Foreign corporation as resident of United States.

RULING. The words "paying agent" as used in this Treasury decision are not to be interpreted as meaning "office or paying agent." The mere maintenance of an office or paying agency in United States for the payment of dividends on stock or interest on bonds does not constitute a foreign corporation a resident of United States within the meaning of this Treasury decision. (Telegram to the First National Bank, Cleveland, Ohio, signed by Commissioner Daniel C. Roper, and dated October 14, 1918.)

Ownership certificates should not be accepted unless all information called for thereon is shown.

RULING. Can certificates one thousand and one thousand one be accepted if questions regarding marital status and head of family are not answered? Wire collect. (Answer.) Certificates should not be accepted unless all information called for thereon is shown. (Telegram from M. F. Frey, Guaranty Trust Co., New York, N. Y., the reply thereto signed by Commissioner Daniel C. Roper, and dated February 28, 1918.)

Address may be omitted from certificates in certain

cases.

RULING. Address may be omitted from ownership certificates in case of prominent corporation and in its place description bond issue. inserted. (Telegram to Lee, Higginson & Co., Boston, Mass., signed by Commissioner Daniel C. Roper, dated February 11, 1918.)

Name of actual owner of income to be furnished.—

REGULATION. When the person receiving a payment falling within the provisions of law for information at the source is not the actual owner of the income received, the name and address of the actual owner shall be furnished upon demand of the person, corporation, partnership, or association paying the income, and in default of a compliance with such demand the payee becomes liable to a penalty of not less than $20 nor more than $1,000. (Reg. No. 33, 1918, Art. 36, 240.)

Regulation governing returns by brokers.

REGULATION. Every person, corporation, partnership, or association doing business as a broker on any exchange or board of trade or other similar place of business, shall, upon request of the Commissioner of Internal Revenue, render a correct return under oath,

on a form furnished by the Commissioner of Internal Revenue for that purpose, showing the names of customers for whom such person, corporation, partnership, or association has transacted any business, with such details as to the profits, losses, or other information as may be called for by such return form as to each of such customers. See special regulations No. 40. (Reg. No. 33, 1918, Art. 33, ¶ 232.)

Return covering dividends paid.

REGULATION. Under the provisions of Section 26 of the act of September 8, 1916, as amended, every corporation subject to the tax imposed by this title shall, when required so to do by the Commissioner of Internal Revenue, render a correct return under oath, in which is set out the amount of dividends paid by it during the year covered by the return, whether paid in cash or its equivalent in stock; the names and addresses of its stockholders, the number of shares owned by each, the tax years in which the amounts distributed were earned, and the amounts so distributed to each stockholder, applicable to the earnings of each of such years.

This return, when required, will be made upon a form prescribed for this purpose, and will be forwarded direct to the office of the Commissioner of Internal Revenue within 10 days from the date of the receipt of the notice requiring such return. (Reg. No. 33, 1918, Art. 237, ¶ 665.)

Payment of interest on United States bonds.

REGULATION. The requirement of law for information at the source shall not apply to the payment of interest on obligations of the United States. (Reg. No. 33, 1918, Art. 37, ¶ 241.)

Certificates of ownership.-The information required. under the law must be given on the prescribed forms of ownership certificates. In the case of reports of information on form 1099, the forms must be forwarded to the sorting division at Washington, D. C., with an annual return on form 1096. Ownership certificates received with coupons or foreign dividend cheques, however, must be forwarded before the 20th of the month following their receipt, the number of such certificates and the aggregate amount disclosed thereon being entered on form 1096, line 1. (T. D. 2687, April 1,

Form 1086 has not been declared obsolete. This was provided for the use of non-resident alien firms, corporations, etc., having an office or place of business in the United States in claiming exemption from withholding normal income tax by debtor corporations in the United States. However, form 1001, line 5, was later prescribed for the same purpose and presumably supersedes 1086.

Substitute certificates.

REGULATION. Collecting agents, responsible banks and bankers, receiving coupons for collection with ownership certificates attached may present the coupons with the original certificates to the debtor corporation or its duly authorized withholding agent for collection or the original certificates may be detached and forwarded direct to the Commissioner of Internal Revenue, provided such collecting agent shall substitute for such certificate its own certificate and shall keep a complete record of each transaction showing

1. Serial number of item received.

2. Date received.

3. Name and address of person from whom received.
4. Name of debtor corporation.

5. Class of bonds from which coupons were cut.

6. Face amount of coupons.

For the purpose of identification the substitute certificates shall be numbered consecutively and corresponding numbers given the original certificates of ownership.

Substitute certificates by collecting agents, banks, and bankers, in lieu of original certificates of ownership accompanying coupons presented for collection, shall be discontinued with respect to ownership certificates presented with coupons for collection by non-resident alien individuals, firms, corporations, organizations, etc.

In all such cases the original certificates of ownership shall be forwarded to the debtor corporation without substitution.

The debtor corporation or its duly authorized withholding agent shall forward all certificates to the collector of internal revenue with its duplicate monthly list return, form 1012, revised, and such collector shall forward the original return and the certificates to the Commissioner, as heretofore. (Reg. No. 33, 1918, ¶¶ 265, 266.)

'An exception to this occurs when form 1001 is used for the purpose of claiming exemption from withholding in the case of tax-free bonds. Then the total of such certificates must be entered on the last line of monthly return form 1012, used for reporting tax withheld. See Chapter VII, "Payment of Tax at Source."

The substitute certificates authorized by the Treasury Department are forms 1058 and 1059. Form 1058 may be substituted for form 1000, and form 1059 for form 1001 and 1001A, in accordance with the provisions of the foregoing regulation.

Monthly and annual returns.--Information concerning monthly and annual returns is given in Chapter VII, “Payment of Tax at Source."

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