F 
 
 
^iHA^a.^'i^t^^^^f 
 
iiiiii oiPT 
 
 lllll APR 12 t917 
 
 The Federal Estate Tax 
 Law and Regulations 
 
 jji (United States Inheritance Tax) 
 
 k 
 Ill 
 
 •I;:::::: 
 jiiilill: 
 
 Act of September 8, 1916 
 Amended March 3, 1917 
 
 
 
 ••••ill 
 
 
 
 
 
 Guaranty Trust Company 
 of New York 
 
The Federal Estate Tax 
 Law and Regulations 
 
 ( United States Inheritance Tojc) 
 
 Act of September 8, 1916 
 Amended March 3, 1917 
 
 Guaranty Trust Company of New York 
 
 140 Broadway 
 
 FIFTH AVE. OFFICE PARIS OFFICE LONDON OFFICE 
 
 Fifth Ave. & 43rd Street Rue dee Italiens, 1 & 3 32 Lombard St. , E. C. 
 
 (Opens about June, 1917) 
 

 COPYRIGHT, 1917 
 BY GUARANTY TRUST COMPANY OF NEW YORK 
 
FOREWORD 
 
 rpHE Federal Estate Tax Law of Septem- 
 ^ ber 8, 1916, was amended by the Act of 
 March 3, 1917. This Amendment aflfects 
 only the rate of tax on estates of decedents 
 dying on or after March 3, 1917. 
 
 The net estate of every resident decedent Estates 
 and the net estate situated within the United Tax 
 States of every nonresident decedent dying 
 on or after September 9, 1916, is subject to 
 the provisions of the Federal Estate Tax Law 
 and liable for the payment of the tax thereby 
 imposed. 
 
 The rate of tax varies according to the Rate of Tax 
 amount of the net estate and increases pro- 
 gressively from 1% on estates of $50,000, to 
 10% on estates in excess of $5,000,000 of de- 
 cedents dying prior to March 3, 1917, and 
 from 13^% on estates of $50,000 to 15% on 
 estates in excess of $5,000,000 of decedents 
 dying on or after March 3, 1917. 
 
 The following tables show the rate of tax, 
 the amount of net estate, and the amount for 
 which the estate is liable. 
 
 359122 
 
Decedents 
 Dying Prior 
 to March 3, 
 1917 
 
 Decedents 
 Dying on or 
 after March 
 3, 1917 
 
 Assessment 
 Based on 
 Net Estate 
 
 Net Estate 
 
 (1) Estates of 
 
 March 3, 1917: 
 1% on first 
 next 
 
 3% 
 4% 
 5% 
 
 e% 
 
 8% 
 
 9% 
 
 10% 
 
 decedents dying yrioT to 
 
 $500 
 
 2,000 
 
 3,000 
 
 8,000 
 
 27,500 
 
 60,000 
 
 70,000 
 
 80,000 
 
 90,000 
 
 >,000 = 
 
 100,000 = 
 
 100,000 = 
 
 " 200,000 = 
 
 " 550,000 = 
 
 " 1,000,000 = 
 
 " 1,000,000 = 
 
 " 1,000,000 = 
 
 " 1,000,000 = 
 
 all amounts in 
 
 excess of $5,000,000 
 
 (2) Estates of decedents dying on or after 
 
 March 3, 1917: 
 
 1|% on first $50,000 = ^$750 
 
 100,000= 3,000 
 
 100,000 = 4,500 
 
 200,000 = 12,000 
 
 550,000 = 41,250 
 
 1,000,000 = 90,000 
 
 1,000,000= 105,000 
 
 1,000,000= 120,000 
 
 1,000,000= 135,000 
 
 15% on all amounts in 
 
 excess of $5,000,000 
 
 The figures given above are based upon a 
 net estate; that is, an estate from which there 
 have been deducted the allowable deductions 
 and, in the case of an estate of a resident de- 
 cedent, the specific exemption of $50,000. 
 
 Net estate subject to tax is determined by 
 deducting certain items from the gross es- 
 tate of the decedent. 
 
 3% 
 4i% 
 6% 
 71% 
 9% 
 10i% 
 12% 
 
 131% 
 
 next 
 u 
 
 u 
 
 u 
 
 a 
 
 u 
 
 u 
 
 u 
 
The gross estate, as defined by the statute, ^^^^^ Estate 
 includes: 
 
 1. All properfy, real or personal, tangible Property in 
 
 . . . « 1 Charge of 
 
 or intangible, coming into the hands of the Executor 
 executor or other in charge of the estate, 
 which property would be subject to charges 
 against the estate, expenses of administra- 
 tion, and distribution to the heirs or legatees ; 
 
 2. Property transferred without valuable Transfers 
 
 -^^ *^ ^ ^ m Contem- 
 
 consideration in contemplation of or in- plationof 
 tended to take effect at or after death; 
 
 3. Decedent's share in money or property Interests 
 owned by decedent jointly with another or orlnEntSety 
 with others in entirety, unless it can be shown 
 
 that such interest was never owned by the 
 decedent. 
 
 In determining the net estate of resident Deductions, 
 decedents the following deductions from gross Decedents 
 estate are allowed: 
 
 Funeral expenses. 
 
 Administration expenses. 
 
 Claims against the estate. 
 
 Unpaid mortgages. 
 
 Lossesjiot compensated by insurance. 
 
 Support of dependents during the settlement 
 of the estate. 
 
 Other charges allowed by the laws of the 
 jurisdiction under which estate is adminis- 
 tered. 
 
In addition to the above deductions, a 
 specific exemption of $50,000 is allowed to 
 the estates of resident decedents. 
 
 The above items, except the specific ex- 
 emption of $50,000, may also be deducted 
 from the value of that part of the gross estate 
 of a nonresident decedent which, at the time 
 of his death, is situated in the United States, 
 in such proportion as the value of such part 
 bears to the value of the gross estate, where- 
 ever situated, of such nonresident decedent. 
 
 For example: a nonresident dies leav- 
 ing a total estate of $200,000, of which 
 $100,000 is represented by property in the 
 United States. The total expenses of the 
 estate under the items enumerated above as 
 deductions amount to $20,000. The estate 
 would, therefore, be allowed to deduct that 
 proportion of $20,000, which $100,000, the 
 value of the estate in the United States, 
 bears to $200,000, the total value of the estate, 
 i.e., one-half of the total expenses amount- 
 ing to a deduction of $10,000. This estate 
 would accordingly be taxed on $100,000, 
 the value of the estate in the United States, 
 less $10,000, the total deductions allowed, 
 i.e., $90,000. 
 
Required 
 
 Within thirty days after qualifying or after j^^^'"**^ 
 coming into possession of any property of a 
 decedent, an executor or other person coming 
 into the possession of an estate must give 
 written notice to that effect to the Collector 
 of Internal Revenue. 
 
 A return of the estate, on Form 706, as Return 
 provided by the Regulations of the Treasury 
 Department, must be made by the executor 
 or other person coming into the possession of 
 the estate: (1) in the case of a resident de- When 
 cedent, if the estate is subject to tax or if the 
 gross estate at the time of the death of the 
 decedent exceeds $60,000, and (2) in the 
 case of the estate of a nonresident, if any part 
 of the gross estate is situated in the United 
 States, regardless of amount. 
 
 This return, if the decedent was a resident 
 of the United States, shall be filed with the 
 Collector of Internal Revenue for the dis- 
 trict in which the decedent was domiciled; 
 if the decedent was a nonresident, it shall be 
 filed with the Collector of Internal Revenue 
 for the district in which the gross estate of 
 the decedent is situated in the United States , 
 or, if such estate within the United States is 
 situated in more than one district, it shall be 
 
filed with the Collector of Internal Revenue, 
 at Baltimore, Maryland. 
 
 Pa^ble^^^^ '^^^ ^^^ ^'^ ^^^ ^^^ ^^^^ after decedent's 
 death, and, except where a valid will of a 
 testator provides otherwise, must be paid 
 from the principal of the estate, by the ex- 
 ecutors or administrators, before distribution 
 
 Discount is made to beneficiaries. A discount at the 
 rate of 5% per annum is allowed if payment 
 
 Penalty for jg m^de prior to the time the tax is due. If 
 
 XNonpayment /^ 
 
 the tax is not paid within ninety days after it 
 is due, a penalty at the rate of 10% per an- 
 num from the date of decedent's death is ad- 
 ded. If, however, failure to pay the tax when 
 Penalty for [^ Jg ^j^jg results from inability to settle the es- 
 
 JMonpayment ^ ^ 
 
 if Due to tate because of necessary litigation or other un- 
 
 Delay avoidable delay, the penalty will be assessed 
 
 at the rate of 6% per annum from the date of 
 
 Lien death. Unpaid taxes are a lien against the 
 
 estate for ten years and may be recovered 
 
 Suit l3y court proceedings to subject the prop- 
 
 erty of the decedent to sale under judgment 
 or decree of the court. 
 
The 
 Federal Estate Tax Law 
 
 Being Title II of "An Act to increase the reve- 
 nue, and for other purposes". Approved Septem- 
 ber 8, 1916, as Amended March 3, 1917 
 
 Title II.— Estate Tax 
 
 Sec. 200. That when used in this title — 
 
 The term "person'* includes partnerships, corporations, 
 and associations; 
 
 The term ''United States" means only the States, the 
 Territories of Alaska and Hawaii, and the District of 
 Columbia; 
 
 The term "executor" means the executor or adminis- 
 trator of the decedent, or, if there is no executor or adminis- 
 trator, any person who takes possession of any property of 
 the decedent; and 
 
 The term "collector" means the collector of internal 
 revenue of the district in which was the domicile of the 
 decedent at the time of his death, or, if there was no such 
 domicile in the United States, then the collector of the 
 district in which is situated the part of th€ gross estate of 
 the decedent in the United States, or, if such part of 
 the gross estate is situated in more than one district, then 
 the collector of internal revenue at Baltimore, Maryland. 
 
 Sec. 201. That a tax (hereinafter in this title referred 
 to as the tax), equal to the following percentages of the 
 value of the net estate to be determined as provided in 
 section two hundred and three, is hereby imposed upon the 
 transfer of the net estate of every decedent dying after the 
 passage of this Act (and prior to March 3, 1917), whether 
 a resident or nonresident of the United States; 
 
 One per centum of the amount of such net estate not in 
 excess of $50,000; 
 
 Two per centum of the iamount by which such net estate 
 exceeds $50,000 and does not exceed $150,000; 
 
 Three per centum of the amount by which such net estate 
 exceeds $150,000 and does not exceed $250,000; 
 
 Four per centum of the amount by which such net estate 
 exceeds $250,000 and does not exceed $450,000; 
 
 "Person" 
 
 "United 
 States" 
 
10 
 
 FEDERAL ESTATE TAX LAW 
 
 Tax Rates 
 Decedents 
 Dying on 
 or after 
 March 3,1917 
 
 Five per centum of the amount by which such net estate 
 exceeds $450,000 and does not exceed $1,000,000; 
 
 Six per centum of the amount by which such net estate 
 exceeds $1,000,000 and does not exceed $2,000,000; 
 
 Seven per centum of the amount by which such net estate 
 exceeds $2,000,000 and does not exceed $3,000,000; 
 
 Eight per centum of the amount by which such net estate 
 exceeds $3,000,000 and does not exceed $4,000,000; 
 
 Nine per centum of the amount by which such net estate 
 exceeds $4,000,000 and does not exceed $5,000,000; and 
 
 Ten per centum of the amount by which such net estate 
 exceeds $5,000,000. 
 
 Amendment by Act March 3, 1917 
 
 Sec. 201. That a tax (hereinafter in this title referred 
 to as the tax), equal to the following percentages of the 
 value of the net estate, to be determined as provided in 
 section two hundred and three, is hereby imposed upon the 
 transfer of the net estate of every decedent d3dng after 
 the passage of this Act, whether a resident or nonresident 
 of the United States: 
 
 One and one-half per centum of the amount of such net 
 estate not in excess of $50,000; 
 
 Three per centum of the amount by which such net es- 
 tate exceeds $50,000 and does not exceed $150,000; 
 
 Four and one-half per centum of the amount by which 
 such net estate exceeds $150,000 and does not exceed 
 $250,000; 
 
 Six per centum of the amount by which such net estate 
 exceeds $250,000 and does not exceed $450,000; 
 
 Seven and one-half per centum of the amount by which 
 such net estate exceeds $450,000 and does not exceed 
 $1,000,000; 
 
 Nine per centum of the amount by which such net es- 
 tate exceeds $1,000,000 and does not exceed $2,000,000; 
 
 Ten and one-half per centum of the amount by which 
 such net estate exceeds $2,000,000 and does not exceed 
 $3,000,000; 
 
 Twelve per centum of the amount by which such net 
 estate exceeds $3,000,000 and does not exceed $4,000,000; 
 
 Thirteen and one-half per centum of the amount by 
 which such net estate exceeds $4,000,000 and does not ex- 
 ceed $5,000,000; and 
 
FEDERAL ESTATE TAX LAW 
 
 11 
 
 Fifteen per centum of the amount by which such net 
 estate exceeds $5,000,000. 
 
 Sec. 301- That the tax on the transfer of the net es- 
 tate of decedents dying between September eighth, nine- 
 teen hundred and sixteen, and the passage of this Act shall 
 be computed at the rates originally prescribed in the Act 
 approved September eighth, nineteen hundred and sixteen. 
 
 Property in 
 Charge of 
 Executor 
 
 Transfers in 
 Contempla- 
 tion of Death 
 
 Sec. 202. That the value of the gross estate of the 
 decedent shall be determined by includSig the value at the Gross Estate 
 time of his death of all property, real or personal, tangible 
 or intangible, wherever situated: 
 
 (a) To the extent of the interest therein of the decedent 
 at the time of his death which after his death is subject to 
 the payment of the charges against his estate and the 
 expenses of its administration and is subject to distribution 
 as part of his estate. 
 
 (b) To the extent of any interest therein of which the 
 decedent has at any time made a transfer, or with respect 
 to which he has created a trust, in contemplation of or 
 intended to take effect in possession or enjoyment at or 
 after his death, except in case of a bona fide sale for a fair 
 consideration in money or money's worth. Any transfer of 
 a material part of his property in the nature of a final dis- 
 position or distribution thereof, made by the decedent 
 within two years prior to his death without such a con- 
 sideration, shall, unless shown to the contrary, be deemed 
 to have been made in contemplation of death within the 
 meaning of this title; and 
 
 (c) To the extent of the interest therein held jointly 
 or as tenants in the entirety by the decedent and any other 
 person, or deposited in banks or other institutions in their 
 joint names and payable to either or the survivor, except 
 such part thereof as may be shown to have originally 
 belonged to such other person and never to have belonged 
 to the decedent. 
 
 For the purpose of this title stock in a domestic cor- 
 poration owned and held by a nonresident decedent shall 
 be deemed property within the United States, and any 
 property of which the decedent has made a transfer or 
 with respect to which he has created a trust, within the 
 meaning of subdivision (b) of this section, shall be deemed 
 
 Interests 
 Held Jointly 
 or in Entirety 
 
 Situs of Prop- 
 erty owned 
 by nonresi- 
 dents 
 
12 
 
 FEDERAL ESTATE TAX LAW 
 
 to be situated in the United States, if so situated either 
 at the time of the transfer or the creation of the trust, or 
 at the time of the decedent's death. 
 
 Net Estate 
 Residents 
 
 Deductions 
 Allowed 
 
 Exemption 
 
 Non- 
 
 Residents,, 
 Deductions 
 Allowed 
 
 When Tax 
 Due 
 
 Discount 
 Allowed 
 
 Penalty 
 
 Sec. 203. That for the purpose of the tax the value of 
 the net estate shall be determined — 
 
 (a) In the case of a resident, by deducting from the 
 value of the gross estate — 
 
 (1) Such amounts for funeral expenses, administration 
 expenses, claims against the estate, unpaid mortgages, 
 losses incurred during the settlement of the estate arising 
 from fires, storms, shipwreck, or other casualty, and from 
 theft, when such losses are not compensated for by insur- 
 ance or otherwise, support during the settlement of the 
 estate of those dependent upon the decedent, and such 
 other charges against the estate, as are allowed by the laws 
 of the jurisdiction, whether within or without the United 
 States, under which the estate is being administered; and 
 
 (2) An exemption of $50,000; 
 
 (b) In the case of a nonresident, by deducting from the 
 value of that part of his gross estate which at the time of 
 his death is situated in the United States that proportion 
 of the deductions specified in paragraph (1) of subdivision 
 (a) of this section which the value of such part bears to the 
 value of his entire gross estate, wherever situated. But no 
 deductions shall be allowed in the case of a nonresident 
 unless the executor includes in the return required to be 
 filed under section two hundred and five the value at the 
 time of his death of that part of the gross estate of the 
 nonresident not situated in the United States. 
 
 Sec. 204. That the tax shall be due one year after the 
 decedent's death. If the tax is paid before it is due a 
 discount at the rate of five per centum per annum, cal- 
 culated from the time payment is made to the date when 
 the tax is due, shall be deducted. If the tax is not paid 
 within ninety days after it is due interest at the rate of 
 ten per centum per annum from the time of the decedent's 
 death shall be added as part of the tax^ unless because of 
 claims against the estate, necessary litigation, or other 
 unavoidable delay the collector finds that the tax can not 
 be determined, in which case the interest shall be at the 
 rate of six per centum per annum from the time of the 
 decedent's death until the cause of such delay is removed, 
 
FEDERAL ESTATE TAX LAW 
 
 13 
 
 and thereafter at the rate of ten per centum per annum. 
 Litigation to defeat the payment of the tax shall not be 
 deemed necessary litigation. 
 
 Sec. 205. That the executor^ within thirty days after 
 qualifying as such, or after commg into possession of any 
 property of the aecedent, whichever event first occurs, 
 shall give written notice thereof to the collector. The 
 executor, shall also, at such times and in such manner as 
 may be required by the regulations made under this title, 
 file with the collector a return under oath in duplicate, 
 setting forth (a) the value of the gross estate of the decedent 
 at the time of his death, or, in case of a nonresident, of 
 that part of his gross estate situated in the United States; 
 (b) the deductions allowed under section two hundred and 
 three; (c) the value of the net estate of the decedent as 
 defined in section two hundred and three; and (d) the 
 tax paid or payable thereon; or such part of such informa- 
 tion as may at the time be ascertainable and such sup- 
 plemental data as may be necessary to establish the correct 
 tax. 
 
 Return shall be made in all cases of estates subject to 
 the tax or where the gross estate at the death of the 
 decedent exceeds $60,000, and in the case of the estate of 
 every nonresident any part of whose gross estate is situated 
 in the United States. If the executor is unable to make a 
 complete return as to any part of the gross estate of the 
 dec^ent, he shall include in his return a description of 
 such part and the name of every person holding a legal or 
 beneficial interest therein, and upon notice from the col- 
 lector such person shall in like manner make a return as 
 to such part of the gross estate. The Commissioner of 
 Internal Revenue shall make all assessments of the tax 
 under the authority of existing administrative special and 
 general provisions of law relating to the assessment and 
 collection of taxes. 
 
 Sec. 206. That if no administration is granted upon the 
 estate of a decedent, or if no return is filed as provided in 
 section two hundred and five, or if a return contains a 
 false or incorrect statement of a material fact, the collector 
 or deputy collector shall make a return and the Commis- 
 sioner of Internal Revenue shall assess the tax thereon. 
 
 Sec. 207. That the executor shall pay the tax to the 
 collector or deputy collector. If for any reason the amoimt 
 
 Executor's 
 Notice to 
 Collector 
 
 Return 
 
 Contents 
 of Return 
 
 When 
 
 Return 
 
 Required 
 
 Return 
 When Made 
 by Collector 
 
 Payment of 
 the Tax 
 
14 
 
 FEDERAL ESTATE TAX LAW 
 
 Refund of 
 
 Excess Tax 
 Payments 
 
 Payment of 
 Balance Due 
 
 Duplicate 
 Receipts 
 
 Default in 
 Payment of 
 Tax 
 
 Property to 
 Be Sold for 
 Payment 
 of Tax in 
 Default 
 
 Equitable 
 Contribution 
 
 of the tax can not be determined, the payment of a sum 
 of money suflBcient, in the opinion of the collector, to dis- 
 charge the tax shall be deemed payment in full of the tax, 
 except as in this section otherwise provided. If the 
 amount so paid exceeds the amount of the tax as finally 
 determined, the Commissioner of Internal Revenue shall 
 refund such excess to the executor. If the amount of the 
 tax as finally determiued exceeds the amount so paid the 
 commissioner shall notify the executor of the amount of 
 such excess. From the time of such notification to the 
 time of the final payment of such excess part of the tax, 
 interest shall be added thereto at the rate of ten per 
 centum per annum^ and the amount of such excess shall be 
 a lien upon the entire gross estate, except such part thereof 
 as may have been sold to a bona fide purchaser for a fair 
 consideration in money or money's worth. 
 
 The collector shall grant to the person paying the tax 
 dupUcate receipts, either of which shall be sufficient evi- 
 dence of such payment, and shall entitle the executor to 
 be credited and allowed the amount thereof by any court 
 having jurisdiction to audit or settle his accounts. 
 
 Sec. 208. That if the tax herein imposed is not paid 
 within sixty days after it is due, the collector shall, unless 
 there is reasonable cause for further delay, commence 
 appropriate proceedings in any court of the United States, 
 in the name of the United States, to subject the property of 
 the decedent to be sold under the judgment or decree of 
 the court. From the proceeds of such sale the amount of 
 the tax, together with the costs and expenses of every 
 description to be allowed by the court, shall be first paid, 
 and the balance shall be deposited according to the order 
 of the court, to be paid under its direction to the person 
 entitled thereto. If the tax or any part thereof is paid 
 by, or collected out of that part of the estate passing to 
 or in the possession of, any person other than the executor 
 in his capacity as such, such person shall be entitled to 
 reimbursement out of any part of the estate still undis- 
 tributed or by a just and equitable contribution by the 
 Eersons whose interest in the estate of the decedent would 
 ave been reduced if the tax had been paid before the 
 distribution of the estate or whose interest is subject to 
 equal or prior liability for the payment of taxes, debts, or 
 other charges against the estate, it being the purpose and 
 intent of this title that so far as is practicable and unless 
 
FEDERAL ESTATE TAX LAW 
 
 16 
 
 otherwise directed by the will of the decedent the tax shall 
 be paid out of the estate before its distnbution. 
 
 Sec. 209. That unless the tax is sooner paid in full, it 
 shall be a lien for ten years upon the gross estate of the 
 decedent, except that such part of the gross estate as is 
 used for the payment of charges against the estate and 
 expenses of its administration, allowed by any court having 
 jurisdiction thereof, shall be divested of such lien. 
 
 If the decedent makes a transfer of, or creates a trust 
 with respect to, any property in contemplation of or in- 
 tended to take effect in possession or enjoyment at or 
 after his death (except in the case of a bona fide sale for a 
 fair consideration in money or money's worth) and if the 
 tax in respect thereto is not paid when due, the transferee 
 or trustee shall be personally liable for such tax, and such 
 property, to the extent of the decedent's interest therein at 
 the time of such transfer, shall be subject to a like lien 
 equal to the amount of such tax. Any part of such prop- 
 erty sold by such transferee or trustee to a bona fide 
 purchaser for a fair consideration in money or money's 
 worth shall be divested of the lien and a like hen shall then 
 attach to all the property of such transferee or trustee, 
 except any part sold to a bona fide purchaser for a fair 
 consideration in money or money's worth. 
 
 Tax a Lien 
 for Ten Years 
 
 When Trans- 
 feree or 
 Trustee 
 Liable for 
 Payment of 
 Tax 
 
 Sec. 210. That whoever knowingly makes any false 
 statement in any notice or return required to be filed by 
 this title shall be liable to a penalty of not exceeding 
 $5,000, or imprisonment not exceeding one year, or both, 
 in the discretion of the court. 
 
 Whoever fails to comply with any duty imposed upon 
 him bjr section two hundred and five, or, having in his 
 possession or control any record, file, or paper, containing 
 or supposed to contain any information concerning the 
 estate of the decedent, fails to exhibit the same upon 
 request to the Commissioner of Internal Revenue or any 
 collector or law officer of the United States, or his duly 
 authorized deputy or agent, who desires to examine the 
 same in the performance of hjs duties under this title, shall 
 be liable to a penalty of not exceeding $500, to be recov- 
 ered, with costs of suit, in a civil action in the name of 
 the tlnited States. 
 
 Penalty for 
 
 False 
 
 Statement 
 
 Penalty for 
 Failure to 
 Give Notice 
 of Qualifying 
 or for Failure 
 to Make 
 Return 
 
16 
 
 FEDERAL ESTATE TAX LAW 
 
 Laws Made 
 Applicable 
 Bfereto 
 
 Regulations 
 
 Sec. 211. That all administrative, special, and general 
 provisions of law, including the laws in relation to the 
 assessment and collection of taxes, not heretofore specifi- 
 cally repealed are hereby made to apply to this title so 
 far as applicable and not inconsistent with its provisions. 
 
 Sec. 212. That the Commissioner of Internal Revenue, 
 with the approval of the Secretary of the Treasury, shall 
 make such regulations, and prescribe and require the use 
 of such books and forms, as he may deem necessary to 
 carry out the provisions of this title. 
 
APPENDIX 
 
 Federal Estate Tax Law Regulations 
 and Decisions 
 
 Regulations No. 37, Governing the Collection of Estate 
 Tax, Under the Act of September 8, 1916 
 
 Treasury Department, 
 Office op Commissioner of Internal Revenue, 
 Washington, D. C, October 10, 1916. 
 
 Transfer of Net Estates Taxable where Decedent 
 
 Died after Sept. 8, 1916 
 
 Article I. — Title II of the revenue act of September 8, 
 1916, levies a tax upon the transfer of net estates of 
 decedents dying after the passage of the act — i. e., on or 
 after September 9, 1916 — whether the decedent be a resi- 
 dent or a nonresident of the United States. 
 
 Territory for Tax Levy, United States Defined 
 
 for Purpose of This Tax 
 
 Art. II. — The United States is defined (section 200) as 
 including continental United States, Alaska, and Hawaii. 
 The tax is not imposed in Porto Rico or the Philippine 
 Islands, but, under the definition of the title, the property 
 in the United States of deceased residents of the islands is 
 taxable as the property of nonresidents. 
 
 Exemption of $50,000 for Estates of Residents 
 
 Art. III. — The rates of tax are set forth in section 201. 
 In the case of the estates of all residents an exemption of 
 $50,000 is allowed in determining the value of the net 
 estate. But in the case of nonresidents^ estates, no exemp- 
 tion is allowed, the only deductions from the gross estate 
 being a certain proportion of such charges and losses as are 
 allowed estates of residents. (See Article IX.) 
 
1« APPENDIX 
 
 The Gross Estate 
 
 Gix^s Estate Defined. Property in Charge of 
 Executors 
 
 Art. IV. — The gross estate of a decedent, as defined in 
 section 202, includes; 
 
 (1) The entire estate of every kind, real, personal, and 
 mixed, tangible and intangible property, coming into the 
 hands of executors or administrators, or such as would 
 legally come into their charge if executors or administrators 
 were appointed, and which property would be subject to 
 charges against the estate, expenses of administration, 
 and distribution to the heirs or legatees. This woula 
 include insurance, not payable directly to a beneficiary 
 named in the insurance contract, but passing as a part of 
 the administered estate. It would include also the good 
 will of claimant's business, if such good will possessed an 
 actual monetary value. 
 
 Property Transferred by Deed of Trust, Gift, or 
 Sale; when to be Included in Gross Estate 
 
 (2) All property transferred by decedent during his 
 lifetime, but in contemplation of, or intended to take 
 effect, at his death. This includes not only property 
 transferred by an instrument effecting a final disposition 
 of the transferor's death, but transfers of anjr kind, includ- 
 ing gifts and sales that were not bona fide — -i. e., made for 
 an adequate consideration in money or money's worth — 
 where it can be established that such transfers were made 
 in contemplation of death. The law provides not only 
 that all such transfers of any portion of decedent's prop- 
 erty shall be included in the gross estate, but that all such 
 transfers of material value made within two years prior to 
 death shall be presumed to have been made m contempla- 
 tion of death, and the burden of proving that they were 
 not made in such contemplation and securing their exemp- 
 tion from tax is placed upon the beneficiary. Wherever, 
 therefore, a collector or agent shall have knowledge of such 
 a gift, "sale," or other transfer he shall require that it be 
 returned as a part of the decedent's gross estate. All 
 executors and administrators having knowledge of such 
 transfers as are described in this paragraph are required 
 by the law to set forth the facts upon their return of the 
 estate (Form 706). 
 
APPENDIX 19 
 
 Investigation of Transfers Made More Than Two 
 
 Years Prior to Decedent's Death 
 
 If, in the case of transfers made more than two years 
 prior to decedent's death, the executors or administrators 
 shall not include the value of the transfers upon the return 
 of the estate, collectors shall not add such value to the 
 gross estate until a thorough investigation has been made, 
 all the facts have been ascertained, and the collector shall 
 have satisfied himself that the transfers were actually 
 made with the view of providing for the beneficiary after 
 or because of decedent's death. 
 
 ''Material'' Transfers Made Within Two Years 
 
 Prior to Death Required To Be Returned 
 
 In the case of transfers made within two years prior to 
 decedent's death, it should be noted that if such transfers 
 were made in contemplation of death they are to be in- 
 cluded in the gross estate regardless of their value. It is 
 only where the value is a ''material part" of decedent's 
 whole estate that the presumption is that they were made 
 in contemplation of death. Where, therefore, an executor 
 has made return and the collector finds that transfers of 
 material value made within two years prior to decedent's 
 death have been omitted, the collector shall require the 
 executor to amend the return by including such transfers 
 in the gross estate, unless the executor shall file conclusive 
 evidence that the transfers were not made in contempla- 
 tion of death. 
 
 Property Owned Jointly 
 
 (3) Decedent's share in joint bank accounts or in any 
 other property owned by decedent jointly with another or 
 with others as tenants in entirety. Only such part of such , 
 property as can be shown never to have been owned by the 
 decedent can be excluded from his gross estate. 
 
 Gross Estate Where There Is No Executor 
 
 Art. V. — In the case of property of a decedent whose 
 estate has no executor or administrator, all the property 
 and interests of the decedent, including the mterests 
 described in paragraphs 2 and 3 above, will be aggregated 
 to determine the gross estate. (See Art. XVII.) 
 
20 APPENDIX 
 
 Situs of Stock, Etc., Owned by a Nonresident 
 
 Art. VI. — In the cases of nonresident decedents, stock 
 owned in a domestic corporation is to be treated as a part 
 of the gross estate in the United States, Hawaii, or Alaska. 
 Also such property and interests of a nonresident decedent 
 as are described in paragraph 2 of this article [Art. IV.] 
 are to be treated as part of the gross estate in the United 
 States, Hawaii, and Alaska, if their situs was the United 
 States, Hawaii, and Alaska, either at the time of making a 
 transfer thereof, or at the time of decedent's death. 
 
 Income and Appreciation To Be Included in the 
 Gross Estate 
 
 Art. yil. — Income earned during the settlement of the 
 estate (in the case of a nonresident, income earned on the 
 property situated in the United States, Hawaii, and 
 Alaska) is also to be treated as a part of the gross estate. 
 Also, any appreciation in values after the death of the 
 decedent and prior to the distribution of the net estate is 
 to be included in the gross estate on the return, since the 
 tax attaches upon the transfer of the net estate and losses 
 sustained during administration are deductible. 
 
 [Amended by Treasury Decision 2j^6, see page 32] 
 
 The Net Estate 
 
 Residents^ Net Estates — Deductions From the Gross 
 Estate — Funeral Expenses, Etc. 
 
 Art. VIII. — From the gross estate, determined as set 
 forth in Articles IV to VII above, certain deductions are 
 allowable, as follows: 
 
 In the cases of estates of residents: 
 
 (1) Funeral expenses. 
 
 (2) Legitimate administration expense. 
 
 (3) Valid claims against the estate. 
 
 Mortgages 
 
 (4) Mortgages against decedent's property, but only 
 such mortgages as were existent and unpaid at the time of 
 
APPENDIX 21 
 
 decedent^s death. If in returning the gross estate only the 
 net value to the estate of the mortgaged property is 
 reported, the value of the mortgages can not be deducted, 
 as, obviously, this would effect a double deduction. 
 
 Losses 
 
 (5) Losses of the estate arising during the legal period 
 of administration and caused by fires, storms, shipwreck, 
 or other unavoidable accident, or by theft. Only the net 
 loss, after all compensations from insurance or otherwise 
 have been credited can be deducted. 
 
 Support of Dependents 
 
 (6) Support of decedent's dependents during the legal 
 period of administration. This can not be an arbitrary 
 estimate, but must be limited to the amount actually paid 
 by the executors or administrators to such persons as were 
 dependent upon the decedent for support at the time of 
 decedent's death. 
 
 Other Legal Charges — Exemption of $50,000 
 
 (7) Such other legal charges against the ^oss estate 
 as may be allowed in a court of competent jurisdiction. 
 
 (8) The specific exemption of $50,000. 
 
 Nonresidents' Net Estates 
 
 Abt. IX. — In the case of estates of nonresidents: 
 (a) From the gross estate situate in the United States, 
 Alaska, and Hawaii, determined in the manner set forth 
 in Article II, there may be deducted a proportionate share 
 of all the expenses, losses, and charges enumerated in 
 items 1 to 7, Article VIII above, equal to the share the 
 whole gross estate in the United States, Alaska, and Hawaii 
 is of the entire gross estate wherever situated. 
 
 Example : If the total gross estate wherever situated is 
 $1,000,000, and the share in the United States, Alaska, 
 and Hawaii is $100,000, and if the total of legal expenses, 
 charges and losses is $50,000, the share deductible from the 
 gross estate within the United States, etc., is $5,000. A 
 synopsis of the correct return would read: Gross estate, 
 $100,000; legal deductions, $5,000; net estate, $95,000; 
 tax due, $1,400. 
 
22 APPENDIX 
 
 No Exemption for NonresidenU 
 
 (b) The exemption of $50,000 to be taken in determin- 
 ing the net estates of residents does not apply, and no part 
 of it applies, to the estate of a nonresident. 
 
 No Deductions for Nonresidents if Return Is 
 Incomplete 
 
 (c) Furthermore, the law specifically provides (sec. 
 203) that if any deductions whatever are to be allowed from 
 the gross estate of a nonresident decedent, the return filed 
 by the executor or administrator must show not only the 
 value of the gross estate situated in the United States, 
 Hawaii, and Alaska, but also the value of all the property 
 and interests, wherever situated, of the decedent. 
 
 30-Day Notice 
 
 Abt. X.— In cases of estates in the hands of executors 
 and administrators, the act requires — 
 
 Executors To File Notice of Appointment 
 
 (1) That within 30 days after the issuance by the court 
 of letters testamentary or letters of administration a formal 
 notice of such issuance be filed by the executors or adminis- 
 trators with the collector of the district in which decedent 
 was a resident at the time of his death. (Form 704.) 
 
 Other Persons Taking Possession of Decedent's 
 Property To File Notice 
 
 (2) That any person coming into possession, prior to 
 the issuance of letters to executors or administrators, of 
 any property of the decedent, shall, within 30 da^ys from 
 the day of acquiring possession, file a similar notice with 
 collector. (Form 705.) 
 
APPENDIX 28 
 
 Donees and Transferees — Similar Notice 
 Required 
 
 (3) The law contemplates also that aU persons who 
 shall have received withmtwo years prior to the death of 
 the decedent any material part of decedent's property, 
 either as a gift in contemplation of death, or by a transfer 
 intended to take legal effect at decedent's death, or by a 
 so-called sale which was not a bona-fide sale for a fair con- 
 sideration in money or money's worth, should file a similar 
 notice with the collector within 30 days after the death of 
 decedent. This is clearly indicated by section 202, para- 
 graph B, of the act, wherein, for the purpose of tax liability, 
 such gifts, transfers, and "sales" are held effective m 
 every case as of the day of the donor's or transferor's 
 death. With the notice to the collector, the donee or 
 transferee may file such evidence as may be desired to 
 establish whether the gift or transfer was in contemplation 
 of, or intended to take effect at, the donor's or transferor's 
 death, or whether the sale was bona fide. (Form 705.) 
 
 Duty of Beneficiaries Where There Is No Executor 
 
 (4) In the cases of estates where no executors or ad- 
 ministrators come at any time into charge of the property, 
 the burden of filing the 30-day notice is placed by the law 
 upon the individual beneficiaries. Each such beneficiarj' 
 having reason to believe that the total property of the 
 decedent exceeds the gross value of $60,000 or the net value 
 of $50,000, must file the 30-<lay notice with the collector 
 within 30 days after coming into possession of any portion 
 of the property. (Form 705.) 
 
 Where Notice for Nonresidents' Estates Shall Be 
 Filed 
 
 Art. XI. — In the cases of the estates of nonresidents the 
 above set forth requirements apply fully, except that the 
 collector with whom any notice is to be filed is the collector 
 in whose district the property liable for the tax is situated. 
 If such property is located in more than one district the 
 notice is to be filed with the collector at Baltimore, Md. 
 
24 APPENDIX 
 
 Collectors to Inform Executors as to Beneficiaries 
 
 Art. XII. — Whenever a collector, in the case of a given 
 estate, receives the notice from a beneficiary and there are 
 executors or administrators acting, he shall promptly in- 
 form the executors or administrators of the beneficiary's 
 name and address, in order that the executor or adminis- 
 trator, in compliance with the provisions of section 205, 
 may ascertain such facts with regard to the property pos- 
 sessed by the beneficiary as the executor or administrator is 
 required to show upon his return. 
 
 Forms for Giving Notice 
 
 Executors or administrators will render this notice on 
 Form 704. Beneficiaries will render the notice on Form 
 705. 
 
 The Return 
 
 Return to Be Made Within One Year After De- 
 cedent^s Death — Tentative Return May Be Made 
 
 Art. XIII. — ^A return of the gross and net estate must 
 be filed with the collector by the executor or administrator 
 within one year after decedent's death and before distribu- 
 tion or tax payment is made. The return must be upon 
 Form 706 and all information called for upon the blank 
 return must be given. If the administration of the estate 
 is in such incomplete condition that correct information as 
 to the value of the net estate can not be given, a tentative 
 return may be filed showing an estimate of the gross and 
 net estate, and the tax due, and such estimated tax may be 
 paid at the time the return is filed. The return must be 
 made and filed with the collector in duplicate, one copy to 
 be retained by the collector and one forwarded by him to 
 the commissioner. Where a tentative return has been 
 filed a final and complete return must be made on or before 
 the date of final payment of the tax in full. Wherever 
 there is a partial payment of tax in advance a tentative 
 return must be filed before the collector will accept the 
 partial payment. 
 
APPENDIX 26 
 
 When Estates of Residents Are Not Required to 
 File Notice or Return 
 
 Abt. XIV. — In the case of the estates of residents neither 
 the 30-day notice or the return can be required, except 
 where the gross estate, as defined in Articles IV to VII above, 
 exceeds $60,000, or the net estate, computed in accordance 
 with Article VIII above, exceeds $50,000. Wherever 
 either of these conditions exists the 30-day notice and the 
 return must be filed. 
 
 Every Nonresident's Estate Liable for Notice and 
 Return 
 
 Art. XV. — The return is required of the estate of every 
 nonresident leaving property within the United States, 
 Alaska, or Hawaii, regardless of the amount of property so 
 left. 
 
 When Beneficiaries Must File Notice and Return 
 
 Art. XVI. — In the case of estates having no executors 
 or administrators, or where any part of the gross estate as 
 defined in Articles IV to VII above passes other than in charge 
 of executors or administrators, the act places upon the separ- 
 ate beneficiaries the precise duties with regard to the filing 
 of the 30-day notice and the return and the payment of 
 tax that are otherwise imposed on the executors and 
 administrators. Each such beneficiary is as fully liable to 
 all the penalties provided in the act as is the executor or 
 the administrator. Where the property is held for the 
 beneficiary by guardians, trustees, or fiduciaries, the 30- 
 day notice and the return may be executed by such repre- 
 sentatives of the beneficiary. 
 
 Collector to Make Final Returns Where There Is 
 
 No Executor 
 
 Art. XVII. — ^Each beneficiary making return for any 
 part of the estate tax is required by the law to give all the 
 mformation possible regarding any part of the estate. The 
 final and complete return, in cases where no executor or 
 administrator acts, will be compiled by the collector from 
 the several returns of the individual beneficiaries. After 
 
26 APPENDIX 
 
 having determined in this manner the total gross and net 
 estate, the rate of tax, and the prop^^rtionate amount due 
 from each beneficiary, the collector shall notify each bene- 
 ficiary accordingly, and will enter upon the assessment list 
 the amount of tax apportionable to each. 
 
 When no Return or When False Return Is Filed 
 
 Abt. XVIII. — Where a return is materially false or in- 
 correct, or where no return is filed, the collector or his 
 deputy, after investigation, shall make the return and the 
 commissioner shall assess tne tax thereupon. 
 
 Cooperation of Collectors 
 
 Abt. XIX.— When a beneficiary files with the collector 
 in whose district he resides a notice of the receipt of prop- 
 erty which discloses that the decedent was resident at the 
 time of death in another collection district, the collector 
 receiving the notice shall forward it to the proper collector 
 and shall promptly inform the beneficiary as to the collec- 
 tion district in which return is required to be made and 
 tax paid. 
 
 Where Returns of Nonresidents' Estates Are To Be 
 Filed 
 
 Abt. XX. — In the cases of the estates of nonresidents 
 the above set forth requirements apply fully, except that 
 the collector with whom the notice or return is to be filed 
 is the collector in whose district the property hable for the 
 tax is situated. If such property is located in more than 
 one district, the notice or return is to be filed with the 
 collector at Baltimore, Md. 
 
 Penalties 
 
 Abt. XXI. — ^Two separate penalties are provided 
 connection with the 30-day notice and the return: 
 
APPENDIX 27 
 
 Five Thousand Dollars Penalty for False 
 Statement 
 
 (1) For a false statement knowingly made in a notice 
 or return the penalty is a fine not to exceed $5,000, or 
 imprisonment not exceeding one year, or both; 
 
 Five Hundred Dollars Penalty for Failure to File 
 
 (2) For failure, whether through neglect or otherwise, 
 to file the notice or the return at the times required, a 
 penalty of not exceeding $500 to be recovered, with costs of 
 suit, in a civil action in the name of the United States. 
 
 Payment of Tax 
 
 Tax Due One Year From Day of Decedent's Death 
 — 5 Per Cent, Discount for Advance Payment 
 
 Art. XXII. — Section 204 provides that the tax is due 
 and payable one year from the day of decedent^s death. 
 Discount at the rate of 5 per cent, per annum is allowed for 
 avment in advance. Thus, if the tax is paid two months 
 efore the due date, a discount of one-sixth of 5 per cent, 
 of the total tax shown by the return as due is allowed. 
 
 Suit for Taxes 60 Days Overdue 
 
 Art. XXIII, — The law makes two provisions with 
 regard to taxes delayed in pajonent beyond the due date: 
 
 (1) Where the delay exceeds 60 days beyond the due 
 date, if the collector has reason to believe the payment is 
 being arbitrarily withheld, or the Government is in danger 
 of loss thereby, he shall report the facts to the commis- 
 sioner, and with the approval of the commissioner, he shall 
 then proceed in accordance with section 208 to report 
 the facts to the United States attorney in order that action 
 may be brought to subject the property of the decedent to 
 be sold under judgment of the United States court. 
 
 Interest at 10 per Cent, or 6 per Cent, on Tax 90 
 Days Overdue 
 
 (2) Where the tax is delayed in payment more than 90 
 days after the due date interest begins to run at the rate 
 of 10 per cent, per annum and is computed from the day of 
 
 E; 
 
28 APPENDIX 
 
 the decedent^s death to the day of pajmaent. Provision 
 is made, however, that if after investigation the collector 
 determines the cause of the delay to be imavoidable, 
 either because of necessary Utigation or other condition 
 beyond the control of those responsible for the payment of 
 the tax, and the true tax can not, therefore, be determined, 
 the interest shall be at the rate of 6 per cent, instead of 
 10 per cent, per annum, running, nevertheless, from the 
 date of decedent's death. 
 
 Duplicate Receipt 
 
 Art. XXIV. — The tax may be paid to the collector or 
 his deputy. The collector will issue a receipt in duplicate. 
 
 When Advance Payment Relieves From Interest 
 
 Abt. XXV. — Where prior to final settlement of an estate 
 the collector has accepted a tax pajrment which he deems 
 sufficient fully to cover the estate's liability, such payment 
 shall reUeve from the accruing of further interest imtil such 
 time, if ever, as it may be determined that the payment was 
 insufficient. The collector shall then notify the persons 
 liable for the additional tax, and interest at the rate of 10 
 per cent, per annum shall run upon the due tax from the 
 date of the collector's notice and demand until the date of 
 pa3anent of the entire additional tax due. 
 
 Tax To Be Paid Before Distribution of Estate 
 
 Art. XXVI. — It is provided in the law (see sec. 208) 
 that in every case, except where a valid will of a testator 
 provides otherwise, the tax shall be paid from the corpus 
 of the estate by the executors or administrators before 
 distribution to beneficiaries is made. 
 
 Lien for 10 Years 
 
 Art. XXVII. — Any unpaid amount of tax due is a lien 
 for 10 years upon all the property of the decedent. Under 
 certain conditions outlined in the section 209 the lien may 
 attach to the property of a trustee or transferee of decedent. 
 
APPENDIX 29 
 
 Administration Provisions 
 Powers of Investigation; Collectors, Agents, Etc, 
 
 Art. XXVIII. — Under section 210 of the act the com- 
 missioner, or any collector or law oflScer, or his authorized 
 deputy or agent, has authority to examine any record, 
 file, or paper containing, or supposed by the oflficial to con- 
 tain, any information concerning the estate of a decedent. 
 Refusal to exhibit, upon the officiaFs request, any such 
 record, file, or paper renders the person having custody of 
 the same liable to a penalty of not exceeding S500, recover- 
 able, with costs, in a civil action in the name of the United 
 States. 
 
 Before, however, proceeding to report any such case to 
 the United States attorney, the collector or agent should 
 submit all the facts to the commissioner for advice. 
 
 Assessment, Etc, 
 
 Abt. XXIX. — The present regulations No. 1 [general 
 Internal Revenue regulations] will apply to methods of 
 assessment and collection for the time being and until 
 experience shall have demonstrated whether specific rules 
 for the assessment and collection of this tax are required. 
 
 Claims 
 
 Art. XXX. — The present regulations regarding abate- 
 ment and refund claims will also apply. Attention is called, 
 however, to the provision of section 207^ that where a 
 tentative payment of tax is made, sufficient mthe judgment 
 of the collector at that time to cover all tax liability of the 
 estate, and later it is found that there has been an over- 
 payment, refund of the excess shall be made. This would 
 apply regardless of whether the claim were filed within two 
 years of date of tax pajmaent. 
 
 W. H. OSBORN, 
 
 Commissioner of Internal Revenue. 
 
 Approved: 
 Wm. p. Malburn, 
 Acting Secretary of the Treasury 
 
30 APPENDIX 
 
 (Treasury Decision 2372) 
 Notice and Return by Beneficiaries Coming into 
 Possession of any Property of a Decedent, where 
 no Executor or Administrator of the Decedent's 
 Property is Acting, or Prior to the Appointment 
 of Executors or Administrators 
 
 Treasury Department, 
 Office of Commissioner of Internal Revenue, 
 Washington, D. C, September 25, 1916. 
 To Collectors of Ijjternal Revenue: 
 
 The subjomed extract from an opinion of the Solicitor of 
 Internal Revenue, dated September 23, 1916, is published 
 for the information of those concerned. 
 
 "The said law, the Revenue Act of September 8, 1916, 
 Section 200, defines the term * Executor' as meaning *the 
 executor or administrator, of the decedent, or, if there is 
 no executor or administrator any person who takes posses- 
 sion of any property of the decedent.' 
 
 "Section 205 requires 'that the executor, within 30 days 
 after qualifying as such, or after coming into possession 
 of any property of the decedent, whichever event first 
 occurs, shall give written notice thereof to the collector*; 
 and that *the executor shall also, at such times and in such 
 maimer as may be required by the regulations made under 
 this title, file with the collector a return under oath in 
 duplicate, setting forth the value of the gross estate,' etc. 
 
 "Manifestly the purpose of the law is to secure such 
 information and returns as will enable the Government to 
 properly execute the law and collect such taxes as may be 
 thereby imposed. 
 
 "In view of this uniform interpretation as to the 
 requirement of notice and returns in all matters of revenue 
 taxation, as well as the specific language of the law, I am 
 of the opinion that you are justified m the preparation 
 of regulations requiring persons who come into possession 
 of the property of a decedent, or anv part thereof, prior 
 to the appointment of executors or admmistrators, to give 
 due and proper notice to the collector of that fact. '\^lien 
 executors or administrators are appointed they, of course, 
 supersede all other persons in the control of the property 
 whether such persons are in possession or not, and the 
 duty of giving notice and making returns for the entire 
 estate immediately devolves upon such executors or 
 administrators." 
 
APPENDIX 
 
 {Treasury Decision 2385) 
 Taxable Transfers 
 
 Treasuky Department, 
 Office of Commissioner of Internal Revenue, 
 Washington, D. C, October 21, 1916. 
 Sir: 
 
 Replying to the inquiry in your letter of the 10th in- 
 stant, you are informed that Paragraph B of Section 202, 
 Title II, of the Act of September 8, 1916. provides for the 
 inclusion in the gross estate of a decedent dying on or 
 after September 9, 1916, of any interest of which the de- 
 cedent **has, at any Umey made a transfer" in contempla- 
 tion of, or intended to take effect at or after, decedent's 
 death. 
 
 This language is so specific that it hardly would seem 
 open to question that Congress intended to include in the 
 gross estate, not only such transfers including gifts and 
 sales not bona fide made by instrument dated after Sep- 
 tember 8, 1916, or where the actual transfer took place 
 after that date, but transfers of any kind made in contem- 
 
 Elation of death at any time whatsoever prior to Septem- 
 er 8, 1916. It is believed also that there is no question of 
 the power of Congress to enact such revenue legislation. 
 The test of the tax liability is not in such cases the date of 
 the instrument making the transfer, or the date of the act- 
 ual transfer, but the date of the death of the decedent. 
 
 {Treasury Decision 2395) 
 State Inheritance Taxes 
 
 Treasury Department, 
 Office of Commissioner of Internal Revenue , 
 Washington, D. C, November 17, 1916. 
 Sir: ^ 
 
 Replying to your letter of the 14th instant inquiring 
 whether state inheritance taxes are deductible from the 
 gross estate of a decedent, in determining the federal tax 
 due under Title II of the Revenue Act of September 8, 
 1916, you are informed that among the deductions from 
 the gross estate specified in Section 203. Paragraph a, 
 Subparagraph 1, of the above-mentioned Act, is the item 
 **8uch other charges against the estate, as are allowed by 
 the laws of the jurisdiction, whether within or without the 
 
32 APPENDIX 
 
 United States, under which the estate is being adminis- 
 tered." 
 
 Since it does not appear open to question that state 
 inheritance taxes are a primary charge against an estate 
 and allowable as credits to executors and administrators 
 in every state imposing such taxes, they are clearly de- 
 ductible from the gross estate ©f the decedent whose prop- 
 erty and interests are liable to the federal tax imposed in 
 Title II of the Act of September 8, 1916. 
 
 {Treasury Decision 2406) 
 Income Earned after Decedent's Death and Ap- 
 preciation in Values During Administration 
 are not to be Returned as a Portion of 
 the Gross Estate 
 
 Treasury Department, 
 Office of Commissioner of Internal Revenue, 
 Washington, D. C, December 2, 1916. 
 Sir: 
 
 Replying further to your letter of October 26, 1916, you 
 are informed that Art. VII of Regulations 37 has been re- 
 considered and in view of an opinion of the Solicitor of 
 Internal Revenue dated November 9th, sustained in an 
 opinion of the Attorney General of November 29th, it is 
 held that, for the purpose of tax under Title II of the 
 Revenue Act, of September 8, 1916, the gross estate of a 
 decedent must be based upon the value of the property at 
 the time of decedent's death, and income earned after 
 death and appreciation in values during administration 
 shall be not returned for estate tax. 
 
 {Treasury Decision 2415) 
 
 Conditions Under Which Tentative Return may 
 
 be Filed and Advance Tax Payment Accepted 
 
 Treasury Department, 
 Office of Commissioner op Internal Revenue, 
 Washington, D. C, December 14, 1916. 
 Sm: 
 
 Receipt is acknowledged of your report of the 7th instant 
 with regard to the liability to estate tax of the estate of 
 
 You make specific inquiry with 
 
 regard to the allowance of certain estimated deductions 
 
APPENDIX 33 
 
 from the gross estate which were shown by the executor 
 upon his preliminary return. 
 
 Section 204 of the taxing act, in which provision is 
 made for the allowance of a discount of 5 per cent, for 
 payment of tax before the expiration of one year from 
 the death of the decedent, does not, of course, contemplate 
 that, in order to take advantage of this discount, executors 
 shall be permitted to make vague and inaccurate estimates 
 of the value of the gross estate, or the extent of the legal 
 deductions therefrom. If executors were permitted to 
 make returns which were mere estimates it is obvious that 
 they might oftentimes estimate the gross estate conserva- 
 tively and estimate the deductions generously, or, at least, 
 it could not be assumed that this had not been done, and 
 it would, therefore, be necessary that in every case, after 
 the final accounting of the executors, the Government 
 should make a supplementary investigation to determine 
 the true facts, since in the majority of the cases it would be 
 probable that the tax had been underpaid in the first in- 
 stance. 
 
 Section 205 provides for the filing of the return at 
 such times and in such manner as may be required 
 under the regulations promulgated by the Commissioner 
 of Internal Revenue, with the approval of the Secretary 
 of the Treasury, and it is obvious that the proper time for 
 return to be made is a time coincident, as nearly as possi- 
 ble, with the final settlement of the estate ana the date 
 upon which the estate tax is due. Since in many States 
 more than a year from the decedent's death is allowed for 
 administration, the time set by the regulations for the 
 filing of the return was made comcident with the due date 
 of the tax — that is, one year after decedent's death. 
 
 Section 207 of the act relates primilarly to the pay- 
 ment of the tax and not to the filing of the return, and 
 it contemplates that, if at the time the tax is due it is im- 
 possible, because of delay in administration, for an exactly 
 accurate return to be made, a tentative return may be filed 
 and tax shown thereon to be due may be tentatively ac- 
 cepted by the collector. Neither section 205 nor section 
 207 contemplates that at any time return may be filed 
 and tax paid without a reasonably approximate determin- 
 ation of the facts relating to the gross estate and the sepa- 
 rate legal deductions. 
 
 Therefore, when application is made to collectors for 
 authority to^file^^returns within one year from the death of 
 
34 APPENDIX 
 
 the decedent whose estate is being returned, collectors 
 will reguire that such tentative return be based upon 
 determined or accurately determinable values of gross 
 estate and items of deductions, and if the estate in ques- 
 tion has not reached such a state of settlement that a 
 reasonably accurate retiun can be made, advance payment 
 of tax will not be accepted. 
 
 (Treasury Decision 2421) 
 Thirty-day Notice, Return, and Tax Payment re- 
 quired of Representatives in this Country of Non- 
 residents where no Executor Acts Within ike Re- 
 ?uired Time; also a similar Requirement in the 
 'ase of Fiduciaries holding Property of a Resident 
 Where no Executor Acts 
 
 Treasury Department, 
 Office of Commissioner of Internal Revenue, 
 iWashington, D. C, December 22, 1916. 
 To Collectors of Internal Revenue and Revenue 
 
 Agents: 
 
 Inquiry has been made of this office as to the liability 
 under Section 205 of the Revenue Act of September 8, 
 1916, of representatives in this country of a nonresident 
 decedent leaving property in the hands of the representa- 
 tives, and where, so far as the representatives know, no 
 executor has been appointed. 
 
 Section 205 of the Act requires that the "executor" 
 within thirty days after qualifying as such, or after taking 
 possession of any property of decedent whichever event 
 first occurs, shall give notice to the proper collector, and 
 that later the "executor" shall file return of the estate. 
 Section 207 requires that the "executor" shall pay the tax 
 to the proper collector or his deputy. In Section 200 the 
 term "executor," as used throughout Title II is defined 
 as meaning either the executor or administrator, or if 
 there is none, "any person who !takes_ possession of any 
 property of the decedent." 
 
 In the instance cited to this office for ruling, it is argued 
 that the representatives in this country of the nonresident 
 decedent do not "take possession" of decedent's property, 
 and that, since the representatives are neither adminis- 
 trators nor beneficiaries, they can not be required to file 
 the thirty-day notice, or return, or make pajnoaent of the 
 tax. 
 
APPENDIX 35 
 
 From this view the Government must dissent, for al- 
 though there is no change of agent or representative, there 
 is, immediately upon the nonresident's death, a complete 
 change in the character of the agency. Prior to the death, 
 the local representatives held the property in charge for 
 the nonresident, but immediately the death has occurred, 
 they hold subject to the order of executors or adminis- 
 trators, and for the beneficiaries legally entitled thereto. 
 At the moment of death, there is, on the part of the local 
 representatives, an actual legal taking of possession for 
 succeeding owners; a change in the conditions of possession 
 so complete that no actuality would be added by the sub- 
 stitution of other agents. It is clear, therefore, that, 
 under the provisions of Title II, such representatives are 
 responsible for the filing of the thirty-day notice and can 
 be saved from this responsibility only if, prior to the ex- 
 piration of thirty days from the death of the nonresident, 
 the required notice has been filed by the executor or admin- 
 istrator. 
 
 Further weight is §iven to this ruling by a consideration 
 of the very evident mtent of Congress in its definition in 
 Section 200 of the term "executor." This definition was 
 given with the sole purpose of providing effective means for 
 the ascertainment and collection of the tax due in every 
 case where the complete facts might not be known to the 
 executor or where the executor might be in a position 
 successfully to evade his responsibilities under the taxing 
 act. Obviously, the object on the part of Congress in 
 causing "any person who takes possession of any propertv 
 of the decedent" to share equally with executors and aci- 
 ministrators the liability to render notice and return and 
 pay the tax, was that there should not be, under any cir- 
 cumstances of transmission, a failure of the administrative 
 power to secure a full disclosure of the facts and a complete 
 satisfaction of the tax. Congress must have foreseen^ in 
 enacting the final paragraph of Section 202 that with- 
 out such an administrative requirement as this, the 
 tax due because of stock owned by a nonresident in domes- 
 tic corporations could be successfully evaded. The defi- 
 nition of '* executor" in Section 200 was made intentionally 
 so broad that no property subject to the tax could escape 
 taxation through any uncertamty as to the person liable 
 for giving accurate information with regard thereto. 
 
 The thirty-day notice will, therefore, be required in 
 every case of such representatives in the United States of 
 
36 APPENDIX 
 
 nonresident decedents, unless the representatives know 
 that within thirty days after the death of the decedent 
 the executor or administrator has filed the notice. Simi- 
 larly, the return for the portion of the estate within their 
 charge will be required of the local representatives within 
 one year from the death of the decedent, unless the local 
 representatives, piior to that time, have ascertained that 
 the executor or administrator has filed the return. Simi- 
 larly, tax payment will be required of the representatives 
 out of the property in their charge, if payment has not 
 been made before the due date by the executor or adminis- 
 trator. The penalty imposed m Section 210 for failure 
 to fulfill these requirements is $500, to be recovered with 
 costs of suit in a civil action. 
 
 This ruling applies also with regard to certain property 
 of residents, such as the decedent's interest in joint oant 
 accoiints or any other property owned jointly, or as ten- 
 ants in entirety, and property conveyed by deed of trust. 
 In such cases, the fiduciary holding for the succeeding 
 beneficiary the decedent's share of the joint account, or 
 other property jointly owned, or acting as trustee of prop- 
 erty conveyed to beneficiaries by a deed of trust, is re- 
 quired to file the thirty-day notice and the return and make 
 tax payment, imless, within the required periods, the re- 
 quirements of the law have been otherwise fully satisfied. 
 
 (Treasury Decision 2449) 
 The Value of United States Bonds can not be 
 Excluded from the Gross or Net Estate in Deter- 
 mining Estate Tax Due 
 
 Treasury Department, 
 Office of Commissioner of Internal Revenue, 
 Washington, D. C, February 13, 1917. 
 Sir: 
 
 Answering the question presented by * * * under 
 date of the 10th instant, relative to the liability of estates 
 to taxation under the recent Federal Estate Tax Act, it is 
 manifest from the following decisions of the United States 
 Supreme Court that U. S. Government bonds must be 
 added to the value of estates for the purpose of taxation 
 imder said Act. 
 
 The U. S. Supreme Court in Plummer vs. Coler (178 
 U. S. 134), considering the question whether, under the 
 inheritance tax laws of a State, a tax might be validly im- 
 
APPENDIX 37 
 
 posed upon a legacy consisting of United States bonds 
 issued under a statute declaring them exempt from state 
 taxation in any form, said: 
 
 "We think the conclusion, fairly to be drawn from 
 the state and Federal cases, is, thab the right to take 
 property by will or descent is derived from and 
 regulated by municipal law; that, in assessing a tax 
 upon such right or privilege, the State may lawfully 
 measure or fix the amount of the tax by referring to 
 the value of the property passing; and that the inci- 
 dental fact that such property is composed wholly 
 or in part, of Federal securities, does not invalidate 
 the tax or the law under which it is imposed." 
 
 And dealing directly with the power of the Federal 
 Government under the Inheritance Tax Act of 1898, to 
 impose legacy taxes upon the transmission of an estate 
 consisting of "free-tax" Government bonds, the Court 
 in Murdock vs. Ward (178 U. S. 147), referring to the dis- 
 cussion and decision in the Plummer case, held : 
 
 "If a state inheritance law can validly impose a 
 tax measured by the amount or value of the legacy, 
 even if that amount includes United States bonds, the 
 reasoning that justifies such a conclusion must, when 
 applied to the case of a Federal inheritance law taxing 
 the very same legacy, bring us to the same conclusion. 
 We must, therefore, hold that if, as held in Knowl- 
 ton vs. Moore, the tax imposed under the Act of 
 June 13, 1898, is not invalid as a direct, unappor- 
 tioned tax, nor for want of uniformity, nor as an 
 infringement upon the laws of the states regulating 
 wills and descents, then the tax upon legaciei or be- 
 quests, descendible under and regulated by state laws, 
 is valid even if such legacies incidentally are com- 
 posed of Federal bonds." 
 
 And further, in Sherman vs. United States (178 U. S. 
 151 ) the Court said : 
 
 "The proposition that bonds of the United States 
 and the income therefrom are not lawfully taxable 
 under an inheritance tax law of the United States, 
 because exempted by contract from such tax, has 
 just been decided not to be well founded,^[ 
 This is clearly conclusive of the whole question. 
 
38 APPENDIX 
 
 (Treasury Decision 2450) 
 Method of [Determining Share in Community 
 Property or Property Owned Jointly or in En- 
 tirety^ to be Returned as a Portion of the Gross 
 Estate of a Decedent Tenant 
 
 Treasury Department, 
 Office of Commissioner of Internal Revenue , 
 Washington, D. C, February 14, 1917. 
 Sir: 
 
 Receipt is acknowledged of your letter of the 6th instant 
 calling attention to the report of the Revenue Agent, dated 
 the 3rd instant, with regard to the liability to estate tax of 
 the estate of . , . 
 
 You state that, under the Texas law, all property earned 
 by a husband or wife during the period of their marriage is 
 community property and owned jointly. The death of 
 either does not affect the interest owned by the survivor; 
 that is, this interest does not pass by inheritance. The 
 
 Eublic records in such cases may, however, be misleading 
 ecause any conveyance, legally made to both, is apt to be 
 recorded in the name of one, usually the husband. As a 
 matter of fact, however, there is a legal presumption that 
 the whole property conveyed to either is community, with- 
 out reference to the maimer of its acquisition. However, 
 if property were purchased by the separate means or 
 property of either, or were received by either as an inheri- 
 tance, such property would not be community, but would 
 be individual property, without reference to the maimer 
 in which the deed of conveyance is stated. Notwith- 
 standing this, however, under the presumption of the 
 Texas law, it would have to be considered community prop- 
 erty until facts otherwise were developed. 
 
 In the case of the .... estate, the Revenue 
 Agent reported as belonging to the estate of the deceased 
 husband, the entire property which the public records 
 showed as in his name. The widow, who is also adminis- 
 tratrix, stated to the Agent that the entire property so 
 treatea by the Agent as the gross estate of the deceased 
 husband was, in fact, community property, but up to this 
 time she has submitted no evidence substantiating this con- 
 tention. While, for the purposes of local admimstration a 
 presumption would be created by the local law in favor of 
 the widow's contention in this case, such a presumption 
 
APPENDIX 39 
 
 does not rest in her favor so far as any responsibility or duty 
 that may be imposed upon her by Federal Law is con- 
 cerned. No State Statute of this character has any modi- 
 fying effect whatever upon the explicit terms of a Federal 
 Taxmg Act. The Act of CJongress of September 8, 1916, 
 creates its own presumptions and defines explicitly the 
 terms under which exemption from tax may be clauned. 
 You will note that, under Section 202, Paragraph C, there 
 is required to be included in the gross estate of a decedent 
 all the interest held jointly or as tenants in the entirety by 
 the decedent and another person, * 'except such part thereof 
 as may be shown to have originally belonged to such other 
 person and never to have belonged to the decedent." Under 
 this paragraph of the taxing act, wherever the public 
 records show property in the name of the decedent, the 
 presumption is that it was the sole property of the decedent, 
 and the burden of proving that another person owned, 
 prior to the decedent's death, any interest therein is not 
 upon the Government, but is upon the estate. 
 
 You will note the extremely limiting terms of the para- 
 graph quoted above and that it must be shown that any 
 part of the property to be excluded from the gross estate 
 actually belonged in the first instance to a person other 
 than the decedent and that it has never been owned by the 
 decedent. If, under the Texas law, property conveyed to 
 a husband or wife during their marriage is taken by each 
 in entirety and in such a manner that it could not be con- 
 tended that any specific part belonged to either, but that 
 each was the owner of all, and upon the death of either no 
 new interest or title vested in the survivor, as is the case in 
 some states, the Government, under a strict and technical 
 interpretation of Paragraph C of Section 202, would per- 
 haps be justified in demanding that the whole of the prop- 
 erty thus owned be included as a portion of the gross estate 
 of the decedent. This, however, does not seem to have 
 been the intent of Congress and it has heretofore been 
 ruled in a similar case that one-haK of the property, thus 
 jointly owned, should be returned as a portion of the gross 
 estate of the decedent husband or wife, as the case might 
 be. 
 
 In the case of the .... estate, therefore, you 
 should require of the administratrix in due time the return 
 on Form 706 and therewith may be submitted any evidence 
 available to the administratrix to establish that any part of 
 the property included in the gross estate was actually com- 
 
40 APPENDIX 
 
 munity property of the decedent and his wife and that, 
 therefore, but one-half thereof is to be treated as the estate 
 of the decedent. 
 
 (Treasury Decision 2453) 
 
 The Deductions from the Gross Estate Provided 
 
 in Section 203, Paragraph i, are Limited to 
 
 Amounts Allowed Under the Laws of the Local 
 
 Jurisdiction 
 
 Treasury Department, 
 Office of Commissioner of Internal Revenue, 
 Washington, D. C, March 7, 1917. 
 
 SlRl 
 
 Receipt is acknowledged of your letter of the third in- 
 stant quoting Section 203, paragraph 1, of the estate tax- 
 ing act and inquiring whether the phrase, "such other 
 charges against the estate as are allowed by the laws of the 
 jurisdiction" is interpreted by the Bureau as limiting all 
 the preceding clauses of the paragraph; that is, whether any 
 amounts could be deducted from the gross estate because 
 of funeral expenses, claims against the estate, losses, etc., 
 which were in excess of the amounts allowable under the 
 laws of the local jurisdiction. 
 
 While the punctuation and construction of the para- 
 graph may not be absolutely conclusive upon this point, 
 it is the opinion of this office that the Umitation set up in 
 the concluding part of the paragraph applies to all the 
 items enumerated in the paragraph; that is, there could 
 not be deducted from the gross estate in determining the 
 net estate liable to tax any funeral or other expenses, or 
 any losses and charges which were in excess of the amounts 
 allowable under the laws of the local jurisdiction as 
 credits to administrators or executors in their accounts in 
 the probate courts. 
 
 It is so ruled. 
 
APPENDIX 41 
 
 {Treasury Decision 2454) 
 
 Duties of HeirSf Donees, Trustees, Fiduciaries, 
 
 Tranrfer Agents, and Others Having or Coming 
 
 into Possession of Property of a Decedent Whose 
 
 Estate is Liable for Estate Tax, 
 
 Treasury Department, 
 Office of Commissioner of Internal Revenue, 
 Washington, D. C, February 28, 1917. 
 
 Section 200 of the revenue act of September 8, 1916, 
 in defining the term "executor" as including, "if there is 
 no executor or administrator, any person who takes pos- 
 session of any property of the decedent," clearly intended 
 to provide that wherever circumstances are such that the 
 Government could not proceed against an administrator 
 or executor for satisfaction of the requirements of the 
 taxing act there shall be no failure, because of inability 
 to hold others in possession responsible, to collect the whole 
 tax due. 
 
 Careful consideration has been given in the light of this 
 intent of Congress to the problem of determining how far 
 the duties of filing 30-day notice and return and making 
 tax payment may be left solely to duly appointed execu- 
 tors or administrators, and to what extent, in order to 
 insure the collection of tax due, others in possession must 
 be required to assume these responsibihties. As a result 
 of this consideration the following supplemental regula- 
 tions are promulgated, under authority of section 212 of the 
 Act. 
 
 Estates of Resident Decedents 
 
 Thirty day notice (Form 705) must be filed, within 30 
 days after death of the decedent whose estate is taxable, 
 by others than executors or administrators, as follows: 
 
 (1) By the surviving husband or wife, as the case may 
 be, for one-half the value at the decedent's death, of 
 community property owned by the decedent and the sur- 
 vivor. 
 
 (2) By the first taker after the decedent of any of de- 
 cedent's real property where this passes, in accordance 
 with the local law, directly to the heirs of decedent. 
 
 (3) By donees who have received within two years prior 
 to the decedent's death any gift of material value from the 
 decedent, or who have received at any time whatever gifts 
 
42 APPENDIX 
 
 made by decedent in contemplation of, or intended to take 
 legal effect at, death. 
 
 (4) By trustees holding property conveyed dm-ing life 
 time by the decedent in contemplation of 'death or with 
 intent to provide for others than decedent at or after de- 
 cedent's death, regardless of the date of the instrument 
 maJdng the conveyance, or the date of possession by the 
 trustee, or the date of vesting of the right of survivors to 
 possession or enjo3anent at or after decedent's death. 
 
 (5) By fiduciaries holding property of any kind jointly 
 or in entirety for the decedent and another or others^ *^ ^ 
 
 (6) By any other person, persons, joint-stock com- 
 panies, corporations, or associations holding at, or taking 
 immediately upon, decedent's death any property inclusive 
 in the ^oss estate imder the definition of section 202 of 
 the taxmg act, which property may not be taken in charge 
 by decedent's executors or administrators, if any. 
 
 When the collector of internal revenue shall receive 
 Form 705^ filed as above required, he shall proceed as 
 indicated m Article XII of regulations No. 37. If, at the 
 expiration of one year from decedent's death, it has not 
 been ascertained that an administrator or executor has 
 been appointed for the decedent's estate, the collector will 
 proceed to secure return and tax payment from the bene- 
 ficiary or beneficiaries, in accordance with Article XVI 
 and XVII of regulations No. 37. 
 
 Estates of Nonresident Decedents 
 
 The 30-day notice (Form 705) is required to be filed for 
 all property of every kind, located or legally situate in this 
 coimtry (including Hawaii and Alaska), by those agents 
 or representatives, donees, transferees, trustees, or fidu- 
 ciaries of a decedent dying domiciled abroad, whether alien 
 or citizen of the United States. The notice must be filed 
 within 30 days from decedent's death with the collector 
 of internal revenue in whose district the property within 
 this country is situate, unless the local a^ent, etc., having 
 the property in charge knows that there is other property 
 of decedent located in another collection district, m which 
 case the notice is to be filed with the collector of internal 
 revenue, Baltimore^ Md. 
 
 If it be not possible for the local agent, representative, 
 etc., to file the notice within 30 days from death of the non- 
 resident, the penalty denounced in section 210 will not 
 be asserted if the notice lis filed within 30 days from the 
 
APPENDIX 43 
 
 day upon which the local agent, representative, etc., re- 
 ceives information of the nonresident decedent's death. 
 
 Each collector receiving Form 705 showing property of 
 a nonresident will immediately 'inform the commissioner 
 of the fact. A record will be kept in the commissioner's 
 oflBice from which it can be determined whether Forms 705 
 for a given estate have been filed in more than one collec- 
 tion district, in which case the several collectors will be 
 instructed to forward the Forms 705 to the collector at 
 Baltimore, Md. 
 
 In due time, if the administrator or executor of the non- 
 resident decedent has failed to file return as provided in 
 section 203, paragraph (b), and pay the tax due, the col- 
 lector shall require such return and tax payment from the 
 local agent, representative, etc. No deductions what- 
 ever from the gross estate will be allowed in such a case 
 unless all the property of the nonresident decedent is 
 shown to be located in this coimtry and it is established 
 that all has been returned for estate tax. Where there is 
 more than one holder in this country of decedent's prop- 
 erty, the collector will aggregate the separate returns, 
 proceeding in accordance with|Article XVII of regulations 
 No. 37. 
 
 Under no circumstances may the local agent, representa- 
 tive, etc., release to a foreign administrator or executor 
 or a foreign beneficiary of the decedent any property with- 
 in this country at the time of decedent's death until either 
 (1) the tax due because thereof has been paid or (2) 
 ancillary letters have been taken out in this country or 
 otherwise provision has been made by the estate for the 
 satisfaction of the tax lien resting upon the decedent's 
 property in this country. When such ancillary letters 
 have been taken out or such provision has been made, the 
 local agent, representative, etc., shall immediately inform 
 the collector fully as to the facts. 
 
 An administrator or executor acting in a foreign country 
 will not be recognized as believing others in charge or 
 possession of a decedent s property from responsibility for 
 satisfying the requirements of the taxing act unless and 
 untiljie has made return and tendered payment of all tax 
 due. The penalty denounced in section 210 of the act 
 will be asserted against every agent^ representative, etc., 
 in this country releasing to a foreign administrator or 
 executor or beneficiary of the decedent the property within 
 
44 APPENDIX 
 
 this country, except where the requirements of this regu- 
 lation have been complied with. 
 
 The above regulation fully applies to transfer agents of 
 corporate stock or bonds, receiving into possession for 
 transfer purposes such personalty of a nonresident de- 
 cedent. The transfer shall not be effected or the stock or 
 bonds released to the foreign administrator or executor or 
 the succeeding beneficiary until the transfer agent shall 
 have been fully assured either that the tax due has been 
 paid or that ancillary letters have been taken out in this 
 country or provision otherwise made for the satisfaction 
 of the tax lien against the estate. 
 
 This ruling applies also to safe-deposit companies, ware- 
 houses, and similar custodians of property in this country 
 of a nonresident decedent, to brokers holding as collateral 
 securities belonging to a nonresident decedent, to banking 
 institutions holding money of nonresident decedents on 
 deposit or for any specific purpose, such as the purchase of 
 goods, so long as the title rests in the nonresident decedent, 
 his estate or his heirs, and to debtors in this country of non- 
 resident decedents. 
 
 It does not apply to carriers of property of a nonresident 
 decedent while such property is in their charge for the pur- 
 pose of transit. 
 
 Form 704 {Thirty-Day Notice) is for Exclusive 
 
 Use of Executors or Administrators 
 
 Repljdng to your letter of the 14th instant, you are in- 
 formed that the mimeograph letter of February 6, 1917, 
 published on page 36 of your War Tax Service is in error in 
 stating that beneficiaries should file Form 704. The 
 proper form is, of course, 705, Form 704 being for the ex- 
 clusive use of executors or administrators. 
 
 Claims for Refund and Abatement of Taxes 
 
 Revised Statutes, Sec. 3220 
 
 The Commissioner of Internal Revenue, subject to 
 regulations prescribed by the Secretary of the Treasury, is 
 authorized, on appeal to him made, to remit, refund, and 
 pay back all taxes erroneously or illegally assessed or 
 
APPENDIX 45 
 
 collected, all penalties collected without authority, and all 
 taxes that appear to be unjustly assessed or excessive 
 in amount, or in any manner wrongfully collected; also to 
 repay to any collector or deputy collector the full amount 
 of such sums of money as may be recovered against him in 
 any court for any internal taxes collected by him, with the 
 cost and expenses of suit; also all damages and costs 
 recovered against any assessor, assistant assessor, collector, 
 deputy collector, or inspector, in any suit brought against 
 him by reason of anything done in the due performance of 
 his official duty; Provided, That where a second assess- 
 ment is made in case of a list, statement or return which 
 in the opinion of the collector or deputy collector was 
 false or fraudulent, or contained any understatement or 
 undervaluation, such assessment shall not be remitted nor 
 shall taxes collected under such assessment be refunded or 
 paid back, unless it is proved that said list, statement, or 
 return was not false or fraudulent and did not contain any 
 understatement or undervaluation. 
 
 Forms 46 and 47 on Which to Present Claims for 
 Refund and Abatement of Taxes 
 
 Form 46 
 
 Claims for the refunding of assessed taxes and penalties 
 must be made out upon Form 46. In this case, as in that 
 of claims for abatement upon Form 47, the burden of proof 
 rests upon the claimant. All the facts relied upon in 
 support of the claim should be clearly set forth under 
 oath. The claim should be stDl further supported by an 
 affidavit of the deputy collector of the proper division, and 
 by the certificate of the collector. (Extract from Regula- 
 tion No. 14, Revised, published October 15, 1911.) 
 
 Form 47 
 
 Claims for abatement of taxes or penalties erroneously 
 or illegally assessed or which are abatable under remedial 
 acts, etc., must be made out upon Form 47, and must be 
 sustained by the affidavits of the parties against whom the 
 taxes were assessed, or of other parties cognizant of the 
 facts, and must be accompanied by affidavits of the deputy 
 collectors of the divisions in which the claims arise. 
 (Extract from Regulation No. 14, Revised, published 
 October 15, 1911.) 
 
Index 
 Law, Regulations and Decisions 
 
 PAGE 
 
 Administration Expenses 12, 20 
 
 Administrator, Defined 9 
 
 Advance Payment 
 
 Conditions Under Which Accepted 32 
 
 Discount 5% 12, 27 
 
 When Relieves from Interest 2S 
 
 Appreciation 20, 32 
 
 Assessment 13, 29 
 
 Association, Defined 9 
 
 Beneficiaries 
 
 Fiduciaries, to Make Return for 25, 34, 41 
 
 Notice, 30-day, Form 705 23, 30, 44 
 
 Notice, 30-Day, When Required 13, 25, 41 
 
 Return, When Required 13, 25, 41 
 
 Bona Fide Purchaser, Property Sold To. 13, 15, 23, 31 
 
 Charges Allowed by Court 12, 21, 40 
 
 Claims Against Estate 12, 20 
 
 Claims For Abatement and Refund 14, 29, 44, 45 
 
 Collector 
 
 Defined 9 
 
 Notice to Collectors of Other Districts 26 
 
 Notice to Executor 24 
 
 Returns by 13, 25, 26 
 
 Return, in what District to be Made 9, 26 
 
 Commissioner op Internal Revenue 
 
 To Assess Tax 13, 14, 29 
 
 To Make Regulations 16 
 
 To Prescribe Forms 16 
 
48 INDEX 
 
 PAGE 
 
 Corporation, Defined 9 
 
 Contribution, Equitable, When to Be Made 14 
 
 Deductions 
 
 Nonresidents, Complete Return 12, 21 
 
 Residents 12, 20 
 
 Default in Payment of Tax 14, 27 
 
 Definitions 9 
 
 Discount — 5% For Advance Payment. . . 12, 27, 32 
 
 Donee, Notice to Collector, Form 705 23, 41, 44 
 
 Estate (See Gross Estate and Net Estate) 
 
 Subject to Tax 9, 17 
 
 Excess Tax Payments, Refund of 14, 29 
 
 Executor 
 
 Defined 9, 30 
 
 Duty to Report Gifts 18, 31 
 
 Notice to Collector, Form 704 13, 22, 30, 44 
 
 Return 13, 24 
 
 Exemptions 
 
 No Specific Exemption to Nonresidents 22 
 
 Residents' Specific Exemption $50,000 12, 17, 21 
 
 Expenses 
 
 Administration 12, 20 
 
 Allowed by Court 12, 21, 40 
 
 Funeral 12, 20 
 
 False Statements, Penalty For Making 15, 27 
 
 Forms 
 
 To Be Prescribed by Commissioner of Internal 
 
 Revenue 16 
 
 704 — Executor's and Administrator's 30-Day 
 
 Notice 22, 24, 44 
 
 705— 30-Day Notice in Other Cases 22, 24, 44 
 
 706— Return of Estate 24 
 
INDEX 49 
 
 PAGE 
 
 Funeral Expenses 12, 20 
 
 Government Bonds 36 
 
 Gross Estate 
 
 Appreciation 20, 32 
 
 Goodwill 18 
 
 Government Bonds 36 
 
 How Determined 11, 18 
 
 Income 20, 32 
 
 Insurance 18 
 
 Property Held Jointly or in Entirety 11, 19, 38 
 
 Property in Charge of Executor 11, 18 
 
 Property Transferred in Contemplation of Death 
 
 11, 18, 31 
 
 Stock of Nonresident 11, 20 
 
 Where No Executor 19 
 
 Income 20, 32 
 
 Insurance 18 
 
 Interest on Taxes 
 
 6% From Date of Death 12, 27 
 
 10% From Date of Death 12, 14, 27, 28 
 
 When Advance Payment Relieves 28 
 
 Investigation by Government Officers 15, 29 
 
 Joint Ownership 11, 19, 38 
 
 Lien, For Taxes 15, 28 
 
 Losses From Fire, Storms, Shipwreck, Theft, 
 
 Etc 12,21 
 
 Mortgages, Unpaid 12, 20 
 
 Net Estate 
 
 Deductions From Gross Estate 12, 20 
 
 Exemption, Specific 12, 18, 22 
 
 How Determined 12, 20, 21, 36 
 
 Nonresidents 12, 21, 22 
 
 Residents 12, 20 
 
50 INDEX 
 
 PAGE 
 NONKESIDENTS 
 
 Deductions Allowed 12, 21 
 
 Imposition of Tax Upon Estate of 9, 10, 17 
 
 Net Estate 12, 21, 22 
 
 No Specific Exemption 22 
 
 Notice, 30-Day 13, 22, 23, 24, 25, 34, 42, 44 
 
 Return, Where Filed 9, 26 
 
 Resident Representative, to Give Notice and 
 
 Make Return 34, 42 
 
 Situs of Stock Owned by 11, 20 
 
 Notice 
 
 Beneficiaries', to Collector 13, 23, 25, 30, 41, 44 
 
 Collectors, Notice to Executor 24 
 
 Collectors, Notice to other Collectors 26 
 
 Donee, to Collector 23, 41, 44 
 
 Executors, to CoUector 13, 22, 30, 44 
 
 Nonresident, When Required 25 
 
 Nonresident, Where Filed 9, 23 
 
 Penalty, False Statement 15, 27 
 
 Penalty, Failure to File 15, 27 
 
 Person in Possession of Property, 
 
 to Collector 13, 22, 30, 41, 44 
 
 Resident Representative of Nonresident 34, 42 
 
 Transferee, to Collector 23, 41, 44 
 
 When Notice Not Required 25 
 
 Partnership, Defined 9 
 
 Payment 
 
 Discount, 5% For Advance Payment 12, 27, 32 
 
 Due, One Year From Date of Death 12, 27 
 
 Interest 12, 14, 27, 28 
 
 Lien 15,28 
 
 Receipts 14, 28 
 
INDEX 51 
 
 PAGE 
 
 Payment (Continued) 
 
 Resident Representatives Nonresident Deced- 
 ents 34, 42 
 
 Suit, Overdue Taxes 14, 27 
 
 Time, before Distribution 14, 28 
 
 When Advance Payment Relieves From Interest. 28 
 
 Penalties 
 
 Failure to File Return or Notice 15, 27 
 
 Failure to Give Information 15, 29 
 
 False Statement, Return or Notice 15, 27 
 
 Nonpayment of Tax 12, 27 
 
 Person, Defined 9 
 
 Property 
 
 Date of Death and not Transfer Governs 31 
 
 Held Jointly or in Entirety 11, 19, 38 
 
 In Charge of Executor 11, 18 
 
 Included in Determining Gross Value of Estate. . 11, 18 
 
 Intangible 11, 18 
 
 Personal 11, 18- 
 
 Real 11, 18 
 
 Situs of Stock Owned by Nonresident 11, 20 
 
 Tangible 11, 18 
 
 Transfer of, in Contemplation of Death 11, 18, 31 
 
 When Sold to Bona Fide Purchaser 13, 15, 23, 31 
 
 Rates of Tax 
 
 Decedents Dying on or After September 9, 1916 
 
 and Prior to March 3, 1917 9 
 
 Decedents Dying on or After March 3, 1917 10 
 
 Receipts 14, 28 
 
 Refund of Excess Tax Payments 14, 29 
 
 Regulations by Commissioner of Internal 
 
 Revenue 16 
 
52 INDEX 
 
 PAGE 
 
 Residents 
 
 Deductions 12, 20, 40 
 
 Exemption Allowed 12, 17, 21 
 
 Gross Estate 11, 18 
 
 Imposition of Tax Upon Estate of 9, 11, 17 
 
 Net Estate 12, 20 
 
 Returns 13, 24 
 
 Resident Representatives of Nonresident 
 Decedents to Give Notice and Make Re- 
 turns 34, 42 
 
 Return 
 
 Beneficiaries, When Required 25, 30, 41 
 
 Collector, Where no Executor or Administrator. . 13, 25 
 
 Collector, When Return False 13, 26 
 
 Contents of 13, 24 
 
 Donees, When Required 23, 41 
 
 Final 24, 25 
 
 Fiduciaries 25, 41 
 
 Form 706 24 
 
 Nonresidents, When Required 13, 25 
 
 Nonresidents, Where Filed 9, 26 
 
 Penalty, Failure to File 15, 27 
 
 Penalty, False Statement 15, 27 
 
 Resident Representative of Nonresident 34, 42 
 
 Residents, When Required 13, 24, 25 
 
 Tentative Return 24, 32 
 
 When Filed 24 
 
 Where to be Filed 9 
 
 Sale of Property For Taxes 14, 27 
 
 Suit for Taxes Overdue 14, 27 
 
 Support of Dependents 12, 21 
 
INDEX 53 
 
 PAGE 
 
 Taxes 
 
 Assessment of 13, 29 
 
 Default in Payment 14, 27 
 
 Discount for Advance Payment 12, 27, 32 
 
 Estates Subject to 9, 17 
 
 Lien on Gross Estate for 10 Years 15, 28 
 
 Penalty for Non-Payment 12, 27 
 
 Property to be Sold for Non-Payment 14, 27 
 
 Rate 9, 10 
 
 State Inheritance Taxes Deductible 31 
 
 When Due 12, 27 
 
 When to be Paid 14, 28 
 
 When Fiduciary Liable for Payment of 25, 34, 41 
 
 Theft, Losses Incukred By 12, 21 
 
 Transfers In Contemplation of Death 
 
 Previous to Two Years Prior to Death.. . .11, 18, 19, 31 
 Within Two Years Prior to Death 11, 18, 19 
 
 Transferee 
 
 30-Day Notice to Collector 23, 41, 44 
 
 When Liable for Payment of Tax 41 
 
 Trust 
 
 Creation of in Contemplation of Death 11, 18 
 
 Trustee, When Liable For Payment of Tax ... 34, 41 
 
-KXtV '^ 
 
 h <n^^ 
 
 
 <J lb 
 
 ■_ , ■ . 
 
 6^ -loaooo 
 
 ^'r\ 
 
 - 
 
 1 p< - 1-^^ 
 
 ,->!. 
 
 - 
 
 h'- <* /^ 
 
 -^^x 
 
 - 
 
 ^ - /<? Af 
 
UNIVERSITY OF CALIFORNIA LIBRARY 
 BERKELEY 
 
 Return to desk from which borrowed. 
 This book is DUE on the last date stamped below. 
 
 FEB 7 2008 
 
 LD 21-100m-9,'48(B399sl6)476 
 
I 
 
 Caylord Bros 
 
 Makers 
 Syracuse, N. Y. 
 
 PAT. JAN. 21. 1908 
 
 '^C^)5lSL 
 
 
 ! f' 17 
 
 UNIVERSITY OF CALIFORNIA LIBRARY