State Of New York et al v. Mnuchin et al

Filing 47

DECLARATION of Owen T. Conroy in Support re: 44 CROSS MOTION for Summary Judgment .. Document filed by State Of Connecticut, State Of New York, State of Maryland, State of New Jersey. (Attachments: # 1 Exhibit 1, # 2 Exhibit 2, # 3 Exhibit 3, # 4 Exhibit 4, # 5 Exhibit 5, # 6 Exhibit 6, # 7 Exhibit 7, # 8 Exhibit 8, # 9 Exhibit 9, # 10 Exhibit 10, # 11 Exhibit 11, # 12 Exhibit 12, # 13 Exhibit 13, # 14 Exhibit 14, # 15 Exhibit 15, # 16 Exhibit 16, # 17 Exhibit 17, # 18 Exhibit 18, # 19 Exhibit 19, # 20 Exhibit 20, # 21 Exhibit 21, # 22 Exhibit 22, # 23 Exhibit 23, # 24 Exhibit 24, # 25 Exhibit 25, # 26 Exhibit 26, # 27 Exhibit 27, # 28 Exhibit 28, # 29 Exhibit 29, # 30 Exhibit 30, # 31 Exhibit 31, # 32 Exhibit 32, # 33 Exhibit 33, # 34 Exhibit 34, # 35 Exhibit 35, # 36 Exhibit 36, # 37 Exhibit 37, # 38 Exhibit 38, # 39 Exhibit 39, # 40 Exhibit 40, # 41 Exhibit 41, # 42 Exhibit 42, # 43 Exhibit 43, # 44 Exhibit 44, # 45 Exhibit 45, # 46 Exhibit 46, # 47 Exhibit 47, # 48 Exhibit 48, # 49 Exhibit 49, # 50 Exhibit 50, # 51 Exhibit 51, # 52 Exhibit 52, # 53 Exhibit 53, # 54 Exhibit 54, # 55 Exhibit 55, # 56 Exhibit 56, # 57 Exhibit 57, # 58 Exhibit 58, # 59 Exhibit 59, # 60 Exhibit 60, # 61 Exhibit 61, # 62 Exhibit 62, # 63 Exhibit 63, # 64 Exhibit 64, # 65 Exhibit 65, # 66 Exhibit 66, # 67 Exhibit 67, # 68 Exhibit 68, # 69 Exhibit 69, # 70 Exhibit 70, # 71 Exhibit 71, # 72 Exhibit 72, # 73 Exhibit 73, # 74 Exhibit 74, # 75 Exhibit 75, # 76 Exhibit 76, # 77 Exhibit 77, # 78 Exhibit 78, # 79 Exhibit 79, # 80 Exhibit 80, # 81 Exhibit 81, # 82 Exhibit 82, # 83 Exhibit 83, # 84 Exhibit 84, # 85 Exhibit 85, # 86 Exhibit 86, # 87 Exhibit 87, # 88 Exhibit 88, # 89 Exhibit 89, # 90 Exhibit 90, # 91 Exhibit 91, # 92 Exhibit 92, # 93 Exhibit 93, # 94 Exhibit 94, # 95 Exhibit 95, # 96 Exhibit 96, # 97 Exhibit 97, # 98 Exhibit 98, # 99 Exhibit 99, # 100 Exhibit 100, # 101 Exhibit 101, # 102 Exhibit 102, # 103 Exhibit 103, # 104 Exhibit 104, # 105 Exhibit 105, # 106 Exhibit 106)(Conroy, Owen)

Exhibit 46

PUBLIO LAWS---OH. 019-OCT. 21, 1942

798
[CHAPTER 619)
October 21, 1942

1H. R.7378)
(Public Law 7631
Revenue ct~f 1on2.

156

STAT.

AN ACT
To provide revenue, and for other purposes.

Be it enacted by the Senate and Hou8e of Representative. oj the
United States of America in Congress assembled, That (a) SnORT
TrrLE.-This Act, divided into titles and sections according to the
following Table of Contents, may be cited as the "Revenue Act of
1942":
TABLE OF CONTENTS

[In the following table, a section number following the title of a
section of this Act indicates the provision of the Internal Revenue
S sta; I.
1put
ZU o; 6 . s. Code to which such section of this Act makes the principal amend-

0., supp.

.L.ment.]

TITLE 1-INDIVIDuAL AND CORPORATION INCOME TAXES

Post, p. 802.

PART I-AMENDMENTS TO CHAPTER 1
See. 101. Taxable years to which amendments applicable.
See. 102. Normal tax on Individuals (sec. 11).
See. 103. Surtax on Individuals (we. 12 (b)).

See. 104. Optional tax on individuals wjth gross Income from certain sources of

$8,000 or less (sec. 400).
See. 106. Tax on corporations (see. 15).
Sec. 106. Tax on nonresident alien indiviim~ls (sec. 211).

Sec. 107.
See. 108.
See. 109.
Sec. 110.
Sec. 111.
Sec. 112.
See. 113.
ec. 114.
Sec. 115.
Sec. 116.

Tax on foreign corporations (sec. 231 (a)).
Withholding of tax at source (sc. 143 and 144).
Treaty obligations.
Transfers of life Insurance contracts, etc. (see. 22 (b) (2)
Income received from estates etc., under gifts, bequests, etc. (se.
22 (b) (3) ).
Amendments to conform Internal Revenue Code with Public Debt Act
of 1941 (sec. 22 (b) (4)).
annuities,
Exclusion of pensions, (b) (5)). etc., for disability resulting from military service (se.22
Exclusion of income from discharge of Indebtedness (set. 22 (b) (9)
Improvements by lessee (sec. 22 (b)).
prior taxes, and delinquency amounts (sec.
Recovery of bad debts
22 (b) ).

Sec. 117. Additional allowance for military and naval personnel (sec. 22 (b)).
Sec. 118. Report requirement In connection with inventory methods (se. 22 (d)
(2)).

Ec. 119. Laston fr-outrinventory (se. 22 (d)).

Sec. 120. Alimony and separate maintenance payments (sec. 22).
28
Sec.12. Non-trade or non-business deductions (see. (a)).
See. 122. Deduction allowable to purchasers for State and local retail sales taxes
(sec. 28(c)).
Sec. 12. Deduction for stock and bond losses on securities In affiliated corporations (sec. 23 (g)().
Sec. 124. Deduction for bad debts, etc. (sec. 23 (k)
e
See. 125. Corporate contributions to United States, tc.or for barltable use
outside United States deductible (sec. 28 (q)
See. 126. Amortizable bond premium (sec. 28).
Sec. 17. Deduction for medical, dental, etc., expenses (e. 23).
See. 128. Deduction of certain amounts paid to cooperative apartment corporation (sc. 23).
See.129. Deduction denied If proceeds used to pay for Insurance (see. 24 (a)).
See. 130. Taxes and other charges chargeable to capital account not deductible
24
but treated as capital items (sec. (a)).
See. 181. Reduction of personal exemption and credit for dependents--requie
(1))
d.25d(b) .
mentfornreturn (s
corpra
aduntai tcpeatieo apeajryenl
Sec. 128. Dedcartion tha ern
oth (see. of
See. 182. Computation28). net operating loss credit and dividends paid credit
(sec. 28 (c) (1)).
s
See. 138. Credit for dividends paid o certain preferred stock (se. 26).
(sec. 42 (a)).
respect of decedents n
See. 134. Income infor aperdle ntha etwelveons (se.
7).
s
Sec. 185. Retuctn

56 STAr.]

7Tir

799

CONG., 2D SESS,-CH. 619-OOT. 21, 1942

Sec. 187. Exemption of employees' voluntary beneficiary associations (sec. 101).
See. 188. Denial of capital loss carry-over to section 102 companies (sec. 102
(d) (1)).
Sec. 189. Compensation for services rendered for a period of thirty-six months
or mote (see. 107).
See: 140. Certain fiscal year taxpayers (sec. 108).
See. 141. Western Hemisphere trade corporations (Wec. 109).
Sec. 142. Nonrecognition of loss and determination of basis in case of certain
railroad reorganizations (see. 112 (b)).
Sec. 148. Basotgiftt (see.118 (a)).
a
See. 144. Basis of property in case of optional value for estate tax purposes
(see. 118 (a) (5)). See. 145. Percentage depletion for coal, fluorspar, ball and sagger clay, rock
asphalt, and metal mines and sulphur (se. 114 (b) (4)).
Se. 148. Effect on earnings and profits of wash sale losses (sec. 115 (1)).
Sec. 147. Distribt~tions in liquidation (sec. 115 (C)).
Sec. 148. Income from sources without United States in certain cases (sec. 116
See. 149. Reciprocal exemption of compensation of employees of the Commonwealth of the Philippines (sec. 11Q (h)).

Sec. 150. Capital gains and losses (sec. 117).
See. 151. Real property; involuntary conversions; etc. (sec. 117).
Sep. 152. Hiding period of stock acquired through exercise of rights (sec. 117
'(h)).
Sec. 158. Two-year carry-back of net operating losses (see. 122 (b)).
See. 154. Commodity credit loans (sec. 123).
Sec. 155. Extension of deduction for amortization of emergency facilities (sec.
124).
Sec.158. War losses.
Sec. 157. Recovery of unconstitutional Federal taxes.
Sec. 158. Foreign tax credit (sec. 181).Sec. 159. Extension of consolidated returns privilege to certain corporations
(see. 141).
Sec. 100. Aliens and foreign corporations treated as nonresidents (sees. 148 and
See. 181.
Sec. 162.
Sec. 163.
Sec. 184.
See. 165.
See.166.
See. 167.
See.168.
See. 169.
Sec.170.
See. 171
Sec. 172.

.144). -

Deductions for estate tax and Incometax of estate (sec. 102).
Pension trusts -(sec. 165).
Life insurance companies (see. 201).
Insurance companies other than life or mutual and mutual marine
insurance companies (se. 204).
Mutual insurance companies other than life or marine (sec. 207).
Technical amendment to definition of "dividend" (sec. 115 (a)).
Transactions in.stocks, seArities, and commodities niot considered engaging in trade or business in certain cases (sec. 211 (b)).
Period for filing petition extended In certain cases.(see. 272 (a)).
Statute of limitations on refunds and credits (sec. 822).
Regulated Investment companies (Supplement Q).
Amendments to Supplement R (sec. 871).
Temporary income tax on individuals.
PART II-PERSONAL HOLDING COMPANIES

P

*ds 8*
P.

Sec. 181. Rates of personal holding company tax (sec. 500). sec. 182. Exemption of certain corporations from personal holding company tax
(sec. 501 (b)).
Sec.188. Cofsclidated Income (see. 50f (c)).
8e. 184. Computation of undistributed Subehapter A net incolne (sec. 504).
Sec. 185. Deficiency dividends of personal holding companies (sec. 508).
Se. 18&. Distributions by personal holding companies (see. 115 (a)).

Tia II-ECE8 P

rs TAx

PART I-EXCESS PROFITS TAX AMENDMENTS
See. 201.
Sec. 202.
See. 208.
See. 204.
See. 205.

Taxable years to which amendments applicable.
Rate of excess profits tax (sec. 710 (a)).
Certain fiscal year taxpayers (see. 710 (a)).
Two-year carry-back of unused excess profits credit (sec. 710 (c)).
Computation of excess profits and invested capital of Insurance companies (see. 711 (a)).
See. 206. Technical amendments made necessary by change in base for corpora.
tion tax (sec. 711 (a)).
Sec. 207. Capital gains. and losses In the computation of excess profits net income
(sec. 711 (a)).

Po, p. 899.

800

PUBLIO LAWS-OH. 619-OOT. 21, 1942,

[56 STAT.

flee. 208. Retroactive treatment of involuntary conversions as capital transactions (see. 711 (a) (1)).
Sec. 209. Nontaxable income from certain mining and timber operations (see.
711 (a) (1)) .1
Sec.2.10. Net operating loss deduction adjustment (see. 711 (a) (1)).
See. 211. Credit for dividends received in computation of excess profits net
income in connection with invested capital credit (sec. 711 (a) (2)).
See. 212. Application of excess profits tax to certain foreign corporations (sec.
712 (b)A.
See. 218. Excess profits net income placed on annual basis (see. 711 (a) (8)).
See. 214. Interest on certain Federal obligations (see. 718 (c)).
See. 215. Base period net income of lowest year in base period (sec. 718 (e) (1)).
See. 210. Capital reduction in case of members of controlled group (see. 718 (g)).
See. 217. Invested capital credit (sec. 714).
See. 218. Basis of property paid in (sec. 718 (a) (2)).
Sec. 219. Deficit in earnings and profits of another corporation (see. 718).
See. 220. Amortizable bond premium on certain Government obligations (see.
720 (d) ).
See. 221. Abnormalities in income in taxable period (see. 721).
See. 222. Relief provisions (sec. 722).
See. 223. Exempt corporations (see. 727).
See. 224. Excess profits tax returns (see. 729 (b)).
Sec. 225. Consolidated returns (sec. 730).
Sec. 226. Exemption from tax of mining of certain strategic minerals (see. 731).
See. 227. Amendments to section 734.
See. 228. Rules for income credit in connection with certain exchanges (Supplement A).
See. 229. Termination of Supplement B.
Sec. 230. Invested capital in connection with certain exchanges and liquidations
(Chapter 2E).
Ms P.9.

PART II-POST-WAR REFUND OF EXCESS PROFITS TAX
Sec. 250. Post-war refund of excess profits tax.

PoW,p.939.

TImE III-CAPPAL STOCK AND DEcIARED VAlam

ExoESS PROFIT8

TAXES
See. 801. Capital stock tax (see. 1200).
See. 802. Declared value excess profits tax (see. 600).
See. 803. Declared value excess profits tax for taxable years of less than twelve
months (see. 601).
See. 804. Technical amendments made-necessary by change in base for corporation tax (sec. 602).
Pogo, p.941.

Tif

IV-EarArE AND Gnr TAXES

Sec. 410.
See. 411.
See. 412.
Sec. 413.
Sec. 414.
See. 415.

PART I-ESTATE TAX
Estates to which amendments applicable.
Community interests (sec. 811 (e)).
Powers of appointment (sec. 811 (f)).
Proceeds of life Insurance (sec. 811 (g)).
Deductions not allowable in excess of certain property of estate (see.
812 (b) ).
Charitable pledges (see. 812 (b)).
Deduction on account of property previously taxed (sec. 812 (c)).
Deduction for disclaimed legacies passing to charities (see. 812 (d)).
Denial of deduction on bequest to certain propaganda organizations
(sec. 812 (d)).
Priority of credit for local death taxes (sec. 818 (a)).
Liability of certain transferees (sec. 827 (b)).
Exemption of estates of nonresidents not citizens (sec. 861 (a)).
Period for filing petition extended in certain cases (see. 871 (a)).
Specific exemption (sec. 935 (e)).
Overpayment found by Board (see. 912).

See. 451.
Sec. 452.
Sec. 453.
See. 454.
See. 455.

PART II---GIFT TAX
Gifts to which amendments applicable.
Powers of appointment (sec. 1000).
Gifts of community property (see. 1000).
Exclusion from net gifts reduced (se. 1003 (b)).
Specific exemption of gifts reduced (sec. 1004).

Sec. 401.
See. 402.
See. 403.
See. 404.
Sec. 405.
See. 406.
See. 407.
See. 408.
See. 409.

Pow, p.951.

801

77TH CONG., 2D SESS.-CI. 619--0T. 21,o1942

56 STA,

Sec. 456 Period for filing petition extended in certain cases (sec. 1012 (a)).
See. 457. Overpayment found by*Board (sec.1021 (d)).
Sec. 458. Deanition at property in United States (see. 1080 (b)).

V-A

ENDMmr8 To PRI REvENUE A0r8 AN MISCELANEOUS
PROVISIONS
Se. 501. Additional credits for undistributed profits tax.
Sec. 502. Stamp tax on certain insurance policies (sec. 1804).
Sec.50& Suit against collector bar In other suts (see. 8772).
Sec. 504Change of name of Board of TAX Appeals (sec. 1100).
Sec. 505. Requirement f fling notice of lien (see. 8672).
Sec. 506. Miscellaneous amendments to stamp tax provisions (sec. 1801, ete.).
See. 507. Time for performing certain acts postponed by reason of war.
See. 508, Mitigation of effect of renegotiation of war contracts or disallowance of
reimbursement.
Se. 509. Amendment to the Public Salary Tax Act of 1939.
See. 510. Abolition of Board of Review and transfer of jurisdiction to Board of
Tax Appeals.
Sec. 511. Dednition of military or naval forces of the United states (sec. 8797

Tnsu

Pog, p. 954.

Sec. 512. Joint Committee on Internal Revenue Taxation-Power to obtain data
(Chap. 48),
Pom p. 9700

Tra VI-Exoisg TAxEs
Effective date of this title.
Distilled spirits (wee. 2800).
Fermented malt liquors (see. 8150).
Wines (sec. 8080).
Cigars and cigarettes (sec. 2000).
Telephone, telegraph, etc. (see. 8465).
Photographic apparatus (sec. 8406 (a) (4)).
Lubricating oils (sec. 8418).
Transportation of persons (sec. 8409).
Organs under contract before October 1,1941 (sec. 8404 (d)).
Termination of certain excise taxes (see. 8406 -(a) (5), (7), '(8),
and (9)).
See. 612. Affixing of cigarette stamps in foreign countries (see. 2112 (c))..
See. 618. Exemption of insignia, etc., used in connection with uniforms of the
armed forces from jewelry tax (sec. 2400).
See. 014. Refrigerators, refrigerating apparatus, and air-conditioners (sec. 840).
See. 615. Exemption of certain cash registers (sec. 8408 (a) (6)).
Sec. 616. Exempt transportation of oil by pipe line (sec. 8400).
See. 617. Coin-operated amusement and gaming devices (sec. 8267).
Sec. 818. Sale under chattel mortgage (see, 2405 and sec, 8441)..
Sec. 619. Repeal of certain provisions relating to mixed flour (Chaptere 18,
Chapter 2T.
Sec. 620. Transportation of property.
Sec. 621. Exemption from processing tax of palm oil used In manufacture of
iron or steel products (see. 2477).
See. 622. Cabaret tax (sec. 1700 (e)).
Sec. 828. Sale and use of toilet preparations by beauty parlors, etc. (sec.
2402 (b)).

Sec. 60L
Sec. 602.
See. 608.
See. 604.
Sec. 605.
See. 60.
Sec. 007.
See. 608.
Sec. 000.
Sec. 610.
Sec. 611.

ourrr TAxzs
Trma VII--SooAz SA
See. 701. Automatic increase in 1948 rate not to apply (sees. 1400 and 1410).
TrrLa VIII-REaNoTATION or WAR COTrAor
See. 801. Renegotiation of war contracts.
(b) Aor AxENDATORY Or INTERNAL RzmVN

CoDr.-Except -as

eg,

.981

Poll, P.**.

otherwise expressly provided, wherever in this Act an amendment
is exp em terms of an amendment to a chapter, subchapter, title,
supplement, section, subsection, subdivision, paragraph, subparagrapht or clause the reference shall be considered to be made to a as sat. ru1.
'4.o rU.S
4s
2s.
provision of the internal Revenue Code.
( ) Ma mxxoorTER S 8UsED.-Exoept as otherwise expressly pro. 0., Supp. L
vi terms used in this Act shall have the same meanmg as when
used in the Internal Revenue Code.
05714*-48--z,. I.---51