proceedings instituted for the benefit of the United States. He may .absolutely dismiss or discontinue suits in which the Gov- ernment is interested ; a fortiori, he may terminate the same upon terms, at any stage, by way of compromise or settlement. (22 Op. Atty. Gen., 499;Treas. Dec. (1899), No. 21270.1 An agreement made with the United States District Attorney in the nature of a compromise is not valid unless with the concur- rence of the officers above named. (U. S. v. Quantity of Dis- tilled Spirits, 4 Ben., 349; Fed. Cas. 16099.) There is no authority for a district attorney or collector to compromise, adjust, or settle any charge or complaint for any violation, or alleged violation, of the internal-revenue law. (T. D. 845, Dec. 9, 1904.) United States Commissioners have no authority to settle cases. (T. D. 1216.) A compromise operates for the protection of the offender against subsequent proceedings as fully as a former conviction or acquittal, and is a bar to a suit on a bond to recover penalties based upon the same offense. CO. S. v. Chouteau (1880), 102 U. S. 603; 27 Int. Rev. Rec, 51.') The officers of the Treasury Department are authorized to com- promise a case involving a violation of the oleomargarine statutes upon terms, which, in their judgment, are just and reasonable. The initiative of action is with the Commissioner. (26 Op. Atty. Gen., 282.) Suits against illicit distillers may not be nolled without per- mission of Attorney General. (Sec. 3230, R. S.) Commissioner may instruct United States attorney to prose- cute or abstain. (Sees. 838, p. 401; 3214, p. 111.) Instructions relative to offers in compromise. (T. D. 18854, Jan. 22, 1898; T. D. 20265, Oct, 28, 1898.) As to compromises induced by threats and duress. (T. D . 206, Aug. 30, 1900; Int. Rev. Cir. 579.) As to five-dollar offers. (T. D. 496, Apr. 2, 1902.) Offers in compromise should include payment of costs. (T. D. 642, Mar. 20, 1903.) Relative to deposit of amount offered. (T. D. 1253.) o^i/Sf ^™?™" Sec. 3230. No discontinuance or nolle prosequi of any ances oi prosecu- . . . 1 . i ± t i i ticms. prosecution under section three thousand two hundred and fifty-seven shall be allowed without the permission in writing of the Secretary of the Treasury and the Attorney-General. continuance of Sec. 3231. It shall be lawf ul f or any court in which any toternai - revenue gu -^. of cr i mma i proceeding arising under the internal- revenue laws may be pending, to continue the same at any stage thereof, for good cause shown on motion by the dis- trict attorney. Digitized by Microsoft® Chapter Three. SPECIAL TAXES. Sec. 3232. Occupation not to be carried on until tax is paid. 3233. Business to be registered. [3233a.] Selling on passenger railroad trains or vessels. 3234. Persons in partnership at same place liable for only one tax. 3235. Payment of one special tax not to cover several places of business. 3236. When more than one pursuit is car- ried on in same place by same person at same time. 3237 (amended). When special tax to be due, how reckoned. 3238. Stamps for special taxes. 3239. Special-tax stamp to be exhibited in place of business. 3240. List of special-tax payers to be ex- hibited in collector's office. 3241. Death or removal after paying tax; business carried on without addi- tional tax. 3242. Carrying on business without pay- ment of special tax; penalties. [3242a.] Same. [32426.] Section 4, act of August 2, 1886. Same as to oleomargarine. [3242c] Section 4, act of May 9, 1902. Same as to process, renovated , or adulterated butter. 3243. Payment of special tax not to au- thorize violation of State laws nor prohibit State taxation. Sec. 3244 (amended) . Special taxes imposed on whom: 1st. Brewers. 2d. Manufacturers of stills. 3d. Kectifiers. 4th. Retail liquor dealers. Wholesale liquor dealers. 5th. Retail dealers in malt liquors. Wholesale dealers in malt liquors. Act of August 2, 1886, section 3; as amended by section 2, act of May 9, 1902: Manufacturers of oleomargarine. Wholesale dealers in oleomargarine. Retail dealers in oleomargarine. Act of May 9, 1902, section 4: Manufacturers of process or renovated butter. Manufacturers of adulterated butter. Wholesale dealers in adulterated butter. Retail dealers in adulterated butter. Act of June 6, 1896, section 3: Manufacturers of filled cheese. Wholesale dealers in filled cheese. Retail dealers in filled cheese. Act of June 13, 1898, section 36: Manufacturers, packers, and repack- ers of mixed flour. 3246 (amended). Special tax not to apply to vintners nor apothecaries in cer- tain cases. Sec. 3232. No person shall be engaged in or carry on to °«™P^S n ^ any trade or business hereinafter mentioned until he has until tax is paid. paid a special tax therefor in the manner hereinafter provided. See section 53, act of October 1, 1890, amending section 3237, Revised Statutes, modifying the above. It was held in License Tax Cases (5 Wall., 462, 6 Int. Rev. Rec, 36) that the provisions of the act of Congress of June 30, 1864, "to provide internal revenue to support the Government," etc. (13 Stat., 223), and the amendatory acts requiring licenses for certain kinds of business and imposing penalties for not taking out and paying for them, were not contrary to the Constitution or to public policv, and that the provisions of the act of July 13, 1866, "to reduce internal taxation," etc. (14 Stat., 98), for the imposing of special taxes, in lieu of requiring payment for licenses, removed whatever ambiguity existed in the previous laws, and were in harmony with the Constitution and public policy. Digitized by Microsoft® 125 126 SPECIAL TAXES. Returns to be made (Form 11). (Sec. 3173, p. 86.) For failure to make sworn return within time prescribed, without excuse of "sickness or absence," the Commissioner oj Internal Revenue is required to add 50 per centum to the special tax. (Sec. 3176, p. 89.) Prosecutions not to be commenced (except in cases of pecL- dlers of liquors) against special-tax payers who make return and pay the tax at any time before expiration of the calendar month in which liability began. (T. D. 18946, 1898.) Except in the case of persons engaging in business as liquor dealers in localities where such business is prohibited by local law. In such cases prosecution to be instituted unless the special tax is paid and the stamp posted before business is begun. (T. D. 1605, Mar.25, 1910.) Where a person, after his arrest for failure to pay special tax as required by law, proffers to the collector the amount of the tax and 50 per cent penalty, upon his signing and swearing to return (Form 11), the collector should receive the money proffered. This does not relieve such person from his criminal liability. (T. D. 21850, 1899.) A verdict in favor of defendant in a criminal action does not estop the United States from proving the special-tax liability in a civil action. (TJ. S. v. Schneider, 35 Fed. Rep., 107.) ness ra to e b°e regis- Sec. 3233. Every person engaged in any trade or busi- tered. ness on which a special tax is imposed by law shall register with the collector of the district his name or style, place of residence, trade or business, and the place where such trade or business is to be carried on. In case of a firm or company, the names of the several persons constituting the same, and their places of residence, shall be so regis- S ecial-tax*' ere ^- stamps C may be [Sec. 3233a.] [Joint resolution May 8, 1876 (19 Stat., ktadsofbS^S^S).] That nothing contained in chapter three of title on passenger ran- thirty-five of the Revised Statutes shall prevent the issue, road trains or ves- . •> . . . ., „ . K *-•; seis. under such regulations as the Commissioner ol Internal Revenue may prescribe, of special-tax stamps to persons carrying on the business of retail dealers in liquors, retail dealers in malt liquors, or dealers in tobacco, upon pas- senger railroad trams or upon steamboats or other vessels engaged in the business of carrying passengers. The special-tax stamps issued for the retailing of wine and liquor on buffet cars attached to passenger railway trains are to be made in general terms for such cars in "the United States," in view of the impracticability of repeated transfers of such stamps in the various districts and States through which the train passes. (T. D. 21318, 1899.) Retailing liquors on small boats. (T. D. 1007.) nerawp^rsame Sec. 3234. Any number of persons doing business in onlyVetex. Ior copartnership at any one place shall be required to pay but one special tax. United States v. Glab, 99 U. S., 225; 25 Int. Rev. Rec, 84. (See section 3241.) special tax not to Sec. 3235. The payment of the special tax imposed places S of V busi- shall not exempt from an additional special tax the person ness - carrying on a trade or business in any other place than that stated in the collector's register; but nothing herein contained shall require a special tax for the storage of goods, wares, or merchandise in other places than the Digitized by Microsoft® SPECIAL TAXES. 127 place of business, nor, except as hereinafter provided, for the sale by manufacturers or producers of their own goods, wares, and merchandise, at the place of production or manufacture, and at their principal office or place of busi- ness, provided no goods, wares, or merchandise shall be kept except as samples at said office or place of business. Where beer is delivered to customers from a storage house' that house is held to be a place of sale for which special tax is required to be paid, unless there has, in every instance, been prior constructive delivery at a regular place of business else- where. (T. D. 18999, 1898.) Where warehouses for storage of malt liquors are merely places of storage and not places where customers leave their orders, special tax is not required to be paid therefor, nor a special-tax stamp required to be posted up therein. (T. D. 21619, 1899.) Goods are offered for sale at the place where they are kept for sale, and where a sale may be effected. They are not offered for sale elsewhere by sending abroad an agent with samples or by establishing an office for the purpose of taking orders. (U. S. v. Chevalier, 107 Fed. Rep., 434, affirming 102 Fed. Rep. 125.) But a wholesale liquor dealer at one point permitting actual delivery from warehouse at another point without prior con- structive delivery at place where special-tax stamp is held is liable for special tax at the place of delivery. De Bary et al. v. Dunne, collector. (172 Fed. Rep., 940; T. D. 1550.) Sec. 3236. Whenever more than one of the pursuits or .. when more j . , ■ p, i mi -l j i than one pursuit occupations hereinafter described are carried on in tneis carried on in same place by the same person at the same time, except assa™ person b at hereinafter provided, the tax shall be paid for each accord- same time - ing to the rates severally prescribed. Sec. 3237 [as amended by sec. 53, act of Oct. 1, 1890 {26^^^™^ Stat. ,667)]. That all special taxes shall become due on the first day of July, eighteen hundred and ninety-one, and on the first day of July in each year thereafter, or on com- mencing any trade or business on which such tax is im- posed. In the former case the tax shall be reckoned for one year; and in the latter case it shall be reckoned pro- portionately, from the first day of the month in which the liability to a special tax commenced to the first day of July following. Special tax stamps may be issued for the months. of May and June, eighteen hundred and ninety- one, upon payment of the amount of tax reckoned propor- tionately under the laws now in force, and such stamps which have been or may be issued for the period ending April thirtieth, eighteen hundred and ninety (one) may upon payment of one-sixth of the amount required to be paid for such stamps for one year, be extended until July first, eighteen hundred and ninety-one, under such regula- tions as may be prescribed by the Commissioner of Inter- nal Eevenue. And it shall be the duty of special tax payers to render Returns. their returns to the deputy collector at such times within the calendar month in which the special tax liability com- menced as shall enable him to receive such returns, duly signed and verified, not later than the last day of the month, except in cases of sickness or absence, as provided Digitized by Microsoft® 128 SPECIAL TAXES. for in section three thousand one hundred and seventy- six of the Revised Statutes. This section is amendatory of sections 3173 (p. 86), 3176 (p. 89). It also repeals the proviso to section 3 of the act of August 2, 1886, relative to the special tax of manufacturers of oleomargarine commencing business subsequent to the 30th day of June in any year. Time of payment. Special-tax payer, even though he makes sworn return within the calendar month of his liability, is liable to criminal prosecution if he fails to pay the tax within that month and to post the stamp in his place of business. (T. D. 20230, 1898.) ciai taxes. orsp6 ' Sec. 3238. All special taxes imposed by law, including the tax on stills or worms, shall be paid by stamps denot- ing the tax, and the Commissioner of Internal Revenue is required to procure appropriate stamps for the payment of i8^5 Ct (i8 8b 'stat! I suc h taxes ; and the provisions of sections thirty-three hun- 316). ' dred an d twelve and thirty-four hundred and forty-six, and all other provisions of law relating to the preparation and issue of stamps for distilled spirits, fermented liquors, to- bacco, and cigars, shall, so far as applicable, extend to and include such stamps for special taxes; and the Commis- sioner of Internal Revenue shall have authority to make all needful regulations relative thereto. Section 3312 as to distilled sprits, page 207. Section 3446 as amended, page 355. The act of December 24, 1872 (17 Stat., 401), first required special taxes to be paid by stamps. Collectors prohibited from issuing receipts in lieu of stamps (Sec. 3183, p. 94). From issuing stamps before payment (Sec. 3169a, p. 82). Receipt of partial payments for stamps prohibited. (T. D. 1457.) Unlawful issue of receipts for moneys received in payment of special taxes. (Cir. 595, T. D. 297, March 11, 1901.) Reporting delinquent special-tax payers for assessment. — All per-« sons liable to pay a special tax who failed to pay the same prior to or during the calendar months in which liability thereto occurred should be reported on Form 23, with date of receipt of Form 11, or other application to pay tax noted in column 7, Form 23. (Special No. 185, Mar. 20, 1878; 24 Int. Rev. Rec, 99; Cir. No. 539, revising No. 470, June 27, 1899; T. D., No. 21316. Int. Rev. Cir. 590, Jan. 31, 1901, revising Cir. No. 410.) Stamp not to be issued until Form 11 and the money have been received. (28 Int. Rev. Rec, 37. See T. D. 1560.) The special-tax stamp is not a license, but merely a receipt for the tax. It puts the United States under no obligation whatever to the holder beyond assuring him against prosecution under the special-tax laws. License Tax Cases (4 Wall., 462; 6 Int. Rev. Rec, 36; T. D. 1484.) The particular place of business, by street and number, to be designated in the stamp. (T. D., 18912, 1898.) stam e tobe"con- ^ E0- 3239. Every person engaged in any business, avoca- spicuousiy placed tion, or employment, who is thereby made liable to a ofbusmL™ place special tax shall place and keep conspicuously in his 1877°' (19 itat'' es t aD hshment or place of business all stamps denoting the 240). verbal er- payment of said special tax; and any person who shall, ror corrected. through negligence, fail to so place and Keep said stamps, shall be liable to a penalty equal to the special tax for which his business rendered him liable, and the costs of Digitized by Microsoft® SPECIAL TAXES. 129 prosecution; but in no case shall said penalty be less than ten dollars. And where the failure to comply with the foregoing provision of law shall be through willful neglect or refusal, then the penalty shall be double the amount above prescribed: Provided, That nothing in this section shall in any way affect the liability of any person for exercising or carrying on any trade, business, or profession, or doing any act for the exercising, carrying on, or doing of which a special tax is imposed by law, without the payment thereof. The words ''except tobacco peddlers" in third line omitted, as under existing law they are not required to pay a special tax. Posting special-tax stamp. (Cir. letter, Sept. 26, 1898; T. D., 20094.) Sec. 3240 [As amended by the act of June 21, 1906, ^ fc t "rfspeciat 34 Stat., 387]. Each collector of internal revenue shall, eSibfted in°coi- under regulations of the Commissioner of Internal R e ve- leotor ' sofflce " nue, place and keep conspicuously in his office, for public inspection, an alphabetical list of the names of all persons who shall have paid special taxes within his district, and shall state thereon the time, place, and business for which such special taxes have been paid, and upon application of any prosecuting officer of any State, County, or munici- pality Tie shall furnish a certified copy thereof, as of a public record, for which a fee of one dollar for each one hundred words or fraction thereof in the copy or copies so requested may be charged. The names in this list should be the true names and not the fictitious ones under which parties may elect to do business. (36 Int. Rev. Rec, 14.) Production of records of internal-revenue offices, or copies thereof except of Record 10 as above provided, or divulging information secured in an official capacity, for use in trial of persons indicted for violating State laws is forbidden. (T. D., 19245, 1898; 34 Int. Rev. Rec, 261; In re Weeks (Vt.), 82 Fed. Rep., 730; Judge Evans's decision in re David N. Comingore, collector Sixth district of Kentucky; T. D. (1899), No. 21584; 96 Fed. Rep., 552; Boskev. Comingore (477U. S., 459; T. D., 104;) In re Lamberton, 124 Fed. Rep., 446; T. D., 689; Stegall v. Thurman, 175 Fed. Rep., 813; T. D., 1616.) Regulations prohibiting the giving out by collectors of records in their offices, or copies thereof, for purposes not contemplated by the internal-revenue laws. (Regulations No. 12 Revised, Sec. 3167, p. 79; Sec. 882, appendix, p. 391.) Information (departmental), how furnished. (Dept. Cir. No. 69, July 5, 19.06. Dept. Rule IX, p. 391.) Records in a collector's office relating to special-tax payers are based on returns made by these persons under compulsion of law for the sole purpose of raising revenue for the United States. Collectors are not permitted to send out these records, or copies thereof, for use against the special-tax payers in cases not arising under the laws of the United States. (T. D., 19190, 1898.) While all persons are entitled to inspect Record No. 10 in the collector's office at reasonable and proper times, and are not prohibited from copying the names and addresses of special- tax payers, yet no person is to be permitted to monopolize the book to the extent of interfering with the collector's use of it or to the exclusion of other persons. (T. D., 19225, 1898.) 72190 — U 9 Digitized by Microsoft® 13.0 SPECIAL TAXES. The regulations prohibiting collectors from sending out their records, or making and furnishing copies thereof, do; mot author- ize them to prevent the public inspection of Record No. 10 in their offices. (T. D., 19332, 1898.) Scope of act of June 21, 1906. (T. D. 1050, T. D. 1164.) mOTafafter°pa£ ^ec. 3241. When any person who has paid the special mg tax; business tax f or any trade or business dies, his wife or child, or TOt ned additTona- executors or administrators or other legal representatives, tax - may occupy the house or premises, and in like manner carry on, for the residue of the term for which the tax is paid, the same trade or business as the deceased before carried on, in the same house, and upon the same prem- ises, without the payment of any additional tax. And when any person removes from the house or premises for which any trade or business was taxed to any other place, he may carry on the trade or business specified in the collector's register at the place to which he removes, without the payment of any additional tax: Provided, That all cases of death, change, or removal, as aforesaid, with the name of the successor to any person decreased, or of the person making such change or removal, shall be registered with the collector, under regulations to be prescribed by the Commissioner of Internal Revenue. A special-tax payer who discontinues business is not entitled to any rebate for the unexpired portion of the year for which 'the special-tax stamp was issued. Special-tax stamps are not transferable from one dealer to another. Whjn a nsw member is added to a firm paying special tax, a, new stamp will be required. When two persons, each holdmg a stamp for busmess carried on by himself, form a part- nership, the firm (a separate person, in law, from either of them) must pay special tax. Stamps for separate persons can not be joined together to answer for a partnership. (T. D., 19189, 1898; 35 Int. Rev. Rec, 285.) Regulations governing the transfer of stamp upon removal of business from one place to another within a district or from one district to another. (Regulations No. 1, supplement No. 1, June 6, 1910; T. D., 1637.) Collector has no discretion as to granting or declining to grant application for transfer of special-tax stamp. (T. D., 20338, 1898.) No additional special tax in case of change of firm, one or more of its members succeeding to and carrying on the business at same place. (United States v. Glab, 99 U. S. (9 Otto), 225; 25 Int. Rev. Rec, 84.) A member of a firm who has acquired the interest of the other members of the firm is entitled to transfer the business to another location without payment of additional special tax. (United States v. Davis, 35 Int. Rev. Rec, 46; 37 Fed. Rep., 468; Cir. No. 324; 35 Int. Rev. Rec, 109.) A member of a firm who, upon its dissolution, carries on the business himself without associating any other person with him therein is entitled to continue the business under the firm's special-tax stamp and to have such stamp transferred to any other place to which he removes the business. (T. D., 20346, 1898.) Where new partners are taken into a firm, thereby dissolving the old firm and creating a new partnership, the new firm can not, under the law, carry on business under the special-tax stamp of the old firm. It must make return and pay its own special tax reckoned from the first day of the month in which it usiness. (T. D„ 20550. 1899. iglfized by Microsoft® SPECIAL TAXES. 131 Additional special tax not to be required of unincorporated club by reason of changes in membership, Where such changes do not result in dissolution and formation of new club. (T. D. 1625, May 17, 1910.) Firm changing into a corporation, new special tax required. (T.D.1165.) A mere change of name of a firm to which a special-tax stamp has been issued does not necessitate the taking out of a new stamp. (T. D. 19064, 1898; T. D. 1451.) A special-tax stamp taken by a woman as a retail liquor dealer, in her own name, is sufficient for the same business conducted by her husband, who takes charge of it upon her retirement therefrom; he is not required to pay special tax and take out a stamp in his own name because of the fact that a town license was refused to her, but issued to him. (T. D. 19411, 1898.) A special-tax payer's wife may continue business under his stamp. (T. D. 19026, 1898.) Sec. 3242. * * * And every person who carries carrying on on the business of a brewer or wholesale or retail dealer in^S^^"'^ malt liquors, without having paid a special tax therefor, ««" tax. as required by law, shall, besides being liable to the pay- ment of the tax, be fined not less than ten dollars nor more than five hundred dollars. The portion of this section which is omitted relates to recti- fiers, liquor dealers, etc., and was superseded by the following section; and to tobacco, cigar manufacturers, etc., repealed by section 26, act of October 1, 1890. [Sec. 3242a.] [Sec. 16, act of Feb. 8, 1875 (18 Stat., 807).] Rectifiers, iiq- That any person who shall carry on the business of a recti- carryings' busi- fier, wholesale liquor dealer, retail liquor dealer, wholesale gess without pay- dealer in malt liquors, retail dealer in malt liquors, or mgspecia manufacturer of stills, without having paid the special tax as required by law, or who shall carry on the business of a distiller without having given bond as required by law, or Distiller carry- who shall engage in or carry on the business of a distiller ™g h ™. bus ^ 1 i ^ with intent to defraud the United States of the tax on the bond, or with in- spirits distilled by him, or any part thereof, shall, for every tent t0 defraud - such offense, be fined not less than one hundred dollars nor more than five thousand dollars and imprisoned not less Penalties _ than thirty days nor more than two years. * * * Payment of tax after the offense not a bar to prosecution. (United States v. Van Horn, 20 Int. Rev. Rec, 145; United States v. Devlin, 6 Blatch., 71; United States v. Ellis, 15 Int. Rev. Rec, 43.) Special-tax stamp not retroactive. (United States v. Angell, 11 Fed. Rep., 34.) The penalty is incurred by a rectifier who omits to pay the special tax irrespective of any intention to defraud. (United States v. Rectifying Establishment of Sloss, 11 Int. Rev. Rec, 46.) In regard to distillers, see section 3281, page 173. Prosecution must be by indictment or presentment, not by information. (United States v. Johannesen, 35 Fed. Rep., 411.) See note under section 3213, page 109. Rectifiers intending to defraud. (Sec. 3317, p. 210.) [Sec. 3242&.] [See. 4, act of Aug. 2, 1886 (21+ Stat, of SfSSSTS 209).] That every person who carries on the business ^Tnl^n"""'- of a manufacturer of oleomargarine without having paidness without the special tax therefor, as required by law, shall, besides ^1^ Digitized by Microsoft® 132 SPECIAL TAXES. being liable to the payment of the tax, be fined not less than one thousand and not more than five thousand dollars; and every person who carries on the business of a wholesale dealer in oleomargarine without having Eaid the special tax therefor, as required by law, shall, esides being liable to the payment of the tax, be fined not less than five hundred nor more than two thousand dollars; and every person who carries on the business of a retail dealer in oleomargarine without having paid the special tax therefor, as required by law, shall, besides being liable to the payment of the tax, be fined not less than fifty nor more than five hundred dollars for each and every offense. penalty. [s EC . 3242c] [Sec. 4, of act of May 9, 1902 (32 Stat, 193) .] That every person who carries on the business of a manu- facturer of process or renovated butter or adulterated butter without having paid the special tax therefor, as required by law, shall, besides being liable to the payment of the tax, be fined not less than one thousand and not more than five thousand dollars ; and every person who carries on the business of a dealer in adulterated butter without having paid the special tax therefor, as required by law, shall, besides being liable to the payment of the tax, be fined not less than fifty nor more than five hundred dollars for each offense. Paymentofspe- Sec. 3243. The payment of any tax imposed by the cial tax not to au- . , i it • r j t_ • tnorize violation internal-revenue laws tor carrying on any trade or busi- prohfb?t la s t ate ness shall not be held to exempt any person from any taxation. penalty or punishment provided by the laws of any State for carrying on the same within such State, or in any manner to authorize the commencement or continuance of such trade or business contrary to the laws of such State or in places prohibited by municipal law; nor shall the payment of any such tax be held to prohibit any State from placing a duty or tax on the same trade or business, for State or other purposes. McGuire v. Commonwealth, 3 Wall., 387; License Tax cases, 5 ibid., 462; 6 Int. Rev. Rec, 36; affirmed in the case of Per- vear v. The Commonwealth. A license (special-tax stamp) from the Federal Government, under the internal-revenue act of Congress, is no bar to an indict- ment under a State law prohibiting the sale of intoxicating liquors. (Pervear v. The Commonwealth, 5 Wall., 475.) The act of August 2, 1886 (24 Stat., 209), does not give author- ity to those who pay the taxes prescribed by it to engage in the manufacture or sale of oleomargarine in any State which law- fully forbids such manufacture or sale, or to disregard any regu- lations which a State may lawfully prescribe in reference to that article, and that act is not a regulation of commerce among the States. The statute of Massachusetts "to prevent deception in the manufacture and sale of imitation butter," is not in conflict with the clause of the Constitution of the United States investing Congress with power to regulate commerce among the States. (Plumley v. Massachusetts, 155 U. S., 461.) Persons who engage in the sale of alcoholic liquor, even though such business is a violation of the law of their State, are nevertheless required to pay special tax under the internal- revenue, laws of the,,. United States. The stamp, however. Digitizedbylvlicrosort® * ' SPECIAL TAXES. 133 issued to them is not a license, and does not protect them from prosecution, conviction, and sentence under the State law. (T. D. (1899) No. 21851; see also T. B. 1484, Apr. 21, 1909.) Special tax to be paid by town and State liquor agents. (T. D. State agencies. (South Carolina v. United States, 199 U. S., 437; (T. D. 961, 1904); 139 Ct. Cls., 257; T. B. 759.) A State statute requiring the holder of a special-tax stamp to perform duties in conflict with the Federal statute is uncon- stitutional. A State may not so exert its police power as to directly hamper or destroy a lawful authority of the United States. (North Dakota ex rel. Flaherty v. Hanson, 215 U. S., 515.) Sec. 3244, [as amended.] Special taxes are imposed special taxes, as follows: First. Brewers shall pay one hundred dollars. Every Brewers, person who manufactures fermented liquors of any name or description for sale, from malt, wholly or in part, or from any substitute therefor, shall be deemed a brewer: Provided, That any person who manufactures less than five hundred barrels a year shaU pay the sum of fifty dollars. Rice beer fermented is a fermented liquor made from a sub- stitute for malt. (34 Int. Rev. Rec, 253.) Ruling in regard to manufacture of small beer. (35 Int. Rev. Rec, 133.) Root beer, a fermented liquor made from "roots, barks, herbs, sugar, and bread yeast," if it is not similar to weiss beer or to any of the fermented liquors enumerated in section 3339, R. S., is not subject to tax; nor is the special tax of a brewer required to be paid for its manufacture for sale. (T. D. 19383, 1898.) Special tax is required to be paid for the manufacture and sale of "hop beer" resembling weiss beer. (T. D. 20233, 1898; T. D. 19445.) Fermented liquor made from malt, or from substitute there- for. (T. B. 892; T. B. 646.) Beverages under the name of "Hop ale," "Hop tonic," "Maltina," etc. (T. D. 19154.) "Hop tea tonic." (T. D. 829.) Second. Manufacturers of stills shall each pay fifty Manufacturers dollars, and twenty dollars for each still or worm for" distilling made by him. Any person who manufactures any still or worm to be used in distilling shall be deemed a manufacturer of stills. Sec._18 [act of May 28, 1880 (21 Stat, 145).] That Exception. subsection second of section thirty-two hundred and forty- four shall not apply to distillers in registered distilleries who manufacture for their own use wooden stills, but each of said distillers shall give notice to the collector of the dis- trict in which his distillery is located of each still manu- factured before the same is used. Manufacturers of stills for pharmaceutical and scientific pur- poses. (22 Int. Rev. Rec, 397; 36 ibid., 285; T. B. (1898), No. 20063.) A still made for use in the manufacture of vinegar comes under the ruling as to stills not used in the distillation of the spirits, and special tax is not required to be paid thereon. — Ruling 20878 revoked. (T. D. (1900), No 11.) Liability to special tax of manufacturers of stills of 5-gallon capacity or less, and of stills used for pharmaceutical purposes. Settled ruling, 36 ^^Ji^^fcrosoft® 134 SPECIAL TAXES. Stills of 5 gallons or less. (33 Int. Rev. Rec, 397.) Allstills"setup"requiredtoberegistered. (Sec.3258,p. 157.^ Ruling in regard to repairing of stills. (35 Int. Rev. Rec, 133.) Separate special tax to be paid on a still for distillation of spirits and on a worm for such distillation. Settled ruling as to a person who is employed by a distiller to manufacture parts of a wooden still. (T. D. No. 21835, 1899.) The manufacturer of a still, to be used only for pharmaceutical purposes, or for distillation of volatile oils, is not required to pay tax thereon, provided he furnishes the collector evidence, under oath, setting forth the purpose for which the still is to be used. (T. D. 5, Jan. 5, 1900.) The statutory provision imposing special tax on stills is held not to apply to a still that is shown not to be intended for the production of the spirits defined by the internal-revenue laws. (T. D. 64, Mar. 8, 1900.) The manufacturer of a worm for use by a rectifier in the redis- tillation of spirits is required to pay special tax thereon. (T. D. 917, Aug. 16, 1905.) There is no special tax under these laws on stills for the pro- duction of wood alcohol. (T. D. 918, Aug. 26, 1905.) Tax must be paid on stills and worms manufactured for use in industrial distilleries producing alcohol solely for denaturation. (T. D. 1423, Oct. 2, 1908.) s t£s raWbaCk ° n . Sec - 10 \- act °f Mar - 1 > 1879 ( 20 StaL > 3 ®V-] U P on aU stills manufactured for export, and actually exported, there shall be allowed a drawback, where the tax thereon has been paid, under such rules and regulations as the Commissioner of Internal Revenue, with the approval of the Secretary of the Treasury, shall prescribe. See Regulations, No. 29, revised. Rectifiers. Third. Rectifiers of distilled spirits shall pay two hundred dollars. Every person who rectifies, purifies, or refines distilled spirits or wines by any process other than by original and ' continuous distillation from mash, wort, or wash, through i, 1879 (20 stat; continuous closed vessels and pipes, until the manufacture 327) - thereof is complete, and every wholesale or retail liquor- Rectifiers of dealer who has in his possession any still or leach tub, or less than 500 bar- , , , , r , » A „ n >. reis a year. who keeps any other apparatus lor the purpose or refining in any manner distilled spirits, and every person who, without rectifying, purifying, or refining distilled spirits, shall, by mixing such spirits, wine, or other liquor with any materials, manufacture any spurious, imitation, or compound liquors for sale, under the name of whisky, brandy, gin, rum, wine, spirits, cordials, or wine bitters, or any other name, shall be regarded as a rectifier, and as being engaged in the business of rectifying. Provided, That any person who rectifies, purifies, refines, or manufactures as aforesaid less than five hundred barrels a year, counting forty gallons of proof spirits to the barrel, shall pay one hundred dollars. And provided, That nothing in this section shall be held to prohibit the purifying or refining of spirits in the course of original and continuous distillation through any material which will not remain incorporated with such spirits when the manufacture thereof is complete. Digitized by Microsoft® SPECIAL TAXES. 135 And provided further, That no officer shall collect any Rectifying special tax for rectifying distilled spirits on any premises ^tiiiery °' distant less than six hundred feet in a direct line from any 18 ^ 5 ct J 8 e \$' distillery. And every officer who collects any special tax 3ie). in violation of this proviso shall be liable to a penalty of Penalty for coi- five thousand dollars for each offense. ' tSf s spedal Rectifiers or brewers who have paid special tax as "rectifiers or brewers of less than 500 barrels," and who during the same special-tax year desire to increase their product, should make application for a new stamp, of the denomination of $200 in the case of a rectifier or $100 in the case of a brewer. On obtaining this new stamp the rectifier or brewer may apply to the Com- missioner of Internal Revenue, under act of May 12, 1900, for the redemption of the stamp first issued. Gin, manufacture of. (12 Int. Rev. Rec, 197.) Rectifying within 600 feet of a distillery. (Sec. 3266, p. 166r Sec. 3280, p. 172.) The presence of a filter, consisting of a closely packed pulp through which liquid is forced under pressure, on premises of a wholesale or retail liquor dealer constitutes such dealer a recti- fier. (T. D. 19060, 1898.)" Filtering apparatus. — Permitting certain described filtering apparatus in bottling warehouses, but not on premises of whole- sale liquor dealers. (T. D. 21106, 1899.) Liability of persons who mix spirits or liquors of different strengths or different kinds. (10 Int. Rev. Rec, 121.) The addition of water or the simple mixing of spirits of the same kind, produced at the same distillery at or about the same time, is not regarded as rectification. The general rule is that a wholesale liquor dealer in his capacity as such may commingle spirits of the same production, quality, and kind, differing in age not more than one year and in proof not more than 10 per cent, without rendering himself liable as a rectifier. The addition to distilled spirits of any coloring matter or foreign substance which in any way changes the character of the spirits or remains incorporated therein is regarded as rectification. (Regulations No. 1, Revised, Aug. 15, 1907, p. 27; Stark v. Nunn, 101 Fed. Rep., 423; T. D. 121.) Addition of caramel to spirits constitutes rectification. (T. D. 1332.) A retail liquor dealer who reduces with water a small quantity of whisky (less than 5 gallons) and mixes it with sugar, or other material, keeping it in a demijohn or other receptacle, merely for his own convenience in meeting orders of his customers at his bar, and does not make it a practice to put up the compound in bottles in advance of orders therfor for sale, is not to be regarded as liable to special tax as a rectifier. (T. D. 418, Oct. 5, 1901; T. D. 1014, June 19, 1906.) Recovering alcohol. — Druggists recovering alcohol previously U. S. v. Hance used in making medicines. (24 Int. Rev. Rec, 282.) T'sniitn 3 ' Kline The recovery of alcohol from preparations that are not medi- & French Co (T cines is rectification. (T. D. 963, Dec. 30, 1905.) D. 1684.) Medicinal compounds. — Special tax as rectifier required for manufacture of alcoholic medicinal compounds which are not so medicated as to be unfit for use as a beverage and for the manufacture of medicinal cordials, flavoring extracts, essences, and soda-water sirups which contain alcohol in excess of the quantity necessary to preserve the ingredients, extract the properties, or cut the oils and hold them in solution. (T. D. 1251, Oct. 12, 1907; T. D. 1255.) In a genuine medicine the alcohol should not be more than is necessary for the legitimate purposes of extraction, solution, or preservation, and the preparation should contain approximately a U. S. P. dose of some medicinal ingredient of recognized value, Digitized by Microsoft® 136 SPECIAL TAXES. either alone or in combination with other compatible drugs. (T. D. 1510, June 17, 1909.) Wines. — Wines manufactured from prunes. (T. D. 633.) " Blackberry wine " and "blackberry cordial," produced from grapes grown in the United States, fortified with spirits and flavored with blackberry, held to be a product of rectification, but not liable to stamp tax under section 3328, Bevised Statutes. (T. D. 495, Mar. 31, 1902.) Flavoring extracts. — Manufacture of. Allen v. Liquid Car- bonic Co. (170 Fed. Rep., 315.) Fourth. [Sec. 18, act of Feb. 8, 1875 (18 Stat., 309), as Retail liquor amended by sec. 4, act of Mar. 1, 1879 {20 Stat., 327).] That retail dealers in liquors shall pay twenty-five dollars. Every persons who sells, or offers for sale, foreign or domestic distilled spirits, wines, or malt liquors, otherwise than as hereinafter provided, in less quantities than five wine gallons at the same time, shall be regarded as a retail dealer in liquors. wholesale Uq- Wholesale liquor dealers shall each pay one hundred uor dealers. i ,, ^ L •> dollars. Every person who sells, or offers for sale, foreign or domestic distilled spirits, wines, or malt liquors, otherwise than as hereinafter provided, in quantities of not less than five wine gallons at the same time, shall be regarded as a wholesale liquor-dealer. If the quantity of malt liquor sold at one time exceeds five gallons, the vender is a wholesale dealer, although the same is not contained in one package. (United States v. Clare, 2 Fed. Rep., 55.) In prosecutions for selling liquor at wholesale, without pay- ment of special tax, it is not incumbent upon the Government to prove that the gallon measure used by defendant conformed to the legal standard; nor is it necessary to prove that each gallon contained a gallon of proof spirits. (United States v. Hart, 28 Int. Rev. Rec, 226.) wholesale' HqSor But n0 distiller who has given the required bond and dealer when. who sells only distilled spirits of his own production at the place of manufacture, or at the place of storage in bond, in the original packages to which the tax-paid stamps are affixed, shall be required to pay the special tax of a wholesale liquor-dealer on account of such sales. See section 3318a, p. 211. Clvbs. Club owning liquors and selling to members. (United States v. Wittig, 2 Low., 466; 22 Int. Rev. Rec, 98; United States v. Woods, 24 ibid.j 150; United States v. Rolinger, 28 ibid., 314; United States v. Kallstrom et al., 33 ibid., 152; United States v. Giller, 54 Fed. Rep., 656.) Every social club that receives orders from its members for alcoholic liquor in any quantity less than five gallons, and fur- nishes the liquor so ordered and collects pay therefor, "or accepts the consumer's promise to pay in the future," sells the liquor to its members and is a retail liquor dealer under the internal-revenue laws, and is required to pay special tax accord- ingly. (United States v. The Alexis Club, U. S. district court, eastern district of Pennsylvania; 98 Fed. Rep., 725; T. D. 8, 1900.) Clubs or societies collecting money for purchase of liquors for joint use of contributors. (T. D. 1262.) A social club in which beer is supplied to its members, who help themselves thereto "and throw their contributions into a Digitized by Microsoft® SPECIAL TAXES. 137 box through a slot," furnishes the beer under conditions consti- tuting sale, and is required to pay special tax. (T. D. 20119, 1898.) But. if a club has lockers m which each member places the liquor he desires to .drink, the liquor not having been purchased from the club, and no sale is made by the club but each mem- ber uses his own liquor, then no special-tax liability is incurred. (T.D.1311.) Shipping spirits to be paid for on delivery [C . O . D . ] . (United C.O.D. sales. States v. Shriver, 31 Int. Rev. Rec, 54; United States v. Ott, 31 ibid., 79; United States v. Cline, 26 Fed. Rep., 515; Jug Liquor cases, 32 Int. Rev. Rec, 70; Cir. No. 285; Cur. No. 339, modify- ing No. 285; Dec. No. 180 (1890); 36 Int. Rev. Rec, 13; U. S. v. Orene Parker Co., 121 Fed. Rep., 596.) Delivery by carrier. (United States v. Lackey, 120 Fed. Rep., 571.) CO. D. sales: When a retail liquor dealer, who has paid the special tax, ships liquors by express on orders received from another town, the express company delivering the goods and receiving and sending to the seller the purchase money, no addi- tional special tax is required. The sale is completed, and the property passes when tne goods are delivered to the carrier, the collection and transmission of the price being merely an incident of the express business. (Jones v. United States (1909), Circuit Court of Appeals, fourth circuit, Pritchard, J., dissenting, 170 Fed. Rep., 1. (Decisions contra cited in dissenting opinion of Judge Pritchard.) U. S. v. Adams Express Co., 119 Fed. Rep., 240. Ruling as to shipment of spirits to shipper's order, bill of lading attached to draft. (T. D. 1426, Oct. 16, 1908.) Liability for single sale or occasional acts. (United States v. Barnhardt, 20 Int. Rev. Rec, 137; United States v. Shouse, 31 ibid., 120; United States v. Rennecke, 28 Fed. Rep., 847; Let- ter to Collector Stearns, 31 Int. Rev. Rec, 141; United States v. Jackson, 1 Hughes, 531; Ledbetter v. United States, 170 U. S., 606; T. D. 1199, July 11, 1907.) One is engaged in the business of a retail liquor dealer within the meaning of section 3242, Revised Statutes, if he has liquor on hand to be sold to anyone who applies for it. (United States v. Rennecke, 28 Fed. Rep., 847.) "Canteens " on military reservations. (34 Int. Rev. Rec, 398). Post exchanges under the complete control of the Secretary of War as governmental agencies not subject to special tax as retail liquor dealers. (Dugan v. United States, 34 Ct. Cls. (1899) 458; T. D. 21285.) Sale of brandy peaches. (United States v. Stafford, 20 Fed. Rep., 720; 30 Int. Rev. Rec, 247; 18 ibid., 105; T. D. 19031, 1898.) No liability for sale of warehouse certificates for whisky in bond. (T. D. 1278, Nov. 19, 1907.) Selling at same time different packages of liquors, aggregating over five gallons. (10 Int. Rev. Rec, 98; 31 ibid., 317; United States v. Hart, 28 ibid., 226; United States v. James, 30 ibid., 24 29; United States v. Shouse, 31 ibid., 120.) Retail liquor dealer not entitled to accept order for a quantity of spirits amounting to 5 gallons or more, even though he fills the order by shipping from time to time less than 5 gallons. (T. D. 655.) Ruling as to constructive delivery. (Letter to C. W. Moulton, 23 Int. Rev. Rec, 253; T. D. 737.) Constructive delivery. (De Bary v. Souer, 101 Fed. Rep. 425.) Liability of party for negotiating sales for others. (30 Int. Rev. Agents negotio Rec, 93; United States v. Howell, 30 Int. Rev. Rec, 246.) tm « sales - A person'is not liable as a dealer in liquors simply for negotiating sales for others, provided he has neither actual nor constructive possession; but if he has such possession, so that a delivery, either actual or constructive, is made by him, such a delivery Digitized by Microsoft® 138 SPECIAL TAXES. Physicians and druggists. Bitters. as vests the ownership in the purchaser, he is liable to the tax, even though he himself is not the owner of the liquors. (14 Int. Rev. Rec, 193.) Taking orders for spirits does not render a person liable as liquor dealer. (U. S. v. Chevalier, 107 Fed. Rep. 434; T. D. 310.) Selling liquors as pretended agent. (United States v. Herman Rose, 28 Int. Rev. Rec, 274.) One subscriber ordering and receiving liquors purchased by subscription. (T. D. 1474.) Societies receiving commissions on sales of liquors induced by them. (T. D. 1486.) Where goods are shipped with privilege of trial before payment. (T. D. 1492.) Question of liability of merchants to special tax for ordering liquors for others. (27 Int. Rev. Rec, 234; T. D. 699; T. D. 972; T. D. 1072; T. D. 1249.) If commission merchants do not buy or sell, but upon receipt of orders from their foreign customers act merely as purchasing agents, they do not involve themselves in special-tax liability. (T. D. 823.) If a person buys spirits in his own name, and has the same billed to him in his own name, and deals it out from time to time, as called for, he is a retail liquor dealer although the liquor was disposed of without profit to himself, and he purchased it with money advanced by others. (U. S. v. Angell, 11 Fed. Rep., 34.) Selling liquors on fair grounds. (18 Int. Rev. Rec, 81; T. D. 169. Importers who sell spirits in bond are wholesale liquor dealers. (United States v. McCullough, 22 Int. Rev. Rec, 202.) Commission merchants who, at the request of foreign corre- spondents, occasionally purchase liquors in quantity, and take charge of shipping the same, and either charge the costs and their commissions upon their books to the account of such cor- respondents, or draw upon them for the full amount of the purchase price, with costs and commissions, are "wholesale liquor dealers." (Quinn v. Dimond et al. (1896), 72 Fed. Rep., 993.) An importer of alcoholic liquors or compounds thereof who holds a special-tax stamp as a wholesale liquor dealer at his place of business in one city, and sells and delivers packages of these liquors at a place of storage in another city, without prior constructive delivery to the purchasers at the place where such stamp is held, is required to pay additional special tax and to take out the requisite stamp for that storage place. (T. D. 19281, 1898.) (De Bary et al. v. Dunne, 172 Fed. Rep., 940; T. D. 1550.) The law does not treat distilled spirits as a drug or medicine, and doctors and druggists are not privileged to sell it as such without first paying the special tax required of dealers in liquor. (United States v. Stafford, 20 Fed. Rep., 720.) Druggist liable criminally for sales by clerk. (U. S. v. White, 42 Fed. Rep., 138, 1890.) A practicing physician who prescribed whisky for his patients, furnishing the liquor himself and charging the usual price, is liable. (United States v. Smith, 45 Fed. Rep., 115; T.D.4; T. D. 806.) But not if spirits or wines are furnished under conditions which do not constitute sale thereof. (T. D. 1355, May 2, 1908.) Sale of bitters. (29 Int. Rev. Rec, 305; 33 ibid., 17; United States v. Cota, 17 Fed. Rep., 734; 29 Int. Rev. Rec, 249; Hos- tetter's Bitters, 29 ibid., 273; United States v. Bibb, 33 ibid., 391.) Bitters sold as a beverage. The fact that the bitters were labeled patent medicine and that the defendant was advised that he might sell the same without a license was no excuse. Parties held liable as liquor dealers. (United States v. Foster. 39 Int. Rev. Rec, 9.) Digitized by Microsoft® SPECIAL TAXES, 139 The law is not to be avoided by mere deceptive names, and if Medicinal com- alcoholic beverages in which the essential ingredient is distilled P ounis - spirits, disguised by aromatic or other drugs, are commonly bought and sold as and for intoxicating beverages, the same are not to be classed as patent or proprietary medicines, and the seller is liable to the tax as a retail liquor dealer. (United States v. Wilson; district court, eastern district of Missouri (Article labeled as an appetiser, 1895), 69 Fed. Rep., 144; 41 Int. Rev. Rec.,411.; U. S.u.Bray, 113 Fed. Rep., 1008; U. S. v. Morfew (1905), 136 Fed. Rep., 491.) The sale of beer, whisky, or other alcoholic liquor, which has not been combined with drugs or other medicinal substances, involves the seller in special-tax liability even though it be sold under a label as a medicine. (T. D. 19090, 1898.) Liability for selling alcoholic medicinal compounds. (United States v. Starnes, 35 Int. Rev. Rec, 136; 37 Fed. Rep., 665; United States v. Stubblefield, 40 Fed. Rep., 454; T. D. 1251 (new ruling); Cir. No. 707; T. D. 1255.) To be classed as medicinal, an alcoholic compound should carry with each 1-ounce dose approximately a U. S. P. dose of some drug or drugs of recognized therapeutic value. (T. D . 1510, June 17, 1909; T.D.1514.) _ Revised list to July 1, 1910, of alcoholic medicinal prepara- tions for the sale of which special tax is required. Subject to further revision periodically. (T. D. 1643.) A fermented liquor made from oranges, sugar, and elder bios- Wine. soms is wine within the meaning of the internal-revenue laws, and the special tax of a liquor dealer is required to be paid for its sale. (T. D._ 19089, 1898.) Where wine is used for making a "casing fluid for leaf to- bacco," unless the material added to the wine changes its char- acter so that it is neither a potable liquid nor a liquid coming under the head of distilled spirits, wine, or malt liquor, special tax is required to be paid for its manufacture and sale, even though it be sold only to cigar manufacturers for use in leaf tobacco. (T. D. 19333, 1898.) Special tax is not required to be paid for the sale of cider; that Cider. is, the juice of apples, whether unfermented or fermented, and whether it is "hard cider" (strongly alcoholic) or not, if no distilled spirits, or wine, or other alcoholic liquor has been added thereto. (T. D. 20309, 1898; T. D. 1174, May 28, 1907.) Nothing is cider except the juice of apples, fermented or un- fermented. Imitation cider, mixed with distilled spirits or wine, is a compound liquor, for the manufacture or sale of which special tax is required. (T. D. 20097, 1898; U. S. v. Lewis, T. D. 801.) Concerning the collection of special tax as liquor dealers from distillers who sell distilled spirits in bottles put up under the act of March 3, 1897. (Cir. No. 481, Aug. 18, 1897; 43 Int. Rev. Rec, 318.) Auctioneer selling liquors. (T. D. 1300.) Express company selling liquors to secure charges. (T. D. 715.) Selling liquors by peddlers prohibited. (Cir. No. 143; 22 Int. Rev. Rec, 37; 22 ibid., 157; T. D. 584; T. D. 951.) Fifth [Act of Feb. 8, 1875 (18 Stat, 309), as amended by sec. 4, ad of Mar. 1, 1879 (20 Stat 327).] Retail m^StBqSSSf" dealers in malt liquors shall pay twenty dollars. Every person who sells, or offers for sale, malt liquors in less quantities than five gallons at one time, but who does not deal in spirituous liquors, shall be regarded as a retail dealer in malt liquors. Retail dealers in malt liquors can not retail spirituous liquors or wines without paying special tax as retail liquor dealers. Digitized by Microsoft® 140 SPECIAL TAXES. No refund of a tax to a R. M. L. D. who becomes a R. L. D. (33 Int. Rev. Rec, 397; T. D. 415.) Special tax on bottled beer; when not imposed. (Letter to Jos. Schlitz Brewing Co., April 5, 1897; 43 Int. Rev. Rec, 193.) Dealers in small Deer. (T. D. 19154, 1898.) See note under section 3244, first paragraph, page 133. Liability of express companies. The actual ownership of trie property is not essential to fix upon the trafficker the quality of a dealer in liquors. The statute attaches to him the office of a dealer when he "sells or offers for sale malt liquors." (West- ern ExpresB Co. v. United States, 141 Fed. Rep., 28; T. D. 965.) Peddling fermented liquors. (26 Int. Rev. Rec, 169; T. D. 494.) wholesale deal- Wholesale dealers in malt liquors shall pay fifty «ta malt Bq- doUara> Every person who sells, or offers for sale, malt liquors in quantities of not less than five gallons at one time, but who does not deal in spirituous liquors at wholesale, shall be regarded as a wholesale dealer in malt liquors: Brewers not Ha- Provided, That no brewer shall be required to pay a tax, when. ealer ('§ special tax as a dealer by reason of selling in the original 3349 - ) stamped packages whether at the place of manufacture or elsewhere, malt liquors manufactured by him or pur- chased and procured by him in his own casks or vessels, under the provisions of section thirty-three hundred and forty-nine of the Revised Statutes; but the quantity of malt liquors so purchased shall be included in calculating the liability to brewer's special tax of both the brewer who manufactures and sells the same and the brewer who purchases the same. And it is hereby provided, That no further collection of special tax as retail dealers in malt liquors shall be made from brewers for selling malt liquors of their own manu- facture in the original stamped eighth-barrel package. * No special tax But no special tax shall be held to accrue on a sale of ciar| ale offlcer fld oi distilled spirits, wines, or malt liquors made by a person court, etc. wno ^ n ot otherwise a dealer m liquors, where such spirits, wines, or liquors have been received by the per- son so selling as security for or in payment of a debt, or as executor, administrator, or other fiduciary, or have been levied on by any officer, under order or process of any court or magistrate, and where such spirits are sold by such person in one parcel only, or at public auction in parcels not less than twenty wine gallons, nor shall such tax be held to accrue on a sale made by a retiring partner, or the representatives of a deceased partner to the incoming, remaining, or surviving partner or partners No t wholesale of a firm; nor shall the special tax of a wholesale liquor saie er of en X tl?° dealer or wholesale deafer in malt liquors be held to deaieiv of retail a PPlj to a retail dealer in liquors or a retail dealer in malt liquors, because of such retail dealer selling out his entire stock of liquors in one parcel, or in parcels em- bracing not less than his entire stock of distilled spirits, of wines, or of malt liquors ; and section thirty-three hun- dred and nineteen of the Revised Statutes shall not be held to prohibit a rectifier or liquor dealer from purchas- Digitized by Microsoft® SPECIAL TAXES. 141 ing, in quantities greater than twenty wine-gallons, the distilled spirits sold in one parcel as aforesaid. Sale of spirits, etc., by sheriff. (33 Int. Rev. Rec, 405.) Brewers shipping bottled beer 0. O. D. (33 Int. Rev. Rec, 77.) A brewer holding a special-tax stamp of the smaller class is not required to pay special tax as a brewer of the larger class until the entire quantity of beer produced by him within the special-tax year amounts to 500 barrels. As soon as the quanti- ties produced month by month within that period amount in the aggregate to 500 barrels he must pay the special tax of a brewer of the larger class for the entire year ($100). He may then send in his stamp of the smaller class for redemption. (T. D. 19439, 1898.) Brewers who establish places of storage for bottled beer, and complete sales by deliveries therefrom to purchasers in whole- sale quantities, are required to pay special tax as wholesale dealers in malt liquor at every such place. (T. D. 19440, 1898; but see T. D. 21619.) Where a brewer ships bottled beer marked for delivery to persons who had ordered it, but consigns and waybills the beer in general terms to his agent, instead of shipping it to these persons, sale is made at the time and place of the actual delivery by the agent. (T. D. 21852, 1899; T. D. 1369; T. D. 1426.) Persons calling themselves agents of brewers in the sale of original stamped packages of beer should furnish abstracts from the books of the brewers, showing how the beer is charged, or billed, and also a statement under oath by the brewers, showing that the beer remains absolutely their property until sold, and that these persons are under their orders and control in making such sales. (T. D. 21019, 1899.) They must show that the beer remains absolutely the prop- erty of the brewers until sold by them on account of the brewers, and not on their own account. (T. D. 21836, 1899.) A fermented malt liquor, though diluted to such an extent as to be called nonintoxicating, is a beverage for the sale of which special tax must be paid under the internal-revenue laws. (T. D. 21473, 1899.) The executor of a person who had been a manufacturer of • wine is entitled to sell the wine made by his testator at one "business office" in any quantities, small or large, through an auctioneer, without the payment of special tax; but if the testator was not the manufacturer of the wine, the executor or his auctioneer is not entitled to sell the wine without paying special tax therefor, unless he disposes of the entire quantity of wine at a single sale. (T. D. 21648, 1899.) Executor selling liquor. (T. D. 419.) Repeal of certain special taxes. — Section 26, act of October 1, 1890, repealed on and after May 1, 1891, special taxes upon dealers in leaf tobacco, retail dealers in leaf tobacco, dealers in tobacco, manufacturers of tobacco, manufacturers of cigars, and peddlers of tobacco. Special taxes were reimposed upon the above-named occu- pations, except retail dealers in leaf tobacco and peddlers of tobacco, by the act of June 13, 1898, which were repealed by section 5, act of April 12, 1902, taking effect July 1, 1902. Sec. 3 [act of Aug. 2, 1886 (24 Stat., 209), as amended by sec. 2 of the act of May 9, 1902 (82 Stat. 193)]. Manufac- turers of oleomargarine shall pay six hundred dollars. Every person who manufactures oleomargarine for sale shall be deemed a manufacturer of oleomargarine. And any person that sells, vends, or furnishes oleomar- garine for the use and consumption of others, except to his own family table without compensation, who shall add to J 9 Digitized by Microsoft® 142 SPECIAL TAXES. or mix with such oleomargarine any artificial coloration that causes it to look like butter of any shade of yellow shall also be held to be a manufacturer of oleomargarine within the meaning of said Act, and subject to the provisions thereof. See U. S. v. White & Paller (T. D. 1334); U. S. v. Shipley et al. (T. D. 1504); Zinn Co. v. U. S. (T. D. 1517.) mamu rae tifrers Wholesale dealers in oleomargarine shall pay four hun- and dealers. dred and eighty dollars. Every person who sells or offers for sale oleomargarine in the original manufacturer's pack- ages shall be deemed a wholesale dealer in oleomargarine. But any manufacturer of oleomargarine who has given the required bond and paid the required special tax, and who sells only oleomargarine of his own production, at the place of manufacture, in the original packages to which the tax-paid stamps are affixed, shall not be required to pay the special tax of a wholesale dealer in oleomargarine on account of such sales. When a broker in oleomargarine is not a wholesale dealer. (32 Int. Rev. Eec, 373.) Retail dealers in oleomargarine shall pay forty-eight dollars. Every person who sells oleomargarine in less quantities than ten pounds at one time shall be regarded as a retail dealer in oleomargarine. 32II 111 111' J ^ 11C ^ sections thirty-two hundred and thirty-two, thirty- 3237! 3238^ 3239 \ t wo hundred and thirty-three, thirty-two hundred and f^piuabit?; thirty-four, thirty-two hundred and thirty-five, thirty- pp. 126-132. £ wo hundred and thirty-six, thirty-two hundred and thirty-seven, thirty-two hundred and thirty-eight, thirty- two hundred and thirty-nine, thirty-two hundred and forty, thirty-two hundred and forty-one, and thirty-two hundred and forty-three of the Revised Statutes of the United States are, so far as applicable, made to extend to and include and apply to the special taxes imposed by this section, and to the persons upon whom they are imposed : Exception. Provided further, That wholesale dealers who vend no other oleomargarine or butterine except that upon which a tax of one-fourth of one per cent per pound is imposed by this Act, as amended, shall pay two hundred dollars; and such retail dealers as vend no other oleomargarine or butter- ine except that upon which is imposed by this Act, as amended, a tax of one-fourth of one cent per pound shall pay six dollars. Rulings as to sales of oleomargarine. (32 Int. Rev. Rec, 365, 381.) The 50 per cent penalty imposed by section 3176, Revised Statutes, does not apply to the taxes imposed by the oleomarga- rine act. (Schafer v. Craft, 144 Fed. Rep., 907; 153 Fed. Rep., 175; 154 Fed. Rep., 1002. Grier v. Tucker, 150 Fed. Rep., 658; 160 Fed. Rep., 611, T. D. 1455.) Liability as wholesale dealer. (Judd O. Hartzell v. The United States, T. D. (1900), 2; 83 Fed. Rep., 1002.) Manufacturers and wholesale dealers may sell oleomargarine Only in original stamped packages of not less than 10 pounds. Digitized by Microsoft® SPECIAL TAXES. 143 A retail dealer must sell only from original stamped packages in quantities of not more than 10 pounds, packed in new wooden or paper packages marked with his name and address, and the word Oleomargarine" in large letters printed or branded thereon. (See sec. 6, act Aug. 2, 1886, p. 294.) A sheriff or other officer who levies upon and sells the oleo- margarine belonging to the stock of goods of a retail dealer in oleomargarine is not required to pay special tax therefor, inas- much as he is acting in his official character, in the discharge of lawful duties. (T. D. 730.) Retail dealers are not permitted to peddle oleomargarine on the streets. (T. D. 610.) Liability of agents or brokers receiving and transmitting orders for oleomargarine to manufacturers. Unless sales are fully completed at the factory to the persons ordering^ special tax is required to be paid at the place of delivery. (T. D. 18978, 1898.) Parties selling oleomargarine are liable to special tax, although they are ignorant that the substance is oleomargarine. (Charge of Judge Jackson in Hubbard & Paul v. Collector Gilkeson, U. S. circuit court, district of West Virginia. T. D. 19246, 1898; Eagle v. Nowlin, collector. Decision of Judge Baker (1899), 94 Fed. Rep., 646, T. D. 21228.) Dealers in colored and uncolored oleomargarine. — Where a per- son pays special tax as a dealer in uncolored oleomargarine and thereafter desires to sell also colored oleomargarine, the only course for him to pursue is to pay the special tax at the higher rate for the entire period to the close of the year, and take out the requisite special-tax stamp, and then send in for redemp- tion the special-tax stamp taken out at the lower rate. (T. D. 526.) Sec. 4 [Act of May 9, 1902 (32 Stat., 195.)] * * * That special taxes are imposed as follows: Manufacturers of process or renovated butter shall pay | p ^j fjJtnrera' fifty dollars per year and manufacturers of adulterated renovated and" butter shall pay six hundred dollars per year. Every butter. era person who engages in the production of process or reno- vated butter or adulterated butter as a business shall be considered to be a manufacturer thereof. Coopersville Cooperative Creamery v. Lemon. (163 Fed. Rep., 145; T. D. 1371.) Wholesale dealers in adulterated butter shall pay a tax aJ^'V^ut of four hundred and eighty dollars per annum, and retail terated butter. dealers in adulterated butter shall pay a tax of forty-eight dollars per annum. Every person who sells adulterated butter in less quantities than ten pounds at one time shall be regarded as a retail dealer in adulterated butter. Every person who sells adulterated butter shall be_re- & ^J alet de - garded as a dealer in adulterated butter. And sections thirty-two hundred and thirty-two, thirty-two hundred and thirty-three, thirty-two hundred and thirty-four, thirty- two hundred and thirty-five, thirty-two hundred and thirty-six, thirty-two hundred and thirty-seven, thirty-two hundred and thirty-eight, thirty-two hundred and thirty- nine, thirty-two hundred and forty, thirty-two hundred and forty-one, and thirty-two hundred and forty-three of the Revised Statutes of the United States are, so far as appli- cable, made to extend to and include and apply to the special Digitized by Microsoft® 144 SPECIAL TAXES. taxes imposed by this section and to the person upon whom they are imposed. offlSfheesT 8 Sec - 3 - l A <* of June 6, 1896 (29 Stat., 253).] Manufacturers of filled cheese shall pay four hundred dollars for each and every factory per annum. Every person, firm, or corporation who manufactures filled cheese for sale shall be deemed a manufacturer of filled wholesale cheese. Wholesale dealers in filled cheese shall pay two cheese! in fiUed hundred and fifty dollars per annum. Every person, firm, or corporation who sells or offers for sale filled cheese in the original manufacturer's packages for resale, or to retail dealers as hereinafter defined, shall be deemed a wholesale dealer in filled cheese. But any manufacturer of filled cheese who has given the required bond and paid the required special tax, and who sells only filled cheese of his own production, at the place of manufacture, in the original packages, to which the tax-paid stamps are af- fixed, shall not be required to pay the special tax of a wholesale dealer in filled cheese on account of such sales. Retail dealers. Retail dealers in filled cheese shall pay twelve dollars per annum. Every person who sells filled cheese at retail, not for resale, and tor actual consumption, shall be re- regarded as a retail dealer in filled cheese, and sections thnty-two hundred and thirty-two, thirty-two hundred and thirty-three, thirty-two hundred and thirty-four, thirty-two hundred and thirty-five, thirty-two hundred and thirty-six, thirty-two hundred and thirty-seven, thirty-two hundred and thirty-eight, thirty-two hundred and thirty-nine, thirty-two hundred and forty, thirty- two hundred and forty-one, thirty-two hundred and forty- three of the Revised Statutes of the United States are, so far as applicable, made to extend to and include and apply to the special taxes imposed by this section and to the persons, firms, or corporations upon whom they are due. axes ' when imposed : Provided, That all special taxes under this Act shall become due on the first day of July in every year, or on commencing any manufacture, trade, or business on which said tax is imposed. In the latter case the tax shall be reckoned proportionately from the first day of the month in which the liability to the special tax com- mences to the first day of July following. Penalties. Sec. 4. That every person, firm, or corporation who car- ries on the business of a manufacturer of filled cheese without having paid the special tax therefor, as required by law, shall, besides being liable to the payment of the tax, be fined not less than four hundred dollars and not more than three thousand dollars; and every person, firm, or corporation who carries on the business or a wholesale dealer in filled cheese without having paid the special tax therefor, as required by law, shall, besides being liable to the payment of the tax, be fined not less than two hun- dred and fifty dollars nor more than one thousand dollars; Digitized by Microsoft® SPECIAL TAXES. 145 and every person, firm, or corporation who carries on the business of a retail dealer in filled cheese without having paid the special tax therefor, as required by law, shall, besides being liable for the payment of the tax, be fined not less than forty nor more than five hundred dollars for each and every offense. Sec. 36. [Act of June 13, 1898 (30 Stat, 448).] That an ^ anu a f ^ s rer s , every person, firm, or corporation, before engaging in the mixed" Hour, business of making, packing, or repacking mixed flour, shall pay a special tax at the rate of twelve dollars per annum, the same to be paid and posted in accordance with the provisions of sections thirty-two hundred and forty- two and thirty-two hundred and thirty-nine of the Revised Statutes, and subject to the fines and penalties Penalties, therein imposed for any violation thereof. Sec. 3245. [Obsolete.] Sec. 3246. [as amended hy sec. 5, act of Mar. 1, 1879 (^9 to S appiy to vint- Stat., 327).] Nothing in this chapter shall be construed ncr ? n ? r apotn.e- to• • 1 x • i , 1 n • p canes in certain impose a special tax upon vintners who sell wine of cases. their own growth, or manufacturers who sell wine pro- duced from grapes grown by others, at the place where the same is made or at the general business office of such vintner or manufacturer: Provided, That no vintner or manufacturer shall have more than one office for the sale of such wine that shall be exempt from special tax under this act; nor shall any special tax be imposed upon apoth- ecaries as to wines or spirituous liquors which they use exclusively in the preparation or making-up of medicines. Limitation of a druggist's right to sell liquors without paying special tax. (34 Int. Rev. Rec, 157.) An apothecary, who bona fide uses spirituous liquors in the preparation of a medicine to be used as such and not as a bev- erage, does not violate section 3242, by not paying the special tax required of a retail liquor dealer. (United States v. Calhoun, 39 Fed. Rep., 604.) Druggists compounding medicines. (T. D. 933; T. D. 1514.) The fact that a person is an authorized liquor dealer under the internal-revenue laws does not prevent him from engaging also in the compounding of medicines; and if he does so, using spirits in combination with roots, herbs, or drugs, and Bells the com- pound only under a label specifying the diseases for which it is held out as a remedy, he is an apothecary within the exempting provision of section 3246. (T. D. 19412, 1898.) The exemption from special tax granted druggists for use of spirits or wine by this section relates only to medicines in which the spirits or wine used have been changed in nature and made clearly medicinal by the addition of drugs. (T. D. 1019.) What alcoholic compounds may be classed as medicinal. Medicinal com- (T. D. 1510, June 17, 1909.) P» un ^>- A manufacturer of medicinal compounds, by the use of tax- paid spirits in combination with drugs, is entitled to the exemp- tion wnen he sells such compounds only under labels specifying the diseases for which they are held out as remedies, and his use of a pharmaceutical still in the preparation of these medicines does not involve him in liability under the internal-revenue laws. (T. D. 19347, 1898.) A compound of medicinal roots and distilled spirits, if held out not merely as a remedy for disease, but also as "bitters for mixed drinks," is not to be regarded as made in good faith for 72170°— 11 10 „. u . ,, „. - Digitized by Microsoft® 146 SPECIAL TAXES. medicinal use only, and the manufacturer who sells it under such a label is not entitled to the exemption, and is required to pay special tax as a rectifier and liquor dealer. (T. D. 19442, 1898.) Wine. Where grapes are pressed at one place and the juice is then carried to another place and there fermented, the latter is the place of manufacture of the wine, and the manufacturer is there permitted by the provisions of section 3246 to sell it without pay- ing special tax. (T. D. 19410, 1898.) A person who sells blackberry wine (a fermented liquor made from blackberry juice) is required to pay special tax as a liquor dealer for selling the wine, unless he is the manufacturer of it and has made it from berries grown by himself or gathered wild by himself or by persons in his employ, and the wine is sold by him only at the place of manufacture or at his one "general busi- ness office." (T. D. 20366, 1898.) A person who buys elderberries and makes wine therefrom is not within the exempting provision, and is required to pay special tax for selling such wine, even when he sells it at the place of manufacture. (T. D. 20541, 1899.) Digitized by Microsoft® Chapter Four. DISTILLED SPIRITS. Sec. 3247. Distiller, definition of. 3248. Distilled spirits, definition of. 3249. Standard of proof spirits; instru- mGnts ptc 3250. Gallon, definition of. 3251 (amended). Tax on distilled spirits. [3251a.] Tax on spirits; lien. [32516.] Alcoholic compounds from Porto Rico. [3251C] Manufacturer of sorghum sugar authorized to remove spirits in bond, free of tax, for use m manu- facture of sugar from sorghum. Act March 3, 1891. 3252. Adding substances to create ficti- tious proof; penalty. 3253. Tax on spirits removed without de- posit in warehouse; assessment. 3254. Products of distillation containing spirits taxable. 3255 (amended). Brandy made from ap- ples, peaches, or grapes, etc., ex- emptions. [3255a.] Distilleries of 30 gallons ca- pacity or less; exemptions. 3256. Evading tax; penalty. 3257. Distiller defrauding or attempting to defraud; penalties. 3258. Registry of stills; penalties. 3259. Notice of intention to carry on business of distiller or rectifier; penalty. 3260 (amended). Distiller's bonds; pen- alty. [3260a.] Refusal to approve bond in cer- tain cases. 3261. Bond not to be approved until law is complied with; penalty. 3262 (amended). Distiller must be owner in fee-simple, or have written consent of owner, etc. 3263. Plan of distillery. 3264 (amended). Surveys. 3265. Notice by manufacturer of a still. Setting up a still without per- mit; penalty. 3266. Distilling on certain premises pro- hibited; penalty. 3267. Receiving-cisterns. 3268. Breaking locks, gaining access to cisterns, etc.; penalty. 3269. Furnaces, tubs, doublers, worm- tanks; penalty. See. 3270. Apparatus and fastenings. 3271. Distillery warehouses. [3271a.] Use of warehouse by successors in certain cases. 3272. When a warehouse becomes unsafe. 3273. Storekeepers have charge under direction of collector. 3274. Custody and management of ware- houses. 3275. Distiller to keep distillery accessi- ble; penalty. 3276 (amended). Authority of revenue officers to enter distilleries. Ob- structing officer; penalty. 3277. Distillers and rectifiers to furnish facilities for examination; pen- alty. 3278. Officers can break up ground or walls in order to examine. 3279. Signs to be put up by distillers and rectifiers; penalty for neglect and for using false signs, etc. 3280. Distillers not to carry on business until the law is complied with, nor within 600 feet of a rectifying establishment. [3281.] Superseded by section 16, act of February 8, 1875. Carrying on distilling without giving bond, etc.; penalty. [3281a.] Arrest of persons operating illicit distillery. 3282 (amended). Vinegar establishments; penalty. 3283. No process for distilling between 11 &m. of Saturday and 1 a. m. of onday; penalty. 3284. Using material or removing spirits in absence of storekeeper; pen- alty. 3285 (amended). Emptying fermenting tubs. 3286 (amended). Drawing off water, cleansing worm- tub, etc.; pen- alty. 3287 (amended). Removal of spirits to warehouse. 3288. Tax-paid spirits not to remain on distillery premises. 3289. Forfeiture of unstamped packages. 3290. Gauger employing distiller, etc., to use brands or perform his duties; penalty. Digitized by Microsoft® 147 148 DISTILLED SPIRITS. Sec. 3291. Gauger's returns. 3292. Fraudulent gauging, etc.; penalty. 3293 (amended). Distiller's entry of de- posit in warehouse; warehousing bonds. [3293a.] Warehousing and transportation bonds. 3294 (amended). Withdrawal from ware- house. [3294a.] Allowance for leakage; spirits may be regauged, etc. [32945.] Act March 3, 1899. Allowance for loss. 51-59. Act of Aug. 28, 1894. General bonded warehouses for distilled spirits, other than fruit brandy. Acts of March 3, 1877, and October 18, 1888. Special bonded warehouses for fruit brandy. 3295 (amended). Gauging, stamping, and branding spirits removed from warehouse. 3296. Removal, concealment, etc., of spir- its contrary to law; penalty. 3297 and [3297a.] Alcohol withdrawn for scientific purposes; penalty. 3298. Power of officers to detain packages forty-eight hours. 3299. Forfeiture of spirits unlawfully re- moved from distillery. 3300. Storekeeper unlawfully removing spirits, or allowing same to be removed, etc.; penalty. 3301 (amended). Storekeepers' ware- house books and returns. 3302. Storekeepers to have charge of dis- tillery and keep account of ma- terials, etc. 3303. Distillers' books. 3304. Books to be open to inspection and preserved two years. 3305. False entries, or omitting to keep or produce books; penalty. 3306. Using false weights or measures, or unregistered materials; penalty. 3307 and 3308. Distillers' returns. 3309 (amended). Monthly examination of distiller's returns, assessment, etc., capacity tax. [3309a.] Relief from assessments for defi- ciencies, etc., in certain cases. [33096.] Assessments to be at rate of tax imposed by act August 28, 1894. 3310 (amended). Commencement and sus- pension of work; penalties. 3311. Reduction of capacity; penalty for tampering with locks, etc. 3312 and 3313. Stamps. 3314 (amended). Accountability for stamp books; export stamps. 3315 (amended). Restamping spirits, fer- mented liquors, tobacco, cigars, etc., when stamps are lost or de- stroyed. Sec. 3316. Officer issuing or permitting use of stamps, contrary to law; penalty. [3316a.] Imitation stamps; penalty. 3317 (amended). Rectifiers' returns; rec- tifiers intending to defraud; pen- alty. [3317a] (amended). Rectifier's notice of intention to rectify. 3318 (amended). Rectifiers' and wholesale dealers' books and transcripts; penalties. [3318a.] Distiller required to keep book. 3319. Purchase of quantities greater than 20 gallons for many persons other than, etc.; penalty. 3320. Gauging and stamping rectified spirits. 3322. Filling blanks and affixing and var- nishing stamps. 3323 (amended). Spirits drawn into new packages to be gauged and branded; forfeiture. 3324. Stamps and brands to be effaced from empty casks; penalties. 3325. Buying or selling spirit casks hav- ing inspection marks; penalty. 3326. Changing stamps, shifting spirits, etc.; penalty. 3327. Removal within certain hours from distillery or rectifier's premises; penalty. 3328. Tax on imitation wines; counter- feiting or reusing stamps; penal- ties. 3329 (amended). Drawback on spirits. 3330 (amended). Exportation of spirits withdrawn from bonded ware- houses; relanding; penalties. [3330a.] Transportation bond may be taken; change of package. [33306.] Act of December 20, 1879. Allow- ance for loss during transporta- tion. 3331. Release of distillery before judg- ment, in what cases. 3332 (amended). Stills, etc., to be de- stroyed in certain cases. 3333. Burden of proof. 3334 (amended). Spirits sold under judi- cial process subject to tax. Pro- vision where spirits will not sell for price equal to tax. Sections 11, 12, and 13, act March 1, 1879; penalties. Imported liquor stamps, etc. Act October 1, 1890, as amended by act of June 7, 1906. Fortification of wines. Act of March 3, 1897. Bottling of distilled spirits in bond. Act June 7, 1906. Denatured alcohol. Act March 2, 1907. Amendatory of the denatured alcohol act. Digitized by Microsoft® DISTILLED SPIBITS. 149 Sec. 3247. Every person who produces distilled spirits, n i t ^™, er - d9fl " or who brews or makes mash, wort, or wash, fit for distilla- tion or for the production of spirits, or who, by any process of evaporization, separates alcoholic spirit from any fer- mented substance, or who, making or keeping mash, wort, or wash, has also in his possession or use a still, shall be regarded as a distiller. See section 3282 as to vinegar makers, page 175. To make one in possession of a still a distiller because he keeps mash, wort, or wash, the mash, wort, or wash must be such as will produce spirits on distillation. (United States v. House and Lot No. 3 Abattoir Place; 25 Int. Rev. Rec, 319.) Special tax on distillers repealed. (Act of June 6, 1872.) A corporation may carry on the business of distilling. Also, meaning of the word "person"' in this chapter. (15 Op. Atty. Gen., 230; 23 Int. Rev. Rec, 141.) Sec. 3248. Distilled spirits, spirits, alcohol, and alco- its D ^XiUon P oi* holic spirit, within the true intent and meaning of this act, ' is that substance known as ethyl alcohol, hydrated oxide of ethyl, or spirit of wine, which is commonly produced by the fermentation of grain, starch, molasses, or sugar, in- cluding all dilutions and mixtures of this substance; and the tax shall attach to this substance as soon as it is in existence as such, whether it be subsequently separated as pure or impure spirit, or be immediately, or at any subse- quent time, transferred into any other substance, either in the process of original production or by any subsequent process. Under the internal-revenue laws the tax on spirits attaches as soon as they come into existence, and must be paid by the man- ufacturer, even in case of their destruction, unless the circum- stances on which here lies for exemption comewithin theparticular description in some one of the remedial statutes. (Greenbrier Distillery Co. v. Johnson, 88 Fed. Rep., 638.) Sec. 3249. Proof spirit shall be held to be that alcoholic ^una ? *f t °l liquor which contains one-half its volume of alcohol of apr'eventYonoi specific gravity of seven thousand nine hundred and frauds - thirty-nine ten thousandths (.7939) at sixty degrees Fah- renheit. And for the prevention and detection of frauds by distillers of spirits, the Commissioner of Internal Revenue may prescribe for use such hydrometers, saccharometers, weighing and gauging instruments, or other means for ascertaining the quantity, gravity, and producing capac- ity of any mash, wort, or beer used, or to be used, in the production of distilled spirits, and the strength and quan- tity of spirits subject to tax, as he may deem necessary; and he may prescribe rules and regulations to secure a uni- form and correct system of inspection, weighing, marking, and gauging of spirits. Meters. (Tice v. United States, 99 U. S., 286; Sausser v. United States, 9 Ct. Cls., 338; 11 ibid., 538; Finch v. United States, 12 Ct. Cls., 364; 102 U. S. (12 Otto), 269; 26 Int. Rev. Rec, 410.) By the act of June 6, 1872 (17 Stat., 239), all the provisions of the act of July 20, 1868, touching meters were repealed. On the 1st of May, 1892, the method of gauging of spirits by rod, theretofore use^-w^^agge^^-g^iing system, by 150 DISTILLED SPIRITS. which the number of wine gallons contents is determined by the weight of the package. Weighing beams are furnished for the use of distilleries and rectifying houses, and their use made obligatory, except at fruit distilleries of a production of less than 10,000 proof gallons during the season, and at rectifying houses rectifying less than 5,000 proof gallons of spirits annually. (Gaugers' Weighing Manual, 1906.) Weighing spirits: Commissioner's annual report (1892). (38 Int. Rev. Rec, 13.) Circular No. 218, August 1, 1879, authorizes the outage of packages of less than 63 gallons capacity to be 1 gallon where Corey's apparatus for aging whisky and other spirits in distillery warehouses is used, and modifies Circular No. 180 accordingly. (25 Int. Rev. Rec, 245.) See Gaugers' Manual, 1906, for rule applicable to all apparatus for aging whisky, which has been approved by the commis- sioner. The Internal Revenue Gaugers' Manual, 1906, embraces regu- lations and instructions and tables prescribed by the Commissioner of Internal Revenue by virtue of section 3249, Revised Statutes. What is the meaning of the term "Whisky 12 ' under the pure- food act, and the proper regulations for branding various kinds of whisky under the internal-revenue act. (Decision by Presi- dent Taft, Dec. 27, 1909.) in G sai°es "defln? ^ EC- 3250. In all sales of spirits a gallon shall be held to tionof. ' m "be a gallon of proof spirit, according to the standard pre- scribed in the preceding section, set forth and declared for the inspection and gauging of spirits throughout the United States. See definition of gallon, as relates to fermented liquors, in sec- tion 21, act of March 1, 1879. (Sec. 3339a.) s P wtL ondistilled Sec - 3251 t as <>>™<™dtd by sec. 1, act of Mar. S, 1875 (18 Repealed by Stat., 839)]. [There shall be levied and collected on all lugJl'mt of distilled spirits produced in the United States on which the tax prescribed by law has not been paid, a tax of ninety cents on each proof gallon, or wine gallon when below proof, to be paid by the distiller, owner, or person having posses- sion thereof before removal from the distillery bonded warehouse: Provided, That distilled spirits lawfully de- posited in a distillery bonded warehouse prior to the first obsolete. day f August, eighteen hundred and seventy-two, may be withdrawn on payment of the taxes thereon at the rate, within the time, and in the manner provided by law at the time of such deposit.] The tax on such spirits shall be collected on the whole number of gauge or wine gallons when below proof, and shall be increased in proportion for any greater strength than the strength of proof spirit, as defined in this title; [and any fractional part of a gallon amounting to one-half gallon or over in a cask or package shall be taxed as a gal- lon, and any fractional part of a gallon less than one-half gallon in any cask or package shall be exempt from tax.] Every proprietor or possessor of, and every person in any manner interested in the use of, any still, distillery, or dis- tilling apparatus, shall be jointly and severally liable for the taxes imposed by law on the distilled spirits produced Lien. therefrom, and the tax shall be a first lien on the spirits distilled, the distillery used for distilling the same, the Digitized by Microsoft® MSTILLED SPIRITS. 151 stills, vessels, fixtures, and tools therein, the lot or tract of land whereon the said distillery is situated, and on any building thereon from the time said spirits are in existence as such until the said tax is paid. Part in brackets repealed by act of August 28, 1894. Prac tional parts of a gallon. (Sec. 3251a.) The stockholders of a corporation engaged in operating a dis- tillery are "persons interested in the use of the distillery," within the meaning of section 3251, which declares that every proprietor and possessor, "and every person in any manner inter- ested in the use of 8 ' a distillery, shall be jointly and severally liable for the taxes imposed by law on the distilled spirits pro- duced therefrom. (United States v. Wolters et al. (1891), southern district of California, 46 Fed. Rep., 509. United States v. Howard, 11 Int. Rev. Rec, 119.) [3251a.] Sec. 48 [act of Aug. 28, 1894 (&? Stat., £0S)]. s J r a *° n ^ complied with the Digitized by Microsoft® DISTILLED SPIRITS. 173 provisions of law relating to the registration and survey of distilleries, and the arrangement and construction of distilleries and the premises connected therewith; nor shall it be lawful for any person to engage in the business of distilling on any premises distant less than six hundred In ^™«!t g o7re£ feet in a direct line from any premises used for rectifying; tifying estabiisn- nor shall the processes of distillation and rectification both ment P rohiblted - be carried on within the distance of six hundred feet in a direct line. Section 3266, page 166. [Sec. 3281.] [Sec. 16, act of Feb. 8, 1875 (18 M )B JSf e S; 807).] That any person who shall carry on the business carrying on'tmsi- of a rectifier, wholesale liquor-dealer, retail liquor-dealer, mmt wi of°"peciai wholesale dealer in malt-liquors, retail dealer in malt tax - liquors, or manufacturer of stills, without having paid the special tax as required by law, or who shall carry on the business of a distiller without having given bond as . Distiller eany- ji! i i ii . <= " . , ing on business required by law, or who shall engage in or carry on the without giving business of a distiller with intent to defraud the United t e TtVaetoud m ' States of the tax on the spirits distilled by him, or any part thereof, shall, for every such offense, be fined not less than one hundred dollars nor more than five thousand ^^nmt im " dollars and imprisoned not less than thirty days nor more than two years. And all distilled spirits or wines, and all stills or other Forteiture - apparatus, fit or intended to be used for the distillation or rectification of spirits, or for the compounding of liquors, owned by such person, wherever found, and all distilled spirits or wines and personal property found in the distil- lery or rectifying establishment, or in any building, room, yard, or inclosure connected therewith, and used with or constituting a part of the premises ; and all the right, title, and interest of such person in the lot or tract of land on which such distillery is situated, and all right, title, and interest therein of every person who knowingly has suf- fered or permitted the business of a distiller to be there carried on, or has connived at the same ; and all personal property owned by or in possession of any person who has permitted or suffered any building, yard, or inclosure, or any part thereof, to be used for purposes of ingress or egress to or from such distillery which shall be found in any such building, yard, or enclosure, and all the right, title, and interest of every person in any premises used for ingress or egress to or from such distillery, who has knowingly suffered or permitted such premises to be used for such ingress or egress, shall be forfeited to the United States. See sections 3242, and 3257. See references under section 3453, p. 359. Penalty for omitting to do things required where no punish- ment is imposed by any other section. (Sec. 3456 , p. 361.) As to rectifiers carrying on business with intent to defraud. (Sec. 3317, p. 210.) As to sales made to evade tax. (Sec. 3454, p. 360.) Digitized by Microsoft® 174 DISTILLED SPIRITS. The provision declaring forfeiture of real estate not unconsti- tutional. (United States v. Distillery on West Front Street, 11 Int. Rev. Rec, 174.) Stock of W. L. D. not forfeitable by reason of nonpayment of special tax. (2000 Bottles of Liquors, 5 Ben., 265.) Forfeiture dates back. — Forfeiture dates back to the time the offense was committed, and operates at that time as a statutory transfer of the right of property to the Government. (United States v. Fifty-six Barrels of Whisky, 1 Abb., U. S., 93, 4 Int. Rev. Rec, 106; United States v. One Cask, etc., 10 ibid., 93; Henderson's Distilled Spirits, 14 Wall., 44; 15 Int. Rev. Rec, 119; United States v. McCoy's Distillery, 21 ibid., 165.) The title of the Government to the property infected with fraud vests from the time of its commission and the taint of fraud inheres in it even in the possession of an innocent pur- chaser. (United States v. Eight Hundred Caddies of Tobacco, 2 Bond, 305.) Where an act is committed by the owner of a distillery by which a forfeiture thereof is incurred under the revenue laws, and subsequently the owner conveys the property to an innocent purchaser without notice of the commission of the act, the prop- erty remains still subject to the forfeiture incurred. The con- veyance, in such case, passes no title as against the United States. (16 Op. Atty. Gen., 41.) Forfeiture does not attach to spirits acquired after the offense. (United States v. One Water Cask, 10 Int. Rev. Rec, 93.) Forfeiture denounced against distillers for carrying on busi- ness without having given bond, or with intent to defraud, and omission to keep books. (Sec. 3305, p. 201.) Extent of forfeiture. — All personal property used in the unlaw- ful business or in any other business openly carried on upon the premises is forfeited, even if the owner had no participation in or knowledge of the unlawful acts. The forfeiture of lands and buildings does not reach beyond the right, title, and interest of the distiller, or of such other per- sons as have consented to the carrying on of the business of a dis- tiller upon the premises. (United States v. Stowell (1890), 133 U. S., 1; 36 Int. Rev. Rec, 30.) An engine is part of a house, and goes with it. (Walker v. Sherman, 20 Wend., 635.) As to the boiler, engine, pump, vats, and tanks. (United States v. Stowell, 133 U. S., 1; 36 Int. Rev. Rec, 30.) Amount of real estate liable to forfeiture. (United States v. Piece of Land, 1 Sawyer, 84; 11 Int. Rev. Rec, 126.) Nothing can be plainer in legal decision than the proposition that the offense therein defined is attached primarily to the distillery and the real and personal property used in connec- tion with the same, without any regard whatsoever to the per- sonal misconduct or responsibility of the owner, beyond what necessarily arises from the fact that he leased the property to the distiller and suffered it to be used and occupied by the lessee as a distillery. (Dobbins's Distillery v. United States, 96 U. S., 395; 24 Int. Rev. Rec, 21; U. S. v. Blair, 3 Int. Rev. Rec, 67; Fed. Cas. 14, 607.) A mortgage given by the distiller before the unlawful acts were committed is good as against the United States if the business was not carried on by the morgagee's permission or connivance. (U. S. v. Stowell, 133 U. S., 1; 36 Int. Rev. Rec, 30.) Forfeiture of distillery. (T. D., 589.) Distillery liable to forfeiture without regard to the culpa- bility of the owner of the property. Mechanics' liens can not be enforced in State courts after seizure by the marshal in for- feiture proceedings. (Heidritter v. Elizabeth Oil-Cloth Co. (1881), 6 Fed. Rep., 138. The principles of law upon this subject are clearly and fully announced in Distiller} v. United States (96 U. S., 395), and cases cited. (United States v. Two Bay Mules (1888), 36 Fed. Rep., 84.) Digitized by Microsoft® DISTILLED SPIRITS. 175 Operation of forfeitures against innocent persons. (United States v. One Barrel Whisky, 4 Int. Rev. Rec, 146; United States v One Still, 5 Blatch., 403; 5 Int. Rev. Rec, 189; United States v. Twenty-one Barrels High Wines, 6 ibid., 213; Distilled Spirits, etc. (mortgage), 2 Ben., 486; 8 Int. Rev. Rec, 81; United States v. Whisky, 11 ibid.. 109- United States v. Distillery at Spring Valley (leading case), 11 Blatch., 255; 18 Int. Rev. Rec, 59; Dobbins v. United States, 6 Otto, 395; 24 Int. Rev. Rec, 21; United States v. One Copper Still (mortgage), ibid., 317; 8 Biss., 270- Thacher's Distilled Spirits, 103 if. S. (13 Otto), 679; 27 Int. Rev. Rec, 144; U. S. v. Three Copper Stills, 47 Fed. Rep., 495; U. S. v. 220 Patented Machines (Jacobs), 99 Fed. Rep., 495; T. D., 54.) As to person allowing ingress or egress over premises to or from a distillery. (Gregory v. United States, 17 Blatch., 325; 26 Int. Rev. Rec, 27.) Principal liable for acts of agent. — The acts of the agent imputed to the principal so far as they work the forfeiture of property used for unlawful purposes. (Bush v. United States, 31 Int. Rev. Rec, 305; 24 Fed. Rep., 917.) Liability of employer for acts of servant. (United States v. Buchanan, 28 Int. Rev. Rec, 51.) Presumption and burden of proof. (One Hundred and Ninety-nine Barrels of Whisky v. United States, 94 U. S., 86; United States v. One Still, 5 Int. Rev. Rec, 189; United States v. Mathoit, 1 Sawyer, 142; 11 Int. Rev. Rec, 158.) The burden of establishing the right of forfeiture is on the Government. Absence of proof. (United States v. One Engine and Belting, etc. (1910), C. C. A.; 179 Fed. Rep., 698.) Intent to defraud. (U. S. v. Simmons, 96 U. S., 360; 24 Int. Rev. Rec, 347.) Effect of acquittal. — If a person is tried for the same offense for which distillery is seized and acquitted, it is a bar to a suit in rem against the distillery. (Coffey v. United States, 116 U. S., 436; 32 Int. Rev. Rec, 38.) Evidence. (Quantity of distilled spirits, 9 Int. Rev. Rec, 9; United States v. Blaisdell, ibid., 82; United States v. Staton, 25 ibid., 10; United States v. Dobbs, 15 ibid., 9.) The abandonment by the Government of an action for forfei- ture does not affect its lien on the seized property for unpaid taxes. (Aiken v. Bean, 8 Biss., 83; 23 Int. Rev. Rec, 351.) [Sec. 3281a.] [Sec. 9, act of Mar. 1, 1879 (20 Stat, 327)}. s j£Zlx£ 806 -> DISTILLED SPIRITS. 181 Stamps without date forfeit spirits. (United States i). 9 pack- ages and United States v. 64 packages (1892), 51 Fed. Rep., 191.) Proceedings may be had under section 3289 without regard to the guilt of any particular person. (U. S. v. 3 Copper Stills, 47 Fed. Rep., 495.) The law provides a complete system of marks and brands on spirits in order to enable them to be traced from the distillery or rectifying establishment into the hands of the consumer or retail dealer, and to prevent fraud on the revenue. (U. S. v. Bardenheier, 49 Fed. Rep., 846; U. S. v. Three Pkgs. Dist. Spirits (Graf & Co., claimants), 125 Fed. Rep., 52.) Tampering with spirits in stamped packages. (T. D. 997.) Covering stamps prohibited. (T. D. 772.) Sec. 3290. Whenever any gauger employs any owner, in Ga ^fff u e ™ P etr agent, or superintendent of any distillery or distillery to g use brands or warehouse, or any person in the service of such owner, ^°™ na ^y. du " agent, or superintendent, or any rectifier or wholesale liquor-dealer, or any person in the service of such rectifier or wholesale liquor-dealer, to use his brands, or to dis- charge any of the duties imposed upon him by law, he shall, for each offense so committed, pay a fine not ex- ceeding one thousand dollars, in the discretion of the court. Gauger can not delegate his authority to any person. No sub- stitution authorized. (United States v. Bittinger, 21 Int. Rev. Rec, 342; Fed. Cas. No. 14599.) Regulations in regard to unofficial gauging. (No. 2, Revised, p. 92.) Attachment of stamps by the successor of a gauging officer who has gauged spirits without stamping the package and com- pleting and marking. (Regulations No. 7, p. 169.) Internal-revenue officers prohibited from acting as agents of distillers. (Letter to Collector Herring, Aug. 17, 1896; 42 Int. Rev. Rec, 354.) The furnishing blank Forms 59 for private purposes is unlawful. (T. D. 513.) Sec. 3291. Every gauger shall, under such regulations tu ^ uger ' s re " as may be prescribed by the Commissioner of Internal Revenue, make a daily return to the collector of his dis- trict, giving a true account, in detail, of all articles gauged and proved or inspected by him, and for whom, and the number and kind of stamps used by him. Gauger's compensation, etc. (Sec. 3157, p. 73.) Sec. 3292. Every gauger who makes any false or fraud- sp^Sn^^aug- ulent inspection, gauging, or proof shall pay a penalty of ing,etc.;' P enaity. one thousand dollars, and be fined not less than five hun- dred dollars nor more than five thousand dollars, and im- prisoned not less than three months nor more than three years. ENTRIES FOR DEPOSIT AND WAREHOUSING BONDS COVERINO SPIRITS IN DISTILLERY WAREHOUSES AND SPECIAL BONDED WAREHOUSES. Sec. 3293 [as amended by section 4, act of May 28, 1880 (21 Stat, 145), and sec. 49, act of Aug. 28, 1894 (&§ Stat., 509)]. The distiller of all spirits removed as aforesaid to Entry, etc., of the distillery warehouse shall, on the first day of eachto tt *j_i j_i i o of lading, in case Commissioner oi Internal .Revenue, with the approval of of Bo a nds er 'to be the Secretary of the Treasury, may, from time to time, IrJ 6 and 7 mt isti b" P rescr ^ e ' anc ^ ^e bonds covering spirits in general renewed. m ' ° e bonded warehouses shall be given by distillers of the spirits, and shall be renewed at such times as the Com- missioner of Internal Revenue may, by regulations, require. fr e xp ortation g EC _ 55. That the provisions of existing law in regard to the withdrawal of distilled spirits from warehouses upon Transfers to payment of tax, or for exportation, or for transfer to a manufac tunng^ J n , . ' t r i ,,i ■ i warehouse and manufacturing warehouse, and as to the gauging, mark- unitcd° states' or ing, branding, and stamping of the spirits upon such with- scientific institu- drawals, and in regard to withdrawals for the use of the United States or scientific institutions or colleges of learn- ing, including the provisions for allowance for loss by Loss by acci- accidental fire or other unavoidable accident, are hereby extended and made applicable to spirits deposited in gen- eral bonded warehouses under this act. Under section 56 of the act of August 28, 1894, providing for the establishment of general bonded warehouses, the provisions for allowance for loss by fire or other unavoidable accident do not extend to the case of such a loss while spirits are in transit from a distillery warehouse to a general bonded warehouse. (Greenbrier Distillery Co. v. Johnson, 88 Fed. Rep., 638.) distutay 1 waS Sec. ^7. Whenever distilling shall have been suspended house to general at any distillery for a period or periods aggregating: six bonded ware- xi i • i r i r j j.i to b x-P t house may be months during any calendar year, and the quantity oi Sfstione^o? !^- spirits remaining in the distillery warehouse does not temai Revenue exceed five thousand proof gallons, or whenever, in the warehouse' 3 col- opinion of the Commissioner of Internal Revenue, any 5ooo gaiims'and distillery warehouse or general bonded warehouse is un- tie distillery is safe or unfit for use, or the merchandise therein is liable to Son six months loss or great wastage, he may in either such case discon- w»r,X™L £ r ,„!'tinue such warehouse and require the merchandise therein WartJllUUtiB la UI1- 1 01 ii i i ^ sate or unfit for to be transferred to such other warehouse as he may des- us provisions of ignate, and within such time as he may prescribe ; and all s ot made 3 ap 2 piica- the provisions of section thirt} T -two hundred and seventy- tie, two of the Revised Statutes of the United States relating Digitized by Microsoft® DISTILLED SPIRITS. 191 to transfers of spirits from warehouses, including those imposing penalties, are hereby made applicable to trans- fers to or from general bonded warehouses established under this act. Sec. 58. The tax upon any distilled spirits removed blessed ™l from a distillery warehouse for deposit in a general bonded ™^ c t ted by dis " warehouse, and in respect of which any requirement of ram this act is not complied with, shall, at any time when knowledge of such fact is obtained by the Commissioner of Internal Revenue, be assessed by him upon the distiller of the same, and returned to the collector, who shall imme- diately demand payment of such tax, and upon the neglect of payment by the distiller shall proceed to col- lect the same by distraint. But this provision shall not exclude any other remedy or proceeding provided by law to enforce the payment of the tax. If it shall appear at cJ"^^^^ e f n " any time that there has been a loss of distilled spirits from casks in ware- any cask or package deposited in a general bonded ware- ^one? ma™™!- house or special bonded warehouse, other than the loss demand'tax^and provided for in section thirty-two hundred and twenty- « tax unpaid -one of the Revised Statutes of the United States, which, raay assess ' in the opinion of the Commissioner of Internal Revenue, is excessive, he may instruct the collector of the district in which the loss has occurred to require the withdrawal from warehouse of such cask or package of distilled spirits and to collect the tax accrued upon the original quantity of distilled spirits entered into the warehouse in such cask or package, less only the allowance for loss provided by law. If the said tax is not paid on demand the collector shall report the amount due, as shown by the original gauge, upon his next monthly list, and it shall be assessed and collected as other taxes are assessed and collected. Sec. 59. That in case any distilled spirits removed from . Penal P rov j- a distillery warehouse for deposit in a general bonded tenses specified. warehouse shall fail to be deposited in such general bonded warehouse within ten days after such removal, or within the time specified in any bond given on such re- moval, or if any distilled spirits deposited in any general bonded warehouse shall be taken therefrom, for export or otherwise, without full compliance with the provisions of this act, and with the requirements of any regulations made thereunder, and with the terms of any bond given on such removal, or if any distilled spirits which have been deposited in a general bonded warehouse shall be found elsewhere, not having been removed therefrom according to law, any person who shall be guilty of such failure, or any person who shall in any manner violate any provision of the next preceding eleven sections of this act, shall be subject, on conviction, to a fine of not less than one hundred dollars nor more than five thousand dollars, or to imprisonment for not less than three months nor more than three years for every such failure or viola- Digitized by Microsoft® 192 DISTILLED SPIRITS. tion; and the spirits as to which such failure or violation, or unlawful removal shall take place shall be forfeited to the United States. Begulations, No. 20, relative to the establishment of general bonded warehouses, for the storage of spirits made from material other than fruit. Supplement No. 1, relative to the bonding of distilled spirits in general bonded warehouses. Bills of lading. (T. D. 1533.) SPECIAL BONDED WAREHOUSES FOR FRUIT BRANDY. ! [Act of March 3, 1877 (19 Stat., 393).] The provisions of this act were extended and made applicable to brandy distilled from apples or peaches, or from any other fruit, by the act of October 18, 1888. (25 Stat., 560.) Seep. 195. Sec. 1. That the Commissioner of Internal Revenue shall be, and hereby is, • authorized in his discretion, and upon the execution of such bonds as he may prescribe, to on?d t is°tric r t tenlnes t a ^ usn warehouses, to be known as special bonded warehouses, not exceeding ten in number in any one col- in charge of lection-district, exclusively for the storage of brandy eeper. mac [ e from grapes, each of which warehouses shall be in the charge of a storekeeper, to be appointed, assigned, transferred, and paid in the same manner that store- keepers for distillery-warehouses are now appointed, as- i cite "t r contro1 signed, transferred, and paid. Every such warehouse shall be under the control of the collector of internal in joint custody revenue of the district in which such warehouse is located, and proprietor?" and shall be in the joint custody of the storekeeper and locked or opened the proprietor thereof and kept securely locked, and shall except, etc. a t no time be unlocked or opened or remain open except in the presence of such storekeeper or other person who may be designated to act for him, as provided in the case Eeguiations. f distillery-warehouses. And such warehouses shall be under such further regulations as the Commissioner of Internal Revenue, with the approval of the Secretary of the Treasury, may prescribe. tax 3iS n ill re I ndenn y ^ E0- ^" That every distiller of brandy from grapes, monthly return, upon rendering his monthly return of materials used and brand y y inTo°nd spirits produced by him, shall immediately pay the tax to special bonded U p 0n such spirits, or may, after they have been properly gauged, marked, and branded, under regulations to be prescribed by the Commissioner of Internal Revenue and approved by the Secretary of the Treasury, and also stamped as hereinafter provided, cause them to be re- moved in bond from the place of manufacture to a special bonded warehouse, under such regulations, and after making such entries, and executing and filing with the collector of the district in which such spirits were manu- factured such bonds and bills of lading, and giving such other additional security as may be prescribed by the Commissioner of Internal Revenue and approved by the Secretary of the Treasury. Bond to be conditioned under act August 28, 1894, for payment of tax at $1.10 per gallon within eight years from date of original gauge. D^H^edsby Microsoft® DISTILLED SPIRITS. 193 re- Seo. 3. That all brandy intended for deposit in a special fo^&ton* af bonded warehouse, before being removed from the dis- moral, tillery, shall have affixed to each package an engraved stamp indicative of such intention, to be provided and furnished to the several collectors as in the case of other stamps, and to be charged to them and accounted for in the same manner. * * * The act of May 28, 1880 (21 Stat., 145), repealed the provision charging 10 cents for these stamps. Sec. 4. [as amended by sec. 49, act of Aug. 28, 1894 ($8 Stat. , 509) . ] That any brandy made from grapes removed in bond according to law may, upon its arrival at a special how brandy bonded warehouse, be deposited therein upon making m^wScS such entries, filing such bonds and other securities, and under such regulations as shall be prescribed by the Com- missioner of Internal Revenue with the approval of the Secretary of the Treasury. It shall be one of the condi- Tax shall be tions of the warehousing-bond covering such spirits that y ^?g W from ISe the, principal named in said bond shall pay the tax on the of original gauge. spirits as specified in the entry, or cause the same to be paid within eight years from the date of the original fauging of the same, and before withdrawal, except as ereinafter provided. Sec. 5. That any brandy made from grapes may be^n^y onewjtb- withdrawn once and no more from one special bonded port at ion to warehouse for transportation to another special bonded SSSse" ware " warehouse; and such brandy shall, on its arrival at the second special bonded warehouse, be immediately entered therein, from which warehouse it shall be withdrawn only on payment of the tax or for immediate exportation. In A^. 8110 } 1 t case ' r •>■. , , .,ii • • . i i p i •, • additional stamp case the brandy withdrawn is intended tor deposit in to be affixed. another special bonded warehouse, an additional stamp, indicative of such intention, shall be affixed to each pack- age withdrawn, as in the case of brandy withdrawn from a distillery intended to be so deposited. And in case the etc^n'exporta- brandy is intended for exportation, an engraved stamp turn. indicative of such intention, shall be affixed to each pack- age so removed, as in the case of spirits withdrawn from Pr ?Y& ion J[ g ' a distillery bonded warehouse for exportation, under the page 220', made provisions of section thirty-three hundred and thirty, applicable ' Revised Statutes : all the provisions of which section not inconsistent with this act are hereby made applicable to such withdrawals. And all withdrawals authorized by al ^°^ b ^ a a ,j£ law of grape-brandy from any special bonded warehouse shall be upon making such withdrawal entries, and under such regulations, and unless the withdrawal is upon pay- ment of tax, upon the execution of such bonds and bills of lading as the Commissioner of Internal Revenue, with the approval of the Secretary of the Treasury, may pre- scribe. Export bonds given under the provisions of this how 3 ?a°nceied nds ' act shall be canceled upon the production of such certifi- cates of landing as the Commissioner of Internal Revenue, with the approval of the Secretary of the Treasury, may 72i70°-ll 13 Digitized by Microsoft® 194 DISTILLED SPIRITS. prescribe, or upon proof of loss at sea satisfactory to the sef r 322 S i i0I R s of Commissioner of Internal Revenue. And the provisions page 117, as to of existing law relative to an allowance of loss by casualty mado b ap C pucabie! in a distillery bonded warehouse are hereby made appli- cable to brandy stored in special bonded warehouses, in accordance with the provisions of this act. As to regauge of spirits withdrawn from warehouse, allowance for leakage, etc., see section 3294a and 32946. fre^o?to aUon Sec. 6. That the provisions of existing law in regard to the exportation of distilled spirits are hereby extended so as to permit the exportation from special bonded ware- houses of grape brandy free of tax in any original cask containing not less than twenty gallons, and for the expor- tation of grape brandy upon which all taxes have been Drawback. paid, with the privilege of drawback in quantities of not less than one hundred gallons, and in the distillers' original cask, containing not less than twenty nine gallons each. Twenty wine gallons undoubtedly intended, instead of "twenty nine gallons," as in the act. It was probably an error in engrossing. See section 3329, page 217, and section 3330, page 220. warehouse S EC . 7. That whenever, in the opinion of the Commis- may be discon- . ct_l 1 t-> ■ 1 t_ i 1 1 tmued, etc. sioner of Internal Revenue, any special bonded warehouse is unsafe or unfit for use, or the merchandise therein is liable to loss or great wastage, he may discontinue such warehouse, and require the merchandise therein to be transferred to such other' warehouse as he may designate, and within such time as he may prescribe; and all the sec. 3272, r.s., provisions of section thirty two hundred and seventy two etc.'made 1 oppii- of the Revised Statutes of the United States, relating to cab ' e - transfers of spirits from warehouses, including those imposing penalties, are hereby made applicable to trans- fers from special bonded warehouses, when tax may Sec. 8. That the tax upon any brandy distilled from coiierteTby d^s- grapes, removed from the place where it was distilled, traint. anc f j n reS p ec t f which any requirement of this act is not complied with, shall at any time when knowledge of such fact is obtained by the Commissioner of Internal Revenue, be assessed by him upon the distiller of the same, and returned to the collector, who shall immediately demand payment of such tax, and, upon the neglect or refusal of Eayment by the distiller, shall proceed to collect the same y distraint. But this provision shall not exclude any other remedy or proceeding provided by law. P a?d a withta eigM Sec. 9. That nothing in this act shall be construed as years. extending the time in which the tax on brandy made from grapes shall be paid beyond three [eight] years from the day on which the taxable quantity is ascertained by the gauger; Forfeiture. and all brandy made from grapes, found elsewhere than in a distillery or special bonded warehouse, not having been removed therefrom according to law, and all brandy on which the tax has not been paid within three [eight] years Digitized by Microsoft® 0V1S- of- DISTILLED SPIRITS. 195 of the date of the original gauging shall be forfeited to the United States. Bonding period changed from three years to eight years by section 49, act of August 28, 1894. (See p. 193.) Sec. 10. That the Commissioner of Internal Revenue, ha ve eE 1ne° n torce with the approval of the Secretary of the Treasury, may and eflect of law. make all needful rules and regulations for carrying into effect the provisions of this act, and such regulations when made shall have all the force and effect of law. Sec. 11. That in case any grape brandy removed fromj™^ j£ the distillery for deposit in a special warehouse, shall fail tenses specified' to be deposited in such warehouse within ten days there- after, or within the time specified in any bond given on such removal, or if any grape brandy deposited in any special warehouse shall be taken therefrom for deposit in another warehouse, or for export, or otherwise, without full compliance with the provisions of this act, and with the requirements of any regulations made thereunder, and with the terms of any bond given on such removal, then any person who shall be guilty of such failure, and any person who shall in any manenr violate any provision of this act, or of the regulations made in pursuance thereof, shall be subject, on conviction, to a fine of not less than one hundred dollars nor more than five thousand dollars, and to imprisonment for not less than three months nor more than three years, for every such failure or violation; and the spirits as to which such failure or violation shall take place shall be forfeited to the United States. Proprietors of special bonded warehouses may (except in case of tax-paid withdrawals) decline to deliver brandy stored in such warehouses until the warehouse receipts issued by them are surrendered, where the surrender of such receipts, before delivery of the spirits, is required by law. (T. D. 714.) AN ACT To provide for warehousing fruit brandy. [Act of October 18, 1888 (25 Stat., 560).] That the provisions of an act entitled "An act relating r E ** ensi ? n , t { to the production of fruit brandy, and to punish frauds ofMarch3,i877. c connected with the same," approved March third, eighteen hundred and seventy-seven, be extended and made appli- cable to brandy distilled from apples or peaches, or from any other fruit the brandy distilled from which is not now required or hereafter shall not be required to be deposited in a distillery warehouse : Provided, That each of the warehouses established under said act, or which may hereafter be established, shall be in charge either of a storekeeper or of a storekeeper and gauger, at the dis- cretion of the Commissioner of Internal Revenue. Regulations, No. 5, revised — Concerning special-bonded ware- houses for storage of brandy made from apples, peaches, grapes, pears, pineapples, oranges, apricots, berries, or prunes, exclu- sively. Storekeeper and gauger is now styled storekeeper-gauger. Act of June 28, 1902. Digitized by Microsoft® 196 DISTILLED SPIRITS. iSdl'rSg Sec - 3295 - [Amended by act of July 16, 1892 (27 Stat, spirits remove! #01).] Whenever an order is received from the collector from warehouse. f Qj . ^ g remova i fj. om an y distillery warehouse of any cask of distilled spirits on which tax has been paid, the gauger by whom the same is gauged and inspected shall, in pres- ence of the storekeeper and before such cask has left the warehouse, place upon the head thereof, in such manner as to cover no portion of any brand or mark prescribed by law already placed thereon, a stamp, on which shall be engraved the number of proof gallons contained in said cask on which the tax has been paid, and which shall state the serial number of the cask, the name of the person by whom the tax was paid, and the person to whom and the place where it is to be delivered. Said stamp shall be signed by the collector of the district, the storekeeper and gauger, and shall be as follows: Tax-paid stamp, No. — . Received , 18 — , from , tax on gallons proof spirit, cask No. , warehouse at for delivery to , at . Collector District, State of - Attest: United States Storekeeper. United States Gauger. And at the time of affixing the tax-paid stamp the gauger shall, in the presence of the storekeeper, cut or burn upon each cask the name of the distiller, the district, the date of the payment of the tax, the number of proof- gallons, and the number of the stamp, which cutting or burning shall be erased when such cask is emptied. The last words of section 3295, namely, "by cutting or burn- ing a canceling line across such marks or brands," were struck out by amendatory act of July 16, 1892. Alleged infringement of patent in the use of stamps. (Fletcher v. Blake, 27 Int. Rev. Rec, 6; Hollister v. Benedict and Burn- ham Manufacturing Co., 113 U. S., 59; 31 Int. Rev. Rec, 30.) Regulations relative to the signing of stamps. (Regulations, No. 7, pp. 114, 117, 123, 132.) Regulations concerning the affixing of stamps to heads of spirit packages. (Circular No. 535, May 26, 1899.) In the case of spirit packages, the heads of which are in three parts, the Government stamp, or stamps, required to be placed upon the same, will be affixed across a joint, or joints, of the head in such a manner that each stamp shall rest over a joint at about the middle of the stamp, and so that the center piece of the head may not be removed without destroying the stamp or stamps. (Regulations, No. 7, p. 163.) Regulations concerning reduction in proof of distilled spirits in distillers' original packages. (Regulations, No. 7, pp. 190-195.) The tax-paid stamps issued by collectors for the payment of taxes on distilled spirits are nothing more than receipts, and are worthless as receipts to other parties than those to whom they are issued. (Woolner v. United States, 13 Ct. Cls., 355; 24 Int. Rev. Rec, 181.) Digitized by Microsoft® DISTILLED SPIRITS. 197 Sec. 3296. Whenever any person removes, or aids or Removal, con- abets in the removal of any distilled spirits on which the spirit's™ contrary tax has not been paid, to a place other than the distillery t0 law; P enalt y- warehouse provided by law, or conceals or aids in the concealment of any spirits so removed, or removes, or aids or abets in the removal of any distilled spirits from any distillery warehouse, or other warehouse for distilled spirits authorized by law, in any manner other than is provided by law, or conceals or aids in the concealment of any spirits so removed he shall be liable to a penalty of double the tax imposed on such distilled spirits so removed or concealed, and shall be fined not less than two hundred dollars nor more than five thousand dollars, and im- prisoned not less than three months nor more than three years. Sections 3256, 3279, 3299, 3450. Aiding or abetting. (United States v. Blaisdell et al., 9 Int. Rev. Rec, 82.) A conviction, under section 3296, for removing distilled spirits to a place other than a distillery warehouse, or concealing them there contrary to law, is not a bar to a conviction under section 3281 for illicit distilling, because the same are different offenses; and the question of being twice in jeopardy, within the Consti- tution, amendment 5, does not arise. (United States v. Three Copper Stills, etc. (1890), 47 Fe'd. Rep., 495.) The fact that the statute makes the aiding and abetting of another in the removal of illicit spirits a distinct offense does not prevent a person so aiding and abetting from being convicted as a principal in the removal, under the rule making all partici- pants in misdemeanors liable as principals. (United States v. Sykes, 58 Fed. Rep., 1000.) Sec. 332, Criminal Code, p. 110. An indictment under this section for the concealment of dis- tilled spirits on which the tax has not been paid, removed to a place other than the distillery warehouse provided by law, which charges the performance of that act at a particular time and place, and in the language of the statutes is sufficiently certain. (Pounds v. United States, 171 U. S., 35.) See United States v. Smith, 27 Fed. Rep., 854. (Pilcher v. U. S., 113 Fed. Rep., 248; U. S. v. Harries, 26 Fed. Cos., 166, No. 15309; U. S. v. Nunnemacher, 27 Fed. Cas., 197, No. 15902.) Bond may be sued for these penalties. (United States v. Chouteau, 102 U. S., 603; 27 Int. Rev. Rec., 49.) Sec. 3297. The Secretary of the Treasury is authorized Aiconoi with- to grant permits to any incorporated or chartered scien- tirSTpurposS'lfy tine institution or college of learning to withdraw alcohol charured ted msti- in specified quantities from bond without payment of thetutions. internal-revenue tax on the same, or on the spirits from which the alcohol has been distilled, for the sole purpose of preserving specimens of anatomy, physiology, or nat- ural history belonging to such institution, or for use in its chemical laboratory: Provided, That application for per- mits shall be made by the president or curator of such in- stitution, who shall file a bond for double the amount of the tax on the alcohol to be withdrawn, with two good and sufficient sureties, to be approved by the Commissioner of Internal Revenue, and conditioned that the whole quan- tity of alcohol so withdrawn from bond shall be used for Digitized by Microsoft® 198 DISTILLED SPIRITS. the purposes above specified, and for no other, and that the saia president or curator shall comply with such other requirements and regulations as the Secretary of the Penalty. Treasury may prescribe. And if any alcohol so obtained is used by any officer, as aforesaid, of such institution for any purposes other than that above specified, then the said officer or sureties shall pay the tax on the whole amount of alcohol withdrawn from bond, together with a like amount as a penalty in addition thereto. Aicohoi with- [Sec. 3297a]. [Act of May 3, 1878 {20 Stat., 48)]. That tiflTpurposes'by ^^ e Secretary of the Treasury be, and is hereby authorized institutions not to grant permits, as provided for in section thirty-two incorpoia e . h unc lred and ninety-seven of the Revised Statutes of the United States passed at the first session of the Forty-third Congress, to any scientific university, or college of learn- ing created and constituted such by any State or Terri- tory under its laws, though not incorporated or chartered, upon the same terms and subject to the same restrictions and penalties, already provided by said section thirty-two hundred and ninety-seven: Provided further, That the bond required thereby may be executed by any officer of such university or college, or by any other person for it, and on its behalf, with two good and sufficient sureties, upon like conditions, and to be approved as by said sec- tion is provided. Regulations, No. 7, Revised, p. 238, and Revised Circular, January 14, 1908; Dept. No. 5. See section 3464, page 367. Alcohol is the only kind of spirit that can be used free of tax for scientific purposes. (T. D. 21664, 1899). Alcohol classified and branded as "commercial alcohol" may be withdrawn from bond, free of tax, under the provisions of section 3297, for scientific purposes. (T. D. 1483, Apr. 14, 1909.) Power of otn- Sec. 3298. It shall be lawful for any internal-revenue packages on^su?- officer to detain any cask or package containing, or sup- picion. posed to contain, distilled spirits, when he has reason to believe that the tax imposed by law upon the same has not been paid, or that the same is being removed in viola- tion of law; and every such cask or package may be held by him at a safe place until it shall be determined whether the property so detained is liable by law to be proceeded against for forfeiture ; but such summary detention shall not continue in any case longer than forty-eight hours without process of law or intervention of the officer to whom such detention is to be reported. Forfeiture of Sec. 3299. All distilled spirits found elsewhere than in a nints unlawful- ....... -. . .,-. ,^ _ . ; been removed to the United spirits unlawful spirits uniawiui- i- ,-n l' t 'n i , 1 i ly removed from distillery or dtstiltery warehouse, not having b " lst '" ei ' y - therefrom according to law, shall be forfeited ig Act Feb. instates. If agent is cognizant of fraud at time of purchase, the principal is bound. Confusion and mixture of goods by rectification. (Harrington's Distilled Spirits, 11 Wall., 356; 13 Int. Rev. Rec, 193.) Burden of proof. (Sec. 3333, p. 225. United States v. Eight Casks of Whisky, 7 Int. Rev. Rec, 4.) Digitized by Microsoft® DISTILLED SPIRITS. 199 Sec. 3300. Whenever any store-keeper or other person un ^wfiSl keep r" in the employment of the United States, having charge of moving spirits ot a bonded warehouse, removes or allows to be removed be rImovfd™e e to: therefrom any cask or other package, without an order or permit of the collector, or which has not been marked or stamped in the manner required by law, or removes or allows to be removed any part of the contents of any cask or package deposited therein, he shall be immediately dis- p ena it y . missed from office or employment, and be fined not less than five hundred dollars nor more than two thousand dollars, and imprisoned not less than three months nor more than two years. Sec. 3301 [as amended by sec. 5, act of Mar. 1, 1879 (20 store-keepers' Stat., 327)]. Every storekeeper shall keep a warehouse books. 6 h ° u s e " book, which shall at all times be open to the examination of any revenue officer, and shall enter therein an account of all articles deposited in the warehouse to which he is assigned, indicating in each case the date of deposit, by whom manufactured or produced, the number and descrip- tion of the packages and contents, the quantities therein, the marks and serial numbers thereon, and by whom gauged, inspected, or weighed, and if distilled spirits, the number of gauge or wine gallons, of proof-gallons, and of taxable gallons; and before delivering any article from the warehouse he shall enter in said book the date of the permit or order of the collector for the delivery of such articles, the number and description of the packages, the marks and serial numbers thereon, the date of delivery, to whom delivered, and for what purpose, which purpose shall be specified in the permit or order for delivery; and in case of dehvery of any distilled spirits the number of gauge or wine gallons, of proof-gallons, and of taxable gallons shall also be stated; and such further particulars shall be entered in the warehouse-books as may be pre- scribed or found necessary for the identification of the packages, to insure the correct delivery thereof and proper accountability therefor. And every store-keeper shall furnish daily to the col- store -keepers' lector of the district a return of all articles received in and ports, delivered from the warehouse during the day preceding that on which the return is made, and mail at the same time a copy thereof to the Commissioner of Internal Rev- enue, and shall, on the first Monday of every month, make a report in duplicate of the number of packages of all articles, with the respective descriptions thereof, as above provided, which remained in the warehouse at the date of his last report, of all articles received therein and delivered therefrom during the preceding month, and of articles remaining therein at the end of said month. He shall deliver one of these reports to the collector having control of the warehouse, to be recorded and filed in his office, and transmit one to the Commissioner of Internal Revenue, to be recorded and filed in his office. The reports made by a distiller, or by storekeepers or other officers, to a collecto*5Mde^#ftm1(BM»alsKWKfiBme laws are in no 200 DISTILLED SPIRITS. sense public records, but are executive documents, which, the United States in its sovereign capacity has acquired for the sole purpose of administering its own governmental affairs, and are its private property, the custody and use of which the Secre- tary of the Treasury, has the lawful authority to control by proper regulations. (In re Comingore, collector (1899), 96 Fed. Rep., 552; T. D. 21584; Boske v. Comingore, 177 U. S., 459, T. D. 104.) to Saws chS-TSt ^ec. 3302. The store-keeper assigned to any distillery d°istiii C ery 8 an°d warehouse shall, in addition to the duties required of him ma?erfafs° UI used! as store-keeper in charge of a warehouse, keep in a book etc - ' to be provided for that purpose, and in the manner pre- scribed by the Commissioner of Internal Revenue, a daily account of all the meal and vegetable productions or other substances brought into said distillery, or on said premises, to be used for the purpose of producing spirits, from whom Eurchased, and when delivered at said distillery; of the ind and quantity of all fuel used, and from whom pur- chased; of all repairs made on said distillery, and by whom and when made; of the names and places of resi- dence of all persons employed in or about the distillery; of the materials put into the mash-tub or otherwise used for the production of spirits; of the time when any fer- menting-tub is emptied of ripe mash or beer, recording the same by the number painted on said tub; and of all spirits drawn off from the receiving-cistern, and the time when the same were drawn off. Examination of grain distilleries and duties of examining offi- cers. (Cir. No. 612. T. D. 439.) Records at registered distilleries. — Collectors are instructed to give personal attention to records kept by storekeepers and store- keeper-gaugers, particularly grain account and temperature and gravity reports. (T. D. 1628.) book's^en'totaio Sec. 3303. Every person who makes or distills spirits, be made. or owns any still, boiler, or other vessel used for the pur- pose of distilling spirits, or who has such still, boiler, or other vessel so used under his superintendence, either as agent or owner, or who uses any such still, boiler, or other vessel, shall from day to day make, or cause to be made, in a book or books, to be kept by him in such form as the Commissioner of Internal Revenue may prescribe, a true and exact entry of the kind of materials, and the quantity in pounds, bushels, or gallons purchased by him for the production of spirits, from whom and when purchased, and by what conveyance delivered at said distillery, the amount paid therefor, the kind and quantity of fuel pur- chased for use in the distillery, and from whom purchased, the amount paid for ice or water for use in the distillery, the repairs placed on said distillery or distilling-apparatus, the cost thereof, and by whom and when made, and of the name and residence of each person employed in or about the distillery, and in what capacity employed. And in another book he shall make like entry of the quantity of grain or other material used for the production of spirits, the time of day when any yeast or other composition is put into ^m^l^or^beer^the purpose of exciting DISTILLED SPIRITS. 201 fermentation, the quantity of mash in each tub, designat- ing the same by the number of the tub, the number of dry inches, that is to say, the number of inches between the top of each tub and the surface of the mash or beer therein at the time of yeasting, the gravity and temperature of the beer at the time of yeasting, and on every day there- after its quantity, gravity, and temperature at the hour of twelve meridian ; also, of the time when any f ermenting- tub is emptied of ripe mash or beer, the number of gallons of spirits distilled, the number of gallons placed in the warehouse, and the proof thereof, the number of gallons sold or removed, with the proof thereof, and the name, place of business, and residence of the person to whom sold. Sec. 3304. The books of every distiller hereinafter Books to be required shall always be kept at the distillery and be S n and preS'rv- always open to the inspection of any revenue officer, and, ed two years - when filled up, shall be preserved by the distiller for a period of not less than two years thereafter, and whenever required shall be produced for the inspection of any rev- enue officer. The books of a distiller required by law to be kept can be seized and used as evidence. The United States have the right to demand their production without judicial process for all purposes connected with the revenue liabilities of the distillers or the distilleries. " (Waite, C. J., in the United States Circuit Court, Eastern District of Virginia. United States v. A Distillery at Petersburg, 1 Hughes, 533; 22 Int. Rev. Rec, 195.) ' Distillers' books. Every book kept by a distiller is, to a cer- tain extent, a Government book, and may, under the law, be rightfully examined by the revenue officers to determine its correctness. (United States v. Parker, Mason & Co., and Roelle, Junker & Co., 21 Int. Rev. Rec, 245; 6 Biss., 350.) Private books and papers seized at distillery can be used as evidence in proceedings to forfeit distillery. (Dobbins v. United States, 24 Int. Rev. Rec, 22; 96 U. S., 395.) Sec. 3305. Whenever any false entry is made in, or any opting ™ keep entry required to be made is omitted from, either of the or e P^ t auce b00ks; said books mentioned in the two preceding sections, with pen intent to defraud or to conceal from the revenue officers any fact or particular required to be stated and entered in either of said books, or to mislead in reference thereto ; or any distiller as aforesaid omits or refuses to provide either of said books, or cancels, obliterates, or destroys any part of either of such books, or any entry therein, with intent to defraud, or permits the same to be done, or such books, or either of them, are not produced when required by any revenue officer, the distillery, distilling-apparatus, and the lot or tract of land on which it stands, and all personal property on said premises used in the business there car- ried on, shall be forfeited to the United States. And every person who makes such false entry, or omits to make any entry hereinbefore required to be made, with intent aforesaid, or who causes or procures the same to be done, or fraudulently cancels, obliterates, or destroys any part of said books, or any entry therein, or willfully fails to Digitized by Microsoft® 202 DISTILLED SPIRITS. produce such books, or either of them, shall be fined not less than five hundred dollars, nor more than five thousand dollars, and imprisoned not less than six months, nor more than two years. See United States v. One Water Cask, 10 Int. Rev. Rec, 93; United States v. Stowell, 133 U. S., 1; 36 Int. Rev. Rec, 30.) Using false Sec. 3306. Every person who knowingly uses any false m e el h im°a!ty. ea:i weights or measures in ascertaining, weighing, or meas- uring the quantities of grain, meal, or vegetable materials, molasses, beer, or other substances to be used for distilla- tion, shall be fined not less than five hundred dollars nor more than five thousand dollars, and imprisoned not less using unreKjs- than one year nor more than three years. Any person penalty. ' ' ' who uses any molasses, beer, or other substance, whether fermented on the premises or elsewhere, for the purpose of producing spirits, before an account of the same is registered in the proper book provided for that purpose, shall forfeit and pay the sum of one thousand dollars for each offense so committed. Distiller's bond, suit to recover penalty. (U. S. v. Zemel, 137 Fed. Rep., 989.) Distillers' re- Sec. 3307. On the first day of each month, or within tion\>° collect"?, five days thereafter, every distiller shall render to the col- lector of the district an account in duplicate, taken from his books, stating the quantity and kind of materials used for the production of spirits each day, and the number of wine-gallons and of proof-gallons of spirits produced and placed in warehouse. And the distiller or the principal manager of the distillery shall make and subscribe the following oath, to be attached to said return: "I, , distiller (or principal manager, as the case may be) of the distillery at , do solemnly swear that, since the date of the last return of the business of said distillery, dated day of to day of , both inclusive, there was produced in said distillery, and withdrawn and placed in warehouse, the num- ber of wine-gallons and proof -gallons of spirits; and there were actually mashed and used in said distillery, and consumed in the production of spirits therein, the several quantities of grain, sugar, molasses, and other materials respectively hereinbefore specified, and no more. " One of the said duplicate returns shall be transmitted by the collector to the Commissioner of Internal Revenue. Fruit distillers' returns, Form 15. (Regulations No. 7, p. 215.) Distillers' re- Sec. 3308. Every distiller shall make a return of the Sotoi bamis™- number of barrels of spirits distilled by him, counting tiIled - forty gallons of proof-spirits to the barrel, whenever such return is demanded by the collector of the district. Monthly ex- Sec. 3309, as amended. On the receipt of the distiller's tiiier 1 s £ ' tI0I leturi!^ return in each month, the Commissioner of Internal Reve- assessments.etc. nue shall inquire and determine whether the distiller has accounted for all the grain or molasses used, and all the capacity tax. spirits produced by him in the preceding month. If he is satisfied that the distiller has reported all the spirits pro- duced by him, and the quantity so reported is found to be Digitized by Microsoft® DISTILLED SPIRITS. 20 S less than eighty per centum of the producing-capacity of the distillery as estimated according to law, he shall make an assessment for such deficiency at the rate of ninety cents for every proof -gallon. In determining the quan- m ^ d m end merit tity of grain used, fifty-six pounds shaU be accounted as act Mar. 3, 1375 a bushel; and if the Commissioner finds that the distiller (t8 stat - 402) ' has used any grain or molasses in excess of the capacity of his distillery as estimated according to law, he shall make an assessment against the distiller at the rate of 3 ^ffiffij^' ninety cents for every proof -gallon of spirits that should 462). Amend-' have been produced from the grain or molasses so used ment in excess, which assessment shall be made whether the quantity of spirits reported is equal to or exceeds eighty fer centum of the producing-capacity of the distillery. f the Commissioner finds that the distiller has not ac- counted for all the spirits produced by him, he shall, from all the evidence he can obtain, determine what quantity of spirits was actually produced by such distiller, and an 3 ^^/^g^' assessment shall be made for the difference between the 463). Am end- quantity reported and the quantity shown to have been ment ' actually produced, at the rate of ninety cents for every E roof-gallon : Provided, That the actual product shall e assumed to be in no case less than eighty per centum of the producing-capacity of the distillery as estimated according to law. All assessments made under this sec- tion shall be a lien on all distilled spirits on the distillery premises, the distillery used for distilling the same, the stills, vessels, fixtures, and tools therein, the tract of land whereon the said distillery is located, and any building thereon, from the time such assessment is made until the same shall have been paid. When a fruit distiller has received pomace, in the absence of any explanation otherwise accounting for it, it is justifiable to infer that the material was used in the production of spirits at the rate of 1 gallon to 14 gallons of pomace. (United States v. Cole, 134 Fed. Rep., 697; T. D. 786.) It is well settled that a distiller is legally liable to a tax on his entire actual product, and on a quantity equal at least to 80 per centum of the producing capacity of his distillery as fixed by the survey, however small the actual product may be. (United States v. Singer, 15 Wall., Ill; 17 Int. Rev. Rec, 9. Collector v. Beggs, 17 Wall., 182; 17 Int. Rev. Rec, 164. United States v. Ferrary et al., 93 U. S., 625; 22 Int. Rev. Rec, 394.) Construction of the statute and method of computation. (Stoll v. Pepper, 97 U. S. (7 Otto), 438; 25 Int. Rev. Rec, 2. Weitzel v. Rabe, 103 U. S., 340. See also United States v. Nissley, 1 Dillon, 586; 13 Int. Rev. Rec, 174. Pahlman v. Collector, 20 Wall., 189; 19 Int. Rev. Rec, 171. Turner v. Williams, 18 Int. Rev. Rec, 6.) The producing capacity of a distillery, and not the amount of spirits produced, is made the measure of taxation. (U. S. v. Halloran, 14 Blatch., 1; Fed. Cas. No. 15, 286.) In a suit for taxes under section 3309 the original assessment list signed by the Commissioner is evidence of assessment, and the original report of survey and certificate of collector of deliv- ery of triplicate copy to distiller are competent evidence. United States v. Bristow, 20 Fed. Rep., 378.) If a distiller uses material for distillation in excess of the estimated capacity of his distillery according to the survey, but, in the regular course of his business, pays the tax upon his Digitized by Microsoft® 204 DISTILLED SPIRITS. entire production, he can not be again assessed the regular gallon tax on the spirits which the excess of material used should have produced. (Runkle v. Citizens' Insurance Co. of Pitts- burg, Pa., 6 Fed. Rep., 143.) The provision under this section that if the Commissioner of Internal Revenue, on making a monthly examination of a dis- tiller's return, "finds that the distiller has used any grain or molasses in excess of the capacity of his distillery as estimated according to law, he shall make an assessment against the dis- tiller," etc., refers to the real average spirit-producing capacity of the distillery, and not to a fictitious capacity for any particu- lar day or days. (Chicago Distilling Co. v. Stone, 140 TJ. S., 647; 37 Int. Rev. Rec, 206.) See on this section Stowell v. Williams, jr., 17 Int. Rev. Rec, 38; Daly v. United States, 16 Int. Rev. Rec, 147; Hartman v. Bean, 99 U. S., 393; 25 Int. Rev. Rec, 141. The distiller is required to produce at least 80 per cent of the producing capacity of his distillery. If he uses defective fruit or material from which he can not produce 80 per cent, he does so with full knowledge that he will be assessed on the basis of 80 per cent of his producing capacity. (U. S. v. Ball, 1908, 163 Fed. Rep., 504.) se^miLsZ £ [ Sec - 3309a.] [Sec. 6, act of Mar. 1, 1879 (20 Stat., 327), flciencies, etc., in amended by sec. 8, act of May 28, 1880 (21 Stat., 14S). That whenever, under the provisions of section thirty- three hundred and nine of the Revised Statutes, an assess- ment shall have been made against a distiller for a defi- ciency in not producing eighty per centum of the produc- ing capacity of his distillery as established by law, or for the tax upon the spirits that should have been produced from the grain, or fruit, or molasses found to have been used in excess of the capacity of his distillery for any month, as estimated according to law, such excessive use of grain, or fruit, or molasses having arisen from a failure on the part of the distiller to maintain the capacity re- quired by law to enable him to use such grain, or fruit, or molasses without incurring liability to such assessment, and it shall be made to appear to the satisfaction of the Commissioner of Internal Revenue that said deficiency, or that said failure, whereby such excessive use of grain, molasses, or fruit arose, was not occasioned by any want of diligence or by any fraudulent purpose, on the part of the distiller, but from misunderstanding as to the require- ments of the law and regulations in that respect or by reason of unavoidable accidents, then, and in such case, the Commissioner of Internal Revenue, subject to regu- lations prescribed by the Secretary of the Treasury is authorized, on appeal made to him, to remit or refund such tax, or such part thereof as shall appear to him to be equitable and just in the premises. Accidental Arc And the Commissioner of Internal Revenue upon the pro- duction to him of satisfactory proof of the actual destruction, by accidental fire or other casualty any without any fraud, collusion, or negligence of the distiller of any spirits %n pro- cess of manufacture or distillation, or before removal to the distillery warehouse, shall not assess the distiller for a deficiency in not producing eighty per centum of the produc- ing capacity of his distillery as established by law when the Digitized by Microsoft® DISTILLED SPIRITS. 205 deficiency is occasioned by such destruction, nor shall he, in such case, assess the tax on the spirits so destroyed: Provided, That no tax shall be remitted or refunded under the provisions of this section upon any assessment made prior to January first, eighteen hundred and seventy- four: Provided further, That no assessment shall be charged ftl J t is * i 3 J 1 e e " J against any distiller of fruit for any failure to maintain the from such assess- required capacity, unless the Commissioner shall, within S ents ' except ' six months after his receipt of each monthly report notify such distiller of such failure so to maintain the required capacity. U. S. v. Ball (C. C. A.), 163 Fed. Rep., 504. Assessment. — No distiller of fruit brandy to be reported for assessment on account of brandy produced and unaccounted for until determination of taxes due under section 3309, Revised Statutes, nor until due notice is given the distiller as required by regulations. (T. D., 1555.) October 27, 1909. Statutory relief in cases of assessments under this section. (Regulations No. 7, Revised, 1908, pp. 87-92.) [Sec. 33095.] [Sec. 60, act of Aug. 28, 1894 (28 Stat., Rate of tax. 509).] That all assessments made under the provisions of section thirty-three hundred and nine of the Revised Statutes of the United States, and Acts amendatory thereof, shall be at the rate of tax imposed by this Act on each proof gallon. Sec. 3310 [as amended by act of Feb. 27, 1877 (19 Stat., rermentingpe- 2Jfi), and sec. 7, act of May 28, 1880 (21 Stat, 145)]. The™" 1 - first fermenting period of every distiller shall be talcen to begin on the day the distiller's bond is approved; and every distiller at the hour of twelve meridian on the last day of such fermenting period, or at the same hour on any previous day of such fermenting period on which spirits are distilled, shall be deemed to have commenced, and thereafter to be continuously engaged in, the production of distilled spirits in his distillery, except in the intervals when he shall suspend work as hereinafter provided. Any distiller desiring to suspend work in his distillery w ^ spension °' may give notice in writing to the collector of the district, w< stating when he will suspend work; and on the day men- tioned in said notice said collector or one of his deputies shall, at the expense of the distiller, proceed to fasten securely the door of every furnace of every still or boiler in said distillery, by locks and otherwise, and shall adopt such other means as the Commissioner of Internal Eevenue may prescribe to prevent the lighting of any fire in such furnace or under such stills or boilers. The locks and seals, and other materials required for such purpose, shall be furnished to the collector Tby the Commissioner of Internal Revenue, to be duly accounted for by said col- lector. Such notice by any distiller, and the action taken by the collector in pursuance thereof, shall be immediately transmitted to the Commissioner of Internal Revenue. No distiller, after having given such notice, shall, after the time stated therein, carry on the business of a distiller Digitized by Microsoft® 206 DISTILLED SPIRITS. on said premises until he gives another notice in writing to said collector, stating the time when he will resume work; and at the time so stated for resuming work the collector or one of his deputies shall attend at the distillery to remove said locks and other fastenings; and thereupon, and not before, work may be resumed in said distillery, which fact shall be immediately reported to the collector of the district, and by him transmitted to the Commissioner of Internal Revenue. business 7 a°t™ Every distiller who, after the time fixed in said notice notice of suspen- declaring his intention to suspend work, carries on the business of a distiller on said premises, or has mash, wort, or beer in his distillery, or on any premises connected therewith, or has in his possession or under his control any mash, wort, or beer, with intent to distill the same on said premises, shall incur the forfeitures and be subject to. the 326o ena ec " same punishment as provided for persons who carry on the business of a distiller without having given the. bonds required by law. caused P b? S una- But nothing in this section shall be held to apply to voidable aoci- suspensions caused by unavoidable accident; and the verbal amend- Commissioner of Internal Revenue shall prescribe regula- $ e i877. Act ' Feb ' tions to govern such cases of involuntary suspension. A distiller has one full fermenting period to prepare his mash or beer for distillation, and the liability to the 80 per cent capacity commences on the last day of such period, or on any previous day on which spirits are distilled. (Regulations No. 7, Revised, p. 56.) When a nominal change shall occur at a distillery, by reason of a change in the name or style in which the operations at the distillery are conducted, it will not be required that the business of producing spirits shall be completely finished and operations suspended by the distiller desiring to change his name or style before the business shall be undertaken or begun by him under a different name or style; nor will he be required to give notice of suspension upon Form 124. (Regulations No. 7, p. 11.) ca R adt ction ° f ^ EC ' 3311. Whenever any distiller desires to reduce the producing-capacity of his distillery, he shall give notice of such intention, in writing, to the collector, stating the quantity of spirits which he desires thereafter to manu- facture or produce every twenty-four hours, and there- upon said collector shall proceed, at the expense of the distiller, to reduce and limit the producing-capacity of the distillery to the quantity stated in said notice, by placing upon a sufficient number of the fermenting-tubs close- fitting covers, which shall be securely fastened by nails, seals, and otherwise, and in such manner as to prevent the use of such tubs without removing said covers or breaking said seals, and shall adopt such other precautions as may be prescribed by the Commissioner or Internal Revenue to reduce the capacity of said distillery. with took" etc.! ^ J1C ' eve fy person who breaks, injures", or in any manner penalty. " tampers with any lock, seal, or other fastening applied to any furnace, still, or fermenting-tub, or other vessel, in pursuance of the provisions of law, or who opens or attempts to open any door, tub, or other vessel, which is Digitized by Microsoft® DISTILLED SPIRITS. 207 locked or sealed, or otherwise closed or fastened as herein provided, or who uses any furnace, still, or fermenting- tub, or other vessel, which is so locked, sealed, or fastened, shall be deemed guilty of a felony, and shall be fined not less than one thousand dollars nor more than five thou- sand dollars, and imprisoned for not less than one year nor more than three years. (Sec. 3268, R. S.) Weitzel v. Rabe (103 U. S., 340). Sec. 3312. All stamps required for distilled spirits shall J 4 !™^'^"^ be engraved in their several kinds in book-form, and shall sued. be issued by the Commissioner of Internal Revenue to any collector, upon his requisition, in such numbers as may be necessary in the several districts. Each stamp shall have an engraved stub attached thereto, with a number thereon corresponding with an engraved number on the stamp, and the stub shall not be removed from the book. And there shall be entered on each stub such memoranda of the contents of its corresponding stamp as shall be necessary to preserve a perfect record of the use of such stamp when detached. Traffic in and possession of internal-revenue stamps. (11 Int. Rev. Rec, 57.) Counterfeiting stamps. (Sec. 5414, Appendix, p. 420.) Sec. 3313. On every stamp for the payment of tax on stamps, form distilled spirits there shall be engraved words and figures ' representing a decimal number of gallons, and on the stub corresponding to such stamp there shall be engraved a similar number of gallons, and between the stamp and the stub, and connecting them, shall be engraved nine cou- pons, which, beginning next to the stamp, shall indicate m succession the several numbers of gallons between the number named in the stamp and the decimal number next above. And whenever any collector receives the tax on the distilled spirits contained in any cask, he shall detach from the book a stamp representing the denominate quantity nearest to the quantity of proof-spirits in such cask, as shown by the gauger's return, with such number of the coupons attached thereto as shall be necessary to make up the whole number of proof-gallons in said cask; * * * All unused coupons shall remain attached to the marginal stub, and no coupon shall have any value or significance when detached from the stamp and stub. And the tax-paid stamps with the coupons may denote such number of gallons, not less than twenty [ten], as the Commissioner of Internal Revenue may deem advisable. Part indicated by * * * obsolete. * Section 48, act of August 28, 1894. See section 3251. Pactional gallons. (See sec. [3251a], p. 151.) The act of May 28, 1880, amending section 32S7, page 178, pro- vided for original packages of a distiller of not less than 10 wine gallons' capacity, thus modifying the last clause of the above section without specifically amending it. The tax-paid Btamps issued by collectors for the payment of taxes on spirits are nothing more than receipts, and are worth- Digitized by Microsoft® 208 DISTILLED SPIRITS. less as receipts to other parties than those to whom they are issued. (A. & S. Woolner v. United States, 13 Ct. Cls. 355; 24 Int. Rev. Rec, 181.) Tax-paid spirit stamps containing coupons for the fractional parts of a gallon. (Circular Letter of Dec. 21, 1894; 40 Int. Rev. Rec, 405.) Accountability Sec. 3314 [amended by act of Mar. 1 , 1879 {20 Stat, 827), ror stamp-boo^. ^ hy sec _ 16> act f May 28, 1880 {21 Stat, 146).] The books of tax-paid stamps issued to any collector shall be charged to his account at the full value of the tax on the number of gallons represented on the stamps and coupons contained in said books; and every collector shall make a monthly return to the Commissioner of Internal Revenue of all tax-paid stamps issued by him to be affixed to any cask or package containing distilled spirits on which the tax has been paid, and account for the amount of the tax collected; and when the said collector returns to the Com- missioner of Internal Revenue any book of marginal stubs, which it shall be his duty to do as soon as all the stamps contained in the book when issued to him have been used, and accounts for the tax on the number of gallons repre- sented on the stamps and coupons that were contained in said book, there shall be allowed to the collector a com- commissions. mission of one-half of one per centum on the amount of such tax, in addition to any other commission by law al- lowed: Provided, That the total net compensation of col- lectors as fixed by this title shall not be thereby increased. All stamps relating to distilled spirits, other than the tax- Eaid stamps, shall be charged to collectors; and the ooks containing such stamps may be intrusted by any collector to the gauger of the district, who shall make a daily report to the collector of all such stamps used by him and for whom used; and when all the stamps con- tained in any such book have been issued, the gauger of the district shall return the book to the collector, with all Export stamps. ti ie marginal stubs therein: Provided, That all export stamps issued to collectors shall be charged to them as representing the value of ten cents for each stamp, and they shall collect the amount due for such stamps at the rate of ten cents for each stamp issued in such manner and at such time as the Commissioner of Internal Revenue may prescribe, and the Commissioner may, in his discre- tion, make assessment therefor. The stamps having a money value are as follows, viz: Tax- paid, $1.10 per gallon; case stamps for spirits bottled in bond, 10 cents each, and exportation stamps for spirits in original casks, 10 cents each, and for spirits in wooden packages, each containing two or more metallic cans, each having a capacity of not less than 5 gallons wine measure, 5 cents each. (Reg- ulations No. 7, revised, p. 113, sec. 3330, p. 220; act Mar. 3, 1897, p. 234; act Feb. 21, 1899, p. 178. In United States v. Landram (118 U. S., 81; 32 Int. Rev. Rec. 151) it was held that the right of collectors to commissions on taxes collected by the sale of tax-paid spirit stamps was not taken from them by section 2, act of March 1, 1879 (sec. 3148, amended, p. 63). Circular No. 306. Collectors' commissions on sale of tax-paid spWt »z 8 e ( ^Ate S R o e rf® 325) - DISTILLED SPIRITS. 209 Sec. 3315 [as amended by sec. 5, act of Mar. 1, 1879 Best am ping {20 Stat., 327).] The Commissioner of Internal Kevenuetobarao, s i^l', may, under regulations prescribed by him with the appro- f^ figj val of the Secretary of the Treasury, issue stamps for re- "« uors - stamping packages of distilled spirits, tobacco, cigars, snuff, cigarettes, and fermented liquors which have been duly stamped, but from which the stamps have been lost or destroyed by unavoidable accident. Redemption of stamps (p. 331). Restamping packages of spirits, tobacco, cigars, snuff, ciga- rettes, fermented liquors, and denatured alcohol. (Cir. No. 705, Sept. 6, 1907; T. D. 1226.) Packages of fermented liquors may be restamped under direc- tion of the collector. T. D. 1672. Amending regulations No. 7, concerning restamping of pack- ages of spirits from which stamps have been lost or destroyed by unavoidable accident. (T. D., 1532, Aug. 13, 1909.) Sec. 3316. Whenever any revenue officer affixes or omcerusing.or cancels, or causes or permits to be affixed or canceled, j^tung °u r se pe oi any stamp relating to distilled spirits provided for by stamps contrary law, in any other manner or in any other place, or issues t0 law " the same to any other person than as provided by law, or by regulation made in pursuance thereof, or knowingly affixes, or permits to be affixed, any such stamp to any cask or package of spirits of which the whole or any part has been distilled, rectified, compounded, removed, or sold, in violation of law, or which has in any manner escaped payment of tax due thereon, he shall, for every Penalty . such offense, be fined not less than five hundred dollars nor more than three thousand dollars, and be imprisoned for not less than six months nor more than three years. [Sec. 3316a.] [Sec. 17, act Feb. 8, 1875 (18 Stat., 307).] Affixing imi - That if any person shall affix, or cause to be affixed, to or*^° g 4 ta S p d i° upon any cask or package containing, or intended to con- tilled spirits. tain, distilled spirits, any imitation stamp or other en- graved, printed, stamped, or photographed label, device, or token, whether the same be designed as a trade mark, caution notice, caution, or otherwise, and which shall be in the similitude or likeness of, or shall have the resem- blance or general appearance of, any internal-revenue stamp required by law to be affixed to or upon any cask or package containing distilled spirits, he shall, for each Penalty. offense, be liable to a penalty of one hundred dollars, and, on conviction, shall be fined not more than one thousand dollars, and imprisoned not more than three years, and the cask or package with its contents shall be forfeited to the United States. The statute prohibits the use of any device in tbe similitude of, or having the general appearance of, a stamp required by the internal-revenue laws for distilled spirits. The Commissioner of Internal Revenue has not adopted a standard as to what devices of this kind are allowable and what are prohibited. (T. D. 507.) Wholesale liquor dealers and rectifiers who place such stamps on packages containing distilled spirits must do so at their own risk if they are in any wise in the similitude of stamps required for spirits. (T. D. 559.) 72170°— ii — 14 Digitized by Microsoft® 210 DISTILLED SPIRITS. Rectifiers' turns. Rectifiers tending to fraud. Penalties. Rectifiers' no- tice of intention to rectify. Gauging. re_ Sec. 3317 [as amended by sec. 5, act of Mar. 1, 1879 (20 Stat., 327).] That on or before the tenth day of each month every person engaged in rectifying or compound- ing distilled spirits shall make, in such form as may be prescribed by the Commissioner of Internal Revenue, a return to the collector of the district, showing the quan- tity of spirits received for rectification, and from whom received, the quantity dumped for rectification, the quan- tity rectified, the quantity removed after rectification during the preceding month, and giving such other in- formation as may be required by the Commissioner of Internal Revenue, such return to be made in duplicate and sworn to by the rectifier; and the collector shaU for- ward one of such returns to the Commissioner of Internal Revenue. |£ Every person who engages in, or carries on, the business of a rectifier with intent to defraud the United States of the tax on the spirits rectified by him, or any part thereof, or with intent to aid, abet, or assist any person or persons in defrauding the United States of the tax on any distilled spirits, or who shaU purchase or receive or rectify any dis- tilled spirits which have been removed from a distillery to a place other than the distillery-warehouse provided by law, knowing or having reasonable grounds to believe that the tax on said spirits, required by law, has not been paid, shall, for every such offense, be fined not less than one thousand dollars nor more than five thousand dollars, and imprisoned not less than six months nor more than two years. As to employee swearing to returns. (32 Int. Rev. Rec, 165, T. D. 1046.) Carrying on business as rectifiers, with intent to defraud. (Sprinkle v. U. S., 141 Fed. Rep., 811; Angle v. U. S., 162 ibid, 264; U. S. v. Byrne, 7 Fed. Rep., 963.) [Sec. 3317a.] [Amended by act of July 16, 1892 (27 Stat., 200) .] When any rectifier intends to rectify or compound any distilled spirits he shall, before emptying any package of distilled spirits for that purpose, give notice in dupli- cate to the collector of internal revenue for the district of his intention so to rectify, and submit such package for the inspection of a United States gauger, who shall duly weigh or gauge such package and its contents and make due return thereof, and such spirits shall not be emptied for rectification, nor rectified or compounded in the pack- age, until gauged or weighed as herein above provided. And such notice and return shall be made in such form and contain such particulars as the Commissioner of In- ternal Revenue, with the approval of the Secretary of the Treasury, may from time to time prescribe. Penalty. (See sec. 3323, R. S., amended.) Regulations concerning marking, reporting, and accounting for sweetened spirits at rectifying nouses. (Regulations, No. 7, pp. 100, 105, 109, 111.) Addition of caramel or burnt sugar. (T. D. 1306.) Digitized by Microsoft® DISTILLED SPIRITS. 211 Sec. 3318 [as amended]. Every rectifier and wholesale ke p t b y k reotito liquor-dealer shall provide a book, to be prepared and and wholesale kept in such form as may be prescribed by the Commis- dealers - sioner of Internal Revenue, and shall, on the same day on which he receives any foreign or domestic spirits, and before he draws off any part thereof, or adds water or any- thing thereto, or in any respect alters the same, enter in such book, and in the proper columns respectively pre- pared for the purpose, the date when, the name of the person or firm from whom, and the place whence the spirits were received, by whom distilled, rectified, or com- pounded, and when and by whom inspected, and, if in the original package, the serial number of each package, the number of wine-gallons and proof-gallons, the kind of spirit, and the number and kind of adhesive stamps thereon. And every such rectifier and wholesale dealer shall, at the time of sending out of his stock or possession any spirits, and before the same are removed from his premises, enter in like manner in said book the day when and the name and place of business of the person or firm to whom such spirits are to be sent, the quantity and kind or quality 1 of such spirits, the number of gallons and frac- tions of a gallon at proof, and, if in the original packages in which they were received, the name of the distiller and the serial number of the package. Every such book shall be at all times kept in some public or open place on the premises of such rectifier or wholesale dealer for inspec- tion, and any revenue officer may examine it and take an abstract therefrom; and when it has been filled up as aforesaid, it shall be preserved by such rectifier or whole- sale liquor-dealer for a period not less than two years; and during such time it shall be produced by him to every revenue officer demanding it. And whenever any rectifier or wholesale liquor-dealer Penalties. refuses or neglects to provide such book, or to make en- tries therein as aforesaid, or cancels, alters, obliterates, or destroys any part of such book, or any entry therein, or makes any false entry therein, or hinders or obstructs any lg ^ 7 ct Feb - 27 > revenue officer from examining such book, or making any entry therein, or taking any abstract therefrom; or when- ever such book is not preserved or is not produced by any rectifier or wholesale liquor-dealer as hereinbefore directed, he shall pay a penalty of one hundred dollars, and shall on lg ^ ct Feb - 27 > conviction be fined not less than one hundred dollars nor more than five thousand dollars, and imprisoned not less than three months nor more than three years. That every person required to keep the looks prescribed by i t fm. 5 ' (Sitil] this section shall, on or before the tenth day of each month, &i-) make a full and complete transcript of aU entries made in Transcripts. • such book during the month preceding, and, after verifying the same by oath, shall forward the same to the collector of the 1 This word " quality " is erroneously printed " quantity " in the Revised Statutes, "edition 011878." Digitized by Microsoft® 212 DISTILLED SPIRITS. Penalty. district in which he resides. Any failure by reason of refusal or neglect to make said transcripts shall subject the person so offending to a fine of one hundred dollars for each neglect or refusal. Law construed and applied. Where parties are both wholesale and retail dealers in the'same place. (United States v. Malone, 8 Ben., 574; 22 Int. Rev. Rec, 403.) Importers must keep the wholesale liquor dealers' book. (United States v. McCullough, 22 Int. Rev. Rec, 202.) Recovery of penalty of $100 in a civil action no bar to criminal proceedings. (Case of Leszynsky, 25 Int. Rev. Rec, 71; 16 Blatch., 9.) The duty of making entries in the book may be delegated to a clerk, but the dealers and rectifiers are responsible if the proper entries are not made. (United States v. 50 Barrels "Whisky, 11 Int. Rev. Rec, 94; U. S. v. Amann, Fed. Cas. No. 14438.) Oath should be made by the principal instead of employee. (32 Int. Rev. Rec, 165.) Verification of returns. (T. D. Nos. 1039, 1046, 1212, 1646.) Forms 52 A and 122. (T. D., 1626.) Revision of Form 45. (T. D. 353, June 3, 1901.) A wholesale liquor dealer who deals exclusively in wines or malt liquors not required to keep the book. (13 Int. Rev. Rec, 161.) In an indictment under this section it is not necessary to spec- ify the name of the person to whom, or the place where, the casks were sent. That is a matter of evidence. (Williams v. U. S., 158 Fed. Rep., 30.) Indictment under section 3318. (U. S. v. Miller, 14 Blatch., 93, Fed. Cas. No. 15771.) The statute refers only to wholesale dealers in spirits. A whole- sale dealer in malt liquors is not required to keep the book. (U. S. v. Reagan, Fed. Cas. No. 16128; 15 Int. Rev. Rec, 8.) Transcripts must be filed. (Brown v. Hariri ns, 131 Fed. Rep., 63.) Cases of whisky bottled in bond should be entered on book Form 52. (T. D. 808; Regs. No. 23, revised, p. 23.) It is not necessary for a person qualifying as rectifier, for the sole purpose of rectifying for other persons, to qualify as whole- sale liquor dealer. How book Form 52 should be kept. (T. D. 640.) [Sec. 3318a.] [Sec. 62, act of Aug. 28, 1894 (28 Stat., 509).] That no distiller who has given the required bond and who sells only distilled spirits of his own production at the place of manufacture, or at the place of storage in bond, in the original packages to which the tax-paid stamps are affixed, shall be required to pay the special tax of a wholesale liquor dealer on account of such sales: Distnier re-Provided, That he shall be required to keep the book pre- i)ook. d sec. Inscribed hj section thirty- three hundred and eighteen of e. s. 'the Kevised Statutes of the United States, or so much as shall show the date when he sent out any spirits, the serial numbers of the packages containing same, the kind and quality of the spirits in wine gallons and taxable gal- lons, the serial numbers of the stamps on the packages, and the name and residence of the person to whom sent; and the provisions of section five of an Act entitled "An Act to amend the laws relating to internal revenue" ap- proved March fifth, eighteen hundred and seventy-nine, as to transcripts, shall apply to such books. Any failure, Digitized by Microsoft® DISTILLED SPIRITS. 213 by reason of refusal or willful neglect, to furnish the trans- cript by him shall subject the spirits owned or distilled by him to forfeiture. Sec. 3319. It shall not be lawful for any rectifier of dis- qu ^tH C iS a 'great- tilled spirits, or wholesale or retail liquor-dealer, to pur-<* than 20 gai- chase or receive any distilled spirits in quantities greater S on% r °c moiieper ~ than twenty gallons from any person other than an au- thorized rectifier of distdled spirits, distiller, or wholesale liquor-dealer. Every person who violates this section shall forfeit and pay one thousand doUars: Provided, Penalty. That this provision shall not be held to apply to judicial sales, or to sales at public auction made by an auctioneer. The exception made in this proviso is extended to certain other Bales by section 4, act of March 1, 1879, amending section 3244, paragraph 5, page 139. If a rectifier purchases from an authorized distiller, who is not an authorized rectifier or an authorized wholesale liquor dealer, distilled spirits, in quantities greater than 20 gallons, which were not produced by such authorized distiller, euch purchaser is liable to the penalty imposed by section 3319. (The New York Rectifying Co. v. United States, 14 Blatch., 549.) Held, That the word "receive" as used in this section means receive for sale, and that where a retail dealer receives more than 20 gallons of spirits from any person other than one authorized by the act to sell such spirits, for storage only, and not for sale, he does not incur the penalty. (United States v. Fridenberg, 11 Int. Rev. Rec, 5.) Sec. 3320 [as amended by act of July 16, 1892 (27 Stat., s £™&* oi <£* 183), and as further amended by sec. 66, act of Aug. 28, .ZSP^tmeifspirits. (28 Stat., 509) .] Whenever any cask or package, contain- ing five wine gallons or more, is filled for shipment, sale, or delivery on the premises of any rectifier who has paid the special tax required by law, it shall be inspected and gauged by a United States gauger whose duty it shall be to mark and brand the same and place thereon an engraved stamp, which shall state the date when affixed and the number of proof gallons, and shall be in such form as shall be prescribed by the Commissioner of Internal Revenue with the approval of the Secretary of the Treasury: Pro- vided, That when such cask or package is filled on the premises of a rectifier rectifying less than five hundred barrels a year, counting forty gallons of proof spirits to the barrel, it may be gauged, marked, branded, and stamped by a United States gauger, or it may be gauged, marked, branded, and stamped by the rectifier, as the Commis- sioner of Internal Revenue, with the approval of the Sec- retary of the Treasury, may by regulations prescribe. The act of July 20, 1868, imposed a tax of 25 cents each on stamps for rectified spirits and wholesale liquor dealers' packages. This rate was in force until August 1, 1872. (Act of June 6, 1872.) The act of June 6, 1872, reduced the price of these stamps to 10 cents, which continued until the taking effect of the act of May 28, 1880, since which time no charge has been made for rectifiers' or wholesale liquor dealers' stamps. (Commissioner's reports, 1905, p. 5; 1910, p. 18.) Rectified spirits stamps must be signed by gaugers on the date they affixed them, ^l^^.^m^ 214 DISTILLED SPIRITS. Regulations concerning the gauging and marking of distilled spirits at rectifying houses. (Regulations, No. 7, pp. 179-183. Circulars 737, 738, 740.) Violations of law and regulations by wholesale liquor dealers and rectifiers. (Cir. No. 616; T. D. 455.) Marks on packages put up by wholesale liquor dealers. (Cir. No. 652, T. D. 734.) Brands in spiral form are no longer to be used on rectifiers' packages of spirits. (T. D. 721, Nov. 24, 1903.) Obscure marking and branding. (T. D. 566.) Sec. 3321 [relative to gauging and stamping spirits on premises of wholesale dealer, repealed by legislative, execu- tive, and judicial appropriation act of Aug. 15, 1876 (19 Stat, 152).] aS! and^: Sec - 3322 - A 11 blanks in any of the forms prescribed in mshing stamps, the preceding sections shall be duly filled in accordance with the facts in each case. And the stamps therein des- ignated shall in every case be affixed to a smooth surface of the cask or other package, which surface shall not have been previously painted or covered with any sub- stance, and so as to fasten the same securely to the cask or package, and shall be duly canceled, and shall then be immediately covered with a coating of transparent var- nish, or other substance, so as to protect them from re- moval or damage by exposure; and such affixing, can- cellation, and covering shall be done in such manner as the Commissioner of Internal Revenue may by regulation prescribe. iiq^dL e ie S rs a to Sec - 3323 t as amended by the act of July 16, 1892 (27 mark, brand, and Stat., 200)]. Every package of distilled spirits containing stamp packages. five ^ ine g a u ons or more> fin e d on the premises of a whole- sale liquor dealer, who has paid the special tax required by law, shall be marked, branded, and stamped by such wholesale liquor dealer in such manner and under such rules and regulations as the Commissioner of Internal Revenue, with the approval of the Secretary of the Treasury, may prescribe; and on or before the tenth day of each Returns. month every wholesale liquor dealer shall make return, under oath, to the collector of internal revenue for the district of the various kinds and quantities of each kind Form. an( j f the total quantities of distilled spirits received on his premises and of the various kinds and quantities of each kind and of the total quantity of distilled spirits sent out frorn his stock or possession during the preceding month, and of the quantity of each kind and the total quantity remaining on hand at the end of the month; and such return shall be made in such form and contain such other particulars as the Commissioner of Internal Rev- enue, with the approval of the Secretary of the Treasury, Penalty. may prescribe. And every rectifier or wholesale liquor dealer who refuses or willfully neglects to comply with the requirements of this act as to giving the said notice or the said return, and as to marking, "branding, and stamping, in accordance with the law and the regulations made in pursuance thereof, the packages of spirits filled on his prem- Digitized by Microsoft® DISTILLED SPIRITS. 215 ises as aforesaid, shall, for each such offense, oe fined not less than two hundred dollars nor more than one thousand dollars. Spurious labels. (T. D. 286.) Reduction in proof of distilled spirits in distillers' original packages. (Regulations No. 7, rev., p. 190.) Section 3289, Revised Statutes, provides forfeiture if spirits are not marked and branded as required. (U. S. v. 7 BblB. of Whiskey, 131 Fed. Rep., 806.) Sec. 3324. Every person who empties or draws off, or stamps and causes to be emptied or drawn off, any distilled spirits faced from empty from a cask or package bearing any mark, brand, or casks - stamp, required by law, shall, at the time of emptying such cask or package, efface and obliterate said mark _ ... i it H^ ii in Penalties for stamp, or brand. .Every such cask or package from omitting to efface which said mark, brand, or stamp is not effaced and™Hon or in ai vioi£ obliterated as herein required, shall be forfeited to the tiouoflaw - United States, and may be seized by any officer of in- ternal revenue wherever found. And every railroad company or other transportation company, or person who receives or transports, or has in possession with in- tent to transport, or with intent to cause or procure to be transported, any such empty cask or package, or any part thereof, having thereon any brand, mark, or stamp, required by law to be placed on any cask or package con- taining distilled spirits, shall forfeit three hundred dollars for each such cask or package, or any part thereof, so received or transported, or had in possession with the in- tent aforesaid; and every boat, railroad-car, cart, dray, wagon, or other vehicle, and all horses and other animals used in carrying or transporting the same shall be for- feited to the United States. Every person who fails to efface and obliterate said mark, stamp, or brand, at the time of emptying such cask or package, or who receives any such cask or package, or any part thereof, with the intent aforesaid, or who transports the same, or know- ingly aids or assists therein, or who removes any stamp provided by law from any cask or package containing, or which had contained, distilled spirits, without defacing and destroying the same at the time of such removal, or who aids or assists therein, or who has in his possession any such stamp so removed as aforesaid, or has in his possession any canceled stamp, or any stamp which has been used, or which purports to have been used, upon any cask or package of distilled spirits, shall be deemed guilty of a felony, and shall be fined not less than five hundred dollars nor more than ten thousand dollars, and imprisoned not less than one year nor more than five years. As to empty imported spirit packages, see act of March 1, 1879, as amended, page 227. It is of no consequence under this Bection what the intent of the person failing to obliterate stamp is. There is no discretion given to the court whether to fine or imprison for the offense. Digitized by Microsoft® 216 DISTILLED SPIRITS. The offender must be fined and also imprisoned. (United States v. Quantity of Distilled Spirits, 3 Ben., 552; 11 Int. Rev. Rec, 3.) Principal liable for failure of employee to obliterate stamps. (United States v. Adler & Furst, 21 Int. Rev. Rec., 316.) The emptying of a cask without destroying stamp by the wife of a retail liquor dealer, who acts for her husband, renders the latter liable to the penalty. It is well settled that where a master, owing a certain duty to the public, intrusts its performance to a servant, he is re- sponsible criminally for failure of servant to discharge the duty, if nonperformance of the duty is a crime. (United States v. Buchanan (1881), 4 Hughes, 487; 9 Fed. Rep., 689.) Indictment for removing stamps from casks containing dis- tilled spirits. (United States v. Bayaud et al., 16 Fed. Rep., 376; 21 Blatch., 287.) Verdict set aside. (U. S. v. Rogers, western district of Ken- tucky (1908), 164 Fed. Rep., 520.) An indictment for failing to efface and cancel marks and brands at the time of emptying the package, need not aver a criminal intent. (U. S. v. Ulrici, 3 Dill, 533; Fed. Cas. No. 16594; U. S. v. Gallant, 177 Fed. Rep., 281.) The carrier is bound to know whether or not there were stamps upon the barrels not effaced or obliterated. (U. S. v. Goodrich Transp. Co., Fed. Cas. 15228; 8 Biss, 224.) Section 3324 does not apply to stamps on cases which had con- tained spirits bottled-in-bond. (T. D. 1252.) Circular letter to revenue officers relative to the requirements of this section. (T. D. 1648.) Definition of felony. (Sec. 335, Criminal Code, act of Mar. 4, 1909, p. 388.) in Buyi int or c se ks ^ EC- 3325. Whenever any person knowingly purchases having 1 " inspec-or sells, with inspection-marks thereon, any cask or twn marts. package, after the same has been used for distilled spirits, Penalty. he shall forfeit and pay the sum of two hundred dollars for every such cask so purchased or sold. changing or ai- Sec. 3326. Whenever any person changes or alters any brants. m shifting stamp, mark, or brand on an}' cask or package containing spirits, etc distilled spirits, or puts into any cask or package spirits of greater strength than is indicated by the inspection- mark thereon, or fraudulently uses any cask or package having any inspection-mark or stamp thereon, for the purpose of selling other spirits, or spirits of quantity or quality different from the spirits previously inspected Penalty. therein, he shall forfeit and pay the sum of two hundred dollars for every cask or package on which the stamp or mark is so changed or altered, or which is so fraudulently used, and shall be fined for each such offense not less than one hundred dollars nor more than one thousand dollars, and imprisoned not less than one month nor more than one year. United States v. Bardenheier (49 Fed. Rep., 846.) Removaj of Sec. 3327. No person shall remove any distilled spirits spirits from dis- , ,i ,■ x ,i p, • • i i_ .c tfiiery or rectia- at any other time than after sun-rising and before sun- to! ^nSfand^tting in any cask or package containing more than ten after sunset. gallons from any premises or building in which the same may have been distilled, redistilled, rectified, com- pounded, manufactured, or stored; and every person who Penalty. violates this provision shall be liable to a penalty of one hundred dollars for each cask, barrel, or package of Digitized by Microsoft® DISTILLED SPIRITS. 217 spirits so removed; and said spirits, together with any Forfeiture, vessel containing the same, and any horse, cart, boat, or other conveyance used in the removal thereof, shall be forfeited to the United States. Sec. 3328. On all wines, liquors, or compounds known tio ^| x ° f n £g^: or denominated as wine, and made in imitation of spar- tow paid, kling wine or champagne, but not made from grapes grown in the United States, and on all liquors, not made from grapes, currants, rhubarb, or berries grown in the United States, but produced by being rectified or mixed with distilled spirits or by the infusion of any matter in spirits, to be sold as wine, or as a substitute for wine, . there shall be levied and collected a tax of ten cents per bottle or package containing not more than one pint, or of twenty cents per bottle or package containing more than one pint and not more than one quart, and at the same rate for any larger quantity of such merchandise, however the same may be put up, or whatever may be the package. The Commissioner of Internal Revenue shall cause to be prepared suitable and special stamps denoting the tax herein imposed, to be affixed to each bottle or package containing such merchandise, by the person manufacturing, compounding, or putting up the same, before removal from the place of manufacture, compounding, or putting up; and said stamps shall be affixed and canceled in such manner as the Commissioner may prescribe; and the absence of such stamp from any bottle or package containing such merchandise shall be prima facie evidence that the tax thereon has not been paid, and such merchandise shall be forfeited to the United States. Any person counterfeiting, altering, or reusing said alt c°™terMting, stamps shall be subject to the same penalties as are usmgistamps. imposed for the same offenses in relation to proprietary Penaltles - stamps. See section 3429, Revised Statutes, for penalties for counter- feiting, etc., and section 8, act of June 13, 1898 (30 Stat., 448). Held, that the article was none the less free from tax, as being "made from grapes grown in the United States," notwithstand- ing the carbonic acid gas was injected by a separate proness of manufacture. (United States v. Wines of Blum., 6 Ben., 493; 17 Int. Rev. Rec, 181.) Sec. 3329 [as amended by see. 10, act of May 28, 1880 (21 Stat., 145)]. Distilled spirits upon which all taxes have been paid may be exported, with the privilege of drawback, * * * and in distillers' original casks (or) ^. 1 ?^ ba * on -r . . . 1 ,1 . , • -i-i distilled, spirits. packages, containing not less than twenty wme-gallons each, on application of the owner thereof to the collector of customs at any port of entry, and under such rules and regulations, and after making such entry as may be pre- scribed by law and by the Secretary of the Treasury. The entry for such exportation shall be in triplicate, and shall contain the name of the person applying to export, d if t nF e °d tat spWte the name of the distiller, the name of the district in upon which, tax which the spirits were^rUstJlled, the name of the vessel by has been pai ' r Digitized by Microsoft® J 218 DISTILLED SPIRITS. which, and the name of the port to which, they are to be exported; and the form of the entry shall be as follows: Export entry of distilled spirits entitled to drawback. Entry of spirits distilled by , in district, State of , to be exported by , in the , whereof is master, bound to . And the entry shall specify the whole number of casks or packages, the marks and serial numbers thereon, the quality or kind of spirits as known in commerce, the number of gauge or wine gallons and of proof -gallons; and the amount of the tax on such spirits shall be verified by the oath of the owner of the spirits, arid that the tax has been paid thereon, and that they are truly intended to be exported to the port of — , and not to be relanded within the limits of the United States. One bill of lading, duly signed by the master of the vessel, shall be deposited with said collector, to be filed at his office with the entry retained by him. One of said entries shall be, when the shipment is completed, trans- mitted to the Secretary of the Treasury, to be recorded and filed in his office. The lading on board said vessel shall be only after the receipt of an order or permit signed by the collector of customs and directed to a customs gauger, and after each cask or package shall have been distinctly marked or branded by said gauger as follows: "For export from U. S. A.," and the tax-paid stamps thereon obliterated. The casks or packages shall be inspected and gauged alongside of or on the vessel by the gauger designated by said collector, under such rules and regulations as the Secretary of the Treas- ury may prescribe; and on application of the said col- lector it shall be the duty of the surveyor of the port to designate and direct one of the custom-house inspectors to superintend such shipment. And the gauger aforesaid shall make a full return of such inspection and gauging in such form as may be prescribed by the Secretary of the Treasury, showing by whom each cask of such spirits was distilled, the serial number of the cask, and of the tax-paid stamp attached thereto, the proof and quantity of such spirits as per the original gauge-mark on each cask, and the quantity in proof and wine gallons as per the gauge then made by him. And said gauger shall certify on such return that the shipment has been made, in his presence, on board the vessel named in the entry for export, which return shall be indorsed by said custom- house inspector certifying that the casks or packages have been shipped under his supervision on board said vessel, and the tax-paid stamps obliterated; and the said inspector shall make a similar certificate to the surveyor of the port, indorsed on or to be attached to the entry in possession of the custom-house. Digitized by Microsoft® DISTILLED SPIRITS. 219 A drawback shall be allowed upon distilled spirits on Drawback, which the tax has been paid and exported to foreign coun- tries, under the provisions of this act, when exported as herein provided for. The drawback allowed shall include the taxes levied and paid upon the distilled spirits ex- f)orted, at the rate of ninety cents per proof-gallon, as per ast gauge of said spirits prior to exportation, and shall be due and payable only after the proper entries have been made and filed, and all other conditions complied with as hereinbefore required, and on filing with the Secretary of the Treasury the proper claim, accompanied by the certifi- cate of the collector of customs at the port of entry where the spirits are entered for export, that such spirits have been received into his custody and the tax-paid stamps thereon obliterated; and the Secretary of the Treasury shall prescribe such rules and regulations in relation thereto as may be necessary to secure the Treasury of the United States against frauds: Provided, That the drawback on spirits distilled prior to August one, eighteen hundred and seventy-two, shall not exceed sixty cents per proof-gallon. For penalty imposed for fraudulently claiming drawback Bee section 3330, Revised Statutes. One of the changes in section 3329 made by section 10, act of May 28, 1880, was in these words: "That section thirty-three hundred, and twenty-nine of the Revised Statutes of the United States be amended by striking out after the word 'exported, ' in the fifty -sixth line, the words 'at the rate of seventy cents per proof-gallon,' and inserting in lieu thereof the word 'ninety.'" It was intended by this amendment, as construed by this office, simply to strike out "seventy" and insert "ninety," and is printed as intended. In the absence of any provision of law for the allowance of drawback of tax at the rate imposed by section 48, act of August 28, 1894, no greater allowance than here authorized can be made. The allowance of drawback is limited to 90 cents per gallon, owing to the failure of Congress to amend this section when the rate of tax was increased to $1.10 per gallon. Drawback to be computed on prooz-gallons in all cases, not- withstanding the fact that tax is levied and paid on the wine- gallon when below proof. (Decision of Secretary of the Treasury May 19, 1884, case of Lilienthal & Co., 30 Int. Rev. Rec, 157.) Removal of spirits from distiller's original casks or packages to other packages prior to exportation, even if under supervision of customs officers, vitiates claim for drawback. (Decision of Secretary of the Treasury June 14, 1883, case of Hayes & Poppele. See also like decision (Treasury Dept., No. 5859, Aug. 1883) aa to exported spirits returned to United States to be recasked for re-exportation; 29 Int. Rev. Rec, 308.) As the statute provides only for the exportation of spirits by vessel (see sec. 3, R. S.) no allowance of drawback can be made on spirits exported by cars or other vehicles used as a means of transportation on lana. (Decision of Secretary of the Treasury Apr. 18, 1885, case of Lilienthal & Co.) Date of exportation to be determined by date of sailing of exporting vessel. (Thompson et al., v. Peaslee, 20 How., 57.) Drawback on medicinal and toilet preparations manufactured from tax-paid alcohol, page 337. Regulation in regard to drawback of tax on distilled spirits. (Regulations No. 29 Revised.) Digitized by Microsoft® 220 DISTILLED SPIRITS. diSuFed ta ™wte Sec - 3330 t as amended by sec. 2, act of June 9, 1874 (18 withdrawn iiomStat, 64); arid sec. 11, act of May 28, 1880 (21 Stat., 145)]. ho°uses. ed ware * Distilled spirits may be withdrawn from distillery bonded warehouses, at the instance of the owner of the spirits for exportation in the original casks, or packages, without the payment of tax, under such regulations, and after makmg such entries and executing and filing with the collector of the district from which the removal is to be made such bonds and bills of lading, and giving such other additional security as may be prescribed by the Commissioner of Internal Revenue, with the approval of the Secretary of the Treasury: Provided, That bonds given under this section shall be canceled under such regulations as the Secretary of the Treasury shall pre- scribe : And provided further, That the* bonds required to be given for the exportation of distilled spirits shall be canceled upon the presentation of satisfactory proof and certificates that said distilled spirits have been landed at the port of destination named in the bill of lading, or upon satisfactory proof that after shipment the same were lost at sea without fault or neglect of the owner or shipper thereof. All distilled spirits intended for export, as aforesaid, before being removed from the distillery warehouse, shall be marked as the Commissioner of Internal Revenue may prescribe, and shall have affixed to each cask an engraved stamp indicative of such intention, to be provided and fur- nished by the several collectors as in the case of other stamps, and to be charged to them and accounted for in Export stamp, the same manner, and for the expense attending the pro- of aws to ? tea !J viding and affixing such stamps ten cents for each package June 9, 1874.)' so stamped shall be paid to the collector on making the entry for such transportation. When the owner of the spirits shall have made the proper entries, filed the bonds, and otherwise complied with all the requirements of the law and regulations as herein provided, the collector shall issue to him a permit for the removal and transportation of said spirits to the collector of the port from which the same are to be exported, accurately describing the spirits to be shipped, the amount of tax thereon, the State and district from which the same is to be shipped, the name of the distiller by whom distilled, the port to which the same are to be transported, the name of the collector of the port to whom the spirits are to be consigned, and the routes over which they are to be sent to the port of ship- ment. Such shipment shall be made over bonded routes whenever practicable. The collector of the port shall receive such spirits, and permit the exportation thereof, under the same rules and regulations as are prescribed for the exportation of spirits upon which the tax has been paid. Fraudulent And every person who fraudulently claims, or seeks, or S™ 8 for draw " obtains an allowance of drawback on any distilled spirits, or fraudulently claims any greater allowance or drawback Digitized by Microsoft® DISTILLED SPIRITS. 221 than the tax actually paid thereon, shall forfeit and pay to Penalty. the Government of the United States triple the amount wrongfully and fraudulently sought to be obtained, and shall be imprisoned not more than ten years; and every owner, agent, or master of any vessel or other person who knowingly aids or abets in the fraudulent collection or fraudulent attempts to collect any drawback Upon, or knowingly aids or permits any fraudulent change in the spirits so shipped, shall be fined not exceeding five thou- sand dollars and imprisoned not more than one year, and the ship or vessel on board of which such shipment was made or pretended to be made shall be forfeited to the United States, whether a conviction of the master or owner be had or otherwise, and proceedings may be had in admiralty by libel for such forfeiture. Every person who intentionally relands within the juris- Reiandjng spir- diction of the United States any distilled spirits which portatSn. have been shipped for exportation under the provisions of this act, or who receives such relanded distilled spirits, and every person who aids or abets in such relandmg or receiving of such spirits, shall be fined not exceeding five thousand dollars and imprisoned not more than three Penalty. years; and all distilled spirits so relanded, together with the vessel from which the same were relanded within the jurisdiction of the United States, and all boats, vehicles, horses, or other animals used in relanding and removing such distilled spirits, shall be forfeited to the United States. See notes under section 3329. Fraudulent claims for drawback. (Sec. 3443, p. 353.) The amendment by the act of June 9, 1874, reduced the ex- pense of export stamp from 25 to 10 cents. Instructions relative to removal of spirits and giving bonds within 30 days from date of regauge for exportation. (T. D. 21472, 1899.) Regulations No. 29. Concerning the transportation and ex- portation of distilled spirits in bond without payment of tax. See on this section Clay v. Swope (1889), (35 Int. Rev. Rec, 136). As to wooden packages containing metallic cans, see section 3287, as amended. Exportation and reimportation of distilled spirits. (T. D. 1458) (incorporated in Regulation No. 29 revised), Cir. No. 5, Int. Rev. No. 733, Feb. 4, 1909.) Transfer of distilled spirits to bonded manufacturing ware- house, page 336. The execution of the export bond frees the spirits for the time being from obligation to pay the tax, and from the operation of the warehousing bond. (18 Op. Atty. Gen., 92.) Sec. [3330a.] [Sec. 1, act of June 9, 1874 (18 Stat, 64), i%Mu h " as amended by sec. 10, act of Mar. 1, 1879 (20 Stat., 327).]^**™ b ^ That whenever the owner or owners of distilled spirits may be taken. shall desire to withdraw the same from any distillery bonded warehouse for exportation under existing law, such owner or owners may at their option, in lieu of exe- cuting an export bond as now provided by law, give a transportation bond with sureties satisfactory to the col- Digitized by Microsoft® 222 DISTILLED SPIRITS. lector of internal revenue, and under such rules and regu- lations as the Secretary of the Treasury may prescribe, conditioned for the due delivery thereof on board ship at a port of exportation to be named therein, and for the due performance on the part of the exporter or owner at the port of export of all the requirements in regard to notice of export, entry, and the giving of bond hereinafter specified; and in such case, on arrival of the spirits at the port of export, the exporter or .owner at that port shall immediately lectoro? art col " n °tify the collector of the port of the fact, setting forth his intention to export the same, and the name of the vessel upon which the same are to be laden, and the port to which they are intended to be exported. He shall, after the quantity of spirits has been determined by the gauger and inspector, file with the collector of the port an Export entry, export-entry verified by his oath or affirmation. He Export bond, shall also give bond to the United States, with at least two sureties, satisfactory to the collector of customs, condi- tioned that the principal named in said bond will export the spirits as specified in said entry to the port designated in said entry, or to some other port without the jurisdic- tion of the United States. And upon the lading of such spirits, the collector of the Eort, after proper bonds for the exportation of the same ave been completed by the exporter or owner at the port of shipment thereof, shall transmit to the collector of in- ternal revenue of the district from which the said spirits tfflcateiand a c u er I were withdrawn for exportation, a clearance certificate er's report. ' and a detailed report of the gauger, which report shall show the capacity of each cask in wine-gallons, and the contents thereof in wine-gallons, proof-gallons, and tax- able gallons. Upon receipt of the certificate and report, and upon payment of tax on deficiency, if any, the col- lector of internal revenue shall cancel the transportation transportation bond. The bond required to be given for the landing at bond. a foreign port of distilled spirits shall be canceled upon the presentation of satisfactory proof and certificates that said expo?tbond° n of distilled spirits have been landed at the port of destina- tion named in the bill of lading or any other port without the jurisdiction of the United States or upon satisfactory proof that after shipment the same were lost at sea with- change of ou t fault or neglect of the owner or shipper thereof; and whenever a distiller of spirits in hond shall desire to change the packages in which the same is contained, in order to ex- port them, the Commissioner of Internal Revenue shall be authorized, under regulations to be prescribed by him, and upon the execution of proper bonds with sufficient sureties, to permit the withdrawal of so much spirits from bond and in new packages as the distiller shau desire to export as aforesaid. The withdrawal of spirits from a bonded warehouse for con- sumption on a foreign war vessel is not an exportation. (23 Op. Atty. Gen., 420.) Tax on deficiency in transportation on the quantity of spirits withdrawn from distillery warehouse for export may be collected Digitized by Microsoft® DISTILLED SPIRITS. 223 by distraint as well as by suit upon the transportation bond. (16 Op. Atty. Gen., 634; 25 Int. Eev. Rec, 342.) The shipment of domestic spirits to a foreign country and their subsequent return to the United States do not constitute an ex- portation and reimportation within the contemplation of law, where the spirits were shipped abroad with the intention of being returned to this country. (17 Op. Atty. Gen., 579; 29 Int. Rev. Rec, 225; 27 Op. Atty. Gen., 113.) Spirits so shipped are liable to forfeiture under the provisions of section 3299, Revised Statutes, and every person making such shipment is also liable to the penalties imposed by section 3296, Revised Statutes. _ (Cir. No. 733; T. D. 1458.) Extending bonding period in case of spirits to be exported. (18 Op. Atty. Gen., 92; 30 Int. Rev. Rec, 405.) ' Condition of export bond being broken through failure to with- draw spirits from distillery warehouse, tax should be assessed, bond may be sued, or tax may be collected by distraint. (18 Op. Atty. Gen., 246 (Garland); 31 Int. Rev. Rec, 246.) Railroad companies and stockholders in incorporated distilling companies, as sureties on transportation bonds. (29 Int. Rev. Rec, 177, 185.) Tax on loss in distillery warehouse after filing export bond and before actual withdrawal. (United States v. Thompson. 32 Int. Rev. Rec, 166; 142 U. S., 471.) Suit to restrain the collector from refusing to accept export bonds. (Miles v. Johnson, collector, 40 Int. Rev. Rec, 10.) Flagler v. Kidd, 78 Fed. Rep., 341, 343, reversing 54 Id., 367. Transportation and warehousing bonds, Forms 235 and 351, for distilled spirits, transferred to a general or special bonded warehouse, may be executed in duplicate instead of in triplicate, as heretofore required. (T. D. 1548, Oct. 5, 1909.) See notes under section 3330, Revised Statutes. [Sec. 3330&.] _ [Sec. 1, act of Dec. 20, 1879 (21 Stat, 59).]^™™° to That where spirits are withdrawn from distillery ware- during 6 transpo? houses for exportation according to law, it shall be lawful, tat1011, under such rules and regulations and limitations as shall be prescribed by the Commissioner of Internal Revenue, with the approval of the Secretary of the Treasury, for an allowance to be made for leakage or loss by any unavoid- able accident, and without any fraud or negligence of the distiller, owner, exporter, carrier, or their agents or em- ployees, occurring during transportation from a distillery warehouse to the port of export ; nor shall any assessment be collected for such loss or leakage where the same has not been paid on distilled spirits exported since the first day of May, eighteen hundred and seventy-eight. Sec. 2. That where the spirits provided for in the pre- when spirits ceding section are covered by a valid claim of insurance in are msured - excess of the market value thereof, exclusive of the tax, the tax upon such spirits shall not be remitted to the extent of such excessive insurance. See sections 3221 and 3223, Revised Statutes, as to spirits acci- dentally destroyed in warehouse. Section 15, act of May 28, 1880, page 336, as to losses during transfers from distillery warehouses to manufacturing warehouses. United States v. Mullins (119 Fed. Rep., 334). In any assessment growing out of the regauge or claim for loss an appeal lies to the Commissioner of Internal Revenue, whose decisions are final. (Corning v. United States (1899), 34 Ct. Cls., 272.) Articles shipped to the Philippine Islands. (Sec. 6, act of Mar. 8, 1902, p. 375.) Digitized by Microsoft® 224 DISTILLED SPIRITS. No provision has been made for like shipments of articles to Porto Rico free of tax or with benefit of drawback. (Sec. 5, act Aug. 5, 1909.) Articles shipped to the Canal Zone. (25 Op. Atty. Gen., 324.) Regulations relative to the exportation of distilled spirits free of tax or with benefit of drawback. (No. 29, Revised.) Release of dis- Sec. 3331. No distillery nor distilling-apparatus seized judgment," r in for any violation of law shall be released to the claimant or what cases. £ an y intervening party before judgment, except in case of a distillery for which bond has been given and which has a registered producing capacity of one hundred and fifty proof gallons or more per day, on showing, by suffi- cient affidavits, that there are hogs or other live stock, not less than 50 head in number, depending for their feed on the products of said distillery, which would suffer injury if the business of such distillery is stopped. Such distillery, in that case, may be released to the claimant, or to any other intervening party, at the discretion of the court, on a bond to be given and approved in open court, with two or more sureties, for the full appraised value of all the property seized, to be ascertained by three com- petent appraisers designated and appointed by the court. Whisky seized for forfeiture and released on bond. (United States v. 18 Barrels High Wines; 25 Fed. Cas. (No, 15033), 985; 8 Blatch., 475.) Distilling apparatus seized for forfeiture, and application made for its release on bond. (United States v. 2 Tons of Coal; 28 Fed. Cas., 320; 5 Blatch., 386; United States v. Distillery, etc., of J. C. McCoy et al.; (25 Fed. Cas., 864; 21 Int. Rev. Rec, 165.) Nature of bond. (U. S. v. Bergenthal, 29 Fed. Rep., 444.) Sec. 3332, [as amended by sec. 5, act of Mar. 1, 1879 stuis, etc., to be (20 Stat., 327).] When a judgment of forfeiture, in any ta1n r cases. m ° er " case or seizure, is recovered against any distillery used or fit for use in the production of distilled spirits, because no bond has been given, or against any distillery used or fit for use in the production of spirits, having a reg- istered producing capacity of less than one hundred and fifty gallons a day, for any violation of law, of whatever nature, every still, doubler, worm, worm-tub, mash-tub, and fermenting-tub therein shall be so destroyed as to prevent the use of the same or of any part thereof for the purpose of distilling; and the materials shall be sold as in case of other forfeited property. And in case of seizure of a still, doubler, worm, worm- tub, mash-tub, fermenting-tub, or other distilling-appa- ratus, having a less producing capacity than one hundred and fifty gallons per day, for any offense involving for- feiture of the same, where said apparatus shall be of less than five hundred dollars' value, and where it shall be impracticable to remove the same to a place of safe storage from the place where seized, the seizing officer is author- ized to destroy the same only so far as to prevent the use thereof, or any part thereof, for the purpose of distilling: Provided, That such destruction shall be in the presence of at least one credible witness, and that such witness shall unite with the said officer in a duly sworn report Digitized by Microsoft® DISTILLED SPIRITS. 225 of said seizure and destruction, to be made to the Com- missioner of Internal Revenue, in which report they shall set forth the grounds of the claim of forfeiture, the reasons for such seizure and destruction, their estimate of the fair cash value of the apparatus destroyed, and also of the materials remaining after such destruction, and a statement that, from facts within their own knowledge, they have no doubt whatever that said distilling appara- tus was set up for use and not registered, or had been used in the unlawful distillation of spirits, and that it was impracticable to remove the same to a place of safe storage. Within one year after such destruction the owner of the owner may be apparatus so destroyed may make application to the Sec- certain cases on retary of the Treasury through the Commissioner of gj*^ a ^ witl1 " Internal Revenue, for reimbursement of the value of the same; and unless it shall be made to appear to the satis- faction of the Secretary and the Commissioner that said apparatus had been used in the unlawful distillation of spirits, the Secretary shall make an allowance to said owner, not exceeding the value of said apparatus, less the value of said materials as estimated in said report; and if the claimant shall thereupon satisfy said Secretary and Commissioner that said unlawful use of the appa- ratus had been without his consent or knowledge, he shall still be entitled to such compensation, but not otherwise. And in case of a wrongful seizure and destruc- Wrongful sdz- ,• » , j ,1 /. ° • • • ,, ures; officer lia- tion or property under the foregoing provisions, tnebie. owner thereof shall have right of action on the official bond of the officer who occasioned the destruction for all damages caused thereby. The words "judgment of forfeiture" include cases of forfeit- ure under section 3460. (33 Int. Rev. Rec, 397.) State of North Carolina v. Thos. H. Vanderford. Indictment for a wanton and willful injury to personal property. (34 Int. Rev. Rec, 190.) Sec. 3333. Whenever seizure is made of any distilled jq,," 1 ^ 61 , of spirits found elsewhere than in a distillery or distillery ant warehouse, or other warehouse for distilled spirits author- ized by law, or than in the store or place of business of a rectifier, or of a wholesale liqour-dealer, or than in transit from any one of said places; or of any distilled spirits found in any one of the places aforesaid, or in transit therefrom, which have not been received into or sent out therefrom in conformity to law, or in regard to which any of the entries required by law to be made in the books of the owner of such spirits, or of the store-keeper, wholesale dealer, or rectifier, have not been made at the time or in the manner required, or in respect to which the owner or person having possession, control, or charge of said spirits, has omitted to do any act required to be done, or has done or committed any act prohibited in regard to said spirits, the burden of proof shall be upon the claimant of said spirits to show that no fraud has been 72170°— il 15 Digitized by Microsoft® 226 DISTILLED SPIRITS. committed, and that all the requirements of the law in relation to the payment of the tax have been complied with. Where evidence is introduced tending to show that true entries and returns relative to the spirits have not been made, the burden is thrown upon the claimant to prove regularity. (U. S. v. 18 Bbls. of High Wines, 8 Blatchf., 475; Fed. Cas. No. 15033. 199 Bbls. of Whiskey v. United States, 94 U. S., 86. U. S. v. 8 Casks of Whisky, 7 Int. Rev. Rec, 4; Fed. Cas. No. 15030. U. S. v. 508 Bbls. of Spirits, 5 Blatchf, 407, Fed. Cas. No. 15113. United States v. Six Barrels Distilled Spirits, 6 Int. Rev. Rec, 187; Fed. Cas. No. 15114. U. S. v. Sykes, 58 Fed. Rep., 1000. Twenty-Six Barrels and Seventeen Tierces of Distilled Spirits, Fed. Cas. No. 14283.) This provision requiring affirmative proof by claimant is not unconstitutional. (XL S. v. 78 Bbls., 7 Int. Rev. Rec. 4; Fed. Cas. No. 16257.) Sec. 3334, [as amended by sec. 5, act Mar. 1, 1879 (20 syrtesoiav^Stat., 327).] All distilled spirits forfeited to the United es e s rj subjec?°to States, sold by order of court, or under process of dis- tax - traint, shall be sold subject to tax; and the purchaser shall immediately, and before he takes possession of said spirits, pay the tax thereon. And any distilled spirits heretofore condemned, and now in the possession of the United States, shall be sold as herein provided. If any tax-paid stamps are affixed to any cask or package so condemned, such stamps shall be obliterated and de- stroyed by the collector or marshal after forfeiture, and before such sale. h rov,1 it3wiu Provided: That in all cases wherein it shall appear that not sen for price any distilled spirits offered for sale on distraint for taxes, equal to tax. w here the taxes on such spirits have not been paid, or offered for sale for the benefit of the United States as forfeited spirits under order of court or under proceeding pursuant to section thirty-four hundred and sixty of the Revised Statutes, will not, by reason of such spirits being below proof, being [bring] a price equal to the taxes due and payable thereon, but will bring a price equal to, or greater than, the tax on said spirits, computed only upon the proof-gallons contained in the pack- ages, without regard to the greater number of wine-gallons contained therein, then, and in such case, upon sale being so made, tax-paid stamps to the amount required to stamp such spirits as if the tax thereon were only on the proof-gallons thereof may, under such rules and regulations as the Com- missioner of Internal Revenue shall prescribe, be used by the collector making such sale, or furnished by a collector to a United States marshal, or to any other government officer making such sale for the benefit of the United States, without making payment for said stamps so used or delivered. Any collector using or furnishing stamps in manner aforesaid, on presenting vouchers satisfactory to the Commissioner of Internal Revenue, shall be allowed credit for the same in settling his stamp account with the department. In such cases, the officer selling the distilled spirits shall affix, or cause to be affixed, to the same the tax-paid stamps so provided, and shall write across theface. of suchstamps the true number of DISTILLED SPIRITS. 227 proof and wine gallons contained in the package, the amount of tax actually paid thereon, and also the words "Affixed under provisions of act of , 1879" (inserting the date of the approval of this act) . In case spirits which have once paid the tax are seized and sold under process of distraint for the collection of an assessed tax they are not required to be sold subject to tax. Foreign distilled Bpirits not liable to tax imposed under the internal-revenue laws when forfeited under the provisions of the customs laws. (24 Int. Rev. Rec, 393.) As to destruction of spirits which will not sell for a price equal to tax on the proof gallons see last provision of section 3450, p. 357. IMPORTED LIQUOR STAMPS, ETC. _ [Sec. 11.] [Act of Mar. 1, 1879 (20 Stat, 327).] That ah J^f*^ distilled spirits, wines, and malt liquors, imported in pipes, wines, and mail hogsheads, tierces, barrels, casks, or other similar pack- stamped, etc" be ages, shall be first placed in public store or bonded ware- house, and shall not be removed therefrom until the same shall have been inspected, marked, and branded by a United States customs-gauger, and a stamp affixed to each package, indicating the date and particulars of such inspection; and the Secretary of the Treasury is hereby authorized to prescribe the form of, and provide, the requisite stamps, and to make all regulations which he may deem necessary and proper for carrying the foregoing requirements into effect. Any pipe, hogshead, tierce, barrel, cask, or other pack- Forfeiture. age withdrawn from public store or bonded warehouse after the thirtieth day of June, eighteen hundred and seventy-nine, purporting to contain imported liquor, found without having thereon the stamp hereby required, shall be, with its contents, forfeited to the United States; special stamp . . WI16I1 T)UCK!l£r6S of and whenever any cask or package of imported distilled imported spirits spirits of not less than five wine-gallons is filled for ship- praises 1 °of th t ment, sale, or delivery on the premises of any wholesale J^J^ 8 ale Uquor liquor-dealer, the same shall be stamped with a special stamp for imported spirits, under such rules and regula- tions as the Commissioner of Internal Revenue has pre- scribed, or may hereafter prescribe, in the case of domes- tic distilled spirits. Reimportation of articles exported (p. 337). Stamps for reimported domestic spirits. (27 Int. Rev. Rec, 333.) As to imported liquors. (See tariff act of Aug. 5, 1909; par. 300.) [Sec. 12.] [Act of Mar. 1, 1879 (20 Stat., 327), as amend- ™7, p«J: ed by sec. 12, act of May 28, 1880 (21 Stat, 145).] ThatnWs ar e P emp. every person who empties or draws off, or causes to beefl^ed ainpst0 e emptied or drawn off, the contents of any package of imported liquors stamped as above required, shall, at the time of such emptying, efface, obliterate, and destroj r the stamp thereon, and a^j^^gOjtWy^a^k^^brands which 228 DISTILLED SPIRITS. shall have been placed thereon in accordance with the . law or regulations concerning imported liquors. * * * effactrcstunps ' Every cask or other package from which the stamp for imported liquors required by this act to be placed thereon shall not be effaced, obliterated, or destroyed, on empty- ing such package, shall be forfeited, and the same may be seized by any officer of internal revenue, wherever found; and all the provisions and penalties of section thirty-three sec. 3324. hundred and twenty-four of the Revised Statutes of the United States, relating to empty casks or packages from which the marks, brands, or stamps have not been effaced or obliterated, and relating to the removal of stamps from packages, and to having in possession any stamps so removed, shall apply to the stamps for imported spirits herein provided for, and to the casks or other packages on which such stamps shall have been used. United States v. Morris Spiegel (116 U. S., 270; 32 Int. Rev. Rec, 54). Penalty for [Sec. 13.] [Act of Mar. 1, 1879, as amended ly sec. IS, Ssing ng enV°yac!S of May 28, 1880 (21 Stat, 145).] That if any person prated ^stam™^ shall purchase or sell, with the imported-liquor stamp marks, etc. herein required remaining thereon, or any of the marks or brands which shall have been placed thereon in accordance with the laws or regulations concerning imported liquors remaining thereon, any cask or other package, after the same has been once used to contain imported liquors and has been emptied; or if any person shall use or have in possession such cask or package, with any imitation of such marks or brands, for the purpose of placing domestic distilled spirits therein for sale, * * * every such cask or package, with its contents, if any, shall be for- feited to the United States. Penalty. ^d every such person who shall violate any of the pro- visions of this section shall be liable to a penalty of two hundred dollars for every such cask or package so pur- chased, sold, manufactured, used, or had in possession. Grape hrandy used for the fortification of wine. wine spirits Sec. 42. [Act ofOct. 1, 1890 {26 Stat, 621).} That any mD.y D6 US6Q 1TG6 -• ,-. *' . • 1 * l i" i »n of tax. producer or pure sweet wines, who is also a distiller, authorized to separate from fermented grape-juice, under internal-revenue laws, wine spirits, may use, free of tax, in the preparation of siich sweet wines, under such regula- tions and after the filing of such notices and bonds, together with the keeping of such records and the rendi- tion of such reports as to materials and products, as the Commissioner of Internal Revenue with the approval of the Secretary of the Treasury may prescribe, so much of such wine spirits so separated by him as may be necessary to fortify the wine for the preservation of the saccharine matter contained therein: Limitations. Provided, That the wine spirits so used free of tax shall not be in excess of the amount required to introduce into Digitized by Microsoft® DISTILLLED SPIRITS. 229 such sweet wines in (an) alcoholic strength equal to four- teen per centum of the volume of such wines after such use: Provided further, That such wine containing after such fortification more than twenty-four per centum of alcohol, Bt £*£g h ° ' ' ° as defined by section thirty-two hundred and forty-nine of the Revised Statutes, shall be forfeited to the United Forfeiture. States : Provided further, That such use of wine spirits free from tax shall be confined to the months of August, September, c t ° nIlne t ? t0 October, November, December, January, February, "^ " March, and April of each year. The Commissioner of Internal Revenue, in determining the liability of any distiller of fermented grape-juice to assessment under section thirty-three hundred and nine of un ^| r se s s e s ™?°^ the Revised Statutes, is authorized to allow such distiller 3309, credits. credit in his computation for the wine spirits used by him in preparing sweet wine under the provisions of this sec- tion. Sec. 43. [Act of Oct. 1, 1890 (26 Stat, 567) as amended by sec. 68, act of Aug. 28, 189 J,. (28 Stat, 509), and act of June 7, 1906 (84 Stat, 215).] That the wine spirits fln y d taespiritade - mentioned in section forty-two of this Act is the product resulting from the distillation of fermented grape juice, to which water may have been added prior to, during, or after fermentation, for the sole purpose of facilitating the fermentation and economical distillation thereof, and shall be held to include the product from grapes or their residues, commonly known as grape brandy; and the pure sweet wine, which may be fortified free of tax, as provided in said section, is fermented grape juice only, and shall contain no other substance whatever introduced before, at the time of, or after fermentation, except as herein expressly provided; and such sweet wine shall contain not less than four per centum of saccharine matter, which saccharine strength may be determined by testing with Balling's saccharometer or must scale, such sweet wine, after the evaporation of the spirits contained therein, and restoving the sample tested to original volume by addition of water: Provided, That the addition of pure boiled or condensed grape must or pure crystallized cane or beet sugar or pure anhydrous sugar to the pure grape juice aforesaid, or the fermented product of such grape juice prior to the fortification provided by this Act for the sole purpose of perfecting sweet wines according to commercial standard, or the addition of water in such quantities only as may be whenwater necessary in the mechanical operation grape conveyors,™ 7 euse ' crushers, and pipes leading to fermenting tanks, shall not be excluded by the definition of pure sweet wine afore- said: Provided, however, That the cane or beet sugar, or pure anhydrous sugar, or water, so used shall not in either case Digitized by Microsoft® 230 DISTILLED SPIRITS. be in excess of ten per centum of the weight of the wine to be fortified under this Act: And provided further, That the addition of water herein authorized shall be under such regulations and limitations as the Commissioner of Internal Revenue, with the approval of the Secretary of the Treasury, may from time to time prescribe; but in no case shall such wines to which water stren th h when ^ as oeen added be eligible for fortification under the provi- water has been sions of this Act where the same, after fermentation andbej "ore used ' fortification, have an alcoholic strength of less than five per centum of their volume. Sec. 44. That any person who shall use wine spirits, as defined by section fifty-four (forty-three) of this act, or other spirits on which the internal-revenue tax has not been paid, otherwise than within the limitations set forth in section fifty-five (forty-two) of this act, and in accord- ance with the regulations made pursuant to this act, shall iawM a useofw?oe De liable to a penalty of double the amount of the tax on spirits. the wine spirits or other spirits so unlawfully used. Whenever it is impracticable in any case to ascertain the quantity of wine spirits or other spirits that have been used in violation of this act in mixtures with any wines, all alcohol contained in such unlawful mixtures of wine with wine spirits or other spirits in excess of ten per centum shall be held to be unlawfully used: uiega^ e addld te Provided, however, That if water has been added to such unlawful mixtures, either before, at the time of, or after such unlawful use of wine-spirits or other spirits, all the alcohol contained therein shall be considered to have been Alcohol by vol- unlawfully used. In reference to alcoholic strength of ume. not by . V . - . jn . . . ,, . & , weight. wines and mixtures of wines with spirits m this act the measurement is intended to be according to volume and not according to weight. Sec. 45. That under such regulations and official super- vision, and upon the execution of such entries and the giv- ing of such bonds, bills of lading, and other security as the Commissioner of Internal Revenue, with the approval of the Secretary of the Treasury, shall prescribe, any pro- of W mirita r from - 11 cer °f P ure sweet wines as defined by this act may with- warehouse free draw wine spirits from any special bonded warehouse free '"" i: " of tax, in original packages, in any quantity not less than eighty wine-gallons, and may use so much of the same as may be required by him, under such regulations, and after the filing of such notices and bonds, and the keeping of such records, and the rendition of such reports as to materials and products and the disposition of the same as the Commissioner of Internal Revenue with the approval of the Secretary of the Treasury shall prescribe, in fortifying the pure sweet wines made by him, and for no other pur- pose, in accordance with the limitations and provisions as to uses, amount to be used, and period for using the same set forth in section fifty-three (forty-two) of this act ; and Digitized by Microsoft® DISTILLED SPIRITS. 231 the Commissioner of Internal Revenue, with the approval may™rautre n use of the Secretary of the Treasury, is authorized, whenever to be at a certain he shall deem it to be necessary for the prevention of Sue?™ et™™ db " violations of this law, to prescribe that wine-spirits with- drawn under this section shall not be used to fortify wines except at a certain distance prescribed by him from any distillery,' rectifying-house, winery, or other establish- ment used for producing or storing distilled spirits, or for making or storing wines other than wines which are so fortified, and that in the building in which such fortifica- tion of wines is practiced no wines or spirits other than those permitted by his regulation shall be stored. The use of wine-spirits free of tax for the fortification of b ^ { taxT'be sweet wines under this act shall be begun and completed at vineyard, ™- at the vineyard of the wine-grower where the grapes are of e offie S er per crushed and the grape juice is expressed and fermented, such use to be under the immediate supervision of an offi- cer of internal revenue, who shall make returns describing the kinds and quantities of wine so fortified, and shall affix such stamps and seals to the packages containing such wines as may be prescribed by the Commissioner of Inter- nal Revenue, with the approval of the Secretary of the Treasury; and the Commissioner of Internal Revenue shall provide by regulations the time within which wines Regulations, so fortified with the wine spirits so withdrawn may be subject to inspection, and for final accounting for the use of such wine-spirits and for rewarehousing or for pay- ment of the tax on any portion of such wine-spirits which remain not used in fortifying pure sweet wines. Circular 637, T. D. 603; Circular 730, T. D. 1436. Sec. 46._ That wine-spirits may be withdrawn from withdrawal special bonded warehouses at the instance of any personify ^w'ines desiring to use the same to fortify any wines, in accord- }£ 1 t r e t nded for ex ' ance with commercial demands of foreign markets, when such wines are intended for exportation, without the pay- ment of tax on the amount of wine spirits used in such fortification, under such regulations, and after making such entries, and executing and filing with the collector of the district from which the removal is to be made such bonds and bills of lading, and giving such other addi- tional security to prevent the use of such wine-spirits free of tax otherwise than in the fortification of wine intended for exportation, and for the due exportation of the wine so fortified, as may be prescribed by the Commissioner of Internal Revenue, with the approval of the Secretary of the Treasury; and all of the provisions of law governing the exportation of distilled spirits free of tax, so far as applicable, shall apply to the withdrawal and use of wine- spirits and the exportation of the same in accordance with this section ; • and the Commissioner of Internal Revenue is authorized, subject to approval by the Secretary of the Treasury, to prescribe that wine spirits intended for the Digitized by Microsoft® 232 DISTILLED SPIRITS. fortification of wines under this section shall not be intro- duced into such wines except under the immediate super- vision of an officer of internal revenue, who shall make returns describing the kinds and quantities of wine so for- tified, and shall affix such stamps and seals to the pack- ages containing such wines as may be prescribed by the Commissioner of Internal Revenue, with the approval of the Secretary of the Treasury. Whenever such wine- spirits are withdrawn as provided herein for the fortifica- tion of wines intended for exportation by sea they shall be introduced into such wines only after removal from stor- age and arrival alongside of the vessel which is to trans- port the same ; and whenever transportation of such wines is to be effected by land carriage the Commissioner of Internal Kevenue, with the approval of the Secretary of the Treasury, shall prescribe such regulations as to sealing packages and vehicles containing the same, and as to the supervision of transportation from the point of departure, which point shall be determined as the place where such wine-spirits may be introduced into such wines to the point of destination as may be necessary to insure the due exportation of such fortified wines. As to bonds, see Section 3, Act of June 7, 1906, p. 233. Provisions of Regulations 29, governing the exportation of distilled spirits, extended to withdrawal of brandy for use in fortifying wines for export, and to the exportation of such for- tified wines. (T. D. 1663.) Re-importa- Sec. 47. That all provisions of law relating to the re-im- tion " portation of any goods of domestic growth or manufacture which were originally liable to an internal-revenue tax shall be, as far as applicable, enforced against any domes- tic wines sought to be re-imported; and duty shall be levied and collected upon the same when re-imported, as an original importation. Penalty for Sec. 48. That any person using wine spirits or other }ofaf in piri wines s pi r its which have not been tax-paid in fortifying wine contrary to law. otherwise than as provided for in this act, shall be guilty of a misdemeanor, and shall, on conviction thereof, be punished for each offense by a fine of not more than two thousand dollars, and for every offense other than the first also by imprisonment for not more than one year. Sec. 49. [Act Oct. 1, 1890 (26 Stat, 667), as amended ly Sec. 2, Act June 7, 1906 (34 Stat., 215).] That wine Recovery of spirits used in fortifying wines may be recovered from fortifying wine. m su °h wine onlv on the premises of a duly authorized grape-brandy distiller; and for the purpose of such recov- ery wine so fortified may be received as material on the t)remises of such a distiller, on a special permit of the col- ector of internal revenue in whose district the distillery is located; and the distiller will be held to pay the tax on a product from such wines as will include both the alco- holic strength therein produced by the fermentation of the grape juice and that obtained from the added distilled § 3309. spirits, subject, however, to the provisions of section thirty- Digitized by Microsoft® DISTILLED SPIRITS. 233 three hundred and nine of the Revised Statutes of the United States, as amended by section six of the Act entitled "An Act to amend the laws relating to internal revenue," approved March first, eighteen hundred and seventy-nine; and such spirits so recovered may be used oy such distiller to fortify wines as authorized by section forty two of the aforesaid Act, approved October first, eighteen hundred and ninety. [An act to amend existing laws relating to the fortification of pure sweet wines, ap- proved June 7, 1906 (34 Stat., 215).] Sec. 3. That the Commissioner of Internal Revenue is . Gaugertobeas- hereby authorized to assign at each winery where wines winery. a are to be fortified such number of gaugers or storekeeper- gaugers, in the capacity of gaugers, for special duties as may be necessary for the proper supervision of the making and fortifying of such wines, and the compensation of such officers shall not exceed five dollars per diem while so assigned, together with their actual and necessary traveling expenses, and also a reasonable allowance for their board bills, to be fixed by the Commissioner of Internal Revenue, but not to exceed two dollars per day for said board bills; and to cover the expenses to the Government attending the making and fortification of such sweet wines there shall be levied and assessed against each maker of such wines, and collected monthly, a charge wine maker of three cents on each taxable gallon of brandy used by cents ed on th each him in the fortification of such wines during the preceding j£^ Ie u E S g d on of month. That bonds hereafter given under the provisions of the aforesaid Act of October first, eighteen hundred Bonds, and ninety, as amended, shall be conditioned for the pay- ment of the tax on all brandy removed thereunder and not used and accounted for within the time and in the manner required by law and regulations, and for the pay- ment of all charges herein imposed on the brandy so with- drawn and used; and the said bonds shall contain such other conditions as the Commissioner of Internal Revenue with the approval of the Secretary of the Treasury, may by regulation prescribe. Sec. 4. That where brandy to be used in the f ortifica- ^XaTrSved tion of wine is distilled on premises adjacent to the winery on winery prem- premises the Commissioner of Internal Revenue may, in 11568 ' his discretion, authorize the erection on either of said premises of fermenting vats for material to be used either m the manufacture of such wines or the brandy to be used in the fortification thereof; and all such materials used received on either of said premises shall be under the supervision of the officer assigned to such winery, and shall be accounted for at such times and in such manner as the Commissioner may direct. Sec. 5. That the provisions of sections thirty-two hun- ta^azafsBa?' dred and twenty-one and thirty-two hundred and twenty- three of the Revised Statutes of the United States, as amended by an Act approved March first, eighteen hun- dred and seventy-nine, are hereby extended to grape Digitized by Microsoft® 234 DISTILLED SPIRITS. etc. Penalty. Exception. brandy withdrawn for use in the fortification of sweet wines, and which, prior to such use, is accidentally de- stroyed by fire or other casualty while stored in the forti- fying room on the winery premises. Recovery of Sec. 6. That any person who by any process recovers spWtef rectifying from wines fortified under the provisions of the aforesaid Act approved October first, eighteen hundred and ninety, or amendments thereto, any brandy or wine spirits used in the manufacture or fortification of said wine, otherwise than is provided for in said Act and its amendments, or who shall rectify, mix, or compound with other distilled spirits such fortified wines or grape brandy or wine spirits unlawfully recovered therefrom, shall, on convic- tion, be punished for each such. offense by a fine of not less than two hundred dollars nor more than one thousand dollars. But the provisions of this section, and the pro- visions of section thirty-two hundred and forty-four of the Revised Statutes of the United States, as amended, re- lating to rectification, shall not be held to apply to the blending of pure sweet wines fortified under the provisions of the said Act of October first, eighteen hundred and ninety, or amendments thereto, where such wines are blended for the sole purpose of perfecting the same ac- cording to commercial standard. Regulations No. 28, revised, relative to withdrawal free of tax of spirits for fortification of pure sweet wines. Sweet wines fortified with spirits free from tax can not be used by a rectifier in the production of imitation, spurious, or com- pound liquors. (T. D. 539, June 26, 1902.) Grape juice treated with the fumes of sulphur not eligible for fortification as pure sweet wine under tariff act of October 1, 1890, and amendments thereto. (T. D. 1314.) Suspension of the provision of regulations prohibiting use of fortified wines in the manufacture or preparation of patent or proprietary medicines or compounds. (T. D. 1435.) [Act of March 3, 1897 (29 Stat., 626).] AN ACT To allow the bottling of distilled spirits in bond. ■ Sec. 1. That whenever any distilled spirits deposited in bond. sp the warehouse of a distillery having a surveyed daily capacity of not less than twenty bushels of grain, which capacity or not less than twenty bushels thereof is com- monly used by the distiller, have been duly entered for withdrawal upon payment of tax, or for export in bond, and have been gauged and the required marks, brands, and tax-paid stamps or export stamps, as the case may be, have been affixed to the package or packages containing the same, the distiller or owner of said distilled spirits, if he has declared his purpose so to do in the entry for with- spirits entered drawal, which entry for bottling purposes may be made by Ssra'in^wM^ tne owner as well as the distiller, may remove such spirits house. to a separate portion of said warehouse which shall be set apart and used exclusively for that purpose, and there, under the supervision of a United States storekeeper, or storekeeper and gauger, in charge of such warehouse, may Bottling of dis- pirits Digitized by Microsoft® DISTILLED SPIEITS. 235 immediately draw off such spirits, bottle, pack, and case the same : Provided, That for convenience in such process any number of packages of spirits of the same kind, differ- ing only in proof, but produced at the same distillery by the same distiller, may be mingled together in a cistern provided for that purpose, but nothing herein shall authorize or permit any mingling of different products, or of the same products of different distilling seasons, or the addition or the subtraction of any substance or material or the application of any method or process to alter or change in any way the original condition or character of the product except as herein authorized; nor shall there be at the same time in the bottling room of any bonded warehouse any spirits entered for withdrawal upon pay- ment of the tax and any spirits entered for export: Provided also, That under such regulations and limitations Regulations. as the Commissioner of Internal Revenue, with the approval of the Secretary of the Treasury, may prescribe, the provisions of this Act may be made to apply to the bottling and casing of fruit brandy in special bonded warehouses. Every bottle when filled shall have affixed thereto and^^P' how passing over the mouth of the same such suitable adhesive engraved strip stamp as may be prescribed, as hereinafter Erovided, and shall be packed into cases to contain six ottles or multiples thereof, and in the aggregate not less than two nor more than five gallons in each case, which shall be immediately removed from the distillery premises. Each of such cases shall have affixed thereto a stamp et amplffixed ave denoting the number of gallons therein contained, such stamp to be affixed to the case before its removal from the warehouse, and such stamps shall have a cash value of ten cents each, and shall be charged at that rate to the collectors to whom issued, and shall be paid for at that rate by the distiller or owner using the same. And there shall be plainly burned on the side of each Branding of case, to be known as the Government side, the proof of the spirits, the registered distillery number, the State and district in which the distillery is located, the real name of the actual bona fide distiller, the year and distilling season, whether spring or fall, of original inspection or entry into bond, and the date of bottling, and the same wording shall be placed upon the adhesive engraved strip stamp over the mouth of the bottle. It being understood that the spring season shall include the months from January to July, and the fall season the months from July to January. And no trade marks shall be put upon any bottle unless Trade marks. the real name of the actual bona fide distiller shall also be placed conspicuously on said bottle. Combination cases of spirits bottled in bond. (T. D. 888.) Case stamps for distilled spirits bottled for export. (Cir. No. 6; Int. Rev. Cir. No. 489, Jan. 6, 1898; T. D. 18763.) Digitized by Microsoft® 236 DISTILLED SPIRITS. Regulations. Change of date on and use of case stamps printed for bottling distilled spirits in fall of 1897. (Cir. No. 10; Int. Rev. 490, Jan. 12, 1898; T. D. 18802; Art. 21, Reg. No. 23.) Case stamps. (Cir. No. 55; Int. Rev. 492, Mar. 29, 1898; T. D. 19155; Cir. No. 552; T. D. 32, 1900.) What the Government stamp on bottled-in-bond goods guaran- tees as to purity or quality of the spirits. The Government assumes no responsibility with respect to claims of dealers in advertising spirits. (T. D. 1299.) Using undersized bottles or underfilling bottles when bottling spirits in bond prohibited. Suspension of issue of stamps on account of persistent violation of requirements, and forfeiture of goods in certain cases. (Circular letter, Oct. 6, 1897; 43 Int. Rev. Rec, 374.) Bottling of spirits in bond. No foreign materials to be added. (T. D. 1433.) Bottling warehouses for use of different distilleries. (T. D. 531; Cir. No. 631; T. D. 555; Regulations No. 23, rev., p. 12.) Cases of spirits bottled in bond should be entered on Form 52. (T. D. 808; Regulations No. 23, rev., p. 23.) Testing bottles for containing bottled-in-bond spirits. (Cir. No. 681; T. D. 991 and T. D. 1063; Regulations No. 23, rev., p. 18.) Stamps and brands on cases of bottled-in-bond whisky should be kept intact. (T. D. 1076.) Discontinuance of serial numbers on case and strip stamps. (T. D. 1573.) Caution notice on spirits bottled in bond. (T. D. 1491.) Tax will be assessed and collected on gains in bottling in excess of one-half gallon per package, but in ascertaining the quantity to be assessed credit will be allowed for the excessive loss paid at the time of withdrawal. (Letter to Collector Heiner, Oct. 25, 1910.) Bottled-in-bond whisky. Where proof is less than 99 per cent. (T. D. 943.) Sec. 2. That the Commissioner of Internal Revenue, with the approval of the Secretary of the Treasury, may, by regulations, prescribe the mode of separating and securing the additional warehouse, or portion of the ware- house hereinbefore required to be set apart, the manner in which the business of bottling spirits in bond shall be carried on, the notices, bonds, and returns to be given and accounts and records to be kept by the persons con- inapection of ducting such business, the mode and time of inspection of spirits ' such spirits, the accounts and records to be kept and returns made by the Government officers, and all such other matters and things, as in his discretion, he may deem requisite for a secure and orderly supervision of said business; and he may also, with the approval of the Secretary of the Treasury, prescribe and issue the stamps required. The distiller may, in the presence of the United States storekeeper or storekeeper and gauger, remove by strain- ing through cloth, felt, or other like material any charcoal, sediment, or other like substance found therein, and may spirits reduced whenever necessary reduce such spirits as are withdrawn by adding water. ^ QJ , bottling purposes by the addition of pure water only to one hundred per centum proof for spirits for domestic use, or to not less than eighty per centum proof for spirits for export purposes, under such rules and regulations as may be prescribed by the Commissioner of Internal Revenue Digitized by Microsoft® DISTILLED SPIBITS. 237 with the approral of the Secretary of the Treasury; and no spirits shall be withdrawn for bottling under this Act until after the period shall have expired within which a distiller may request a regauge of distilled spirits as pro- vided in section fifty of the Act of August twenty-eighth, eighteen hundred and ninety-four. No spirits to be withdrawn for bottling until the expiration of four years from the date of deposit in warehouse. (Art. 14, Regu- lation No. 23.) A filtering apparatus, packed with cloth, felt, or other like material, such as cotton fiber or wood or paper pulp, may be used for straining spirits to be bottled in bond. Permission to use such filters will be granted only upon the express condition that the packing material is one mentioned in the statute, or similar thereto, and that in no case shall charcoal, boneblack, etc., be used, as such materials might effect changes in the spirits other than the mechanical removal of matter in suspension. (T. D. 21106, 1899; Regulations No. 23, rev., p. 11.) The distiller is responsible for the correctness of the proof. (T. D. 930; T. D. 936.) Sec. 3. That all distilled spirits intended for export spirits for ex- under the provisions of this Act shall be inspected, port ' bottled, cased, weighed, marked, labeled, stamped, or sealed in such manner and at such time as the Commis- sioner of Internal Revenue may prescribe; and the said Commissioner, with the approval of the Secretary of the Treasury, may provide such regulations for the trans- portation, entry, reinspection, and lading of such spirits for export as may from time to time be deemed necessary; and all provisions of existing law relating to the exporta- m f^ tin f ica kte 9 tion of distilled spirits in bond, so far as applicable, and all penalties therein imposed, are hereby extended and made applicable to distilled spirits bottled for export under the provisions of this Act, but no drawback shall No drawback. be allowed or paid upon any spirits bottled under this Act. Reimportation of distilled spirits bottled in bond below proof for export. (T. D. 1006.) Bottled spirits for export. (Cir. 719; T. D. 1338.) Sec. 4. That where, upon inspection at the bonded in case of loss warehouse in which the spirits are bottled as aforesaid, or e ciency - the quantity so bottled and cased for export is less than the quantity actually contained in the distiller's original casks or packages at the time of withdrawal for that pur- Eose the tax on the loss or deficiency so ascertained shall e paid before the removal of the spirits from such ware- house, and the tax so paid shall be receipted and accounted for by the collector in such manner as the Commissioner of Internal Revenue may prescribe. Sec. 5. That where, upon reinspection at the port of Reinspection. entry, any case containing or purporting to contain dis- tilled spirits for export is found to have been opened or tampered with, or where any mark, brand, stamp, label, or seal placed thereon or upon any bottle contained therein has been removed, changed, or willfully defaced, or where upon such reinspection any loss or discrepancy is found to exist as to the contents of any case so entered Digitized by Microsoft® 238 DISTILLED SPIRITS. for export, the tax on the spirits contained in each such case at the time of its removal from warehouse shall be collected and paid. Penalties. g EC _ g That any person who shall reuse any stamp pro- vided under this Act after the same shall have been once affixed to a bottle as provided herein, or who shall reuse a bottle for the purpose of containing distilled spirits which has once been filled and stamped under the provisions of this Act without removing and destroying the stamp so previously affixed to such bottle, or who shall, contrary to the provisions of this Act or of the regulations issued thereunder remove or cause to be removed from any bonded warehouse any distilled spirits inspected or bot- tled under the provisions of this Act, or who shall bottle or case any such spirits in violation of this Act or of any regulation issued thereunder, or who shall, during the transportation and before the exportation of any such spirits, open or cause to be opened any case or bottle con- taining such spirits, or who shall willfully remove, change, or deface any stamp, brand, label, or seal affixed to any such case or to any bottle contained therein, shaU for each such offense be fined not less than one hundred nor more than one thousand dollars, and be imprisoned not more than two years, in the discretion of the court, and such spirts shall be forfeited to the United States. Refilling with spirits bottles previously used for bottling spirits in bond without destroying the stamps. (Cir. No. 647, Sept. 19, 1903; T. D. 696.) Refilling bottles. Guilty intent is not an element of the of- fense. The principal is criminally liable for the acts of his agent or employee. (IT. S. v. Guthrie, 171 Fed. Rep., 528; T. D. 1520.) etc C °s U t™ps! tIns ' Sec. 7. That every person who, with intent to defraud, falsely makes, forges, alters, or counterfeits any stamp made or used under any provision of this Act, or who uses, sells, or has in his possession any such forged, altered, or counterfeited stamp, or any plate or die used or which may be used in the manufacture thereof, or who shall make, use, sell, or have in his possession any paper in imitation of the paper used in the manufacture of any stamp required by this Act, shall on conviction be pun- ished by a fine not exceeding one thousand dollars and by imprisonment at hard labor not exceeding five years. i89o ct °' Aug ' 8 ' ^ EC " ^' That nothing in this Act shall be construed to exempt spirits bottled under the provisions of this Act from the operation of chapter seven hundred and twenty- eight of the public laws of the Fifty-first Congress, ap- proved August eighth, eighteen hundred and ninety. Act of August 8, 1890 (26 Stat., 313): That all fermented, dis- tilled, or other intoxicating liquors or liquids transported into any State or Territory, or remaining therein for use, consump- tion, sale, or storage therein, shall upon arrival in such State or Territory be subject to the operation and effect of the laws of such State or Territory enacted in the exercise of its police pow- ers, to the same extent and in the same manner as though such liquids or liquors had been produced in such State or Territory, Digitized by Microsoft® DISTILLED SPIRITS. 239 and shall not be exempt therefrom by reason of being intro- duced therein in original packages or otherwise. (In re Rahrer, 140 U. S., 545; 37 Int. Rev. Rec, 230; Rhodes v. Iowa, 170 U. S., 412.) Provisions of the criminal code (act of Mar. 4, 1909) relative to distilled spirits. (See Appendix, p. 421, 422.) DENATURED ALCOHOL. [Act of June 7, 1906 (34 Stat., 217).] AN ACT For the withdrawal from bond, tax free, of domestic alcohol when rendered unfit for beverage or liquid medicinal uses by mixture with suitable denaturing materials. Sec. 1. That from and after January first, nineteen h0 ?™^ $j?£ hundred and seven, domestic alcohol of such degree of drawn tax-free for proof as may be prescribed by the Commissioner of Inter- denaturatlon - nal Revenue, and approved by the Secretary of the Treas- ury, may be withdrawn from bond without the payment of internal-revenue tax, for use in the arts and industries, and for fuel, light, and power, provided said alcohol shall have been mixed in the presence and under the direction of an authorized Government officer, after withdrawal from the distillery warehouse, with methyl alcohol or other denaturing material or materials, or admixture of the same, suitable to the use for which the alcohol is with- drawn, but which destroys its character as a beverage and renders it unfit for liquid medicinal purposes; such de 5° t 1 J r a ^ dwhere denaturing to be done upon the application of any registered distillery in denaturing bonded warehouses specially designated or set apart for denaturing purposes only, and under conditions prescribed by the Commis- sioner of Internal Revenue with the approval of the Secre- tary of the Treasury. The character and quantity of the said denaturing material* to" be material and the conditions upon which said alcohol may prescribed by be withdrawn free of tax shall be prescribed by the Com- omnussioner - missioner of Internal Revenue, who shall, with the ap- proval of the Secretary of the Treasury, make all neces- sary regulations for carrying into effect the provisions of this Act. Distillers, manufacturers, dealers and all other persons f°° ks ™ d re t j. ■ i ■ 't t1 . '. i i i -ii i r j- ords to be kept. furnishing, handling or using alcohol withdrawn from Bonds to T>e bond under the provisions of this Act shall keep such glven " books and records, execute such bonds and render such returns as the Commissioner of Internal Revenue, with the approval of the Secretary of the Treasury, may by regulation require. Such books and records shall be open at all times to the inspection of any internal-revenue officer or agent. Sec. 2. That any person who withdraws alcohol f ree pr op^Srtn*™- of tax under the provisions of this Act and regulations ai, use as a bever- i j.1. j i l l age, or for medici- made m pursuance thereof, and who removes or conceals n li purpose. same,, or is concerned in removing, depositing or conceal- ing same for the purpose of preventing the same from being denatured under governmental supervision, and Digitized by Microsoft® 240 DISTILLED SPIRITS. any person who uses alcohol withdrawn from bond under the provisions of section one of this Act for manufacturing any beverage or liquid medicinal preparation, or know- ingly sells any beverage or liquid medicinal preparation made in whole or in part from such alcohol, or knowingly violates any of the provisions of this Act, or who shall recover or attempt to recover by redistillation or by any other process or means, any alcohol rendered unfit for beverage or liquid medicinal purposes under the pro- visions of this Act, or who knowingly uses, sells, conceals, or otherwise disposes of alcohol so recovered or redistilled, shall on conviction of each offense be fined not more than five thousand dollars, or be imprisoned not more than five years, or both, and shall, in addition, forfeit to the United States all personal property used in connection with his business, together with the buildings and lots or parcels of ground constituting the premises on which said unlawful acts are performed or permitted to be performed: er^and^edenr^ ^^^' That manufacturers employing processes in tured. which alcohol, used free of tax under the provisions of this Act, is expressed or evaporated from the articles manufactured, shall be permitted to recover such alcohol and to have such alcohol restored to a condition suitable solely for reuse in manufacturing processes under such regulations as the Commissioner of Internal Revenue, with the approval of the Secretary of the Treasury shall prescribe. Sec. 3. (Obsolete.) This section provided an appropriation for payment of an additional force of chemists, internal-revenue agents, inspectors, deputy collectors, clerks, laborers, and other assistants, the force authorized to be appointed by the Commissioner of Internal Revenue, with the approval of the Secretary of the Treasury, for a period of two years without compliance with the conditions prescribed by the civil service act of January 16, 1883. Sec. 4. (Obsolete.) This section provided for a report to Congress at its next ses- sion of all appointments made under the provisions of this act and regulations prescribed and for a report of any additional legislation necessary to safeguard the revenue and secure a proper enforcement of the law. [Amendment to the act of June 7, 1906.) AN ACT To amend an Act entitled "An Act for the withdrawal from bond tax free of domestic alcohol when rendered unfit for beverage or liquid medicinal uses by mixture with suitable denaturing materials," approved June 7, 1906. (Act of Mar. 2, 1907: 34 Stat., 1250.) ^Denatured ai- Sec. 1. That notwithstanding anything contained in used in marmfac- the Act entitled "An Act for the withdrawal from bond cMoroform, et and tax fr ee or domestic alcohol when rendered unfit for bev- 'i^^chemicai erage or liquid medicinal uses by mixture with suitable denaturing material," approved June seventh, nineteen hundred and six, domestic alcohol when suitably dena- tured may be withdrawn from bond without the payment Digitized by Microsoft® under regu- DISTIIiLED SPIRITS. 241 of internal-revenue tax and used in the manufacture of ether and chloroform and other definite chemical sub- stances where said alcohol is changed into some other chemical substance and does not appear in the finished product as alcohol: Provided, That rum of not less than Rum °f not less one hundred and fifty degrees proof may be withdrawn, may be with- for denaturation only, in accordance with the provisions Oration'" dena " of said Act of June seventh, nineteen hundred and six, and in accordance with the provisions of this Act. Sec. 2. That the Commissioner of Internal Revenue, tu ^ n g tral b0 S with the approval of the Secretary of the Treasury, may warehouses may authorize the establishment of central denaturing bonded eeaB warehouses, other than those at distilleries, to which alcohol of the required proof may be transferred from distilleries or distillery bonded warehouse without the payment of internal-revenue tax, and in which such alcohol may be stored and denatured. The establish- ment, operation, and custody of such warehouses shall be under such regulations and upon the execution of such bonds as the Commissioner of Internal Revenue, with tfye approval of the Secretary of the Treasury, may prescribe. Sec. 3. That alcohol of the required proof may be withdrawal by . ~. » . . , . ii! ■• • I pipes direct from drawn on, tor denaturation only, from receivmg cisterns cisterns may^be in the cistern room of any distillery for transfer by pipes Scribed direct to any denaturing bonded warehouse on the distil- lations. lery premises or to closed metal storage tanks situated in the distillery bonded warehouse, or from such storage tanks to any denaturing bonded warehouse on the distil- lery premises, and denatured alcohol may also be trans- ported from the denaturing bonded warehouse, in such manner and by means of such packages, tanks or tank cars, and on the execution of such bonds, and under such regulations as the Commissioner of Internal Revenue, with the approval of the Secretary of the Treasury, may prescribe. And further, alcohol to be denatured may be withdrawn without the payment of internal-revenue tax ^^ m £ from the distillery bonded warehouse for shipment to cen- dYstiiie^™ wa°™ tral denaturing plants in such packages, tanks and tank ^e£t to° r centrai cars, under such regulations, and on the execution of such denaturing bond- bonds as may be prescribed by the Commissioner of In- e ternal Revenue, with the approval of the Secretary of the Treasury. Sec. 4. That at distilleries producing alcohol from any ta D dauf^pad- substance whatever, for denaturation only, and having a ty not exceeding daily spirit-producing capacity of not exceeding one hun- m^product'™- dred proof gallons, the use of cisterns or tanks of such? 0110 . 1 , for , dena - r , ° , , • , . -. i • , turation only. size and construction as may be deemed expedient may be permitted in lieu of distillery bonded warehouses, and the production, storage, the manner and process of dena- turing on the distillery premises the alcohol produced, and transportation of such alcohol, and the operation of such distilleries shall be upon the execution of such bonds and under such regulations as the Commissioner of Internal 72170°— 11 16 Digitized by Microsoft® 242 DISTILLED SPIRITS. Revenue, with the approval of the Secretary of the Treas- teMrom certX ur y> ma, y prescribe, and such distilleries may by such provisions of ex- regulations be exempted from such provisions of the ex- feting laws. isting laws relating to distilleries as may be deemed expe- dient by said officials. Sec. 5. That the provisions of this Act shall take effect on September first, nineteen hundred and seven. Regulations concerning denatured alcohol, No. 30, rev. July 15, 1907, and Supplement No. 1, June 3, 1908. Circular 721, April 27, 1908, relates to the use of stills by agri- cultural experiment stations, T. D. 1347. Suggestions regarding the manufacture of denatured alcohol at small distilleries — Materials available for such use. (Int. Rev. Cir. 706, Sept. 26, 1907, T.'D. 1242.) Denatured-alcohol regulations explained. Instructions to col- lectors, revenue agents, and other internal-revenue field officers concerning the sale and use of denatured alcohol. (T. D. 1250, Oct. 12, 1907.) Circular relative to reports of manufacturers or wholesale deal- ers handling denatured alcohol. (Cir. No. 732; T. D. 1438.) Retail dealers permitted to draw off denatured alcohol from original packages and sell in quantities not exceeding 10 gallons at any one time. (T. D. 1392.) Completely denatured alcohol can not be lawfully sold for bathing purposes or any medicinal use. (T. D. 1495.) Digitized by Microsoft® Chapter Five. FERMENTED LIQUORS. Sec. 3347 Sour malt liquors, how removable without stamps. Brewers selling at retail at brewery. Packages to be marked; penalty. One brewer purchasing from an- other. Permit to carry on business at an- other place on account of acci- dent. Unfermented worts sold to other brewers. 3352. Fermented liquor removed from brewery without payment of tax forfeited. Absence of stamps to be notice and evidence. 3353. Removal or defacement of stamps; penalty. 3354 (amended). Withdrawing fermented liquor from unstamped packages for bottling, or bottling on brew- ery premises; penalty. Fer- mented liquor permitted to be removed from brewery through pipe or conduit for bottling only. Act of June 18, 1890. Removal of fer- mented liquors for export with- out payment of tax-. 3348 3349 3350. 3351. Sec. 3335. Brewer's notice. 3336 (amended). Bond. 3337. Books and monthly statement [3337a.] Section 3337 construed. ment. 3338. Monthly verification of entries in books. 3339 (amended). Tax. Fractional parts of a barrel, how estimated. [3339a.] Gallon defined. 3340 (amended). Evading tax, making or procuring false entries, etc.; penalty. 3341 (amended). Stamps. Permits. 3342 (amended). Stamps, how procured, affixed, and canceled. Penalty for fraud and neglect. 3343. Selling, removing, or buying fer- mented liquor in packages with- out stamp or with twice-used stamp; penalty. 3344. Drawing fermented liquor from package without stamp or with- out defacing stamp; penalty. 3345. Removal for storage without stamps; penalties. 3346 (amended). Making, selling, or using false or counterfeit stamps or permits, reusing stamps, having removed stamps in possession, selling same; penalty. Sec. 3335. Every brewed shall, before commencing or of ^ e s ^| notice continuing business, file with the collector, or proper deputy collector, of the district in which he designs to carry it on a notice in writing, stating the name of the person, company, corporation, or firm, the names of the members of any such company or firm, the places of resi- dence of such persons, a description of the premises on which the brewery is situated, and of his or their title thereto, and the name of the owner thereof. A person manufacturing for sale a fermented liquor, made from a substitute for malt, must qualify as a brewer. (T. D. 646.) Definition of brewer. Special tax of brewer. (Sec. 3244, p. 133.) Sec. 3336 [as amended ly the act of Apr. 29, 1886_ (24 Stat., 15).] Every brewer, on filing notice as aforesaid of his intention to commence or continue business, * * * shall execute a bond to the United States, to be approved by the collector of the district, in a sum equal to three 243 Digitized by Microsoft® Bond. 244 FERMENTED LIQUORS. times the amount of the tax which, in the opinion of the collector, said brewer will be liable to pay during any one month, and conditioned that he shall pay, or cause to be Eaid, as herein provided, the tax required by law on all eer, lager-beer, ale, porter, and other fermented liquors made by or for him, before the same is sold or removed for consumption or sale, except as hereinafter provided; and that he shall keep, or cause to be kept, a book, in the manner and for the purposes hereinafter specified, which shall be open to inspection by the proper officers, as by law required; and that he shall in all respects faithfully comply, without fraud or evasion, with all requirements of law relating to the manufacture and sale of any malt liquors aforesaid; and he shall execute a new bond once in four years and whenever required so to do by said collector, in the amount above named and conditioned as above pro- vided, which bond shall be in lieu of any former bond or bonds of such brewer in respect to all liabilities accruing after its approval by said collector. In case of incorporated companies the bond must be executed in their corporate capacity and under their corporate seals and signatures. In case of a brewing company not incorporated the name of the firm as well as of each member thereof must be recited in the bond, which should be signed by each member of the firm. No provision is made for cancellation of bond where brewers have gone out of business before the expiration of the four years. (T. D. 648.) A second bond given voluntarily during the four-year period is merely cumulative and does not release the first bond. (T. D. 834.) Executors, administrators, assignees, and receivers continuing the business must execute a new bond. Brewer's books. g EC _ 3337 Every person who owns or occupies any brewery, or premises used or intended to be used for the purpose of brewing or making such fermented liquors, or who has such premises under his control or superintend- ence, as agent for the owner or occupant, or has in his possession or custody any brewing materials, utensils, or apparatus, used or intended to be used on said premises in the manufacture of beer, lager-beer, ale, porter, or other similar fermented liquors, either as owner, agent, or super- intendent, shall, from day to day, enter, or cause to be entered, in a book to be kept by him for that purpose, the kind of such malt liquors, the estimated quantity pro- duced in barrels, and the actual quantity sold or removed for consumption or sale in barrels or fractional parts of barrels. He shallalso, from day to day, enter, or cause to be entered, in a separate book to be kept by him for that purpose, an account of all materials by him pur- chased for the purpose of producing such fermented liquors, including grain and malt. ^Monthly state- ^ n( j ^g s h a r] renc i er to the collector, or the proper deputy collector, on or before the tenth day or each month, a true statement, in writing, in duplicate, taken from his books, of the estimated quantity in barrels of Digitized by Microsoft® FERMENTED LIQUOES. 245 such malt liquors brewed, and the actual quantity sold or removed for consumption or sale during the preceding month; and shall verify, or cause to be verified, the said statement, and the facts therein set forth, by oath, to be taken before the collector of the district, or proper deputy collector, according to the form required by law. Said books shall be open at all times for the inspection of any collector, deputy collector, inspector, or revenue agent, who may take memorandums and transcripts therefrom. United States v. Obermeyer (5 Ben., 541; 15 Int. Rev. Rec, 83; 27 Fed. Cas., 211). United States v. Miller (16 Int. Rev. Rec, 25; 25 Fed. Cas., 1257). Brewers' returns. — Returns made by brewers of trie amount of beer manufactured and sold by them are made under compul- sion of law for but one purpose, namely, the collection of reve- nue for the United States, and copies thereof ■are not permitted to be furnished to any persons for other purposes. (T. D. 19443, 1898.) Verification of returns. (T. D. 1046.) [Sec. 3337a.] [Act of Hay IS, 1876 (19 Stat., 53).} That C0 X 3 e 337 ' E - s - nothing contained in section three thousand three hun- dred and thirty-seven of the Revised Statutes of the United States shall be so construed as to authorize an assessment upon the quantity of materials used in pro- Quantity of ma- i L i i / j.i £ 1*1! tenal used not ducmg or purchased tor the purpose or producing, ter- evidence for pur- mented or malt liquors, nor shall the quantity of materials Quantity of'iiq- so used or purchased be evidence, for the purpose of tax- uor produced, ation, of the quantity of liquor produced ; but the tax on as m-o°ided pa in all beer, lager-beer, ale, porter, or other similar fermented § 333 '' R - s - liquor, brewed or manufactured, and sold or removed for consumption or sale, shall be paid as provided in section three thousand three hundred and thirty-nine of said statutes, and not otherwise : Provided, That this act shall not apply to cases of fraud. . Cas f d of fraud And provided further, That nothing in this act shall have eX No ? change of the effect to change the present rules of law respecting evi- ^Sence'ln miu, dence in any prosecution or suit. etc. Bergdoll v. Pollock, collector. (95 U. S., 337; 24 Int. Rev. Rec, 2.) Sec. 3338. The entries made in such books shall, on or before the tenth day of each month, be verified by the oath of the person by whom they are made. The said oath shall be written in the book at the end of such entries, and be certified by the officer administering the same, and shall be in form as follows: I do swear (or affirm) that the foregoing entries were made by me; Monthly verifi- and that they state truly, according to the best of my knowledge and IJJ ^Joks* entrle3 belief, the estimated quantity of the whole amount of such malt liq- uors brewed, and the actual quantity sold, and the actual quantity removed, from the brewery owned by , in the county of ; and, further, that I have no knowledge of any matter or thing required by law to be stated in said entries which has been omitted therefrom. And the owner, agent, or superintendent aforesaid shall also, in case the original entries made in his book were not Digitized by Microsoft® 246 FERMENTED LIQUOBS. made by himself, subjoin thereto the following oath, to be taken in manner as aforesaid: I do swear (or affirm) that, to the best of my knowledge and belief the foregoing entries fully set forth all the matters therein required by law; and that the same are just and true, and that I have taken all the means in my power to make them so. Brewer required to enter all malt liquors in his book. "Malt liquor" and "fermented liquor" used synonymously. (First circuit (Mass.), 1874, United States v. Dooley, 21 Int. Rev. Rec, 115; 25 Fed. Cas. 890, No. 14984.) A book of general accounts kept by a brewer in conducting his business can not be deemed a book of entries of materials purchased, or such a book as the statute requires. (United States v. Bellingstein, 16 Int. Rev. Rec, 92; Fed. Cas. No. 14566.) mentedh ? q n uors er " Sec - 3339 i as amended by the act of Apr. 12, 1902 {82 Stat., 96).] There shall be paid on all beer, lager-beer, ale, porter, and other similar fermented liquors, brewed or manufactured and sold, or stored in warehouse, or removed for consumption or sale, within the United States, by whatever name such liquors may be called, a tax of one dollar for every barrel containing not more than thirty-one gallons; and at a like rate for any other quan- tity or for any fractional part of a barrel. In estimating and computing such tax, the fractional parts of a barrel shall be halves, thirds, quarters, sixths, and eighths; and any fractional part of a barrel, containing less than one- eighth, shall be accounted one-eighth; more than one- eighth, and not more than one-sixth, shall be accounted one-sixth; more than one-sixth, and not more than one- fourth, shall be accounted one-fourth; more than one- fourth, and not more than one-third, shall be accounted one-third; more than one-third, and not more than one- half, shall be accounted one-half; more than one-half, and not more than one barrel, shall be accounted one barrel; and more than one barrel, and not more than sixty-three gallons, shall be accounted two barrels, or a hogshead. The said tax shall be paid by the owner, agent, or super- intendent of the brewery or premises in which such fer- mented liquors are made, and in the manner and at the MwS?2 d Sm t of ti me hereinafter specified: Provided, That in lieu of or in addition to the present requirements of law in that respect, all stamps used for denoting the tax upon fermented liquors or other taxes may, in the discretion of the Commissioner of Internal Revenue, be canceled by perforations to be made in such manner and form as the Commissioner may by regula- tions prescribe. Legislation of recent years affecting the rate of tax on fer- mented liquors is given for reference, as follows: [Act ol June 13, 1898 (30 Stat., 448).] Sec. 1. That there shall be paid, in lieu of the tax of one dollar now imposed by law, a tax of two dollars on all beer, lager beer, ale, porter, and other similar fermented liquors, brewed or man- ufactured and sold, or stored in warehouse, or removed for con- sumption or sale, within the United States, by whatever name such liquors may be called, for every barrel containing not more Digitized by Microsoft® FERMENTED LIQUORS. 247 than thirty-one gallons; and at a like rate for any other quantity or for the fractional parts of a barrel authorized and denned by law. And section thirty-three hundred and thirty-nine of the Revised Statutes is hereby amended accordingly: Provided, That a discount of seven and one-half per centum shall be allowed upon all sales by collectors to brewers of the stamps provided for the payment of said tax: Provided further, That the additional tax imposed in this section on all fermented liquors stored in warehouse to which a stamp had been affixed shall be assessed and collected in the manner now provided by law for the col- lection of taxes not paid by stamps. * * * Sec 51. That this act shall take effect on the day next suc- ceeding the date of its passage, except as otherwise specially provided for. [Act ol March 2, 1901 (31 Stat., 938).] Sec. 1. That section one of the act entitled "An act to provide ways and means to meet war expenditures, and for other pur- poses," approved June thirteenth, eighteen hundred and ninety- eight, is hereby amended so as to read as follows: That there shall be paid, in lieu of the tax of one dollar now imposed by law, a tax of one dollar and sixty cents on all beer, lager beer, ale, porter, and other similar fermented liquors, brewed or manufactured and sold, or stored in warehouse, or removed for consumption or sale, within the United States, by whatever name such liquors may be called, for every barrel con- taining not more than thirty-one gallons; and at a like rate for any other quantity or for the fractional parts of a barrel authorized and defined by law. And section thirty-three hundred and thirty-nine of the Revised Statutes is hereby amended accord- ingly: Provided, That in lieu of or in addition to the present requirements of law in that respect, all stamps used for denoting the tax upon fermented liquors or other taxes may, in the discre- tion of the Commissioner of Internal Revenue, be canceled by perforations to be made in such manner and form as the Commis- sioner may by regulations prescribe." * * * Sec. 15. That the provisions of this act shall take effect on and after the first day of July, nineteen hundred and one, except where otherwise expressly provided. [Act of April 12, 1902 (32 Stat., 96).] Sec. 1. That section one of the act entitled "An act to provide ways and means to meet war expenditures, and for other pur- poses," approved June thirteenth, eighteen hundred and ninety- eight, as amended by the act of March second, nineteen hundred and one, entitled "An act to amend an act entitled 'An act to provide ways and means to meet war expenditures, and for other purposes,' approved June thirteenth, eighteen hundred and ninety-eight, and to reduce taxation thereunder," be, and is hereby, further amended so as to read as follows: Section 1. That there shall be paid on all beer, lager beer, ale, porter, or other similar fermented liquor, brewed or manufactured and sold, or stored in warehouse, or, removed for consumption or sale, within the United States, by whatever name such liquors may be called, in lieu of the tax now imposed by law, a tax of one dollar for every barrel containing not more than thirty-one gallons; and at a like rate for any other quantity or for any fractional part of a barrel, as authorized and defined by section thirty-three hundred and thirty-nine of the Revised Statutes of the United States: Provided, That in lieu of or in addition to the present requirements of law in that respect all stamps used for denoting the tax upon fermented liquors or other taxes may, in the discretion of the Commissioner of Internal Revenue, be can- celed by perforations to be made in such manner and form as the Commissioner may, by regulations, prescribe." * * * Sec 11. That this act, except as otherwise specially provided for in the preceding section, shall take effect July first, nineteen hundred and two. Digitized by Microsoft® 248 FERMENTED LIQUORS. Acts imposing tax on fermented liquors and rates of tax. Per barrel. From September, 1862, to March 3, 1863 (act July 1, 1862). $1. 00 From March. 3, 1863, to March 31, 1864 (act March 3, 1863). . 60 From April 1, 1864, to June 13, 1898 1.00 From June 14, 1898, to June 30, 1901 2. 00 From July 1, 1901, to June 30, 1902 1. 60 From July 1, 1902 1. 00 The act of March 3, 1863, provided that the tax on fermented liquors should be 60 cents per barrel from the date of the passage of that act to April 1, 1864. Hence the tax of 60 cents per barrel having expired by limitation April 1, 1864, the tax of $1 per bar- rel under act of July 1, 1862, was again revived, which rate was increased to $2 under act of June 13, 1898. The act of July 13, 1866 (14 Stat., 98), changed the mode of assessing and collecting the tax on fermented liquors, and made the tax on them after September 1, 1866, payable by stamps. Hop beer. (T. D. 20233, 1898.) Weiss beer taxable. (Special No. 153; 29 Int. Eev. Rec, 313.) Imported malt liquors. (Sec. 11, act of Mar. 1, 1879, p. 227.) The manufacturer of a drink called "Maltina," similar to beer, lager beer, ale, and porter, made in part from one of those liquors and in part from another substance, is liable as a brewer. (Davis v. Daugherty, 105 Fed. Rep., 769.) A liquor made from barley malt, fermented by means of a wine yeast, is a fermented malt liquor, for the manufacture of which for sale the special tax of a brewer is required to be paid, and on which tax is imposed, notwithstanding the fact that by the use of a wine yeast instead of a beer yeast it has the appear- ance and taste of wine. (T. D. 19025, 1898.) Gallon defined. [Sec. 3339a.] Section 21, act of March 1, 1879 (20 Stat., 827). That the word "gallon," wherever used in the internal-revenue law, relating to beer, lager-beer, ale, porter, and other similar fermented liquors, shall be held ana taken to mean a wine-gallon, the liquid measure containing two hundred and thirty-one cubic inches. The standard gallon of the United States contains 231 cubic inches or 8.3389 pounds avoirdupois of distilled water at its max- imum density and with the barometer at 30 inches. (Webster's Dictionary.) The old beer gallon of 282 cubic inches was recognized as the standard for domestic malt liquors before the act of March 1, 1879. That act was passed to make the gallon conform to the standard in the customs service and to that recognized by the mercantile community. (16 Op. Atty. Gen., 361; Nichols v. Beard, 29 Int. Rev. Rec, 46.) Evading tax, Sec. 3340 [as amended by sec. 10, act of Mar. 1, 1879 rarn!g E fabe V m- (20 Stat., 327).] Every owner, agent, or superintendent tries, etc.; pen- f an y brewery, vessels, or utensils used in making fer- mented liquors, who evades, or attempts to evade, the payment of the tax thereon, or fraudulently neglects or refuses to make true and exact entry and report of the same in the manner required by law, or to do, or cause to be done, any of the things by law required to be done by bi m * * *, or who intentionally makes false entry in said book or in said statement, or knowingly allows or procures the same to be done, shall forfeit, for every such offense, all the liquors made by him or for him, and all the vessels, utensils, and apparatus used in making the same, Digitized by Microsoft® FERMENTED LIQUORS. 249 and be liable to a penalty of not less than five hundred nor more than one thousand' dollars, to be recovered with costs of suit, and shall be deemed guilty of a misdemeanor, and be imprisoned for a term not exceeding one year. And every brewer who neglects to keep books, or ke ^ e P aIt 5 r b '™ ^ refuses to furnish the account and duplicate thereof as etc. provided by law, or refuses to permit the proper officer to examine the books in the manner provided, shall, for every such refusal or neglect, forfeit and pay the sum of three hundred dollars. The words "as aforesaid 8 ' were stricken out in the seventh line by section 10, act March 1, 1879 (20 Stat., 327). Brewer liable for neglecting to keep books, although there was no criminal intent. (United States v. Miller, 16 Int. Rev. Rec. , 25; United States v. Poster, 19 ibid., 5; 25 Fed. Cas., 1173; 2 Biss., 453; United States v. Bellingstein, Fed. Cas. No. 14566; 16 Int. Rev. Rec, 92; Archbold's Crim. Prac, p. 395.) Evading or attempting to evade the tax forfeits all the liquors made, and all the vessels, utensils, and apparatus used in making the same. (United States v. Brewery Utensils, 13 Int. Rev. Rec, 95; Fed. Cas. No. 14641.) Sec. 3341 [as amended oy sec. 9, act of July 24, 1897 $0 ^^ff^^ Stat., 151).]. The Commissioner of Internal Revenue lo\S v ie shall cause to be prepared, for the payment of such tax, suitable stamps aenoting the amount of tax required to be paid on the hogsheads, barrels, and halves, thirds, quarters, sixths, and eighths of a barrel of such fermented hquors (and shall also cause to be prepared suitable per- mits for the purpose hereinafter mentioned), and shall furnish the same to the collectors of internal revenue, who shall each be required to keep on hand at all times a sufficient supply of permits and a supply of stamps equal in amount to two months' sales thereof, if there be any brewery or brewery warehouse in his district; and such stamps shall be sold, and permits granted and delivered Permits. by such collectors, only to the brewers of their district, respectively. Such collectors shall keep an account of the number of permits delivered and of the number and value of the stamps sold by them to each brewer. As to stamps, see section 3446, amended, p. 355. Relative to sale to sheriff of stamps for tax on beer levied upon or attached by him. (Letter to Collector Johnson, Feb. 15, 1894; 40 Int. Rev. Rec, 53.) Under the act of July 24, 1897, a brewer was required to pay the full face value of the stamps purchased, without deduction of the 7J per cent discount previously allowed. The act of June 13, 1898, increasing the tax to $2 per barrel, restored the right to the discount. The right to the discount was repealed by the act of March 2, 1901 (31 Stat., 938). (Nunn v. Wm. Gerst Brew- ing Co. (1900), 99 Fed. Rep., 939; Nassau Brewing Co. v. Moore, collector (1899), 97 Fed. Rep., 206.) A collector's duty, as prescribed by section 3341, Revised Statutes, is to keep on hand stamps equal in amount to two months' sale thereof. The law does not permit transactions for future delivery. The agency is limited to the stock on hand. (The American Brewing Co. v. United States (1898), 33 Ct. Ola., 348; T. D. 19248, 1898.) Digitized by Microsoft® 250 FERMENTED LIQUORS. procured?affix°ed SeC - 3342 ^ aS amende ^ ty act °f Mar - S , 1875 V 8 Stat -> and canceled. '484).] That every brewer shall obtain, from the collector of the district in which his brewery or brewery- warehouse is situated, and not otherwise unless such collector shall fail to furnish the same upon application to him, the proper stamps, and shall affix, upon the spigot-hole in the head of every hogshead, barrel, keg, or other recep- tacle in which any fermented liquor is contained, when sold or removed from such brewery or warehouse, (except in case of removal under permit, as hereinafter provided,) a stamp denoting the amount of the tax required upon such fermented liquor, which stamp shall be destroyed by driving through the same the faucet through which the liquor is to be withdrawn, or an air-faucet of equal size, at the time the vessel is tapped, in case the vessel is tapped through the other spigot-hole, (of which there shall be but two, one in the head and one in the side,) and shall, also, at the time of affixing such stamp, cancel the same by writing or imprinting thereon the name of the person, firm, or corporation by whom such liquor was made, or the initial letters thereof, and the date when canceled. iraud o?neJiect. r Every brewer who refuses or neglects to affix and cancel the stamps required by law in the manner aforesaid, or who affixes a false or fraudulent stamp thereto, or know- ingly permits the same to be done, shall pay a penalty of one hundred dollars for each barrel or package on which such omission or fraud occurs, and be imprisoned not more than one year. Beer stamps are not articles of merchandise. They are merely evidence of payment of tax. (American Brewing Co. v. United States, 33 Ct. Cls., 349; Nunn v. Wm. Gerst Brewing Co., 99 Fed. Rep., 939; Nassau Brewing Co. v. Moore, collector, 97 Fed. Rep., 206.) Stamps must be affixed upon a spigot hole in the head of the package. (United States v. McKechnie, 15 Int. Rev. Rec, 8; Fed. Cas. No. 15682.) The proviso in the first section of the act of March 2, 1901, p. 247, reads as follows: "Provided, That in lieu of or in addition to the present require- ments of law in that respect, all stamps used for denoting the tax upon fermented liquors or other taxes may, in the discretion of the Commissioner of Internal Revenue, be canceled by perfo- rations to be made in such manner and form as the Commissioner may by regulations prescribe." In the exercise of the authority thus conferred it was pre- scribed that on and after September 1, 1901, and until otherwise ordered, all stamps used for denoting the tax upon fermented liquors shall be canceled by perforations. (Reg. No. 6, Rev., p. 13.) As to spigot holes. (32 Int. Rev. Rec, 317; see T. D. 743, T. D. 751, and T. D. 762.) Where the law prescribes as punishment for an offense both a money penalty and imprisonment, it is not true that the penalty can only be enforced by indictment. The Government can maintain an action of debt for the money penalty. (United States v. Foster, 2 Biss., 453; 19 Int. Rev. Rec, 5.) It is sufficient as a general rule to charge an offense in the language of the statute. (United States u. Schimer, 5 Bias., 195.) Digitized by Microsoft® FERMENTED LIQUORS. 251 Sec. 3343. Whenever any brewer, cartman, agent for in ^ elli J r g ' k™ ^ transportation, or other person, sells, removes, receives, fermented liquor or purchases, or in any way aids in the sale, removal, ouf^fam^Tr receipt, or purchase, of any fermented liquor contained^ f^P' use °a in any hogshead, barrel, keg, or other vessel from any stamp; penalty. brewery or brewery warehouse, upon which the stamp, or permit, in case of removal, required by law, has not been affixed, or on which a false or fraudulent stamp, or permit, in case of removal, is affixed, with knowledge that it is such, or on which a stamp, or permit, in case of removal, once canceled, is used a second time, he shall be fined one hundred dollars and imprisoned for not more than one year. Sec. 3344. Whenever any retail dealer, or other ^J^f *®£; person, withdraws or aids in the withdrawal of any fer-trom package mented liquor from any hogshead, barrel, keg, or other ^with st ™?e vessel containing the same, without destroying or defac- sta ™^ ° r ^ th ' ing the stamp affixed thereon, or withdraws or aids in stamp; penalty. g the withdrawal of any fermented liquor from any hogs- head, barrel, keg, or other vessel, upon which the proper stamp has not been affixed or on which a false or fraudu- lent stamp is affixed, he shall be fined one hundred dollars and imprisoned not more than one year. See section 3455, page 360, as to selling, receiving, etc., empty stamped packages. Sec. 3345. Anv brewer mav remove or transport, or Removal for , -', jij! i-i r storage without cause to be removed or transported, rrom his brewery or stamps. other place of manufacture to a depot, warehouse, or other place used exclusively for storage or sale in bulk, and occupied by him, in another part of the same collection- district, or in another collection-district, but to no other place, malt liquor of his own manufacture, known as lager-beer, in quantities of not less than six barrels in one vessel, and malt liquor of his own manufacture, known as ale or porter, or any other malt liquor of his own manufacture not heretofore mentioned, in quantities not less than fifty barrels at a time, without affixing the proper stamps on said vessels of lager-beer, ale, porter, or other malt liquor, at the brewery or place of manu- facture, under a permit, which shall be granted, upon Permit- application, by the collector of the district in which said malt liquor is manufactured, and under such regulations as the Commissioner of Internal Revenue may prescribe ; and thereafter the manufacturer of said malt liquor shall stamp the same, when it leaves such depot or warehouse, in the same manner and under the same penalties and liabilities as when stamped at the brewery as herein provided. And the collector of the district in which such depot or warehouse is situated shall furnish the manufacturer with the stamps for stamping the same, as if the said malt liquor had been manufactured in his district. And said permit must be affixed to every such vessel or cask so removed, and canceled or destroyed in such manner as Digitized by Microsoft® 252 FERMENTED' LIQTJOBS. the Commissioner of Internal Revenue may prescribe, and under the same penalties and liabilities as provided herein as to stamps. or Ha u S to g g Sell fSfe Sec - 3346 [as amended by sec. 5, act of Mar. 1, 1879 {20 stamps, permits, Stat., 327)]. Every person who makes, sells, or uses any false or counterfeit stamp or permit, or die for printing or making stamps or permits, which is in imitation of or pur- Eorts to be a lawful stamp, permit, or die of the kind efore mentioned in this chapter, or who procures the ustag m s?Smp r fj same to be done, and every person who shall remove, or selling or having cause to be removed, f-rom any cask or package of f er- moveT^tamps; mented liquors, any stamp denoting the tax thereon, penalty. with intent to re-use such stamp, or who, with intent to defraud the revenue, knowingly uses, or permits to be used, any stamp removed from another cask or package, or receives, buys, sells, gives away, or has in his posses- sion, any stamp so removed, or makes any fraudulent use of any stamp for fermented liquors, shall be fined not less than one hundred dollars nor more than one thousand dollars, and imprisoned not less than six months nor more than three years. All officers are instructed that canceled beer stamps, or stamps that have been once used, found in the hands of a brewer or other person, should be seized, marked for identification, and deposited with the collector for use in a prosecution to be instituted under section 3346, R. S., as amended. (Cir. No. 407, Aug. 25, 1893.) sour malt Mq- Sec. 3347. When fermented liquor has become sour or inpecuHa^pack- damaged, so as to be incapable of use as such, brewers Si a without may sell the same for manufacturing purposes, and may remove the same to places where it may be used for such purposes, in casks, or other vessels, unlike those ordinarily used for fermented liquors, containing respectively not less than one barrel each, and having the nature of their contents marked upon them, without affixing thereon the permit, stamp or stamps required. Section 3347, Revised Statutes, providing for the sale by a brewer of sour beer in peculiar packages without a stamp does not confer the privilege of removing a stamp for re-use in the case of beer soured or spoiled after being stamped. A stamp once applied to a package can never legally be removed and applied to another. No refund allowed of money paid for stamps on packages of beer which have soured after removal from the brewery. (T. D. 799.) Brewers selling Sec. 3348. Every brewer who sells fermented liquor at e*ry ta to at a b f r nx retail at the brewery or other place where the same is sta ™P^ t andkeep made, sn aU a fR x an d cancel the proper stamps upon the hogsheads, barrels, kegs, or other vessels m which the same is contained, and shall keep an account of the quan- tity so sold by him, and of the number and size of the hogsheads, barrels, kegs, or other vessels in which the same has been contained, and shall make a report thereof, verified by oath, monthly to the collector. Digitized by Microsoft® FERMENTED DIQUOES. 253 Sec. 3349. Every brewer shall, by branding, mark or ^me °t ma.nu- cause to be marked upon every hogshead, barrel, keg, or be marked on other vessel containing the fermented liquor made by ty ° fofTenSvlug him, before it is sold or removed from the brewery or marks > 6tc - brewery warehouse, or other place of manufacture, the name of the person, firm, or corporation by whom such liquor was manufactured, and the place of manufacture; and every person other than the owner thereof, or his agent authorized so to do, who intentionally removes or defaces such marks therefrom, shall be liable to a penalty of fifty dollars for each cask or other vessel from which the mark is so removed or defaced: Provided, That when a brewer purchases fermented chS^fermenV liquor finished and readv for sale from another brewer, in«i liquor from ^t . i j i j pi i ,i another brewer. order to supply the customers of such purchaser, the pur- chaser may, upon written notice to the collector of his intention so to do, and under such regulations as the Com- missioner of Internal Revenue may prescribe, furnish his own vessels, branded with his name and the place where his brewery is situated, to be filled with the fermented liquor so purchased, and to be so removed; the proper stamps to be affixed and canceled, as aforesaid, by the manufacturer before removal. See section 3244, subdivision fifth, page 139, for liability to spe- cial tax in such cases. Shipping fermented liquors under other than the name as known to the trade. (Sec. 3449, R. S.) Sec. 3350. Whenever, in the opinion of the collector of on Pe b™i n l e °^ ar S any district, it becomes requisite or proper, by reason of another place on an accident to any brewery therein, by fire or flood, or of dent" nt ° f acci such brewery undergoing repairs, or of other circum- stances, that the brewer carrying on the same shall be per- mitted to conduct his business wholly or in part at some other place within such district or an adjoining district for a temporary period, it shall be lawful for such collector, under such regulations and subject to such limitation of time as the Commissioner of Internal Revenue may pre- scribe, to issue a permit to such brewer, authorizing him to conduct his business wholly or in part, according to the circumstances, at such other place, for a period to be stated in such permit; and such brewer shall not be re- quired to pay another special tax for the purpose. Sec. 3351. When malt liquor or tun liquor, in the first ^tefomootb 1 - stages of fermentation, known as unfermented worts, of er brewers; how whatever kind, is sold by one brewer to another for the pur- tax shaU be paid ' pose of producing fermentation or enlivening old or stale ale, porter, lager-beer, or other fermented liquors, it shall not be liable to a tax to be paid by the seller thereof, but the tax on the same shall be paid by the purchaser thereof, when the same, having been mixed with the old or stale beer, is sold by him as provided by law, and such sale or transfer shall be subject to such restrictions and regulations as the Commissioner of Internal Revenue may prescribe. Digitized by Microsoft® 254 FERMENTED LIQUORS. femmw™ uor ^ec. 3352. The ownership or possession by any person ^te en r!movTiof any fermented liquor after its sale or removal from the w°hen W tax h °not brewery or warehouse, or other place where it was made, paid cause of for- U p 0n w hich the tax required has not been paid, shall ren- der such liquor liable to seizure wherever found, and to forfeiture, removal under said permits excepted. Absence of And the absence of the proper stamps from any hogs- Mti™ p lnd°ew-head, barrel, keg, or other vessel containing fermented dence. liquor, after its sale or removal from the brewery where it was made, or warehouse as aforesaid, shall be notice to all persons that the tax has not been paid thereon, and shall be prima-facie evidence of the non-payment thereof. Removal or de- Sec. 3353. Every person, other than the purchaser or stempTby others owner of any fermented liquor, or person acting on his penalty 6 owners; behalf, or as his agent, who intentionally removes or defaces the stamp or permit affixed upon the hogshead, barrel, keg, or other vessel, in which the same is contained, shall be liable to a fine of fifty dollars for each such vessel from which the stamp or permit is so removed or defaced, and to render compensation to such purchaser or owner for all damages sustained by him therefrom. withdrawing Sec. 3354. [As amended by act of June 18, 1890 {26 st q am ped fro p n ac U k"'Stot, 169).] Every person who withdraws any fermented of S bottiin' ttlill on hquor from any hogshead, barrel, keg, or other vessel brewery prem-upon which the proper stamp has not been affixed, for lses ' the purpose of bottling the same, or who carries on, or attempts to carry on, the business of bottling fermented liquor in any brewery or other place in which fermented liquor is made, or upon any premises having communica- tion with such brewery, or any warehouse, shall be liable Penalty. to a fine of five hundred dollars, and the property used in such bottling or business shall be liable to forfeiture: Removal of fer- Provided, however, That this section shall not be construed r*tu t mg 1 e 4 s U t°ab^to prevent the withdrawal and transfer of fermented liquors ito^'or°ond'mt pe / rom an y of the vats in any brewery, by way of a pipe hne or other conduit, to another buildina or place, for the sole pur- pose of bottling the same; such p%pe line or conduit to be con- structed and operated in such manner, and with such cisterns, vats, tanks, valves, cocks, faucets, and, gauges, or other uten- sils or apparatus, either on the premises of the brewery or the bottling house, and with such changes of or additions thereto, and such locks, seals, or other fastenings, and under such rules and regulations as shall be from time to time prescribed by the Commissioner of Internal Revenue, subject to the approval of the Secretary of the Treasury, and all locks and seals prescribed shall be provided by the Commissioner of Internal Revenue, at the expense of the United States: Provided further, That the tax imposed in section thirty- three hundred and thirty-nine of the Revised Statutes of the United States shall be paid on all fermented liquor removed from a brewery to a bottling house by means of a pipe or con- canceiiation^mi, at the time of such removal, by the cancellation and o?stam'ps a£einent defacement, by the collector of the district, or his deputy, in the presence of the brewer, of the number of stamps denoting Digitized by Microsoft® FERMENTED LIQUORS. 255 the tax on the fermented liquor thus removed. The stamps thus cancelled and defaced shall be disposed of and accounted for in the manner directed by the Commissioner of Internal Revenue, with the approval of the Secretary of the Treasury. And any violation of the rules and regulations hereafter prescribed by the Commissioner of Internal Revenue, with the approval of the Secretary of the Treasury, in pursuance of these provisions, shall be subject to the penalties above pro- Penalties and vided by this section. Every owner, agent, or superintendent ° of any brewery or bottling house who removes, or connives at the removal of any fermented liquor through a pipe line or conduit, without payment of the tax thereon, or who attempts in any manner to defraud the revenue as above, shall forfeit all the liquors made by and for him, and all the vessels, utensils, and apparatus used in making the same. Storing of bottled beer and empty bottles is part of the business of bottling and not allowed on brewery premises. Beer intended for bottling, except when removed by pipe line, must be drawn into stamped packages and removed from the brewery, and the bottling premises must be so separated from the brewery that the beer must be carried upon a street or road which is a public highway, actually and commonly used as a thoroughfare by the public, in its passage from the brewery to the bottling establishment. (Int. Rev. Reg., No. 6, revised, under "Bottling.") Concerning the transfer of fermented liquors from a brewery by way of pipe line or conduit for the sole purpose of bottling the same. (Regulations, No. 6, revised, Oct. 8, 1909.) EXPORTATION OF FERMENTED LIQUORS. [Act of June 18, 1890 (26 Stat., 162).} That from and ,5^*;^ after the first day of January, eighteen hundred anduors. ninety-one, fermented liquor may be removed from the place of manufacture, or storage, for export to a foreign country, without pa} T ment of tax, in such packages and under such regulations, and upon the giving of such notices, entries, bonds, and other security, as the Com- missioner of Internal Revenue, with the approval of the Secretary of the Treasury, may from time to time pre- scribe; and no drawback of tax shall be allowed on fer- No drawback, mented liquor exported on and after the first day of January, eighteen hundred and ninety-one, unless entered for exportation prior to such date. This operates as a repeal, on and after January 1, 1891, of section 3441, Revised Statutes, as amended. (Regulations No. 29, T. D. 540.) » Digitized by Microsoft® Chapter Six. TOBACCO AND SNUFF. Sec. 69. Act of August 28, 1894. Manufac- turer of tobacco denned. 27. Act of October 1, 1890, amended. Restrictions upon farmers re- moved. 3355 (amended). Manufacturer's state- ment. Bond and certificate; penalties. 3356. Sign to be put up by manufacturer; penalty for omission. 3357 (amended). Record of manufactur- ers to be kept by collector. 3358. Annual inventory. Books and monthly abstracts. Taxes on ci- gars, cigarettes, and size of pack- ages of tobacco; penalty. 3244 (amended). Subsection 6. Dealers in leaf tobacco defined. 26. Act of Oct. 1, 1890. Registry. 3359. Dealers in leaf tobacco to render statement of sales when de- manded. Examination of books. 3360 (amended). Books of dealer in leaf tobacco; penalty. 3361. Repealed by section 69, act August 28, 1894. 35. Act Aug. 5, 1909. Retail dealers in leaf tobacco; definition, etc. 3362 (amended). Tobacco and snuff, how put up. 3363. Tobacco and snuff to be sold only in prescribed packages; penalty. Exception. 3364 (amended). Caution label; penalty. 3365. Obsolete. 3366. Purchasing tobacco not branded or stamped; penalty. 3367. Obsolete. 3368 (as amended). Tax on tobacco and snuff. 3369. Stamps, how prepared, furnished, and sold. Stamping forfeited tobacco or to- bacco sold under distraint. Destruction of unsalable tobacco and cigars. Sec. 3370. Tobacco manufactured by one per- son for another or on shares; fraud in such cases; penalty. 3371 (amended). Assessment of tax on tobacco, snuff, and cigars re- moved without stamps. 3372. Removing unlawfully, selling with- out stamps, or payment of tax, or giving bond, making false en- tries; forfeiture. 3373. Absence of stamp evidence of non- payment; forfeiture. 3374. Removing, except in proper pack- ages or without stamp, selling unlawfully, etc.; penalty. 3375. Affixing false stamps or stamps be- fore used; penalty. 3376. Stamps on empty packages to be destroyed; buying, selling, or using the same; penalty. 3377 (amended). Imported tobacco and snuff; also scraps, cuttings, and clippings. 3378. Obsolete. 3379. Obsolete. 3380. Obsolete. 3244 (amended). Subsection 11. Ped- dlers of tobacco, defined. 3381. Peddlers of tobacco; statement and bond. 3382. Peddlers of tobacco traveling with wagon. 3383 (amended). Peddler to obtain and exhibit certificate, etc. 3384 (amended). Peddling tobacco un- lawfully; penalty. 3385 (amended). Exportation of manu- factured tobacco, etc.; penalty for relanding, etc. [3385a.] Transportation bond, etc.; ex- port bond, etc. [33856.] Regulations authorized. [3385c] Reimported tobacco. 3386 (amended). Drawback on exported tobacco, snuff, and cigars. [3386a.] Fraudulent claims for drawback. 1894 {28 Stat., 509).] Every of M ^ a c c ture ' Sec. 69. [Act of Aug. 28, person whose business it is to manufacture tobacco or fined, snuff for himself, or who employs others to manufacture tobacco or snuff, whether such manufacture be by cutting, pressing, grinding, crushing, or rubbing of any raw or 256 Digitized by Microsoft® de- TOBACCO AND SNUFF. 257 leaf-tobacco, or otherwise preparing raw or leaf tobacco, or manufactured or partially manufactured tobacco or snuff, or the putting up for use or consumption of scraps, waste, clippings, stems, or deposits of tobacco resultmg from any process of handling tobacco, or by the working or preparation of leaf tobacco, tobacco stems, scraps, clippings, or waste, by sifting, twisting, screening, or any other process, shall be regarded as a manufacturer of tobacco. Every person shall also be regarded as a manufacturer Retail leaf of tobacco whose business it is to sell leaf tobacco in gltael as mam> quantities less than a hogshead, case, or bale; or who » acturers - sells directly to consumers, or to persons other than duly registered dealers in leaf tobacco, or duly registered manu- facturers of tobacco, snuff or cigars, or to persons who purchase in packages for export; and- all tobacco so sold by such persons shall be regarded as manufactured tobacco, and such manufactured tobacco shall be put up and pre- pared by such manufacturer in such packages only as the Commissioner of Internal Revenue, with the approval of the Secretary of the Treasury, shall prescribe: Provided, That farmers and growers of tobacco who sell leaf tobacco Farmers and of their own growth and raising .shall not be regarded as growers- manufacturers of tobacco; and so much of section three thousand two hundred and forty-four of the Revised Stat- utes of the United States, and acts amendatory thereof, as are in conflict with this Act, are hereby repealed : ***** That section thirty-three hundred and sixty-one of the Revised Statutes is hereby repealed. See also section 35, Act of August 5, 1909, page 261. Sec. 27. [Ant of Oct. 1, 1890 {26 Stat., 618), as amended Kestnctiont ly sec. 69, act of Aug. 28, 1894- (28 Stat, 509).} That allmWed 3 re " provisions of the statutes imposing restrictions of any kind whatsoever upon farmers and growers of tobacco in regard to the sale of their leaf tobacco, and the keeping of books, and the registration and report of their sales of leaf tobacco, or imposing any tax on account of such sales are hereby repealed. See also section 35, Act of August 5, 1909, page 261. Sec. 3355, [as amended by sec. 14, act of Mar. 1, ^^75 ^Manufactured {20 Stat., 327).} Every person, before commencing, or, and certificates. ' if he has already commenced, before continuing, the manufacture of tobacco or snuff, shall furnish, without previous demand therefor, to the collector of the dis- trict where the manufacture is to be carried on, a state- po^l 6111611 * ment in duplicate, subscribed under oath, setting forth the place, and if in a city, the street and number of the street, where the manufacture is to be carried on; the number of cutting-machines, presses, snuff-mills, hand- mills, or other machines; the name, kind, and quality of the article manufactured or proposed to be manufac- 72170°— 11 17 Digitized by Microsoft® 258 TOBACCO AND SNUFF. tured; and when the same is manufactured by him as agent for any other person, or to be sold and delivered to any other person under a special contract, the name and residence and business or occupation of the person for whom the said article is to be manufactured, or to whom BondFonn4o.it is to be delivered; and he shall give a bond, to be ap- proved by the collector of the district, in the sum of not less than two thousand nor more than twenty thousand dollars, to be fixed by the collector of the district, accord- ing to the quantum of business proposed to be done by the manufacturer, with right of appeal oy the manufacturer to the Commissioner of Internal Kevenue in respect to the amount of said bond, conditioned that he shall not engage in any attempt, by himself or by collusion with others, to defraud the government of any tax on his manufactures; that he shall render truly and completely all the returns statements, and inventories prescribed by law or regula- tions; that whenever he adds to the number of cutting- machines, presses, snuff-mills, hand-mills, or other mills or machines as aforesaid, he shall immediately give notice thereof to the collector of the district; that he shall stamp, in accordance with law, aU tobacco and snuff manu- tured by him before he removes any part thereof from the place of manufacture; that he shall not knowingly sell, purchase, expose, or receive for sale, any manufactured tobacco or snuff which has not been stamped as required by law; and that he shall comply with all the requirements of law relating to the manufacture of tobacco or snuff. Additional sureties may be required by the collector from time to time. F ( rm r 4i lncate J ^ n( ^ every manufacturer shall obtain a certificate from the collector of the district, who is hereby directed to issue the same, setting forth the kind and number of machines, presses, snuff mills, hand mills, or other mills and ma- chines as aforesaid; which certificate shall be posted in a conspicuous place within the manufactory. Penalties. j^^ eyeT y tobacco-manufacturer who neglects or re- fuses to obtain such certificate, or to keep the same posted as hereinbefore provided, shall be fined not less than one hundred dollars nor more than five hundred dollars. And every person who manufactures tobacco or snuff of any description without first giving bond, as herein required, shall be fined not less than one thousand dollars nor more than five thousand dollars, and imprisoned for not less than one nor more than five years. The liability of the sureties on the bond of a manufacturer of tobacco, given in pursuance of this section, does not cease upon the expiration of his "license " as such manufacturer. Revenue officers are not required to give notice of the expira- tion of a manufacturer's "license. " It is a matter within his knowl- edge, and of which he must take notice at his peril. (United States v. Truesdell, 2 Bond, 78; 5 Int. Rev. Rec, 102.) The manufacture and sale at retail of cigars and tobacco can not be lawfully carried on at the same time and at the same place. (16 Op. Atty. Gen., 89; 24 Int. Rev. Rec, 227.) Digitized by Microsoft® TOBACCO AND SNXJFF. 259 Use of abbreviation " Co. " for " Company " does not invalidate a bond, and a bond so signed is legally binding upon principals and sureties. (T. D. 1660.) Sec. 3356. Every manufacturer of tobacco and snuff up Si f£ ^ n e u F^ shall place and keep on the side or end of the building turer; penalty wherein his business is carried on, so that it can be dis- oromisslon - tinctly seen, a sign, with letters thereon not less than three inches in length, painted in oil-colors or gilded, giving his full name and business. And every person who neglects to comply with the requirements of this section shall be fined not less than one hundred dollars or more than five hundred dollars. Sign must be in English language (Regulations No. 8, p. 36.) Sec. 3357 [as amended by sec. S3, act of Oct. 1, 1890 (26,£"^«™*: n /i/-i/i\t -n ' -ii i -n i i • ufacturers of to- btat., bzU)\. livery collector shall keep a record, m abacco and snua book or books provided for that purpose, to be open to the lectoV"*' by co1 " inspection of only the proper officers of internal revenue, including deputy collectors and internal-revenue agents, of the name and residence of every person engaged in the manufacture of tobacco or snuff in his district, the place where such manufacture is carried on, and the number of the manufactory; and he shall enter in said record, under Record 13. the name of each manufacturer, a copy of every inventory required by law to be made by such manufacturer, and an abstract' of his monthly returns; and he shall cause the several manufactories of tobacco or snuff in his dis- trict to be numbered consecutively, which numbers shall not be thereafter changed, except for reasons satisfac- tory to himself and approved by the Commissioner of Internal Revenue. Sec. 3358. Every person now or hereafter engaged in torV"?? manufa& the manufacture of tobacco or snuff shall make and turer. deliver to the collector of the district a true inventory, in such form as may be prescribed by the Commissioner Form 70a - of Internal Revenue, and verified by his own oath, of the auantity of each of the different kinds of tobacco, snuff- our, snuff, stems, scraps, clippings, waste, tin foil, licorice, sugar, gum, and other materials held or owned by him on the first day of January of each year, or at the time of commencing and at the time of concluding busi- ness, if before or after the first of January; setting forth what portions of said goods and materials, and what kinds were manufactured and produced by him, and what was purchased from others. The collector shall make personal examination of the stock sufficient to satisfy himself as to the correctness of the inventory, and shall verify the fact of such examination by oath, to be indorsed on or affixed to the inventory. And every such person shall keep a book or books, the ^"S 1 * 3 - Form forms of which shall be prescribed by the Commissioner of Internal Revenue, and enter therein daily an accurate account of all the articles aforesaid purchased by him, the quantity of tobacco, snuff, and snuff-flour, stems, scraps, Digitized by Microsoft® 260 TOBACCO AND SNUFF. clippings, waste, tin-foil, licorice, sugar, gum, and other material, of whatever description, manufactured, sold, consumed, or removed for consumption or sale, or re- moved from the place of manufacture in bond, and to what district removed; also the number of net pounds of lumps of plug tobacco made in the lump room, and the number of packages and pounds thereof produced in the press-room each day. And he shall, on or before the tenth day of each month, furnish to the collector a true staLte nth F I or a m"and complete abstract from such book, verifying the No. 62. same by his oath, of all such purchases, sales, and remov- als made during the month next preceding. Penalty. And whenever any such person refuses or willfully neg- lects to deliver the inventory, or keep the account, or furnish the abstract aforesaid, he shall be fined not less than five hundred dollars nor more than five thousand dollars, and imprisoned not less than six months nor more than three years. Case involving the forfeiture of the tobacco factory of C. H. Lilienthal, before Judge Blatchford and a jury. (U. S. district court, southern district of New York; 13 Int. Rev. Rec, 158.) Returns of manufacturers of tobacco and cigars: A manufac- turer may employ, under power of attorney, a person to prepare his returns, inventories, etc., but the returns and inventories must be verified by the oath of the manufacturer. (T. D. 1039, T. D. 1047.) Annual inventories. (Cir. 709, rev.; T. D. 1557.) P ealer 5 ik i eaf Sec. 3244, sixth subsection of as amended by sec. 14, ' act of Mar. 1, 1879 (20 Stat, 327), and act of Mar. 3, 1883 (22 Stat, 488) : * * * Every person shall be regarded as a dealer in leaf tobacco whose business it is, for himself or on commission, to sell, or offer for sale, or consign for sale on commission, leaf tobacco. k^b'^deaiera Dealers hi l ea ^ tobacco shall sell only to other dealers in leaf tobacco, and to manufacturers of tobacco, snuff, or cigars, and to such persons as are known to be purchasers of leaf tobacco for export: Provided, It shall be lawful for any licensed manufac- turer of cigars to purchase leaf tobacco of any licensed dealer or other licensed manufacturer in quantities less than the original package, for use in his own manufactory exclusively. Special-tax provision repealed by section 26, act of October 1; 1890. Special tax again imposed by act of June 13, 1898. (p. 140. Compilation of 1900.) Again repealed by act of Apr. 12, 1902, sec. 7 (32 Stat., 97). as to regis"" 1 eDt SeC - 26 & Ct °f 0ct 1 ' 1890 ^ 6 Stat > 567 ) > ( Su PP- R- S; vol. 1,862)]. * * * Every such dealer in leaf tobacco, * * * manufacturer and peddler shall, however, reg- ister with the collector of the district his name, or style, place of residence, trade, or business, and the place where such trade or business is to be carried on, the same as though the tax had not been repealed, and a failure to Digitized by Microsoft® TOBACCO AND SNUFF. 261 register as herein required shall subject such person to a penalty of fifty dollars. Penalty for failure to register (T. D. 854, T. D. 1612). Sec. 3359. It shall be the duty of any dealer in leaf to- Dealers in leaf bacco, or in any material used in manufacturing tobacco statement of or snuff, on demand of any officer of internal revenue, to landed*™ de " render a true and complete statement, under oath, of the quantity and amount of such leaf-tobacco or materials sold or delivered to any person named in such demand, and in case of refusal or neglect to render such statement, or if there is cause to believe such statement to be incor- rect or fraudulent, the collector shall make an examina- tion of persons, books, and papers, in the manner provided Examination of • i , » , n i i * • A persons, booics, in relation to frauds and. evasions. and papers. Sections 3163a, page 75, and 3173, page 86. Sec. 3360 [as amended hy sec. 14, Act of Mar. 1, 1879 A £g£t°g*£ c ° (20 Stat, 327}.] Every dealer in leaf-tobacco shall make daily entries in two books kept for that purpose, one Record No. 59. book to be furnished by the government, under such regu- lations as the Commissioner of Internal Revenue shall prescribe, of the number of hogsheads, cases, and pounds of leaf-tobacco purchased or received by him on assign- ment, consignment, transfer, or otherwise, and of whom purchased or received, and the number of hogsheads, cases, or pounds sold by him, with the name and resi- dence, in each instance, of £he person to whom sold, and, if shipped, to whom shipped, and to what district; one of these books shall be kept at his place of business, and shall be open at all hours to the inspection of any internal- revenue officer or agent, and the other shall, at the end of . each and every year, and upon the discontinuance of business of any leaf dealer during any year, be handed over to the collector of his district for the use of the government. And every dealer in leaf-tobacco who Penalty, willfully neglects or refuses to keep the books herein provided for, and in the manner which shall be prescribed by the Commissioner of Internal Revenue, or to transfer to the collector of his district, as herein provided, the duplicate copy containing his daily transactions, as afore- said, shall be fined not less than one hundred dollars nor more than five thousand dollars, and imprisoned not more than one year. [Sec. 3361] repealed. See page 257. Sec. 35. [Act of Aug. 5, 1909, 36 Stat, 110.] That un- bJ^fSu^toS: stemmed leaf tobacco in the natural leaf, in the hand, and not manufactured or altered in any manner, raised and grown in the United States, shaU not be subject to any internal-revenue tax or charge of any kind whatsoever, and it shall be lawful for any person to buy and sell such un- stemmed tobacco in the leaf, in the hand, without pay- ment of tax of any kind: Provided, That any person, other than the farmer or producer of leaf tobacco, who Digitized by Microsoft® 262 TOBACCO AND SNUFF. sells leaf tobacco to manufacturers of tobacco, snuff or cigars shall be deemed and considered a dealer in leaf tobacco, and become subject to all the provisions of section thirty-two hundred and forty-four, as amended by section fourteen, Act of March first, eighteen hundred and seventy-nine, and also as amended by the Act of March third, eighteen hundred and eighty-three, and, further, shall be subject to all the provisions of section thirty-three hundred and sixty, as amended by section fourteen, Act of March first, eighteen hundred and seventy-nine, and of sections thirty-three hundred and fifty-nine and thirty-three hundred and ninety-one, United States Revised Statutes. ie5 e tobS er c£ Every person shall be regarded as a retail dealer in leaf fined. tobacco whose business it is to sell leaf tobacco in quan- tities of less than an original hogshead, case or bale; or who shall sell directly to consumers or to persons other than dealers in leaf tobacco or to manufacturers of to- bacco, snuff or cigars, or to persons who purchase in original packages for export. Registry. Every such retail dealer in leaf tobacco shall register with the collector of the district his name or style, place of residence, trade or business, and the place where such trade or business is to be carried on; and a failure to register as herein required shall subject such person to a penalty of fifty dollars; and every retail dealer in leaf tobacco shall also keep a book and enter therein daily his purchases of leaf tobacco and his sales, where such sales amount to two pounds or more to one person in one day. Such record shall be kept written up to date and shall be in such form and contain such entries as shall be prescribed by the Commissioner of Internal Revenue, with the ap- Books. proval of the Secretary of the Treasury, and such books shall be open at all times for the inspection of any internal- revenue officer or agent. self whom may -^ny P er son who has duly qualified as a retail dealer in leaf tobacco may sell natural leaf tobacco grown or raised in the United States in its condition as cured on the farm, in the hand, and not manufactured in any way, except to manufacturers of tobacco, snuff or cigars, without the payment of any tax on such leaf tobacco whatsoever, and so much of section sixty-nine, tariff Act of August twenty-seventh, eighteen hundred and ninety-four, which took effect the following day, and section thirty-two hundred and forty-four, United States Revised Statutes, or any other existing law, as is inconsistent with the pre- visions of this Act, is hereby repealed. Record no. 145. A n d ft shall'be the duty of every retail dealer in leaf tobacco, as herein described, under regulations to be prescribed by the Commissioner of Internal Revenue with the approval of the Secretary of the Treasury, to furnish on demand to any internal-revenue officer or other authorized agent of the Treasury Department a true and correct statement, verified by his oath or affirmation, of Digitized by Microsoft® TOBACCO AND SNUFF. 263 all his sales of leaf tobacco in quantities of ten pounds or more to any one person in any one day, with the name and residence in each instance of the person to whom sold, and any such retail dealer in leaf tobacco who shall willfully refuse to furnish such information or keep the book as required herein, or who shall knowingly make any false statements or false entries in such book as to any of the facts aforesaid, shall be guilty of a misdemeanor, and on conviction shall be liable to a fine of fifty dollars Penalty. for each offense: And provided further, That nothing in Sales °y farm - this Act shall be construed as imposing any restrictions whatsoever upon the farmers or growers of leaf tobacco in regard to the sales of their leaf tobacco. Sec. 34. [Act of Aug. 5, 1909.(36 Stat., 110).] That the provisions of sections thirty, thirty-one, thirty-two, and thirty-three of this Act shall not take effect until July first, nineteen hundred and ten. Relates to sections 3362, 3368, 3392, and 3394, amended by Act of August 5, 1909. Sec. 3362 [as amended by sec. SO of the Act of Aug. 5, 1909 (36 Stat, 108).] All manufactured tobacco shall be put up and prepared by the manufacturer for sale, or removal for sale or consumption, in packages of the fol- lowing description and in no other manner: All smoking tobacco, snuff, fine-cut chewing tobacco, Packages desig- all cut and granulated tobacco, all shorts, the refuse of fine-cut chewing, which has passed through a riddle of thirty-six meshes to the square inch, and all refuse scraps, clippings, cuttings, and sweepings of tobacco, and all other kinds of tobacco not otherwise provided for, in packages containing one-half ounce, three-fourths of an ounce, and further packages with a difference between each package and the one next smaller of one-fourth of an ounce up to and including four ounces, and packages of six ounces, seven ounces, eight ounces, ten ounces, twelve ounces, fourteen ounces, and sixteen ounces : Pro- Proviso. vided, That snuff may, at the option of the manufacturer, snufl. be put up in bladders and in jars containing not exceeding twenty pounds. All cavendish, plug, and twist tobacco, in wooden pack- ag *^ p° ug p ^tc" ages not exceeding two hundred pounds net weight. And every such wooden package shall have printed or Marking. marked thereon the manufacturer's name and place of manufacture, the registered number of the manufactory, and the gross weight, the tare, and the net weight of the tobacco in each package: Provided, That these limita- f™orts S oxee P t- tions and descriptions of packages shall not apply to ed. tobacco and snuff transported in bond for exportation and actually exported: And provided further, Thatperique saiesoiperique, ,i J n> n f j i i j.i j> jr i a etc., in bulk free tobacco, snuff flour, fine-cut snorts, the refuse ol nne-cut ftax. chewing tobacco, refuse scraps, clippings, cuttings, and sweepings of tobacco, may be sold in bulk as material, and without the payment of tax, by one manufacturer Digitized by Microsoft® 264 TOBACCO AND SNUFF. directly to another manufacturer, or for export, under such restrictions, rules, and regulations as the Commis- sioner of Internal Revenue may prescribe : And 'provided pack™ g «! sition ol further, That wood, metal, paper, or other materials may be used separately or in combination for packing tobacco, snuff, and cigars, under such regulations as the Com- missioner of Internal Revenue may establish. Congress may prescribe any rule or regulation which is not in itself unreasonable, relative to the manufacture and handling of tobacco or cigars. (Felsenheld v. U. S. (1902), 186 U. S., 126, affirming 103 Fed. Rep., 453.) Tobacco and snuff must be put up by the manufacturer in prescribed packages. (U. S. v. 288 Packages of Merry World Tobacco, 103 Fed. Rep., 453.) Section 3362 was amended by section 14, act of March 1, 1879 (20 Stat., 327), and act of January 9, 1883 (22 Stat., 401), section 3, act of June 13, 1898 (30 Stat., 449), act of July 1, 1902, and section 30, act of August 5, 1909 (36 Stat., 108). Sec. 3363 [as amended by sec. 31, act of Oct. 1, 1890 {26 Stat., 567).] No manufactured tobacco shall be sold or offered for sale unless put up in packages and stamped as prescribed in this chapter, except at retail by retail dealers from the packages authorized by section thirty-three hundred Tobacco and and sixty-two of the Revised Statutes; and every person snuff to be sold i n ™^ <• i _o> i • i c only in pre- who sells or oners tor sale any snuff or any kind of manu- ag r i 1 fpena]t a y?e i x-f ac t' ure( i tobacco not so put up in packages and stamped ception. shall be fined not less than five hundred dollars nor more than five thousand dollars, and imprisoned not less than six months nor more than two years. U. S. v. Jenkinson, 15 Fed. Rep., 903. caution label. g EC _ 3354 [ as amended oy sec. 5, act of Mar. 3, 1883 {22 Stat., 4S8).] Every manufacturer of tobacco or snuff shall, in addition to all other requirements of this title relating to tobacco, print on each package, or securely affix, by pasting, on each package containing tobacco or snuff manufactured by or for him, a label, on which shall be printed * * * the number of the manufactory, the district and State in which it is situated, and these words : Notice. — The manufacturer of this tobacco has complied with all requirements of law. Every person is cautioned, under the penalties of law, not to use this package for tobacco again. Penalty. Every manufacturer of tobacco who neglects to print on or affix such label to any package containing tobacco made by or for him, or sold or offered for sale by or for him, and every person who removes any such label so affixed from any such package, shall be fined fifty dollars for each pack- age in respect to which such offense shall be committed. [Sec. 3365.] Obsolete. ba^"notbran£ Sec. 3366. Every person who purchases, or receives for ed or stamped; sale, any manufactured tobacco or snuff which has not pena y. been branded or stamped according to law, shall be liable to a penalty of fifty dollars for each offense. Digitized by Microsoft® TOBACCO AND SNUFF. 265 Sec. 3367. (Buying tobacco from a manufacturer who has not paid special tax.) Obsolete, as manufacturers are not now required to pay special tax. Sec. 3368 [as amended ly sec. 31, act of Aug. 5, 1909 S!Sfactu"r'ed (36 Stat., 109).] Upon tobacco and snuff manufactured tobacco and and sold, or removed for consumption or use, there shall snuff ' be levied and collected the following taxes: On snuff, manufactured of tobacco or any substitute snufl. for tobacco, ground, dry, damp, pickled, scented, or other- wise, of all descriptions, when prepared for use, a tax of eight cents per pound. And snuff flour, when sold, or removed for use or consumption, shall be taxed as snuff, and shall be put up in packages and stamped in the same manner as snuff. On all chewing and smoking tobacco, fine-cut, caven- chewing and dish, plug, or twist, cut or granulated, of every descrip- smo g ' tion; on tobacco twisted by hand or reduced into a con- dition to be consumed, or in any manner other than the ordinary mode of drying and curing, prepared for sale or consumption, even if prepared without the use of any machine or instrument, and without being pressed or sweetened; and on all fine-cut shorts and refuse scraps, clippings, cuttings, and sweepings of tobacco, a tax of eignt cents per pound. This is an excise tax, and Congress has the power to increase it, at least while the property is held for sale, and before it has passed into the hands of the consumer. (Patton v. Brady, 184 IT. S., 608; additional tax of 3 cents per pound on tobacco in the hands of dealers imposed by sec. 3, act of June 13, 1898). Section 3368 was amended by section 30, act of October 1, 1890 (26 Stat., 619); section 3, act of June 13, 1898 (30 Stat., 448); section 3, act of March 2, 1901 (31 Stat., 939); section 3, act of April 12 ,1902, and section 31, act of August 5 , 1909 (36 Stat. , 109), in effect July 1, 1910. Date of acts imposing tax on tobacco and rates of tax. Tobacco. Smoking, made exclusively of stems Do Smoking, prepared with all the stems Cavendish, plug, twist, fine-cut, valued at not over 30 cents per pound Cavendish, plug, twist, fine-cut, valued at over 30 cents per pound Cavendish, plug, twist, fine-cut, and manufactured tobacco of all descrip- tions, except smoking tobacco Snuff Smoking, made exclusively of stems Smoking, prepared with all the stems in, and fine-cut shorts Cavendish, plug, twist, etc., and fine- cut chewing Snufl Twisted by hand Rate of tax per pound. Cents. 2 5 5 10 15 Acts impos- ing tax. July 1, 1862 Mar. 3, 1863 July 1, 1862 ....do ....do Mar. 3, 1863 July 1, 1862 June 30,1864 ....do ....do ....do Mar. 3,1866 Acts repeal- ing tax. Mar. 3, 1863 June 30,1864 ....do Mar. 3, 1863 ....do June 30,1864 do July 13,1866 Mar. 3, 1865 do do July 13,1866 Length of time rates were in force. Months. 6 16 22 6 6 16 22 25 9 ■' 16 Digitized by Microsoft® 266 TOBACCO AND SNUFF. Date of acts imposing tax on tobacco and rates of tax — Continued. Tobacco. Hate of tax per pound Acts impos- ing tax. Acts repeal- ing tax. Length of time rates were in force. Smoking, of all kinds, not otherwise pro- vided for Cavendish, plug, twist, etc., and fine-cut chewing Snuff Smoking, not sweetened, stemmed, or butted Twisted by hand, etc., and fine-cut shorts Smoking, sweetened, stemmed, or butted Chewing Chewing, etc., smoking,etc., part of the •stems removed Smoking, exclusively of stems, etc SnufI All kinds, except snuff, cigars, cheroots, and cigarettes Do.! Do Do Smoking and manufactured tobacco and snufi* Manufactured tobacoo and snuff Do Do Cents. 35 Mar. 3, 1865 .do. .do.. July 13,1866 do .do., .do. July 20,1868 do do June 6, 1872 Mar. 3,1875 Mar. 1,1879 Mar. 3,1883 Oct. 1,1890 June 13,1898 Apr. 12,1902 Aug. 5, 1909 July 13,1866 do July 20,1868 .do.. .do.. .do.. .do- June 6,1872 do Mar. 1,1879 Mar. 3,1875 Mar. 1,1879 Mar. 3,1883 Oct. 1,1890 June 13,1898 Apr. 12,1902 Aug. 5,1909 Months. 16 16 40 24 24 24 24 47 47 129 32 50 48 91 90 49 96 The acts relating to the tax on manufactured tobacco and snuff went into operation immediately on their passage, except the following: Act of March 3, 1865, took effect April 1, 1865; act of July 13, 1866, took effect August 1, 1866; act of June 6, 1872, took effect July 1, 1872; act of March 1, 1879, took effect May 1, 1879; act of March 3, 1883, took effect May 1, 1883 (Rep. Com. Int. Rev., 1888, p. 136); act of October 1, 1890, took effect January 1, 1891; act of June 13, 1898, took effect June 14, 1898; act of March 2, 1901, which took effect July 1, 1901, allowed 20 per cent discount on all sales of tobacco and snuff stamps, virtually making rate 9.6 cents; act of April 12, 1902, took effect July 1, 1902; and act of August 5, 1909, took effect July 1, 1910. The tax on manufactured tobacco and snuff first required to be paid by stamps. (Act of July 20, 1868.) Stamps not of money value were required to be affixed by in- spectors previous to that time. (Act of Mar. 3, 1865.) The term "granulated tobacco " not synonymous with "snuff." (Venable v. Richards, 105 U. S., 636; 28 Int. Rev. Rec, 162; affirming 1 Hughes, 326; 22 Int. Rev. Rec, 299.) Tobacco stamped and removed in forenoon of March 3, 1875, while the act of that date which increased the tax to 24 cents per pound was signed in the afternoon. The increase of tax did not apply in that case. (Burgess v. Salmon, 97 U. S., 381; 25 Int. Rev. Rec, 31; affirming 1 Hughes, 356; 21 Int. Rev. Rec, 333.) Manufactured tobacco shipped in bond from the manufactory and stored in an export bonded warehouse on the 14th of June, 1872, was subject to the tax of 32 cents per pound prescribed by the internal-revenue act of July 20, 1868. (Jones v. Black- well, 100 U. S., 599; 26 Int. Rev. Rec, 114; 14 Op. Atty. Gen., 110; 16 Int. Rev. Rec, 77.) Section 4 of "An act to repeal war revenue taxation, and for other purposes," approved April 12, 1902, provided for rebate of tax on tobacco held by manufacturers or dealers on which the Digitized by Microsoft® TOBACCO AND SNUFF. 267 higher rate had been paid. (Hyams v. United States, 139 Fed. Rep., 997; 146 ibid., 15.) The rules and regulations prescribed by the Commissioner were authorized and were not unreasonable. (Powell v. United States (1905), 135 Fed., 881.) Sec. 3369. The Commissioner of Internal Revenue stamps, how shall cause to be prepared suitable and special stamps foresaid, "and' sold" the payment of the tax on tobacco and snuff, which shall indicate the weight and class of the article on which pay- ment is to be made, and shall be affixed and canceled in the mode prescribed by the Commissioner of Internal Revenue, and stamps when used on any wooden package shall be canceled by sinking a portion of the same mto the wood with a steel die, and also such export-stamps as are required by law. Such stamps shall be furnished to the collectors requiring them, and each collector shall keep at ail times a supply equal in amount to three months' sale thereof, and shall sell the same only to the manufacturers of tobacco and snuff in their respective districts who have given bonds as required by law, and to owners or con- signees of tobacco or snuff, upon the requisition of the proper custom-house officer having the custody of such tobacco or snuff; and to persons required by law to affix the same to tobacco or snuff on hand on the first day of January, eighteen hundred and sixty-nine. And every collector shall keep an account of the number, amount, Record No. 98. and denominate values of stamps sold by him to each manufacturer or other person aforesaid: Provided, That such stamps as may be required to stamping tor- stamp tobacco, snuff, or cigars, sold under distraint hy^^J^^ ' any collector of internal revenue, or for stamping any tobacco, snuff, or cigars which may have been abandoned, condemned, or forfeited, and sold by order of court or of any Government officer for the benefit of the United States, may, under such rules and regulations as the Commissioner of Internal Revenue shall prescribe, be used by the collector making such sale, or furnished by a collector to a United States marshal, or to any other Government officer making such sale for the benefit of the United States, without making payment for said stamps so used or delivered; and any revenue collector using or furnishing stamps in manner as aforesaid, on presenting vouchers satisfactory to the Commissioner of Internal Revenue, shall be allowed credit for the same in settling his stamp account with the Department: And provided further, That in case it shall appear that kestructton^ oi any abandoned, condemned, or forfeited tobacco, snuff, b^cco and cigars. or cigars, when offered for sale, will not bring a price equal to the tax due and payable thereon, such goods shall not be sold for consumption in the United States; and upon application made to the Commissioner of Internal Revenue, he is authorized and directed to order the destruction of such tobacco, snuff, or cigars by the officer in whose custody and control the same may be at the Digitized by Microsoft® 268 TOBACCO AND SNUFF. time, and in such manner and under such regulations as the Commissioner of Internal Revenue may prescribe. As to power to establish, alter, or change stamps, etc., see sec- tions 3445 and 3446 as amended, pages 354, 355. As to stamps on tobacco sold on distraint, etc., section 3458, page 362. Tobacco used as samples must be stamped. (23 Int. Rev. Rec, 29.) As to the issue of duplicate stamps for restamping packages of tobacco from which the stamps have been lost or destroyed by accident. (See sec. 3315, R. S., p. 209.) The term "tax," as used in the last proviso of section 3369, is not intended to include import duties; and cigarettes, when for- feited, may be sold and delivered when they bring enough to pay the internal-revenue tax, although they may not bring enough to pay that and the customs duties. (United States v. 59 Demijohns Aguadiente and Four Barrels of Cigarettes. (1889.) 39 Fed. Rep., 401.) See Department Circular, No. 34, February 18, 1898. T. D., 18984.) Tobacco manu- Sec. 3370. Whenever tobacco or snuff of any descrip- factured by one , . i*ji*ii ■ . + person lor an-tion is manufactured, m whole or in part, upon commis- sha'resV stemp^ s i° n or shares, or the material from which any such arti- by whom affixed; des are made, or are to be made, is furnished bv one cases. person and made and manufactured by another, or the material is furnished or sold by one person with an under- standing or agreement with another that the manu- factured article is to be received in payment therefor or for any part thereof, the stamps required by law shall be affixed by the actual maker or manufacturer before the article passes from the place of making or manufacturing. And in case of fraud on the part of either of said persons in respect to said manufacture, or of any collusion on their part with intent to defraud the revenue, such mate- rial and manufactured articles shall be forfeited to the United States; and each party to such fraud or collusion penalty. shall be deemed guilty of a misdemeanor, and be fined not less than one hundred dollars nor more than five thousand dollars, and imprisoned for not less than six months nor more than three years. tax S o e n S ™obacco f ^ec. ^*71 [as amended by sec. 14, act oj Mar. 1, 1879 snun\ n and° cfgare (20 Stat., 327).] Whenever any manufacturer of tobacco, stamps.* 1 WIth0Ut snuff, or cigars, sells, or removes for sale or consumption, any tobacco, snuff, or cigars, upon which a tax is required to be paid by stamps, without the use of the proper stamps, it shall be the duty of the Commissioner of Internal Revenue, within a period of not more - th#n two years after such sale or removal, upon satisfactory proof, to estimate the amount of tax which has been omitted to be paid, and to make an assessment therefor, and certify the same to the collector. The tax so assessed shall be in addition to the penalties imposed by law for such sale or removal: Provided, however, That no such assessment shall be made until and after notice to the manufacturer of the alleged sale and removal to show cause against said assessment; and the Commissioner of Internal Revenue shall, upon a full hearing of all the Digitized by Microsoft® TOBACCO AND SNUFF. 269 evidence, determine what assessment, if any, should be made. It is estimated that 25 pounds of leaf tobacco will make 1,000 cigars. (Regulations, No. 8, Rev., p. 58.) Authority of Commissioner under the provisions of sections 3371 and 3396 to examine returns of cigar manufacturers and to treat deficiency in product based on the return of 1,000 cigars for every 25 pounds of tobacco as prima facie evidence ot non- payment of taxes. (United States v. Appel and Katencamp, 22 Int. Rev. Rec, 169.) Sec. 3372. Every manufacturer of tobacco or snuff who Removing un- removes, otherwise than as provided by law, or sells, with- ^jjffi' stomps^ out the proper stamps denoting the tax thereon, or with- ° r payment of out havmg paid the special tax or given bond as required bond, malTnf by law, any tobacco or snuff, or who makes false and fabe entnes > etc - fraudulent entries of manufactures or sales of tobacco or snuff, or makes false or fradulent entries of the purchase or sales of leaf-tobacco, tobacco stems, or other material, or who affixes any false, forged, fraudulent, spurious, or counterfeit stamp, or imitation of any stamp, required by law, or any stamp required by law which has been pre- viously used, to any box or package containing any tobacco or snuff, shall in addition to the penalties else- where provided by law for such offenses, forfeit to the Forfeiture. United States all the raw material and manufactured or partly manufactured tobacco and snuff, and all ma- chinery, tools, implements, apparatus, fixtures, boxes, and barrels, and all other materials which may be found in his possession, in his manufactory, or elsewhere. The tobacco is forfeited for fraud of the manufacturer in the possession of an innocent purchaser. (U. S. v. 800 Caddies of Tobacco, 2 Bond, 305, Fed. Cas. No. 15036.) Raw material intended for fraudulent manufacture may be seized for forfeiture wherever found. (United States v. 16 Hogsheads Tobacco, 2 Bond, 137, Fed. Cas. No. 16302.) Sec. 3373. The absence of the proper stamp on any Absence of , - jx iii jx i nn a* stamp to be evi- package of manufactured tobacco or snuft snail be notice dence of nonpay- to all persons that the tax has not been paid thereon, and ment ' shall be prima-facie evidence of the non-payment thereof. And such tobacco or snuff shall be forfeited to the Forfeiture. United States. United States v. Keyes (10 Fed. Rep., 876). U. S. v. 117 Packages of Plug Tobacco (10 Ben., 343, Fed. Cas. No. 15936). "Quantity of Tobacco (5 Ben., 407, 20 Fed. Cas. No. 11500.) Sec. 3374. Every person who removes from any manu- ee B t em m ving ro e er factory, or from any place where tobacco or snuff is made, packaged" 1 " any manufactured tobacco or snuff without the same being jSmg^u ni aw"- put up in proper packages, or without the proper stamp fuiiy.etc. for the amount of tax thereon being affixed and canceled, as required by law; or, if the same be intended for export, without the proper export stamp being affixed; or who uses, sells, or offers for sale, or has in possession, except in the manufactory, or while in transfer under bond or a collector's permit, from any manufactory, store, or ware- Digitized by Microsoft® 270 TOBACCO AND SNUFF. house, to a vessel for exportation to a foreign country, any manufactured tobacco or snuff, without proper stamps for the amount of tax thereon being affixed and canceled; or who sells, or offers for sale, for consumption in the United States, or uses, or has in possession, except in the manufactory, or while in transfer under bond or a collec- tor's permit, from any manufactory, store, or warehouse, to a vessel for exportation to a foreign country, any manu- factured tobacco or snuff on which only the stamp mark- ing the same for export has been affixed, shall for each Penalty. such offense, respectively, be fined not less than one thousand dollars nor more than five thousand dollars, and be imprisoned not less than six months nor more than two years. Affixing false Sec. 3375. Every person who affixes to any package bKuse(i amps containing tobacco or snuff any false, forged, fraudulent, spurious, or counterfeit stamp, or a stamp which has been before used, shall be deemed guilty of a felony, and Penalty. shall be fined not less than one thousand dollars nor more than five thousand dollars, and imprisoned not less than two years nor more than five years. tifdTackages 111 ^ Sec - 3376 - Whenever any stamped box, bag, vessel, be destroyed; wrapper, or envelope of any kind, containing tobacco or using a |ame. ms ' or snuff, is emptied, the stamp or stamps thereon shall be destroyed by the person in whose hands the same may be. Penalty. And every person who willfully neglects or refuses so to do shall, for each such offense, be fined fifty dollars, and imprisoned not less than ten days nor more than six months. And every person who sells or gives away, or who buys or accepts from another any such empty stamped box, bag, vessel, wrapper, or envelope of any kind, or the stamp or stamps taken from any such empty- box, bag, vessel, wrapper, or envelope of any kind, shall, for each such offense, be fined one hundred dollars, and imprisoned for not less than twenty days and not more than one year. And every manufacturer or other person who puts tobacco or snuff into any such box, bag, vessel, wrapper, or envelope, the same having been either emptied, or partially emptied, or who has in his possession, or affixes to any box or other package, any stamp which has been pre- viously used, or who sells, or offers for sale, any box or other package of tobacco, snuff, or cigars, having affixed thereto any fraudulent, spurious, imitation, or counterfeit stamp, or stamp that has been previously used, or sells from any such fraudulently stamped box or packagej or has in his possession any box or package as aforesaid, knowing the same to be fraudulently stamped, shall, for each such offense, be fined not less than one hundred dollars nor more than five hundred dollars, and imprisoned for not less than one year nor more than three years. See section 3455, p. 360. bacS P and d snufl: Se0 - 3377 t as amended hy sec. 14, act of Mar. 1, 1879 (20 Stat., 327).] All manufactured tobacco and snuff (not in- Digitized by Microsoft® TOBACCO AND SNUFF. 271 eluding cigars) imported from foreign countries, shall, in addition to the import duties imposed on the same, pay the tax imposed by law on like kinds of tobacco and snuff manufactured in the United States, and have the same stamps respectively affixed. Such stamps shall be affixed and canceled on all such articles so imported by the owner or importer thereof, while they are in the custody of the proper custom-house officers, and such articles shall not Eass out of the custody of said officers until the stamps ave been affixed and canceled. Such tobacco and snuff shall be put up in packages, as prescribed by law for like articles manufactured in the United States before the stamps are affixed; and the owner or importer shall be liable to all the penal provisions prescribed for manu- factures of tobacco and snuff manufactured in the United States. Whenever it is necessary to take any such arti- cles, so imported, to any place for the purpose of repack- ing, affixing, and canceling such stamps, other than the public stores of the United States, the collector of cus- toms of the port where they are entered shall designate a bonded warenouse to which they shall be taken, under the control of such customs officers as he may direct. And every officer of customs who permits any such articles to pass out of his custody or control without compliance by the owner or importer thereof with the provisions of this section relating thereto, shall be deemed gudty of a mis- demeanor, and shall be fined not less than one thousand dollars nor more than five thousand dollars, and impris- oned not less than six months nor more than three years : Provided, That scraps, cuttings, and clippings of tobacco imported • ,7/- r ' i t± _i7 scraps, cuttings, imported from any Joreign country may, ajter the proper and clippings of customs duty has been paid thereon, be withdrawn in bulk toha£00 - without the payment of the internal-revenue tax, and trans- ferred as material directly to the factory of a manufacturer of tobacco or snuff, or of a cigar manufacturer, under such re- strictions and regulations as shall be prescribed by the Com- missioner of Internal Revenue and approved by the Secre- tary of the Treasury. Sec. 3378. (Obsolete) . Tobacco deemed as having been manufactured after July twentieth,, eighteen hundred and sixty-eight. Sec. 3379. (Obsolete.) Relates to tobacco, snuff, and cigars manufactured between July 20, 1868, and November Sec. 3380. (Obsolete.) Selling tobacco falsely repre- sented to be made and, tax paid before July 20, 1868. Sec. 3244 (as amended. Eleventh sub-section]. Any per- ^^iererf to- son who sells or offers to sell and deliver manufactured tobacco, snuff, or cigars, traveling from place to place, in the town or through the country, shall be regarded as a peddler of tobacco. Under existing law peddlers of tobacco are not required to pay special tax. Digitized by Microsoft® 272 TOBACCO AND SNUFF. bacco dlers ot t0 " Sec - 3381 f as amended by sec. 28, act of Oct. 1, 1890 (26 Stat., 618)]. Every peddler of tobacco, before com- mencing, or, if he has already commenced, before con- tinuing to peddle tobacco, shall furnish to the collector Form a 95 ement '°f ^is district a statement accurately setting forth the place of his residence, and, if in a city, the street and num- ber of the street where he resides, the State or States through which he proposes to travel; also whether he proposes to sell his own manufactures or the manufactures of others, and, if he sells for other parties, the person for Bond. Form w hom he sells. He shall also give a bond in the sum of five hundred dollars, to be approved by the collector of the district, conditioned that he shall not engage in any attempt, by himself or by collusion with others, to defraud the Government of any tax on tobacco, snuff, or cigars; that he shall neither sell nor offer for sale any tobacco, snuff, or cigars, except in original and full packages, as the law requires the same to be put up and prepared by the manufacturer for sale, or for removal for sale or consump- tion, and except such packages of tobacco, snuff, and cigars as bear the manufacturer's label or caution notice, and his legal marks and brands, and genuine internal- revenue stamps which have never before been used. peddlers oi to- Sec. 3382. Every peddler of tobacco, snuff, or cigars, withwagon™ g traveling with a wagon, shall affix and keep on the same, in a conspicuous place, a sign painted in oil-colors, or gilded, giving his full name, business, and collection dis- trict. Pesi™™t. the amount wrongfully or fraudulently claimed or sought to be obtained, or the sum of five hundred dollars, at the election of the Secretary of the Treasury, to be recovered as in other cases of forfeiture provided for in the internal revenue laws. See also penalty provided by section 3443, page 353. Digitized by Microsoft® Chapter Seven. CIGARS. Sec. 3244. Subsection 10. Manufacturers of cigars denned. 3387 (amended). Manufacturer's state- ment, bond, and certificate; cig- arettes and cheroots held to be cigars; penalty. 3388. Manufacturer's sign. 3389 (amended). Record of manufactur- ers. 3390. Annual inventory, book, and monthly abstracts of manufac- turer; penalty. 3391. Dealers in materials for cigars to. make sworn statement; exami- nation of books. 3392 (amended). How cigars and ciga- rettes to be put up and stamped ; penalty. 3393 (amended). Caution notice; pen- alty. 3394 (amended). Tax on cigars and ciga- rettes. 3395. Stamps, how prepared, furnished, etc. 3396. Commissioner to prescribe regula- tions. Sec. 3397 (amended). Removal without prop- erly boxing, stamping, or brand- ing; using false stamps, etc.; cigars packed for export; penalty. 3398. Absence of stamp cause of for- feiture. Cigars manufactured on shares, commission, or contract, how stamped; fraud, penalty. Forfeiture of property for selling etc., contrary to law, using false stamps, etc. (Obsolete.) Imported cigars to pay tax. 3403. Cigars on hand after April 1, 1869. Selling imported cigars not Eacked and stamped as required y law; penalty. Purchasing cigars not branded or stamped; penalty. (Obsolete.) Stamps on emptied cigar boxes to be destroyed; penalty. Destruction of emptied stamped cigar boxes; penalty. 3399. 3400. 3401 3402. 3404. 3405. 3406. Manufacturers of cigars defined. 278 Sec. 3244, [as amended. Tenth subsection] * * * Every person whose business it is to make or manufacture cigars for himself, or who employs others to make or manufacture cigars, shall be regarded as a manufacturer of cigars. Every person whose business it is to make cigars for others, either for pay upon commission, on shares, or otherwise, from material furnished by others, shall be regarded as a cigar-maker. Every cigar-maker shall cause his name and residence to be registered, without previous demand, with the collector of the district in which such cigar-maker shall be employed; and every manufacturer of cigars employing any cigar-maker who shall have neglected or refused to make such registry shall be fined five dollars for each day that such cigar-maker so offending, by neglect or refusal to register, shall be em- ployed by him. The provision relative to registry of cigar-makers is virtually obsolete. The other provisions of the law on the same subject were stricken out by section 16, act of March 1, 1879 (20 Stat., 347), amending sections 3387, page 279, and 3389, page 280, and the omission to strike this out was evidently accidental. Special tax provision repealed by act October 1, 1890. Special tax again imposed by act June 13, 1898, and repealed by the act of April 12, 1902. (Sec. 5.) Digitized by Microsoft® CIGARS. 279 Seo. 3387 [, as amended by sec. 35, act of Oct. 1, 1890 (26 s Jf e ^f t £™ r '| Stat., 620).} Every person before commencing, or, if he has bond, already commenced, before continuing, the manufacture of cigars, shall furnish, without previous demand therefor, to the collector of the district a statement in duplicate, under fo^no 6 36j nt ' oath, setting forth the place, and, if in a city, the street and number of the street, where the manufacture is to be car- ried on; and when the same are to be manufactured for, or to be sold and delivered to, any other person, the name and residence and business or occupation of the person for whom they are to be manufactured, or to whom they are to be delivered; and shall give a bond, in conformity with 71 Bond - Form the provisions of this Title, in such penal sum as the col- lector may require, not less than [one] hundred dollars, and the sum of said bond may be increased from time to time and additional sureties required, at the discretion of the collector, or under the ^instructions of the Commis- sioner of Internal Eevenue. Said bond shall be condi- tioned that * * * he shall not engage in any at- tempt, by himself or by collusion with others, to defraud the Government of any tax on his manufactures ; that he shall render correctly all the returns, statements, and in- ventories prescribed; that whenever he shall add to the number of cigar-makers employed by him he shall imme- diately give notice thereof to the collector of the district; that he shall stamp, in accordance with law, all cigars man- ufactured by him before he offers the same or any part thereof for sale, and before he removes any part thereof from the place of manufacture ; that he shall not knowingly sell, purchase, expose, or receive for sale, any cigars which have not been stamped as required by law; and that he shall comply with all the requirements of law relating to the manufacture of cigars. Every cigar-manufacturer shall obtain from the collector of the district, who is hereby required to issue the same, a certificate setting forth poimNo'^ij 1 '''' the number of cigar-makers for which the bond has been given, and shall keep the same posted in a conspicuous place within the manufactory; and every cigar-manu- facturer who neglects or refuses to obtain such certificate, or to keep the same posted as hereinbefore provided, shall be fined one hundred dollars. And every person who manufactures cigars of any de- Penalty. scription, without first giving bond as herein required, shall be fined not less than one hundred dollars nor more than five thousand dollars, and imprisoned not less than three months nor more than five years. Cigarettes and cheroots shall be held to be cigars under C herootf 'hlw^to the meaning of this chapter. be cigars. The place of manufacture should be kept separate and apart from the place of sale. (U. S. v. Neid, 13 Int. Rev. Rec, 28; Fed. Cas. No. 15, 860.) A manufacturer of tobacco or cigars can not sell at retail at place of manufacture. (Ludloff v. United States, 108 U. S., 176; 29 Int. Rev. Rec, 125; 16 Op. Atty.Gen.,89; 24 Int. Rev. Rec, 227 Digitized by Microsoft® 280 CIGAES. A manufacturer can not retail cigars in his cigar factory. (Crisp v. Proud, 24 Int. Rev. Rec, 340; 4 Hughes 57, Fed. Oas. No. 3392.) Where cigar manufacturers desire to voluntarily file a new bond, such bonds, if approved by the collector, should be ac- cepted, and the manufacturers' accounts closed under the old bond. Sureties on old bond released when a new bond is given. (T. D. 740.) Bond of minor son of deceased manufacturer. (T. D. 792.) Administrator must obtain consent of sureties to continue under . bond of deceased. (T. D. 926.) Consent of sureties necessary before factory can be enlarged or changed. (T. D. 964.) Manufacturer's Sec. 3388. Every cigar-manufacturer shall place and Slgn- keep on the side or end of the building within which his business is carried on, so that it can be distinctly seen, a sign, with letters thereon not less than three inches in length, painted in oil-colors or gilded, giving his full name and business. Any person neglecting to comply with the requirements of this section shall on conviction, be fined not less than one hundred dollars nor more than five hun- dred dollars. Sign must be in English language. (Regulations No. 8, p. 48.) u Record^ man- Sec. 3389 [, as amended by sec. 34, act of Oct. 1, 1890 (26 cigars to be "kept Stat. , 620) .] Every collector shall keep a record, in a book by collector. provided for that purpose, to be open to the inspection of only the proper officers of internal-revenue, including deputy Record ii. collectors and internal-revenue agents, of the name and resi- dence of every person engaged in the manufacture of cigars in his district, the place where such manufacture is carried on, and the number of the manufactory; and he shall enter in said record, under the name of each manu- facturer an abstract of his inventory and monthly returns; and he shall cause the several manufacturers of cigars in the district to be numbered consecutively, which number shall not thereafter be changed. torV 1I "book nv ™I S EC - 3390. Every person now or hereafter engaged in tries' and month- the manufacture of cigars shall make and deliver to the manutacTu^er ! collector of the district a true inventory, in such form as Form No. 70b. may be prescribed by the Commissioner of Internal Rev- enue, of the quantity of leaf tobacco, cigars, stems, scraps, clippings, ana waste, and of the number of cigar-boxes and the capacity of each box, held or owned by him on the first day of January of each year, or at the time of commencing and at the time of concluding business, if before or after the first of January; setting forth what portion and kinds of said goods were manufactured or produced by him, and what were purchased from others, and shall verify said inventory by his oath indorsed thereon. The collector shall make personal examination of the stock sufficient to verification of satisfy himself as to the correctness of the inventory ; and inventory. shall verify the fact of such examination by oath to be indorsed on the inventory. Every such person shall also Form No. ?3. enter daily in a book, the form of which shall be prescribed by the Commissioner of Internal Revenue, an accurate account o^tytfe&frtfy$fik;f l S§VfP&& purchased by him, the CIGARS. 281 quantity of leaf-tobacco, cigars, stems, or cigar-boxes, of whatever description, manufactured, sold, consumed, or removed for consumption or sale, or removed from the place of manufacture; and shall, on or before the tenth day of each and every month, furnish to the collector of the district a true and accurate abstract from such book, verified by his oath, of all such purchases, sales, and Form No. 72. removals made during the month next preceding. In case of refusal or willful neglect to deliver the inventory or keep the account, or furnish the abstract aforesaid, he shall be fined not less than five hundred dollars nor more Penalty. than five thousand dollars, and imprisoned not less than six months nor more than three years. Verification of returns (T. D. 1646). 1910 (T. D. 1631). Inventory taken July 1, Sec. 3391 It shall be the duty of every dealer in leaf- t ?°? e g r ia ci ™% tobacco or material used in manuf acturing cigars, on de- to make sworn -in rr> r- • , i j.i\l i statement, when mand or any officer of internal revenue, to render to such demanded officer a true and correct statement, under oath, of the quantity and amount of such leaf-tobacco or materials sold or delivered to any person named in such demand; and in case of refusal or neglect to render such statement, or if there is cause to believe such statement to be incor- rect or fraudulent, the collector shall make an examina- of fj^ matlon tion of persons, books, and papers in the manner provided in this Title in relation to frauds and evasions. See sections 3163a, page 76; 3173, page 86; and 3176, page 89. Sec. 3392 [as amended hy sec. 32, act of Oct. 1, 1890 (26 Stat., 619), and by sec. 32, act of Aug. 5, 1909 (36 Stat., 109)]. All cigars weighing more than three pounds per thousand f'gars shall be packed in boxes not before used for that purpose quired. containing, respectively, five, ten, twelve, thirteen, twenty-five, fifty, one hundred, two hundred, two hun- dred and fifty, or five hundred cigars each ; and every per- Penalty, son who sells, or offers for sale, or delivers, or offers to deliver, any cigars in any other form than in new boxes as above described, or who packs in any box any cigars in excess of or less than the number provided by law to be Eut in each box, respectively, or who falsely brands any ox, or affixes a stamp on any box denoting a less amount of tax than that required by law, shall be fined for each offense not more than one thousand dollars, and be impris- oned not more than two years : Provided, That nothing in Pr o™os. this section shall be construed as preventing the sale of cigars at retail by retail dealers from boxes packed, Retail sales. stamped and branded in the manner prescribed by law: And provided further, That every manufacturer of ciga- cigarettes. rettes shall put up all the cigarettes that he manufactures or has manufactured for him and sells or removes for consumption or use, in packages or parcels containing q J r a e c d kages re " five, eight, ten, fifteen, twenty, fifty, or one hundred cigarettes each, and shall securely affix to each of said packages or parcels a suitable stamp denoting the Digitized by Microsoft® 282 CIGAES. Imported rettes. Label and no- tice on cigars. Penalty. Rates of tax. Cigars. Cigarettes. Proviso. Classification. Stamps for new rate of tax. tax thereon, and shall properly cancel the same prior to such sale or removal for consumption or use, under such regulations as the Commissioner of Internal Revenue ciga " shall prescribe; and all cigarettes imported from a foreign country shall be packed, stamped, and the stamps canceled in like manner, in addition to the import stamp indicating inspection of the custom house before they are withdrawn therefrom. Cigars shall be put up in boxes properly stamped and branded with the number of the factory and number of the district and the State. (United States v. 76,125 Cigars, 18 Fed. Rep., 147; Jackson v. United States, 21 Fed. Rep., 35.) Sec. 3393 [as amended by see. 16, act of Mar. 1, 1879 (20 Stat., 327)]. Every manufacturer of cigars shall securely affix, by pasting on each box containing cigars manufactured by or for him, a label, on which shall be printed, besides the number of the manufactory and the district and State in which it is situated, these words: Notice. — The manufacturer of the cigars herein contained has com- plied with all the requirements of law. Every person is cautioned not to use either this box for cigars again, or the stomp thereon again, nor to remove the contents of this box without destroying said stamp, under the penalties provided by law in such cases. Every manufacturer of cigars who neglects to affix such label to any box containing cigars made by or for him, or sold or offered for sale by or for him, and every person who removes any such label, so affixed, from any such box, shall be fined fifty dollars for each box in re- spect to which such offense is committed. Imprinting caution notice on cigar boxes (T. D. 1599). Sec. 3394 [as amended by sec. 33, act of Aug. 5. 1909 (36 Stat., 110).] Upon cigars and cigarettes which shall be manufactured and sold, or removed for consumption or sale, there shall be assessed and collected the following taxes, to be paid by the manufacturer thereof: On cigars of all descriptions made of tobacco or any substitute therefor and weighing more than three pounds per thou- sand, three dollars per thousand; on cigars, made of tobacco, or any substitute therefor, and weighing not more than three pounds per thousand, seventy-five cents per thousand; on cigarettes, made of tobacco, or any substitute therefor, and weighing more than three pounds per thousand, three dollars and sixty cents per thousand; on cigarettes, made of tobacco, or any substitute therefor, and weighing not more than three pounds per thousand, one dollar and twenty-five cents per thousand: Provided, That all rolls of tobacco, or any substitute therefor, wrapped with tobacco, shall be classed as cigars ; and all rolls of tobacco, or any substitute therefor, wrapped in paper or any substance other than tobacco, shall be classed as cigarettes. And the Commissioner of Internal Revenue, with the approval of the Secretary of the Treasury, shall pro- vide dies and stamps for cigars weighing not more than Digitized by Microsoft® CIGARS. 283 Proviso. Denominations Restrictions on all packages. three pounds per thousand; and for cigarettes at the rates of tax imposed by this section: Provided, That such stamps shall be in denominations of five, eight, ten, fifteen, twenty, fifty, and one hundred; and the laws and regulations governing the packing and removal for sale of cigarettes, and the affixing and canceling of the stamps on the packages thereof, shall apply to cigars weighing not more than three pounds per thousand. No packages of manufactured tobacco, snuff, cigars, or cigarettes, prescribed by law, shall be permitted to have packed in, or attached to, or connected with, them, nor affixed to, branded, stamped, marked, written, or printed upon them, any paper, certificate, or instrument purporting to be or represent a ticket, chance, share or mterest in, or dependent upon, the event of a lottery, Lottery. nor any indecent or immoral picture, representation, print, or words; and any violation of the provisions of this paragraph shall subject the offender to the penalties and punishments provided by section thirty-four hundred and fifty-six of the Revised Statutes. Section 3394 was amended by section 2, act of March 3, 1875 (18 Stat., 339); section 4, act of March 3, 1883 (22 Stat., 488); section 10, act of July 24, 1897 (30 Stat., 206); section 3, act of June 13, 1898 (30 Stat., 449); section 3, act of March 2, 1901 (31 Stat., 939); section 3, act of April 12, 1902 (32 Stat., 96); act of July 1, 1902, and section 33, act of August 5, 1909 (36 Stat., 110), taking effect July 1, 1910. "Jumbo 12 ' cigars, or cigars of unusual size, to be classified as manufactured tobacco. The fact that they could be smoked did not altogether determine their character. (D'Estrinoz v. Gerker, 43 Fed. Rep., 285.) Date of acts imposing tax on cigars and cigarettes and rates of tax. Penalty. Cigars valued at not over $5 per M Valued at over $5 and not over $10 per M Valued at over $10 and not over $20 per M Valued at over $20 per M Cheroots valued at not over $5 per M. . . Cigars valued at not over $5 per M Valued at over $5 and not over $15 per M Valued at over $15 and not over $30 per M Valued at over $30 and not over $45 per M Valued at over $45 per M Cigarettes valued at not over $6 per 100 packages of 25 each Valued at over $6 per 100 packages of 25 each Cigarettes made wholly of tobacco Cigars and cheroots made wholly of to- bacco or of any substitutes therefor. . Cigarettes valued at not over $5 per 100 packages of 25 each Valued at over $5 per 100 packages of 25 each Cigarettes made wholly of tobacco or of any substitutes therefor Rates of tax. Per M. $1.50 2.00 2.50 3.50 3.00 3.00 8.00 15.00 25.00 40.00 I 1.00 13.00 3.00 10.00 2.05 s.05 Acts impos- ing tax. July 1, 1862 do do... do... June 30,1804 do... do... do... do... do... do... do... do... Mar. 3, 1865 do do 10.00 do.. Acts repeal- ing tax. June 30,1864 ....do ..do ..do Mar. 3, 1865 ..do ..do ..do ..do ..do ..do ..do ..do July 13,1866 ....do ....do ....do Length of time rates were in force. Months. 22 22 22 9 9 16 16 16 16 i Per 100 packages. DigitiZQ(& f$fa£$CrOSOft®i> ev cent. 284 CIGAES. Date of acts imposing tax on cigars and cigarettes and rates of tax — Continued . Rates of tax. Acts Impos- ing tax. Acts repeal- ing tax. Length of -time rates were in force. Cigars, cigarettes, and cheroots valued at $8 per M or less Valued at over $8 and not over $12 per M Valued at over S12 per M Cigars, cigarettes, and cheroots of all descriptions Cigars and cheroots of all descriptions . . Cigarettes weighing not over 3 pounds per M Weighing over 3 pounds per M Cigars and cheroots of all descriptions . . . Cigarettes weighing not over 3 pounds per M Weighing over 3 pounds per M Cigars and cheroots of all descriptions. . Cigarettes weighing not over 3 pounds per M Weighing over 3 pounds per M Cigars weighing more than 3 pounds per M . Weighing not more than 3 pounds per M Cigarettes weighing more than 3 pounds per M Weighing not more than 3 pounds per M Cigars weighing more than 3 pounds per M Weighing not more than 3 pounds per M Cigarettes weighing more than 3 pounds per M Weighing not more than 3 pounds per M Cigars weighing more than 3 pounds per M Weighing not more than 3 pounds per M Cigarettes weighing more than 3 pounds per M Weighing not more than 3 pounds per M of wholesale value or price of— Not over &2 per M More than S2 per M Cigars weighing more than 3 pounds per M Weighing not more than 3 pounds per M Cigarettes weighing more than 3 pounds per M Weighing not more than 3 pounds per M PerM. {2.00 4.00 '4.00 5.00 5.00 1. 50 5.00 6.00 1.75 0.00 3.00 . 50 3.00 3.00 1.00 3.00 1.00 3.60 1.00 3.60 1.50 3.00 .54 3.00 . 54 1.08 3.00 .75 3.60 1.25 July 13,1866 do do Mar. 2, 1867 July 20,1868 do do Mar." 3,1875 ....do ....do Mar. 3, 1883 ....do ....do July 24,1897 ....do do do June 13,1898 do do do Mar. 2, 1901 do Apr. 12,1902 Mar. 2, 1901 do Aug. 5, 1909 do do do Mar. 2, 1867 ...do.. ...do.. Months. July 20, Mar. 3, ....do. . ....do... Mar. 3, ....do... ....do... June 13, July 24, June 13, 1808 1875 1883 1S97 18(18 ....do... Mar. 2, June 13, ....do... Mar. 2, ....do... Apr. 12, Mar. 2, 1901 1902 1901 17 79 79 79 172 183 10 47 10 10 37 37 49 37 Aug. 5, 1909 ....do ....do . ....do. 108 90 108 108 1 And 20 per cent. The act of July 1, 1862, went into operation Septembe r 1, 1862. The act of July 20, 1868, first required payment of tax on cigars by stamps. Assessment of tax on cigars removed without stamps. (Sec. 3371, p. 268.) Authority of commissioner to examine returns of cigar manu- facturers and to treat deficiency in product based on the return of one thousand cigars for every 25 pounds of tobacco as prima facie evidence of nonpayment of taxes. (See note under sec. 3371, p. 268.) Section 3362, amended, provides that fine-cut shorts, the refuse of fine-cut chewing tobacco, refuse scraps, clippings, cut- tines, and sweepings of tobacco may be sold in bulk as material and without the payment of tax, by one manufacturer directly to anogCT^a^f^ctu^^fo^port, under such restrictions, CIGARS. 285 rules, and regulations as the Commissioner of Internal Revenue may prescribe. This relates to cigar manufacturers as well as manufacturers of tobacco. As to reimportation of articles exported in bond or with draw- back (see sec. 26, act Aug. 5, 1909, p. 337.) Summary of sections of the act of August 5, 1909, effective July 1, 1910. (T. D. 1602.) Increased rates of taxation under said act. (T. D. 1622; T. D. 1629.) Sec. 3395. The Commissioner of Internal Revenue ^JJjg?' f h u ° r w . shall cause to be prepared, for payment of the tax uponEisned, and U ac- cigars, suitable stamps denoting the tax thereon. Such counted for - stamps shall be furnished to collectors requiring them, and collectors shall, if there be any cigar-manufacturers within their respective districts, keep on hand at all times a supply equal in amount to two months' sales thereof, and shall sell the same only to the cigar-manu- facturers who have given bonds and paid the special tax, as required by law, in their districts, respectively, and to importers of cigars, who are required to affix the same to imported cigars in the custody of customs officers, and to persons required by law to affix the same to cigars on hand after the first day of April, eighteen hundred and sixty-nine. Every collector shall keep an account of the Record 47. number, amount, and denominate values of the stamps sold by him to each cigar-manufacturer, and to other persons above described. See sections 3445 and 3446 as amended (pp. 354, 355,) as to au- thority to prescribe how stamps shall be attached, canceled, etc. See, also, section 3369, page 267. Porto Rico. An act to provide means for the sale of internal- revenue stamps in the island of Porto Rico, approved June 29, 1906. (Seep. 374.) Sale of internal-revenue stamps in the island of Porto Rico, Circular No. 679, dated July 25, 1906 (T. D. 1031). Sale of stamps to a sheriff or constable. (25 Int. Rev. Rec. 21.) Sec. 3396. The Commissioner of Internal Revenue Regulations • 7 1 i . • . ,, ,■ 1. authorized. may prescribe such regulations tor the mspection of cigars, cheroots, and cigarettes, and the collection of the tax thereon, as he may deem most effective for the pre- vention of frauds in the payment of such tax. The commissioner has authority to prescribe regulations for the inspection of cigars and the collection of the tax thereon. (Ludloff v. United States, 108 U. S., 176.) Sec. 3397 [, as amended by sec. 16, act of Mar. 1, 1879 Removal with- (20 Stat., 327)}. Whenever any cigars are removed f rom ^S^or any manufactory, or place where cigars are made, without brandin g- being packed in boxes as required by the provisions of this chapter, or without the proper stamp thereon denoting the tax, or without stamping, indenting, burning, or impressing into each box, in a legible and durable manner, the number of the cigars contained therein, the number of the manufactory, and the number of the district and the State, or without properly affixing thereon and canceling the stamp denoting the tax on the same, or are sold, or Digitized by Microsoft® 286 CIGABS. offered for sale, not properly boxed and stamped, they Penalty. shall be forfeited to the United States. And every person who commits any of the above-described offenses shall be fined for each such offense not less than one hundred dollars nor more than one thousand dollars, and impris- oned not less than six months nor more than two years. ien? S or g imi?ai?on And every person who packs cigars in any box bearing stamps. a false or fraudulent or counterfeit stamp, or who affixes to any box containing cigars a stamp in the similitude or likeness of any stamp required to be used by the laws of the United States, whether the same be a customs or internal-revenue stamp, or who buys, receives, or has in his possession any cigars on which the tax to which they are liable has not been paid, or who removes, or causes to be removed, from any box any stamp denoting the tax on cigars, with intent to use the same, or who uses, or permits any other person to use, any stamp so removed, or who receives, buys, sells, gives away, or has in his possession any stamp so removed, or who makes any other fraudulent use of any stamp intended for cigars, or who removes from the place of manufacture any cigars not properly boxed and stamped as required by law, Penalty. shall be deemed guilty of a felony, and shall be fined not less than one hundred dollars nor more than one thousand dollars, and imprisoned not less than six months nor more than three years. for C elp r ort packeii Provided, That cigars packed expressly for export, and which shall be exported to a foreign country under the restrictions and regulations prescribed by the Commis- sioner of Internal Revenue, and approved by the Secre- tary of the Treasury, shall be exempt from the provisions of this section, and also from the provisions of section thirty-three hundred and ninety-three of the Revised Statutes, requiring a label to be affixed to each box. See section 3445, page 354, relative to canceling stamps. Affixing to a box containing domestic cigars a stamp in the similitude of a customs stamp is an indictable offense, and it is not necessary in the indictment to aver an intent to defraud the United States. (United States v. Jacoby, 12 Blatchf. 491, Fed. Cas. No. 15462.) Where a sheriff or constable removes cigars from a cigar fac- tory without the same being properly boxed and stamped, and sells the same unstamped, he is liable to the penalty prescribed. (1899, No. 21167.) Stamps on boxes of cigars must be properly affixed and can- celed to avoid liability to seizure. (T. D. (1899) No. 19063.) Cigars removed from factory without stamping into each box the number of the manufactory and the number of the district and State; the natural inference is that the cigars were removed from the factory in the condition in which they were found. (Jackson v. U. S., 21 Fed. Rep., 35; 30 Int. Rev. Rec, 279.) U. S. v. Woolheim, 11 Int. Rev. Rec, 78. Fed. Cas. No. 16761. Boxes of cigars in the hands of innocent purchasers upon which the number of the factory had not beenimpressed for- feitable. (U. S. v. 76, 125 Cigars, 18 Fed. Rep., 147.) stanp? 6 evidence ^ec. 3398 - Th e absence of the proper revenue-stamp of nonpayment on any box of cigars sold, or offered for sale, or kept for sale, shall be notice to all persons that the tax has not Digitized by Microsoft® ■ CIGARS. 287 been paid thereon, and shall be prima-facie evidence of the nonpayment thereof, and such cigars shall be for- feited to the United States. See section 3376, page 270, (T. D. 1296.) Sec. 3399. Whenever cigars of any description are man-f^'f^,, ™ ufactured, in whole or in part, upon commission or shares, s ? iares > commis- , i , • t • p • r i 3 , ^ p sion, or contract, or the material is furnished by one party and manurac- now stamped. tured by another, or the material is furnished or sold by one party with an understanding or agreement with another that the cigars are to be received in payment therefor, or for any part thereof, the stamps required by law shall be affixed by the actual maker before the cigars are removed from the place of manufacturing. And in Fraud, penalty. case of fraud on the part of either of said parties in respect to said manufacture, or of any collusion on their part with intent to defraud the revenue, such material and cigars shall be forfeited to the United States ; and every person engaged in such fraud or collusion shall be fined not less than one hundred dollars nor more than five thousand dollars, and imprisoned for not less than six months nor more than three years. Sec. 3400. Every manufacturer of cigars who removes pr F °^ u j™ se ^ or sells any cigars without payment of the special tax as a tag, etc., contra- cigar manufacturer, or without having given bond as such, iake°stampsrete S or without the proper stamps denoting the tax thereon; or who makes false or fraudulent entries of the manufac- ture or sale of any cigars; or makes false or fraudulent entries of the purchase or sale of leaf-tobacco, tobacco- stems, or other material used in the manufacture of cigars ; or who affixes any false, forged, spurious, fraudulent, or counterfeit stamp, or imitation of any stamp, required by law to any box containing any cigars, shall, in addition to the penalties elsewhere provided in this Title for such offenses, forfeit to the United States all raw material and manufactured or partly manufactured tobacco and cigars, and all machinery, tools, implements, apparatus, fixtures, boxes, barrels, and all other materials which shall be found in his possession, or in his manufactory, and used in his business as such manufacturer, together with his estate or interest in the building or factory, and the lot or tract of ground on which such building or factory is located, and all appurtenances thereunto belonging. See sections 3708 Revised Statutes, 5413, page 420, and 5430, Revised Statutes. Machines used in violation of law, although leased from a third person ignorant of such violation, are subject to forefeiture. The owner is held to have acted with the knowledge that the property would be subject to forfeiture if the business was unlawfully conducted, and to have taken the risk. (U. S. v. 220 Patented Machines, 99 Fed., 559; T. D. 54.) Sec. 3401. (Obsolete.) Falsely representing cigars to have been made prior to July 20, 1868. Sec. 3402. All cigars imported from foreign countries imported ci- shall pay, in addition to the import duties imposed thereon, Sps.whJn an X m afflxed - 288 CIGARS. . United States, and shall have the same stamps affixed. The stamps shall be affixed and canceled by the owner or importer of the cigars while they are in the custody of the proper custom-house officers, and the cigars shall not pass out of the custody of such officers until the stamps have been so affixed and canceled, but shall be put up in boxes containing quantities as prescribed in this chapter for cigars manufactured in the United States, before the stamps are affixed. And the owner or importer of such cigars shall be liable to all the penal provisions of this Title prescribed for manufacturers of cigars manufactured in the United States. Whenever it is necessary to take any cigars so imported to any place other than the public stores of the United States, for the purpose of affixing and canceling such stamps, the collector of customs of the port where such cigars are entered shall designate a bonded warehouse to which they shall be taken, under the control of such customs officer as such collector may direct. And every officer of customs who permits any such cigars to pass out of his custody or control, without compliance by the owner or importer thereof with the provisions of this section relating thereto, shall be deemed guilty of a mis- demeanor, and shall be fined not less than one thousand dollars nor more than five thousand dollars, and impris- oned not less than six months nor more than three years. Relative to packing and stamping imported cigars: Sec. 2804, amended act of Aug. 28, 1894, Sec. 26. No cigars shall be imported unless the same are packed in boxes of not more than five hundred cigars in each box; and no entry of any imported cigars shall be allowed of less quantity than three thousand in a single package; and all cigars on importation shall be placed in public store or bonded warehouse, and shall not be removed therefrom until the same shall have been inspected and a stamp affixed to each box indicating such inspection, and also a serial number to be recorded in the custom house. And the Secretary of the Treasury is hereby authorized to provide the requisite stamps, and to make all necessary regulations for car- rying the above provisions of law into effect. As to imported cigarettes, see section 3392 as amended, page 281. As to exportation of cigars, see under tobacco, section 3385, page 273. As to drawback on cigars. (Sec. 3386, p. 276.) Instructions for stamping domestic cigars reimported. (Regu- lations No. 8, p. 65.) Cigars imported from the Philippines are not imported from a foreign country. (24 Op. Atty. Gen., 120.) Section 3377 as amended provides, "That scraps, cuttings, and clippings of tobacco imported from any foreign country may, after the proper customs duty has been paid thereon, be with- drawn in bulk without the payment of the internal-revenue tax, and transferred as material directly to the factory of a manu- facturer of tobacco or snuff, or of a cigar manufacturer, under such restrictions and regulations as shall be prescribed by the Commissioner of Internal Revenue and approved by the Secre- tary of the Treasury." afte i r g Tp°r 1 n™ d , ^ec. 3403 - AU ci g ars °f every description, on hand after 1869. 'the first day of April, eighteen hundred and sixty-nine, shall be taken to have been either manufactured or im- ported after the passage of the internal-revenue act of Digitized by Microsoft® CIGAES. 289 July twentieth, eighteen hundred and sixty-eight, and shall be stamped accordingly. Every person who sells or offers for sale any imported selling import- cigars, or cigars purporting or claimed to have been im-p"L C ked rS an°d Eorted, not put up in packages and stamped as provided ^^^ la ™: y this chapter, shall be fined not less than five hundred penalty, dollars nor more than five thousand dollars, and be im- prisoned not less than six months nor more than two years. Sec. 3404. Every person who purchases or receives for Purchasing d- sale any cigars which have not been branded or stamped SampedTp™^ according to law, shall be liable to a penalty of fifty dollars al 'y- for each such offense. Dealers, as well as manufacturers, are liable for selling or offering for sale cigars not properly boxed and stamped. (U. S. v. Edwards, 17 Int. Rev. Rec, 126; Fed. Cas. No. 15025; TJ. S. v. Mena, 29 Int. Rev. Rec, 190.) Sec. [3405.] Obsolete. Relative to purchasing cigars from manufacturers who have not paid special tax. Sec. 3406. Whenever any stamped box containing e m P t tfed ip e S iga?- cigars, cheroots, or cigarettes, is emptied, it shall be the ^° r xes t0 he de- duty of the person in whose hands the same is to destroy for negiec^etc. y utterly the stamps thereon. Any person who willfully neglects or refuses so to do shall, for each such offense, be fined not exceeding fifty dollars and imprisoned not less than ten days nor more than six months. And any per- son who fraudulently gives away or accepts from another, or who sells, buys, or uses for packing cigars, cheroots, or cigarettes, any such stamped box, shall for each such offense be fined not exceeding one hundred dollars and be imprisoned not more than one year. Any revenue officer Destruction of may destroy any emptied cigar-box upon which a cigar- cig?rbox Stamped stamp is found. Section 3315, as amended by section 5, act March 1, 1879, page 209 ; provides for restamping . packages of cigars and cigarettes which have been duly stamped but from which the stamps have been lost or destroyed by unavoidable accident. As to the Philippines (See p. 377). 72170°— 11 19 Digitized by Microsoft® Chapter Eight. OPIUM. [Act ol Oct. 1, 1890 (26 Stat., 667).] Sec. 39. Laws relating to stamps in case of manufactured tobacco and snuff to apply to the manufacture of opium for smoking purposes as far as applicable. 40 (as amended). Penalty of not more than one thousand dollars and imprisonment of not more than one year for each and every violation of law. All prepared smoking opium not stamped to be forfeited. Sec. 36. Tax on opium manufactured in the United States for smoking pur- poses, ten dollars per pound. 37. Manufacturer shall file notices, inven- tories, and bonds, keep books and render returns, put up signs and affix factory number, and conduct his business under such regula- tions as may be prescribed . 38. Prepared smoking opium imported into the United States to be stamped before removal from custom-house. Opium manu- factured in the United States for smoking purposes to be stamped before removal from place of manufacture. manufacture™. Sec. 36. [Act of Oct. 1, 1890 {26 Stat., 567).] That an for smoking pur- internal-revenue tax of ten dollars per pound shall be poses.. levied and collected upon all opium manufactured in the United States for smoking purposes; and no person shall engage in such manufacture who is not a citizen of the United States and who has not given the bond required by the Commissioner of Internal Revenue. Manufacturer's Sec 37. That every manufacturer of such opium shall tones'; 3 ' b on dTj file with the collector of internal revenue of the district in ana k signs. rctums ' which his manufactory is located such notices, inventories, and bonds, shall keep such books and render such returns of material and products, shall put up such signs and affix such number to his factory, and conduct his business under such surveillance of officers and agents as the Commis- sioner of Internal Revenue, with the approval of the Sec- retary of the Treasur} 1 -, may, by regulation, require. But the bond required of such manufacturer shall be with sure- ties satisfactory to the collector of internal revenue and in a penal sum of not less than five thousand dollars; and the sum of said bond may be increased from time to time and additional sureties required at the discretion of the collector or under instructions of the Commissioner of Internal Revenue. Sec. 38. That all prepared smoking opium imported into the United States shall, before removal from the cus- tom-house, be duly stamped in such manner as to denote that the duty thereon has been paid; and that all opium manufactured in the United States for smoking purposes, before being removed from the place of manufacture, whether for consumption or storage, shall be duly stamped Penal bond. sum ofi Stamps. 290 Digitized by Microsoft® / 3460. opium. 291 in such permanent manner as to denote the payment of the internal-revenue tax thereon. Sec. 39. That the provisions of existing laws governing 32 ?8 e 1i445 S 3446. 6g ' the engraving, issue, sale, accountability, eff acement, can- ' cellation, ana destruction of stamps relating to tobacco and snuff, as far as applicable are hereby made to apply to stamps provided for by the preceding section. See sections 3369, page 267; 3218, page 113; 3445 and 3446, page 354, 355. Sec. 40 [as amended by the act of Mar. S, 1897 (29 Stat, Penalty - 228).] That a penalty of not more than one thousand dollars, or imprisonment not more than one year, or both, in the discretion of the court shall be imposed for each and every violation of the preceding sections of this act relating to opium by any person or persons; and all pre- Sared smoking opium wherever found within the United tates without stamps required by this act shall be for- Pursuant t0 feited, and may be sold to the highest bidder, pursuant to the provisions of sec. ■provisions of section thirty-four hundred ana sixty, Revised Statutes, if not valued as therein -provided at over five hundred dollars; but if valued at more than five hundred dollars sale. the sale shall be made pursuant to the judgment of the court ■ in the proceedings for condemnation or forfeiture. AN ACT To prohibit the importation and use of opium for other than medicinal purposes, That after the first day of April, nineteen hundred and nine, it shall be unlawful to import into the United States opium in any form or any preparation or derivative thereof: Provided, That opium and preparations and derivatives thereof, other than smoking opium or opium prepared for smoking, may be imported for medicinal purposes only, under regulations which the Secre- tary of the Treasury is hereby authorized to prescribe, and when so imported shall be subject to the duties which are now or may hereafter be imposed by law. Sec. 2. That if any person shall fraudulently or knowingly import or bring into the United States, or assist in so doing, any opium or any preparation or derivative thereof contrary to law, or shall receive, conceal, buy, sell, or in any manner facilitate the transportation, concealment, or sale of such opium or prep- aration or derivative thereof after importation, knowing the same to have been imported contrary to law, such opium or preparation or derivative thereof shall be forfeited and shall be destroyed, and the offender shall be fined in any sum not exceeding five thousand dollars nor less than fifty dollars, or by imprisonment for any time not exceeding two years, or both. Whenever, on trial for a violation of this section, the defendant is shown to have or to have had, possession of such opium or preparation or deriva- tive thereof, such possession shall be deemed sufficient evidence to authorize conviction unless the defendant shall explain the possession to the satisfaction of the jury. Approved, February 9, 1909. (35 Stat., 614.) (T. D. No. 29657, Mar. 27, 1909.) Digitized by Microsoft® Chapter Nine. OLEOMAKGARINE; ADULTERATED BUTTER; PROCESSOR RENOVATED BUTTER. [Acts of Aug. 2, 1886 (24 Stat., 209), Sec. and Oct. 1, 1890 (26 Stat., 621), as amended by act of May 9, 1902 (32 Stat., 193).] 1. Act May 9, 1902, imitation dairy prod- ucts subject to State laws. Act Aug. 2, 1886: 1. Butter defined. 2. Oleomargarine defined. 3. (Amended.) Special taxes. 4. Penalties for nonpayment of special taxes. 5. Manufacturer's notices, books, re- turns, bonds, signs, etc. 6. Oleomargarine, how to be packed and sold; penalty. 7. Manufacturer's labels, penalty for failing to affix. 8. (Amended.) Tax, stamps, laws rela- tive to stamps for tobacco and snuff made to apply. 9. Assessment of tax on oleomargarine when removed without stamps. 10. Tax on imported oleomargarine; pen- alty. Warehousing. Penalty for receiving for sale un- stamped oleomargarine. Penalty for purchasing from a manu- facturer who has not paid special tax; forfeiture. Stamps on empty packages to be de- stroyed; penalty for failure; dealing in empty stamped pack- ages. Authority to employ chemists and microscopists. Commissioner to decide in contested cases; appeal. Forfeiture of unstamped oleomarga- rine; penalty for defacing or re- moving stamps. Oleomargarine removed for export. Carrying on business as manufacturer in fraud of the revenue; penal- ties and forfeitures. 11. 12. 13 14 15 Sec. 18. Penalty for omitting things required and for doing things forbidden. 19. Courts in which fines may be recov- ered. 20. Commissioner to make regulations. 21. Date when act goes into effect; stock on hand. 4. Act of May 9, 1902. Butter defined. Adulterated butter defined. Porcess or renovated butter de- fined. Notices, bonds. Inventories, signs. Manufacturers' packages. Dealers' packages. Caution label. Tax on adulterated and process or renovated butter. Stamps — Sections relating to stamps for tobacco and snuff made applicable. Sections of act of August 2, 1886, made applicable to adulterated butter. 5. Act May 9, 1902. Inspection of renovated butter. Marking of process or renovated butter. Secretary of Agriculture to make regulations. 6. Act May 9, 1902, wholesale dealers in oleomargarine, etc., to keep books and render returns. Penalty. 7. Act May 9, 1902, date of taking effect. 292 (Act of Aug. 2, 1886 (24 Stat., 209), as amended by acts of Oct. 1, 1890 (26 Stat., 621), and May 9 ; 1902 (32 Stat., 193), an act to make oleomargarine and other imitation dairy products subject to the laws of any State or Territory, or the District of Columbia, into which they are transported, and to change the tax on oleomargarine, and to impose a tax, provide for the inspection, and regulate the manufac- ture and sale of certain dairy products, and to amend an act entitled "An act defining butter, also imposing a tax upon and regulating the manufacture, sale, importation, and exportation of oleomarga- rine," approved Aug. 2, 1886.) Digitized by Microsoft® OLEOMAEGARINE. 293 Sec. 1 [act of May 9, 1902 (32 Stat., 198)]. That all X"jed$ articles known as oleomargarine, butterine, imitation, to state laws. process, renovated, or adulterated butter, or imitation cheese, or any substance in the semblance of butter or cheese not the usual product of the dairy and not made exclusively of pure and unadulterated milk or cream, transported into any State or Territory or the District of Columbia, and remaining therein for use, consumption, sale, or storage therein shall, upon the arrival within the limits of such State or Territory or the District of Columbia, be subject to the operation and effect of the laws of such State or Territory or the District of Columbia, enacted in the exercise of its police powers to the same extent and in the same manner as though such articles or substances had been produced in such State or Territory or the District of Columbia, and shall not be exempt there- from by reason of being introduced therein in original packages or otherwise. Sec. 1 [act. of Aug. 2, 1886 (24 Stat., 209)]. That f or J****' deflni - the purpose of this act the word "butter" shall be under- stood to mean the food product usually known as butter, and which is made exclusively from milk or cream, or both, with or without common salt, and with or without additional coloring matter. See section 4, act May 9, 1902, defining "butter," also "Adul- terated butter," and "Process or renovated butter," page 300. Sec. 2 [act of Aug. 2, 1886 (24 Stat., 209)]. That for the^"™"^ purposes of this act certain manufactured substances, certain extracts, and certain mixtures and compounds, including such mixtures and compounds with butter, shall be known and designated as "oleomargarine," namely: All substances heretofore known as oleomar- garine, oleo, oleomargarine-oil, butterine, lardine, suine, and neutral; all mixtures and compounds of oleo- margarine, oleo, oleomargarine-oil, butterine, lardine, suine, and neutral; all lard extracts and tallow extracts; and all mixtures and compounds of tallow, beef-fat, suet, lard, lard-oil, vegetable oil, annotto, and other coloring matter, intestinal fat, and offal fat made in imitation or semblance of butter, or when so made, calculated or intended to be sold as butter or for butter. Interpretation of definition. (18 Op. Atty. Gen. 489; 32 Int. Rev. Rec, 333.) Addition of foreign fat, lard, or oil to butter produces oleo- margarine. (33 Int. Rev. Rec, 397; Regulations No. 9, pp. 24, 88.) Taxability of mixtures or compounds of animal or vegetable oils or fats. (T. D. 1354, May 12, 1908.) Sec. 3 [act of Aug. 2, 1886], as amended by section 2 of the act of May 9, 1902, imposing special taxes on manufacturers and dealers will be found under chapter 3, "Special taxes," section 3242&, page 131. Sec. 4 [act of Aug. 2, 1886 (24 Stat., 209)]. That every v™^?*™™- person who carries on the business of a manufacturer of }aotu n rer by ma ™" oleomargarine withou^h^v^ W$/fetes l 9^ al tax there " 294 OLEOMARGARINE. for, as required by law, shall, besides being liable to the payment of the tax, be fined not less than one thousand and not more than five thousand dollars; and every per- son who carries on the business of a wholesale dealer in oleomargarine without having paid the special tax there- for, as required by law, shall, besides being liable to the payment of the tax, be fined not less than five hundred nor more than two thousand dollars; and every person who carries on the business of a retail dealer in oleomar- garine without having paid the special tax therefor, as required by law, shall, besides being liable to the pay- ment of the tax, be fined not less than fifty nor more than five hundred dollars for each and every offense. Penalty for failure to pay special tax. (TJ. S. v. Joyce, 138 Fed. Rep., 455; Morris v. U. 8., 161 Fed. Rep., 672; Hartman et al. v. U. S., 168 Fed. Rep., 30, T. D. 1468; Vermont v. U. S., 174 Fed. Rep., 792; T. D. 1579; U. S. v. Shipley et al., T. D. 1504; Enders v. U. S., T. D. 1669.) Manufacturers' Sec. 5 [act of Aug. 2, 1886 (21 Stat, 210)]. That every notices, inven- » , if X. n .ci 'ii, xu l tories, s i gns manufacturer of oleomargarine shall me with the col- books, bonds, etc. i ec t or Q f internal revenue of the district in which his manufactory is located such notices, inventories, and bonds, shall keep such books and render such returns of material and products, shall put up such signs and affix such number to his factory, and conduct his business under such surveillance of officers and agents as the Commissioner of Internal Revenue, with the approval of the Secretary of the Treasury, may, by regulation, require. But the bond required of such manufacturer shall be with sureties satisfactory to the collector of internal revenue, and in a penal sum of not less than five thousand dollars; and the sum of said bond may be increased from time to time and additional sureties required at the discretion of the collector, or under instruc- tions of the Commissioner of Internal Revenue. Regulations No. 9, T. D. 797, June 6, 1904; T. D. 906, June 20, 1905; and T. D. 1652, August 29, 1910. Power of attorney by manufacturers to agente to render returns. (T. D. 1263.) Manufacturers- Sec. 6 [act of Aug. 2, 1886 (24 Stat, 210)]. That all original packages. i eomar g ar ine shall be packed by the manufacturer thereof m firkins, tubs, or other wooden packages not before used for that purpose, each containing not less than ten pounds, and marked, stamped, and branded as the Commissioner of Internal Revenue, with the approval of the Secretary of the Treasury, shall prescribe; and all sales made by manufacturers of oleomargarine, and wholesale dealers in oleomargarine shall be in original Retail dealers' stamped packages. Retail dealers in oleomargarine must packages. ge jj on jy f rom original stamped packages, in quantities not exceeding ten pounds, and shall pack the oleomarga- rine sold by them in suitable wooden or paper packages which shall be marked and branded as the Commissioner of Internal Revenue, with the approval of the Secretary Digitized by Microsoft® OLEOMARGARINE. 295 of the Treasury, shall prescribe. Every person who knowingly sells or offers for sale, or delivers or offers to deliver, any oleomargarine in any other form than in new wooden or paper packages as above described, or who packs in any package any oleomargarine in any manner contrary to law, or who falsely brands any package or affixes a stamp on any package denoting a less amount of tax than that required by law shall be fined for each Penalties. offense not more than one thousand dollars, and be imprisoned not more than two years. Original packages, no objection to using old boxes for ma- terial for new packages. (32 Int. Rev. Rec, 405.) Waxed cartons or containers for packing oleomargarine inside original packages permissible. (T. D. 1323, Feb. 24, 1908, and T. D. 1563, Nov. 11, 1909.) Crates made of wooden slats for holding waxed or enameled cardboard cartons within definition of "wooden packages" as original packages for oleomargarine. (T. D. 1613, Apr. 8, 1910.) Power of commissioner to make regulations as to marks and brands on packages of oleomargarine. (In re Kollock, 165 U. S., 526, 43 Int. Rev., Rec. 170; In re McCaully 165 U. S., 538. Prather v. U. S., 9 Appeal Cases D. C, 82; Wilkins v. U. S., 96 Fed. Rep., 837; T. D. 21623.) Retail packages, marks, and brands. (U. S. v. Ford, 50 Fed. Rep., 467, distinguishing TJ. S.v. Eaton, 144 U.S., 677; Dougherty v. U. S., 108 Fed. Rep., 56 (T. D. 335), affirming 101 Fed. Rep., 439; U. S. v. Joyce et al, 138 Fed. Rep., 457; U. S. v. Knott, 151 Fed. Rep., 925; Morris v. U. S., 161 Fed. Rep., 680.) Limit of 10 pounds retail sales. (U. S. v. Ripper, 178 Fed. Rep., 24; Ripper u. U. S., 179 Fed. Rep., 497; T. D. 1609; Goll v. U. S., 166 Fed. Rep., 419.) A party is liable for the sale by a clerk or employee of oleo- margarine without its being in a stamped or wrapped package. (Prather v. U. S., 9 App. Cases, D. C, 82.) Sec. 7 [act of Aug. 2, 1886 (24 Stat, 210)}. That every oi c Z™Ltm™. manufacturer of oleomargarine shall securely affix, by pasting, on each package containing oleomargarine manu- factured by him, a label on which shall be printed, besides the number of the manufactory and the district and State in which it is situated, these words: "Notice — The manu- facturer of the oleomargarine herein contained has com- plied with all the requirements of law. Every person is cautioned not to use either this package again or the stamp thereon again, nor to remove the contents of this package without destroying said stamp, under the penalty provided by law in such cases." Every manu- facturer of oleomargarine who neglects to affix such label to any package containing oleomargarine made by him, or sold or offered for sale by or for him, and every person who removes any such label so affixed from any such package, shall be fined fifty dollars for each package in respect to which such offense is committed. Sec. 8 [act of Aug. 2, 1886 (24 Stat., 210), as amended by sec. 3, act of May 9, 1902 (32 Stat, 193)]. That upon oleo- margarine which shall be manufactured and sold, or re- moved for consumption or use, there shall be assessed and, collected a tax of ten cents per pound, to be paid by the Tax per pound. manufacturer thereof; and any fractional part of a pound Digitized by Microsoft® 296 OLEOMARGARINE. in a package shall be taxed as a pound: Provided, When oleomargarine is free from artificial coloration that causes it to look like butter of any shade of yellow said tax shall he one-fourth of one cent per pound. The tax levied hy this Tax represent- section shall he represented hy coupon stamps; and the pro- stampZ ooupon visions of existing laws governing the engraving, issue, sale, accountability, effacement, and destruction of stamps rela- ting to tobacco and snuff, as far as applicable, are hereby made to apply to stamps provided jor by this section. Use of an ingredient in minute quantities to impart yellow color subjects product to tax at rate of 10 cents per pound. (T. D. 564, Aug. 11, 1902.) Use of an ingredient containing artificial coloring which imparts shade of yellow makes finished product taxable at 10 cents. (Regulations, No. 9.) Butter artificially colored as an ingredient in oleomargarine subjects product to higher rate of tax. (McCray v. U. S., 195 TJ. S., 27; T. D. 795.) Palm oil constitutes artificial coloration. (Cliff v. U. S., 195 U. S., 159; T. D. 839.) Palm oil. (Moxley v. Hertz, 216 U. S., 344; T. D. 1596, affirming 173 Fed. Rep., 728; T. D. 1168; Moxley v. Hertz, collector, T. D. 1671.) Coloring for customer after sale. (W. H. Zinn Co. v. U. S., T. D. 1517.) Use of a rubber stamp for cancellation of tax-paid stamps for oleomargarine, in lieu of a stencil plate of brass or copper. (T. D. 614, Jan. 12, 1903.) See chapter under heading "Tobacco and Snuff" for laws relating to stamps. Stamps issued in book form in denominations of 10, 20, 30, 40, 50, 60, 70, 80, 90, and 100 pounds, and each book contains 200 stamps and 1,800 coupons. Assessment Sec. 9 [act of Aug. 2, 1886 (21 Stat., 211)]. That when- of tax within two L "r , /■ i • n years. ever any manufacturer of oleomargarine sells, or removes for sale or consumption, any oleomargarine upon which the tax is required to be paid by stamps, without the use of the proper stamps, it snail be the duty of the Commis- sioner of Internal Revenue, within a period of not more than two years after such sale or removah upon satisfac- tory proof, to estimate the amount of tax which has been omitted to be paid, and to make an assessment therefor and certify the same to the collector. The tax so assessed shall be in addition to the penalties imposed by law for such sale or removal. See Regulations No. 1 concerning assessments. Tax on to- g EC . 10 [ ac t of Aug. 2, 1886 (21,. Stat., 211)]. That all ported oleomar- , L . .J f > » • , • i n • garine. oleomargarine imported Irom foreign countries shall, in addition to any import duty imposed on the same, pay an internal revenue tax of fifteen cents per pound, such stamps. tax to be represented by coupon stamps as in the case of oleomargarine manufactured in the United States. The stamps shall be affixed and canceled by the owner or importer of the oleomargarine while it is in the custody of the proper custom-house officers; and the oleomar- garine shall not pass out of the custody of said officers until the stamps have been so affixed and canceled, but Digitized by Microsoft® OLEOMAKGARINE. 297 shall be put up in wooden packages, each containing not less than ten pounds, as prescribed in this act for oleo- margarine manufactured in the United States, before the stamps are affixed; and the owner or importer of such oleomargarine shall be liable to all the penal provisions of this act prescribed for manufacturers of oleomargarine manufactured in the United States. Whenever it is. warehousing necessary to take any oleomargarine so imported to any margarine. °' e °~ place other than the public stores of the United States for the purpose of affixing and canceling such stamps, the collector of customs of the port where such oleomargarine is entered shall designate a bonded warehouse to which it shall be taken, under the control of such customs officer as such collector may direct ; and every officer of customs who permits any such oleomargarine to pass out of his custody or control without compliance by the owner or importer thereof with the provisions of this section relat- ing thereto, shall be guilty of a misdemeanor, and shall be Penalty tor fined not less than one thousand dollars nor more than c \J s ° ^ f B I cei . by five thousand dollars, and imprisoned not less than six months nor more than three years. Every person who sells or offers for sale any imported oleomargarine, or oleomargarine purporting or claimed to have been im- ported, not put up in packages and stamped as provided Penalty for seii- by this act, shall be fined not less than five hundred dol-^™| properly lars nor more than five thousand dollars, and be im- prisoned not less than six months nor more than two years. Oleomargarine exported free of tax and reimported dutiable at domestic rates remitted. (T. D. 669, June 16, 1903.) Sec. 11 [act of Aug. 2, 1886 (24 Stat, £11).] That every p *?™^ & person who knowingly purchases or receives for sale any omargarine not oleomargarine which has not been branded or stamped stamped. 6 r ' y according to law shall be liable to a penalty of fifty dollars for each such offense. Sec. 12 [ad of Aug 2,1886 (24 Stat, 211).] That every ^e-uyjor person who knowmgiy purchases or receives lor sale any manufacturers oleomargarine from any manufacturer who has not paidspedaftax? Pa ' d the special tax shall be liable for each offense to a penalty of one hundred dollars, and to a forfeiture of all articles so purchased or received, or of the full value thereof. Sec. 13 [act of Aug. 2, 1886 (24 Stat, 211).] That when- stamps on J -. D i ~ . . . , . - empty packages ever any stamped package containing oleomargarine is to be destroyed. emptied, it shall be the duty of the person in whose hands the same is to destroy utterly the stamps thereon; and any person who willfully neglects or refuses so to do shall for each such offense be fined not exceeding fifty dollars, Penalty. and imprisoned not less than ten days nor more than six months. And any person who fraudulently gives away or accepts from another, or who sells, buys, or uses for packing oleomargarine, any such stamped package, shall for each such offense be fined not exceeding one hundred dollars, and be imprisoned not more than one year. Digitized by Microsoft® 298 OLEOMARGARINE. Any revenue officer may destroy any emptied oleomar- garine package upon which the tax-paid stamp is found. Failure to destroy stamp on empty package. (Morris v. U. S., 161 Fed. Rep., 672; Vermont v. U. S., r4 Fed. Rep., 792; T. D. 1579; U. S. v. White & Paller, U. S. D. C. E. D. Pa.; T. D. 1334; U. S. v. Ripper, 178 Fed. Rep., 24; Ripper v. U. S., 179 Fed. Rep., 497; T. D. 1609.) mEro^pfste and Sec - 14 . \- act °f Au 9- 2 , 1886 m Stat : , ®l%)-\ TQ at there shall be in the office of the Commissioner of Internal Kevenue an analytical chemist and a microscopist, who shall each be appointed by the Secretary of the Treasury, and shall each receive a salary of two thousand five hun- dred dollars per annum; and the Commissioner of Internal Revenue may, whenever in his judgment the necessities of the service so require, employ chemists and microscopists, to be paid such compensation as he may deem proper, not exceeding in the aggregate any appropriation made for that purpose. to C "decSe^oo" ^ Ilc ^ such Commissioner is authorized to decide what tested cases. substances, extracts, mixtures, or compounds which may be submitted for his inspection in contested cases are to be taxed under this act; and his decision in matters of taxation under this act shall be final. The Commissioner may also decide whether any sub- stance made in imitation or semblance of butter, and intended for human consumption, contains ingredients deleterious to the public health; but in case of doubt or contest his decision in this class of cases may be appealed from to a board hereby constituted for the purpose, and composed of the Surgeon-General of the Army, the Sur- geon-General of the Navy, and the Commissioner (now Secretary) of Agriculture ; and the decisions of this board shall be final in the premises. u n°s r t e a U mp ed SeC " 15 ^ ad °f Au 9 ' 2 > 1886 P^ Stat > 212 "> J That aU packages a n d packages of oleomargarine subject to tax under this margarine! oleo " act that shall be found without stamps or marks as herein provided, and all oleomargarine intended for human consumption which contain ingredients adjudged, as hereinbefore provided, to be deleterious to the public health, shall be forfeited to the United States. Any per- r e ml v!n°gson who shall willfully remove or deface the stamps, stamps. marks, or brands on a package containing oleomargarine taxed as provided herein shall be guilty of a misde- meanor, and shall be punished by a fine of not less than one hundred dollars nor more than two thousand dollars, and by imprisonment for not less than thirty days nor more than six months. Wilkins v. U. S., 96 Fed. Rep., 837; T. D. 21623. for°export arBarlne SEC - 16 t aCt °f Au 9- 2 > 1886 (H Stat > 212 ^^ Tnat ° le °- margarine may be removed from the place of manufacture for export to a foreign country without payment of tax or affixing stamps thereto, under such regulations and the filing of such bonds and other security as the Com- Digitized by Microsoft® Appeal. OLEOMARGARINE. 299 missioner of Internal Bevenue, with the approval of the Secretary of the Treasury, may prescribe. Every person who shall export oleomargarine shall brand upon every tub, firkin, or other package containing such article the word "Oleomargarine," in plain Roman letters not less than one-half inch square. Sales to vessels in porta of this country not exportation (T. D. 657, May 18, 1903; Swan & Finch Co. v. U. S., 190 U. S., 143). See Regulations No. 29 concerning exportations. Oleomargarine reimported subject to duty equal to the internal- revenue tax, although returned to the factory for remanufacture. (T. D. 857.) Withdrawals of oleomargarine free of tax for export where the tax remitted amounts to $100 or over can not be afterwards separated into small consignments for the purpose of being accounted for as shipments on which the tax is less than $100. (T. D. 1662.) Sec. 17 [act of Aug. 2, 1886 (24 Stat., 212) .] That when- Forfeiture and ever any person engaged in carrying on the business of f r ™ d U ^ mlnS- manufacturing oleomargarine defrauds, or attempts to facturer - defraud, the United States of the tax on the oleomar- garine produced by him, or any part thereof, he shall for- feit the factory and manufacturing apparatus used by him, and all oleomargarine and all raw material for the production of oleomargarine found in the factory and on the factory premises, and shall be fined not less than five hundred dollars nor more than five thousand dollars, and be imprisoned not less than six months nor more than three years. Indictment. Enders v. IT. S. (T. D. 1669.) Forfeiture and penalty for defrauding or attempting to defraud. (Hardesty v. U. S., 168 Fed. Rep., 25.) Information for forfeiture of oleomargarine plant. The language of this section is similar to that in regard to distilled spirits (sec. 3257), and decision under latter section applicable. (U. S. v. Manufacturing Apparatus, etc., of New Jersey Melting & Churning Co., 141 Fed. Rep., 475.) Sec. 18 [act of Aug. 2, 1886 (24 Stat, 212) .] That if any Forfeiture tor manufacturer of oleomargarine, any dealer therein, or ^ttiaw. comply any importer or exporter thereof shall knowingly or will- fully omit, neglect, or refuse to do, or cause to be done, any of the things required by law in the carrying on or conducting of his business, or shall do anything by this act prohibited, if there be no specific penalty or punish- ment imposed by any other section of this act for the neglecting, omitting, or refusing to do, or for the doing or causing to be done, the thing required or prohibited, he shall pay a penalty of one thousand dollars ; and if the person so offending be the manufacturer of or a wholesale dealer in oleomargarine, all the oleomargarine owned by him, or in which he has any interest as owner, shall be forfeited to the United States. Sales in quantities exceeding 10 pounds at one time by retail dealers, penalty provided in section 18applies. (U. S. v. Ripper, 178 Fed. Rep., 24; Ripper v. U. S., 179 Fed. Rep., 497; T. D. 1609.) Digitized by Microsoft® 300 OLEOMAKGARINE. Recovery of g EC . 19 [ act fAug.2, 1886 (24 Stat, 212) .] That allfines, penalties, and forfeitures imposed by this act may be recovered in any court of competent jurisdiction. Regulations. Sec. 20 [act of Aug. 2, 1886 (24 Stat., 212) .] That the Commissioner of Internal Revenue, with the approval of the Secretary of the Treasury, may make all needful regu- lations for the carrying into effect of this act. See citations under section 6, power of Commissioner to make regulations, page 295. Act in effect Sec. 21 [act ofAug. 2, 1886 (24 Stat., 218)]. That this act Oct. 31, 1886. shall g i n to effect on the ninetieth day after its passage; and all wooden packages containing ten or more pounds of oleomargarine found on the premises of any dealer on or after the ninetieth day succeeding the date of the passage of this act shall be deemed to be taxable under section eight of this act, and shall be taxed, and shall have affixed thereto the stamps, marks, and brands required by this act or by regulations made pursuant to this act; and for the purpose of securing the affixing of the stamps, marks, and brands required by this act, the oleomargarine shall be regarded as having been manufactured and sold, or removed from the manufactory for consumption or use, on or after the day this act takes effect; and such stock on hand, stock on hand at the time of the taking effect of this act may be stamped, marked, and branded under special regulations of the Commissioner of Internal Revenue, approved by the Secretary of the Treasury; and the Commissioner of Internal Revenue may authorize the holder of such packages to mark and brand the same and to affix thereto the proper tax-paid stamps. See section 7, act May 9, 1902, page 304. Butter defined. Sec. 4 [act of May 9, 1902 (32 Stat., 94)]. That for the purpose of this Act "butter" is hereby defined to mean an article of food as defined in "An Act defining butter, also imposing a tax upon and regulating the manufacture, sale, importation, and exportation of oleomargarine," approved August second, eighteen hundred and eighty- Ad uiterated six ; that "adulterated butter" is hereby defined to mean a grade of butter produced by mixing, reworking, rechurn- ing in milk or cream, refining, or in any way producing a uniform, purified, or improved product from different lots or parcels of melted or unmelted butter or butter fat, in which any acid, alkali, chemical, or any substance what- ever is introduced or used for the purpose or with the effect of deodorizing or removing therefrom rancidity, or any butter or butter fat with which there is mixed any substance foreign to butter as herein defined, with intent or effect of cheapening in cost the product or any butter in the manufacture or manipulation of which any process or material is used with intent or effect of causing the absorption of abnormal quantities of water, milk, or Process or ieno- cream; that "process butter" or "renovated butter" is vated butter penalties, and forfeitures im-' ery.' posed by this Act may be recovered in any court of com- petent jurisdiction. Regulations. gEC. - 18- ^hat the Commissioner of Internal Revenue, with the approval of the Secretary of the Treasury, shall make all needful regulations for the carrying into effect of the provisions of this Act. Regulations No. 22 relative to filled cheese. when 60 "™' date Sec - 19. That this Act shall go into effect on the nine- tieth day after its passage, and all wooden packages con- taining ten or more pounds of filled cheese found on the premises of any dealer on and after the ninetieth day succeeding the date of the passage of this Act, shall be deemed to be taxable under section nine of this Act, and shall be taxed, and shall have affixed thereto the stamps, marks, and brands required by this Act or by regulations made pursuant to this Act; and for the purpose of secur- ing the affixing of the stamps, marks, and brands required by this Act, the filled cheese shall be regarded as having Digitized by Microsoft® PILLED CHEESE. 309 been manufactured and sold or removed from the manu- factory for consumption or use on or after the day this Act takes effect; and such stock on hand at the time of the taking effect of this Act may be stamped, marked, and branded under special regulations of the Commis- sioner of Internal Revenue, approved by the Secretary of the Treasury ; and the Commissioner of Internal Revenue may authorize the holder of such packages to mark and brand the same and to affix thereto the proper tax-paid stamps. Circular letter to collectors and revenue agents relative to the enforcement of the law imposing a tax on filled cheese. (T. D. 1516.) Digitized by Microsoft® Chapter Eleven. MIXED FLOUR. [Sections 35 to 49, act of June 13, 1898 (30 Stat., 448), as amended by act April 12, 1902 (32 Stat., 96).] Sec 35. Mixed flour defined. 36. Special tax. 37. Marks and brands; penalty. 38. Packages; penalty. 39. Label; penalty. 40. Tax, stamps, laws applicable. Re- packed flour; penalty. 41. Assessment of tax on mixed flour when removed without stamps. 42. Tax on imported mixed flour; pen- alty. Sec. 43. Penalty and forfeiture. 44. Removal for export. 45. Destruction of stamps on empty packages; penalty. 46. Penalties recoverable. 47. Regulations. Additional clerks and agents. 48. Penalty for subsequent violations. 49. Date when act takes effect. fine 1 d xedfl0urde " the word s "mixed flour Special taxes. Sec. 35. [Act June 13, 1898 (SO Stat., 467), as amended ly sec. IS, act Mar. 2, 1901 '(31 Stat., 949), and act of Apr. 12, 1902 (32 Stat., 99) .] That for the purposes of this Act, shall be taken and construed to mean the food product resulting from the grinding or mixing together or wheat, or wheat flour, as the principal constituent in quantity, with any other grain, or the product of any other grain, or other material, except such material, and not the product of any grain, as is com- monly used for baking purposes: Provided, That when the product resulting from the grinding or mixing together of wheat or wheat flour with any other grain, or the product of any other grain, of which wheat or wheat flour is not the principal constituent as specified in the foregoing definition, is intended for sale, or is sold, or offered for sale as wheat flour, such product shall be held to be mixed flour within the meaning of this Act. See pages 7-8, Regulations, No. 25, revised August, 1907. "Pancake" and "Compound" Flours are classed as "mixed flour' ' if wheat flour is principal ingredient. (T. D. 971, Jan. 27, 1906.) Sec. 36. That every person, firm, or corporation, before engaging in the business of making, packing, or repacking mixed flour, shall pay a special tax at the rate or twelve dollars per annum, the same to be paid and posted in accordance with the provisions of sections thirty-two hundred and forty-two and thirty-two hundred and thirty-nine of the "Revised Statutes, and subject to the fines and penalties therein imposed for any violation thereof. Mixed flour — Investigations by collectors as to proper returns. (T. D. 471, Feb. 6, 1902.) 310 Digitized by Microsoft® MIXED PLOUE. 311 Sec. 37. That every person, firm, or corporation nmk- m ^J££ a y i n s ( j ing, packing, or repacking mixed flour shall plainly mark brands. or brand each package containing the same with the words "mixed flour" in plain black letters not less than two inches in length, together with the true weight of such package, the names of the ingredients composing the same, the name of the maker or packer, and the place where made or packed. In addition thereto, such maker or packer shall place in each package a card not smaller cards in paek- than two inches in width by three inches in length, upon ages ' which shall be printed the words "mixed flour," together with the names of the ingredients composing the same, and the name of the maker or packer, and the place where made or packed. Any person, firm, or corporation mak- ing, packing, or repacking mixed flour hereunder, failing to comply with the provisions of this section, shall ba deemed guilty of a misdemeanor, and upon conviction Penalty. shall be punished by a fine of not less than two hundred and fifty dollars and not more than five hundred dollars, or be imprisoned not less than sixty days nor more than one year. Pages 12-13, Regulations, No. 25, revised August, 1907. Sec. 38. That all sales and consignments of mixed flour Packages, char- shall be in packages not before used for that purpose ; and acter ' every person, firm, or corporation knowingly selling or offering for sale any mixed flour in other than marked and branded packages, as required by the provisions of this Act relating to the manufacture and sale of mixed flour, or who packs in any package or packages any mixed flour in any manner contrary to the provisions relating to the manufacture and sale of mixed flour of this Act, or who falsely marks or brands any package or packages contain- ing mixed flour, or unlawfully removes such marks or brands, shall, for each such offense, be punished by a fine Penalty. ■, of not less than two hundred and fifty dollars and not more than five hundred dollars, or by imprisonment not less than thirty days nor more than one year. Sec. 39. That in addition to the branding and marking Label. of mixed flour as herein provided, there shall be affixed to the packages containing the same a label in the following words: "Notice. — The (manufacturer or packer, as the case may be) of the mixed flour herein contained has com- plied with all the requirements of law. Every person is cautioned not to use this package or label again or to remove the contents without destroying the revenue stamp thereon, under the penalty prescribed by law in such cases." Every person, firm, or corporation failing or neglecting to affix such label to any package contain- ing mixed flour made or packed by him or them, or who removes from any such package any label so affixed, shall, upon conviction thereof, be fined not less than fifty dol- Penalty. lars for each label so removed. Digitized by Microsoft® 312 MIXED FLOUR. ^rax on prod- Sec. 40. That barrels or other packages in which mixed flour may be packed shall contain not to exceed one hun- dred and ninety-six pounds; that upon the manufacture and sale of mixed flour there shall be levied a tax of four cents per barrel or other package containing one hundred and ninety-six pounds or more than ninety-eight pounds; two cents on every half barrel or other package contain- ing ninety-eight pounds or more than forty-nine pounds; one cent on every quarter barrel or other package con- taining forty*-nine pounds or more than twenty-four and one-half pounds- and one-half cent on every one-eighth barrel or other package containing twenty-four and a half pounds or less, to be paid by the person, firm, or corpora- tion making or packing said flour. The tax levied by this coupon stamps, section shall be represented by coupon stamps, and the Laws appiica- provisions of existing laws governing the engraving, issue, sale, accountability, effacement, and destruction of stamps relating to tobacco and snuff shall, so far as ap- plicable, be made to apply to stamps provided in this sec- tion: Provided, That when mixed flour, on the manufac- ture and sale of which the tax herein imposed has been paid, is -sold and then repacked without the addition of Eepacked, not any other material, such repacked flour shall not be liable 1 to any additional tax; but the packages containing such repacked flour shall be branded or marked as required by the provisions of section thirty-seven of this Act, and shall contain the card provided for in section thirty-seven hereof; and in addition thereto the person, firm, or cor- poration repacking mixed flour shall place on the pack- ages containing the same a label in the following words: Notice. "Notice. — The contents of this package have been taken from a regular statutory package, upon which the tax has been duly paid." Any person violating the provisions of this section shall, upon conviction thereof, be punished Penalty. by a fine of not less than two hundred and fifty dollars and not more than five hundred dollars, or by imprison- ment not to exceed one year. Cartons or other small unstamped packages in original pack- ages, page 16, Regulations, No. 25. Assessment of g EC . 41. That whenever anv person, firm, or corpora- stamp tax. n1 . - i ' ' . f tion sells, consigns, or removes tor sale, consignment, or consumption any mixed flour upon which the tax required by this Act has not been paid, it shall be the duty of the Commissioner of Internal Revenue, for a period of not more than one year after such sale, consignment, or re- moval, upon satisfactory proof, to estimate the amount of tax which should have been paid, and to make an as- sessment therefor and certify the same to the collector of the proper district. The tax so assessed shall be in addi- tion to the penalties imposed by this Act for an unau- thorized sale or removal. mixS P flour * tax ^ EC- 42- That all mixed flours, imported from foreign thereon, etc.' countries, shall, in addition to any import duties imposed thereon, pay an internal revenue tax equal in amount to Digitized by Microsoft® MIXED FLOUR. 313 the tax imposed under section forty of this Act, such tax to be represented by coupon stamps, and the packages containing such imported mixed flour shall be marked, branded, labeled, and stamped as in the case of mixed flour made or packed in the United States. Any person, Penalty, firm, or corporation purchasing or receiving for sale or repacking any such mixed flour which has not been branded, labeled, or stamped, as required by this Act, or which is contained in packages which have not been marked, branded, labeled, or stamped, as required by this Act, shall, upon conviction, be fined not less than fifty dollars nor more than five hundred dollars. Sec. 43. That any person, firm, or corporation know- Penalty. inglv purchasing or receiving for sale or for repacking and resale any mixed flour from any maker, packer, or im- porter, who has not paid the tax herein provided, shall, for each offense, be fined not less than fifty dollars, and forfeit to the United States all the articles so purchased or received, or the full value thereof. Sec. 44. That mixed flour may be removed from the Removal for ex- place of manufacture or from the place where packed for por export to a foreign country without payment of tax or affixing stamps or label thereto, under such regulation and the filing of such bond and other security as the Com- missioner of Internal Revenue, with the approval of the Secretary of the Treasury, may prescribe. Every person, firm, or corporation who shall export mixed flour shall plainly mark on each package containing the same the words "mixed flour," and the names of the ingredients composing the same, the name of the maker or packer, and the place where made or packed, in accordance with the provisions of sections thirty-six to forty-five, inclu- sive, of this Act. See Regulations No. 29 relative to all exportations under Int. Rev. Laws. Sec. 45. That whenever any package containing mixed ag^ft^npfdt" flour is emptied it shall be the duty of the person in whose stroyed. possession it is to destroy the stamp thereon. Any person Penalty. disposing of such package without first having destroyed the stamp or mark or marks thereon shall, upon convic- tion, be punished by a fine not exceeding the sum of twenty-five dollars. Sec. 46. That all fines, penalties, and forfeitures ^- ei ^ altiesieC0Y ' posed by section thirty-six to section forty-five, both inclusive, of this Act ma,y be recovered in any court of competent jurisdiction. Sec. 47. That the Commissioner of Internal Revenue, c< SS^. by with the approval of the Secretary of the Treasury, shall make all needful rules and regulations for carrying into effect the provisions relating to the manufacture and sale of mixed flour, being section thirty-five to section forty- nine, both inclusive, of this Act (and the said Commis- sioner of Internal Revenue, by and with the approval of the Secretary of the Treasury, for the purpose of carrying Digitized by Microsoft® 314 MIXED FLOUR. said last-mentioned provisions of this Act into effect, is hereby authorized to employ such additional clerks and agents as may be necessary for that purpose, not to exceed twenty in number.) Regulations No. 25 revised August, 1907. The provision in regard to employment of clerks and agents is obsolete. As to agents, see Leg. Ex. and Jud. Appro. Act of April 28, 1902, page 68. Penaityforsub- s EC- 4g_ That any person, firm, or corporation found sequent violation. ... „ . J r > > . f . guilty ol a second or any subsequent violation ol any ol the provisions of section thirty-six to section forty-five, both inclusive, relating to the manufacture and sale of mixed flour as aforesaid, of this Act shall, in addition to the penalties herein imposed, be imprisoned not less than thirty days nor more than ninety days. Effective, date Sec. 49. That the provisions of this Act relating to the when. manufacture and sale of mixed flour shall take effect and be in force sixty days from and after the date of the pas- sage of this Act; and all packages of mixed flour found on the premises of any person, firm, or corporation on said day, who has made, packed, or repacked the same, on which the tax herein authorized has not been paid, shall be deemed taxable under the provisions of section thirty- six to section forty-five, both inclusive, of this Act, and shall be taxed and have affixed thereon such marks, brands, labels, and stamps as required by the provisions of said sections or by the rules and regulations prescribed by the Commissioner of Internal Revenue, under author- ity of this Act. Digitized by Microsoft® Chapter Twelve. LEGACIES AND DISTRIBUTIVE SHARES OF PERSONAL PROPERTY. [Sections 29 and 30. Act of June 13, 1898. (30 Stat., 464.)] The tax on legacies (sec. 29) was repealed by section 7 of the act of April 12, 1902 (32 Stat., 96), taking effect July 1, 1902. No legacy tax accrued where the testator died prior to the act of June 13, 1898. (Penn. Co. for Insurance on Lives and Grant- ing Annuities v. Collector McClain, 105 Fed. Rep., 367, T. D. 343.) Legacy tax constitutional. (Knowlton et al. v. Moore, col- lector, 178 U. S., 41; T. D., 129, 1900.) Vanderbilt v. Eidman. (196 U. S., 480; T. D., 868; Decision in United States circuit court, southern district of N. Y., 121 Fed. Rep., 590; T. D., No. 618.) SAVING CLAUSE. Sec. 8. [of the act of April 12, 1902 (32 Stat., 96).] That all taxes or duties imposed by section twenty-nine of the Act of June thirteenth, eighteen hundred and ninety- eight, and amendments thereof, prior to the taking effect of this Act, shall be subject, as to lien, charge, collection, and otherwise, to the provisions of section thirty of said Act of June thirteenth, eighteen hundred and ninety- eight, and amendments thereof, which are hereby con- tinued in force, as follows: "Sec. 30. That the tax or duty aforesaid shall be due and payable in one year after the death of the testator and shall be a lien and charge upon the property of every Legacy tax a person who may die as aforesaid for twenty years, or until property ** the same shall, within that period, be fully paid to and discharged by the United States; and every executor, ad- ministrator, or trustee having in charge or trust any legacy or distributive share, as aforesaid, shall give notice eC uto r ie | tc by ex " thereof, in writing, to the collector or deputy collector of the district where the deceased grantor or bargainer last resided within thirty days after he shall have taken charge of such trust, and every executor, administrator, or trus- tee, before payment and distribution to the legatees, or any parties entitled to beneficial interest therein, shall pay Payment. to the collector or deputy collector of the district of which the deceased person was a resident, or in which the prop- erty was located in case of nonresidents, the amount of the duty or tax assessed upon such legacy or distributive share, and shall also make and render to the said collector 315 Digitized by Microsoft® 316 LEGACIES AND DISTRIBUTIVE SHAKES. schedules, etc. or deputy collector a schedule, list, or statement, in dupli- cate, of the amount of such legacy or distributive share, together with the amount of duty which has accrued, or shall accrue, thereon, verified by his oath or affirmation, to be administered and certified thereon by some magis- trate or officer having lawful power to administer such oaths, in such form and manner as may be prescribed by the Commissioner of Internal Kevenue, which schedule, list, or statement shall contain the names of each and every person entitled to any beneficial interest therein, together with the clear value of such interest, the dupli- cate of which schedule, list, or statement shall be by him immediately delivered, and the tax thereon paid to such collector; and upon such payment and delivery of such schedule, list, or statement said collector or deputy col- lector shall grant to such person paying such duty or tax Receipts. a receipt or receipts for the same in duplicate, which shall be prepared as hereinafter provided. Such receipt or receipts, duly signed and delivered by such collector or deputy collector, shall be sufficient evidence to entitle such executor, administrator, or trustee to be credited and allowed such payment by every tribunal which, by the laws of any State or Territory, is, or may be, empowered to decide upon and settle the accounts of executors and administrators. And in case such executor, administra- tor, or trustee shall refuse or neglect to pay the aforesaid duty or tax to the collector or deputy collector, as afore- said, within the time hereinbefore provided, or shall neg- lect or refuse to deliver to said collector or deputy collec- tor the duplicate of the schedule, list, or statement of such legacies, property, or personal estate, under oath, as afore- said, or shall neglect or refuse to deliver the schedule, list, or statement of such legacies, property, or personal estate, under oath, as aforesaid, or shall deliver to said collector or deputy collector a false schedule or statement of such legacies, property, or personal estate, or give the names Assessment, and relationship of the persons entitled to beneficial inter- on 'iauure'ofex- ests therein untruly, or shall not truly and correctly set ecutor, etc. forth and state therein the clear value of such beneficial interest, or where no administration upon such property or personal estate shall have been granted or allowed under existing laws, the collector or deputy collector shall make out such lists and valuation as in other cases of neg- lect or refusal, and shall assess the duty thereon; and the Legal proceed- collector shall commence appropriate proceedings before ings to recover. any court f t]ie Tjifited States, in the name of the United States, against such person or persons as may have the actual or constructive custody or possession of such prop- erty or personal estate, or any part thereof, and shall sub- ject such property or personal estate, or any portion of the same, to be sold upon the judgment or decree of such court, and from the proceeds of such sale the amount of such tax or duty, together with all costs and expenses of every description to be allowed by such court, shall be first Digitized by Microsoft® LEGACIES AND DISTRIBUTIVE SHARES. 317 paid, and the balance, if any, deposited according to the order of such court, to be paid under its direction to such person or persons as shall establish title to the same. The deed or deeds, or any proper conveyance of such property or personal estate, or any portion thereof, so sold under such judgment or decree, executed by the officer lawfully charged with carrying the same into effect, shall vest in the purchaser thereof all the title of the delinquent to the pu^chls^ 1611 m property or personal estate sold under and by virtue of such judgment or decree, and shall release every other portion of such property or personal estate from the lien or charge thereon created by this Act. And every person or persons who shall have in his possession, charge, or custody any record, file, or paper containing, or supposed to contain, any information concerning such property or personal estate, as aforesaid, passing from any person who may die, as aforesaid, shall exhibit the same at the request papers! b eto 0n °' of the collector or deputy collector of the district, and to any law officer of the United States, in the performance of his duty under this Act, his deputy or agent, who may desire to examine the same. And if any such person, Penalty for re- having in his possession, charge, or custody any such rec- ords, files, or papers, shall refuse or neglect to exhibit the same on request, as aforesaid, he shall forfeit and pay the sum of five hundred dollars: Provided, That in all legal Provisos - controversies where such deed or title shall be the subject of judicial -investigation, the recital in said deed shall be ^E^t of recital prima facie evidence of its truth, and that the require- ments of the law had been complied with by the officers of the Government: And provided further, That in case of i e ct?eta yforneg " willful neglect, refusal, or false statement by such executor, administrator, or trustee, as aforesaid, he shall be liable to a penalty of not exceeding one thousand dollars, to be recovered with costs of suit. Any tax paid under the pro- Dedueticm - visions of sections twenty-nine and thirty shall be de- ducted from the particular legacy or distributive share on account of which the same is charged. Effect of the repealing act. — The war revenue act of June 13, 1898, as amended, provided for a tax on legacies to become due and payable in one year after the death of the testator, and to be a lien and charge on his property for 20 years. Such provisions were repealed by the act of April 12, 1902, with a saving clause as to all taxes imposed thereby prior to July 1, 1902, 'when the repeal took effect. The act of June 27, 1902, prohibited the further assessment or imposition of any tax under said act "upon or in respect of any contingent beneficial interest which shall not become absolutely vested in possession or enjoyment" prior to July 1, 1902, and required the refunding of taxes previously collected on any such interests. Held, that where a testator who died in December, 1901, bequeathed a share of his residuary estate in trust, the income to be paid to a son during his life, the life estate of the son in the income of the trust property became absolutely vested in enjoyment at once on the death of the testator, and subject to the tax; that the tax was "imposed" by the statute itself at the time of such vesting without reference to the time when it became due and payable or to any act of assessment by the internal revenue officers, which was merely an administrative Digitized by Microsoft® 318 LEGACIES AND DISTRIBUTIVE SHARES. detail necessary to fix the amount but not affecting the time when the tax was imposed or became a lien. (Westhus et al. v. Union Trust Co., 164 Fed. Rep., 795; 168 Fed. Rep., 617; pe- tition for rehearing denied. Contra Lynch v. Union Trust Co., 164 Fed. Rep., 161.) The fact that the testator dies within one year prior to the tak- ing effect of the repealing act of April 12, 1902, does not relieve from taxation legacies otherwise taxable under sections 29 and 30 of the act of June 13, 1898, as amended by the act of March 2, 1901, being saved by the saving clause of the repealing act. (Hertz, Collector, v. Woodman (218 U. S., 205), T. D. 1636 overruling decision in Eidman v. Tilghman (136 Fed. Rep., 141).) In Disston v. McClain, collector (1906), it was held that an annuity passing as a legacy prior to repeal of the act, payable in quarterly installments out of the income of personal property during the life of the beneficiary was taxable, only as to so much of the income as was vested in the actual possession of the leg- atee prior to the 1st day of July, 1902, when the law was repealed. (147 Fed. Rep., 114, reversing 143 Fed. Rep., 191; T. D. 976). A petition was filed in the United States Supreme Court for a writ of certiorari in this case, but the court refused to issue the writ. (207 U. S., 587.) REFUND OF TAX ON LEGACIES AND BEQUESTS FOR USES OF A RELIGIOUS, CHARITABLE, OR EDUCATIONAL CHAR- ACTER; REFUND OF TAX ON CONTINGENT BENEFICIAL INTERESTS, WHICH HAD NOT BECOME VESTED JULY 1, 1902. NO TAX TO BE ASSESSED ON CONTINGENT BENE- FICIAL INTERESTS NOT VESTED JULY 1, 1902. AN ACT To provide for refunding taxes paid upon legacies and bequests for uses of a religious, charitable, or educational character, for the encouragement of art, and so forth, under the Act of June thirteenth, eighteen hundred and ninety-eight, and for other purposes, approved June 27, 1902. (32 Stat., 406.) Sec. 1. That the Secretary of the Treasury, under appropriate rules and regulations to be prescribed by him, be, and he is hereby, authorized and directed to pay, out of any money in the Treasury not otherwise appropriated, to the corporations, associations, societies, or individuals as trustees or executors, such sums of money as have been paid by them as taxes upon bequests or legacies for uses of a religious, literary, charitable, or educational character, or for the encouragement of art, or legacies or bequests to societies for the prevention of cruelty to children, under the provisions of section twenty-nine of the Act entitled "An Act to provide ways and means to meet war expenditures, and for other purposes," approved June thirteenth, eighteen hundred and ninety-eight. Sec. 2. (See p. 340.) Sec. 3. That in all cases where an executor, adminis- trator, or trustee shall have paid, or shall hereafter pay, any tax upon any legacy or distributive share of personal property under the provisions of the act approved June thirteenth, eighteen hundred and ninety-eight, entitled "An Act to provide ways and means to meet war expend- itures, and for other purposes, " and amendments thereof, the Secretary of the Treasury be, and he is hereby, authorized and directed to refund, out of any money in Digitized by Microsoft® LEGACIES AND DISTRIBUTIVE SHARES. 319 the Treasury not otherwise appropriated, upon proper application being made to the Commissioner of Internal Revenue, under such rules and regulations as may be prescribed, so much of said tax as may have been col- lected on contingent beneficial interests which shall not have become vested prior to July first, nineteen hundred and two. And no tax shall hereafter be assessed or im- posed under said Act approved June thirteenth, eighteen hundred and ninety-eight, upon or in respect of any con- tingent beneficial interest which shall not become abso- lutely vested in possession or enjoyment prior to said July first, nineteen hundred and two. % * :&: % * Circular No. .627, relative to refunding legacy taxes as provided in the first paragraph. July 3, 1902. T. D. No. 543. The act of June 27, 1902, relative to the refund of tax collected on contingent beneficial interests not vested prior to July 1, fixes no time within which the claim for refund must be filed with the collector. If the two years' limit is applicable under section 3228, R. S., it must be two years from the passage of the act and not two years from payment of the tax. Thacher v. United States. (United States Circuit Court, District of Massachusetts, 149 Fed. Rep., 902; 26 Op. Atty. Gen., 194.) Attorney General's opinion as to vested interests, August 1, 1902. (T. D. 570, modifying Circular No. 630, T. D. 552; 24 Op. Atty. Gen., 98.) Digitized by Microsoft® Chapter Thirteen. SPECIAL EXCISE TAX ON CORPORATIONS. [Sec. 38, act of August 5, 1909. (36 Stat., 112.)] Sec. 38. Excise tax on corporations; rate of tax; organizations excepted. Second. Net income; how deter- mined. Third. Annual returns required from officers of corporations; computation of tax. Fourth. Procedure when returns are incorrect; failure to make returns; books may be examined; attendance of witnesses com- pelled. Fifth. Assessment of tax; addition to tax for false returns; payment of tax; penalty for failure to pay; notice; limitation; penalty; in- terest. Sixth. Returns to be filed in office of Commissioner of Internal Revenue. Sec. 38. Excise tax, etc. — Continued. Seventh. Government officer or employee divulging information; penalty. Eighth. Failure to make true re- turns; false returns; penalty; revenue laws made applicable for collection, etc., of tax; juris- diction United States courts to compel testimony and produc- tion of books, etc. Act of June 17, 1910 (36 Stat., 494). Appropriation for expenses of collecting corporation tax. Re- turns open to inspection by order of the President. Act of June 25, 1910 (36 Stat., 780). Additional employees au- thorized . Corpor ations subject to tax. (36 Stat. 112.; Rate. Sec. 38. [Act of Aug. 5, 1909.] That every corpora- tion, joint stock company or association, organized for profit and having a capital stock represented by shares, and every insurance company, now or hereafter organized under the laws of the United States or of any State or Territory of the United States or under the Acts of Con- gress applicable to Alaska or the District of Columbia, or now or hereafter organized under the laws of any foreign country and engaged in business in any State or Territory of the United States or in Alaska or in the District of Co- lumbia, shall be subject to pay annually a special excise tax with respect to the carrying on or doing business by such corporation, joint stock company or association, or insurance company, equivalent to one per centum upon the entire net income over and above five thousand dol- lars received by it from all sources during such year, ex- clusive of amounts received by it as dividends upon stock of other corporations, joint stock companies or associa- tions, or insurance companies, subject to the tax hereby imposed; or if organized under the laws of any foreign country, upon the amount of net income over and above five thousand dollars received by it from business trans- acted and capital invested within the United States and its Territories, Alaska, and the District of Columbia during 320 Digitized by Microsoft® EXCISE TAX ON CORPORATIONS. 321 such year, exclusive of amounts so received by it as divi- dends upon stock of other corporations, joint stock com- panies or associations, or insurance companies, subject to the tax hereby imposed : Provided, however, That nothing c o r p o r ations in this section contained shall apply to labor, agricultural exerapt trom tax ' or horticultural organizations, or to fraternal beneficiary societies, orders, or associations operating under the lodge system, and providing for the payment of life, sick, acci- dent, and other benefits to the members of such societies, orders, or associations, and dependents of such members, nor to domestic building and loan associations, organized and operated exclusively for the mutual benefit of their members, nor to any corporation or association organ- ized and operated exclusively for religious, charitable, or educational purposes, no part of the net income of which inures to the benefit of any private stockholder or individual. Second. Such net income shall be ascertained bv de-, Net income; i ,. « .-, . P . -, i» l how ascertained. ducting from the gross amount ot the income of such cor- poration, joint stock company or association, or insurance company, received within the year from all sources, (first) all the ordinary and necessary expenses actually paid within the year out of income in the maintenance and operation of its business and properties, including all charges such as rentals or franchise payments, required to be made as a condition to the continued use or pos- session of property; (second) all losses actually sustained within the year and not compensated by insurance or otherwise, including a reasonable allowance for deprecia- tion of property, if any, and in the case of insurance com- panies the sums other than dividends, paid within the year on policy and annuity contracts and the net addition, if any, required by law to be made within the year to reserve funds; (third) interest actually paid within the year on its bonded or other indebtedness to an amount of such bonded and other indebtedness not exceeding the paid-up capital stock of such corporation, joint stock com- pany or association, or insurance company, outstanding at the close of the year, and in the case of a bank, banking association or trust company, all interest actually paid by it within the year on deposits; (fourth) all sums paid by it within the year for taxes, imposed under the authority of the United States or of any State or Territory thereof, or imposed by the government of any foreign country as a condition to carrying on business therein; (fifth) all amounts received by it within the year as dividends upon stock of other corporations, joint stock companies or asso- ciations, or insurance companies, subject to the tax hereby imposed: Provided, That in the case of a corporation, Foreign con- joint stock company or association, or insurance company, tfonTaiiowabie? * organized under the laws of a foreign country, such net income shall be ascertained by deducting from the gross amount of its income received within the year from 72170°— 11 21 Digitized by Microsoft® 322 EXCISE TAX OK CORPORATIONS. business transacted and capital invested within the United States and any of its Territories, Alaska, and the District of Columbia, (first) all the ordinary and necessary expenses actually paid within the year out of earnings in the maintenance and operation of its business and prop- erty within the United States and its Territories, Alaska, and the District of Columbia, including all charges such as rentals or franchise payments required to be made as a condition to the continued use or possession of property; (second) all losses actually sustained within the year in business conducted by it within the United States or its Territories, Alaska, or the District of Columbia not com- pensated by insurance or otherwise, including a reasonable allowance for depreciation of property, if any, and in the case of insurance companies the sums other than divi- dends, paid within the year on policy and annuity con- tracts and the net addition, if any, required by law to be made within the year to reserve funds; (third) interest actually paid within the year on its bonded or other indebtedness to an amount of such bonded and other indebtedness, not exceeding the proportion of its paid-up capital stock outstanding at the close of the year which the gross amount of its income for the year from business transacted and capital invested within the United States and any of its Territories, Alaska, and the District of Columbia bears to the gross amount of its income derived from all sources within and without the United States; (fourth) the sums paid by it within the year for taxes imposed under the authority of the United States or of any State or Territory thereof; (fifth) all amounts received by it within the year as dividends upon stock of other corporations, joint stock companies or associations, and insurance companies, subject to the tax hereby imposed. in^u?mce S compa- I n the case of assessment insurance companies the actual nies, reserve deposit of sums with State or Territorial officers, pursuant to law, as additions to guaranty or reserve funds shall be treated as being payments required by law to reserve funds. t . specie deduc- Third. There shall be deducted from the amount of the net income of each of such corporations, joint stock com- panies or associations, or insurance companies, ascer- tained as provided in the foregoing paragraphs of this section, the sum of five thousand dollars, and said tax computation of shall be computed upon the remainder of said net in- tax ' come of such corporation, joint stock company or associa- tion, or insurance company, for the year ending December thirty-first, nineteen hundred and nine, and for^each cal- endar year thereafter; and on or before the first day of March, nineteen hundred and ten, and the first day of Return to be March in each year thereafter, a true and accurate return made on or before . -'„ . . .' ... • 1 ± March l to coiiee- under oath or affirmation 01 its president, vice-president, tor of district. Qr ^ eT principal officer, and its treasurer or assistant treasurer, shall be made by each of the corporations, joint stock companies or associations, and insurance companies, Digitized by Microsoft® EXCISE TAX ON CORPOKATIONS. 323 subject to the tax imposed by this section, to the collector of internal revenue for the district in which such corpora- tion, joint stock company or association, or insurance company, has its principal place of business, or, in the case of a corporation, joint stock company or association, or insurance company, organized under the laws of a foreign country, in the. place where its principal business is carried on within the United States, in such form as the Commis- sioner of Internal Revenue, with the approval of the Sec- retary of the Treasury, shall prescribe, setting forth (first) items to be ra- the total amount of the paid-up capital stock of such cor- por on re um ' poration, joint stock company or association, or insurance company, outstanding at the close of the year; (second) the total amount of the bonded and other indebtedness of such corporation, joint stock company or association, or insurance company at the close of the year; (third) the gross amount of the income of such corporation, joint stock company or association, or insurance company, received during such year from all sources, and if organ- ized under the laws of a foreign country the gross amount of its income received within the year from business trans- acted and capital invested within the United States and any of its Territories, Alaska, and the District of Colum- bia; also the amount received by such corporation, joint stock company or association, or insurance company, within the year by way of dividends upon stock of other corporations, joint stock companies or associations, or insurance companies, subject to the tax imposed by this section; (fourth) the total amount of all the ordinary and necessary expenses actually paid out of earnings in the Deductions ai maintenance and operation of the business and properties penses. ' of such corporation, joint stock company or association, or insurance company, within the year, stating separately all charges such as rentals or franchise payments required to be made as a condition to the continued use or possession of property, and if organized under the laws of a foreign country the amount so paid in the maintenance and oper- ation of its business within the United States and its Ter- ritories, Alaska, and the District of Columbia; (fifth) the total amount of all losses actually sustained during the su ^j^ 1 aota ^Jy year and not compensated by insurance or otherwise, preciation. stating separately any amounts allowed for depreciation of property, and in the case of insurance companies the sums other than dividends, paid within the year on policy and annuity contracts and the net addition, if any, re- quired by law to be made within the year to reserve funds; and in the case of a corporation, joint stock company or association, or insurance company, organized under the laws of a foreign country, all losses actually sustained by it during the year in business conducted by it within the United States or its Territories, Alaska, and the District of Columbia, not compensated by insurance or otherwise, stating separately any amounts allowed for depreciation of property, and in the case of insurance companies the sums Digitized by Microsoft® 324 EXCISE TAX ON CORPORATIONS. other than dividends, paid within the year on policy and annuity contracts and the net addition, if any, required by law to be made within the year to reserve fund ; (sixth) interest actual- the amount of interest actually paid within the year on its iy paid. bonded or other indebtedness to an amount of such bonded and other indebtedness not exceeding the paid-up capital stock of such corporation, joint stock company or asso- ciation, or insurance company, outstanding at the close of the year, and in the case of a bank, banking association or trust company, stating separately all interest paid by it interest paid within the year on deposits; or in case of a corporation, by foreign eorpo- . . , J r '■ , ■ ■ r ' rations to be ap- joint stock company or association, or insurance company, portioned. organized under the laws of a foreign country, interest so paid on its bonded or other indebtedness to an amount of such bonded and other indebtedness not exceeding the proportion of its paid-up capital stock outstanding at the close of the year, which the gross amount of its income for the year from business transacted and capital invested within the United States and any of its Territories, Alaska, and the District of Columbia, bears to the gross amount of its income derived from all sources within and Taxes paid, without the United States; (seventh) the amount paid by it within the year for taxes imposed under the author- ity of the United States or any State or Territory thereof, and separately the amount so paid by it for taxes imposed by the government of any foreign country as a condition to carrying on business therein; (eighth) the net income of such corporation, joint stock company or association, or insurance company, after making the deductions in this section authorized. All such returns shall as received be transmitted forthwith by the collector to the Commis- sioner of Internal Revenue. ma°™e m uire 0I in- Fourth. Whenever evidence shall be produced before formation as to the Commissioner of Internal Revenue which in the opin- que°™retuni. elin i°n of the Commissioner justifies the belief that the return made by any corporation, joint stock company or associa- tion, or insurance company, is incorrect, or whenever any collector shall report to the Commissioner of Internal Revenue that any corporation, joint stock company or association, or insurance company, has failed to make a return as required by law, the Commissioner of Internal Revenue may require from the corporation, joint stock company or association, or insurance company making such return, such further information with reference to its capital, income, losses, and expenditures as he may deem expedient; and the Commissioner of Internal to exSl books! Revenue, for the purpose of ascertaining the correctness etc - of such return or for the purpose of making a return where none has been made, is hereby authorized, by any regularly appointed revenue agent specially designated by him for that purpose, to examine any books and papers bearing upon the matters required to be included in the return of such corporation, joint stock company or asso- ciation, or insurance company, and to require the attend- Digitized by Microsoft® EXCISE TAX ON COEPOBATIONS. 325 ance of any officer or employee of such corporation, joint stock company or association, or insurance company, and to take his testimony with reference to the matter required by law to be included in such return, with power to administer oaths to such person or persons; and the Commissioner of Internal Revenue may also invoke the aid of any court of the United States having jurisdiction to require the attendance of such officers or employees and the production of such books and papers. Upon the information so acquired the Commissioner of Internal Revenue may amend any return or make a return where m ay om a Send 0n or none has been made. All proceedings taken by the make return. Commissioner of Internal Revenue under the provisions of this section shall be subject to the approval of the Secretary of the Treasury. _ Fifth. All returns shall be retained by the Commis- J^JZt^ sioner of Internal Revenue, who shall make assessments turn. thereon; and in case of any return made with false or fraudulent intent, he shall add one hundred per centum of such tax, and in case of a refusal or neglect to make a return or to verify the same as aforesaid he shall add fifty per centum of such tax. In case of neglect occasioned bv Collector may ti • i i r rr t? i , ■ J extend time for the sickness or absence of an officer of such corporation, making return, joint stock company or association, or insurance company, required to make said return, or for other sufficient reason, the collector may allow such further time for making and delivering such return as he may deem necessary, not exceeding thirty days. The amount so added to the tax Penalty, when shall be collected at the same time and in the same man- an howcollec ner as the tax originally assessed unless the refusal, neglect, or falsity is discovered after the date for payment of said taxes, in which case the amount so added shall be paid by the delinquent corporation, joint stock company or association, or insurance company, immediately upon notice given by the collector. All assessments shall be Assessments' 011 made and the several corporations, joint stock companies or associations, or insurance companies, shall be notified of the amount for which they are respectively liable on or before the first day of June of each successive year, and said assessments shall be paid on or before the thirtieth day of June, except in cases of refusal or neglect to make such return, and in cases of false or fraudulent returns, in which cases the Commissioner of Internal Revenue shall, upon the discovery thereof, at any time within three years after said return is due, make a return upon infor- mation obtained as above provided for, and the assess- ment made by the Commissioner of Internal Revenue thereon shall be paid by such corporation, joint stock company or association, or insurance company imme- diately upon notification of the amount of such assess- ment; and to any sum or sums due and unpaid after the n ^ , n en a aI ^5 r e ^ thirtieth day of June in any year, and for ten days after when due. notice and demand thereof by the collector, there shall be added the sum of five per centum on the amount of tax Digitized by Microsoft® 326 EXCISE TAX ON CORPORATIONS. unpaid and interest at the rate of 1 per centum per month upon said tax from the time the same becomes due. T. D. 1659, Oct. 20, 1910; sec. 3184, p. 95. ai^d et w™h com- Sixth. When the assessment shall be made, as provided missioner. in this section, the returns, together with any corrections thereof which may have been made by the Commissioner, shall be filed in the office of the Commissioner of Internal Revenue and shall constitute public records and be open to inspection as such. Amended by the Act of June 17, 1910, which, provides that the returns shall be open to inspection only upon the order of the President, page 328. unlawful to di- Seventh. It shall be unlawful for any collector, deputy tion ge Penaft™ 3 " collector, agent, clerk, or other officer or employee of the United States to divulge or make known in any manner whatever not provided by law to any person any informa- tion obtained by him in the discharge of his official duty, or to divulge or make known in any manner not provided by law any document received, evidence taken, or report made under this section except upon the special direction of the President; and any offense against the foregoing provision shall be a misdemeanor and be punished by a fine not exceeding one thousand dollars, or by imprison- ment not exceeding one year, or both, at the discretion of the court. Penalty for re- Eighth. If any of the corporations, ioint stock com- fusal or neglect to • • V r J j? -j make return, or panies or associations, or insurance companies, aforesaid, f?t ! ud 6 ui f ent r ™ s ^ a ^ refuse or neglect to make a return at the time or turn. times hereinbefore specified in each year, or shall render a false or fraudulent return, such corporation, joint stock company or association, or insurance company, shall be liable to a penalty of not less than one thousand dollars and not exceeding ten thousand dollars. Any person authorized by law to make, render, sign, or verify any return who makes false or fraudulent return, or statement, with intent to defeat or evade the assessment required by this section to be made, shall be guilty of a misdemeanor, and shall be fined not exceeding one thousand dollars or be imprisoned not exceeding one year, or both, at the discretion of the court, with the costs of prosecution. puoabie made ap " l&ws relating to the collection, remission, and refund of internal-revenue taxes, so far as applicable to and not inconsistent with the provisions of this section, are hereby extended and made applicable to the tax imposed by this section. oonf^r^e'S* 1 ™ Jurisdiction is hereby conferred upon the circuit and United states district courts of the United States for the district within which any person summoned under this section to appear to testify or to produce books, as aforesaid, shall reside, to compel such attendance, production of books, and testimony by appropriate process. Regulations relating, to the^ssessment and collection of the specia%f Jp ^t -P ^T- For expenses of collecting the corporation tax author- for ^^^ ation ized by the Act approved August fifth, nineteen hundred and nine: "To provide revenue, equalize duties, and encourage the industries of the United States, and for other purposes," one ^fe§$ tyWffi&M™ 8 - 328 EXCISE TAX ON CORPORATIONS. For classifying, indexing, exhibiting and properly caring for the returns of all corporations, required by section thirty-eight of an Act entitled "An Act to pro- vide revenue, equalize duties, encourage the industries of the United States, and for other purposes," approved August fifth, nineteen hundred and nine, including the employment, in the District of Columbia, of such clerical and other personal services and for rent of such quarters as may be necessary, twenty-five thousand dollars: to^mpection P oS-f >TOV ^^ e ^' That any and all such returns shall be open to otietot the Pvesi- inspection only upon the order of the President under rules and regulations to be prescribed by the Secretary of the Treasury and approved by the President. See also the legislative, executive, and judicial appropriation act approved March 4, 1911, which appropriates the same amount for the year ending June 30, 1912, repeating the proviso. (36 Stat., 1197.) Deficiency appropriation act of March 4, 1911 (36 Stat., 1291), appropriates $5,000 for the purposes above specified, repeating the proviso. Executive Order and Regulations governing the publicity of returns November 25, 1910. (T. D. 1665.) [Extract from the deficiency appropriation Act for 1910. (Act of June 25, 1910, 36 Stat., 780.)1 The Commissioner of Internal Revenue, with the force d authorized 1 approval of the Secretary of the Treasury, is authorized out of the appropriation made for the purpose of carrying into effect section thirty-eight of the tariff Act of August fifth, nineteen hundred and nine, for the fiscal year nine- teen hundred and eleven, and out of the balance of the appropriation for that purpose for the fiscal year nineteen hundred and ten, which balance is hereby reappropriated and made available for the fiscal year nineteen hundred and eleven, to employ such additional force of internal- revenue agents, inspectors, deputy collectors, clerks, laborers, and other assistants as he may deem proper and necessary to the prompt operation and enforcement of said section thirty-eight. See also the deficiency appropriation act of March 4, 1911 (36 Stat., 1291), which reenacts authority to employ additional force. Digitized by Microsoft® Chapter Fourteen. STAMP TAXES ON SPECIFIC OBJECTS. Sec. 3437. Assessment of stamp taxes where articles are removed without being stamped. Act of June 13, 1898: Sec. 13. Provisions for stamping any document issued without stamps. 14. Unstamped instruments not admissible as evidence. 15. Recording unstamped in- struments. Act of June 27, 1902. Refund of tax on export bills of lading. Act of March 4, 1907. Refund of tax on export ship's manifests. Act of February 1, 1909. Refund of tax on foreign bills of exchange. Act of June 25, 1910. Extension of time for refunding stamp taxes on foreign bills of exchange. Sec. 3422. Affixing stamps to instruments to render them valid. 3426 (amended). Superseded by Act of May 12, 1900 (amended). Redemption of stamps. 3429 (amended). Forging, counterfeiting, etc., or fraudulently using or Bell- ing stamps, etc. ; penalties. 23. Act August 5, 1909. Manufacture of articles intended for exporta- tion in bonded warehouses. 3433 (amended). Articles for exportation, manufactured in bonded ware- houses. [3433a.] Withdrawal of distilled spirits by manufacturer of cordials, liq- uors, etc. [34336.] Section 15, act May 28, 1880. Allowance for loss in transit. 25. Act August 5, 1909. Drawback. 26. Act August 5, 1909. Duties on re- imported taxable articles. For former acts of Congress requiring stamps to be affixed to certain written instruments, see act of July 1, 1862, Schedule B following section 110 (12 Stat., 479); act of March 3, 1863, sec- tion 6 (12 Stat., 720); act of June 30, 1864, section 151 (13 Stat., 291); act of March 3, 1865, section 1 (13 Stat., 469); act of July 13, 1866 (14 Stat., 141); act of June 23, 1874, section 1 (18 Stat., part 3, 250). The act of June 6, 1872, section 36 (17 Stat., 256), provided for the repeal, on and after October 31, 1872, of stamp taxes on instruments, except the tax of 2 cents on bank checks, drafts, and orders, which was repealed by the act of March 3, 1883 (22 Stat., 488). Taxes were imposed by the act of June 13, 1898, on instruments and documents, under Schedule A thereof, and were repealed in part by the act of March 2, 1901, and wholly repealed by the war- revenue repeal act (act of Apr. 12, 1902) (32 Stat., 96) taking effect July 1, 1902. Sec. 3422. * * * Provided, That, hereafter, in all^*^™]* cases where the party has not affixed to any instrument struments. the stamp required by law thereon, at the time of making or issuing the said instrument, and he or they, or any party having an interest therein, shall be subsequently desirous of affixing such stamp to said instrument, or if said instrument be lost, to a copy thereof, he or they shall appear before the collector of the revenue of the proper district, who shall, upon the payment of the price of the proper stamp required by law, and of a penalty of double the amount of tax remaining unpaid, but in no case less Digitized by Microsoft® 329 330 STAMP TAXES ON SPECIFIC OBJECTS. than five dollars, and where the whole amount of the tax denoted by the stamp required shall exceed the sum of fifty dollars, on payment also of interest, at the rate of six per centum on said tax from the day on which such stamp ought to have been affixed, affix the proper stamp to such instrument or copy, and note upon the margin thereof the date of his so doing, and the fact that such penalty has been paid; and the same shall thereupon be deemed and held to be as valid, to all intents and purposes, as if stamped when made or issued. when instru- And -provided jurther, That where it shall appear to said ed en through a "ac^ collector, upon oath or otherwise, to his satisfaction, that take!ete. ; mis " an Y sucn instrument has not been duly stamped at the Act of Feb. is, time of making or issuing the same, by reason of accident, 3160 a " mistake, inadvertence, or urgent necessity, and without any willful design to defraud the United States of the stamps, or to evade or delay the payment thereof^ then, and in such case, if such instrument, or, if the original be lost, a copy thereof, duly certified by the officer having charge of any records in which such original is required to be recorded, or otherwise duly proven to the satisfaction of the collector, shall, within twelve calendar months after the making or issuing thereof, be brought to the said collector of revenue to be stamped, and the stamp-tax chargeable thereon shall be paid, it shall be lawful for the renat^enaity. ansa ^ collector to remit the penalty aforesaid, and to cause such instrument to be duly stamped. And when the original instrument, or a certified or duly proved copy thereof, as aforesaid, duly stamped so as to entitle the same to be recorded, shall be presented to the clerk, register, recorder, or other officer having charge of the original records, it shall be lawful for such officer,, upon the payment of the fee legally chargeable for the record- ing thereof, to make a new record thereof, or to note upon the original record the fact that the error or omission in the stamping of said original instrument, has been cor- rected pursuant to law; and the original instrument, or such certified copy of the record thereof may be used in all courts and places in the same manner and with like effect as if the instrument had been originally stamped. But no right acquired in good faith before the stamping of such instrument or copy thereof, and the recording thereof, as herein provided, if such record be required by law, shall in any manner be affected by such stamp- ing as aforesaid. The above section was practically superseded by section 13, act of June 13, 1898 (30 Stat., 448), page 338. See act to provide for the stamping of unstamped instruments, etc., approved June 23, 1874 (18 Stat., 250), and act to extend the time for stamping unstamped instruments approved February 25, 1876 (19 Stat., 5). Digitized by Microsoft® STAMP TAXES ON SPECIFIC OBJECTS. 331 Sec. 3426 [as amended by see. 17, act of Mar. 1, 1879 (20 Stat, 327)]. Redemption of stamps, etc. This section has been superseded by the following Act: REDEMPTION OF STAMPS. An Act Authorizing the Commissioner of Internal Revenue to redeem or make allowance for internal-revenue stamps. (Act of May 12, 1900 (31 Stat., 177), as amended by the act of June 30, 1902 (32 Stat., 506).) That the Commissioner of Internal Revenue, subject re ^ d ™Pn™ t ,™ to regulations prescribed by the Secretary of the Treas- value of stamps ury, may, upon receipt of satisfactory evidence of the StPoF an/ln- facts, make allowance for or redeem such of the stamps, temai-re venue issued under authority of law, to denote the payment of any internal-revenue tax, as may have been spoiled, destroyed, or rendered useless or unfit for the purpose intended, or for which the owner may have no use, or which through mistake may have been improperly or unnecessarily used, or where the rates or duties repre- sented thereby have been excessive in amount, paid in error, or in any manner wrongfully collected. Such allowance or redemption may be made, either by giving other stamps in lieu of the stamps so allowed for or redeemed, or by refunding the amount or value to the owner thereof, deducting therefrom, in case of repay- ment, the percentage, if any, allowed to the purchaser thereof; but no allowance or redemption shall be made in any case until the stamps so spoiled or rendered useless shall have been returned to the Commissioner of Internal Revenue, or until satisfactory proof has been made showing the reason why the same can not be returned; or, if so required by the said Commissioner, when the person E resenting the same can not satisfactorily trace the istory of said stamps from their issuance to the presen- tation of his claim as aforesaid. Provided, That documentary and proprietary stamps issued under the provisions of "An act to provide ways and means for war expenditures, and for other purposes," approved June thirteenth, eighteen hundred and ninety- eight, may be redeemed only when presented in quan- tities of two dollars or more, face value: Provided further , That no claim for the redemption of Limitation to or allowance for stamps shall be allowed unless pre- re emp Ion ' sented within two years after the purchase of said stamps from the Government, "excepting documentary and proprietary stamps issued under the Act of June thirteenth, eighteen hundred and ninety-eight, which stamps may be redeemed as hereinbefore authorized, upon presentation prior to the first day of July, nineteen hundred and four." Sec. 2. That the finding of facts in and the decision of m f s ^o n ^ ofC fl °™j' the Commissioner of Internal Revenue upon the merits except in case of of any claim presented under or authorized by this Act matfcafmisttke 6 " Digitized by Microsoft® 332 STAMP TAXES ON SPECIFIC OBJECTS. shall, in the absence of fraud or mistake in mathematical calculation, be final and not subject to revision by any- accounting officer. Sec. 3. That all laws and parts of laws in conflict with any of the provisions of this Act are hereby repealed. The American West Indies Trading Co. v. U. S. (45 Ct. Cls., 488.) Regulations No. 27 and Supp. No. 1. Court of Claims has jurisdiction to enforce payment of a claim allowed by Commissioner and disallowed by Comptroller. (Kaufman v. United StateB, 11 Ct. Cls., 659; 96 U. S., 567; 24 Int. Rev. Rec, 135.) See also Woolner's case (13 Ct. Cls., 355; 24 Int. Rev. Rec, 181). Authority to issue duplicate stamps for spirits, etc., in place of stamps which have been lost or accidentally destroyed. (Sec. 3315, p. 209.) Stamps not representing revenue taxes will not be redeemed by the Government. (Letter to Collector Shearer, Oct. 28, 1897; 43 Int. Rev. Rec, 401.) There is no material difference between the powers of the Com- missioner under section 3426, and under section 3220, page 114. Under section 3426 he is to "allow" the claim, which is done either by giving other stamps in lieu of those that have been spoiled , etc. , or by repaying the amount or value. Under section 3220 he is to "refund" and "pay back." His payments in both cases must be made through the accounting officers of the Treas- ury Department, as he is not himself a disbursing officer. (United States v. Savings Bank (1881), 104 U. S., 733; 28 Int. Rev. Rec, 87.) (United States v. American Tobacco Co., 166 U. S., 468.) Internal-revenue stamps redeemable only when owned and presented for redemption by persons, or their legal representa- tives, authorized to purchase and use them for the payment of taxes. (T. D. 19224, 1898.) Sec 3429 [as amended by sec. 17. act of Mar. 1, 1879 (20 Stat., 827). Supp. R. S., vol. 1, p. 242.] Penalties for forging, counterfeiting, etc., or fraudulently using or selling stamps, etc. This section not repealed by the Criminal Code, and remains in force. Section 8 of the war revenue act (act of June 13, 1898) re- enacted the provisions for purposes of that act (p. 300, Com- pilation of 1900). See also section 42, act of August 28, 1894, page 344. ***** Prima facie evi- And the fact that any adhesive stamp so bought, sold, dence of washing, ro j p i l l i • ■ p • i restoring, etc. ottered tor sale, used, or had in possession as aforesaid, has been washed or restored by removing or altering the canceling or defacing marks thereon, shall be prima- facie proof that such stamp has been once used and re- moved by the possessor thereof from some paper, instru- ment, or writing, charged with taxes imposed by law, in violation of the provisions of this section. Kaufmans United States, 51 C. C. A., 549, 113 Fed. Rep., 919. (Indictment for having in possession and knowingly offering for sale washed and restored adhesive documentary stamps.) Counterfeiting imitation wine or compound liquor stamps (sec. 3328, p. 217). Counterfeiting stamps for fermented liquors (sec. 3346, p. 252). Using imitation stamps on packages of distilled spirits (sec. 3316o, p. 209). Digitized by Microsoft® STAMP TAXES ON SPECIFIC OBJECTS. 333 Counterfeiting obligations or securities of the United States, which includes stamps (sees. 147, 148, Criminal Code, act Mar. 4, 1909, 35 Stat., 1115, p. 420, Appendix). Dealing in counterfeit securities (sec. 154, Criminal Code, act Mar. 4, 1909, 35 Stat., 1117). MANUFACTURE OF ARTICLES INTENDED FOR EXPORTATION IN BONDED WAREHOUSES. Sec. 23. [Act of Aug. 5, 1909 (36 Stat.. 88).] That, Artfctes manu- all articles manufactured in whole or in part or im- ported materials ported materials, or of materials subject to internal- potation. f ° r **' revenue tax, and intended for exportation without being charged with duty, and without having an internal- revenue stamp affixed thereto, shall, under such regula- tions as the Secretary of the Treasury may prescribe, in order to be so manufactured and exported, be made and manufactured in bonded warehouses similar to those known and designated in Treasury Regulations as bonded warehouses, class six: Provided, That the manufacturer of such articles shall first give satisfactory bonds for the t0 M ^° b f ^d turer faithful observance of all the provisions of law and of such regulations as shall be prescribed by the Secretary of the Treasury: Provided further, That the manufacture Manufacture of » ,. ,.,, , .•'., j, • j. -i i distilled spirits of distilled spirits from grain, starch, molasses, or sugar, not permitted m including all dilutions or mixtures of them or either of^"^ ware - them, shall not be permitted in such manufacturing ware- houses. Whenever goods manufactured in any bonded ware- what is ex- house established under the provisions of the preceding emp ' Earagraph shall be exported directly therefrom or shall e duly laden for transportation and immediate exporta- tion under the supervision of the proper officer who shall be duly designated for that purpose, such goods shall be exempt from duty and from the requirements relating to revenue stamps. Any materials used in the manufacture of such goods b e M conveyed C to and any packages, coverings, vessels, brands, and labels bonded manufac- used in putting up the same may, under the regulations housed t hVut of the Secretary of the Treasury, be conveyed without payment0,tax - the payment of revenue tax or duty into any bonded manufacturing warehouse, and imported goods may, under the aforesaid regulations, be transferred without the exaction of duty from any bonded warehouse into any bonded manufacturing warehouse; but this privilege shall not be held to apply to implements, machinery, or apparatus to be used in the construction or repair of any bonded manufacturing warehouse or for the prosecution of the business carried on therein. No articles or materials received into such bonded K No articles to „ . . ini',11 i oe withdrawn ex- manufacturing warehouse shall be withdrawn or removed cept for ship- therefrom except for direct shipment and exportation or ment ' for transportation and immediate exportation in bond to foreign countries or to the Philippine Islands under the supervision of the officer duly designated therefor by the Digitized by Microsoft® 334 STAMP TAXES ON SPECIFIC OBJECTS. collector of the port, who shall certify to such shipment and exportation, or ladening for transportation, as the case may be, describing the articles by their mark or otherwise, the quantity, the date of exportation, and the name of the vessel: Provided, That the waste material or by-products incident to the processes of manufacture in said bonded warehouses may be withdrawn for domestic con- sumption on the payment of duty equal to the duty which would be assessed and collected, by law, if such waste or by- products were imported from a foreign country. All labor performed and services rendered under these provisions shall be under the supervision of a duly designated officer of the customs and at the expense of the manufacturer. kept )?" collector! A careful account shall be kept by the collector of all merchandise delivered by him to any bonded manufac- turing warehouse, and a sworn monthly return, verified by the customs officers in charge, shall be made by the manufacturers containing a detailed statement of all imported merchandise used by him in the manufacture of exported articles. wuhsecretaryot Before commencing business the proprietor of any Treasury. manufacturing warehouse shall file with the Secretary of the Treasury a list of all the articles intended to be manu- factured in such warehouse, and state the formula of manufacture and the names and quantities of the in- gredients to be used therein. manufckuredcan Articles manufactured under these provisions may be be withdrawn, withdrawn under such regulations as the Secretary of the Treasury may prescribe for transportation and delivery into any bonded warehouse at an exterior port for the sole purpose of immediate export therefrom. appHcahfe. made The provisions of Revised Statutes thirty-four hundred and thirty- three shall, so far as may be practicable, apply to any bonded manufacturing warehouse established •under this Act and to the merchandise conveyed therein. This section is mainly a reproduction of section 15 of the tariff act of July 24, 1897 (30 Stat., 207). See Internal Revenue Com- pilation of 1900, page 297, amendments being in italics. intended (ta^ex- Sec - 3433 t as amended by sec. 10, act of Oct. 1, 1890 {26 portation to be Stat., 614)]. All medicines, preparations, compositions, we'd^Tar™ perfumery, cosme tics, cordials, and other liquors manu- nouses. factured wholly or in part of domestic spirits, intended for exportation, as provided by law, in order to be manu- factured and sold or removed, without being charged with duty, and without having a stamp affixed thereto, Eeguiations. shall, under such regulations as the Secretary of the Treasury may prescribe, be made and manufactured in warehouses similarly constructed to those known and designated in Treasury regulations as bonded warehouses, class two : Provided, That such manufacturer * shall first Bonds. give satisfactory bonds to the collector of internal revenue for the faithful observance of all the provisions of law and the regulations as aforesaid, in amount not less than half 'This word ' "manufacturer " if „erroneousJy_j>ri statutes, editioBigimaaby Microsoft® STAMP TAXES ON SPECIFIC OBJECTS. 335 of that required by the regulations of the Secretary of the Treasury from persons allowed bonded warehouses. Such goods, when manufactured in such warehouses, may be Removing removed for exportation, under the direction of the proper 800 s ' officer having charge thereof, who shall be designated dv the Secretary of the Treasury, without being charged with duty, and without having a stamp affixed thereto. Any manufacturer of the articles aforesaid, or of any of Articles and them, having such bonded warehouse as aforesaid, shall be warlao a use USed in at liberty, under such regulations as the Secretary of the Treasury may prescribe, to convey therein any materials to be used in such manufacture which are allowed by the provisions of law to be exported free from tax or duty, as well as the necessary materials, implements, packages, vessels, brands, and labels for the preparation, putting up, and export of the said manufactured articles; and every article so used shall be exempt from the payment of stamp and excise duty by such manufacturer. Articles and materials so to be used mav be transferred use of import- £ iji^ i *_i'ij_i i ed materials in irom any bonded warehouse in which the same may be, bond, under such regulations as the Secretary of the Treasury may prescribe, into any bonded warehouse in which such ■ manufacture may be conducted, and may be used in such manufacture, and when so used shall be exempt from stamp and excise duty; and the receipt of the officer in charge, as aforesaid, shall be received as a voucher for the manufacture of such articles. Any materials imported into the Urited States may, under such rules as the Secretary of the Treasury may prescribe, and under the direction of trie proper officer, be removed in original packages from on shipboard, or from the bonded warehouse in which the same may be, into the bonded warehouse in which such manufacture may be carried on, for the purpose of being used in such manufac- ture, without payment of duties thereon, and may there be used in such manufacture. No article so removed, nor any article manufactured in said bonded warehouse, shall be taken therefrom except for exportation, under the direction of the proper officer having charge thereof, as aforesaid, whose certificate, describing the articles by their marks, or otherwise, the quantity, the date of importation, and name of vessel, with such additional particulars as may from time to time be required, shall be received by the collector of customs in cancellation of the bonds, or return of the amount of foreign import duties. All labor performed and services rendered under these supervision, regulations shall be under the supervision of an officer of et0 ' the customs, and at the expense of the manufacturer. (Regulations of the Secretary of Treasury relating to the estab- lishment of bonded manufacturing warehouses (Customs Regu- lations 1908.) (Treasury Department Document 2464, Division of Customs, May 6. 1907.) (T. D. 30458,, Mar. 22, 1910; T. D. 30516, Apr. 9, 1910; T. D. 30927, Sept. 15, 1910.) Digitized by Microsoft® 336 STAMP TAXES ON SPECIFIC OBJECTS. Allowance for sp™y Znu! t SEC - 3433ft '] l SeC - 20 ' aCt °f Mar - !> 1879 W> Stat < S27 )> taoturer of per- as amended by sec. 14, act of May 28, 1880 (21 Stat., 145).] fumery, etc. Th a t under such regulations and requirements as to stamps, bonds, and other security as shall be prescribed by the Commissioner of Internal Revenue, any manufacturer of medicines, preparations, compositions, perfumeries, cos- metics, cordials, and other liquors, for export, manufactur- ing the same in a duly constituted manufacturing ware- house, shall be authorized to withdraw, in original pack- ages, from any distillery-warehouse, so much distilled spirits as he may require for the said purpose, without the payment of the internal-revenue tax thereon. [Sec. 34336.] [Sec. 15, act of May 28, 1880 (21 Stat., 145)-] That where spirits are withdrawn from distillery warehouses for transfer to manufacturing warehouses, under the provisions of this act, it shall be lawful, under such rules and regulations and limitations as shall be prescribed by the Commissioner of Internal Revenue, with the approval of the Secretary of the Treasury, for an allowance to be made for leakage or loss by any unavoid- able accident, and without any fraud or negligence of the distiller, owner, exporter, carrier, or their agents or em- ployees, occurring during transportation from a distillery warehouse to a manufacturing warehouse. See Regulations, No. 29, relative to transportation and exporta- tion of distilled spirits in bond free of tax. Sec. 3434. Superseded by sec. 23 of the act of Aug. 5, 1909, last paragraph but one, p. 334. Drawback. DRAWBACK. Sec. 25. [Act of Aug. 5, 1909 (36 Stat, 90).] That where imported materials on which duties have been paid are used in the manufacture of articles manufactured or produced in the United States, there shall be allowed on the exportation of such articles a drawback equal in amount to the duties paid on the materials used, less one per centum of such duties: Provided, That when the articles exported are made in part from domestic materials dmy U paicUess h i the imported materials, or the parts of the articles made percent. from such materials, shall so appear in the completed articles that the quantity or measure thereof may be ascertained: And provided further, That the drawback on any article allowed under existing law shall be con- tinued at the rate herein provided. That the imported materials used in the manufacture or production of articles entitled to drawback of customs duties when exported shall, in all cases where drawback of duties paid on such materials is claimed, be identified, the quantity of such materials used and the amount of duties paid thereon shall be ascertained, the facts of the manufacture or production of such articles in the United States and their exportation therefrom shall be determined, and the drawback due thereon shall be paid to the manufacturer, producer, ^^xj^^r^o^dgent of either, or to the STAMP TAXES ON SPECIFIC OBJECTS. 337 person to whom such manufacturer, producer, exporter, or agent shall in writing order such drawback paid, under such regulations as the Secretary of the Treasury shall prescribe. That on the exportation of medicinal or toilet prepara- Equal to the ,* /• i v j» \ i d p j i tax on domestic tions (including perfumery) hereafter manufactured oraiconoi used in produced in the United States in part from domestic touet^prepaf^ alcohol on which an internal-revenue tax has been paid, tions. there shall be allowed a drawback equal in amount to the tax found to have been paid on the alcohol so used: Provided, That no other than domestic tax-paid alcohol shall have been used in the manufacture or production of such preparations. Such drawback shall be deter- mined and paid under such rules and regulations, and upon the filing of such notices, bonds, bills of lading, and other evidence of payment of tax and exportation, as the Secretary of the Treasury shall prescribe. * * * Drawback on medicinal and toilet preparations manufactured from tax-paid domestic alcohol. — Regulations, Department Circular No. 39, August 13, 1909. (T. D. 29952.) Drawback on medicinal and toilet preparations manufactured ■from tax-paid domestic alcohol. — Amended Regulations. (T. D. 30559, Apr. 22, 1910; T. D. 30831, July 27, 1910.) Drawback payable from the permanent appropriation carried by section 3689, Revised Statutes. (17 Comp. Dec, 24.) Free entry of domestic products exported and returned. (Dept. Cir. No. 64, Oct. 29, 1907.) Sec. 26. [Reimportation of articles exported in bond or ^^^msi-re 10 with drawback. Act of Aug. 5, 1909 (36 Stat., 90).] Thatenue ta™to re De upon the reimportation of articles once exported, of the retaported artl o n growth, product, or manufacture of the United States, wl } icl1 no m * er - upon which no internal tax has been assessed or paid, or was paid, or, u upon which such tax has been paid and refunded by allow- Funded. was re ~ ance or drawback, there shall be levied, collected, and paid a duty equal to the tax imposed by the internal- revenue laws upon such articles, except articles manu- factured in bonded warehouses and exported pursuant to law, which shall be subject to the same rate of duty as if originally imported, but proof of the identity of such arti- cles shall be made under general regulations to be prescribed by the Secretary of the Treasury. This section is mainly a reproduction of section 27 of the tariff act of July 24 1897 (30 Stat. , 210), Internal Revenue Compilation of 1900, page 298, amendment being in italics. Sec. 3437. Whenever any article upon which a tax is st J ^ ssment oi required to be paid by means of a stamp is sold or removed wnl™ Article* e is for sale by the manufacturer thereof, without the use of Sg V sfan5ld° ut the proper stamp, in addition to the penalties imposed by law for such sale or removal, it shall be the duty of the Commissioner of Internal Revenue, within a period of not more than two years after such removal or sale, upon such information as he can obtain, to estimate the amount of the tax which has been omitted to be paid, and to make an assessment therefor upon the manufacturer or pro- ducer of such article. He shall certify such assessment to the collector, who ^^/frnjo^d^^bj^^and payment 72170°— 11 22 338 STAMP TAXES ON SPECIFIC OBJECTS. of such tax, and upon the neglect or refusal of payment by such manufacturer or producer, shall proceed to collect the same in the manner provided for the collection of other assessed taxes. As to assessments in general, section 3182, page 92. Any person Sec 13. (Act June 13, 1898; 30 Stat., 4-54, as amended ra, e e tf! an) £ oy sec. 7, Ad of March 2, 1901; 31 Stat., 940.) That any mentsfeJc' ilth- person or persons who shall register, issue, sell, or transfer, out stamp!' or who shall cause to be issued, registered, sold, or trans- ferred, any instrument, document, or paper of any kind or description whatsoever mentioned in Schedule A of this Act, without the same being duly stamped, or having thereupon an adhesive stamp for denoting the tax charge- able thereon, and canceled in the manner required by law, with intent to evade the provisions of this Act, shall be Penalty. deemed guilty of a misdemeanor, and upon conviction thereof shall be punished by a fine not exceeding fifty dollars, or by imprisonment not exceeding six months, or both, in the discretion of the court; and such instrument, document, or paper, not being stamped according to law, shall be deemed invalid and of no effect : Provided, That hereafter, in all cases where the party has not affixed to any instrument the stamp required by law thereon at the time of issuing, selling, or transferring the said bonds, validating un- debentures, or certificates of stock or of indebtedness, or ments 6d Instru " any instrument, document, or paper of any Jcind or descrip- tion whatsoever mentioned in Schedule A of this Act, and he or they, or any party having an interest therein, shall be subsequently desirous of affixing such stamp to said instrument, or, if said instrument be lost, to a copy there- Penaity. of, he or they shall appear before the collector of internal revenue of the proper district, who shall, upon the pay- ment of the price of the proper stamp required by law, and of a penalty of ten dollars, and. where the whole amount of the tax denoted by the stamp required shall exceed the sum of fifty dollars, on payment also of interest, at the rate of six per centum, on said tax from the day on which such stamp ought to have been affixed, affix the proper stamp to such bond, debenture, certificate of stock or of indebtedness or copy, or instrument, document, or paper of any Jcind or description whatsoever mentioned in Sched- Remission of ule A of this Act, and note upon the margin thereof the aTcfi (fen tTmis. date of his so doing, and the fact that such penalty has take, etc. been paid; and the same shall thereupon be deemed and held to be as valid, to all intents and purposes, as if stamped when made or issued : And provided further, That where it shall appear to said collector, upon oath or other- wise, to his satisfaction, that any such instrument has not been duly stamped, at the time of making or issuing the same, by reason of accident, mistake, inadvertence, or urgent necessity, and without any willful design to Digitized by Microsoft® STAMP TAXES ON SPECIFIC OBJECTS. 339 defraud the United States of the stamp, or to evade or delay the payment thereof, then and in such case, if such instrument, or, if the original be lost, a copy thereof, duly certified by the officer having charge of any records in which such original is required to be recorded, or other- wise duly proven to the satisfaction of the collector, shall, within twelve calendar months after the making or issuing thereof, be brought to the said collector of internal revenue to be stamped, and the stamp tax chargeable thereon shall be paid, it shall be lawful for the said collector to remit the penalty aforesaid and to cause such instrument to be duly stamped. And when the original instrument, or a certified or duly proven copy Recording, thereof, as aforesaid, duly stamped so as to entitle the same to be recorded, shall be presented to the clerk, register, recorder, or other officer having charge of the original record, it shall be lawful for such officer, upon the payment of the fee legally chargeable for the recording thereof, to make a new record thereof, or to note upon the original record the fact that the error or omission in the stamping of said original instrument has been corrected pursuant to law;, and the original instrument or such certified copy, or the record thereof, may be used in all courts and places in the same manner and with like effect as if the instrument had been originally stamped: And provided further, That in all cases where the party has not affixed the stamp required by law upon any such instru-Stabiished ment issued, registered, sold, or transferred at a time when stamped* aifer- and at a place where no collection district was established, ward - it shall be lawful for him or them, or any party having an interest therein, to affix the proper stamp thereto, or, if the original be lost, to a copy thereof. But no right acquired in good faith before the stamping of such instru- ment, or copy thereof, as herein provided, if such record be required by law, shall in any manner be affected by such stamping as aforesaid. See section 3422, page 329. Post stamping of instruments or documents of any description mentioned in Schedule A after the expiration of twelve months from date of issue. (T. D. 21539, 1889.) Collectors can not remit penalty for omission of stamps where the instrument was presented more than twelve months after it was issued. (T. D. 21368, July 10, 1899.) The action of collector in stamping the instrument under sec- tion 13, act of June 13, 1898, cures the defect and operates retro- actively. (T. D. 164, June 27, 1900.) Instruments to be validated may be sent to collector by mail, with affidavit, instead of being personally brought to the col- lector's office. (T. D. 20696, 1889.) Stamping and validating instruments. (T. D. 644, T. D. 749.) There is no authority of law for the sale of documentary stamps except for the purpose and in the manner provided in section 13, supra. Where no col- lection district is Digitized by Microsoft® 340 STAMP TAXES ON SPECIFIC OBJECTS. aim?sSb 1 i : e n as ^ EC - 14- That hereafter no instrument, paper, or docu- evidence it un-ment required by law to be stamped, which has been stamped. signed or issued without being duly stamped, or with a deficient stamp, nor any copy thereof, shall be recorded or admitted, or used as evidence in any court until a legal stamp or stamps, denoting the amount of tax, shall have been affixed thereto, as prescribed by law : Instruments requiring stamps are not competent evidence in courts unless stamped. (T. D. 21074, 1889.) Unstamped instruments inadmissible as evidence in Federal courts. (T. D. 474.) record i^'ru - Sec. 15. That it shall not be lawful to record or register ments until any instrument, paper, or document required by law to be s pe ' stamped unless a stamp or stamps of the proper amount shall have been affixed and canceled in the manner pre- scribed by law; and the record, registry, or transfer of any such instruments upon which the proper stamp or stamps aforesaid shall not have been affixed and canceled as afore- said shall not be used in evidence. REFUND OF TAX ON EXPORT BILLS OF LADING. iadMg° rt Mls ° f Sec. 2 [of An act to provide for refunding taxes paid upon legacies and bequests for uses of a religious, charitable, or educational character, for the encouragement of art, and so forth, under the act of June 13, 1898, and for other purposes, approved June 27, 1902. (32 Stat, 406)]. That the Secretary of the Treasury, under rules and regu- lations to be prescribed by him, be, and he is hereby, authorized and directed to refund, out of any money in the Treasury not otherwise appropriated, sums paid for documentary stamps used on export bills of lading, such stamps representing taxes which were illegally assessed and collected. Circular No. 628, July 8, 1902. Rules and regulations for the refunding of amounts paid for documentary stamps used on export bills of lading. Stamp taxes on export bills of lading unconstitutional. (Fair- bank v. U. S., 181 U. S., 283; T. D. 339). [Extract from an act making appropriations to supply deficiencies in the appropria- tions for the fiscal year ending June 30, 1907. and for prior years, and for other pur- poses, approved Mar. 4, 1907, (34 Stat., 1373; T. D. 1144).] manifests sWps ' ^° ena hle the Secretary of the Treasury, under the rules and regulations to be prescribed by him, to audit and refund the sums paid for documentary stamps used on export ships' manifests, such stamps representing taxes which were illegally assessed and collected, one hundred and twenty-five thousand dollars, or so much thereof as may be necessary; said refund to be made Digitized by Microsoft® STAMP TAXES ON SPECIFIC OBJECTS. 341 whether said stamp duties were paid under protest or not, and without being subject to any statute of limita- tions. DOCUMENTARY STAMPS AFFIXED TO FOREIGN BILLS OF EXCHANGE REFUNDING. An Act To provide for refunding stamp taxes paid under the act of June 13, 1898, upon foreign bills of exchange drawn between July 1, 1898, and June 30, 1901, against the value of products of merchandise actually exported to foreign countries and authorizing rebate of duties on anthracite coal imported into the United States from Octo- . ber 6, 1902, to January 15, 1903, and for other purposes, approved February 1, 1909. (35 Stat., 590.) That the Secretary of the Treasury be, and he is J;£™f£ bill30, hereby, authorized and directed to pay, out of any money in the Treasury not otherwise appropriated, to the persons or corporations who have, prior to July first, nineteen hundred and four, duly presented their respec- tive claims therefor, the sums paid for documentary stamps used on foreign bills of exchange drawn between July first, eighteen hundred and ninety-eight, and June thirtieth, nineteen hundred and one, against the value of products or merchandise actually exported to foreign countries, such stamps representing taxes which were illegally assessed and collected, said refund to be made whether said stamp taxes were paid under protest or duress or not. Regulations for the refunding of sums paid for documentary stamps used on foreign bills of exchange drawn between July 1, 1898, and June 30, 1901, against the value of products or mer- chandise actually exported to foreign countries. February 23, 1909. T. D. 1467. Extension of time. — The time within which claims may be presented for refunding the sums paid for documentary stamps used on foreign bills of exchange drawn between July 1, 1898, and June 30, 1901, against the value of products or merchandise actually exported to foreign countries, specified in the above act was extended to December 1, 1909. Act of August 5, 1909 (36 Stat., 118, 120). (Urgent deficiency appropriation act.) An Act Making appropriations to supply deficiencies in appropriations for the fiscal year 1910, and for other purposes, approved June 25, 1910 (36 Stat., 779). Refund of sums paid for documentary stamps: The ^fT^'d"?? time within which claims may be presented for refunding mentary* stamps the sums paid for documentary stamps used on foreign ^ms of°exchan^ bills of exchange drawn between July first, eighteen hun- ex t™s ionof t ime ' dred and ninety-eight, and June thirtieth, nineteen hundred and one, against the value of products or mer- chandise actually exported to foreign countries, specified Digitized by Microsoft® 342 STAMP TAXES ON SPECIFIC OBJECTS. in the Act entitled "An Act to provide for refunding stamp taxes paid under the Act of June thirtieth, eighteen hundred and ninety-eight, upon foreign bills of exchange drawn between July first, eighteen hundred and ninety- eight, and June thirtieth, nineteen hundred and one, against the value of products or merchandise actually exported to foreign countries and authorizing rebate of duties on anthracite coal imported into the United States from October sixth, nineteen hundred and two, to January fifteenth, nineteen hundred and three, and for other purposes," approved February first, nineteen hun- dred and nine, be, and is hereby, extended to December first, nineteen hundred and ten. * * * Time further extended to December 1, 1911. (Deficiency- appropriation act of March 4, 1911.) Digitized by Microsoft® Chapter Fifteen. PLAYING CARDS. [Act of Aug. 28, 1894 (28 Stat., 509).] 44. Manufacturer removing or reusing any stamp, wrapper, or cover for the purpose of evading the tax lia- ble to a fine of $50 and forfeiture. 45. Penalty for selling or exposing for sale, removing, or concealing play- ing cards ■without having affixed the stamp thereto. 46. Every person who offers or exposes for sale any playing cards, whether of domestic or foreign manufac- ture, shall be deemed the manu- facturer thereof and liable to the tax. 47. Assessment to be made by the com- missioner in certain cases. 38. Tax of 2 cents on every pack, contain- ing not more than fifty-four cards, whether manufactured, sold, or removed, or in stock of any dealer. 39. Adhesive stamps to be affixed to each package, and canceled by the per- son using the stamp. Penalty, $50. 40. Manufacturer to register with the col- lector of the district. Failure to register, penalty $50. 41. Stamps to be furnished by the col- lector to registered manufacturers and importers. 42. Penalty for counterfeiting, defacing, or removing stamp or illegal use of the same. 43. Penalty for removal or sale of playing cards without having stamp affixed. Cards may be removed for export without previous payment of tax. Sec. 38. [Act of Aug. 28, 189 J, {28 Stat., 509).] That onJ o »^^ and after the first day of August, eighteen hundred and of playing cards, ninety-four, there shall be levied, collected, and paid, by adhesive stamps, a tax of two cents for and upon every pack of playing cards containing not more than fifty-four cards, manufactured and sold or removed, and also upon every pack in the stock of any dealer on and after that date ; and the Commissioner of Internal Revenue, with the approval of the Secretary of the Treasury, shall make reg- ulations as to dies and adhesive stamps. "Where packages of playing cards are sent out from the factory duly stamped and are thereafter opened and stamp broken, the cards can not be returned to the packages and sold under a broken stamp; a new stamp must be affixed to each package and duly canceled. (T. D. 21634, 1889; see also U. S. v. Neu- staedter, 149 Fed. Rep., 1010, T. D. 1100.) Miniature playing cards, intended for use with packages of merchandise, one card to a package, must be put up in packages and properly stamped by the manufacturer. (T. D. 843, Nov. 17, 1904.) Tax must be paid on every pack of cards intended for use in playing games of skill or chance in lieu of ordinary playing cards. (T. D. 959, Dec. 13, 1905.) ' Tax must be paid on every pack of cards even though contain- ing half the ordinary number of cards. (T. D. 1023, July 2, 1906). Sec. 39. That in all cases where an adhesive stamp i s ca n®^, n an d , used for denoting the tax imposed by this Act upon play- stamp, ing cards, except as hereinafter provided, the person using 343 Digitized by Microsoft® 344 PLAYING CARDS. or affixing the same shall write thereon the initials of his name and the date on which such stamp is attached or used so that it may not again be used. And every person who fraudulently makes use of an adhesive stamp to denote any tax imposed by this Act without so effectually canceling and obliterating such stamp shall forfeit the sum of fifty dollars. The Commissioner of Internal Revenue is au- thorized to prescribe such method for the cancellation of stamps as substitute for, or in addition to the method pre- scribed in this section as he may deem expedient and effec- tual. And he is authorized, in his discretion, to make the application of such method imperative upon the manufac- turers of playing cards. Manufacturer Sec. 40. That every manufacturer of playing cards shall ooiieotOT^enalty register with the collector of the district his name or style, so r $5o Uure t0 d0 place of residence, trade, or business, and the place where such business is to be carried on, and a failure to register as herein provided and required shall subject such person to a penalty of fifty dollars. Where playing cards are lithographed on large sheets, and sent to another person to be cut and finished, the latter is held to be the manufacturer and required to register and stamp the cards. (T. D. 410, Sept. 21, 1901.) keptTy P coii t °cto b rl Sec - 41 - Tbat tne Commissioner of Internal Revenue and furnished to shall cause to be prepared, for payment of the tax upon farturer^tapoVl" playing cards, suitable stamps denoting the tax thereon. Saving d stock °on Such stamps shall be furnished to collectors requiring hand. ' them, and collectors shall, if there be any manufacturers of playing cards within their respective districts, keep on hand at all times a supply equal in amount to two months' sales thereof, and shall sell the same only to such manu- facturers as have registered as required by law and to importers of playing cards, who are required to affix the same to imported playing cards, and to persons who are re- quired by law to affix the same to stocks of playing cards on hand when the tax thereon imposed first takes effect. Every collector shall keep an account of the number and denominate values of the stamps sold by him to each man- ufacturer and to other persons above described. Decision as to packing and stamping cards when sold in leather, plush, celluloid, or metal cases. (T. D. 19024, 1898.) ,J™ e t?,VJi?\ l°J Sec. 42. That if any person shall forge or counterfeit, or counterfeiting, . J Jr o > defacing, or re- cause or procure to be forged or counterfeited, any stamp, uie n g 1 ai t use P ' Sdie, plate, or other instrument, or any part of any stamp, ™°- die, plate, or other instrument which shall have been pro- vided or may hereafter be provided, made, or used in pur- suance of the provisions of this Act or of any previous provisions of law on the same subjects, or shall forge, coun- terfeit, or resemble, or cause or procure to be forged, coun- terfeited, or resembled the impression or any part of the impression of any such stamp, die, plate, or other instru- ment, as aforesaid, upon any paper, or shall stamp or mark or cause or procure to be stamped or marked any paper Digitized by Microsoft® PLAYING CARDS. 345 with any such forged or counterfeited stamp, die, or plate, or other instrument or part of any stamp, die, plate, or other instrument, as aforesaid, with intent to defraud the United States of any of the taxes hereby imposed or any part thereof; or if any person shall utter, or sell, or expose to sale any paper, article, or thing having thereupon the impression of any such counterfeited stamp, die, plate, or other instrument, or any part of any stamp, die, plate, or other instrument, or any such forged, counterfeited, or resembled impression, or part of impression, as aforesaid, knowing the same to be forged, counterfeited, or resembled or if any person shall knowingly use or permit the use of any stamp, die, plate, or other instrument which shall have been so provided, made, or used, as aforesaid, with intent to defraud the United States ; or if any person shall fraud- ulently cut, tear, or remove, or cause or procure to be cut, torn, or removed, the impression of any stamp, die, plate, or other instrument, which shall have been provided, made, or used in pursuance of this Act, or of any previous pro- visions of law on the same subjects, from any paper, or any instrument or writing charged or chargeable with any of the taxes imposed by law; or if any person shall fraudu- lently use, join, fix, or place, or caused to be used, joined, fixed, or placed, to, with, or upon any paper, or any instru- ment or writing charged or chargeable with any of the taxes hereby imposed, any adhesive stamp, or the impres- sion of any stamp, die, plate, or other instrument, which shall have been provided, made, or used in pursuance of law, and which shall have been cut, torn, or removed from any other paper or any instrument or writing charged or chargeable with any of the taxes imposed by law; or if any person shall willfully remove or cause to be removed, alter or cause to be altered, the cancelling or defacing marks on any adhesive stamp, with intent to use the same, or to cause the use of the same, after it shall have been once used, or shall knowingly or willfully sell or buy such washed or restored stamps or offer the same for sale, or give or expose the same to any person for use, or know- ingly use the same, or prepare the same with intent for the further use thereof; or if any person shall knowingly and without lawful excuse (the proof whereof shall lie on the person accused) have in his possession any washed, re- stored, or altered stamps, which have been removed from any article, paper, instrument, or writing, then, and in every such case, every person so offending, and every per- son knowingly and willfully aiding, abetting, or assisting in committing any such offense as aforesaid, shall, on con- viction thereof, forfeit the said counterfeit, washed, re- stored, or altered stamps, and the articles upon which they are placed and be punished by fine not exceeding one thou- sand dollars, or by imprisonment and confinement to hard labor not exceeding five years, or both, at the discretion of the court. And the fact that any adhesive stamp so bought, sold, offered for sale, used, or had in possession as Digitized by Microsoft® 346 PLAYING CARDS. aforesaid, has been washed or restored by removing or altering the cancelling or defacing marks thereon, shall be prima-facie proof that such stamp has been once used and removed by the possessor thereof from some paper, instru- ment, or writing charged with taxes imposed by law, in violation of the provisions of this section. This is a substantial reenactment of section 3429, Revised Stat- utes, as amended by section 17, act of March 1, 1879, the only change being the substitution of the word "act" for "chapter " Penalty for re- Sec. 43. That whenever anv person makes, prepares, moval or sale of , n » r i • i ' r -r ■ ' playing cards and sells or removes tor consumption or sale, playing stamps^fflxld" 15 cai- ds, whether of domestic manufacture or imported, upon which a tax is imposed by law, without affixing thereto an adhesive stamp denoting the tax before men- tioned, he shall incur a penalty of fifty dollars for every Playing cards omission to affix such stamp: Provided, That playing cepted xp ° rt ex cards may be removed from the place of manufacture for export to a foreign county, without payment of tax or affixing stamps thereto, under such regulations and the filing of such bonds as the Commissioner of Internal Revenue, with the approval of the Secretary of the Treasury, may prescribe. Concerning the exportation without payment of tax of play- ing cards, see Regulations, No. 29. No. 19 Rev., Supplement No. 1. Relative to the exportation of playing cards by parcels post. (T. D. 1668.) Where a box of playing cards is opened and cards withdrawn, a new stamp must be affixed to the package before its resale. The broken stamp can not protect the package. In sending packs of cards abroad, even as samples, all the provisions of the law and regulations relating to the exportation of playing cards must be complied with, unless tax stamps are affixed to these packages. (T. D. 21669,1899.) Penalty for re- Sec. 44. That everv manufacturer or maker of playing moval or reuse , 1 „, ,, , , ,, r 1- ° of stamp, wrap- cards who, after the same are so made, and the particu- the' purpose 1 'ofl ars hereinbefore required as to stamps have been corn- evading the tax. plied with, takes off, removes, or detaches, or causes, or permits, or suffers to be taken off, or removed, or de- tached, any stamp, or who uses any stamp, or any wrapper or cover to which any stamp is affixed, to cover any other article or commodity than that originally contained in such wrapper or cover, with such stamp when first used, with the intent to evade the stamp duties, shall, for every such article, respectively, in respect of which any such offense is committed, be subject to a penalty of fifty dol- lars, to be recovered together with the costs thereupon accruing; and every such article or commodity as afore- said shall also be forfeited. Penalty for Seo. 45. That every maker or manufacturer of playing rng m for°sai e e xp rt cards who, to evade the tax or duty chargeable thereon, ceaiing 8 ' Saymg 01 " an y P ar ' thereof, sells, exposes for sale, sends out, re- cards without af moves, or delivers any playing cards before the duty Axing the stamp. ^.j iereon ^ ag Deen f u iiy paid, by affixing thereon the proper stamp, as provided by law, or who, to evade as aforesaid, hides or conceals, or causes to be hidden or Digitized by Microsoft® PLAYING CAEDS. 347 concealed, or removes or conveys away, or deposits, or causes to be removed or conveyed away from or deposited in any place, any such article or commodity, shall be subject to a penalty of fifty dollars, together with the forfeiture of any such article or commodity. Sec. 46. That the tax on playing cards shall be paid by Playing cards , r j> . .1 j; r -m i rv of domestic or the manufacturer thereof. Every person who otters ortoreign manu- exposes for sale playing cards, whether the articles so ^Xred^or ex- ottered or exposed are of foreign manufacture and im-p?sed for sale ported or are of domestic manufacture, shall be deemed ^tamp" denoting the manufacturer thereof, and subject to all the duties, paymentoftax - liabilities, and penalties imposed by law in regard to the sale of domestic articles without the use of the proper stamps denoting the tax paid thereon, and all such articles of foreign manufacture shall, in addition to the import duties imposed on the same, be subject to the stamp tax prescribed in this Act. Sec. 47. That whenever any article upon which a tax Assessment to is required to be paid by means of a stamp is sold or re- two™ears m'rar- moved for sale by the manufacturer thereof, without the tain cases - use of the proper stamp, in addition to the penalties im- posed by law for such sale or removal, it shall be the duty of the Commissioner of Internal Revenue, within a period of not more than two years after such removal or sale, upon such information as he can obtain, to estimate the amount of the tax which has been omitted to be paid, and to make an assessment therefor upon the manufacturer or producer of such article. He shall certify such assess- ment to the collector, who shall immediately demand payment of such tax, and upon the neglect or refusal of payment by such manufacturer or producer, shall pro- ceed to collect the same in the manner provided for the collection of other assessed taxes. This is a reenactment, without change, of section 3437, Revised Statutes. Cards for game called "authors," and the like, differing wholly from ordinary playing cards, are held not to be subject to tax under this act. It is held that any number of cards in a deck above 54 and not exceeding another of 54 must be regarded, for the purposes of this act, as belonging to another pack, upon which an additional tax of 2 cents must be paid. (40 Int. Rev. Rec, 277.) Digitized by Microsoft® Chapter Sixteen. BANKS AND BANKERS. Sec. 3407. Sec. [34136.] Tax on circulation other than national banks used and paid out. [3413c] Return of amounts and payment of tax. Banks' and bankers' monthly re- turns. In default of return, commissioner to estimate, etc. State banks converted into national banks; returns, how made. Certain provisions of this chapter not to apply to national banks. 3414. 3415. 3416. 3417. Definition of words "bank'' and "banker." 3408 (amended). Tax on circulation of banks and bankers. 3409. Taxes, when payable; how calcu- lated. 3411. Circulation, when exempted from tax. 3412. Tax on notes of persons or State banks used as circulation, etc. 3413. Tax on notes of town, city, or mu- nicipal corporations paid out by banks, etc. [3413a.] Tax on certain parties' own notes used for circulation and paid out by them. wOTd? liti "bani:'" Sec. 3407. Every incorporated or other bank, and and "banker." every person, firm, or company having a place of business where credits are opened by the deposit or collection of money or currency, subject to be paid or remitted upon draft, check, or order, or where money is advanced or loaned on stocks, bonds, bullion, bills of exchange, or promissory notes, or where stocks, bonds, bullion, bills of exchange, or promissory notes are received for dis- count or for sale, shall be regarded as a bank or as a banker. Who are bankers under this section? (Selden v. Equitable TrustCo., 94 U.S., 419; 23 Int. Rev. Rec, 171; Warren u. Shook, 91 U. S., 704; 22 Int. Rev. Rec, 77.) Liability of foreign banks doing business in United States. Suits to recover taxes on capital employed. (United States v. Bank of Montreal; 30 Int. Rev. Rec, 310; 21 Fed. Rep., 236.) A loan and trust company regarded as a bank (U. S. v. Farm- er's L. & T. Co., 25 Fed. Cas. No. 15070; 3 Int. Rev. Rec, 62.) Sec. 3408. There shall be levied, collected, and paid, as hereafter provided: Tax on circuia- Third. A tax of one-twelf th of one per centum each month upon the average amount of circulation issued by any bank, association, corporation, company, or person, including as circulation all certified checks and all notes and other obligations calculated or intended to circulate or to be used as money, but not including that in the vault of the bank, or redeemed and on deposit for said bank; and an additional tax of one-sixth of one per 348 Digitized by Microsoft® BANKS AND BANKERS. 349 i centum each month upon the average amount of such circulation, issued as aforesaid, beyond the amount of ninety per centum of the capital of any such bank, association, corporation, company, or person. In the case or banks with branches, the tax herein pro- on circulation vided shall be assessed upon the circulation of each branch of bnmch banks. severally, and the amount of capital of each branch shall be considered to be the amount allotted to it. Taxes on deposits and capital repealed. Act of March 3, 1883. (22 Stat., 488.) The taxation ceased December 1, 1882. (29 Int. Rev. Rec, 171; 17 Op. Atty. Gen., 539.) When the plaintiff admits that his business was that of buying and .selling stockB for his customers, and that in such business he employed capital, he proves that he was a banker within the statutory definition, and that, within the meaning of section 3408, his capital was employed in the business of banking. (Richmond v. Blake (1889), 132 U. S., 592; 36 Int. Rev. Rec, 24.) The tax on circulation of national banks is paid to the Treas- urer of the United StateB. (Sec. 5214 as amended. See sec. 3417, p. 352.) Certificates of indebtedness issued by a person or a corporation are not taxable as "circulation" under section 3408, unlesB in- tended to circulate as money. (United States v. Wilson, 106 U. S., 620.) What is capital? (Mechanics and Farmers' Bank v. Town- send, collector, 5 Blatch., 315.) Merchant's Nat'l Bank v. U. S., 42 Ct. Ols., 6. Sec. 3409. The taxes provided in the preceding section Ta ™s. when shall be paid semi-annually, on the first day of January pay and the first day of July; but the same shall be calculated how caicu- at the rate per month as prescribed by said section, so Iated " that the tax for six months shall not be less than the aggregate would be if such taxes were collected monthly. In regard to abating tax against insolvent national, State, and savings banks, see section 22, act of March 1, 1879 (20 Stat., 327), and Supplement, Revised Statutes No. 1, page 243. (Johnson v. U. S., 17 Ct. Cls., 157; Jackson v. U. S., 20 Ct. Cls., 304.) Sec. 3411. Whenever the outstanding circulation of circulation, . . . . . , • ° when exempted any bank, association, corporation, company, or person, from tax. is reduced to an amount not exceeding five per centum of the chartered or declared capital existing at the time the same was issued, said circulation shall be free from taxation; and whenever any bank which has ceased to issue notes for circulation deposits in the Treasury of the United States, in lawful money, the amount of its outstanding circulation, to be redeemed at par, under such regulations as the Secretary of the Treasury shall prescribe, it shall be exempt from any tax upon such cir- culation. Legislation affecting taxes upon the circulation of State banks. (Merchants National Bank v. U. S., 42 Ct. Cls., 6.) Sec. 3412. Every national banking association, State pe „ons n o?°state bank, or State banking association, shall pay a tax of tenbantausedascir- per centum on the amount of notes of any person, or f culatlon ' etc - Digitized by Microsoft® 350 BANKS AND BANKEBS. any State bank or State banking association, used for circulation and paid out by them. The act of March 3, 1875 (18 Stat., 507), provided that the Secretary of the Treasury be authorized and directed to settle and release any claims for tax on circulation of evidences of indebtedness made against any mining, manufacturing, or other corporations other than against any national banking association, State bank, or banking association, by such corporations paying the tax, without penalty, that shall have accrued thereon since November first, eighteen hundred and seventy- three. Internal-revenue tax on State banks. (14 Op. Atty. Gen., 98; 16 Int. Rev. Rec, 57.) The tax of 10 per cent on State bank circulation was designed to drive all such circulation out of existence. (Remark of the court in Head Money Cases. 112 IT. S., 580, 596 J of T t^n? n city? t ?r Sec. 341.3. Every national banking association, State municipal corpo-bank, or banker, or association, shall pay a tax of ten per bybankl'etc. " centum on the amount of notes of any town, city, or municipal corporation, paid out by them. This tax not a direct tax and not repugnant to the Constitu- tion. (Veazie Bank v. Fenno, 8 Wall., 533; 10 Int. Rev. Rec, 195.) Above decision cited and approved (National Bank v. United States, 101 U. S., 1) where the United States sued a national bank for 10 per cent of the notes of the city of Little Rock paid out. Tax on circulation of State banks (Deposit Savings Associa- tions. Marks, 3 Woods, 553; 23 Int. Rev. Rec, 241, Fed. Cas. No. 3813.) Section 3583 provided a penalty for issuing notes for a less sum than $1 intended to circulate as money. (United States v. Van Auken (96 U. S., 6 Otto) 366; 24 Int. Rev. Rec, 204; U. S. v. Roussopulous, 95 Fed. Rep., 977.) Section 3583 has been reproduced in section 178 of the Criminal Code. Act of March 4, 1909. (35 Stat., 1088.) ta^VmiS* t SEC - 3413a -l [Sec. 19 of the act of Feb. 8, 1875 (18 Stat, other° n than rit 3 11).] That every person, firm, association other than their 1 o™ k note° na tional bank associations, and every corporation, State Son f md ircul S^ ail ' i ' or State banking association, shall pay a tax of out.' '" ten per centum on the amount of their own notes used for circulation and paid out by them. Ten per cent [Sec. 34136.] [Sec. 20 of the act of Feb. 8, 1876.] That tax on circula- L , JL « J . . . J ' ,. r., , tion oi other than every such person, firm, association, corporation, state used 0na !lnd b pafd bank, or State banking association, and also every out - national banking association, shall pay a like tax of ten per centum on the amount of notes of any person, firm, association other than a national banking association, or of any corporation, State bank, or State banking associa- tion, or of any town, city, or municipal corporation, used for circulation and paid out by them. The main object of the Federal legislation on this subject was to secure for the national currency the exclusive use in the United States as a circulating medium ; and this object was sought to be effected by imposing upon all competitive money such a tax as would make its issue unprofitable. (21 Op. Atty. Gen., 560.) The effect of the act of February 8, 1875, wis to extend sec- tions 3412 and 3413, which included only banks amd banking associations, to all persons, firms, associations, and corporations. The subject matter of the tax, to wit, "notes used for circulation paid out by them " was the same. Digitized by Microsoft® BANKS AND BANKEKS. 351 Construction of sections 19 and 20, act of February 8, 1875. (21 Int. Rev. Rec, 346.) "Wages certificates" of Philadelphia & Reading Railroad taxable. (16 Op. Atty. Gen., 341; 25 Int. Rev. Rec, 167; see Philadelphia & R. R. Co. v. Pollock, 19 Fed. Rep., 401.) Tax limited to obligations payable in money. (Hollister v. Zion's Co-operative Mercantile Institution, 111 U. S., 62; 30 Int. Rev. Rec, 111. In re Aldrich, 16 Fed. Rep., 369.) Glass manufacturers' cases. Warrick and Stanger were glass manufacturers and issued their notes in various amounts, from 5 cents to $5 each, in payment of wages. These notes circulated as money, and when redeemed were constantly reissued. Every issue of the notes taxable. (United States v. Warrick, 31 Int. Rev. Rec, 327; 25 Fed. Rep., 138.) A national bank paying out on checks and otherwise notes of a bank chartered in a foreign country is subject to tax of 10 per cent upon the total amount of all notes it has received and used as a circulating medium. (20 Op. Atty. Gen., 534.) Notes of Canadian Banks (33 Int. Rev. Rec, 405; 34 ibid., 53, 61, and 77; also Treas. Dec. (1899), No. 20507). Notes of the Dominion of Canada not taxable. (34 Int. Rev. Rec, 61.) Notes of State banks taxable. (T. D., 784.) Certified checks of State banks not notes. (T. D., 885.) Ice tickets not taxable. (19 Op. Atty. Gen., 98.) Opinion of the Attorney General as to whether pay-roll checks issued by manufacturers and others, and certificates issued by clearing-house associations when used for circulation, are notes within the meaning of section 19, act of February 8, 1875. The tax applies only to promissory notes. (39 Int. Rev. Rec, 398; 20 Op. Atty. Gen., 681.) Persons, corporations, banks, etc., purchasing from foreigners and returning tourists notes of foreign banks and corporations for resale to persons going abroad, not liable for 10 per cent tax if such notes are not used for circulation in United States. (T. D., 1041, Sept. 24, 1906.) Clearing-house certificates not notes within the meaning of sec. 34136. (T. D., 1271, Nov. 14, 1907.) [Sec. 3413c] [-Sec. 21 of the act of Feb. 8,1875 (^ a * e un r t ° an ° d ' Stat., 311).] That the amount of such circulating notes, payment of tax. and of the tax due thereon, shall be returned, and the tax paid at the same time, and in the same manner, and with like penalties for failure to return and pay the same, as provided by law for the return and payment of taxes on * * * circulation, imposed by the existing pro- visions of internal revenue law. Sec. 3414. A true and complete return of the monthly,. Banks' and , n ■ n , ■ * * * c ■ 1 1.C.L1 bankers' month- amount of circulation, * * * as aforesaid, and of the iy returns, monthly amount of notes of persons, town, city, or municipal corporation, State banks, or State banking associations paid out as aforesaid for the previous six months, shall be made and rendered in duplicate on the first day of December and the first day of June, by each of such banks, associations, corporations, companies, or persons, with a declaration annexed thereto, under the oath of such person, or of the president or cashier of such bank, association, corporation, or company, in such form and manner as may be prescribed by the Commissioner of Internal Revenue, that the same contains a true and • faithful statement of the amounts subject to tax, as aforesaid; and one copy shall be transmitted to the col- Digitized by Microsoft® 352 BANKS AND BANKEBS. lector of the district in which any such bank, association, corporation, or company is situated, or in which such person has his place of business, and one copy to the Commissioner of Internal Revenue. The words "of deposits and of capital" are dmitted in line 2 as obsolete. retSm de o a omnis- Sec. 3415 - I n default of the returns provided in the si oner to esti- preceding section, the amount of circulation, * * * mate, etc. an( j no ^ es f persons, town, city, and municipal corpora- tions, State banks, and State banking associations paid out, as aforesaid, shall be estimated by the Commissioner of Internal Revenue, upon the best information he can obtain. And for any refusal or neglect to make return and payment, any such bank, association, corporation, company, or person so in default shall pay a penalty of two hundred dollars, besides the additional penalty and forfeitures provided in other cases. The words "deposits, capital" omitted in line 2. See section 3176, page 89, as to additional penalties. (U. S. v. N. Y. Guaranty Co., 8 Ben., 269, 27 Fed. Cas., No. 15, 872; 21 Op. Atty. Gen., 564.) concerted 3 IS to ^ec. 3416. Whenever any State bank or banking asso- nationai banks; ciation has been converted into a national banking made. rns ' ow association, and such national banking association has assumed the liabilities of such State bank or banking association, including the redemption of its bills, by any agreement or understanding whatever with the repre- sentatives of such State bank or banking association, such national banking association shall be held to make the required return and payment on the circulation out- standing, so long as such circulation shall exceed five per centum of the capital before such conversion of such State bank or banking association. This section (3416) is practically obsolete. sion^fttiis^ha"- ^ EC - 3417. The provisions of this chapter, relating to ter not to apply to the tax on the * * circulation of banks, and to their national banks. returnS) except as contained in sections * thirty-four 1875°' (i8 eb stat 8 ' nun dred and eleven, thirty-four hundred and twelve, 319). 'thirty-four hundred and thirteen, and thirty-four hundred and sixteen, and such parts of sections thirty-four hun- dred and fourteen, and thirty-four hundred and fifteen as relate to the tax of ten per centum on certain notes, shall not apply to associations which are taxed under and by virtue of Title "National Banks." Digitized by Microsoft® Chapter Seventeen. PKOVISIONS COMMON TO SEVERAL OBJECTS OF TAXATION. Sec. 3443. Fraudulent claims for drawback; penalty. 3444. Collector's monthly account of ar- ticles in bonded warehouses and articles exported. 3445. Stamps, instruments for attaching, canceling, etc. 3446 (amended). Power to alter or change stamps, marks, labels, etc. [3446a.] Stamps to be sent to officers by mail, registered. 3447. Where mode of assessing or collect- ing tax is not provided for; regu- lations authorized. 3448. Internal-revenue laws, when coex- tensive with jurisdiction of United States. 3449. Removing liquors under other than the proper name known to the trade; penalty. 3450. Removing or concealing articles with intent to defraud; forfeiture and penalty. 3451. Fraudulently executing documents; penalty. 3452. Having property in possession with intent to sell in fraud of law or to evade taxes; penalty. 3453. Property found in possession in fraud of revenue laws; forfeiture. 3454. Sales to evade tax; forfeiture. 3455. Disposing of or receiving or making empty stamped packages; penal- ties. 3456. Penalty and forfeiture by distillers, etc., for omitting things required and for doing things forbidden. Sec. 3441. Relative to drawback on fermented liquors; repealed by act of June 18, 1890 (26 Stat., 162). See page 255. Sec. 3442. Obsolete by repeal of section 3441. Sec. 3443. Whenever anv person fraudulently claims or Fraudulent i , i , • ii j!i i_i i claims for draw- seeks to obtain an allowance or drawback on goods, wares, back; penalty. or merchandise on which no internal duty shall have been Eaid, or fraudulently claims any greater allowance of draw- ack than the tax actually paid as aforesaid, he shall for- feit triple the amount wrongfully or fraudulently claimed 72170°— 11 23 353 Sec. 3457. Packages included in forfeiture of goods. 3458. Goods seized may be delivered to marshal before process issues, etc. 3459. Bonding of goods seized. 3460. Proceedings on seizure of goods valued at $500 or less. 3461. Application for remission. 3462. Search warrants. 3463 and [3463a]. Informers' rewards. Appropriation for detecting frauds. 3464. Purchasing for the Government goods subject to tax. 3465. Construction of act March 2, 1833. Act of August 13, 1894, amended. Guar- antee corporation may be ac- cepted as sole surety on recogni- zances, stipulations, bonds, and undertakings. Section 5 of the legislative, executive, and judicial appropriation act of March 2, 1895. Relative to offi- cial bonds. Actof August8, 1888. Notice of deficiency in accounts of principals to be given to sureties upon bonds of United States officials. Limita- tion of time within which suits shall be brought against sureties. Section 31, act of June 13, 1898. Former laws made applicable. Legislation relative to Hawaii, Porto Rico, and the Philippines. Digitized by Microsoft® 354 PROVISIONS COMMON TO SEVERAL, OBJECTS OF TAXATION. or sought to be obtained, or the sum of five hundred dol- lars, at the election of the Secretary of the Treasury. Section 3330, page 220, provides a penalty in the case of fraudu- lent claims for drawback on spirits, and section 25, act of Febru- ary 8, 1875 (sec. [3386a], p. 277), in the case of fraudulent claims for drawback on tobacco. Drawback is now allowed on distilled spirits, tobacco, snuff, cigars, cigarettes, and stills. No drawback is allowed upon spirits bottled in bond, page 237. Drawback allowed on articles' shipped to the Philippines. (Act of Mar. 8, 1902, p. 375.) Drawback on stills, page 134. Drawback on medicinal and toilet preparations manufactured from tax-paid alcohol, page 337. C °thi ector ' t ^ EC- 3444. Every collector who has charge of any ware- of articles inhouse in which distilled spirits, or other articles, are stored houses e and w arti"- m bond, shall render a monthly account of all such articles cies exported, to the Commissioner of Internal Revenue, by whom such account shall be examined and adjusted monthly, so as to exhibit a true statement of the responsibility of such col- lector thereon. In adjusting such account, the collector shall be charged with all the articles which may have been deposited or received under the provisions of law, in any warehouse in his district and under his control, and shall be credited with all such articles shown to have been removed therefrom according to law, including transfers to other collectors and to his successor in office, and also whatever allowances may have been made in accordance with law to any owner of such goods or articles for leakage or other losses. And every collector from whose district any distilled spirits, tobacco, snuff, or cigars are shipped in bond, under the provisions of this Title, shall render a monthly account of the same to the Commissioner of Internal Revenue, showing the amount of each article produced and shipped in bond, the amounts of which the exportation is com- pleted according to law, and the amount remaining unac- counted for at the end of each month; also any excesses or deficiencies on the amounts originally reported as shipped. changes of Sec. 3445. The Commissioner of Internal Revenue may stamps, instru- . . . . . .. , . J ments lor attach- make such change m stamps, and may prescribe such m- an 8 d caSceiui C g lnB ' struments or other means for attaching, protecting, and canceling stamps, for tobacco, snuff, cigars, distilled spirits, and fermented liquors, or either of them, as he and the Secretary of the Treasury shall approve ; such instru- ments to be furnished by the United States to the person using the stamps to be affixed therewith, under such regulations as the Commissioner of Internal Revenue may prescribe. Regulations under this section have the force of law. (15 Op. Atty. Gen., 191.) Rubber stamps may be used instead of stencils for canceling strip 6tamps on cigar boxes. (Circular letter, Oct. 15, 1897; 43 Int. Rev. Rec.,385.) Digitized by Microsoft® PROVISIONS COMMON TO SEVERAL. OBJECTS OP TAXATION. 355 Sec. 3446 [as amended oy sec. 18, act of Mar. 1,1879 (20 1 ?°™ ^ <£ Stat., 827)]. The Commissioner of Internal Revenue, change' internai- with the approval of the Secretary of the Treasury, may ml™", 6 or 3 labels! establish and, from time to time, alter or change the form, etc - style, character, material, and device of any stamp, mark, or label used under any provision of the laws relating to internal revenue. Such stamps shall be attached, pro- tected, removed, canceled, obliterated, and destroyed, in such manner and by such instruments or other means as he, with the approval of the Secretary of the Treasury, may prescribe; and he is hereby authorized and empow- ered to make, with the approval of the Secretary of the Treasury, all needful regulations relating thereto; and aU pains, penalties, fines, and forfeitures now provided by Penalties, law relating to internal-revenue stamps shall apply to and have full force and effect in relation to any and all stamps which may or shall be so established by the Commissioner of Internal Revenue : Provided, Such stamps or device or instrument or Expense, means of removal or obliteration, shall entail no addi- tional expense upon the persons required to affix or use the same. See section 321, page 45, as to authority of commissioner to pro- vide stamps, etc. Stamps for special taxes, section 3238, page 128; for distilled spirits, section 3312, page 207; for imitation wines, section 3328, page 217 ; for fermented liquors, section 3341, page 249 ; for tobacco, section 3369, page 267;'for cigars, section 3395, page 285; for oleo- margarine, section 8, act of August 2, 1886, amended, page 295. See appropriate sections for other articles. The portraits of living persons upon internal-revenue stamps not prohibited by section 3576, R. S., but their exclusion there- from is in consonance with its spirit. (14 Op. Atty. Gen., 528.) Hamilton-Brooks cigar stamp. (16 Op. Atty. Gen., 444; 26 Int. Rev. Rec, 33; 17 Op. Atty. Gen., 111.) Use of the Hunter stamp. (15 Op. Atty. Gen., 191.) Fletcher's invention. (11 Ct. Cls., 748.) Alleged infringement of patent. (Fletcher v. Blake, 131 TJ. S., cxcvii appendix; 27 Int. Rev. Rec., 6. Hollisteri). Benedict & Burnham Manufacturing Co., 113 U. S., 59; 31 Int. Rev. Rec, 30. Solomons v. United States, 22 Ct. Cls., 335.) Stamps for spirits, beer, tobacco, snuff, and cigars are not legitimate articles of traffic. (11 Int. Rev. Rec, 57; Amer. Brewing Co. v. U. S., 33 Ct. Cls., 351.) [Sec. 3446a.] [Extract from legislative, executive, and ju- s ^^1^° s £ e dicial appropriation act approved Aug. 15, 1876 (1 9 mail, registered. Stat., 152).] * * * And hereafter the transmission of internal revenue stamps to the officers of the internal revenue service shall be made through the mails of the United States in registered packages. * * * Internal-revenue stamps may be mailed to collectors and stamp deputy collectors or returned by them to the commissioner in full packages without regard to the 4-pound limit of weight. (T. D. 18947, 1898.) Sec. 3447. Whenever the mode or time of assessing or ,J™{£| ™ d c °! coUecting any tax which is imposed is not provided for, tecting any tax is the Commissioner of Internal Revenue may establish the re°guFa r tions ed ,or ' Digitized by Microsoft® 356 PROVISIONS COMMON TO SEVERAL OBJECTS OF TAXATION. same by regulation. He may also make all such regula- tions, not otherwise provided for, as may have become necessary by reason of any alteration of law in relation to internal revenue. Spreckels S. R. Co. v. McClain (113 Fed. Rep., 244; T. D. 462; 109 Fed. Rep., 76; T. D. 350). nue nt iawt 'S Sec. 3448. The internal-revenue laws imposing taxes on coextensive with distilled spirits, fermented liquors, tobacco, snuff, and United states. ° cigars shall be held to extend to such articles produced anywhere within the exterior boundaries of the United States, whether the same be within a collection-district or not. Indian Territory: The Cherokee Tobacco (Boudinot's factory) (11 Wall., 616; 14 Int. Rev. Rec, 11). In this case the Supreme Court ruled that the Indian Territory- was included in the general terms of this section, notwithstand- ing any prior treaty, and that the provisions of the internal-reve- nue law as to distilled spirits, fermented liquors, and tobacco were applicable therein. Liquor dealers in Indian Territory. (22 Int. Rev. Rec, 109; 23 ibid., 125. United States v. Forty-three Gallons of Whisky; 108 U. S., 491; 29 Int. Rev. Rec, 188.) Special-tax stamps, being only receipts for taxes paid, may be issued by the collector of internal revenue, notwithstanding acts of Congress relative to sale of liquors in the Indian Territory. (T. D. 18911, 1898.) _ Section 2141, Revised Statutes, provides as follows: Every per- son who shall, within the Indian country, set up or continue any distillery for manufacturing ardent spirits shall be liable to a penalty of one thousand dollars; and the superintendent of Indian affairs, Indian agent, or subagent, within the limit of whose agency any distillery of ardent spirits is set up or con- tinued, shall forthwith destroy and break up the same. The Attorney General, in an opinion rendered October 4, 1898, held that the establishment of a distillery in the Indian Terri- tory, notwithstanding it was on land to which the Indian title was extinct, would be in contravention of law. (T. D. 20162, 1898; 22 Op. Atty. Gen., 232.) Oklahoma and Indian Territory to form a State government. Act June 16, 1906. (34 Stat., 267.) Oklahoma admitted as a State November 16, 1907. (35 Stat., 2161.) Alaska added to Oregon district December 27, 1872. Alaska, case of Savaloff (17 Int. Rev. Rec, 20); case of Ste- phens ( 28 ibid., 194). The payment of the special tax is no defense to a prosecution for illegally selling liquors in Alaska. (United States v. Ash, 75 Fed. Rep., 651; Endleman v. United States, 86 Fed. Rep., 456.) An act to define and punish crimes in the District of Alaska and to provide a code of criminal procedure for said district. (Act of March 3, 1899, 30 Stat., 1253.) Section 477 provides: "That nothing in this act shall in any way repeal, conflict, or interfere with the public general laws of the United States imposing taxes on the manufacture and sale of intoxicating liquors for the purpose of revenue and known as the 'internal-revenue laws. ' " The act of June 6, 1900, (31 Stat., 321), makes further provision for civil government in Alaska. Philippine Islands (24 Op. Atty. Gen., 120). See p. 375. it ^ore°or ng wfn n es ^ EC - 344 9. Whenever any person ships, transports, or under other than removes any spiritous or fermented liquors or wines, penalty. names; un der any other than the proper name or brand known to the trade as designating the kind and quality of the con- Digitized by Microsoft® PROVISIONS COMMON TO SEVERAL OBJECTS OF TAXATION. 357 tents of the casks or packages containing the same, or causes such act to be done, he shall forfeit said liquors or wines, and casks or packages, and be subject to pay a fine of five hundred dollars. Construction of this section in case of shipment of spirits under a false desgination. (Attorney General Tart's letter to Secretary of the Treasury; 22 Int. Rev. Rec, 261.) Section 3449 was passed to prevent frauds on the revenue and to assist revenue officers in discovering such frauds. It has no reference to marks or brands placed upon packages by Govern- ment officers. (Woolner & Co. v. Rennick, (1908), 170 Fed. Rep., 662; T:D. 1425.) When spirituous liquors contained in bottles are packed in barrels and shipped and the barrels are marked ' 'groceries, ' ' such shipment is a violation of this section. (United States v. Liquor Dealers' Supply Co., 156 Fed. Rep., 219; T. D. 1292.) When spirituous liquors contained in bottles are packed in bar- rels and shipped, and the barrels are not marked, Dut described in bill of lading as "drugs, " such shipment is a violation of sec- tion 3449. The matter of intent is immaterial. (Charge to the jury in United States v. Robert Stevenson & Co.; T. D. 1644.) The requirements of this statute can not be limited to distil- lers, manufacturers, and rectifiers, as its language covers all persons who ship, transport, or remove liquors or wines. (United States v. Camp et al., Northern District of California (1898), 89 Fed. Rep., 697.) See 133 Fed. Rep. 910 (T. D. 844) for later decision of Cir. Ct. of appeals. Section 3449 not unconstitutional because in some cases it incidentally acts as a protection to trade-marks. (United States v. Loeb (1892), 49 Fed. Rep., 636; 38 Int. Rev. Rec, 78.) The term "package," as used in section 3449, includes every box, barrel, or other receptacle into which distilled spirits have been placed for shipment or removal, either in quantity or in separate small packages, as bottles or jugs. (United States v. 132 Packages of Spirituous Liquors and Wines et al. (1896), circuit court of appeals, 76 Fed. Rep., 364; 42 Int. Rev. Rec, 438.) Packages of less than 5 gallons marked "Glass, this side up with care." Section 3449 does not apply. (United States v. Twenty Boxes of Corn Liquor, 123 Fed. Rep., 135; 133 ibid., 910; T. D.844.) "J. D. Iler's Rochester Tonic." (United States v. J. D. Her Brewing Co., 121 Fed. Rep., 41; T. D. 630.) Shipping liquors under other than name as known to the trade. (T. D. 956; T. D. 1035.) United States v. Sandefuhr (145 Fed. Rep., 49). See provisions of the criminal code as to marking spirits. Ap- pendix, p. 421. Sec. 3450. Whenever any goods or commodities for or Removing or , -, j. , J . b , ln , , concealing arti- m respect whereof any tax is or shall be imposed, or anycies with intent materials, utensils, or vessels proper or intended to be !°tate^f tf£ uted made use of for or in the making of such goods or com- modities are removed, or are deposited or concealed in any place, with intent to defraud the United States of such tax, or any part thereof, all such goods and commodities, and all such materials, utensils, and vessels, respectively, shall be forfeited; and in every such case all the casks, vessels, cases, or other packages whatsoever, containing, or which shall have contained, such goods or commodities, respec- tively, and every vessel, boat, cart, carriage, or other con- veyance whatsoever, and all horses or other animals, and all things used in the removal or for the deposit or conceal- ment thereof, respectively, shall be forfeited. Digitized by Microsoft® 358 PROVISIONS COMMON TO SEVEEA1, OBJECTS OF TAXATION. forfeiture ty and ^ J1( ^ every person who removes, deposits, or conceals, or is concerned in removing, depositing, or concealing any goods or commodities for or in respect whereof any taxis or shall be imposed, with intent to defraud the United States of such tax or any part thereof, shall be liable to a fine or penalty of not more than five hundred dollars. And all boilers, stills, or other vessels, tools and imple- ments, used in distilling or rectifying, and forfeited under any of the provisions of this Title, and all condemned ma- terial, together with any engine or other machinery con- nected therewith, and all empty barrels, and all grain or other material suitable for distillation, shall, under the direction of the court in which the forfeiture is recovered, be sold at public auction, and the proceeds thereof, after deducting the expenses of sale, shall be disposed of accord- ing to law. edf'ho'w disposed ^^ au spirits or spirituous liquors which may be for- of.' feited under the provisions of this Title, unless herein otherwise provided, shall be disposed of by the Commis- sioner of Internal Revenue as the Secretary of the Treas- ury may direct. An unofficial person may seize property as forfeited to the United States, and the Government, if it chooses, may adopt the seizure and make it the basis of legal proceedings. A proceeding by the Government to enforce the forfeiture by legal process is a confirmation of the seizure. (13 Op. Atty. Gen., 253, 256; The Caledonian, 4 Wheat., 99, 102; Gelston v. Hoyt, 16 Wheat., 245, 310; Taylor v. United States, 3 How., 197, 204.) Circular No. 224, relative to destruction of spirits. (26 Int. Rev. Rec, 105.) Rights of mortgagee. (United States v. Two Barrels Whisky (1899, C. C. A.) 96 Fed. Rep., 479; United States v. One Bay Horse, etc., 128 ibid., 207.) •_ In statutory offenses a guilty intent is not necessarily an in- gredient. (United States v. One Black Horse, 129 Fed. Rep., 167.) The illegal acts of agents or employees work forfeiture of prop- erty. (Bushu.U.S.,24Fed.Rep..917; 31 Int. Rev. Rec, 305; U. S. v. Stowell, 133 U. S., 1; 36 Int. Rev. Rec, 30; U. S. v. 7 Barrels Distilled Oil, 6 Blatch., 174; Fed. Cas. No. 16253.) In Pilcher v. Faircloth (135 Ala., 311), action to recover for the conversion of two mules seized and sold by the collector, the supreme court of Alabama held that the forfeiture took effect immediately upon the commission of the act, and the defendant by purchase at the collector's sale acquired title. Mules and a wagon, hired for the purpose of hauling produce to market, are forfeited when employed by the bailee in the removal of spirits in violation of law, although the owner had no information that his property would be employed in an un- lawful purpose. (United States v. Two Bay Mules, 36 Fed. Rep., 84.) See notes under sec. 3453. Fraudulently g EC 345 1. Everv person who simulates or falsely or ments required fraudulently executes or signs any bond, permit, entry, nue in iaws; pa£or other document required by the provisions of the in- aity. ternal-revenue laws, or by any regulation made in pursu- ance thereof, or who procures the same to be falsely or fraudulently executed, or who advises, aids in, or con- nives at such execution thereof, shall be imprisoned for a Digitized by Microsoft® PROVISIONS COMMON TO SEVERAL OBJECTS OF TAXATION. 359 term not less than one year nor more than five years; and the property to which such false or fraudulent instrument relates shall be forfeited. See section 28, act March 4, 1909 (Criminal Code), p. 420, in appendix, penalties for forging, altering, counterfeiting affidavits, bonds, public records, etc. Fraudulent Form 122 forfeits spirits to which it relates. (Thacher, claimant of 102 packages of distilled spirits, v. The United States, 103 U. S. (13 Otto), 679, affirming 15 Blatch., 15; 27 Int. Rev. Rec, 144.) Sec. 3452. Every person who shall have in his custody Having proper- J r , i i. ,■ i •* ty in possession or possession any goods, wares, merchandise, articles, or w itn intent to objects on which taxes are imposed by law, for the purpose f|^ ! ° r ^evadi of selling the same in fraud of the internal-revenue laws, taxes; penalty. or with design to avoid payment of the taxes imposed thereon, shall be liable to a penalty of five hundred dollars or not less than double the amount of taxes fraudulently attempted to be evaded. U. S. v. Grotenkemper (2 Bond, 140, 26 Fed. Cas., 45.) Sec. 3453. All goods, wares, merchandise, articles, or r o e e ' rt z u r t o U ° d ' objects, on which taxes are imposed, which shall be found fa possession in in the possession, or custody, or within the control of any {J^f forfeitures! person, for the purpose of being sold or removed by him in fraud of the internal-revenue laws, or with design to avoid payment of said taxes, may be seized by the col- lector or deputy collector of the proper district, or by such other collector or deputy collector as may be specially authorized by the Commissioner of Internal Revenue for that purpose, and shall be forfeited to the United States. And all raw materials found in the possession of any person intending to manufacture the same into articles of a kind subject to tax for the purpose of fraudulently selling such-manuf actured articles, or with design to evade the payment of said tax; and all tools, implements, instruments, and personal property whatsoever, in the place or building, or within any yard or inclosure where such articles or raw materials are found, may also be seized by any collector or deputy collector, as aforesaid, and shall be forfeited as aforesaid. The proceedings to enforce such forfeitures shall be in the nature of a pro- ceeding in rem in the circuit court or district court of the United States for the district where such seizure is made. Personal property in the same inclosure with an illicit still. (United States v. Quantity of Rags, 7 Int. Rev. Rec, 123; 27 Fed. Cas., 16103.) Property liable to forfeiture without any regard to the mis- conduct of owner. (United States v. Distillery at Spring Valley, 11 Blatch., 255; 25 Fed. Cas., 854; 18 Int. Rev. Rec, 59, and decisions cited under sec. 3281, p. 173.) Mixture or confusion of fraud spirits with others. (The Dis- tilled Spirits (Harrington's), 11 Wall., 356; 13 Int. Rey. Rec, 193; 10 ibid., 164. United States v. One Still, 5 Blatch., 403; 5 Int. Rev. Rec, 189.) An acquittal in a criminal prosecution is a bar to a proceeding in rem when the offense is the same. (Coffee v. United States, 116 U. S., 436; 32 Int. Rev. Rec, 38.) Digitized by Microsoft® 360 PEOVISIONS COMMON TO SEVEBAL OBJECTS OF TAXATION. The United States is not estopped by verdict of acquittal from proceeding in a civil action for the tax. (United States v. Schneider, 35 Fed. Rep., 107.) Acquittal bar to civil action for penalty. (United States v. Seattle Brewing & Malting Co., 135 Fed. Rep., 597.) Oleomargarine. (United States v. One Bay Horse, 128 Fed. Rep., 207.) Burden of proof: There is a distinction between civil and criminal cases in respect to the degree or quantum of evidence necessary to justify the jury in finding their verdict. In civil cases their duty is to find for the party in whose favor it pre- ponderates. Innocence is presumed in a criminal case until the contrary is proven; but the presumption of innocence as pro- bative evidence is not applicable in civil cases nor in revenue seizures. (Lilienthal's Tobacco v. United States, 97 U. S., 237; 24 Int. Rev. Rec, 60.) • Proceedings for forfeiture are civil, not criminal proceedings. (United States v. Three Tons of Coal, 21 Int. Rev. Rec, 251.) The expression "in fraud of the internal-revenue laws" means in violation of the internal-revenue laws. (A Quantity of To- bacco and Cigars, 5 Ben., 407, Fed. Cas. No. 11500.) Reports of seizure on Form 117 to be made promptly. (T D. 147.) Seizures not to be made on suspicion (T. D. 1543). Notice to shippers (T. D. 585). Sales to evade Sec. 3454. Whenever any person who is liable to pay tax; forfeiture. an y ^ ax U p 0n an y g 00c [ S; war es, or merchandise, sells or causes or allows the same to be sold before the tax is paid to which said property is liable, with intent to avoid such tax, or in fraud of the internal-revenue laws, any debt contracted in such sales, and any security given therefor, unless the same shall have been bona fide transferred to an innocent holder, shall be void, and the collection Moiety. thereof shall not be enforced in any court. And if such goods, wares, or merchandise have been paid for, in whole or in part, the sum so paid shall be deemed forfeited, and any person who shall sue for the same in an action of debt shall recover from the seller the amount so paid, one-half to his own use and the other half to the use of the United States. Disposing of or Sec. 3455. Whenever any person sells, gives, purchases, stamped pTek^ or receives any box, barrel, bag, vessel, package, wrapper, tfes S ' etc ' ; penaI " cover, or envelope of any kind, stamped, branded, or marked in any way so as to show that the contents or intended contents thereof have been duly inspected, or that the tax thereon has been paid, or that any provision of the internal-revenue laws has been complied with, whether such stamping, branding, or marking may have been a duly authorized act or may be false and counter- feit, or otherwise without authority of law, said box, bar- rel, bag, vessel, package, wrapper, cover, or envelope being empty, or containing anything else than the contents which were therein when said articles had been so lawfully stamped, branded, or marked by an officer of the revenue, he shall be liable to a penalty of not less than fifty nor Manufacturing, more than five hundred dollars. And every person who ages. su ° pa ° "makes, manufactures, or produces any box, barrel, bag, vessel, package, wrapper, cover, or envelope, stamped, branded, or marked, as above described, or stamps, Digitized by Microsoft® PROVISIONS COMMON TO SEVERAL OBJECTS OF TAXATION. 361 brands, or marks the same, as hereinbefore recited, shall be liable to penalty as before provided in this section. And every person who violates the foregoing provisions of this section, with intent to defraud the revenue, or to defraud any person, shall be liable to a fine of not less than one thousand nor more than five thousand dollars, or to imprisonment for not less than six months nor more than five years, or to both, at the discretion of the court. And all articles sold, given, purchased, received, made, manufactured, produced, branded, stamped, or marked in violation of the provisions of this section, and all their verbal error contents, shall be forfeited to the United States. corrected. A person can not buy a package containing distilled spirits, already stamped and branded, and take out the contents and put in other distilled spirits of a lower proof, without rendering the property subject to forfeiture. (United States v. Nine Casks and Packages of Distilled Spirits, 51 Fed. Rep., 191.) Empty cigar boxes. (T. D. 873.) The phrase "anything else" in section 3455 does not include substances that are not in themselves taxable. (U. S. v. A. Graf Distilling Co., 208 U. S., 198; T. D. 1304.) For decisions in lower courts see 129 Fed. Rep., 329 and 125 Fed. Rep., 52, T. D. 701. Proceedings for forfeiture — evidence. Corbin & Co. v. United States. (181 Fed. Rep., 296.) Sec. 3456. If any distiller, rectifier, wholesale liquor- future by d£ dealer, or manufacturer of tobacco or cigars, shall know-tmers, rectifiers, i -n* n ■, i , j? j. l j. wholesale liquor mgly or willfully omit, neglect, or refuse to do or cause to dealers and man- be done any of the things required by law in the carrying bS^er 55 dgare~ on or conducting of his business, or shall do anything byfor omitting this Title prohibited, if there be no specific penalty or and s %or q doing punishment imposed by any other section of this Title for things forbidden - the neglecting, omitting or refusing to do, or for the doing or causing to be done the thing required or prohibited, he shall pay a penalty of one thousand dollars; and if the 18 ^ 7 ct £ e 9 b sta 2 t 7, person so offending be a distiller, rectifier, or wholesale 240. j liquor dealer, all distilled spirits or liquors owned by him corrected. error or in which he has any interest as owner, and if he be a manufacturer of tobacco or cigars, all tobacco or cigars found in his manufactory shall be forfeited to the United States. United States v. Two hundred Barrels Whisky (95 U. S., 571; 24 Int. Rev. Rec, 3). United States v. One hundred and thirty- three Casks of Distilled Spirits (11 Int. Rev. Rec, 191). United States v. One thousand four hundred and twelve Gallons Dis- tilled Spirits (10 Blatch., 428; 17 Int. Rev. Rec, 86). United States v. One Rectifying Establishment (11 Int. Rev. Rec, 45; Fed. Cas. No. 15952). This section was not intended to cumulate or increase punish- ment. (United States v. Four thousand eight hundred Gallons of Spirits, 13 Int. Rev. Rec, 52.) Intent. (Felton v. United States, 96 U. S., 699; 24 Int. Rev. Rec, 252.) Meaning of the words " knowingly and willfully. " (A Quantity of Distilled Spirits, etc., 3 Ben. 552, Fed. Cas. No. 11495; 10 Int. Rev. Rec, 206; 11 ibid., 3.) Digitized by Microsoft® 362 PROVISIONS COMMON TO SEVERAL OBJECTS OE TAXATION. eluded h? forfeit Sec. 3457. In every case where any goods or commodi- ure of goods. ties are forfeited under any internal-revenue law, all casks, vessels., cases, or other packages whatsoever, containing, or which shall have contained such goods or commodities, respectively, shall be forfeited. Goods seized Sec. 3458. Any goods, wares, merchandise, articles, or tomareM More ob j ects which may be seized, under the provisions of sec- process issues, j. j on thirty-four hundred and fifty-three, by any collector or deputy collector, may, at the option of the collector, be delivered to the marshal of the district, and remain in the care and custody and under the control of said marshal, until he shall obtain possession by process of law. And Cost of seizure, ^ e cos ^ f se i zure m ade before process issues shall be tax- co W ^te k7 soid'ou aD ^ e by the court. And where any whisky or tobacco, or distraint, forfeit other article of manufacture or produce, requiring brands, brand's ™anS stamps or marks of whatever kind to be placed thereon, rSed P by t offl I cer af " s ^ a ^ ^° e s0 ^ upon distraint, forfeiture, or other process provided by law, the same not having been branded, stamped, or marked, as required by law, the officer selling the same shall, upon sale thereof, fix or cause to be affixed the brands, stamps, or marks, so required, and deduct the expense thereof from the proceeds of such sale. Stamping tobacco, snuff, or cigars sold under distraint or for- feited. (Sec. 3369, p. 267.) Destruction of forfeited tobacco, snuff, or cigars which will not sell for a price equal to the tax. (Sec. 3369, p. 267.) Provision where spirits will not sell for price equal to tax. (Sees. 3334, p. 226, 3450, p. 357; Regulations No. 2, revised, p. 47.) Property sold under distraint. (Sec. 3191, p. 99.) Collectors should be careful to render to the clerk of the court their bill of costs as soon as the marshal takes possession of the Eroperty, or very soon thereafter, which expenses are payable ■om appropriation "Salaries, fees, and expenses of marshals, United States courts." (XIII Comp. Dec, 316.) Payment of expenses of collectors in seizure cases: Expenses incurred by a collector of internal revenue in the care of prop- erty seized for violation of law and turned over to the marshal under the provisions of section 3458 are payable from the appro- priation for "Miscellaneous expenses, internal-Revenue Serv- ice." (T. D. 1506, June 8, 1909.) Payment of expenses of marshals: Expenses incurred byamar- shal in the care of property turned over to him by a collector under the provisions of section 3458, when taxed, by the court, are payable from the appropriation for " Salaries, fees, and ex- penses of marshals, United States courts," even though all pro- ceedings be compromised under the provisions oi sections 3229 and 3230, Revised Statutes. (T. D. 1507, June 8, 1909.) The provision allowing the court to tax in favor of the col- lector the costs of seizure made before process issues may be properly construed to cover any necessary expenses of watching property seized by a collector for such time as shall necessarily elapse between the seizure by the collector and the seizure by the marshal under process ; but it can not be extended to cover a charge for custody during an unreasonable delay. (Fifteen Empty Barrels, etc. (1867), 1 Ben., 125.) isnawe 31 " 8 o^d's ^ EC - 3459. When any property which is seized under the seizedfetcf ' s foregoing provisions of section thirty-four hundred and fifty-three is liable to perish or become greatly reduced in price or value by keeping, or when it cannot be kept with- out great expense, the owner thereof, or the marshal of the Digitized by Microsoft® PROVISIONS COMMON TO SEVERAL. OBJECTS OF TAXATION. 363 district, may apply to the collector of the district to ex- amine it; and ir, in the opinion of the said collector, it shall be necessary that the said property should be sold to prevent such waste or expense, he shall appraise the same; and thereupon the owner shall have said property re- turned to him upon giving bond in such form as may be prescribed by the Commissioner of Internal Revenue, and in an amount equal to the appraised value, with such sureties as the collector shall deem good and sufficient, to abide the final order, decree, or judgment of the court hav- ing cognizance of the case, and to pay the amount of said appraised value to the collector, marshal, or otherwise, as he may be ordered and directed by the court, which bond shaU be filed by said collector with the United States dis- trict attorney for the district in which said proceedings in rem may be commenced: Provided, That in case said bond shall have been executed and the property returned before seizure thereof by virtue of the process aforesaid, the marshal shall give notice of pendency of proceedings in court to the parties executing said bond, by personal service or publication, and in such manner and form as the court may direct, and the court shall thereupon have juris- diction of said matter and parties in the same manner as if such property had been seized by virtue of the process aforesaid. But if said owner shall neglect or refuse to sale for want give said bond, the collector shall issue to a deputy col- ° lector or to the marshal aforesaid an order to sell the same ; and the deputy collector or marshal shall thereupon ad- vertise and sell the said property at public auction in the same manner as goods may be sold on final execution in said district; and the proceeds of the sale, after deducting the reasonable costs of the seizure and sale, shall be paid to the court aforesaid, to abide its final order, decree, or judgment. See section 3331, page 224, as to release of distilleries. Form of bond authorized by section 3459 for release of prop- erty seized under section 3453, Revised Statutes. (Regulations No. 12, revised, p. 50.) United States v. Ninety-two Barrels (27 Fed. Cas. No. 15892; 8 Blatch., 480). United States v. 17 Empty Barrels (3 Dill., 285; 27 Fed. Cas. No. 16255; 21 Int. Rev. Rec, 391). United States v. A lot of Leaf Tobacco (2 Ben., 76; Fed. Cas. No. 15627; 6 Int. Rev. Rec, 222). United States v. 59,650 Cigars (T. D., 992). Sec. 3460. In all cases of seizure of anv goods, wares, or Proceedings on i i- i_ • \.-j.i.ce-j.j seizure of goods merchandise, as being subject to forfeiture under any pro- valued at ssoo or vision of the internal-revenue laws, which, in the opinion less - of the collector or deputy collector making the seizure, are of the appraised value of five hundred dollars or less, the said collector or deputy collector shall, except in cases otherwise provided, proceed as follows: First. He shall cause a list containing a particular de- L^and ap- scription of the goods, wares, or merchandise seized to be prepared in duplicate, and an appraisement thereof to be made by three sworn appraisers, to be selected by him, who shall be respectable and disinterested citizens of the Digitized by Microsoft® ure. 364 PROVISIONS COMMON TO SEVERAL, OBJECTS OF TAXATION. United States residing within the collection -district wherein the seizure was made. Said list and appraise- ment shall be properly attested by the said collector or deputy collector and the said appraisers, for which service each of the said appraisers shall be allowed the sum of one dollar and fifty cents a day, to be paid in the manner pro- vided by law for other necessary charges of collectors. Notice of seiz- Second. If the said goods are found by the said apprais- ers to be of the value of five hundred dollars or less, the said collector or deputy collector shall publish a notice for three weeks, in some newspaper of the district where the seizure was made, describing the articles, and stating the time, place, and cause of their seizure, and requiring any person claiming them to appear and make such claim within thirty days from the date of the first publication of such notice, claim to t>e Third. Any person claiming the goods, wares, or mer- chandise so seized, within the time specified in the notice, may file with the said collector or deputy collector a claim, stating his interest in the articles seized, and may execute ^Bond of claim- a bond to the United States in the penal sum of two hun- dred and fifty dollars, with sureties to be approved by the said collector or deputy collector, conditioned that, in case of condemnation of the articles so seized, the obligors shall pay all the costs and expenses of the proceedings to obtain such condemnation; and upon the clelivery of such bond to the collector or deputy coUector, he shall transmit the same, with the duplicate list or description of the goods seized, to the United States district attorney for the dis- trict, and said attorney shall proceed thereon in the ordi- nary manner prescribed by law. nd al< di° f g00d f Fourth. If no claim is interposed and no bond is given proceed 1 !?' 03 ' ° within the time above specified, the collector or deputy collector, as the case may be, shall give ten days' notice of the sale of the goods, wares, or merchandise by publica- tion, and, at the time and place specified in the notice, shall sell the articles so seized at public auction, and, after deducting the expense of appraisement and sale, he shall deposit the proceeds to the credit of the Secretary of the Treasury. Instructions as to the mode of procedure under this section. (Regulations, No. 2, revised, p. 45.) Instructions as to disposition of property seized. (Cir. No. 580; T. D. 209.) Instructions in regard to reports. (T. D. 623.) The gross amount of proceeds of sale to be covered into the Treasury. (Act of May 27, 1908, 35 Stat., 325, p. 108; T. D. 1373; Cir. 725, June 5, 1908.) Provision relative to spirits which will not sell for price equal to the tax. (Sec. 3334, p. 226.) remFltorfaSd r ™ ^ec. 3461 - Within one year after the sale of any goods, turn of proceeds; wares, or merchandise, as provided in the preceding sec- istr ution. tion, any person claiming to be interested in the property sold may apply to the Secretary of the Treasury for a re- mission of the forfeiture thereof, or of any part thereof, Digitized by Microsoft® PROVISIONS COMMON TO SEVERAL OBJECTS OP TAXATION. 365 and a restoration of the proceeds of the sale; and the said Secretary may grant the same upon satisfactory proof, to be furnished in such manner as he shall prescribe: Pro- vided, That it shall be satisfactorily shown that the appli- cant, at the time of the seizure and sale of the said prop- erty, and during the intervening time, was absent, out of the United States, or in such circumstances as prevented him from knowing of the seizure, and that he did not know of the same; and also that the said forfeiture was incurred without willful negligence or any intention of fraud on the part of the owner of said property. If no application for such restoration is made within one year, as hereinbefore prescribed, the Secretary of the Treasury shall, at the expiration of the said time, cause the proceeds of the sale of the said property to be distributed according to law, as in the case of goods, wares, or merchandise condemned and sold pursuant to the decree of a competent court. Sec. 3462. The several judges of the circuit and district search war- courts of the United States, and commissioners of the cir- rants ' cuit courts, may, within their respective jurisdictions, issue a search-warrant, authorizing any internal-revenue officer to search any premises within the same, if such officer makes oath in writing that he has reason to believe, and does believe, that a fraud upon the revenue has been or is being committed upon or by the use of the said premises. 24 Op. Atty. Gen., 685. Although the search warrant may have been improvidently issued, the evidence obtained by means of the search is not inadmissible. (Rippers. United States, T. D. 1609.) Sec. 3463. The Commissioner of Internal Revenue, with Dg^ion and the approval of the Secretary of the Treasury, is author- frauds. ized to pay such sums, not exceeding in the aggregate the sum appropriated therefor, as he may deem necessary for detecting and bringing to trial and punishment persons guilty of violating the internal-revenue laws, or conniving at the same, in cases where such expenses are not other- wise provided for by law. Moieties repealed, section 39, act of June 6, 1872. (17 Stat., 256.) "Sanborn contract," under act of May 8, 1872 (17 Stat., 69), was repealed June 22, 1874, (18 Stat., 192.) Construction of offer of $300 reward and Circular No. 99 and its revisions. (15 Op. Atty. Gen., 88 (Pierpont); Williams v. United States, 12 Ct. Cls., 193; Briggs v. United States, 15 Ct. Cls., 48.) As to marshal or deputy marshal receiving reward . A contract to pay a reward for the arrest of a felon is valid if not made with a public officer or employee on whom the law imposes the duty of making such arrest, or with some officer or employee otherwise excluded from the right to receive such reward. (Hutsel Ama- rine's case, 2 Lawrence Dec, 545; 28 Int. Rev. Rec, 21.) The payment of a reward to an officer for services within the scope of his official duties is contrary to public policy. (Mat- thews & Gunn v. United States, 32 Ct. Cls., 123.) The authority conferred upon the Attorney General by the act of March 3, 1891 (26 Stat., 985) to offer rewards for the detec- tion and prosecution of crimes against the United States, pre- Digitized by Microsoft® 366 PROVISIONS COMMON TO SEVERAL OBJECTS OP TAXATION. liminary to the indictment, empowered him to authorize the marshal of the northern district of Florida to offer a reward for the arrest and delivery of a person accused of the committal of a crime against the United States in that district, the reward to be paid upon conviction; and a deputy marshal, who had complied with all the conditions of the offer and of the statute, was entitled to receive the amount of the reward offered. (United States v. Matthews, 173 U. S., 381.) Eager v. U. S., 35 Ct. Cls., 447. Effect of repeal of act allowing moieties on informer's claim for information given prior to repeal. (United States v. Connor, 138 U. S., 61.) Rewards for information leading to the detection and punish- ment of persons violating internal-revenue laws. (Circular, Int. Rev., No. 99, 4th revision, Treas. Dec. (1899), No. 21856.)" "Reg- ulations, No. 12, revised, page 51. Commissioner authorized to offer a reward for the recovery of taxes evaded. (15 Op. Atty. Gen., 133; 22 Int. Rev. Rec, 229.) Authority of Commissioner to bind the Government by prom- ising to pay for information. Informer who receives less than 10 per cent can not recover the difference in the Court of Claims. (Green v. United States, 17 Ct. Cls., 238; 28 Int. Rev. Rec, 208.) Right of Commissioner and Secretary to fix amount of reward. (E. D. Crane v. United States, 34 Int. Rev. Rec, 414; 23 Ct. Cls., 94.) In the matter of the authority of persons employed under sec- tion 3463 to visit, enter into, and examine distilleries, etc (4 Lawrence Dec, 60.) _ [Sec. 3463a.] [Extract from appropriation bill (sundry civil) for the fiscal year ending June 30, 1911, act of June 25, 1910 (36 Stat., 713).] Punishment for violations of internal- Appropriation revenue laws: For detecting and bringing to trial and • frauds. 6 i0 ' n E punishment persons guilty of violating the internal-reve- nue laws or conniving at the same, including payments for information and detection of such violations, one hun- dred and fifty thousand dollars; and the Commissioner of statement to Internal Revenue shall make a detailed statement to Congress once in each year as to how he has expended this sum, and also a detailed statement of all miscellaneous expenditures in the Bureau of Internal Revenue for which appropriation is made. The same provision is contained in the act of March 4, 1911. (Sundry civil appropriation act for 1912.) A provision similar to the above respecting statements to Con- gress has been in appropriation bills as to the fraud fund since the act of June 19, 1878 (20 Stat., 187), and as to miscellaneous expenses of the Bureau since the act of June 15, 1880 (21 Stat., 20). The use of words "once in each year," in the second part of the paragraph, would seem to indicate a permanent character. The concluding part of the paragraph relates apparently only to the miscellaneous expenditures for the particular year for which appropriation is made by this act. (Note in Supp. R. S., vol. 2, p. 121.) It is the right of every private citizen of the United States to inform a marshal of the United States, or his deputy, of a viola- tion of the internal-revenue laws; this right is secured by the Constitution; and a conspiracy to injure, oppress, threaten, or intimidate him in the free exercise or enjoyment of this right, or because of his having exercised it, is punishable under sec. 5508, Revised Statutes (superseded by sec. 19 Criminal Code, act Mar. 4, 1909). (In re Quarles and Butler, 158 U. S., 532.) Digitized by Microsoft® PROVISIONS COMMON TO SEVERAL, OBJECTS OF TAXATION. 367 'In Worthington v. Scribner (109 Mass., 487) the principle was laid down that it is the duty of every citizen to communicate to his Government any information which,(ie has of the commission of an offense against its laws; and that a court of justice will not compel or allow such information to be disclosed, either by the subordinate officer to whom it is given, by the informer- himself, or by any other person, without the permission of the Government, the evidence being excluded not for the protection of the witness or of the party in the particular case, but upon general grounds of public policy, because of the confidential nature of such communications. The authorities are collected and reviewed in that case. (Vogel v. Gruaz, 110 U. S., 311.) Compensation of possemen. (T. D. 1513.) Sec. 3464. The privilege of purchasing supplies of goods „ Purchasing tor ,11. £ • j_ ' e ±1 p ji t-P *i i the Government imported from foreign countries for the use of the United goods subject to States, duty free, which now does or hereafter shall exist tax - by provision of law, shall be extended, under such regula- tions as the Secretary of the Treasury may prescribe, to all articles of domestic production which are subject to tax by the provisions of this Title. 26 Op. Atty. Gen., 449. The provisions of this section (3464 R. S.) were not repealed by the tariff act of October 1, 1890. (Op. Solicitor of the Treas- ury, Nov. 11, 1891.) Section 16 of the act of June 26, 1884 (commonly called the shipping act), as amended by section 14 of the act of July 24, 1897 (30 Stat., 151), provides: "That all articles of foreign or domestic production needed and actually withdrawn from bonded warehouses and bonded manufacturing warehouses for supplies (not including equip- ment) of vessels of the United States engaged in foreign trade, or in trade between the Atlantic and Pacific ports of the United States, may be so withdrawn from said bonded warehouses, free of duty or of internal-revenue tax, as the case may be, under such regulations as the Secretary of the Treasury may prescribe ; but no such article shall be landed at any port of the United States." Regulations in pursuance of the above provisions September 24, 1897, Department circular No. 155. (T. D. 18379; T. D. 18643 ; T. D . 19262 .) Articles 743 to 748, both inclusive, Customs Regulations, 1908. The immunity from liability to tax is limited to the actual contents of the packages. (Op. Atty. Gen.; 30 Int. Rev. Rec, 94; ibid., 101; 33 Int. Rev. Rec, 269.) Withdrawal of distilled spirits from bonded warehouse for use of the United States, free of tax, under provisions of section 3464, Regulations No. 7, revised, p. 247. Sec. 2982 [as amended by sec. 21 Act of Aug. 5, 1909, v J s °! r s eign war (36 Stat., 88)]. The privilege of purchasing supplies from public warehouses, free of duty, and from bonded manu- facturing warehouses, free of duty or of internal-revenue tax, as the case may be, shall be extended, under such regulations as the Secretary of the Treasury shall pre- scribe, to the vessels of war of any nation in ports of the United States which may reciprocate such privileges toward the vessels of war of the United States in its ports. Tariff act of August 5, 1909. — Instructions for the guidance of officers of the customs, extending existing regulations prescribed under the tariff act of July 24, 1897, and other acts, to importa- tions under the act of August 5, 1909, wherever applicable. (Circular No. 35; T. D. 29939, Aug. 6, 1909.) Digitized by Microsoft® 368 PROVISIONS COMMON TO SEVERAL OBJECTS OF TAXATION. aotteoh C 2°i83l Sec - 3465 - 4 n ^ ct entitled "An act further to provide (4stat.,632J. for the collection of duties on imports," passed March second, eighteen hundred and thirty-three, shall not be so construed as to apply to cases arising under an act enti- tled "An act to provide internal revenue to support the Government, to pay interest on the public debt, and for other purposes," passed June thirtieth, eighteen hundred and sixty-four, or any act in addition thereto or in amend- ment thereof, nor to any case in which the validity or in- terpretation of said act or acts shall be in issue. Hornthall v. The Collector (9 Wall., 566); The Assessor v. Osbornes (9 Wall., 577). The words "revenue laws, " where used broadly and generally, include internal revenue as well as customs laws. (United States v. Dustin, 15 Int. Rev. Rec, 30.) AN ACT Relative to recognizances, stipulations, bonds, and under- takings, and to allow certain corporations to be accepted as surety thereon. [Act Aug. 13, 1894 (28 Stat., 279), amended by act of Mar. 23, 1910 (36 Stat., 241]). That whenever any recognizance, stipulation, bond, or undertaking conditioned for the faithful performance of any duty, or for doing or refraining from doing any- thing in such recognizance, stipulation, bond, or under- taking specified, is by the laws of the United States required or permitted to be given with one surety or with two or more sureties, the execution of the same or the guaranteeing of the performance of the condition thereof ed B and cxe r"£ shall be sufficient when executed or guaranteed solely teed soiefy .t>y by a corporation incorporated under the laws of the when sufficient. 11 ' United States, or of any State having power to guarantee the fidelity of persons holding positions of public or private trust, and to execute and guarantee bonds and undertakings in judicial proceedings : Provided, That such recognizance, stipulation, bond, or undertaking be ap- E roved by the head of department, court, judge, officer, oard, or body executive, legislative, or judicial required to approve or accept the same. But no officer or person having the approval of any bond shall exact that it shall be furnished by a guarantee company or by any par- ticular guarantee company. Sec. 2. That no such company shall do business under the provisions of this Act beyond the limits of the State or Territory under whose laws it was incorporated and in which its principal office is located, nor beyond the limits of the District of Columbia, when such company was incor- porated under its laws or the laws of the United States and its principal office is located in said District, until it shall Power or attor-by a written power of attorney appoint some person resid- ing within the jurisdiction of the court for the judicial district wherein such suretyship is to be undertake^ who shall be a citizen of the State, Territory, or District of Columbia, wherein such court is held, as its agent, upon whom may be served all lawful process against such com- pany, and who shall be authorized to enter an appearance Digitized by Microsoft® PROVISIONS COMMON TO SEVERAL OBJECTS OP TAXATION. 369 in its behalf. A copy of such power of attorney, duly cer- of A a t?^° fp t ° W be tified and authenticated, shall be filed with the clerk of the fuel °^tl °ierk district court of the United States for such district at each court. he distrlct place where a term of such court is or may be held, which copy, or a certified copy thereof, shall be legal evidence in all controversies arising under this Act. If any such agent shall be removed, resign, or die, become insane, or when agent otherwise incapable of acting, it shall be the duty of such rem ° ve • c ' j. imposed by law on articles or rorto Rican manufacture coming into the United States for consumption or sale may hereafter be paid by affixing to such articles before shipment thereof a proper United States internal-revenue stamp denoting such payment, and for the purpose of carrying into effect the provisions of this Act the Secre- tary of the Treasury is authorized to grant to such col- lector of internal revenue as may be recommended by the Commissioner of Internal Revenue, and approved by the Secretary, an allowance for the salary and expenses of a Digitized by Microsoft® KftOVISIONS COMMON TO SEVERAL OBJECTS OE TAXATION. 375 deputy-collector of internal revenue, to be stationed at San Juan, Porto Rico, and the appointment of this deputy to be approved by the Secretary. The collector will place in the hands of such deputy all stamps. stamps necessary for the payment of the proper tax on articles produced in Porto Rico and shipped to the United States, and the said deputy, upon proper pay- ment made for said stamps, shall issue them to manu- facturers in Porto Rico. All such stamps so issued or transferred to said deputy collector shall be charged to the collector and be accounted for by him as in the case of other tax-paid stamps. The deputy collector assigned to this duty shall perform Deputy o o 1 - such other work in connection with the inspection and stamping of such articles, and shall make such returns Returns, as the Commissioner of Internal Revenue may, by regu- lations approved by the Secretary of the Treasury, direct, and all provisions of existing law relative to the appoint- ment, duties, and compensation of deputy collectors of , compensation. internal revenue, includmg office rent and other necessary expenses, shall, so far as applicable, apply to the deputy collector of internal revenue assigned to dutyjmder the provisions of this Act. Sec. 2. That before entering upon the duties of his7 ?Bond; office such deputy collector shall execute a bond, payable to the collector of internal revenue appointingihim^ in such amount and with such sureties as he may determine.' 1 Sale of internal-revenue stamps in Porto Kico (Cir" No: 679, July 25, 1906; T. D. 1031). Cigars of Porto Eican manufacture brought to trie United States are subject to internal-revenue tax and must have affixed thereto the same stamps as required for domestic cigars. (Dept. circulars: 54, Apr. 25, 1900; 56, Apr. 25, 1900; 81, July 26, 1901: 85, Aug. 23, 1901.) "An Act to impose a tax on alcoholic compounds coming from Porto Kico, and for other purposes," approved February 4, 1909 (Sec. [3251b.] p. 152). Circular No. 734; T. D. 1462. Words "alcoholic compounds" to be omitted from tax-paid stamps for alcohol and other wncompounded spirits brought from Porto Rico. (T. D. 1481.) PHILIPPINE ISLANDS. AN ACT Temporarily to provide revenue for the Philippine Islands, and for other purposes. Approved March 8, 1902 (32 Stat., 54). [Extract.] ***** Sec. 6. That all articles manufactured in bonded ~SMpments t 0| manufacturing warehouses in whole or in part of imported lands. ' pp materials, or of materials subject to internal-revenue tax and intended for shipment from the United States to the Philippine Islands, shall, when so shipped, under such regulations as the Secretary of the Treasury may pre- scribe, be exempt from internal-revenue tax, and shall not be charged with duty except the duty levied under this Act upon imports into the Philippine Islands. Digitized by Microsoft® 376 PROVISIONS COMMON TO SEVERAL. OBJECTS OP TAXATION. Drawback. That all articles subject under the laws of the United States to internal-revenue tax, or on which the internal- revenue tax has been paid, and which may under existing laws and regulations be exported to a foreign country without the payment of such tax, or with benefit of draw- back, as the case may be, may also be shipped to the Philippine Islands with like privilege, under such regula- tions and the filing of such bonds, bills of lading, and other security as the Commissioner of Internal Revenue may, with the approval of the Secretary of the Treasury, Refund of tax. prescribe. And all taxes paid upon such articles shipped to the Philippine Islands since November fifteenth, nine- teen hundred and one, under the decision of the Secretary of the Treasury of that date, shall be refunded to the parties who have paid the same, under such rules and regulations as the Secretary of the Treasury may pre- scribe, and a sum sufficient to make such payment is hereby appropriated, out of any money in the Treasury not otherwise appropriated. That where materials on which duties have been paid are used in the manufacture of articles manufactured or produced in the United States, there shall be. allowed on the shipment of said articles to the Philippine Archi- pelago a drawback equal in amount to the duties paid on the materials used, less one per centum of such duties, under such rules and regulations as the Secretary of the Treasury may prescribe. Drawback. T. D. 484; T. D. 491. T. D. No. 23586. Shipments to the Philippine Islands of articles subject to internal-revenue tax. (Regulations No. 29, rev.) Rules and regulations for the refunding of internal-revenue taxes paid upon articles shipped to the Philippine Islands since November 15, 1901 (Cir. No. 626, July 3, 1902; T.D.542.) Treaty of peace ratified and proclaimed April 11, 1899. (T. D. No. 21006; Cir. No. 57; T. D. No. 23501.) Emil J. Pepkeu. United States. 183 U. S. 176. Case known as the "Fourteen Diamond Rings Case," involving the constitu- tionality of the imposition of customs duties upon merchandise brought into the United States from the Philippines after the treaty of peace took effect. Philippines not a foreign country after its cession. The effect of this decision was to give the Philippines the same status that Porto Rico had before the Foraker Act was passed. The President authorized to establish temporary civil govern- ment in the Philippine Islands. (Act of March 2, 1901; 31 Stat., 910.) An act temporarily to provide for the administration of the affairs of civil government in the Philippine Islands, and for other purposes. (Act of July 1, 1902; 32 Stat., 691). All articles the growth and product of the Philippine Islands coming directly from said islands to the United States or any of its possessions for use and consumption therein, shall be exempt from any export duties imposed in the Philippine Islands. (Act to raise revenue for the Philippine Islands and for other purposes. Act of Aug. 5, 1909; 36 Stat., 174.) Funds derived from the sale of internal-revenue stamps in the Philippine Islands belong to the Philippine government under the provisions of section 4 of the act of March 8, 1902. (32 Stat., 54.) (28 Op. Atty. Gen., 70.) Digitized by Microsoft® PROVISIONS COMMON TO SEVERAL OBJECTS OE TAXATION. 377 BONDS FOR EXPORT TO THE PHILIPPINE ISLANDS. AN ACT To relieve obligors on bonds given to the United States upon the exportation to the Philippine Islands prior to November 20, 1901, of articles subject to internal-revenue tax, approved April 28, 1904 (33 Stat., 574). That all bonds given to the United States prior to b0 nd n s cellatlon °' November twentieth, nineteen hundred and one, upon the transportation and shipment to the Philippine Islands of articles subject under existing statutes to the payment of internal-revenue tax, which are in form given for the proper exportation of the article therein described to a foreign country free of internal-revenue tax, or with ben- efit of drawback, as the case may be, shall be treated in all respects as if given for and upon a shipment to a foreign country, and shall be canceled upon presentation of evi- dence of the shipment to a port of the Philippine Islands, or of landing at such port, as the case may be, the same as if such port were a port of a foreign country. The obligors upon any of such bonds shall have such reason- able time from and after the passage of this Act as may be prescribed by the Secretary of the Treasury within which to present the evidence required by existing statutes for the cancellation of such bonds. Prior to November 20, 1901, for the purposes of commerce, the Philippine Islands were treated as foreign territory. Certain articles liable to pay internal-revenue tax were allowed to be shipped in bond, to be consumed in the Islands. This act pro- vided that these bonds should be canceled upon presentation of evidence of the shipment or landing of such articles in any ports in the Philippine islands. ARTICLES COMING INTO THE UNITED STATES FROM THE PHILIPPINE ISLANDS. [Extract from an act to provide revenue, equalize duties, and encourage the industries of the United States, and for other purposes, approved August 5, 1909 (36 Stat., 11, 83).] Sec. 5. [Act of Aug. 5, 1909 (36 Stat, 83).] That there p^ff^^ shall be levied, collected, and paid upon all articles com- lands subject to ing into the United States from the Philippine Islands the reguIar duties ' rates of duty which are required to be levied, collected, and paid upon like articles imported from foreign coun- tries : Provided, That, except as otherwise hereinafter pro- uc ^ a ^ pte § rod " vided, all articles, the growth or product of or manufac- tured in the Philippine Islands from materials the growth or product of the Philippine > Islands or of the United States, or of both, or which do not contain foreign mate- rials to the vlaue of more than twenty per centum of their total value, upon which no drawback of customs duties has been allowed therein, coming into the United States from the Philippine Islands shall hereafter be admitted free of duty, except rice, and except, in any fiscal year, sugar in excess of three hundred thousand gross tons, wrapper tobacco and filler tobacco when mixed or packed Digitized by Microsoft® 378 PROVISIONS COMMON TO SEVERAL OBJECTS OE TAXATION. with more than fifteen per centum of wrapper tobacco in excess of three hundred thousand pounds, filler tobacco in excess of one million pounds, and cigars in excess of one hundred and fifty million cigars, which quantities shall be ascertained by the Secretary of the Treasury under such rules and regulations as he shall prescribe: ga? U a^d in to°bacra And provided further , That sugar, refined or unrefined, Sth P er r countril r s° m ano - tobacco, manufactured or unmanufactured, imported into the Philippine Islands from foreign countries, shall be dutiable at rates of import duty therein not less than the rates of import duty imposed upon sugar and tobacco in like forms when imported into the United States : snran fe sugar pro" And provided further, That, under rules and regulations ducers. to be prescribed by the Secretary of the Treasury, prefer- ence in the right or free entry of sugar to be imported into the United States from the Philippine Islands, as pro- vided herein, shall be given, first, to the producers of less than five hundred gross tons in any fiscal year, then to producers of the lowest output in excess of five hundred gross tons in any fiscal year: to U be S ' admitted Provided, however, That in consideration of the exemp- free. tions aforesaid, all articles, the growth, product, or manu- facture of the United States, upon which no drawback of customs duties has been allowed therein, shall be admitted to the Philippine Islands from the United States free of duty: And provided further, That the free admission, herein f' irovided, of such articles, the growth, product, or manu- acture of the United States, into the Philippine Islands, or of the growth, product, or manufacture, as hereinbe- fore defined, of the Philippine Islands into the United States, shall be conditioned upon the direct shipment thereof from the country of origin to the country of destination: Provided, That direct shipment shall include shipments in bond through foreign territory contiguous to the United States: a ed to'transit™* Provided, however, That if such articles become un- packed while en route by accident, wreck, or other casual- ty, or so damaged as to necessitate their repacking, the same shall be admitted free of duty upon satisfactory proof that the unpacking occurred through accident or necessity and that the merchandise involved is the identi- cal merchandise originally shipped from the United States or the Philippine Islands, as the case may be, and that its condition has not been changed except for such damage as may have been sustained : Articles for u. And provided further , That all articles, the growth, prod- fiportduties™ 111 uct, or manufacture, as hereinbefore defined, of the Philippine Islands, admitted into the ports of the United States free of duty under the provisions of this section and- shipped as hereinbefore provided from said islands to the United States for use and consumption therein, Digitized by Microsoft® PROVISIONS COMMON TO SEVERAL OBJECTS OF TAXATION. 379 shall be hereafter exempt from the payment of any export duties imposed in the Philippine Islands: And provided further, That there shall be levied, col- int T e rn aI e ?evenu° lected, and paid, in the United States, upon articles, tax. rna goods, wares, or merchandise coming into the United States from the Philippine Islands, a tax equal to the internal-revenue tax imposed in the United States upon the like articles, goods, wares, or merchandise of domestic manufacture; such tax to be paid by internal-revenue stamp or stamps, to be provided by the Commissioner of Internal Revenue, and to be affixed in such manner and under such regulations as he, with the approval of the Secretary of the Treasury, shall prescribe; and such arti- Exempt from cles, goods, wares, or merchandise, shipped from said P-Ltax ' islands to the United States, shall be exempt from the payment of any tax imposed by the internal-revenue laws of the Philippine Islands: And provided further, That there shall be levied, col- internal* eye- lected, and paid in the Philippine Islands, upon articles, ports from™.™" goods, wares, or merchandise going into the Philippine Islands from the United States, a tax equal to the internal- revenue tax imposed in the Philippine Islands upon the like articles, goods, wares, or merchandise of Philippine Islands manufacture; such tax to be paid by internal- revenue stamps or otherwise, as provided by the laws in the Philippine Islands, and such articles, goods, wares, or merchandise going into the Philippine Islands from the United States shall be exempt from the payment of any Exempt from tax imposed by the internal-revenue laws of the United u ' s ' tax ' States : And provided further, That, in addition to the customs intemai-reye- taxes imposed in the Philippine Islands, there shall be ports, other than levied, collected, and paid therein upon articles, goods, from u ' s ' wares, or merchandise, imported into the Philippine Islands from countries other than the United States, the internal-revenue tax imposed by the Philippine govern- ment on like articles manufactured and consumed in the Philippine Islands or shipped thereto, for consumption therein, from the United States : And provided further, That from and after the passage internal re ve- of this Act all internal revenues collected in or for account Sftoinsuiartre^ of the Philippine Islands shall accrue intact to the general ury - government thereof and be paid into the Insular treas- ury, and shall only be allotted and paid out therefrom in accordance with future acts of the Philippine legislature, subject, however, to section seven of the Act of Congress approved July first, nineteen hundred and two, entitled "An Act temporarily to provide for the administration of the affairs of civil government in the Philippine Islands, and for other purposes:" And provided further, That, until action by the Philip- p.^'^LtoZ pine legislature, approved by Congress, internal revenues paid into the Insular treasury, as hereinbefore provided, Digitized by Microsoft® 380 PROVISIONS COMMON TO SEVERAL. OBJECTS OF TAXATION. shall be allotted and paid out by the Philippine Commis- sion. Regulations concerning articles subject to internal-revenue tax coming'into the United States from the Philippine Islands. No. 8, revised July 1, 1910, p. 68. (T. D. 1531, modified by T. D. 1567.) Regulations under section 5, act of August 5, 1909. Circular No. 37, August 10, 1909. (T. D. 29944.) Shipments from the Philippine Islands of sugar, tobacco, and cigars. Dept. Cir. No. 57, Nov. 1, 1909. Articles shipped from the Philippine Islands. (T. D. 1569.) Shipments to and from Philippine Islands. Circular No. 39, July 1, 1910. (T. D. 30744.) Digitized by Microsoft® APPENDIX. CONTAINING LAWS OF A GENERAL NATURE AND MISCELLANEOUS PRO- VISIONS APPLICABLE TO THE ADMINISTRATION OF THE INTERNAL-REVENUE LAWS. Chapter 1 (p. 383). Suits and prosecutions — Jurisdiction — Practice — Evidence — Liens — Limitations — United States attorneys — Duties as to prosecutions — Reports — Clerks of courts, etc. Jurisdiction of district courts. Jurisdiction of circuit courts. Suits for penalties, forfeitures, and taxes. Removal of suits against officers from State to United States circuit courts. Arrests. Competency of witnesses. State laws. Production of books, papers, etc., in suits other than criminal. Certified copies of papers admissible as evidence. Costs in internal-revenue suits upon in- formation from other than a collector, etc. Costs, when paid by defendant. Laws of the States, rules of decision, etc. Proceedings on execution. State laws. Act to regulate liens of judgments and decrees of United States courts. Interest on judgments, etc. Writs of error and appeals. Circuit courts of appeals. Certificate of probable cause. Property taken under revenue laws irre- pleviable. Statute of limitations. Compromises of claims and of cases after judgment. Pardons. Employment of attorneys or counsel. Duty of district attorneys to prosecute delinquents and to defend officers. Reports of district attorneys and mar- shals. Warrants of arrest and prosecutions. Clerks of courts, reports of, etc. Chapter 2 (p. 404). Duties of officers charged with receiving or disbursing public moneys — Penalties for embezzle- ments — Proceedings against delinquent officers, etc. Moneys to be deposited without deduc- tion. Duty of disbursing officers. Persons having moneys of United States must pay the same to Treasurer, etc. Accounts to be rendered. Distinct accounts required according to appropriation. Suits to recover money from officers regu- lated. Distress warrant. Failure of disbursing officer to account; duty thereupon of Auditor and Solici- tor of Treasury. Duties of officers as custodians of public moneys. Embezzlement; penalty for requiring re- ceipt for larger sum than that actually paid. Embezzlement; penalty for disbursing of- ficer unlawfully depositing, converting, loaning, or transferring public money. Embezzlement; penalty for custodians of public money failing to safely keep, etc . Embezzlement; penalty for failure to ren- der accounts. Embezzlement; penalty for failure to de- posit as required. Record evidence of embezzlement. Refusal to pay any draft, etc., prima facie evidence of embezzlement. Evidence of conversion. Unlawfully receiving public money. Embezzlement by internal-revenue offi- cers and assistants where offense is not otherwise punishable. Penalty for clerks and officers of court failing to deposit moneys. Penalty for receiving moneys belonging to the registry of the court. Penalty for failure to make reports. Disbursing officer forbidden to trade in public funds. Collecting officers forbidden to trade in public property. Transcripts from books, etc., of the Treas- ury to be evidence in suits against de- linquents. Delinquents for public money; judgment at return term, unless, etc. 381 Digitized by Microsoft® 382 APPENDIX. Chapter 3 (p.414). Penalties for perjury — Bribery — Resisting officers — Conspiracy — Falsely assuming to be an officer, and other offenses. Penalty for perjury. Penalty for resisting officer in serving process. Penalty for rescuing prisoners. Penalty for rescuing or attempting to res- cue property taken or detained by rev- enue officer. Penalty for extortion by internal-revenue informers. Penalty for conspiracy to prevent persons from accepting office. Penalty for falsely assuming to be a Gov- ernment officer. Penalty for bribery. Penalty for conspiracy. Penalty for destroying or carrying away without authority public records, pa- pers, etc. Penalty for larceny or robbery of personal property of the United States. Penalty for embezzling or stealing public property or receiving and retaining in possession stolen property. Penalty for forging, altering, counterfeit- ing, etc., bid, bond, public record, etc. Penalty for counterfeiting obligations and other securities of the United States, including stamps. Penalty for making false or fraudulent claims. Provisions of the criminal code relative to distilled spirits. Chapter i (p. 422). Claims — Set-offs — Appropriations, etc. Claims. No payment to person in arrears to the United States. Set-offs and credits. Priority of United States in insolvent estates. Permanent annual appropriations. No expenditures beyond appropriations. Heads of Departments prohibited from accepting voluntary service for the Government. Unauthorized contracts prohibited. Unexpended balances of appropriations. Assignment of claims void, unless, etc. Attorneys before the Treasury Depart- ment. Duplicate checks when original is lost. Letters, packages, etc., on Government business sent free; penalty envelopes. Government to have priority in the trans- mission of telegrams. Disposition of useless papers. Chapter 5 (p. 431). Officers, clerics, and employees — Extra services — Perquisites — Prohibition as to business — '. Political contributions, etc. Honorably discharged soldiers or sailors disabled in the service preferred for appointment. Preference given to soldiers and soldiers' 1 widows in reducing force. Employees to be paid from special appro- priations only. Holidays. Double salaries, compensation for extra I services, perquisites, etc. Expenses or clerks, officers, etc., sentaway 1 as witnesses. No mileage beyond traveling expenses allowed. Certain business forbidden to clerks in the Treasury Department. Penalty for officers and clerks receiving compensation in matters before the department. Officers interested in claims; penalty. Persons formerly in the departments not to prosecute claims in them within two years. Restrictions on payment for services. Presents to superior officers prohibited. Political contributions, immunity from official proscription. Digitized by Microsoft® appendix. 383 Chapter 1. Suits and prosecutions — Jurisdiction — Practice — Evidence — Liens — Limitations — Compromises and remissions — United States attor- neys — Duties as to prosecutions — Commissioners — Clerics of courts — Reports, etc. Note. — "The Judicial Code," an Act to codify, revise and amend the laws relating to the judiciary, approved March 3, 1911 (36 Stat. 1087) goes into effect January 1, 1912. It abolishes circuit courts (Sec. 289) and imposes the powers and duties upon district co'urts. Several of the sections in this chapter are superseded as such and reproduced as noted under the appropriate sections. The provi- sions, so far as they are substantially the same as existing statutes, are construed as continuations thereof and not as new enactments. (Sec. 294). Jurisdiction of district courts. Sec. 563. The district courts shall have jurisdiction as follows: First. Of all crimes and offenses cognizable under the authority of the United States, committed within their respective districts, or upon the high seas, the punishment of which is not capital, except in the cases mentioned in section fifty-four hundred and twelve, Title "Crimes." ******* Third. Of all suits for penalties and forfeitures incurred under any law of the United States. ******* Fifth. Of all suits in equity to enforce the lien of the United States upon any real estate for any internal-revenue tax, or to subject to the payment of any such tax any real estate owned by the delinquent, or m which he has any right, title, or interest. (Sec. 3207, p. 105.) United States v. Shaw (39 Fed. Rep., 433). ******* Eighth. * * * And of all seizures on land and on waters not within admiralty and maritime jurisdiction. * * * Coffey v. United States (116 U. S., 427; 117 Id., 233). See Sec. 24 of "The Judicial Code," Act of March 3, 1911. Jurisdiction of circuit courts. Sec. 629. The circuit courts shall have original jurisdiction as follows : ******* Fourth. * * * of all causes arising under any law providing internal revenue. * * * This clause was not repealed by the act of March 3, 1875 (18 Stat., 470), or by the act of March 3, 1887 (24 Stat., 552), defining the jurisdiction of the circuit courts, and these courts have jurisdiction in suits arising under the revenue laws, although the amount in dispute is less than $2,000. (Ames v. Hager, 36 Fed. Rep., 129; Commissioners v. Buckner, 48 Fed. Rep., 533.) Spreckels Sugar Refining Co. v. McClain (192 U. S., 397; T. D. 760). Digitized by Microsoft® 384 APPENDIX. Twentieth. Exclusive cognizance of all crimes and offenses cogni- zable under the authority of the United States, except where it is or may be otherwise provided by law, and concurrent jurisdiction with the district courts of crimes and offenses cognizable therein. Circuit courts abolished after January 1, 1912. (Sec. 289, Act of March 3, 1911.) The original judiciary act of September 24, 1789, remained in force with scarcely any modification until the act of March 3, 1875, which greatly enlarged the jurisdiction of the circuit courts (amended by the act of March 3, 1887; corrected by the act of August 13, 1888, passed to cure defects in the enrollment of the act of March 3, 1887). AN ACT To correct the enrollment of an act approved March third, eighteen hundred and eighty-seven, entitled "An act to amend sections one, two, three, and ten of an act to determine the jurisdiction of the circuit courts of the United States, and to regulate the removal of causes from the State courts, and for other purposes, ap- proved March third, eighteen hundred and seventy-five. (Act of August 13, 1888, 25 Stat., 433.) Sec. 1. That the circuit courts of the United States shall have original cognizance, concurrent with the courts of the several States, of all suits of a civil nature, at common law or in equity, where the matter in dispute exceeds, exclusive of interest and costs, the sumor value of two thousand dollars, and arising under the Constitution or laws of the United States, or treaties made, or which shall be made, under their authority, or in which controversy the United States are plaintiffs or petitioners, * * * United States circuit courts have original jurisdiction when the right of either party depends on the validity of an act of Congress. (Patton v. Brady, 184 U. S., 611.) Exclusive jurisdiction of courts of United States. Sec. 711. The jurisdiction vested in the courts of the United States in the cases and proceedings hereinafter mentioned shall be exclusive of the courts of the several States: First. Of all crimes and offenses cognizable under the authority of the United States. Second. Of all suits for penalties and forfeitures incurred under the laws of the United States. Third. Of all civil causes of admiralty and maritime jurisdiction; saving to suitors, in all cases, the right of a common-law remedy, where the common law is competent to give it. Fourth. Of all seizures under the laws of the United States on land or on waters not within admiralty and maritime jurisdiction. Reenacted Sec. 256 of "The Judicial Code," Act March 3, 1911. The Supreme Court is the only court of the United States which derives any part of its power directly from the Constitution. The circuit and district courts of the United States are, by authority of the Constitution, the creatures of the National Legislature, having such jurisdiction, and only such, as Congress has been pleased to confer upon them, and having no common-law jurisdiction, though drawing upon the common law for modes of procedure and practice when necessary to carry into effect the jurisdiction given by statute. (United States v. Cultus Joe, 15 Int. Rev. Rec, 58.) In general a crime against the laws of the United States is not cognizable in a State court. (Ex parte Houghton, 27 Int. Rev. Rec, 273.) The same offense may be made punishable both under the laws of a State and of the United States; and over such offenses the State and Federal courts have concurrent jurisdiction. (United States v. Wells, 15 Int. Rev. Rec, 56; Fed. Cas. No. 16665.) Digitized by Microsoft® APPENDIX. 385 The same act may constitute an offense against the United States and against a State, subjecting the guilty party to punishment under the laws of each government; and may embrace two or more offenses. (Cross v. North Carolina, 132 U. S., 131, and cases cited. And see Teal v. Felton, 12 How., 284, 292; Crossley v. California, 168 U. S., 641.) A suit against an internal-revenue collector to recover taxes alleged to have been illegally collected is cognizable in the United States circuit court, both under section 629, giving that court jurisdiction of causes arising under any law providing internal revenue, and under act of March 3, 1887, giving it jurisdiction of causes arising under the laws of the United States. (Commis- sioners of Sinking Fund of Louisville v. Buckner (1891), circuit court, 48 Fed. Rep., 533. See Insurance Co. v. Ritchie, 5 Wall., 541; City of Philadelphia v. Collector, 5 Wall., 570; Hornthal v. Collector, 9 Wall., 560; Assessor v. Osborne, 9 Wall., 567.) Williams v. Reynolds (131 U. S. cxi), Cincinnati Brewing Co. v. Bettman, Collr. (102 Fed. Rep., 16). A State court has no authority to enjoin the proceedings of a Federal court. (Central National Bank, Boston, v. Hazard, 49 Fed. Rep., 293.) Conflicting State and Federal jurisdiction. (Booth v. St. Louis Fire Engine Manufacturing Co., 40 Fed. Rep., 1.) Jurisdiction where a federal question is involved. (Adams Express Co. v. Michigan, 177 U. S., 404.) Offenses began In one district and completed In another. Sec. 731. When any offense against the United States is begun in one judicial district and completed in another, it shall be deemed to have been committed in either, and may be dealt with, inquired of, tried, determined, and punished in either district, in the same manner as if it had been actually and wholly committed therein. Reenacted Sec. 42 of "The Judicial Code," Act March 3, 1911. The court of the district where the res is seized has jurisdiction though the violation of law occurred in another State. (U. S. v. 396 Barrels of Distilled Spirits, 3 Int. Rev. Rec. 114; Fed. Cas. No. 16502.) Suits for taxes, penalties, or forfeltnres to be brought In the name of the United States. Sec. 919. All suits for the recovery of any duties, imposts, or taxes, or for the enforcement of any penalty or forfeiture provided by any act respecting imports or tonnage, or the registering and recordmg or enrolling and licensing of vessels, or the internal revenue, or direct taxes, and all suits arising under the postal laws, shall be brought in the name of the United States. Where suits for penalties, forfeitures, and taxes are to be brought. Sec. 732. All pecuniary penalties and forfeitures may be sued for and recovered either in the district where they accrue or m the district where the offender is found. Reenacted Sec. 43 of "The Judicial Code," Act March 3, 1911. Sec. 733. Taxes accruing under any law providing internal revenue may be sued for and recovered either in the district where the liability for such tax occurs or in the district where the delinquent resides. Reenacted Sec. 44 of "The Judicial Code," Act March 3, 1911. See section 3213, Revised Statutes, page 109. United States v. New York, New Haven & Hartford Railroad Co. (10 Ben., 144; 24 Int. Rev. Rec, 341). The Dollar Savings Bank v. United States, (19 Wall., 227; 22 Int. Rev. Rec, 310). Jurisdiction in case of actions on deputy collectors' bonds. (Sec. 3148, p. 63.) Officers suffering injuries may maintain suits for damages in the United States circuit court of the district where the party resides or may be found. (Sec. 3171, p. 83.) 72170°— 11 25 . ... . . ... „_ Digitized by Microsoft® 386 APPENDIX. Jury may be waived in the trial of petty offenses. (Shick v. IT. S., 195 U S 65.) ' "' Residence of a corporation. (Booth et al. v. St. Louis Fire Engine Manufac- turing Co., 40 Fed. Rep., 1.) Penal offenses created by the statute, whether prosecuted by indictment or information, must be accurately and clearly described in the pleadings for recovery of the penalty. (United States v. Mann, 24 Int. Rev. Rec, 20- 95 IT. S., 580.) When the crime is a statutory one, the offense must be charged with pre- cision and certainty. (Ledbetter v. United States, 170 U. S., 606.) The accused must be apprised by the indictment, with reasonable certainty of the nature of the accusation against him. (U. S. v. Simmons, 96 U. S., 360.) Persons not to be arrested In one district for trial In another In civil actions. Sec. 1. [Act of Aug. 13, 1888 (25 Stat., 438), amending act of Mar. 8, 1875 (18 Stat., 470).] But no person shall be arrested in one district for trial in another in any civil action before a circuit or district court; and no civil suit shall be brought before either of said courts against any person by any original process or proceeding in any other district than that whereof he is an inhabitant, but where the jurisdiction is founded only on the fact that the action is between citizens of different States, suit shall be brought only in the district of the residence of either the plaintiff or the defendant. * * * See sec. 51 of "The Judicial Code," Act of March 3, 1911. A corporation may be indicted for the acts of its officers or employees. (IT. S. v. Baltimore &t)hio R. R. Co., 8 Int. Rev. Rec. 148; Fed. Cas. No. 14509.) Suit against foreign corporations doing business in a State. (Wilson Packing Co. v. Hunter, 25 Int. Rev. Rec, 137.) Foreign corporations, where to be sued. (Mohr & Mohr Distilling Co. v. Sundry Insurance Companies, 28 Int. Rev. Rec, 218.) Service of process on nonresident defendant on compulsory attendance illegal. (United States v. Bridgman, 26 Int. Rev. Rec, 139.) Also where fraud is UBed to induce defendant to come within jurisdiction of court (Steiger v. Bonn, 26 Int. Rev. Rec, 365). A party going into another State as witness exempt from process (Brooks v. Farwell, 26 Int. Rev. Rec, 355). Sections 737, 740 provide for cases where there are two or more defendants residing in different districts. A criminal prosecution must be had in the district where the crime or offense was committed. (Sec. 563, R. S.) In conspiracy to defraud, the parties may be tried in any district where the conspiracy is committed or an overt act done in pursuance of the illegal purpose. (U. S. v. Rindskopf, 6 Biss. 259; Fed. Cas. No. 16165.) Removal of suits or prosecutions against officers from State courts to United States circuit courts. Sec.643. [As amended by act of Feb. 8, 1894(28 Stat., 36).] Whenany civil suit or criminal prosecution is commenced in any court of a State against any officer appointed under or acting by authority of any reve- nue law of the United States now or hereafter enacted, or against any person acting under or by authority of any such officer, on account of any act done under color of his office or of any such law, or on account of any right, title, or authority claimed by such officer or other person under any such law; or is commenced against any person holding prop- erty or estate by title derived from any such officer, and affects the validity of any such revenue law; * * * the said suit or prosecu- tion may, at any time before the trial or final hearing thereof, be re- moved for trial into the circuit court next to be holden in the district where the same is pending, upon the petition of such defendant to said circuit court, and m the following manner: Said petition shall set forth Digitized by Microsoft® APPENDIX. 387 the nature of the suit or prosecution, and be verified by affidavit; and, together with a certificate signed by an attorney or counselor at law of some court of record of the State where such suit or prosecution is commenced, or of the United States, stating that, as counsel for the . petitioner, he has examined the proceedings against him, and carefully inquired into all the matters set forth in the petition, and that he believes them to be true, shall be presented to the said circuit court, if in session, or if it be not, to the clerk thereof at his office, and shall be filed in said office. The cause shall thereupon be entered on the docket of the circuit court, and shall proceed as a cause originally commenced in that court; but all bail and other security given upon such suit or prosecution shall continue in like force and effect as if the same had proceeded to final judgment and execution in the State court. When the suit is commenced in the State court by summons, sub- poena, petition, or another process except capias, the clerk of the circuit court shall issue a writ of certiorari to the State court, requiring it to send to the circuit court the record and proceedings in the cause. When it is commenced by capias, or by any other similar form of proceeding by which a personal arrest is ordered, he shall issue a writ of habeas corpus cum causa, a duplicate of which shall be delivered to the clerk of the State court, or left at his office, by the marshal of the district, or his deputy, or by some person duly authorized thereto; and thereupon it shall be the duty of the State court to stay all further proceedings in the cause, and the suit or prosecution, upon delivery of such process, or leaving the same as aforesaid, shall be held to be removed to the circuit court, and any further proceedings, trial, or judgment therein in the State court shall be void. And if the defendant in the suit or prosecution be in actual custody on mesne process therein, it shall be the duty of the marshal, by virtue of the writ of habeas corpus cum causa, to take the body of the de- fendant into his custody, to be dealt with in the cause according to law and the order of the circuit court, or, in vacation, of any judge thereof; and if, upon the removal of such suit or prosecution, it is made to appear to the circuit court that no copy of the record and proceedings therein in the State court can be obtained, the circuit court may allow and require the plaintiff to proceed de novo, and to file a declaration of his cause of action, and the parties may there- upon proceed as in actions originally brought in said circuit court. On failure of the plaintiff so to proceed, judgment of non prosequitur may be rendered against him, with costs for the defendant. Reenacted Sec. 33 of "The Judicial Code," Act March 3, 1911. Under this section, which declares that after removal' "any further proceed- ing, trial, or judgment therein in the State court shall be void," an indictment found in a State court after the removal of the cause to the United States circuit court was null; and where, upon habeas corpus cum causa, it appears that the prisoners were in the discharge of their duty as revenue officers of the United States when the act was committed, and were without fault, they will be discharged (State of North Carolina v. Kirkpatrick et al. (1890); 42 Fed. Rep., 689; 36 Int. Rev. Rec, 133). This act is constitutional. (Sup. Court, State of N. C; State v. Hoskins et al.; 23 Int. Rev. Rec, 263; 77 N. C. 530.) Removal of criminal case. (Tennessee v. Davis, 100 U. S., 257; 26 Int. Rev. Rec, 90.) Digitized by Microsoft® 388 APPENDIX. Case of a guard acting in aid of a marshal. (Davis v. South Carolina, 107 U. S., 597; 29 Int. Rev. Rec, 189.) Habeas corpus: The writ can not be sustained if issued by State court to inquire into detention of a person by a United States officer. Conflict between State and United States courts. (Tarble's Case, 13 Wall., 397; 15 Int. Rev. Rec, 135; dissenting opinion of Chief Justice Chase, 15 ibid., 193.) A summary proceeding by a landlord to recover from a lessee possession of premises used as a bonded warehouse, to which proceeding the collector of internal revenue and a United States storekeeper are made parties defendant, and described as undertenants holding over, is removable to a Federal court under this section. (Gallatin v. Sherman et al., circuit court southern district of New York, (1896), 77 Fed. Rep., 337.) When a prosecution can be deemed to be commenced within the meaning of the acts of Congress authorizing removal from State courts to United States courts for trial. (Virginia v. Paul, 148 U. S., 107.) A criminal prosecution is commenced as soon as a warrant has been issued and is then removable into the United States circuit court. (State of Georgia v. Bolton, 11 Fed. Rep., 217.) The removal of a prosecution against a United States revenue officer from a State to a Federal court is effected, and complete jurisdiction acquired, im- mediately upon the filing of a proper petition therefor in the clerk's office of the Federal court. (State v. Sullivan, 50 Fed. Rep., 593.) Expenses accruing in a local court in action against a collector before being transferred to a Federal court are payable from the appropriation "Miscellaneous expenses, Internal-Revenue Service." (Comp. MS. Dec, Apr. 11, 1907, case of Cureton v. Rucker.) Cost of procuring transcripts of the record of the local courts for the use of the United States payable by the Department of Justice. (Comp. MS. Dec, Lyman v. Cabell, Oct. 2, 1902.) Charges which may bo joined In one Indictment. Sec. 1024. When there are several charges against any person for the same act or transaction, or for two or more acts or trans- actions connected together, or for two or more acts or transactions of the same class of crimes or offenses, which may be properly joined, instead of having several indictments the whole may be joined in one indictment in- separate counts; and if two or more indictments are found in such cases, the court may order them to be consolidated. Although section 3397 designates as felonies some of the offenses specified in it, and omits to designate others as felonies, offenses of each class, which arise out of one and the same transaction, may, under section 1024, be charged in one indictment in different counts. (United States v. Louis Jacoby, 12 Blatch., 491.) Several charges may be joined in one indictment in separate counts, but the accused shall not be tried at the same time for different offenses; and an indict- ment charging the accused in one count with carrying on the business of a retail liquor dealer without having paid the special tax, and in another with dealing in manufactured tobacco without payment of the special tax, will be quashed. (United States v. Gaston, 28 Fed. Rep., 848.) The subject of the joinder of distinct offenses in one indictment against the same person fully examined. (Pointer v. United States, 151 U. S., 396; Wil- liams v. United States, 168 U. S., 390; United States v. Maguire, 22 Int. Rev. Rec, 146.) The statute, in permitting the joinder of different offenses in a single indict- ment, by necessary implication authorizes a separate punishment for each offense proved. (U. S. v. Bennett, 17 Blatchf., 357; Fed. Cas. 14572; 26 Int. Rev. Rec, 45.) Each count is in fact a separate indictment. (U. S. v. Malone, 9 Fed. Rep., 897.) Consolidation of indictments. (U. S. v. Green, 146 Fed Rep., 781.) Felonies defined. All offenses which may be punished by death, or imprison- ment for a term exceeding one year, shall be deemed felonies. All other offenses shall be deemed misdemeanors. (Sec. 335, act of Mar. 4, 1909, 35 Stat., 1152, Criminal Code.) Digitized by Microsoft® APPENDIX. 389 Offenders against the United States, how arrested and removed for trial — Warrants may be Issued by State officers. Sec. 1014. For any crime or offense against the United States, the offender may, by any justice or judge of the United States, or by any commissioner of a circuit court to take bail, or by any chancellor, judge of a supreme or superior court, chief or first judge of common pleas, mayor of a city, justice of the peace, or other magistrate, of any State where he may be found, and agreeably to the usual mode of process against offenders in such State, and at the expense of the United States, be arrested and imprisoned, or bailed, as the case may be, for trial before such court of the United States as by law has cogni- zance of the offense. Copies of the process shall bereturned as speedily as may be into the clerk's office of such court, together with the recognizances of the witnesses for their appearance to testify in the case. And where any offender or witness is committed in any district other than that where the offense is to be tried, it shall be the duty of the judge of the district where such offender or witness is imprisoned, seasonably to issue, and of the marshal to execute, a warrant for his removal to the district where the trial is to be had. Marshal can not be aided by the military. (Sec 15, act of June 18, 1878 (20 Stat., 152); 16 Op. Atty. Gen., 162.) A person arrested in one district may be held to bail for trial in another upon a certified copy of an indictment which has been found against him in such other district. (United States v. Pope, 24 Int. Eev. Rec, 29.) A preliminary examination before a commissioner is not a proceeding in court. (Todd v. United States, 158 U. S., 278.) Powers of United States commissioner. (United States v. Berry, 26 Int. Rev. Rec, 405.) The powers exercised by a United States commissioner in the examination of a person charged with an offense are those common to all examining magis- trates. To authorize him to commit he need not be convinced of the guilt of the accused, but the proof should be such as to afford good reason to believe that the offense was committed, and by the accused; otherwise it is his duty to discharge. (Ex parte Jones, 96 Fed. Rep., 200.) Warrants of arrest, page 402. Section 1014 made applicable to the Philippine Islands. Act of February 9, 1903 (32 Stat., 806). Laws of the State constitute rules of decision as to competency of witnesses. Sec. 858 [Amended by act of June 29,1906 (34 Stat, 618).]. The competency of a witness to testify in any civil action, suit, or proceed- ing in the courts of the United States shall be determined by the lawa of the State or Territory in which the court is held. Persons charged with crime can be witnesses in their own behalf. Act of March 16, 1878. (20 Stat., 30.) That in the trial of all indictments, informations, complaints, and other proceedings against persons charged with the commission of crimes, offenses, and misdemeanors, in the United States courts, Terri- torial courts, and courts-martial, and courts of inquiry, in any State or Territory, including the District of Columbia, the person so charged shall, at his own request but not otherwise, be a competent witness. And his failure to make such request shall not create any presump- tion against him. Accomplices used as witnesses; rule as to prosecution. (United States v. Ford, Whiskey Cases, 99 U. S. (9 Otto), 594; 25 Int. Rev. Rec, 127.) Digitized by Microsoft® 390 APPENDIX. The evidence of an accomplice is competent. If corroborated by other wit- nesses, credit is to be given to it. (United States v. Whalan et al., 7 Int Rev Rec, 161; United States v. Callicott, 7 ibid, 179.) No person shall be compelled in any criminal case to be a witness against himself. Fifth amendment to Constitution. (In re Mark Strouse, 11 Int Rev Rec, 182; In re Phillips, 10 Int. Rev. Rec, 107.) An officer of a corporation is not privileged from giving testimony as a witness because it may tend to convict the corporation of a penal offense. (London u. Everett H. Dunbar Corporation, 179 Fed. Rep., 506.) Production of books, papers, etc., in suits other than criminal. Sec. 5 [Act of June 22,J874 (18 Stat., 187).]. That in all suits and proceedings other than criminal arising under any of the revenue-laws of the United States, the attorney representing the Government, when- ever, in his belief, any business-book, invoice, or paper, belonging to or under the control of the defendant or claimant, will tend to prove any allegation made by the United States, may make a written motion, particularly describing such book, invoice, or paper, and setting forth the allegation which he expects to prove; and thereupon the court in which suit or proceeding is pending may, at its discretion, issue a notice to the defendant or claimant to produce such book, invoice, or paper in court, at a day and hour to be specified in said notice, which, together with a copy of said motion, shall be served formally on the defendant or claimant by the United States marshal by delivering to him a certified copy thereof, or otherwise serving the same as original notices of suit in the same court are served; and if the defendant or claimant shall fail or refuse to produce such book, invoice, or paper in obedience to such notice, the allegation stated in the said motion shall be taken as confessed unless his failure or refusal to produce the same shall be explained to the satisfaction of the court. And if produced, the said attorney shall be permitted, under the direction of the court, to make examination (at which examination the defendant or claim- ant, or his agent, may be present) of such entries in said book, invoice, or paper as relate to or tend to prove the allegation aforesaid, and may offer the same in evidence on behalf of the United States. But the owner of said books and papers, his agent or attorney, shall have, subject to the order of the court, the custody of them, except pending their examination in court as aforesaid'. This act not repugnant to the Constitution. (United States v. Three Tons of Coal, 21 Int. Rev. Rec, 251.) This section applies to proceedings under the internal-revenue laws as well as the customs-revenue laws. The act is constitutional. (United States v. Dis- tillery No. 28 and Other Property, 21 Int. Rev. Rec, 366.) A compulsory production of a person's private papers to be used as evidence against him in a proceeding to forfeit his property for alleged fraud against the revenue laws is an "unreasonable search or seizure" within the meaning of the fourth amendment to the Constitution. (Boyd v. United States, 116 U. S., 617; 32 Int. Rev. Rec, 62.) The power to compel the production of books and papers covers such docu- ments only as would be, "it produced, competent material evidence for the party applying therefor." It does not permit the inquisition into private rec- ords on the mere possibility that something may be found to refresh the rec- ollection of a witness, such records not being in themselves relevant to the case. (United States v. S. J. Tilden, 25 Int. Rev. Rec, 352.) Searches and seizures. (Hale v. Henkel, 201 U. S., 43.) Section 724, R. S., as to power to produce books and papers in action at law. Digitized by Microsoft® APPENDIX. 391 Certified copies of papers admissible as evidence. Sec. 882'. Copies of any books, records, papers, or documents in any of the Executive Departments, authenticated under the seals of such Departments, respectively, shall be admitted in evidence equally with the originals thereof. As to transcripts from books in suits against delinquent officers. (Sees. 886, 887, p. 413.) Typewritten letter signed with stencil inadmissible as evidence, unless acknowledged. (Sprinkle v. U. S., (1906) 150 Fed. Rep., 56.) The proper mode of proving papers on file in the Departments is by procuring certified copies. (Barnes v. Schmeider, 9 Wall., 253.) Documents not official do not by the mere fact of certification become so authenticated as to entitle them to be read in evidence. (Block v. United States, 7 Ct. Cls., 406.) In the matter of the application of a private person for a certified copy of records and files of Department. (30 Int. Rev. Rec, 382.) No information in regard to transactions of an official character in this Depart- ment is to be communicated to anyone not authorized to receive the same. No information in regard to the claim of any person which has ever been filed in the department is to be given to any other person unless proper authority is shown by way of power of attorney, or by letters of administration, or otherwise in a manner satisfactory to the Secretary, or an Assistant Secretary, or to the head of the proper Bureau in the Department, or chief of the proper division in the Secretary's office. (Department Rule IX; Dept. Cir., No. 69, July 5, 1906.) In all cases where copies of documents or records are desired by, or on behalf of, parties to a suit, whether in a court of the United States or any other, such copies shall be furnished to the court only, and on a rule of the court upon the Secretary of the Treasury requesting the same. Exceptions to this rule will be made only on the written order of the Secretary or of an Assistant Secretary. (Department Rule IX.) The records in the office of collector of customs respecting the entry, liquida- tion and payment of duties are so far public records that the importer has a right to inspect them when they relate to his importations. (United States v. Benjamin H7 Hutton and Charles G. Landon, 25 Int. Rev. Rec, 57.) Official communications privileged from disclosure on the ground of public policy. (Gardner v. Anderson, 22 Int. Rev. Rec, 41.) Privileged records, documents, or communications. (Shattuc v. McArthur, 25 Fed. Rep., 137, note 2; 15 Op. Atty. Gen., 415, 562; 16 ibid., 24; 24 Int. Rev. Rec, 178; papers upon which an assessment is made.) A subpoena duces tecum, issued by a State court, was served upon a district attorney, requiring him to appear as a witness in a private suit and bring with him all letters and telegrams received from the Commissioner of Internal Rev- enue relative to certain causes then pending in a United States court on indict- ments under the internal -revenue laws: Advised, That it would be proper for the attorney to appear before the State court in obedience to the writ, and there object to produce the papers on the ground that they are privileged, if, in his judgment or in that of the Commissioner, their production would be prejudi- cial to the public interests. (15 Op. Atty. Gen., 378; 23 Int. Rev. Rec, 341.) The head of an executive department may legally prohibit the chief of a bureau from producing in court any official records of the department, or cer- tified copies thereof , in obedience to a subpoena duces tecum, and from making or certifying copies of such official records. The records of executive departments are quasi-confidential in their nature, and must be classed as privileged communications whose production can not be compelled by a court without express authority of law. (25 Op. Atty. Gen., 326.) Officers of the executive departments can not be required to remove records or papers filed therein by subpoena duces tecum. (5 Lawrence Dec, 446.) The Federal courts have jurisdiction, under section 753, to issue writ for the purpose of releasing a deputy revenue collector from imprisonment for alleged contempt of a State court in refusing to testify to the contents of the records of the internal-revenue office. (In re Huttman, 70 Fed. Rep., 700; 41 Int. Rev. Rec, 477.) Digitized by Microsoft® 392 APPENDIX. An instruction issued by the Commissioner of Internal Revenue directing col- lectors and their deputies to refuse to produce, in criminal prosecutions of liquor dealers in the State courts, the returns made to the collectors, or the lists showing payments of Federal liquor taxes, or to give information derived from official sources as to the fact of such payments, is valid. (In re Weeks Vermont (1897), 82 Fed. Rep., 729; 43 Int. Rev. Rec, 393; Boske v. Comingore 177 U. S., 459, T. D., 104; In re Lamberton, 124 Fed. Rep. 446; T. D., 689 : Stegall v. Thurman, 175 Fed. Rep., 813; T. D., 1616; In re Comingore, collector (1899), 96 Fed. Rep., 552; T. D., 21584.) Costs In Internal-revenue snlts upon information from other than collector, etc. Sec. 969. When a suit for the recovery of any penalty or forfeiture accruing under any law providing internal revenue is Drought upon information received from any person other than a collector, deputy collector, or inspector of internal revenue, the United States shall not be subject to any costs of suit. Similar provision in section 3214, p. 111. Costs when several actions are brought which might be joined in one. (Sees. 977, 980.) Costs when paid by defendant. Sec. 974. When judgment is rendered against the defendant in a prosecution for any fine or forfeiture incurred under a statute of the United States, he shall be subject to the payment of costs; and on every conviction for any other offense not capital, the court may in its discretion award that the defendant shall pay the costs of the prose- cution. The word defendant held to include a claimant in an action in rem for for- feiture. (United States v. Seven Barrels Distilled Oil, 8 Int. Rev. Rec, 162.) Section 17 of the act of May 28, 1896 (29 Stat. 178), relative to salaries of district attorneys, provides that the act is not to be so construed as to prevent or affect the amount of taxation of costs against the unsuccessful party in civil proceedings or against defendants convicted of crimes or misdemeanors. Laws of the States, rales of decision. Sec. 721. The laws of the several States, except where the Consti- tion, treaties, or statutes of the United States otherwise require or provide, shall be regarded as rules of decision in trials at common law, in the courts of the United States, in cases where they apply. The above provision is not applicable to proceedings in equity, or in admi- ralty, or to criminal offenses against the United States. (Bucher, v. Cheshire Railroad Company, 125 U. S., 555.) The courts of the United States are governed by the rules of the common law, because the common law is in force in the State or Territory where the cause of action arose or is to be enforced, and not because the common law has been adopted by the United States, or has under the laws of the United States any binding force, except as being the law of some State, Territory, or District. United States v. Garlinghouse et al., 11 Int. Rev. Rec, 11.) Federal courts are bound to follow the decisions of the State courts constru- ing their own constitution or statutes. (Mooney v. Humphrey, 28 Int. Rev. Rec, 343.) How far decisions of the highest courts of a State on State laws are binding on Supreme Court of United States. (Burgess v. Seligman, 107 U. S., 20.) See section 858, Revised Statutes, amended, page 389, as to laws of the State being rules of decision as to competency of witnesses. Practice conforms to forms and modes of proceeding In State courts. Sec. 914. The practice, pleadings, and forms and modes of pro- ceeding in civil causes other than equity and admiralty causes, in the circuit and district courts, shall conform, as near as may be, to the Digitized by Microsoft® APPENDIX. 393 practice, pleadings, and forms and modes of proceeding existing at the time in like causes in the courts of record of the State within which such circuit or district courts are held, any rule of court to the con- trary notwithstanding. Sage v. Tauszky (24 Int. Rev. Rec, 12). In re Secretary of Treasury (45 Fed. Rep., 396). United States v. Collins (18 Int. Rev. Rec, 69). Nudd v. Burrows (91 U. S., 441). Proceedings on execution governed by State lawB. Sec. 916. The party recovering a judgment in any oommon-law cause in any circuit or district court, shall be entitled to similar reme- dies upon the same, by execution or otherwise, to reach the property of the judgment debtor, as are now provided in like causes by the laws of the State in which such court is held, or by any such laws hereafter enacted, which may be adopted by general rules of such circuit or district court ; and such courts may, from time to time, by general rules, adopt such State laws as may hereafter be in force in such State in relation to remedies upon judgments, as aforesaid, by execution or otherwise. Collection of judgments for fines and penalties (sec. 1041). (Case of Louis Teuscher, 23 Int. Rev. Rec, 202.) Poor convicts law (sec. 1042). State exemption laws govern. (Fink v. O'Neil, 106 U. S. (16 Otto), 272; 28 Int. Rev. Rec, 405.) Homestead exemption. (Allen v. Clark, 126 Fed. Rep., 738, affirming 114 Fed. Rep., 374 and 117 ibid., 679.) Judgment can not be opened at a term subsequent to that at which it was entered. (Bronsoni;. Schulten, 104U. S. (14Otto),410; 28 Int. Rev. Rec, 231.) If plaintiff and defendant agree, judgment may be set aside at a subsequent term. (Seat, administrator, v. United States, 18 Ct. Clms., 468.) Not lawful to employ any part of the United States Army as a posse comitatus. (Act June 18, 1878 (20 Stat., 152); 16 Op. Atty. Gen., 162.) Redemption of lands sold under execution, local laws govern. (Brine v. Hartford Fire Insurance Co., 96 U. S., 627; 24 Int. Rev. Rec, 243.) The United States circuit court, southern district of New York, made an order for the examination of Robert Boyd to discover whether he had property to satisfy judgment of the court. Boyd refused to testify, and was imprisoned for contempt of court. The Supreme Court was petitioned for a writ of habeas corpus and certiorari. The circuit court was sustained in proceedings in the matter in accordance with the laws of the State of New York, under section 916. (Ex parte Boyd, 28 Int. Rev. Rec, 232; 105 U. S., 647.) Proceedings of marshal upon execution. (Sowles v. Witters, 46 Fed. Rep., 497; Cir. No. 331, 35 Int. Rev. Rec, 197.) Executions In favor of United States to run In every State and Territory. Sec. 986. All writs of execution upon judgments obtained for the use of the United States, in any court thereof, in one State, may run and be executed in any other State or in any Territory, but shall be issued from, and made returnable to, the court wherein the judgment was obtained. Judgment records and Hens of judgments. AN ACT To regulate the liens of judgments and decrees of the courts of the United States (act of Aug. 1, 1888 (25 Stat., 357) as amended by act of Mar. 2, 1895 (28 Stat., 814)). Sec. 1 . That judgments and decrees rendered in a circuit or district court of the United States within any State, shall be hens on property throughout such State in the same manner and to the same extent and under the same conditions only as if such judgments and decrees had Digitized by Microsoft® 394 APPENDIX. been rendered by a court of general jurisdiction of such State: Pro- vided, That whenever the laws of any State require a judgment or decree of a State court to be registered, recorded, docketed, indexed or any other thing to be done, in a particular manner, or in a certain office or county, or parish in the State of Louisiana before a lien shall attach, this act shall be applicable therein whenever and only when- ever the laws of such State shall authorize the judgments and decrees of the United States courts to be registered, recorded, docketed, indexed, or otherwise conformed to the rules and requirements re- lating to the judgments and decrees of the courts of the State. Sec. 2. That the clerks of the several courts of the United States shall prepare and keep in their respective offices complete and con- venient indices and cross-indices of the judgment records of said courts, and such indices and records shall at all times be open to the inspection and examination of the public. Sec. 3. That nothing herein shall be construed to require the dock- eting of a judgment or decree of the United States court, or the filing of a transcript thereof, in any State office within the same county or the same parish in the State of Louisiana in which the judgment or decree is rendered, in order that such judgment or decree may be a lien on any property within such county, if the clerk of the United States court be required by law to have a permanent office and a judgment record open at all times for public inspection in such county or parish. Lien of judgments in the Federal courts. (Dartmouth Savings Bank v. Bates, 44 Fed. Rep., 546.) United States not required to file lien under State laws. (United States v. Snyder et al., 39 Int. Rev. Rec, 189; 149 U. S., 210.) Judgment liens not restricted by State statutes. (Carroll v. Watkins, 1 Abb. 474, Fed. Cas. No. 2457; U. S. v. Humphreys, Fed. Cas. No. 15422, 3 Hughes, 201.) Interest. Sec. 963. Upon all bonds, on which suits are brought for the re- covery of duties, interest shall be allowed, at the rate of six per centum a year, from the time when said bonds became due. Sec. 966. Interest shall be allowed on all judgments in civil causes, recovered in a circuit or district court, and may be levied by the mar- shal under process of execution issued thereon, in all cases where, by the law of the State in which such court is held, interest may be levied under process of execution on judgments recovered in the courts of such State, and it shall be calculated from the date of the judgment, at such rate as is allowed by law on judgments recovered in the courts of such State. An act of Congress giving interest on judgments does not include the Gov- ernment unless expressly named or so intended by clear inference. (First Comptroller's Opinion in Stephani's Case, 26 Int. Rev. Rec, 313, and cases there cited; United States ex rel. v. John Sherman, Secretary of the Treasury, 98 U. S., 567; 25 Int. Rev. Rec, 198). Angarica v. Bayard (127 U. S., 251). Schell v. Cochran (107 U. S., 625). Interest on taxes. (See under sees. 3185, p. 96, and 3214, p. 111. Interest on claims against United States. (See under sec. 3220, p. 114.) Interest in suits against officers upon adjustment of accounts. (See sec. 3624, p. 407.) Interest on judgments in Court of Claims. (See sees. 1090, 1091.) Interest only from commencement of the suit when there has been unreason- able delay injprosecuting the claims (Sanborn v. United States, 135 U. S., 271; 36 Int. Rev. Rec, 142; Wightman v. United States, 23 Ct. Cls., 148.) Digitized by Microsoft® APPENDIX. 395 Writs of error and appeals to Supreme Court. Seo. 699. Superseded by the act establishing Circuit Courts of Appeal. See "The Judicial Code," act of March 3, 1911. Supreme Court has jurisdiction in an action to enforce a revenue law with- out regard to amount. (Pettigrew v. United States, 97 U. S., 385; 24 Int. Rev. Rec, 380.) An act to provide for writs of error or appeals to the Supreme Court of the United States in all cases involving the question of the jurisdiction of the court below. (Act of Feb. 25, 1889; 25 Stat., 693.) As to Alaska, the act of June 6, 1900, section 504(31 Stat., 414) provides that appeals and writs of error may be taken from the district court directly to the Supreme Court in five classes of cases. In Porto Rico (act of April 12, 1900; 31 Stat., 84) there is established a dis- trict court of the United States with jurisdiction of circuit courts of the United States. It is provided that writs of error and appeal from the final decisions of the supreme court of Porto Rico and the district court of the United States shall be allowed and may be taken to the Supreme Court of the United States in the same manner and under the same regulations and in the same cases as from the supreme courts of the Territories; ' ' and such writs of error and appeal shall be allowed in all cases where the Constitution of the United States or a treaty thereof or an act of Congress is brought in question and a right claimed there- under is denied." In Hawaii (act of Apr. 30, 1900, amended by act of Mar. 3, 1909) a Federal district court is established with the jurisdiction of district and circuit courta of the United States. Circuit courts of appeals. An Act To establish circuit courts of appeals and to define and regulate in certain cases the jurisdiction of the courts of the United States, and for other purposes, act of March 3, 1891 (26 Stat., 827). No appeal allowed from district to circuit courts — Appeals to Supreme Court. Sec. 4. That no appeal, whether by writ of error or otherwise, shall hereafter be taken or allowed from any district court to the existing circuit courts, and no appellate jurisdiction shall hereafter be exer- cised or allowed by said existing circuit courts, but all appeals by writ of error or otherwise, from said district courts shall only be subject to review in the Supreme Court of the United States or in the circuit court of appeals hereby established, as is hereinafter provided, and the review, by appeal, by writ of error, or otherwise, from the existing circuit courts shall be had only in the Supreme Court of the United States or in the circuit court of appeals hereby established according to the provisions of this act regulating the same. Sec. 5. [Act of Mar. 3, 1891 (26 Stat, 826).] That appeals or writs of error may be taken from the district courts or from the existing cir- cuit courts direct to the Supreme Court in the f ollowing cases :_ In any case in which the jurisdiction of the court is in issue ; in such cases the question of jurisdiction alone shall be certified to the Supreme Court from the court below for decision. From the final sentences and decrees in prize causes. In cases of conviction of a capital or otherwise infamous crime. In re Claasen (140 U. S., 200). In any case that involves the construction or application of the Con- stitution of the United States. Motes v. United States (178 U. S., 459). Digitized by Microsoft® 396 APPENDIX. In any case in which the constitutionality of any law of the United States, or the validity or construction of any treaty made under its authority, is drawn in question. Rice v. Ames (180 U. S., 371). In any case in which the constitution or law of a State is claimed to be in contravention of the Constitution of the United States. * * * Section 6 provides that the judgment of the circuit courts of appeals shall be final in all cases arising * * * "under the revenue laws" * * * , but the circuit court of appeals at any time may certify to the Supreme Court of the United States any questions or propositions of law concerning which it desires the instruction of that court, or the Supreme Court may by certiorari require any case to be certified to the Supreme Court for review. (Railway Co. v. Pope, 74 Fed. Rep., 1; United States v. Union Pac. Ry. Co., 168 U. S., 505; United States v. Felsenheld, 186 U. S., 126; T. D. 525.) Primary object of this act. (American Construction Co. v. Jacksonville Rail- way Co., 148 U.S., 372.) Amendments to the act establishing the circuit court of appeals, with annota- tion of decisions. (90 Fed. Rep., introduction.) In none of the provisions of the act establishing the circuit courts of appeals, defining the appellate jurisdiction, either of the Supreme Court or of the circuit courts of appeals is there any indication of an intention to confer upon the United States the right to take up a criminal case of any grade after judgment below in favor of the defendant. (United States v. Sanges, 144 U. S., 323; United States v. Dickinson, 213 U. S., 92.) A writ of error may be taken by the United States from the district or circuit court to the Supreme Court in criminal cases where indictment has been quashed if the decision was based upon the invalidity or construction of the statute upon which the indictment was founded. (Act Mar. 2, 1907; 34 Stat., 1246.) As to circuit courts of appeals under "The Judicial Code." See chap. 6, sec. 116, et seq., act of March 3, 1911. Sec. 1008. No judgment, decree or order of a circuit or district court, in any civil action, at law or in equity, shall be reviewed in the Supreme Court, on writ of error or appeal, unless the writ of error is brought, or the appeal is taken within two years after the entry of such judgment, decree, or order: Provided, That where a party entitled to prosecute a writ of error, or to take an appeal is an infant, insane person or imprisoned, such writ of error may be prosecuted, or such appeal may be taken, within two years after the judgment, decree, or order, exclusive of the term of such disability. Section 11, act of March 3, 1891 ; ' ' that no appeal or writ of error, by which any order, judgment, or decree may be reviewed in the circuit court of appeals, under the provisions of this act, shall be taken or sued out except within six months after the entry of the order, judgment, or decree sought to be reviewed." (Rutan v. Johnson, 130 Fed. Rep., 109.) Appeals or writs of error to review a judgment of a circuit court of appeals must be sued out within 1 year. (Sec. 6, act of Mar. 3, 1891, 26 Stat., 826.) The statutory time for taking appeals is prescribed by act of Congress, and can not be extended by order of the court. (Old Nick Williams Co. v. United States, 215 U. S., 541.) An internal revenue case may be taken from the circuit court to the circuit court of appeals, and from there to the Supreme Court when the constitution- ality of an act of Congress is involved. (Spreckels Sugar Refining Co. v. McClain; 192 U. S., 397; T. D. 760.) Digitized by Microsoft® APPENDIX. 397 Appeals from Court of Claims to Supreme Court. Seo. 708. All appeals from the Court of Claims shall be taken within ninety days after the judgment is rendered, and shall be allowed under such regulations as the Supreme Court may direct. Reenacted section 243 of "The Judicial Code," act March 3, 1911. A judgment of the Court of Claims from which no appeal is taken is just as conclusive as a decision of the Supreme Court. (United States v. O'Grady, 22 Wall., 641.) No bond required of United States, etc. Sec. 1001. Whenever a writ of error, appeal or other process in law, admiralty, or equity, issues from or is brought up to the Supreme Court, or a circuit court, either by the United States or by direction of any Department of the Government, no bond, obligation, or security shall be required from the United States, or from any party acting under the direction aforesaid, either to prosecute said suit, or to answer in damages or costs. In case of an adverse decision, such costs as by law are taxable against the United States, or against the party acting by direction as aforesaid, shall be paid out of the contingent fund of the Department under whose directions the proceedings were insti- tuted. The United States, when a plaintiff in a civil action, is entitled to the writ of attachment, and is relieved by section 1001 from giving the usual undertaking in such cases. (United States v. Ottman, 23 Int. Rev. Rec, 294). Statute of Limitations. Sec. 1047. No suit or prosecution for any penalty or forfeiture, pecuniary or otherwise, accruing under the laws of the United States, shall be maintained, except in cases where it is otherwise specially provided, unless the same is commenced within five years from the time when the penalty or forfeiture accrued: Provided, That the per- son of the offender, or the property liable for such penalty or forfeit- ure, shall, within the same period, be found within the United States ; so that the proper process therefor may be instituted and served against such person or property. AN ACT To limit the time within which prosecutions may be instituted against per- sons charged with violating internal-revenue laws. Act of July 5, 1884(23 Stat., 122). That no person shall be prosecuted, tried, or punished for any of the various offenses arising under the internal revenue laws of the United States unless the indictment is found or the information instituted Within three years next after the commission of the offense, in all cases where the penalty prescribed may be imprisonment in the penitentiary, and within two years in all other cases : Provided, That the time during which the person committing the offense is absent from the district wherein the same is committed shall not be taken as any part of the time limited by law for the commence- ment of such proceedings: Provided -further, That the provisions of this act shall not apply to offenses committed prior to its passage: And provided further, That where a complaint shall be instituted before a commissioner of the United States within the period above Digitized by Microsoft® 398 APPENDIX. limited, the time shall be extended until the discharge of the grand jury at its next session within the district : And provided further, That this act shall not apply to offenses com- mitted by officers of the United States. Suits for taxes can be brought at any time. (See decisions quoted under sec. 3214, p. 111.) Limitation of time within which suits must be brought against sureties on official bonds five years. (See act of Aug. 8, 1888, p. 372.) States can not pass statutes of limitation binding on the Federal Govern- ment. (United States v. Thompson et al., 98 U. S., 486; 25 Int. Rev. Rec, 143.) United States not bound by any statute of limitations unless Congress has clearly manifested its intention that they should be so bound. (United States v. Nashville Railroad Co., 118 U. S., 125; United States, v. Beebe, 127 U. S., 354.) The limitation laws of the State in which the suit is brought do not furnish the rule for determining whether the action is brought in time. (Arnson v. Murphy, 109 U. S. 238.) When the United States voluntarily appear in a court of justice, they at the same time submit to the law and place themselves upon an equality with other litigants; but this does not apply to such defenses as laches and the statute of limitations. (United States v. Ingate, 1891, 48 Fed. Rep., 251.) Certificate of probable cause. Sec. 970. When, in any prosecution commenced on account of the seizure of any vessel, goods, wares, or merchandise, made by any col- lector or other officer, under any act of Congress authorizing such seizure, judgment is rendered for the claimant, but it appears to the court that there was reasonable cause of seizure, the court shall cause a proper certificate thereof to be entered, and the claimant shall not, in such case, be entitled to costs, nor shall the person who made the seizure, nor the prosecutor, be liable to suit or judgment on account of such suit or prosecution: Provided, That the vessel, goods, wares, or merchandise De, after judgment, forthwith returned to such claimant or his agent. The decision of the court below refusing certificate of probable cause not reviewable by circuit or Supreme Court. (United States v. Abattoir Place, 106 U. S., 160.) Execution not to Issue against officers of revenue In cases of probable cause, etc. Sec. 989. When a recovery is had in any suit or proceeding against a collector or other officer of the revenue for any act done by him, or for the recovery of any money exacted by or paid to him and by him paid into the Treasury, in the performance of his official duty, and the court certifies that there was probable cause for the act done by the collector or other officer, or that he acted under the directions of the Secretary of the Treasury, or other proper officer of the Government, no execution shall issue against such collector or other officer, but the amount so recovered shall, upon final judgment, be provided for and paid out of the proper appropriation from the Treasury. Section 3220, page 114. Payment of judgments against collectors. (United States v. Frerichs, 124 U. S., 315; 34 Int. Rev. Rec, 39.) Protection afforded to officers by certificate of probable cause. (Averill v. Smith, 17 Wall., 82; 17 Int. Rev. Rec, 171. Stacy v. Emery, 97 U. S. (7 Otto), 642; 24 Int. Rev. Rec, 378. Dunnagan v. United States, 17 Ct. Cls., 247; 28 Int. Rev. Rec, 144.) Digitized by Microsoft® APPENDIX. 399 The Government is not liable for the torts of its officers. (Hart v. United States, 95 U. S., 318; Langford v. United States, 101 U. S., 346; United States v. Cummings et al., 35 Int. Rev. Rec, 142, 130 U. S., 453.) State of Maine v. U. S. (36 Ct. Cls., 532). See notes under Section 3220, page 114. The order of the commissioner to the collector of the district directing him to make a seizure is in law a reasonable cause and a protection to him against damages for such action. Sections 970 and 989, Revised Statutes, are both existing laws and not inconsistent or repugnant. (Agnew v. Haymes, 141 Fed. Rep., 631, T. D. 955.) Property taken under revenue laws Irrepleviable. Sec. 934. All property taken or detained by any officer or other per- son, under authority of any revenue law of the United States, shall be irrepleviable, and shall be deemed to be in the custody of the law, and subject only to the orders and decrees of the courts of the United States having jurisdiction thereof. Brice et al. v. Elliott. (22 Int. Rev. Rec, 206.) Conflict of State and United States officers. (14 Op. Atty. Gen., 370; 19 Int. Rev. Rec, 73; Buck v. Colbath, 3 Wall., 334.) Goods in the hands of the United States held for taxes can not be attached by State officers. (Harris v. Dennie, 3 Pet., 292; McCullough v. Large, 30 Int. Rev. Rec, 166.) Compromises of claims and of cases after Judgment. Sec. 3469. Upon a report by a district attorney, or any special attorney or agent having charge of any claim in favor of the United States, showing in detail the condition of such claim, and the terms upon which the same may be compromised, and recommending that it be compromised upon the terms so offered, and upon the recom- mendation of the Solicitor of the Treasury, the Secretary of the Treasury is authorized to compromise such claim accordingly. But the provisions of this section shall not apply to any claim arising under the postal laws. Compromise of internal-revenue cases before judgment. (Sec. 3229, p. 123.) Uncertainty whether the Government can obtain a verdict proper ground for compromise. (16 Op. Atty. Gen. 259.) Forfeited recognizances. (18 Op. Atty. Gen., 277.) Section 3469 does not extend to fines in criminal cases. (United States v. George et al., 6 Blatch., 406; 12 Op. Atty. Gen., 543; 13 ibid., 479.) Compromise of solvent claims. (16 Op. Atty. Gen., 617; 25 Int. Rev. Rec, 29 ) Contra. (MacVeagh, 27 Int. Rev. Rec, 334; 17 Op. Atty. Gen., 213.) _ A claim can not be compromised of whose collectibility in full there is no doubt (Harmon). (21 Op. Atty. Gen. 264.) See also 23 Op. Atty. Gen., 18; 633. Government's claim to real property can not be compromised. (16 Op. Atty. Gen., 385.) No power to compromise taxes. (Dorsheimer v. United States, 74 U. S. (7 Wall.), 166; 10 Int. Rev. Rec, 131; 2 Ct. Cls., 103.) No authority to compromise cases under section 32, act of July 24. 1897. The Attorney General may, however, compromise or settle such cases. (T. D., 21270, 1899.) Remission. The Secretary of the Treasury has authority to remit or mitigate fines, penalties, or forfeitures and to remove disabilities before or after judgment or decree, and until the money is actually paid into the Treasury. (United States v. Morris, 10 Wheat., 246; sees. 5292, 5293, R. S.) The power to remit penalties is intrusted^ to the Secretary of the Treasury alone, and there is no appeal from his decision. Digitized by Microsoft® 400 APPENDIX. Pardons. The President's power under the Constitution to grant pardons (Art. II, sec. 2) includes the power of remitting fines, penalties, and forfeitures. (Ex parte Garland, 4 Wall., 333.) Effect of pardon. (Weimer v. Reynolds, 24 Int. Rev. Rec, 372; Knote v. United States, 95 U. S., 149; 24 Int. Rev. Rec, 4; United States v. McKee, 23 ibid., 338; Fed. Cas. No. 15,688.) Pardon of officer bar to an action on official bond assigning same act as a breach. (United States v. Cullerton, 24 Int. Rev. Rec, 68.) Pardon releases property seized for same offense. (Osborn v. United States, 91 U. S. (1 Otto), 474.) Does not relieve from tax. (United States v. Roelle et al., 24 Int. Rev. Rec, 332.) A pardon is not complete until delivery. (In re Moses De Puy, 10 Int. Rev. Rec, 34.) Act providing for parole of United States prisoners. Act of June 25, 1910. (36 Stat., 819.) Employment of attorneys or counsel. Sec. 189. No head of a department shall employ attorneys or coun- sel at the expense of the United States, but when in need of counsel or advice shall call upon the Department of Justice, the officers of which shall attend to the same. Opinions of the Attorney General ; the effect of his advice. (5 Op. Atty. Gen., 97; 6 ibid., 334; 7 ibid., 699; 9 ibid., 37.) Questions of pure law actually arising in the administration of the Treasury Department, and requiring the personal consideration of the Secretary, may be referred to the Solicitor of the Treasury or to the Attorney General. If referred to the latter, however, his answer should be regarded by the department as law until withdrawn by him or overruled by the courts. (20 Op. Atty. Gen., 655.) A request for an opinion must not relate to a mere moot question. (21 Op. Atty. Gen., 509.) There should be a case actually arising. (24 Op. Atty. Gen., 59; 27 ibid., 49.) Attorney General to provide counsel on Investigation of claims. Sec. 364. Whenever the head of a Department or Bureau gives the Attorney-General due notice that the interests of the United States re- quire the service of counsel upon the examination of witnesses touch- ing any claim, or upon the legal investigation of any claim, pending in such Department or Bureau, the Attorney-General shall provide for such service. AN ACT To authorize the commencement and conduct of legal proceedings under the direction of the Attorney General, approved, June 30, 1906. (34 Stat., 816.) That the Attorney-General or any officer of the Department of Justice, or any attorney or counselor specially appointed by the Attorney-General under any provision of law, may, when thereunto specifically directed by the Attorney-General, conduct any kind of legal proceeding, civil or criminal, including grand jury proceedings and proceedings before committing magistrates, which district attor- neys now are or hereafter may be by law authorized to conduct, whether or not he or they be residents of the district in which such proceeding is brought. Digitized by Microsoft® APPENDIX. 401 Duties of district attorneys to prosecute and to appear for collectors, etc. Sec. 771. It shall be the duty of every district attorney to prose- cute, in his district, all delinquents for crimes and offenses cognizable under the authority of the United States, and all civil actions in which the United States are concerned, and, unless otherwise in- structed by the Secretary of the Treasury, to appear in behalf of the defendants in all suits or proceedings pending m his district against collectors, or other officers of the revenue, for any act done by them or for the recovery of any money exacted by or paid to such officers, and by them paid into the Treasury. "Infamous" crimes can not be prosecuted by information. " No person shall be held to answer for a capital or otherwise infamous crime, unless on a pre- sentment or indictment of a grand jury, except in cases arising in the land or naval forces," etc. (Constitution, fifth amendment.) Imprisonment at hard labor for a term of years is an infamous punishment. (Wilson ex parte, 114 IT. S., 417; 31 Int. Rev. Rec., 224.) A crime punishable by imprisonment in a state's prison or penitentiary with or without hard labor is an infamous" crime. (Mackin v. United States, 117 U. S., 348.) It is the duty of a district attorney to prosecute suits to enforce against certain property the statutory lien for internal-revenue taxes. (Bliss v. U. S., 37 Fed. Rep., 191.) Duty of Government to defend its officers when sued for doing what the law requires. (9 Op. Atty. Gen., 52.) The act of March 3, 1887 (24 Stat., 505), providing for the bringing of suits against the Government in the United States district and circuit courts, makes it the duty of the district attorney to appear and defend the interests of the Government in such suits and within sixty days after the service of petition upon him to file a plea, answer, or demurrer on the part of the Government, and notice of any set-off or counter claim. Suits by or against officers not to abate on their death, resignation, or expira- tion of their term of office. (Act of Feb. 8, 1899, 30 Stat., 822.) By the acts of June 27, 1898, and July 1, 1898, the right of Government offi- cers to bring suits in the circuit and district courts for their fees or salaries was repealed, thus removing what had been found to be a serious difficulty in the workings of the act of March 3, 1887. District attorneys to report to Commissioner of Internal Revenue. Sec. 774. When any suit or proceeding arising under the internal- revenue laws, to which the United States are party, or any suit or pro- ceeding against a collector or other officer of the internal revenue, wherein a district attorney appears, is commenced, the attorney for the district in which it is brought shall immediately report to the Commissioner of Internal Revenue the full particulars relating to the same; and he shall, immediately after the end of each term of the court in which such suit or proceeding is pending, forward to the said Commissioner a full and particular statement of its condition. Duty of commissioner to make regulations for observance of district attor- neys and marshals. (Sec. 3215, p. 111.) Regulations No. 12, revised. Duty of district attorneys as to prosecution and reports. Sec. 838. It shall be the duty of every district attorney to whom any collector of customs, or of internal revenue, shall report, accord- ing to law, any case in which any fine, penalty, or forfeiture has been incurred in the district of such attorney for the violation of any law of the United States relating to the revenue, to cause the proper pro- 72170°— 11 26 Digitized by Microsoft® 402 APPENDIX. ceedings to be commenced and prosecuted without delay, for the fines, penalties, and forfeitures in such case provided, unless, upon inquiry and examination, he shall decide that such proceedings can- not probably be sustained, or that the ends of public justice do not require that such proceedings should be instituted; in which case he shall report the facts in customs cases to the Secretary of the Treasury, and in mternal revenue cases to the Commissioner of Internal Rev- enue for their direction. ******* That portion of this section referring to compensation of district attorneys is omitted, as made inoperative by the act of May 28, 1896. (29 Stat., 178). Duty of collectors to report violations of law to district attorneys. (Sec. 3164, p. 77.) Reports of marshals. — Marshals are required to report proceedings under process issued to them in internal-revenue cases. (Regulations No. 12, revised, p. 17.) Instructions to report status of judgment debtors. (T. D. 703.) Warrants of arrest. Sec. 19. [Act of May 28, 1896 (29 Stat., 184), reenacted .by act Mar. 2, 1901 (31 Stat, 956).] * * * Warrants of arrest for violations of internal-revenue laws may be issued by United States commissioners upon the sworn complaint of a United States district attorney, assist- ant United States district attorney, collector or deputy collector of internal revenue, or revenue agent or private citizen, but no such war- rant of arrest shall be issued upon the sworn complaint of a private citizen unless first approved in writing by a United States district attorney. * * * Under the act of May 28, 1896, the issue of a warrant upon a complaint made by a field deputy marshal, which was approved by the district attorney by telephone, even though subsequently reduced to writing, is not authorized. (VI Comp. Dec, 113.) Fees of United States marshals — illegal warrants. (IV Comp. Dec, 338, 449.) Deputy collectors swearing to complaints. (T. D. 510.) Insufficiency of warrant. (U. S. v. Sapinkow, 90 Fed. Rep., 654.) Warrant must particularly name or describe the person. (West v. Cabell, 153 U. S., 85, 86.) Serving John Doe warrants. (16 Comp. Dec, 891.) Arrest of persons while operating illicit distillery. (Sec. 9, act Mar. 1, 1879, p. 175.) Arrests without warrant. (14 Int. Rev. Rec, 27; 24 ibid., 349, 378.) A marshal has the right to arrest upon visible evidence of crime. (U. S. v. Fullehart, 106 Fed. Rep., 911.) * * * Act of August 18, 1894, sundry civil appropriation act (28 Stat., 416). And hereafter no part of any money appropriated to pay any fees to the United States commissioners, marshals, or clerks shall be used for any warrant issued or arrest made, or other fees in prose- cutions under the internal revenue laws, unless said fees have been taxed against and collected from the defendant, or unless the prosecu- tion has been commenced upon a sworn complaint setting forth the facts constituting the offense and alleging them to be within the per- sonal knowledge of the affiant, or upon a sworn complaint by a United States district attorney, collector, or deputy collector of internal reve- nue or revenue agent, setting forth the facts upon information and belief, and approved either before or after such arrest hy a circuit or district judge or the attorney of the United States in the district where the offense is alleged to have been committed or the indictment is found: Digitized by Microsoft® APPENDIX. 403 Provided, That it shall be the duty of the marshal, his deputy, or other officer who may arrest a person charged with any crime or offense, to take the defendant before the nearest circuit court commis- sioner or the nearest judicial officer having jurisdiction under existing laws for a hearing, commitment or taking bail for trial, and the officer or magistrate issuing the warrant shall attach thereto a certified copy of the complaint ; and upon the arrest of the accused, the return of the warrant, with a copy of the complaint attached, shall confer jurisdic- tion upon such officer as fully as if the complaint had originally been made before him, and no mileage shall be allowed any officer violating the provisions hereof. Construction of statute. (U. S. v. Puleston, 106 Fed. Rep., 294.) Clerks of courts to report to Commissioner as to all moneys paid Into conrt In Internal-revenue cases, etc. Sec. 797. [As amended by sec. 2, act of Mar. 1, 1879 (20 Stat, 327).] Every clerk of a circuit or district court shall, within thirty days after the adjournment of each term thereof, forward to the Solicitor of the Treasury a list of all judgments and decrees, to which the United States are parties, which have been entered in said court, respectively, dur- ing such term, showing the amount adjudged or decreed in each case, for or against the United States, and the term to which execution thereon will be returnable. He shall also, at the close of each quarter, or within ten days thereafter, report to the Commissioner of Internal Revenue all moneys paid into court on account of cases arising under the internal- revenue laws, as well as all moneys paid on suits on bonds of collectors of internal revenue. The report shall show the name and nature of each case, the date of payment into court, the amount paid on account of debt, tax, or penalty, arid also the amount on account of costs. If such money, or any portion thereof, has been paid by the cleric to any internal-revenue officer or other person, the report shall show to whom each of such pay- ments was made; and if to an internal-revenue officer, it shall be accom- panied by the receipt of such officer. Section 5, act of February 22, 1875 (18 Stat., 334), provides that if any clerk of any district or circuit court of the United States shall willfully refuse or neglect to make any report or other document required by law to be by him made, or shall willfully refuse or neglect to forward any such report or docu- ment to the department, officer, or person to whom by law the same should be forwarded, the clerk so offending shall be removed from office and shall not be eligible to any appointment as clerk or deputy clerk for the period of two years next after such removal. Section 6 of the same act also provides additional punishment, by a fine not exceeding $1,000 or by imprisonment not exceeding one year, in the discretion of the court. Clerk of court failing to deposit moneys, etc. (Sec. 99 of the criminal code, act Mar. 4, 1909, 35 Stat., 1088.) Clerks of court to keep indices of judgment records. (See act Aug. 1, 1888, p. 393.) Clerks are instructed in all cases in the several courts arising under the internal-revenue laws, where moneys are recovered and paid in for the United States, to pay over such moneys, including costs, to the collectors of internal revenue under the provisions of section 3216, R. S. Collectors will furnish the clerks with receipts in duplicate on Form No. 540, the original to be forwarded to the Commissioner with the clerk's quarterly report (Form 158), the duplicate to be retained by the clerk. (See circular to clerks of United States courts issued by the Attorney General Apr. 20, 1898, T. D. No. 19306, 1898; also, Instructions to attorneys, clerks, etc., by 'the Department of Justice, Apr. 1, 1904, T. D. 754; Regulations, No. 12, rev. Apr. 18, 1904, p. 21.) Digitized by Microsoft® 404 APPENDIX. Sec. 6. [Act of May 28, 1896 (29 Stat., 178), Legislative, executive, and judicial appropriation act.] That, on and after the first day of July, eighteen hundred and ninety-six, all fees and emoluments authorized by law to be paid to United States district attorneys and United States marshals shall be charged as heretofore, and shall be collected, as far as possible, and paid to the Clerk of the court having jurisdiction, and by him covered into the Treasury of the United States. Chapter 2. Duties of officers charged with receiving or disbursing public moneys — Penalties for embezzlement and for official misconduct — Proceedings against delinquent officers — Evidence — Transcripts, etc. Moneys to be deposited without deduction. Sec. 3617. The gross amount of all moneys received from whatever source for the use of the United States, except as otherwise provided in the next section^ shall be paid by the officer or agent receiving the same into the Treasury, at as early a day as practicable, without any abatement or deduction on account of salary, fees, costs, charges, expenses, or claim of any description whatever. But nothing herein shall affect any provision relating to the revenues of the Post-Office Department. The next section relates to the proceeds of sales of material. Ill Comp. Dec. 149. It seems that no express authority has been given the executive departments to sell old or disused material and supplies. Such practice appears to have grown up, however, for reasons of economy, and is apparently recognized in the provisions of sections 197 and 3618 of the Revised Statutes, which provide for the accounting by Government officers for moneys received from the sale of old material and supplies. (28 Op. Atty. Gen., 203.) Section 3619 provides that "Every officer or agent who neglects or refuses to comply with the provisions of section 3617 shall be subject to be removed from office, and to forfeit to the United States any share or part of the moneys withheld, to which he might otherwise be entitled." (15 Op. Atty. Gen., 387. 24 Int. Rev. Rec, 130; 26 id., 230.) (See sections 3210, 3216, and 3450 R. S., pp. 107, 111, 357. XVI Comp. Dec, 309.) [Extract from sundry civil appropriation act tor the fiscal year ending June 30, 1909, approved May 27, 1908 (35 Stat., 325).] After June thirtieth, nineteen hundred and eight, collectors of internal revenue shall pay daily into the Treasury of the United States, under instruc- tions of the Secretary of the Treasury, the gross amounts of all collections of whatever nature made, by authority of law, and the same shall be covered into the Treasury as internal-revenue collections. (T. D. 1373, Circular No. 725, June 5, 1908.) Duty of disbursing officers. Sec. 3620. [As amended by the act of Feb. 27, 1877 (19 Stat., 2Ifl).] It shall be the duty of every disbursing officer having any public money intrusted to him for disbursement, to deposit the same with the Treasurer or some one of the assistant treasurers of the United States, and to draw for the same only as it may be required for pay- ments to be made by him in pursuance of law and draw for the same only in favor of the persons to whom payment is made; and all transfers from the Treasurer of the United States to a disbursing officer shall be by draft or warrant on the Treasury or an assistant treasurer of Digitized by Microsoft® APPENDIX. 405 the United States. In places, however, where there is no treasurer or assistant treasurer, the Secretary of the Treasury may, when he deems it essential to the public interest, specially authorize in writing the deposit of such public money in any other public depository, or, in writing, authorize the same to be kept in any other manner, and under such rules and regulations as he may deem most safe and effectual to facilitate the payments to public creditors. See section 87 of the Criminal Code, act of March 4, 1909 (35 Stat., 1105,) page 409, providing penalty for unlawfully depositing. Checks of disbursing officers. (15 Op. Atty. Gen., 288.) Depositories to be designated by Secretary, section 3211, page 108. Regulation for the deposit of public moneys. (Dept. Cir. No. 47, Apr. 5, 1905). Public moneys and official checks of United States disbursing officers. (Dept. Cir. No. 102, Dec. 7, 1906; Dept. Cir. No. 125, Aug. 14, 1897, Keg. No. 2, revised, p. 93; Dept. Cir No. 17, Mar. 19, 1908, Reg. No. 2 revised, p. 96.) Deposit of unexpended balances of annual appropriations, etc. (Dept. Cir. No. 133, Dec. 15, 1903.) Every person having moneys ol the United States must pay to Treasurer, etc., and take receipt. Sec. 3621. [vis amended by sec. 5, act May 28, 1896 (29 Stat., 1/fi).] Every person who shall have moneys of the United States in his hands or possession, and disbursing officers having moneys in their posses- sion not required for current expenditure, shall pay the same to the Treasurer and Assistant Treasurer, or some public depositary of the United States, without delay, and in aU cases within thirty days of their receipt. And the Treasurer, the Assistant Treasurer, or the public depositary shall issue duplicate receipts for the moneys £o paid, transmitting forthwith the original to the Secretary of the Treasury, and delivering the duplicate to the depositor. The Secretary of the Treasury prescribed regulations as to "proper dispo- sition of certificates of deposit." (Dept. Cir. No. 46, July 1, 1907.) Deposit of public moneys. (Cir. No. 47, Apr. 5, 1905.) See section 91, Criminal Code, act March 4, 1909 (35 Stat. , 1105), page 410, pro- viding penalty for failure to deposit as required. _ Sec. 4. [Act of Aug. SO, 1890 (26 Stat., 371), sundry civil appropria- tion act] That hereafter all disbursing officers of the United States shall render their accounts quarterly * * * but the Secretary of the Treasury may direct any or all such accounts to be rendered more frequently when in his judgment the public interest may require. Accounts to be rendered. Sec. 3622. [As amended by sec. 12, act of July 81, 1894 (28 Stat., 209).] Every officer or agent of the United States who receives public money which he is not authorized to retain as salary, pay, or emolument, shall render his accounts monthly. Such accounts, with the vouchers necessary to the correct and prompt settlement thereof, shall be sent by mail, or otherwise, to the Bureau to which they pertain, within ten days after the expiration of each successive month, and, after exam- ination there, shall be passed to the proper accounting officer of the Treasury for settlement. Disbursing officers of the Navy shall, however, render their accounts and vouchers direct to the proper accounting officer of the Treasury. In case of the non-receipt at the Treasury, or proper Bureau, of any accounts within a reasonable and proper time thereafter, the officer whose accounts are in default shall Digitized by Microsoft® 406 APPENDIX. be required to furnish satisfactory evidence of having complied with the provisions of this section. * * * Nothing herein contained shall, however, be construed to restrain the heads of any of the Departments from requiring such other returns or reports from the officer or agent, subject to the control of such heads of Departments, as the public interest may require. Collectors of internal revenue shall render their revenue accounts quarterly. (Act May 27, 1908, 35 Stat., 325.) Collectors, acting as disbursing agents, report transactions of funds advanced to them from the several appropriations on Form 44. This report is rendered monthly, and under section 12 of the act of July 31, 1894, should be mailed or otherwise sent to the Commissioner of Internal Revenue within ten days after the end of the month to which it relates.. (Reg. No. 2, revised, p. 68.) See section 90, Criminal Code, act March 4, 1909 (35 Stat., 1105), page 410, providing penalty for failure to render accounts. The provision giving the Secretary of the Treasury power in particular cases to extend the time prescribed for the rendition of accounts does not authorize him to institute a new system of rendering accounts. (16 Op. Atty. Gen., 222.) Rendition of accounts. (19 Op. Atty. Gen., 557; 36 Int. Rev. Rec, 173.) The Dockery commission was organized by the act of March 3, 1893. The "Dockery bill" was included in the legislative, executive, and judicial appropriation Act for the fiscal year 1895. (Act of July 31, 1894, 28 Stat., 162.) The act went into effect October 1, 1894, and provided that hereafter the First Comptroller shall be known as the Comptroller of the Treasury. It abolished the office of Commissioner of Customs, Second Comptroller, and other offices, and modified the method of settlement of accounts. The act prescribes the powers and duties of the accounting officers of the Treasury Department (28 Stat., 205-211). (See Digest of the Decisions of the Comptroller of the Treasury, 1902.) Section 22 contains the following paragraph: "It shall also be the duty of the heads of the several Executive Departments and of the proper officers of other Government establishments, not within the jurisdiction of any Executive Department, to make appropriate rules and regulations to secure a proper administrative examination of all accounts sent to them, as required by section 12 of this act, before their transmission to the Auditors, and for the execution of other requirements of this act in so far as the same relate to the several departments or establishments." Regulations governing the revision, by the Comptroller of the Treasury, of accounts settled by the Auditors. (Dept. Cir. 87, Apr. 25, 1895; Treasury Bookkeeping, Dept. Cir. 38, June 17, 1907; Dept. Cir. 56, July 14, 1908.) Transmittal of accounts. Sec. 12. [Act of July 31, 1894 (# 307 Imitation wines 332S 217 Mixedflour 40 312 Oleomargarine 8 295 Opium, for smoking 39 291 Playing cards 39 343 Tobacco and snuff 3369 267 Cancellation — Commissioner and Secretary may prescribe means or in- struments for 3445, 3446 354, 355 Of permits for fermented liquors 3345 251 Cans — For exportation of distilled spirits 3287 178 Capacity of distillery — Change of 3259 158 Eighty per cent of, basis for taxation 3309 202 Reduction of 3311 206 To be ascertained by survey. 3264 164 Casks — Buying or selling, with inspection marks, after being used.. 3325 216 Capacity of, for distilled spirits 3287 178 Capacity of, for fermented liquors 3339 246 Changing, etc. , marks, stamps, or brands on 3326 216 Fraudulent use of any, having stamp, mark, etc., on 3326 216 Mark, brand, or stamp on, to be effaced at time of emptying. 3324 215 Of imported liquors, when emptied, etc 12 227 Serial number of ;---;;----,--; ,* „l° Spirits drawn into other, to be gauged and branded 6616 214 To be marked and stamped, etc 3287 178 Transporting empty, with brand on, etc 3324 215 Casualty — DpHtnirtionof sniritsbv (sec. 5, act June 7, 1906) 3221, 117,119, Destruction oi spirits oy k ^ ^ ft] ^ ^ 336 Digitized by Microsoft® 448 INDEX. Certificate — Officer making a false Of sale to be prima facie evidence of right to sell Certificate of — Cigar manufacturers Due diligence. . ." Probable cause Purchase of real estate Tobacco manufacturers Tobacco peddlers Certified checks — May be received for taxes (act of Mar. 2, 1911) Certified copy — Of list of special-tax payers to be furnished prosecuting officers Of papers on file in department of equal value as original as evidence Caution notice on — Adulterated butter Cigars Filled cheese Mixed flour Oleomargarine Tobacco and snuff Central denaturing warehouses — For denaturing alcohol, authorized Change of stamps — Commissioner of Internal Revenue may provide for without entailing additional expense on persons using same Champagne — Tax on imitations of Chancery — Bill in, to enforce lien of United States, may be directed by the Commissioner Change in distilling apparatus — May be required by Commissioner Changing — Stamps, marks, or brands on any spirits package Change of package — Of distilled spirits Of distilled spirits for export Charitable bequests — Refunding of legacy tax on (act of June 27, 1902) Checks — Duplicates of lost, how procured Certified, may be received for taxes Chemist — Appointment of, salary, etc Cheroots and cigarettes — Held to be cigars (see Cigars) How to be put up and stamped Imported Stamps on empty boxes to be destroyed Tax on Cherries — Brandy made from, may be exempt from certain provisions. Chief clerk- Designated by Commissioner Duties of Child— Of deceased special-tax payer may carry on the business... Chloroform — Denatured alcohol may be used in manufacture of Cider- See notes to paragraph 4 Cigars and cigarettes — Abandoned, condemned, etc., may be destroyed Absence of stamp evidence of nonpayment of tax Digitized by Microsoft® Section. Page. 3169 81 3194 100 3387 276 3218 113 970, 989 398 3194, 3198 100, 103 3355 257 3383 272 3240 882, 886 4 3393 8 40 7 3364 3446 3328 3207 3270 3326 3323 3330a 3646, 3647 14 3387 3392 3392 3406 3394, 3396 3255 320 173, 174 3241 1 3244 3369 3398 108 129 391, 413 301 282 307 312 295 264 241 355 217 105 168 216 214 221 318 429 108 298 279 281 281 289 283, 285 155 49 49 130 241 278 267 286 INDEX. 449 Cigars and cigarettes — Continued. Section. Page. Additional tax on 3394 282 Cigar boxes to be marked or branded 3397 285 Cigarettes and cheroots held to be 3387 279 Dealers in fl8 3244 278 Dealers in materials used for, to make sworn statement when demanded 3391 281 Dealers in, sale of , by 3392 281 Destruction of tobacco, snuff, and cigars 3369 267 Drawback on, exported 3386 276 Empty tobacco and cigar boxes, destruction of stamps on. . 3376, 3406 270, 289 Exportation of 3385 273 How to be packed 3392 281 Imported, internal-revenue tax to be paid in addition to du- ties 3402 287 Imported, to be stamped and bdxed 3402 287 Internal-revenue officers not to be interested in manufacture of 3168 80 Label on boxes 3393 282 Manufactured on shares, commissions, etc 3399 287 Packages of, not to contain any lottery ticket or indecent picture 3394 283 Peddlers of If 11 3244, 271, 3381-3384 272, 273 Rules for inspection of, may be made by Commissioner 3396 285 Stamps on, when f oref eited or sold under distraint 3369, 3395 267, 285 Stamps, requirements in regard to affixing and canceling, etc 3369 267 Tax on 3394 282 Taxes on, extended to those produced anywhere in the United States 3448 356 Manufacturers of — Assessments for deficiencies 3371 268 Certificates 3387 279 Definition, statement bond, records, books, etc 3387, 3390 279, 280 Keeping up sign 3388 280 Record of, by collectors 3389 280 Returns 3390 280 Penalties and forfeitures — Absence of stamp on cigars cause of forfeiture 3398 286 Cigars not packed as prescribed by law; falsely branding or stamping the same . - 3392 281 Customs officer permitting imported cigars to pass out of his custody without payment of internal-revenue tax and having stamps affixed, etc ..... 3402 287 Failing to destroy stamps on empty cigar boxes or selling, giving away, accepting or using same fraudulently. ..... 3406 289 For cigar manufacturer refusing or neglecting to deliver inventory, keep the account, or furnish the abstract. .... 3390 280 For manufacturing cigars without giving bond or obtaining certificate 3387 279 Fornotkeeping up sign - - - 3388 280 Frauds in manufacture of cigars on commission or shares (forfeiture) - 3399 287 Manufacturers carrying on business in violation of law. .... 3400 287 Manufacturers of tobacco or cigars omitting things required or doing things forbidden where . there is no specific penalty imposed by any other section 3456 361 Neglecting to affix required label to cigars or removing label therefrom 3393 282 Purchasing cigars not branded or stamped.. 3404 289 Removing cigars without properly boxing, stamping or branding, using false stamps, and other offenses relating to boxing and stamping cigars (forfeiture) '3397 285 Removing or selling cigars unlawfully, making false entries, or using false stamps (forfeiture) 3400 287 72170°— ii 29 Digitized by Microsoft® 3406 3393 3392 3406 289 282 281 289 3387 3244 3244 279 278 278 3394 3394 282 282 450 INDEX. Cigars and cigarettes — Continued. Section. Page. Penalties and forfeitures — Continued. Selling cigars falsely represented to have been made and tax paid before July 20, 1868 3401 287 Selling imported cigars not packed and stamped aa required bylaw 3403 289 Cigar boxes — Destruction- of emptied stamped cigar box 3406 289 Giving away, accepting, selling, buying, or using empty stamped, penalty Labels on cigar boxes Number of cigars in Stamps on, emptied, to be destroyed Cigar makers — Collector to issue a certificate as to number Definition of To be registered with collector Cigarettes (see also Cigars) — Packages not to contain any lottery ticket or indecent picture Tax on Circuit courts. (See United States Circuit and District Courts.) Circuit courts of appeals 395 Circulating notes — Other than those of national banks, tax on 3412, 3413, [3413a] 349, 350 Cisterns — Alcohol may be drawn from, by pipe line for denaturation. . Commissioner may require fastenings to be put on Receiving, in distilleries Cistern room — Custody of How constructed Civil-service law See notes Claims — Assignment of For abatement or refund of taxes (see Abatement) For credit in suits For goods seized liable to forfeiture For redemption of stamps For remission of forfeiture or for proceeds Making false Officer or person connected with departments not to act as agent, etc., in prosecuting Prosecution of, by persons formerly in departments Subpoenas for persons to testify respecting To be adjusted in Treasury Department Unlawfully using papers relating to Clearance certificate — In exportation of spirits In exportation of tobacco, etc Clerks of courts — To keep indices of judgment records . . .(act Aug. 1, 1888) Penalty for failing to deposit moneys Reports of Clerks or employees — Acting as attorneys or agents in prosecution of claims (penalty) : -- 5498 437 After leaving departments prohibited from prosecuting claims in them for two years 190 437 Departmental, not to be transferred until after service of threeyears (act June 22, 1906) 5 433 Employed outside of District of Columbia not to be detailed to District of Columbia (act June 22, 1906) 6 433 Employment of, regulated (act Aug. 5, 1882) 3 432 Digitized by Microsoft® 3 241 3270 168 3267 166 3267 167 3267 166 438 3 50 3477 428 3220 114 951, 957 424, 414 3460 364 3426 331 3461 364 5438 420 5498 437 190 437 184 423 236 422 5454 419 3330a 222 3385a 275 2 394 5504 412 797 403 INDEX. 451 Clerks or employees — Continued. Section. Page. Hours of work and absences (act Mar. 15, 1898) 7 51 In Treasury, restriction as to engaging in certain trades andbusiness 244 436 No allowances for extra services 1764, 1765 435 Number employed in collection of internal revenue not to be increased 74 Number employed in Internal-Revenue Office 49 Preference of soldiers in appointments 1754 431 Prohibited from giving to or receiving from officers money for political purposes 1784 438 Prohibited from making presents to superiors 1784 438 Receiving compensation for services in cases in depart- ments (penalty) 1782 436 Restriction on payment for services; oath required 1790, 2693 437, 438 Sent away as witnesses, expenses 850 436 Temporary and additional 53, 328 Transfer of, duties and preference of soldiers and sailors' widows (act Aug. 15, 1876) 3 431 "Voluntary service prohibited (act May 1, 1884) 3679 426, 434 Incapacitated 3 50 Closing out business — Retail liquor dealers not liable as wholesale liquor dealers for TJ5 3244 140 Clubs — See notes to paragraph 4 3244 136 C. O. D. shipments — See notes to paragraph 4 3244 137 Coin — Receivable in payment of dues 3473 108 Collection districts — Collector to be appointed for each 3142 59 List of 37 Number of 3141,3142 58,59 President may establish 3141 58 Collections — Monthly statement of, to be made 3212 109 Secretary may extend time for payment 3210 107 To be paid daily into Treasury 3210 108 Collectors of customs, duties of, relative to — Exportation of tobacco, etc [3385a] 275 Exportation of spirits 3329, 3330 217, 220, [3330a] 221 Imported cigars 3402 287 Imported oleomargarine 10 296 Imported tobacco and snuff 3377 270 Collectors of customs — Certificate of, in case of exportation of tobacco for draw- back 3386 276 Collectors of internal revenue, duties and powers as to — Accounts — • Accountability for stamps for distilled spirits 3314 208 Adjustment of accounts of 3146, 3147 63 Duties and liabilities of, as disbursing officers and receivers of public money 3620-3639, 3643 404, 408 Failing to account 3217 112 Lists to be transferred to successor 3219 113 To render bonded account monthly 3444 354 To render revenue accounts quarterly . . . (act May 27, 1908) 406 To render statement of entire amount of fees, commissions, etc 3158 74 To report collections 3212 109 Transmission of list to district where person liable resides or has property, etc 3209 107 What to be charged and credited with 3218 113 To act as disbursing agents 3144 62 Digitized by Microsoft® 452 INDEX. Collectors of internal revenue, duties and powers as to — Section. Page. Continued. Appointment, supervision of employees, etc. — Appointment of 3142 59 Bonds 3143 59 May appoint deputies, etc [3148] 63 Not to discharge duties of other collectors 3166 79 Proceedings against delinquent 3217, 112, 3624, 3625, 3633 407, 408 Responsibility for deputies [3148] 64 Salary and commissions of [3148] 63 Salary and commissions of, none unless confirmed by Senate (act Mar. 1, 1879) 13 65 Salary and commissions of, none without certificate of com- missioner . 3147 63 Suspension of [3163a] 76 To cause deputies to canvass districts 3172 86 To report delinquencies of officers 3163 76 Limitation as to number of appointmentsby.(actJuly 7, 1884) 74 Vacancy in office of 3149 66 Collections — Collections to be paid into Treasury daily 3210 107 May accept certified checks for taxes (act Mar. 2, 1911) 108 May extend time for special excise tax returns of corpora- tions 38 325 Receipt in lieu of stamp not to be issued 3183 94 To collect amount due for export stamps 3314 208 To collect tax on bay rum, etc., from Porto Rico 32516 152 To distrain for nonpayment of tax 3185, 3187, 3188 96, 97, 98 To collect taxes 3183 94 To give demand notice to pay taxes 3184, 3185 95, 96 To give receipts for taxes not represented by stamps 3183a 95 Distilled spirits — May accept distillers' bond in lieu of consent in certain cases 3262 162 May designate temporary storekeeper 3155 72 May enter distilleries and vinegar establishment, break open doors and windows 3276 170 May refuse to approve distillers' bond 3260 159 Plan of distillery to be made under direction of collector. . 3263 163 To collect tax on spirits in warehouse by distraint in certain cases 3293 182 To have charge of keys of distillery locks 3267 167 To have control of distillery warehouse 3271 168 To make survey of distillery 3264 164 To obliterate tax-paid stamps on spirits sold by order of court. . . . . 3334 226 To sign distillery-warehouse stamps 3287 178 To sign stamps for rectified spirits 3320 213 To sign tax -paid stamps 3295 196 To supervise duties of gaugers 3156 72 Fermented liquors — To keep on hand two months' supply of stamp s for fer- mented li quors ; account of stamps sold 3341 249 Oleomargarine and butter — To approve bond of manufacturer of oleomargarine 5 294 Tobacco and cigars — May furnish stamps for tobacco, snuff, and cigars sold under distraint To approve tobacco or snuff manufacturer's bonds To issue permit for removal of tobacco, snuff, and cigars for exportation To keep account of cigar stamps sold To keep on hand two months' supply of cigar stamps To keep record of and number of cigar manufacturers To keep three months' supply of tobacco and snuff stamps. To record and number manufacturers of tobacco and snuff. Digitized by Microsoft® 3369 267 3355 257 3385 273 3395 285 3395 285 3389 280 3369 267 3357 259 INDEX. 453 Collectors of internal revenue, duties and powers as to — Section. Page. Continued. Property of taxpayers, seizure, sale of, etc. — Examination of place where articles subject to tax are kept or made may be made 3177 90 May enter, in daytime, premises where taxable articles are kept 3177 90 May enter premises and make list or returns and add pen- alty 3176,3177 89, 90 May seize and sell lands in other district in State 3200 104 May seize and 6ell real estate 3196 101 Proceedings by collector, in case of seizure of property of value of $500 or less 3460 363 To account for locks and seals 3310 205 To keep conspicuously in office list of special-tax payers. . . 3240 129 To seize property found in possession in violation of revenue laws 3453 359 Collectors of internal revenue, miscellaneous duties and powers — As superintendents of export and drawback 3161, 3162 75 Duties of collectors in using stamps 3313 207 How to return lists of property of nonresident owners liable to taxation 3180 91 May administer oaths 3165 78 May enter other district and make examination 3173 87 May purchase property sold on distraint for United States.. 3192 99 May remit penalty upon payment of tax on unstamped in- struments, when 13 338 May sell property purchased at distraint sale for United States, under regulations, etc 3192 99 May summon persons to be examined 3163a — note, 3173 77, 87 Prohibited from engaging in certain business 1788, 1789 412 To furnish stamps for playing cards and keep supply of stamps on hand equal to two months' sale of cards 41 344 To keep record of sales 3203 104 To keep register of manufacturers of playing cards 40 344 To prosecute for recovery of sums forfeited 3213 109 To record redemption of real estate 3204 105 To report violations of law to district attorneys 3164 77 To see that the laws are executed 3163 75 To transmit special excise-tax returns to commissioner 38 - 324 Collectors of internal revenue, penalties for — Being interested in manufacture of tobacco, spirits, or fer- mented liquors - - 3168 80 Collecting special tax from rectifier within 600 feet of dis- tillery 3244 135 Divulging operations of manufacturers 3167 79 Failing to make reports 1780, 3169 412, 81 Issuing stamps before payment [3169a] 82 Issuing stamps for distilled spirits to other persons than as provided by law 3316 209 Commissioner of Internal Revenue, powers and duties as to — Appointments, salaries, and supervision of officers — Appointment and salary of commissioner 319 45 General duties of commissioner 321 45 May approve gauger's bond 3156 72 May approve storekeeper's bond 3153 69 May assign agents to duty under direction of other officers. . 3152 67 May prescribe gauger's fees 3157 73 May recommend that duties of storekeeper and gauger be imposed on one person (3153a^ 69 Power to suspend collectors (3163a) 76 To assign storekeepers to warehouses 3154 71 To certify to comptroller fact of due diligence by collector. 3218 113 To certify that all reports of collectors have been received- . 3147 63 To detail deputy collector for special duty in other districts . 3149a 66 Digitized by Microsoft® 454 INDEX. Commissioner of Internal Revenue, powers and duties Section. Page. as to — Continued. Appointments, salaries, and supervision of officers — Cont'd. To designate a head of division as chief clerk 320 49 To determine compensation of storekeepers 3153 69 To employ agents 3152 67 To employ chemists and microscopists . . (act Aug. 2, 1886) 14 298 To notify President when he suspends a collector (3163a) 76 To prescribe amount of collector's bond, etc 3143 59 To prescribe notice relative to revoking appointment of deputy collectors (3148) 64 To recommend allowances for collectors and deputy col- lectors (3148) 63 To transfer storekeepers and gaugers 3163 76 Assessments and collections — For export stamps issued 3314 208 May make correction of incomplete or imperfect lists 3182 92 Of stamp taxes within two years 3437 337 Of taxes and penalties 3176, 3182 89, 92 On distilleries for deficiencies and excess of materials used. 3309 202 On fruit brandy removed without compliance with law (sec. 8, Act Mar. 3, 1877) 8 194 On oleomargarine removed without being stamped (sec. 9, Act Aug. 2, 1886) 9 296 On property sold under distraint 3191 99 On spirits removed without deposit in warehouse 3253 155 On tobacco, snuff, and cigars removed without being stamped. 3371 268 To authorize proceedings before suit for taxes is com- menced 3214 111 To estimate for expenses of collecting, etc 3671 47 To prescribe form of return of persons liable to tax 3173 86 To prescribe manner of giving notice that tax is due 3185 96 Cigars and tobacco — May prescribe entries to be made in books of retail dealers in leaf tobacco 35 261 Prescribe form of book to be kept by cigar manufacturers. . 3390 280 Prescribe form of book to be kept by tobacco manufacturers 3358 259 Prescribe form of cigar manufacturer's inventory 3390 280 Prescribe form of tobacco manufacturer's inventory 3358 259 Prepare stamps for payment of tax on tobacco and snuff, etc . 3369 267 Prepare stamps for tax on cigars 3395 285 Distilled spirits — May accept bonds in lieu of consent of owner of land on which distillery is situated ' 3262 163 May discontinue unsafe or unfit warehouse 3272 169 May exempt distillers of brandy from apples, etc., from cer- tain provisions; also certain small distilleries 3255, [3255a] 155, 156 May prescribe manner of appraising land on which are dis- tillery buildings and apparatus 3262 163 May require bond for additional tax and prescribe rules for reentry for deposit and for new bond [3293a] 183, 184 May require change of distilling apparatus 3270 168 May require fastenings, locks or seals 3270 168 May require new bond for warehoused spirits 3293 182 Procure stamps for distilled spirits 3312 207 To approve warehouse 3271 168 To designate officers to make surveys 3264 164 To dispose of forfeited spirits 3450 358 To prescribe form of distiller's book 3303 200 To prescribe form of distiller's bond 3260 159 To prescribe form of distiller's or rectifier's notice 3259 158 To prescribe form of rectifier's book 3318 211 To prescribe form of rectifier's notice of intention to rectify . [3317a] 210 To prescribe form of rectifier's return 3317 210 To prescribe form of storekeeper's book 3302 200 To prescribe form of wholesale liquor dealers' book 3318 211 Digitized by Microsoft® 3287 178 3330 220 3267 167 ' 38 320 321 45 3166 79 3229 123 INDEX. 455 Commissioner of Internal Revenue, powers and duties Section. Page. as to — Continued. Distilled spirits — Continued. To prescribe hydrometer and gauging instruments 3249 149 To prescribe manner of constructing receiving cisterns at distilleries 3267 166 To prescribe manner of marking casks removed to ware- house To prescribe manner of marking spirits intended for export. . To provide locks and seals Fermented liquors — Procure stamps, etc., for fermented liquors 3341 249 Miscellaneous — For duties and powers of commissioner relative to corpora- tion excise tax, see under head of corporations (act Aua. 5, 1909) . ... Make contract for printing May authorize officers to make seizures May compromise cases, with advice of the Secretary May make allowance for stamps spoiled, destroyed, or ren- dered useless 3426 331 May make change, etc., in stamps and prescribe instru- ments for attaching and canceling, etc.; also marks and labels for 3445, 3446 354, 355 May remit and refund taxes erroneously assessed 3220 114 May repay to officers money recovered for acts in perform- ance of official duties 3220 114 Playing cards, to estimate and within two years to assess tax unpaid thereon, removed by manufacturer without proper stamp 47 347 Playing cards, to prescribe and make imperative on manu- facturers method of affixing and canceling stamps on 39 343 Playing cards, to prescribe regulations for removal of, from place of manufacture for export Prepare stamps for opium Prepare stamps for playing cards Procure special-tax stamps Procure stamps for compound liquors, imitation wines, etc.. To direct proceedings in chancery to enforce lien on real estate 3207 105 To have charge of, and sell real estate acquired under in- ternal-revenue laws 3208 106 To make detailed statement to Congress of expenditures for detecting and punishing violators of revenue law [3463a] 366 To make detailed statement to Congress of miscellaneous expenditures [3463a] 366 To pay for detecting and punishing violations of revenue law 3463 365 To make monthly reports to Secretary of condition of public business (act Mar. 15, 1898) 7 55 Oleomargarine and butter — To decide what substances are taxable as oleomargarine 14 298 To decide whether substances made in imitation of butter are injurious to health (Act Aug. 2, 1886) Prescribe manner in which oleomargarine shall be branded. . Commissioner of Internal Revenue, to make regulations relative to — Cigars an'd Tobacco — ■ Destruction of tobacco, snuff, and cigars Drawback on tobacco, snuff, and cigars Exportation of tobacco, etc 3385 [3385a] Imported scraps, cuttings, etc Inspection of cigars, etc . , and collecting tax Leaf-tobacco dealers' books Packing tobacco, snuff, and cigars in wood, metal, paper, etc. Prescribing packages for leaf tobacco as manufactured to- bacco when retailed by manufacturers 69 257 Digitized by Microsoft® 43 346 39 291 39 343 3238 128 3328 217 14 298 6 294 3369 267 3386 276 585a] 273, 276 3377 271 3396 285 3360 261 3362 263 456 INDEX. Commissioner of Internal Revenue, to make regulations Section. relative to — Continued. Cigars and tobacco — Continued. Relative to retail dealers in leaf tobacco 35 Sale of refuse scraps and sweepings 3362 Stamps for tobacco, snuff, and cigars sold under distraint 3369 Distilled spirits — Affixing, canceling and varnishing stamps on spirits 3322 Allowance for leakage [33306,34336] Bottling spirits in bond (act Mar. 3, 1897) 2 Carrying into effect act relative to fruit brandy 10 Collection of tax on bay rum, etc., from Porto Rico 32516 Denatured alcohol 1, 2, 3, 4 Depositing fruit brandy in warehouse 1 Entering spirits for deposit in warehouse 3293 Fortification of pure sweet wine 45 Gauger's returns 3291 Gauging and marking spirits 3249 Gauging, marking, and oranding fruit brandy 2 Restamping spirits when stamps have been lost or destroyed. 3315 Special bonded warehouses for fruit brandy 1 Stamping and branding packages filled on premises of whole- sale liquor dealer 3323 Stamping and branding rectified spirits 3320 Stamping and branding wholesale liquor dealers' packages. . 3323 Stamping imported liquors 11 Stamps for spirits sold on distraint 3334 Suspensions caused by unavoidable accident 3310 Use of distillery warehouses by successors [3271a] Use of wine spirits free of tax by grape-brandy distillers in preparing pure sweet wine, and may allow distiller credit for wine spirits thus used 42 Withdrawal of spirits by manufacturers [3433a] Withdrawal of wine spirits from special bonded warehouse. . 45 Fermented liquors — Manner of canceling brewers' permits 3345 Manner of disposing of and accounting for stamps canceled for tax on beer removed through pipe or conduit for bot- tling.. 3354 Purchasing fermented liquors by on e brewer from another . . . 3349 Removal of fermented liquors for storage without stamps 3345 Sale of unf ermented worts 3351 Transfer of business in case of accident to brewery 3350 Miscellaneous — Any alteration of law 3447 Carrying into effect the provisions relating to the manufac- ture and sale of mixed flour 47,49 District attorneys and marshals 3215 Drawback on stills exported 10 Fees in cases of distraint 3206 Filled cheese 18 Governing manufacturers of smoking opium 39 List of special taxpayers in collector's office 3240 Manner of affixing and canceling stamps 3322, 3328, 3369, 3446 Providing mode or time of assessing or collecting taxes 3447 Registry of deaths and removal of persons who have paid special tax 3241 Saleof property purchased by United States under distraint. 3192 Returns of persons liable to tax 3173 Special-tax stamps 3238 Use of special-tax stamps on railroad trains and steamboats . . [3233°] Vinegar factories (act June 14, 1879) Oleomargarine and adulterated butter — Books and returns of wholesale dealers in oleomargarine, adulterated butter, or renovated butter 6 Carrying oleomargarine law into effect 20 Page. 261 263 267 214 223, 336 236 195 152 239, 240 192 182 230 1S1 149 192 209 192 214 213 214 227 226 206 169 228 336 230 251 254 253 251 253 253 356 313, 314 111 134 105 308 291 129 214, 217 267, 355 355 130 99 86 128 126 177 304 300 Digitized by Microsoft® INDEX. 457 Commissioner of Internal Revenue, to make regulations Section. Page. relative to — Continued. Oleomargarine and adulterated butter — Continued. Exportation of oleomargarine 16 298 Manufacturer's records, marking, etc., of adulterated butter or renovated butter , (act May 9, 1902) 4 300 Commissions — Internal-revenue officer to make statement of 3158 74 Of collectors 3147,3148,3314 63,208 Of delinquents accountable for public money 3624 407 Company — Word as used in reference to corporations, notes If 5 3140 58 Compensation — Chemist . 49 Clerks 49 Collectors ■ [3148] 63 Commissioner 319 45 Deputy collectors [3148] 3150 63, 67 Deputy collectors acting as collector 3150 67 Deputy commissioner 322 48 Gaugers 3157 73 Gaugers at wineries 3 233 Heads of division 49 No additional, to collectors acting as disbursing agents 3144 62 None for office not authorized 1760 433 None to officers performing duties of other officers 1764 435 Not available for persons incapacitated . (act June 17, 1910) 3 54 No perquisites allowed [1765a] 435 None for extra services 1765 435 None to certain officers until they take special oath 1790 437 None to collectors failing to report 3147 63 None to collectors, unless confirmed by Senate, except in certain cases 13 65 None to persons in arrears to United States 1766 424 Not to be paid for two offices, when, etc 1763 434 Revenue agents 3152 67 Solicitor 349 48 Storekeepers 3153 69 Superintendent of exports 3161 75 Competency — Of witness to be determined by State laws 858 389 Compound liquors — Manufacture of is rectification 3244 134 Tax on 3328 217 Compromise — By district attorney or marshal, penalty 3169 81 By internal -revenue officer, except as authorized, penalty. . 3169 81 Commissioner of Internal Revenue may make, m certain cases - 3229 123 Of claims and cases after judgment 3469 399 Comptroller of Treasury — Commissioner to certify to, as to due diligence of collectors . . 3218 113 Successor of First Comptroller notes, 3217 112 To institute suits against collectors 3624 407 To report to Solicitor of Treasury delinquencies of collectors in rendering accounts 3217 112 Consent — Of mortgagee, owner, judgment creditor, etc., to be filed m certain cases ; - 3262 162 Of surviving principal and sureties interested, under certain conditions.. [3271a] 169 Consolidation — Of two or more charges in one indictment 1024 388 Conspiracy — Of revenue officers, etc., to defraud 3169 81 To defraud United States 3169, 5440 81, 418 To prevent persons from accepting office 5518 417 Digitized by Microsoft® 458 INDEX. Construction of — Distillery Contagious diseases — In immediate family of employee (act Mar. 15, 1898) Containers — Forfeited when contents forfeited Continuance — Of suits lawful, when Contingent interests not vested — Refund of legacy tax on (act July 1, 1902) Contracts — Not to involve the Government in payment of any money not already appropriated Payments on, not to exceed value of services rendered or articles delivered Unauthorized, prohibited Contributions — For political purposes Conversion — Of public money Copartnership — One special tax for any number of persons doing business in. Copies. (See Certified copies.) Of surety company's charter to be filed with Secretary Corporations — Included in word "persons" Special excise tax on (act of Aug. 5, 1909) Assessments — Notification of, on or before June 1 If 5. Payable on or before June 30 f 5. Assessment on insurance companies — Guaranty or reserve funds, how treated U 2. Appropriations for expenses (act June 17, 1910) . Certain associations exempt — Agricultural If 1 . Building and loan associations If 1 . Fraternal beneficiary societies If 1. Labor organizations If 1 . Religious, charitable, or educational If 1. Collector — May allow further time to make return 1f 5. To transmit returns to commissioner if 3. Commissioner may — Add 50 per cent to tax If 5 Amend return 14 Direct examination of books If 4 . Employ agents, clerks, etc (act June 25, 1910). Invoke aid of court If 4. Make assessments If 5. Make return If 4 Require further information If 4 Date — Act to take effect If 3 Of assessment of tax If 5 Of payment of tax If 5 Foreign — Deductions in case of If 2, 3 . General laws made applicable 1f 8 Information not to be divulged If 7 Interest — Allowed as deduction If 2 On unpaid tax If 5. Jurisdiction — Summons to appear and produce books. |f 8. Net income — Deductions from gross income allowed IT 2, 3 Depreciation If 2 Section. 3269 Page. 167 7 52 3457 362 3231 124 318 3679 3648 3732 5496 3234 3140 38 426 428 427 438 410 126 369 58 320 325 325 322 327 320 320 320 320 320 325 324 325 325 324 328 325 325 325 324 322 325 325 321, 322 326 326 321 326 326 321-2 321 Digitized by Microsoft® INDEX. Corporations — Continued . Special excise tax on — Continued. Net income — Continued. Dividends upon stock of other corporations If 2. How ascertained If 2 Interest on bonded indebtedness if 2 Losses not compensated by insurance If 2 Necessary expenses If 2 Taxes, State or Federal If 2 Officers — Not to divulge information. . 1f 7 Penalties — Divulging information 1f 7 Fifty per cent If 5 Five per cent { 5 Making false or fraudulent return \ 8 Neglect or refusal to make return \ 8 One hundred per cent If 5 President — To approve regulations (Act June 17, 1910) Give orders governing publicity of returns (Act June 17, 1910) May give special direction 1f 7 Proceedings — To have approval of Secretary of Treasury 1f 4 Publicity of returns (Act June 17, 1910) Regulations — As to inspection of return (Act June 17, 1910) To be prescribed relative to returns If 3 Rent of quarters (Act June 17, 1910) Returns — Commissioner to make, in certain cases If 4 Disposition of If 6 Inspection of (Act June 17, 1910) Publicity of (ActJunel7, 1910) 1f 6. To be filed with commissioner if 6 To be made for business of calendar year if 3 To be made on or before Mar. 1 If 3 To be made to collector 13 To be on form prescribed If 3 To be verified by principal officer and treasurer if 3 To which collector made if 3 What shall contain If 3 When false or fraudulent If 5. When incorrect If 4 Revenue agent — Powers of 11 4 To examine books U 4 Tax on -. If 1- Words "company," "association," when used with refer- ence to, embrace successors and assigns Costs — No abatement on account of Of levy under distraint to be included Of seizure before sale Recovered in suits to be paid to collectors United States not subject to, in suits brought upon infor- mation of others than collector, etc United States to pay, when When paid by defendant Counsel — Employment of Counterfeiting — Bid, proposal, guaranty, official bond, public record, etc., for purpose of defrauding United States Imitation wine or compound liquor stamps Obligations of United States, including stamps Stamps, etc., for ferme^io^r^ ^ . . . . ft@ Section. 3210 3188 3193 3216 969, 3214 1001, 3220 974 189, 364 459 Page. 321 321 321 321 321 321 326 326 325 325 326 326 325 328 328 326 325 328 328 323 328 324 326 328 328, 326 326 322 322 323 323 322 323 323 325 324 324 324 320 58 107 98 100 111 392, 111 397, 114 392 400 5418, 5479 420 3328 217 5413, 5414 420 3346 252 460 INDEX. Counterfeiting — Continued. Section. Page. Stamps for spirits bottled in bond 7 238 Stamps for distilled spirits 3328 217 County — Includes parish 2 58 Credits. (See Set Off.) Crimes and offenses. (See Penalties.) Currants — Grown in the United States, wine made from 3328 217 Custody — Of goods subject to tax for fraudulent sale thereof 3452 359 D. Dealers in leaf tobacco — Books 3360 261 Definition 260 Render statement of sales 3359, 3391 261-281 To sell only to certain specified classes of persons 3244 260 Dealers in liquors. (See Wholesale and retail.) Death — Of person having paid special tax 3241 130 Debt- Contracted through sale of articles with intent to evade tax void 3454 360 Due United States, to be withheld in paying judgments or allowed claims (act of Mar. 3, 1875) 424 Due the United States to have priority 3466 425 Deductions — Of commissions from delinquents accountable for public money 3624 407 Deed— Of real estate sold for taxes 3198, 3199 103, 104 Subject to tax not properly stamped when issued, how validated Unstamped not to be recorded Unstamped not valid as evidence Definition of — Adulterated butter (act May 9, 1902) . Brewers U 1 Cheese (act June 6, 1896) Cigar maker Cigars and cigarettes Dealer in leaf tobacco Distilled spirits Distiller Fermented liquors Filled cheese (act June 6, Manufactured tobacco Manufacturer of cigars Manufacturer of tobacco Manufacturer of adulterated, process, or renovated butter (act May 9, 1902) Manufacturer of filled cheese (act June 6, 1896) Manufacturer of oleomargarine (act May 9, 1902) Manufacturer of stills U 2 Mixed flour (act June 13, 1898). Oleomargarine (act May 9, 1902) Peddler of tobacco Proof spirits Pure sweet wine Rectifiers If 3 Retail dealers in — Adulterated butter (act May 9, 1902) Distilled spirits If 4 3244, 3248 Fermented liquors If 5 Filled cheese (act June 6, 1896) Digitized by Microsoft® 13, 3422 338, 329 15 340 14 340 300 3244 133 1 305 3244 278 3394 282 3244 278 3248 149 3247 149 3339 246 2 305 69 256 3244 278 69 256 ) 4 143 3 144 3 141 ; 3244 133 310 2 293 .3244 271 3249 149 43 229 3244 134 4 143 3244, 3248 136, 149 3244 139 3 144 INDEX. 461 Definition of — Continued. Section. Retail dealers in — Continued. Leaf tobacco Liquors ^4 Oleomargarine (act Aug. 2, 1886) Wholesale dealers in — Adulterated butter (act May 9, 1903) Distilled spirits * ^[4 Fermented liquors ^ 5 Pilled cheese (act June 6, 1896) Liquors ^[4 Oleomargarine (act Aug. 2, 1886) Wine spirits Definitions — Of words as used in Revised Statutes Of word "Persons" Of word "State" Of words ' ' Obligation or other security of the United States " Demand notice — For taxes 3184,3185 Denatured alcohol (act June 7, 1906) Amendment to the law (act Mar. 2, 1907) Bonds required Books to be kept Central denaturing bonded warehouses Cisterns or tanks may be used Denaturing materials Exemptions allowed in case of small distilleries Forfeiture Not to be recovered for beverage purposes Not to be used in manufacture of liquid medicinal prepara- tions Penalties for violation Regulations to be prescribed Rum may be withdrawn for denaturation Special warehouses Tank cars may be used for transportation of Time act took effect Transportation from bonded warehouses Use of recovered spirits allowed when redenatured Uses for which alcohol may be denatured Use of, in manufacture of ether, etc Withdrawal from bond tax free Denomination of — Packages of tobacco and snuff Stamps for cigars and cigarettes Depositories — To be designated by the Secretary for the safe-keeping of money 3211, 3620 Deposits — Of gross amounts collected to be made daily (act May 27, 1908) Of spirits in warehouse Deputy collectors — Authority of ' ; Bond of, available to legal representatives and sureties of collector - Collector authorized to appoint Collector responsible for Compensation, bonds, etc 3148 Compensation of, while acting as collector during vacancy. . Detailed for special duty in other districts, how paid Duties of, relating to returns Duty of, with respect to taxable property of nonresident. . . May administer oaths May be designated by collector to make survey of distillery. Page. 3244 260 3244 136 3 142 4 143 3244 136 3244 140 3 144 3244 136 3 142 43 229 1-5 58 3140 58 3140 58 147 420 3184, 3185 95,96 239 1 .240 1 239, 241 1 - 239 2 ...241 3 241 1 239 4 • -241 2 .240 2 240 2 240 2 240 1 239 1 241 1 239 3 241 5 242 3 241 2 240 1 239 1 241 1 239 3362 263 3394 282 108, 405 3211 107 3293 181 3148 64 3149 66 3148 63 3148 64 3149 63,66 3150 67 3149a 66 317; 86 3180 92 3165 78 3264 164 Digitized by Microsoft® 462 INDEX. Deputy collectors — Continued. Section. Page. May be authorized to levy distraint 3188 98 May enter building where articles subject to tax are kept. . 3177 90 Not officers within meaning of section 1765 notes, 1765 435 Not to disclose operations, style or apparatus of manufac- turers 3167 79 To be stationed in Porto Rico (act June 29, 1906) 375 To canvass district 3172 86 To give receipts for all sums collected, except in case of stamps 3183 94 To return statement of sales of land to collector 3203 104 To serve summons 3174 88 To transmit notice of distiller or rectifier to collector 3259 158 When to act as collector 3149 66 When to make returns 3176 89 Deputy commissioner of internal revenue — Appointment of 322 48 Duties of, salary, etc 323 48 Deputy marshals — Not officers within meaning of section 1765 notes, 1765 435 Destruction of — Empty cigar boxes with stamps thereon 3406 289 Empty oleomargarine packages 13 297 Internal-revenue locks and seals 3268 167 Property, to prevent seizure 65 415 Public records 5403, 5408 418 Spirits 358 Spirits by accident (sec. 5, act June 7, 1906), 3221 234, 117 Spirits in process of manufacture [3309a] 204 Stills 3332 224 Tobacco, snuff, and cigars abandoned, condemned, or forfeited 3369 267 Useless papers 430 Detection — Of persons violating the internal-revenue laws, commis- sioner may pay for 3463 365 Detention — Of spirits on suspicion 48 hours 3298 198 Disability — Of collector 3149 66 Disbursing agents — Bonds of 3144 62 Collectors to act as 3144 62 Disbursing officers — Duties of 3620, 3621, 3622, 3623, 3643 404, 405, 407, 409 Disclosure — Of official information 3167 79 Discontinuance — Of prosecution under section 3257 not allowed except under certain conditions 3230 124 Between distillery and rectifying establishment. 3244, 3259, 3266, 3280 135, 158, "166, 173 Between vinegar factory and distillery or rectifying house. . 3282 176 Distilled spirits — Abatement or refunding of tax on, destroyed by accidental fire, etc 5, 3221, 3223, [3309a] 233,117, 119, 204 Accountability of collectors for stamps for 3314 208 Affixing and cancellation of stamps for 3322 214 Allowance for leakage [3294a, 33306, 34336] 185, 223, 336 Allowance for loss in warehouse by fire 3221 117 Allowance for stamps spoiled 3426 331 Assessment for deficiencies in production 3309, [3309a] 202, 204 Digitized by Microsoft® Section. Page. ) 3253 155 3333 225 3287 178 3309 203 3248 149 3298 198 3450 357 3287 178 3323 214 3293 181 3294 185 3289, 3320 180, 213 3251 150 3250 150 3320 213 189 3289 180 3249 149 223, [33306] 119, 223 INDEX 463 Distilled spirits— Continued. Assessment of tax on, removed without deposit in warehouse Burden of proof in case of seizure of Capacity of casks Capacity tax, 80 per cent Definition of Detention of, for 48 hours, on suspicion Disposition of forfeited spirits Drawing off, gauging, marking of casks, and removal of, to warehouse Drawn into wholesale liquor dealers' packages containing 5 gallons or more, to be marked and branded Entry for deposit of, in distillery warehouse Entry for withdrawal of Five-gallon packages require stamps 3289 3320 Fractional gallons, how taxed Gallon of, as used in sales Gauging and stamping of rectified General bonded warehouses provided for . (act Aug. 28, 1894) . In any cask or package containing more than 5 gallons, to be stamped Inspection of, etc Insurance on spirits lost or destroyed 3223, [33305] Manufacture of, not allowed in bonded manufacturing warehouse (act Aug. 5, 1909) 23 333 May be withdrawn from warehouse without payment of tax for exportation 3330 220 May be withdrawn without payment of tax for use in bonded manufacturing warehouse 3433a 336 Not to be purchased in quantities greater than 20 gallons by rectifier or liquor dealer, except, etc 3319 213 Not to be removed at other time than between sunrise and sunset..... 3327 216 Not to remain on distillery premises after tax paid 3288 180 Officers interested in the production of, etc., of 3168 80 Products of distillation containing, to be taxed as 3254 155 Production of, when deemed to have commenced 3310 205 Restamping of , in certain cases 3315 209 Sold by order of court, etc., subject to tax 3334 226 Special bonded warehouses provided for. . (act Mar. 3, 1877) 192 Stamps and brands to be effaced from empty casks 3324 215 Stamps for 3312, 3313 207 Stamps for rectified 3320 213 Stamps lost or destroyed by accident 3315 209 Stamps on, when sold under distraint 3191, 3458 99, 362 Tax hen on distillery premises, etc 3251 150 Tax on 3251 150 Tax on, to be paid before removal from warehouse ^ 3271 168 Tax on, when used in the fortification of sweet wines...*:. . ; 3 233 Tax-paid stamps to be placed on, before removal from ware- house 3295 196 To be drawn from receiving cisterns within what time, etc. 3267 167 Used in manufacturing vinegar 3282 176 Warehouse stamps to be placed on by gauger 3287 178 What shall be proof 3249 149 When tax attaches to 3248 149 Withdrawal, iree of tax, to be used in the manufacture of sugar from sorghum [3251c] 154 Withdrawal of, from bond, for scientific purposes 3297 197 Withdrawn iree of tax for use of United States may be trans- ferred b\ use of pipes direct from cisterns to storage tanks, and thence to- tank cars 3287 179 Forfeitures/or violation of law relating to — Absence of stamps on imitation wines 3328 217 Carrying on the business, etc., after notice of suspension. . . 3310 206 Digitized by Microsoft® 464 INDEX. Distilled spirits — Continued. Section. Page. Forfeitures for violation of law relating to — Continued. Carrying on the business of a distiller without having given bond, or with intent to defraud ; permitting any building, etc ., to be used for egress or ingress to fraudulent distillery. 3281 173 Casks and packages of adulterated spirits 3252 154 Distiller defrauding or attempting to defraud United States of tax on spirits 3257 156 Distiller making false entries, omitting to keep or produce books 3305 201 Empty casks with imported stamps, etc., thereon 12,13 227,228 Failing to give bond 3260 159 Forfeiture of fruit brandy found elsewhere than in a distil- lery or bonded warehouse not having been removed therefrom according to law, or where tax has not been paid within three years (act Mar. 3, 1877) 9 194 Fraudulently claiming drawback on distilled spirits 3330 220 Imitation stamps on packages of spirits [3316a] 209 Not effacing stamps, marks, and brands at the time of empty- ing casks.. 3324 215 Omitting things required, or doing things forbidden where there is no specific penalty or punishment elsewhere imposed 3456 361 Package of imported liquor not stamped . . (act Mar. 1, 1879) 11 227 Packages of spirits without marks and stamps required by law 3289 180 Railroad or transportation company transporting, etc., empty stamped casks 3324 215 Receiving, carrying, or delivering spirits to or from distil- lery, rectifying establishment, or wholesale liquor dealers' store having no sign or delivering grain or other raw material 3279 172 Rectifiers and wholesale liquor dealers failing to mark and brand packages of spirits 3323 214 Relanding within the jurisdiction of the United States spirits shipped for exportation 3330 221 Removing or concealing articles with intent to defraud the United States of taxes 3450 357 Setting up still, boiler, etc., without obtaining permit or failing to give notice before removal from place of manu- facture 3265 165 Shipping liquors or wines under other than name known to the trade 3449 356 Spirits found elsewhere than in a distillery or distillery warehouse not having been removed therefrom accord- ing to law 3299 198 Spirits removed after sunset and before sunrise with horse, cart, boat, or conveyance used 3327 216 Still set up, not registered 3258 157 Tax-paid spirits remaining on distillery premises. 3288 180 Vinegar containing more than 2 per cent of proof spirits 3282 176 Penalties for violations of law relating to — Adding substances to, to create fictitious proof 3252 154 Affixing imitation stamps [3316a] 209 Altering stamp, marks or brands, shifting spirits, etc 3326 216 Breaking locks or unlawfully gaining access to cistern room or building of distillery 3268 167 Breaking or tampering with locks, seals, or fastenings 3311 206 Buying or selling casks with inspection marks remaining 3325 216 Carrying on business after giving notice of suspension (see also Forfeitures) 3310 206 Carrying on business of rectifier, dealer, etc., in liquors, manufacturer of stills, without payment of special tax [3242a] 131 Carrying on business of distiller without giving bond or with intent to defraud (see also Forfeitures) 3281 173 Collector approving bond of distiller before law and regu- lations are complied with 3261 162 Digitized by Microsoft® INDEX. 465 Distilled spirits — Continued. Section. Page. Penalties for violations of law relating to — Continued. Counterfeiting or fraudulently using stamps for imitation wines (see also Forfeitures) 3328 217 Distiller defrauding or attempting to defraud United States of tax (see also Forfeitures) 3257 156 Distiller failing to give bond (see also Forfeitures) 3260 159 Distiller failing to keep distillery accessible 3275 170 Distiller using pipe not painted, etc., as required by law. . . 3269 167 Distillers and rectifiers refusing or neglecting to furnish facilities for examination 3277 171 Distillers failing to keep or produce books making false entries (see also Forfeitures) 3305 201 Distillers, rectifiers, wholesale liquor dealers, etc., omitting things required (see also Forfeitures) 3456 361 Distillery, rectifying houses, or wholesale liquor store with- out sign required; using false signs; working on such dis- tillery, etc 3279 172 Distilling between 7 p. m. Saturday and 1 a. m. Monday. . 3283 177 Distilling spirits on certain prohibited premises 3266 166 Double the tax for evading or illegal removal 3256, 3296, 3452 156, 197, 359 Double the tax for spirits illegally used in fortification 44 230 Evading tax on spirits 3256 156 Failing to efface and obliterate marks, stamps, and brands on casks when spirits were drawn off; transporting, receiv- ing, etc., the same (see also Forfeitures) 3324 215 Failing to give notice of intention to carry on business by distiller or rectifier 3259 158 Failing to obliterate stamp on emptying packages of im- ported spirits (see also Forfeitures) 12 227 Failure of rectifiers and wholesale liquor dealers to make transcripts from proper books 3318 211 For illegal recovery of spirits used in fortification 6 234 For unlawful use in fortification 48 232 Fraudulently claiming allowance on drawback (see also Forfeitures) 3330 220 Gaugers unlawfully employing distillers and others to use their brands or perform any of their duties 3290 181 Making fraudulent inspection, gauging, etc 3292 181 Not admitting officer, hindering, obstructing officer in enter- ing or examining distillery 3276 171 Officers affixing, cancelling, or issuing stamps, except as provided by law -•• 3316 209 Purchasing or selling, using, etc., emptied casks of im- ported liquor with stamp and marks thereon 13 228 Purchasing quantities greater than 20 gallons from one person, etc ,- - - 3319 213 Rectifiers and wholesale liquor dealers neglecting to provide proper books, making false entries, or altering entries therein 3318 211 Rectifier carrying on business with intent to defraud or purchasing distilled spirits knowing the tax has not been paid thereon 3317 210 Removal of spirits after sunset and before sunrise (sec also Forfeitures) 3327 216 Removing and concealing - 3296, 3450 197, 358 Removing spirits from warehouse illegally 3296 197 Removing spirits on which tax is not paid to place other than distillery warehouse 3296 197 Refusing or neglecting to draw off water from or cleanse worm, tubs, etc., when required 3286 178 Relanding within the United States spirits shipped for exportation (see also Forfeitures) 3330 221 Setting up still without permit (see also Forfeitures) 3265 165 Shipping spirits under other than name known to the trade (see also Forfeitures) 3449 356 72i70 o -H — 30 Digitized by Microsoft® 466 INDEX. Distilled spirits — Continued. Section. Page. Penalties/or violations of law relating to — Continued. Storekeepers and persons in charge of warehouses allowing spirits to be removed without order of collector 3300 199 Using alcohol obtained for scientific purposes otherwise 3297 198 Using false weights and measures or unregistered materials.. 3306 202 Using material or removing spirits in absence of storekeeper. 3284 177 Violating the provisions of law relative to mash, wort, or vinegar factories (see also Forfeitures) 3282 176 Violating the provisions of the act relative to grape brandy (act Mar. 3, 1877) 11 195 Distiller — Bond of, not to be approved until law, etc., complied with. 3261 162 Books 3318a, 3303, 3304 212, 200, 201 Definition of 3247 149 Evading tax 3256, 3257 156 Hindering officers from entering distillery 3276 171 Manufacturing wooden stills for own use, not liable 3244 133 May withdraw spirits from warehouse on application 3294 185 Must be owner in fee of land on which distillery is situated, or have written consent, etc 3262 162 Mast enter spirits for deposit in warehouse on first day of each month, etc 3293 181 Must furnish facilities for examination of distillery 3277 171 Must furnish keys to gates of distillery 3275 170 Must give bond 3260 159 Must give bond for tax on spirits in warehouse 3293 182 Must keep pipes properly painted 3269 168 Must pay tax on 80 per cent of producing capacity 3309 203 Notice of intention to carry on business 3259 158 Notice of intention to reduce capacity 3311 206 Notice of suspension of work by 3310 205 Not liable as wholesale liquor dealer for sale of original packages of own production K 4 3244 136 Not to do business until law L complied with 3280 172 Not to distill within 600 feet of rectifying establish- ment 3244, 3259, 3266, 3280 135, 158- 166, 173 Not to distill within 600 feet of vinegar establishment 3282 176 Not to use still, boiler, etc., for distilling in certain places.. 3266 166 Of brandy from, apples, peaches, grapes, etc., may be ex- empted from certain provisions 3255 155 Penalty and forfeiture for doing things forbidden when no specific penalty is imposed by any other section 3456 361 Resumption of work by 3310 206 Returns 3307, 3308 202 To be notified of proposed assessments, when [3309a] 205 Whose distillery has a daily capacity of 30 gallons or less may be exempted from certain provisions [3255a] 156 Distillery — Assessment of deficiency tax to be lien on 3309 203 Breaking locks and seals of 3268 167 Commissioner may order changes of apparatus, etc 3270 168 Drawing off water, cleansing worm tubes, etc 3286 178 Distilling apparatus set up to be registered 3258 157 Emptying fermenting tubs '. 3285 177 Facilities for examination of, to be furnished officers 3277 171 Furnaces, tubs, doublers, worm tanks, and pipes 3269 167, 168 Height of walls, keys, etc., and always kept accessible to officers 3275 170 How released before judgment 3331 224 Illicit [3281a] 3332 175, 224 Mash, wort, and vinegar 3282 175 Materials not to be used or spirits removed in absence of storekeeper 3284 177 No distilling Sundays, etc 3283 177 Digitized by Microsoft® 3278 171 3276 170 3263 163 3264 164 3267 166 3302 200 3311 206 3310 206 3279 172 3288 180 3273 170 3264 164 3310 205 3251 150 3332 224 3293 182 3274 170 3293 181 3294 185 3271 168 271a] 169 3272 169 INDEX. 467 Distillery — Continued. Section. Page. Not to be in dwelling house or where liquors are retailed, etc 3266 166 Nor within 600 feet of vinegar establishment 3282 176 Nor within 600 feet of rectifying establishment 3244, 3259, 135, 158, 3266, 3280 166, 173 Officer may break open doors or windows, or through walls . . 3276 171 Officers may break up ground, etc., to search for hidden pipes Officer may enter and examine Plan Producing capacity of, to be ascertained Receiving cisterns in Record of operations at, to be kept by storekeeper Reduction of capacity of Resumption of work at Sign- Spirits not to remain on premises of, after tax paid Storekeeper to have charge of Survey Suspension of work at Tax, lien on To be destroyed in certain cases Distillery warehouses. (See Warehouses.) Bond for payment of tax Custody of Entry for deposit in ' Entry for withdrawal from For storage of spirits before payment of tax In case of change of ownership [3271a] May be discontinued by commissioner 3272 Spirits drawn from receiving cistern to be directly re- moved into 3267, 3287 167, 178 Stamp, form of 3287 178 Storekeepers under direction of collectors to have charge of. 3273 170 To be in charge of storekeeper 3271 168 Transfer of spirits from, to manufacturing warehouse [3433a] 336 Withdrawal of alcohol from, for scientific purposes 3297 [3297a] 197, 198 Dist illin g apparatus. (See Stills.) Distraint — Corporate stock sold under 3194 100 Disposition of proceeds of sale under 3191, 3193-3195 99, 100 Fees and charges in case of 3206 105 For taxes, proceedings under 3187-3190 97-99 Goods to be restored on payment of tax 3193 100 Proceedings for seizure and sale of real estate for taxes. (See Real Estate.) Property not divisible, whole may be sold 3195 100 Property sold under, may be purchased for United States. . 3192 99 Sale of spirits under 3334, 3458 226, 362 Sale of tobacco, snuff, and cigars under, stamps, etc., for. . 3369, 3458 267, 362 Successive seizures of different property may be made on.. 3205 105 Taxes on property sold under 3191 99 Warrant of, against delinquent collectors and other public officers.....! 3217, 3625 112,408 District attorneys — Accepting gift, etc., for settlement of violation of internal- revenue laws, penalty 3170 83 Any officer or special attorney of Department of Justice may act as..... (act June 30, 1906} 400 Fees and emoluments (act May 28, 1896) 6,7 404 Duty to appear for officers in suits 771 401 Duty to make reports to commissioner 774, 838 401 Duty to prosecute for fines, etc 771, 838 401 May move continuance of any internal-revenue case for cause 3231 124 Regulations respecting, to be made by commissioner 3215 111 Digitized by Microsoft® 468 INDEX. District attorneys — Continued. Section. Page. Report of, in compromise of claims and cases after judg- ment 3469 399 To approve warrants in internal-revenue cases 402 To report when proceedings should not be instituted 838 401 District courts — Jurisdiction of 3213, 563 109, 383 Districts. (See Collection districts.) Diligence due — By collector 3218 113 Division — Property not capable of, may be sold as a whole 3195 100 Dockery bill (see Act of July 31, 1894) 406, 408 Door — Of furnace of still or boiler used at distillery, construction of. 3269 167 Doing or omitting — Things prohibited or required, penalty 3456 361 Doubler, (See Stills.) Drawback — Appointment of superintendent of 3161 75 Collector designated to have charge of 3161 75 Fraudulent claims for 3330, [3386a], 3443 220, 277, 353 Of tax on spirits in medicinal or toilet preparations exported. 25 336 On distilled spirits 3329 217 On fruit brandy 6 194 On tobacco, snuff , and cigars 3386 276 Papers in bureau of, to be delivered to collector having chargeof 3161 75 Upon stills manufactured for export 3244 133 Under act of Aug. 5, 1909 25 336 Duties of — Commissioner 321 45 Deputy commissioner 323 48 Solicitor of Internal Revenue 3229 123 Chief clerk 173,174 49 Dwelling house — Not to be used as distillery or warehouse 3266, 3271 166, 168 E. Eighty per cent — Of capacity of distillery 3309 202 Embezzlement. (See Penalties.) Accepting receipt without having paid the full amount specified in receipt 5496 411 By failure of officer to render accounts 5491 410 By failure of person having in possession to deposit w hen required 5492 410 By unlawfully receiving, using, or appropriating contrary to law 5497 411 Evidence in cases of 5494,5495,887 410, 411,413 Custodian who fails to keep safely public money 5490 410 Officer guilty of, who pays sum less than provided by law and requires receipt for sum greater than paid 5483 409 Of public money, by disbursing officer 5488, 5490 409, 410 Of public money, by person charged with safe-keeping 5490, 5494 410 Stealing money or other valuable thing belonging to United States 47 419 Employees — At distilleries, name and residence to be recorded by store- keeper 3302 200 Empty (distilled spirits) casks — Marks, etc., must be obliterated 3324 215 Penalties for transporting with stamps unobliterated 3324 215 Buying or selling with inspection marks thereon. 3325 216 Digitized by Microsoft® Section. Page. 3406 289 3406 289 3376 270 3276 171 3276 170 3177 90 3176 89 3293 181 [3293a] 183 3287 178 3294 185 3169 81 3643 409 INDEX. 469 Empty cigar box — Stamps on, to be destroyed Giving away, selling, or buying stamped ..... Empty tobacco package — Stamps on, to be destroyed Entrance — Breaking open doors or windows to effect Into distillery for examination Into place where articles subject to tax are kept Into premises of person who fails to make return Entry — For deposit of spirits in distillery warehouse For deposit of spirits in special bonded warehouse For deposit of spirits in general bonded warehouse For withdrawal of spirits from distillery warehouse Officer making a false To be kept by disbursing officer Envelopes — Official : 5 429 Estimates — Of expenses of assessing and collecting by Commissioner of Internal Kevenue 321, 3671 45, 47 To be furnished Secretary of the Treasury on or before Oct. 15 (act Mar. 3, 1901) 5 47 Ether- Denatured alcohol may be used in manufacture of 1 241 Evasion — Of payment of tax on spirits, penalty 3256, 3257 156 Evidence — Absence of stamps from packages of cigars prima facie evidence of nonpayment of tax 3398 286 Absence of stamp from packages of fermented liquor prima facie evidence of nonpayment of tax .. 3352 254 Absence of stamp from packages of tobacco and snuff prima facie evidence of nonpayment of tax 3373 269 Certified copies of papers admissible as 882 391 Collector may take in certain cases 3165 78 In cases of embezzlement of public moneys 887, 5494, 5495 413, 410, 411 In suits against persons accountable for public money 886 413 Laws of State rules of decision 858, 721 389, 392 Of books, etc., in revenue cases 5 390 Of conversion by officers charged with disbursement of public money 5496 411 Unstamped instruments not valid as 14 340 Examination — Of objects and articles subject to tax .3177 90 Execution — Not to issue against collectors 989 398 Proceedings on, governed by State laws 916 393 Runs in every State and Territory 986 393 Executors — May carry on business without additional special tax 3241 130 Not liable for special tax under certain conditions H 5 3244 140 When liable for debts due the United States 3467 425 Exemption from tax — . Small distilleries producing alcohol for denaturation only. . 4 241 Exemptions of— Certain property from distraint 3187 98 Distiller of brandy from apples, etc., from certain provi- cvjrtTig - - oZoo J-00 Distillers having a daily capacity of 30 proof gallons [3255a] 156 For sale of liquors taken as security or as debt If 5 3244 140 For sale of liquors by executor, administrator, court officer, or other fiduciary H 5 3244 140 From punishment under State laws, none by reason of pay- ment of internal-revenue tax 3243 132 ™t^V^^jM