tificates nor accept them for an amount other or greater than their face value. . . . . (T. D. 2907, August 7, 1919, as amended by T. D. 2918, September 12, 1919, which replaces articles 1731 and 1732, Regulations 45.)

Deposits of Treasury certificates of indebtedness received in payment of income and profits taxes must be made by collectors, unless otherwise specifically instructed by the Secretary of the Treasury, with the federal reserve bank of the district in which the collector's head office is situated, or, in case such head office is in a city in which there is a branch federal reserve bank, with such branch federal reserve bank.

REGULATION. . . . . Specific instructions may be given in certain instances for the deposit of the certificates with federal reserve banks of other districts and with branch federal reserve banks, and the term "federal reserve bank," where it appears herein, includes such branches. Treasury certificates accepted by the collector prior to the dates when the certificates respectively mature, should be forwarded by the collector to the federal reserve bank to be held for account of the collector until the date of maturity, and for deposit on such date. Certificates of indebtedness should in all cases be stamped as follows by the collector, and when so stamped forwarded to the federal reserve bank by registered mail uninsured:

..., 191.... "This certificate has been accepted in payment of income and profits taxes and will not be redeemed by the United States except for credit of the undersigned.

for the

Collector of Internal Revenue district of ....

Collectors of internal revenue are not authorized, unless otherwise notified by the Secretary of the Treasury, to receive in payment of income or profits taxes interim receipts issued by federal reserve banks in lieu of definite certificates of the series herein described. . . . .

For the purpose of saving taxpayers the expense of transmitting such certificates as are held in federal reserve cities to the office of the collector in whose district the taxes are payable, taxpayers desiring to pay income and profits taxes by Treasury certificates of indebtedness acceptable in payment of such taxes, should communicate with the collector of the district in which the taxes are payable and request from him authority to deposit such certificates with the federal reserve bank in the city in which the certificates are held. Collectors are authorized to permit deposits of Treasury certificates of indebted

ness in any federal reserve bank with the distinct understanding that the federal reserve bank is to issue a certificate of deposit in the collector's name covering the amount of the certificates of indebtedness at par and to state on the face of the certificate of deposit that the amount represented thereby is in payment of income and profits taxes. The federal reserve bank should forward the original certificate of deposit to the Treasurer of the United States, with its daily transcript, and transmit to the collector the duplicate and triplicate, accompanied by a statement giving the name of the taxpayer for whom the payment is made in order that the collector may make the necessary record and forward the duplicate to the office of the Commissioner of Internal Revenue. (Articles 1731 and 1732, as amended by T. D. 2907 and T. D. 2918.)

Collection of Taxes by Summary Process

In view of the possibility that during the coming year certain taxpayers may be unable to pay the tax assessed upon them, it may be of interest to include the articles of the regulations dealing with collection by summary process peculiar to United States practice.

Collection of tax by distraint.—

REGULATION. If any person liable to pay any taxes neglects or refuses to pay them within ten days after notice and demand, it shall be lawful for the collector or his deputy to collect such taxes with 5 per cent additional and interest at 12 per cent per annum by distraint and sale of the goods, chattels or effects, including stocks, securities and evidences of debt, of the person delinquent. When goods, chattels or effects sufficient to satisfy the taxes imposed upon any person are not found by the collector or deputy collector, he is authorized to collect such taxes by seizure and sale of real estate. .. .. (Art. 1009.)

WARRANT FEE.—

LAW. Section 250.

(f) In any case in which in order to enforce payment of a tax it is necessary for a collector to cause a warrant of distraint to be served, there shall also be added as part of the tax the sum of $5.

Enforcement of tax lien by bill in equity.

REGULATION. In any case where there has been failure to pay the tax and it has become necessary to seize and sell real estate to satisfy it, a bill in equity may be filed in a district court of the United States to

enforce the lien of the United States for tax upon any real estate in which the delinquent has any right, title or interest. This remedy does not supersede distraint, but is cumulative. In the event of nonpayment of a tax after demand it becomes a lien in favor of the United States from the time when the assessment list was received by the collector upon all property and rights to property belonging to the taxpayer, except that the lien is not valid as against any mortgagee, purchaser or judgment creditor until notice thereof is filed in the proper public office or offices on form 668. . . . . (Art. 1010.)

The district courts of the United States are invested with jurisdiction to render such judgments and decrees, both in law and in equity, as may be necessary or appropriate for the enforcement of the provisions of the law.*

Compromise of taxes and penalties.-Section 3229 of the Revised Statutes invests the Commissioner with power to compromise cases of taxes and penalties both before and after suit has been commenced. The nature and extent of this power are explained in the following regulation.35

REGULATION. The Commissioner, with the advice and consent of the Secretary of the Treasury, may compromise any civil or criminal case arising under the internal revenue laws instead of commencing suit thereon, and with the advice and consent of the Secretary and the recommendation of the Attorney-General may compromise any such case after suit thereon has been commenced by the United States. Accordingly, the power to compromise extends to (a) both civil and criminal cases; (b) cases whether before or after suit; and (c) both taxes and penalties. Refunds can not be made of accepted offers in compromise in cases where it is subsequently ascertained that no violation of law was involved. . . . . (Art. 1011.)

It would appear from the regulations that the power of the Commissioner to compromise covers all amounts due for taxes and penalties.

For announced compromise for failure to file returns, etc., see page 135.

A letter, similar in content to the following, suitably modified if the delinquent was a corporation, has been used in the

"Section 1318.

as See also page 132.

past by the collectors in charging taxpayers with delinquency and in notifying them of their privilege to submit offers in compromise.

Sir: Your return of net income was not received in this office until ......, thereby involving you in liability to a specific penalty of not less than $20.00, or more than $1,000, under the act of ...... in addition to the 50 per cent additional tax which will be assessed and collected.

The provisions of the act are mandatory, and no excuse or explanation can be accepted, except a showing that a complete or tentative return was in fact mailed in time to have reached this office, or a Deputy Collector, in the ordinary course of business on or before March 1,

.....

However, before instituting proceedings in court for the imposi tion of the specific penalty, I am directed to call your attention to the provisions of section 3229, revised statutes, which reads in part as follows:

"The Commissioner of Internal Revenue with the advice and consent of the Secretary of the Treasury, may compromise any civil or criminal case arising under the internal revenue laws instead of commencing suit thereon,

Should you desire to take advantage of your privilege under this section and to submit an offer in compromise, the amount offered should be forwarded promptly to this office in the form of cash, postal money order, or certified check which can be cashed without cost, payable to my order, accompanied by an affidavit substantially in the following form:

"To the Commissioner of Internal Revenue:

"I hereby solemnly swear (or affirm) that my delinquency in filing return of net income as required by the act of ...... was not due to any intent to violate the law or evade taxation, but was due to (here insert, concisely and clearly, the reason for delay).

"Desiring to compromise my liability I hereby tender the sum of $......, which I request be accepted in compromise of the specific penalty only."

To be signed and sworn to before a deputy collector, notary, or other officer authorized to administer oaths.

This affidavit will then be forwarded by me, together with the sum offered, to the Commissioner for consideration, and you will be notified by him of his acceptance or rejection of your proposal. In the latter event, you may increase your offer, if you so desire.

In an opinion dated June 3, 1919, the United States Attorney-General held that claims falling in the following classes may be compromised by the Commissioner whenever, in his judgment, such compromises are for the interest of the United States:

Claims for sums of 5 per cent on amounts of income and excessprofit taxes not paid when due and interest at the rate of 1 per cent per month on said taxes, the collection of which is authorized by sections 9(a) and 14(a) of the act of September 8, 1916, and section 212 of the act of October 3, 1917.

Receipts for taxes paid. The law requires collectors to give receipts only when requested to do so by taxpayers.

LAW. Section 251. That every collector to whom any payment of any tax is made under the provisions of this title shall upon request give to the person making such payment a full written or printed receipt, stating the amount paid and the particular account for which such payment was made; and whenever any debtor pays taxes on account of payments made or to be made by him to separate creditors the collector shall, if requested by such debtor, give a separate receipt for the tax paid on account of each creditor in such form that the debtor can conveniently produce such receipts separately to his several creditors in satisfaction of their respective demands up to the amounts stated in the receipts; and such receipt shall be sufficient evidence in favor of such debtor to justify him in withholding from his next payment to his creditor the amount therein stated; but the creditor may, upon giving to his debtor a full written receipt acknowledging the payment to him of any sum actually paid and accepting the amount of tax paid as aforesaid. (specifying the same) as a further satisfaction of the debt to that amount, require the surrender to him of such collector's receipt.

RULING.

Receipts are documents required by provisions of the internal revenue laws and by regulations made in pursuance thereof, within the meaning of section 3451, Rev. Stat., making it an offense to simulate or falsely or fraudulently execute or sign any document required by the internal revenue laws, or any regulation made in pursuance thereof, or to procure the same to be falsely or fraudulently executed, or to advise, aid in, or connive at such execution thereof. . . .

The offense may be committed either where the receipt itself is a genuine receipt of the kind kept for that purpose in the office of the internal revenue collector but signed by the defendant without au