Page:Federal Register, Vol. 1, No. 2.pdf/7

Rh F E D E R A L R E G ISTE R, March 17, 1936 turn covering such fa x may he filed under these regulations. I f the tax is not paid to the collector on or before the due date and is not adjusted under article 405 or 406, there shall be added as part of the tax interest at the rate of 6 per cent per year. Such interest accrues from (and including) the day after the due date through the date of payment to the collector or, if the tax is assessed prior to such payment, through the date on which the certificate of assessment is signed by the Commissioner. For provisions relating to in­ terest after assessment, see article 604. Penalties Section 3184 of United States Revised Statutes Sec. 3184. Where it is not ^otherwise provided, the collector shall in person or by deputy, within ten days after receiving any list of taxes from the Commissioner of Internal Revenue, give notice to each person liable to pay any taxes stated therein, to be left at his dwelling or usual place of business, or to be sent by mail, stating the amount of such taxes and demanding payment thereof. I f such person does not pay the taxes within ten days after the service or the sending by mail of such notice, it shall be the duty of the collector or his deputy to collect the said taxes with a penalty of five per centum additional upon the amount of taxes, and interest at the rate of one per centum a month. A rt. 604. Penalty and interest for failure to pay an assess­ ment after notice and demand.— (a ) In case the taxpayer fails to pay to the collector the entire amount of any assess­ ment of tax, penalty, or interest within a period of 10 days after the date of issuance of the form for first notice and demand, based on such assessment, there accrues under sec­ tion 3184 of the United States Revised Statutes (except as provided in subdivision (b) of this article) a penalty o f 5 per cent of the amount of such assessment remaining unpaid at the expiration of such period. Interest also accrues at the rate of 6 per cent per year on such unpaid amount from (and including) the eleventh day after the date of issuance of such form through the date of payment. I f such unpaid amount is settled by partial payments, however, interest is computed through the date of the first payment after the 10 day period, and from the following day through the date of the next pay­ ment, and in like manner when subsequent payments are made until the assessment is paid in full. See article 603 for provisions relating to interest prior to assessment. (b) If, within 10 days after the date of issuance of the form for first notice and demand, a claim for abatement of any amount of the assessment is filed with-the collector who issued the form, the 5 per cent penalty does not attach with respect to such amount unless the claim is rejected. I f the claim is rejected in whole or in part and the amount rejected is not paid, the collector shall issue notice and demand for such amount. I f payment is not made within ten days after the date the collector issues the notice and demand, the five per cent penalty attaches with respect to the amount rejected. The filing of the claim does not stay the running of interest, which accrues on such amount from (and including) the eleventh day after the date of issuance o f the notice and demand referred to in subdivision (a ) through the date of payment. " Section 3176 of the United States Revised Statutes, as amended by section 1103 of the Revenue Act of 1926 and section 619 (d ) of the Revenue Act of 1928 S ec. 3176. * * * In case of any failure to make and file a return or list within the time prescribed by law, or prescribed by the Commissioner of Internal Revenue or the collector in pursuance of law, the Commissioner shall add to the tax 25 per centum of its amount,' except that when a return is filed after such time and it is shown that the failure to file it was due to a reasonable cause and not to willful neglect, no such addition shall be made to the tax. In case a false or fraudulent return or list is willfully made, the Commissioner shall add to the tax 50 per centum of its amount. The amount so added to any tax shall be collected at the same time and in the same manner and as part of the tax

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unless the tax has been paid before the discovery of the neglect, falsity, or fraud, in which case the amount so added shall be collected in the same manner as the tax. Section 406 of the Revenue Act of 1935 S ec. 406.. In the case of a failure to make and file an internal-revenue tax return required by law, within the time prescribed by law or prescribed by the Commissioner in pursu­ ance of law, if the last date so prescribed for filing the return is after the date of the enactment of this Act, if a 25 per centum addition to the tax is prescribed by existing law, then there shall be added to the tax, in lieu of such 25 per centum: 5 per centum if the failure is for not more than 30 days, with an additional 5 per centum for each additional 30 days or fraction thereof during which failure continues, not to exceed 25 per centum in the aggregate. A rt. 605. Penalties fo r delinquent or false returns.— (a) Delinquent returns.— Unless the person required to file a return establishes to the satisfaction of the Commissioner that a reasonable cause exists for the delinquency, the failure to file the return on or before the last date prescribed there­ fo r by these regulations (in this article referred to as the “ due date” ) causes to accrue a penalty equal to the following percentage of the tax: (1) 5 per cent, if the return is filed on or before the 30th day after the due date; (2) 10 per cent, if the return is filed after such 30th day and on or before the 60th day after the due date; (3) 15 per cent, if the return is filed after such 60th day and on or before the 90th day after the due date; (4) 20 per cent, if the return is filed after such 90th day and on or before the 120th day after the due date; or (5) 25 per cent, if the return is filed after such 120th day or if the return is never filed by the person required to file it. In computing the period of delinquency all Sundays and holidays after the due date are counted. Every person filing a return after the due date shall se­ curely attach to the return his statement under oath, in duplicate, setting out in detail the reason for his delinquency. The collector shall forward the statement to the Commis­ sioner with the return. The Commissioner will determine whether a penalty has been incurred and, if so, make the assessment. (b) False returns.— I f a false or fraudulent f t turn is will­ fully made, the penalty under section 3176 of the United States Revised Statutes, as amended, is 50 per cent of the total tax due fo r the entire period involved including any tax previously paid. Additional Penalties Section 1114 of the Revenue A ct of 1926, made applicable by section 8 (c) of the act (a ) Any person required under this Act to pay any tax, or required by law or regulations made under authority thereof to make a return, keep any records, or supply any information, for the purposes of the computation, assess­ ment, or collection o f any tax imposed by this Act, who w illfully fails to pay such tax, make such return, keep such records, or supply such information, at the time or times required by law or regulations, shall, in addition to other penalties provided by law, be guilty of a misdemeanor and, upon conviction thereof, be fined not more than $10,000, or imprisoned for not more than one year, or both, together with the costs o f prosecution. (b) Any person required under this Act to collect, account for, and pay over any tax imposed by this Act, who will­ fully fails to collect or truthfully account for and pay over such tax, and any person who willfully attempts in any manner to evade or defeat any tax imposed by this Act or the payment thereof, shall, in addition to other penalties provided by law, be guilty of a felony and, upon conviction thereof, be fined not 'more than $10,000; or imprisoned fo r not more than five years, or both, together with the costs of prosecution. (c) Any person who willfully aids or assists in, or procures, counsels, or advises, the preparation or presentation under,