personal excmption and credit for dependents shall be reduced respectively to amounts which bear the same ratio to the full credits provided as the number of months in the period for which return is made bears to twelve months. (f) Closing of taxable year in case of jeopardy.-For closing of taxable year in case of jeopardy, see section 146. ART. 371. Returns for periods of less than 12 months.-No return can be made for a period of more than 12 months. A separate return for a fractional part of a year is therefore required wherever there is a change, with the approval of the Commissioner, in the basis of computing net income from one taxable year to another taxable year. The periods to be covered by such separate returns in the several cases are stated in the Act. The requirements with respect. to the filing of a separate return and the payment of tax for a part of a year are the same as for the filing of a return and the payment of tax for a full taxable year closing at the same time. (See sections 53 and 56 and articles 401-404, 431, and 746.) The tax on net income computed on the basis of the period for which a separate return is made shall be paid thereon at the rate for the calendar year in which such period is included. Where a return is made for a fractional part of a year, except where a return is made for a period of less than 12 months by reason of a change in accounting period, the personal exemption and credit for dependents shall be reduced to that proportion of the full credit which the number of months in the period for which the return is made bears to 12 months. In case of a change in accounting period the net income computed on the return for the fractional part of a year shall be placed on an annual basis and the tax computed as provided in section 47 (c). Example (1): The income tax of a citizen of the United States entitled to a personal exemption of $2,500, making a return for a 6-month period by reason of a change in accounting period, and having a net income of $10,000 for such 6-month period, is $840, computed as follows: Example (2): The income tax of a domestic corporation making a return (other than a consolidated return) for a 6-month period by reason of a change in accounting period, and having a net income of $4,000 for such 6-month period, is $550, computed as follows: Net income for 6-month period.. Net income on annual basis ($48,000÷6). Tax on $8,000 at 134 per cent. Amount of tax for period ($1,100 × 11⁄2) $4,000 4S, 000 8,000 1,100 550 The return of a decedent or of his estate for the year in which he died is a return for 12 months and not for a fractional part of a year. SEC. 48. DEFINITIONS. When used in this title (a) Taxable year.-" Taxable year" means the calendar year, or the fiscal year ending during such calendar year, upon the basis of which the net income is computed under this Part. "Taxable year" includes, in the case of a return made for a fractional part of a year under the provisions of this title or under regulations prescribed by the Commissioner with the approval of the Secretary, the period for which such return is made. The first taxable year, to be called the taxable year 1932, shall be the calendar year 1932 or any fiscal year ending during the calendar year 1932. (b) Fiscal year.-" Fiscal year" means an accounting period of twelve months ending on the last day of any month other than December. " - (c) Paid, incurred, accrued. The terms "paid or incurred and "paid or accrued shall be construed according to the method of accounting upon the basis of which the net income is computed under this Part. PART V-RETURNS AND PAYMENT OF TAX SEC. 51. INDIVIDUAL RETURNS. (a) Requirement. The following individuals shall each make under oath a return stating specifically the items of his gross income and the deductions and credits allowed under this title (1) Every individual having a net income for the taxable year of $1,000 or over, if single, or if married and not living with husband or wife; (2) Every individual having a net income for the taxable year of $2,500 or over, if married and living with husband or wife; and (3) Every individual having a gross income for the taxable year of $5,000 or over, regardless of the amount of his net income. (b) Husband and wife. If a husband and wife living together have an aggregate net income for the taxable year of $2,500 or over, or an aggregate gross income for such year of $5,000 or over (1) Each shall make such a return, or (2) The income of each shall be included in a single joint return, in which case the tax shall be computed on the aggregate income. (c) Persons under disability.-If the taxpayer is unable to make his own return, the return shall be made by a duly authorized agent or by the guardian or other person charged with the care of the person or property of such taxpayer. (d) Fiduciaries. For returns to be made by fiduciaries, see section 142. ART. 381. Individual returns. For each taxable year every single person and every married person not living with husband or wife for any part of the taxable year, whose gross income as defined in sections 22 and 116 is $5,000 or over, or whose net income as defined in section 21 is $1,000 or over, must make a return of income. Every married person living with husband or wife for any part of the taxable year, but not at the close of the taxable year, must make a return if his gross income for the taxable year is $5,000 or more, or his net income is equal to, or in excess of, the credit allowed him by section 25 (c) and (e) (computed without regard to his status as the head of a family). (See article 295.) A husband and wife living together for the entire year need make no returns unless their aggregate gross income for the taxable year is at least $5,000, or their aggregate net income is at least $2,500. If their aggregate net income for the taxable year is $2,500 or more, or their aggregate gross income is $5,000 or more, either each must make a return, or the income of each must be included in a single joint return. A husband and wife living together at the close of the taxable year but not during the entire taxable year must make a return or returns if their aggregate gross income for the taxable year is $5,000 or more, or their aggregate net income is equal to, or in excess of, the credit allowed them by section 25 (c) and (e) (computed without regard to the status of either of them as the head of a family). (See article 295.) Where the income of each is included in a single joint return, the tax is computed on the aggregate income and all deductions and credits to which either is entitled shall be taken from such aggregate income. The husband shall include in his return the income derived from services rendered by the wife or from the sale of products of her labor if she does not file a separate return or join with him in a return setting forth her income separately. A joint return of husband and wife may be filed only if they were living together at the close of their taxable year. Where one spouse dies prior to the last day of the taxable year, the surviving spouse may not include the income of the deceased spouse in a joint return for such taxable year. Whether or not an individual is the head of a family or has dependents is immaterial in determining his liability to render a return. For returns by fiduciaries, see section 142 and articles 741-746; by partnerships, see section 189 and articles Art. 381 § 51 941 and 942; and by nonresident alien individuals, see section 217 and article 1081. See also section 53 and articles 401-404. ART. 382. Form of return.-The return shall be on Form 1040, except that it may be on short Form 1040 A where the net income does not exceed $5,000, and is derived chiefly from salaries and wages. The forms may be had from the collectors of the several districts. The return may be made by an agent when, by reason of illness, absence, or nonresidence, the person liable for the return is unable to make it, the agent assuming the responsibility for making the return and incurring liability for the penalties provided for erroneous, false, or fraudulent returns. ART. 383. Return of income of minor.-An individual under the statutory age of majority is required to render a return of income if he has a net income of his own of $1,000 or over, or a gross income of $5,000 or over, for the taxable year. If he is married, see article 381. If a minor has been emancipated by his parent, his earnings are his own income, and such earnings, regardless of amount, are not required to be included in the return of the parent. If the aggregate of the net income of a minor from any property which he possesses, and from any funds held in trust for him by a trustee or guardian, and from his earnings in case he has been emancipated, is at least $1,000, or his gross income is at least $5,000, a return as in the case of any other individual must be made by him or by his guardian, or some other person charged with the care of his person or property for him. (See article 742.) In the absence of proof to the contrary, a parent will be assumed to have the legal right to the earnings of the minor and must include them in his return. ART. 384. Verification of returns.-All income tax returns must be verified under oath or affirmation. The oath or affirmation may be administered by any officer duly authorized to administer oaths for general purposes by the law of the United States or of any State, Territory, or possession of the United States, wherein such oath is administered, or by a consular officer of the United States. Persons in the naval or military service of the United States may verify their returns before any official authorized to administer oaths for the purposes of those services. Income tax returns executed abroad may be attested free of charge before United States consular officers. Where a foreign notary or other official having no seal shall act as attesting officer, the authority of such attesting officer should be certified to by some judicial official or other proper officer having knowledge of the appointment and official character of the attesting officer. ART. 385. Use of prescribed forms.-Copies of the prescribed return forms will so far as possible be furnished taxpayers by collectors. A taxpayer will not be excused from making a return, however, by the fact that no return form has been furnished to him. Taxpayers not supplied with the proper forms should make application therefor to the collector in ample time to have their returns prepared, verified, and filed with the collector on or before the due date. Each taxpayer should carefully prepare his return so as fully and clearly to set forth the data therein called for. Imperfect or incorrect returns will not be accepted as meeting the requirements of the Act. In lack of a prescribed form a statement made by a taxpayer disclosing his gross income and the deductions therefrom may be accepted as a tentative return, and if filed within the prescribed time a return so made will relieve the taxpayer from liability to penalties, provided that without unnecessary delay such a tentative return is replaced by a return made on the proper form. (See further articles 402404.) SEC. 52. CORPORATION RETURNS. (a) Requirement.-Every corporation subject to taxation under this title shall make a return, stating specifically the items of its gross income and the deductions and credits allowed by this title. The return shall be sworn to by the president, vice president, or other principal officer and by the treasurer or assistant treasurer. In cases where receivers, trustees in bankruptcy, or assignees are operating the property or business of corporations, such receivers, trustees, or assignees shall make returns for such corporations in the same manner and form as corporations are required to make returns. Any tax due on the basis of such returns made by receivers, trustees, or assignees shall be collected in the same manner as if collected from the corporations of whose business or property they have custody and control. (b) Consolidated returns.-For provision as to consolidated returns of affiliated corporations, see section 141. ART. 391. Corporation returns.-Every corporation not expressly exempt from tax must make a return of income, regardless of the amount of its net income. In the case of ordinary corporations, the return shall be on Form 1120. For returns of insurance companies, see article 1015; of foreign corporations, see section 235; and of affiliated corporations, see section 141 and article 711. A corporation having an existence during any portion of a taxable year is required to make a return. A corporation which has received a charter, but has never perfected its organization, which has transacted no business and had no income from any source, may upon presentation of the facts to the collector be relieved from the necessity of making a return so long as it remains in an unorganized condition. In the |