UNIVERSITY OF CALIFORNIA LOS ANGELES SCHOOL OF LAW LffiRARY SUPPLEMENT TO TREASURY DECISIONS (T. D. 2837) TREASURY DEPARTMENT UNITED STATES INTERNAL REVENUE U'5. Tuisry^il l^^N/entie S.£fVicA REGULATIONS 51 RELATING TO EXCISE TAXES ON TOILET and MEDICINAL ARTICLES UNDER Section 907 of the REVENUE ACT OF 1918 WASHINGTON GOVERNMENT PRINTING OFRCE 1919 s so s> I REGULATIONS RELATING TO EXCISE TAXES UNDER SECTION 907 OF TITLE DC OF THE REVENUE ACT OF 1918. [Fublic, No. 254, 65th Congress. H. R. 12863.] CONTENTS. IMPOSITION OP TAX. Article. Page. 1. Effective date 4 2. Basis of tax 4 3. Who is the dealer 4 4. Giving of premiums 6 5. Consumption or use 5 6. Articles taxpaid under other acts 5 7. Amount of tax 5 8. Sales to the United States or a State 6 TOILET PREPARATIONS. 9. Toilet preparations 6 10. Containers 6 MEDICINAL PREPARATIONS. 11. Medicinal preparations: Articles included 6 12. Medicinal preparations: Scope of tax 7 13. Medicinal preparations: Under formula 7 14. Medicinal preparations: Under exclusive right 7 15. Medicinal preparations: Under letters patent or trade-mark 7 16. Medicinal preparations : Held out 8 17. Preparations not taxable 8 18. Sales by physician 9 19. Printed directions or autographs 9 COLLECTION OF TAX. 20. Collection of tax 9 21. Affixing and canceling of stamps 10 22. Redemption of stamps 10 23. Aids to collection of tax 11 24."'>'Exemption of export sale 11 25. Proof of exportation 12 26. Trade with poss^^ssions of United States 13 27. Penalties 13 28. Promulgation 14 115490°— 19 (3) EXCISE TAXES ON TOILET AND MEDICINAL PREPARATIONS. IMPOSITION OF TAX. Sec. 907. (a) That on and after May 1, 1919, there shall be levied, assessed, collected and paid (in lieu of the taxes imposed by subdivisions (g) and (h) of section COO of the Revenue Act of 1917) a tax of 1 cent for each 25 cents or frac- tion thereof of the amount paid for any of the following articles when sold by or for a dealer or his estate on or after such date for consumption or use. Article 1. Effective date. — The tax is effective as to all sales made on and after May 1, 1919, superseding the manufacturer's tax imposed by subdivisions (g) and (h) of section 600 of the Revenue Act of 1917, which tax remains in force until and including April 30, 1919. Art. 2. Basis of tax. — The tax is measured by the price for which the article is sold. It is on the actual sales price and not on the list price, where that differs from the sales price. The tax is payable in. respect to a sale made, whether or not the purchase price is actually collected. A discoimt for cash or other discount made subsequently to the sale can not be deducted in computing the price for the pur- pose of the tax. Commissions to agents or others and other expenses of sale are not deductible from the price. If articles are sold and the delivery charges to point of delivery are paid by the purchaser as a specific item, or if the articles are sold delivered at a sum less delivery charges to be paid by the purchaser, such charges need not be included as part of the price of the goods; but if the dealer sells goods at a delivered price and himself pays the delivery charges, he is not entitled to make any deduction on account of the inclusion in the price of delivery charges. Art. 3. Who is the dealer. — For the purpose of the tax and as used in these regulations the term "dealer" means any individual, partnership, association, or corporation engaged in the business of selling for profit any of the enumerated articles to a purchaser for consumption or use and the estate of such a dealer. Thus, a dealer may be a manufacturer, jobber, wholesaler, retailer, mail-order house, installment house, trustee in bankruptcy, receiver, pawnbroker, or peddler, if the sale is for consumption or use; but a casual sale, not in the course of trade or business, by an individual of any of the enumerated articles does not constitute the vendor a "dealer" within the meaning of this section. An auctioneer or broker is a dealer within the meaning of the act in respect of all sales made by him of articles in which he has title, but not in respect to articles which he is selling as an agent. (4) AnT, 4. Giving of preminms. — The giving of so-called "premiums" in return for wrappers, labels, coupons, trading stamps, or other scrip delivered or sold in connection with the sale of a commodity is a sale by a dealer within the meaning of this section if the premium is within the class of enumerated articles. In such cases the tax at- taches at the time title in the premium passes to the person re- ceiving it in exchange for such scrip and is to be computed on the fair market value of the premium at such time. Art. 5. Consumption or use. — An article is sold "for consumption or use" within the meaning of this section if it is sold for any other purpose than to be sold, leased, or otherwise disposed of for profit, whether or not after change in form by process of manufacture. Unless the purchaser is a wholesaler, retailer, or manufacturer cus- tomarily engaged in the business of selling or further manufacturing the article in respect to which the apphcability of the tax is in ques- tion, the sale to such purchaser will be deemed to be for consumption or use, unless the contrary is clearly shown. In other words, a sale to one who buys in order to resell is not a sale for consumption or use. Art. 6. Articles taxpaid under other acts. — (a) The tax is on the sale by or for a dealer or his estate, when any of the enumerated articles are sold for consumption or use, regardless of whether or not a tax under any other law has been previously paid on such articles. (b) Articles in respect to which the manufacturer's excise tax im- posed by section 600 of the Revenue Act of 1917 has been paid are taxable under section 907 when sold by or for a dealer or his estate for consumption or use. Art. 7. Amount of the tax. — The amount of the tax is 1 cent of each 25 cents or fraction thereof of the amount paid by the purchaser for the articles; and the dealer, after exactly determining the selling price of the article, must affix thereto stamp or stamps of the proper denomination denoting the correct amount of the tax; and these two amounts, being distinct separate entities, must be clearly shown to the purchaser to be the price of the article sold and the amount of the tax due thereon. Proper stamps have been provided for the purpose of paying the tax. They will be furnished in the following denominations: 1 cent, 2 cents, 3 cents, 4 cents, 5 cents, 8 cents, 10 cents, 20 cents, and 40 cents. They will be placed on sale in the office of collectors of internal revenue, stamp deputies, post-offices and various agencies throughout each collection district. An article sold for 1 cent to 25 cents requires stamp 1 cent; 26 cents to 50 cents requires stamp 2 cents; 51 cents to 75 cents requires stamp 3 cents; 76 cents to SI. 00 requires stamp 4 cents; $1.01 to SI. 25 requires stamp 5 cents; etc., etc. (See Article 21, in regard to affixing and cancelling stamps.) 6 Abt. 8. Sales to tlie United States or a State. — The tax applies to the sale to the Government of articles enumerated in this section. Articles sold to a State or pohtical subdivision thereof for use in carrying on its governmental operations are not taxable. TOILET PREPARATIONS. (1) Perfumes, eBRences, extracts, toilet waters, cosmetics, petroleum jellies, hair oils, pomades, hair dressings, hair restoratives, hair dyes, tooth and mouth washes, dentifrices, tooth pastes, aromatic cachous, toilet powders (other than soap powders), or any similar substance, article, or preparation by whatsoever name known or distinguished, any of the above which are used or applied or intended to be used or applied for toilet purposes. Art. 9. Toilet preparations. — Section 907 includes concentrated extracts or essences sold to the user to be used in connection with the toilet, bath, or the care of the body, or upon the clothing as a perfume or toilet article. However, concentrated essences sold for the purpose of making toilet articles, but not for use as such, are not subject to the tax. Toilet soap powders are expressly exempted by the act. Toilet soaps are not taxable under section 907, but they, as well as toilet soap powders, are taxable under section 900 when sold by the manufacturer, producer, or importer. Art. 10. Containers. — ^The tax is upon tlie combined price of the container and its contents. The containers of taxable articles constitute a part of the article sold when sold filled with the taxable preparation. MEDICINAL PREPARATIONS. (2) Pills, talilets, powders, tinctures, troches or lozenges, sirups, medicinal cordials or bitters, anodynes, tonics, plasters, liniments, salves, ointments, pastes, drops, waters (except those taxed under section 628 of this act), essences, spirits, oils, and otJber medicinal preparations, compoimds, or compositions (not including serums and antitoxins), upon the amount paid for any of the above as to which the manufacturer or producer claims to have any private formula, secret, or occult art for making or preparing the same, or has or claims to have any exclusive right or title to the making or preparing the same, or which are prepared, uttered, vended, or exposed for sale under any letters patent, or trade-mark, or which (if prepared by any formula, published or impublished) are held out or recommended to the public by the makers, ven- dors, or proprietors thereof as proprietary medicines or medicinal proprietary articles or preparations, or as remedies or specifics for any disease, diseases, or affection whatever affecting the human or animal body: Provided, That the provisions of this section shall not apply to the sale of vaccines and bacterines which are not advertised to the general lay public, nor to the sale by a physician in personal attendance upon a patient of medicinal preparations not so adver- tised. Art. 11. Medicinal preparations: Articles included. — A medicine, medicinal preparation, or specific is a preparation of any substance whatever intended to be applied for the prevention, cure, or mitiga- tion of pain or disease in the human or animal body. Medicinal preparations for beasts, when the same would be taxable if used by- man, are taxable; thus, for example, Arona, National Corn Remover, and Criswell's Jimson Weed Plasters are taxable. But sprays to bo applied to cows, horses, and other animals, to keep off flies, vermin, etc., are not taxable. (See Art. 17.) Art. 12. Medicinal preparations: Scope of tax. — Any of the enu- merated articles are taxable if: (a) The manufacturer or producer claims to have any private formula, secret or occult art for making or preparing the same; or (h) The manufacturer or producer has or claims to have any exclu- sive right or title to the making or preparing the same; or (c) They are prepared, uttered, vended, or exposed for sale under any letters patent or trade-mark; or, (d) They are prepared by any formula, published or unpublished, and are held out or recommended to the public by the makers, vendors, or proprietors thereof (1) as proprietary medicines or me- dicinal proprietary articles or preparations or (2) as remedies or specifics for any disease, diseases, or affection whatever affecting the human or animal body. The above conditions are in the alternative. Thus, for example, if an article is made or prepared by a manufacturer claiming to have a private formula, secret or occult art for it, it is taxable, even though it is not prepared, uttered, vended, or exposed for sale under any letters patent or trade-mark, and it is not held out or recommended to the public as a proprietary medicme or medicinal proprietary article or preparation, or as a remedy or specific for any disease or affection of the human or animal body. Art. 13. Medicinal preparations : Under formula. — Where medicinal preparations are sold mider labels which do not indicate that the formula is pubhshed they wiU be considered to be prepared under private formulas, unless proof is submitted that the formula is not secret. Art. 14. Medicinal preparations: Under exclusive right. — If an ar- ticle is advertised under the name of the manufacturer, or any nams in the possessive case is used on the label or in the literature describing the medicinal preparation, or the name of the manufacturer is made .a part of the name or title, or any intimation is otherwise given that the article is of distinctive origin, the tax is imposed. Art. 1.5. Medicinal preparations: Under letters patent or trade- mark. — Medicmal preparations sold under letters patent are taxable. Where medicinal preparations are sold under what appears to be or what is intended to be a trade-mark appropriated to the article, the tax attaches. A coined name for a particular medicinal preparation, to distmguish it from same or like preparations of other manufacture, 8 is a trade-mark under section 907, and amounts to a holding out of that preparation as proprietary. Art. 16. Medicinal preparations: held out. — (a) The taxability of a medicinal preparation is determined by the manner in which it is prepared or the way in which it is put upon the market. "Held out or recommended" includes representation by any means, pei^onal canvass and statements on the labels, in pamphlets and in advertise- ments, or otherwise. A holding out or recommendation intended for physicians only is a holding out to the public. (b) Any substance or preparation sold or held out to the general lay public as suitable for use in the preparation by the consumer of a remedy or medicinal preparation for use is taxable, even though not capable of use as a medicine without further preparation. (c) Tlie tax applies to a medicinal preparation held out by the producer to the public as a proprietary medicine or as a remedy for disease, even if it is an uncompounded natural substance merely dried or refined. (d) Many articles or substances wliich are not usually considered as belonging to materia medica may become taxable medicinal preparations by being held out or advertised as remedies for diseases affecting the human or animal body; thus, boric acid when held out as a medicinal preparation or sold under a trade-mark as a medicinal preparation is taxable, and licorice put up in sticks, lozenges, or other forms suitable for medicinal piuposes and sold under a trade-mark is subject to the tax. (See Art. 15.) PREPARATIONS NOT TAXABLE. , Art. 17. Preparations not taxable. — (a) Preparations made in ac- cordance with formulas contained in the United States Pharmacopoeia and National Formulary by pharmaceutical manufactm-ei"s, when not held out or recommended as proprietary medicines or medicinal pro- prietary articles or preparations, or as remedies or specifics, are not subject to the tax, but if so held out or recommended they are tax- able, although not identified by any name, trade-mark, or otherwise. (b) Food preparations as distinguished from medicinal prepara- tions are not taxable; thus, products recommended as food for the sick (other than as remedies or specifics for an ailment), such as Thompson's malted milk, malted beef peptone, or Horlick's malted milk, are not taxable. So, too, articles and preparations commonly known as stock foods, avenarious carbolineum, mixed feeds, chicken feeds, etc., not recommended or held out as remedies or specifics for affections or diseases, but as feed only, and other food prepara- tions, whether for man or beast, miless held out or recommended as remedies or specifics for diseases of the human or animal body, are not taxable. (c) Poisons and exterminators of rodents and insects, insecticides, disinfectants (other than those manufactm-ed and sold for use in the treatment of wounds or as cleansers of any portion of the human or animal body), are not medicines or medicinal preparations, com- pounds, or compositions within the meaning of this section, and are not taxable. id) Vaccines and bacterines which are not advertised to the general lay public, and all serums and antitoxins, are specifically exempted from taxation. {e) Natural mineral watei's and table waters, and artificial mineral waters (whether carbonated or not), and other carbonated waters, are not taxable under section 907 if intended for use solely as beverages. SALES BY PHYSICIAN. Art. 18. Sales by physician. — The sale by the physician in personal attendance upon the ]>atient of medicinal preparations not advertised to the general lay public is not taxable. The sale by the physician must be when he is in personal attendance upon the patient and of medicine actual!}" intended for consumption or use by the patient. The sale of such articles by a druggist upon prescription of a physician is not exempt. If the article is advertised to the general lay public it is taxable even when sold by a physician in personal attendance on a patient. PRINTED DIRECTIONS OR AUTOGRAPH. i^RT. 19. Printed directions or autograph. — (a) Printing on the labels the directions and indications for use, dosage, and other similar matter will not alone render preparations made under a standard formula taxable, provided the preparation is not held out or recom- mended as a proprietary preparation or as a remedy or specific. (b) The autographic name of the manufacturer of a medicinal preparation printed across the middle of the label is not a trade-mark under section 907 and does not amount to a holding out of the prepara- tion as proprietary. (But see Art. 14.) COLLECTION OF TAX. Sec. 907. (6) Thetaxesimposedby this section shall be collected by whichever of the following methods the Commissioner may deem expedient: (1) By stamp affixed to such article by the vendor, the cost of which shall be reimbursed to the vendor by the purchaser; or (2) by payment to the vendor by the purchaser at the time of the sale, the taxes so collected being returned and paid to the United States by such vendor in the same manner as provided in section 502. Art. 20. Collection of tax. — Payment of the tax shall be by stamps affixed to the article by the vendor, the cost of which shall be reim- bursed to the vendor by the purchaser. Hence, no form of return of tax payment is required from the dealer. The pmchase and correct affixing of stamps fulfills the law. 1(3 AFFIXING AND CANCELING OF STAMPS. Sec. 1104. That whenever an adhesive stamp is used for denoting any tax imposed by this title, except as hereinafter provided, the person using or aflixing the same shall write or stamp or cause to be written or stamped there- upon the initials of his or its name and the date upon which the same is attached or used, so that the same may not again be used: Provided, That the Commis- sioner may prescribe such other method for the cancellation of such stamps as he may deem expedient. Art. 21. Affixing and canceling of stamps. — Each stamp affixed to a taxable article must be canceled in such a manner as to prevent the further use of the same. If possible, the stamp should be affixed to the outside of the package or container of the taxed commodity, so that upon opening the same the stamp will be destroyed. The initials or the name of the vendor, together with the date when the stamp was affixed or canceled, must appear upon the canceled stamp. This shall constitute the act of cancellation of the stamp. Stamps may be affixed and canceled by the manufacturer, producer, or importer of the taxed articles, or the dealer, in advance of the sale, provided the selling price and the tax thereon be clearly indicated to the purchaser in such manner as not to confuse him. REDEMPTION OF STAMPS. Art. 22. Eedemption of stamps.— Unused stamps may be redeemed on claim executed on Form 46, presented by the owner, or his author- ized representative, accompanied by the stamps. Such claims should show that the claimant is the owner of the stamps presented, that they were purchased from the Government within two years of filing claim, and that the stamps are unused, explaining any cancellation or appearance of having been used. In case of stamps affixed in error to articles not taxable or in excess to articles taxable and unsold, the claims should be accompanied by the stamps, which should be de- tached in the presence of a deputy collector, or, if they can not be detached and filed, by a showing of that fact and by the deputy collector's certificate to their mutilation or destruction by him, and his indorsement thereon that claim was filed. In case of sale made where the articles or sales were not taxable or were stamped in excess, refund may not be made except to the buyer or taxpayer. There is no authority for the redemption of stamps lost or stolen, and no provision for restamping free of charge where stamps become lost from articles or where it becomes necessary to repack. In case it is desired to repack articles to which stamps have been affixed and which have not yet been sold to consumer or user, redemption may be had of the stamps representing the taxes that did not accrue, the stamps to be redeemed in such case to be detached in the presence of a deputy collector. 11 EXTENSION OF EXISTING STATUTES. Sec. 1305. That all adminiBtrative, special, or stamp provisions of law, including the law relating to the assessment of taxes, so far as applicable, are hereby extended to and made a part of this act, and every person liable to any tax imposed by this act, or for the collection thereof, shall keep such records and render, under oath, such statements and returns, and shall comply with such regulations as the Commissioner, with the approval of the Secretary, may from time to time prescribe. Whenever in the judgment of the Commissioner necessary he may require any person, by notice served upon him, to make a return or such statements as he deems sufficient to show whether or not such person is liable to tax. The Commissioner, for the purpose of ascertaining the correctness of any return or for the purpose of making a return where none has been made, ia hereby authorized, by any revenue agent or inspector designated by him for that purpose, to examine any books, papers, records, or memoranda bearing upon the matter required to be included in the return, and may require the attendance of the person rendering the return or of any officer or employee of such person, or the attendance of any other person having knowledge in the premises, and maj'^ 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. Sec. 1400. (6) * * * In the case of any tax imposed by any part of an act herein repealed, if there is a tax imposed by this act in lieu thereof, the provision imposing such tax shall remain in force until the con-esponding tax under this act takes effect under the provisions of this act. Art. 23. Aids to collection of tax. — In collecting the excise taxes the commissioner has the benefit of all existing internal-revenue laws. In aid of the enforcement of the statute the commissioner may require any person to keep specified records to render returns and statements as directed, to submit himself and his books to examina- tion, and to comply with such regulations as may be prescribed. EXPORTS. Sec. 1310. (c) Under such rules and regulations as the Commissioner with the approval of the Secretary may prescribe, the taxes imposed under the pro- visions of Titles ^'I, VII, or IX shall not apply in respect to articles sold or leased for export and in due course so exported. Under such rules and regu- lations the amount of any internal-revenue tax erroneously or illegally collected in .respect to exported articles ma}' be refunded to the exporter of the article instead of to the manufacturer, if the manufacturer waives any claim for the amount so to be refunded. Art. 24. Exemption of export sale. — The tax docs not attach to the sale of an article which is either (1) shipped direct to a foreign destination by the manufacturer himself or (2) both (a) sold by him for export and (h) in due course so exported by the purchaser. Wliere a manufacturer at the time an article is sold or shipped (whichever is prior) has in his possession an order or contract of sale showing in writing (1) that the manufacturer is to export the article or (2) that the purchaser is buying the article in order to export it prior to its being used or subjected to further manufacture, there is a presump- 12 tion that the sale of the article is exempt from tax, as an export sale, and the manufacturer may, for a period of six months from the date of sale or shipment (whichever is prior), rely on such presumption. This presumption becomes conclusive upon the manufacturer's receiv- ing, and attaching to such order or contract, before the termination of such period of six months, due "proof of exportation" (see Art. 25) of such article. On the other hand, if, within such period of six months, the manufacturer has not received, and attached to such order or contract, such "proof of exportation," then the pre- sumption that such sale is an export sale disappears, and the manufacturer shall include a tax on the sale of such article in his return for the month in which such period of six months expires. The order or contract of sale and the "proof of exportation" must be preserved by the manufacturer in such a way as to be readily acces- sible for inspection by internal-revenue officers. No sale shall be considered to be exempt from tax under section 1310 (c) of the act unless its character as an export sale has been estabhshed in accord- ance with the above provisions. Art. 25. Proof of exportation. — By the term "proof of exporta- tion" is meant (1) an affidavit containing the following information: The name and address of the manufacturer; the name and address of the exporter (who, if not the manufacturer, must be a person who has purchased direct from the manufacturer) ; the respective dates of the sale (or shipment, whichever is prior), and exportation of the article; the price for which purchased; the fact that the article has been exported by the manufactm"er or original purchaser without having been used or subjected to further manufacture; the name of the port of foreign destination; the name and address of the carrier issuing the export bill of lading; and any further information neces- sary to identify the article sold with the article exported; and (2) attached to such affidavit, a copy of the export bill of lading, or a certificate by the agent or representative of the export carrier show- ing the exportation of the article, or, if exported by parcel post, a copy of the certificate of mailing. TRADE WITH POSSESSIONS OF UNITED STATES. Sec. 1304. That there shall be levied, collected, and paid in the United States, upon articles coming into the United States from the Virgin Islands, a tax equal to the internal-revenue tax imposed in the United States upon like articles of domestic manufacture; such articles shipped from such islands to the United States shall be exempt from the pajonent of any tax imposed by the internal-revenue laws of such islands: Provided, That there shall be levied, collected, and paid in such islands, upon articles imported from the United States, a tax equal to the internal-revenue tax imposed in such islands upon like articles there manufactured ; and such articles going into such islands from the United States shall be exempt from payment of any tax imposed by th« internal-revenue laws of the United States. 13 Art. 26. Tra^e with possessions of United States. — A sale wliich results in the shipment of articles into the United States from the Virgin Islands is taxable to the same extent as a sale of articles within the United States. Articles going into the Virgin Islands from the United States are free from tax in the United States. The same rules apply to trade with Porto Rico and the Philippine Islands. (See sec. 1000 of the Revenue Act of 1917 and Sec. V of the act of Aug. 4, 1909, as amended by vSec. IV, Subdivision C, of the act of Oct. 3, 1913.) The tax attaches, howevw, to articles shipped to other possessions of the United States, including the Canal Zone. PENALTIES. Art. 27. Penalties. — The act provides: Sec. 1307. * * * All administrative and penalty provisions of Title XI of this act, in so far as applicable, shall apply to the collection of any tax which the Commissioner determines or prescribes shall be paid by stamp. Sec. 1102. That whoever— (6) Consigns or ships, or causes to be consigned or sliipped, by parcel post any parcel, package, or article without the full amount of tax being duly paid; (c) Manufactures or imports and sells, or offers for sale, or causes to be manufactured or imported and sold, or offered for sale, any playing cards, package, or other article without the full amount or tax being duly paid; {d) Makes use of any adehsive satmp to denote any tax imposed by this title without canceling or obliterating such stamp as prescribed in section 1104; Is guilty of a misdemeanor, and upon conviction thereof shall pay a fine of not more than $100 for each offense. Sec. 1103. That whoever— (a) Fraudulently cuts, tears, or removes from any vellum, parchment, paper, instrument, writing, package, or article, upon which any tax is imposed by this title, any adhesive stamp or the impression of any stamp, die, plate, or other article provided, made, or used in pursuance of this title; (6) Fraudulently uses, joins, fixes, or places to, with, or upon any vellum, parchment, paper, instrument, writing, package, or article, upon wliich any tax is imposed by this title, (1) any adhesive stamp, or the impression of any stamp, die, plate, or other article, which has been cut, torn, or removed from any other vellum, parchment, paper, instrument, writing, package, or article, upon which any tax is imposed by this title; or (2) any adhesive stamp or the impression of any stamp, die, plate, or other article of insufficient value; or (3) any forged or counterfeit stamp, or the impression of any forged or counter- feited stamp, die, plate, or other article; (c) Willfully removes, or alters the cancellation, or defacing marks of, or otherwise prepares, any adhesive stamp, with intent to use, or cause the same to be used, after it has been already used, or knowingly or willfully buys, sells, offers for sale, or gives away, any such washed or restored stamp to any person for use, or knowingly uses the same; ((f) Knowingly and without lawful excuse (the burden of proof of such excuse being on the accused) has in possession any washed, restored, or altered stamp, which has bpen removed from any vellum, parchment, paper, instru- ment, writing, package, or article; Is guilty of a misdemeanor, and upon conviction shall be punished by a fine of not more than $1,000, or by imprisonment for not more than five years, or u both, and any such reused, canceled, or counterfeit stamp and the vellum; parchment, document, paper, package, or article upon which it is placed or impressed shall be forfeited to the United States. Sec. 1308. (a) That any person required under titles * * * to pay, or to collect, account for and pay over any tax, or required by law or regulations made under authority thereof to make a return or supply any information for the purposes of the computation, assessment, or collection of any such tax, who fails to pay, collect, or truly account for and pay over any such tax, make any Buch return or supply any such information at the time or tiines required by law or regulation shall in addition to other penalties provided by law be subject to a penalty of not more than $1,000. (b) Any person who willfully refuses to pay, collect, or truly account for and pay over any such tax, make such return or supply such information at the time or times required by law or regulation, or who willfully attempts in any manner to evade such tax shall be guilty of a misdemeanor and in addition to other penalties provided by law shall be fined not more than $10,000 or imprisoned for not more than one year, or both, together with the costs of prosecution. (c) Any person who willfully refuses to pay, collect, or truly account for and pay over any such tax shall in addition to other penalties provided by law be liable to a penalty of the amount of the tax evaded, or not paid, collected, or accounted for and paid over, to be assessed and collected in the same manner as taxes are assessed and collected. * * * (d) The term "person" as used in this section includes an officer or employee of a corporation or a member or employee of a partnership, who as such officer, employee, or member is under a duty to perform the act in respect of which the the violation occurs. Sec. 1319. That whoever in connection with the sale * * * or offer for sale * * * of any article, or for the purpose of making such sale * * * makes any statement, written or oral, (1) intended or calculated to lead any person to believe that any part of the price at which such article is sold * * * or offered for sale * * * consists of a tax im- posed under the authority of the United States, or (2) ascribing a particular part of such price to a tax imposed under the authority of the United States, knowing that such statement is false or that the tax is not so great as the por- tion of such price ascribed to such tax, shall be guilty of 2 misdenisanor and upon conviction thereof shall be punished by a fine of not more than $1 ,000 or by imprisonment not exceeding one yesXj or both. AUTHORITY FOR REGULATIONS. Sec. 1309. That the Commissioner, with the approval of the Secretary, is hereby authorized to make all needful rules and regulations for the enforce- ment of the provisions of this act. Art. 28. Promulgation. — In pursuance of tlie statute the fore- going regulations are hereby made and promulgated and all rulings inconsistent herewith are hereby revoked. Daniel C. Roper, Commissioner of Internal Revenue. Approved May 9, 1919: Carter Glass, Secretary of the Treasury. o 1 AW LIBRARY (JNrVT<]RSITY OF GAL^^RMA LOS ANGfiLES 1 * GAYLAMOUNT . PAMPHLET BINDER *^ Manufactured by | GAYLORD BROS. Inc. , Syracuse, N. Y. ,1 jckton, Co it. UC SOUTHERN REGIONAL LIBRARY FACILITY D 000 829 388 8