Appendix D: Form 1040 for the Year 1913

Author's Note:

The federal government wasted no time in levying income taxes after Secretary of State Philander C. Knox declared that the so-called 16th Amendment had been ratified. His fraudulent declaration was made on February 25, 1913. The first Form 1040 was printed to cover the period of March 1 to December 31, 1913. This form was entitled "Return of Annual Net Income of Individuals (As provided by Act of Congress, approved October 3, 1913.)"

A most revealing part of this Form 1040 is found in the "Instructions", which are reproduced verbatim on the following pages. In the first paragraph of these instructions, there is valuable evidence which substantiates the validity of The Matrix discussed throughout this book. This paragraph is repeated as follows, in order to highlight key phrases:

 
     This return  shall be  made by  every citizen  of the United 
     States, whether  residing at  home or  abroad, and  by every 
     person residing  in the  United States, though not a citizen 
     thereof, having  a net  income of  $3,000 or  over  for  the 
     taxable year,  and also  by every nonresident alien deriving 
     income  from   property  owned   and  business,   trade,  or 
     profession carried on in the United States by him. 
 
 
                                    [Form 1040 for the Year 1913] 
                                   [From March 1, to December 31] 
                                      [Instructions, Paragraph 1] 
 

         
         
                                  INSTRUCTIONS 
                                         
                                         
        1.   This return  shall be  made by  every citizen  of the United 
             States, whether  residing at  home or  abroad, and  by every 
             person residing  in the  United States, though not a citizen 
             thereof, having  a net  income of  $3,000 or  over  for  the 
             taxable year,  and also  by every nonresident alien deriving 
             income  from   property  owned   and  business,   trade,  or 
             profession carried on in the United States by him. 
         
        2.   When an  individual by reason of minority, sickness or other 
             disability, or  absence from the United States, is unable to 
             make his  own return,  it may  be made  for him  by his duly 
             authorized representative. 
         
        3.   The normal  tax of 1 per cent shall be assessed on the total 
             net income  less the  specific exemption of $3,000 or $4,000 
             as the  case may  be.   (For the  year  1913,  the  specific 
             exemption allowable  is $2,500 or $3,333.33, as the case may 
             be.)   If, however,  the normal  tax has  been deducted  and 
             withheld on  any part of the income at the source, or if any 
             part of  the income  is received as dividends upon the stock 
             or from  the net earnings of any corporation, etc., which is 
             taxable upon  its net  income, such income shall be deducted 
             from the  individual's total  net income  for the purpose of 
             calculating the  amount of income on which the individual is 
             liable for  the normal  tax of  1 per cent by virtue of this 
             return.  (See page 1, line 7.) 
         
        4.   The additional or super tax shall be calculated as stated on 
             page 1. 
         
        5.   This return  shall be  filed with  the Collector of Internal 
             Revenue for  the district in which the individual resides if 
             he has no other place of business, otherwise in the district 
             in which  he has his principal place of business; or in case 
             the  person   resides  a  foreign  country,  then  with  the 
             collector for  the district  in which his principal business 
             is carried on in the United States. 
         
        6.   This return  must be  filed on  or before  the first  day of 
             March succeeding  the close  of the  calendar year for which 
             return is made. 
         
        7.   The penalty  for failure  to file the return within the time 
             specified by  law is  $20 to  $1,000.  In case of refusal or 
             neglect to  render  the  return  within  the  required  time 
             (except in  cases of  sickness or absence), 50 percent shall 
             be added  to amount  of tax  assessed.   In case of false or 
             fraudulent return,  100 percent  shall be added to such tax, 
             and any  person required  by law  to make,  render, sign, or 
             verify any  return who  makes any false or fraudulent return 
             or statement  with intent  to defeat or evade the assessment 
             required by  this section  to be  made shall  be guilty of a 
             misdemeanor, and  shall be  fined not exceeding $2,000 or be 
             imprisoned  not   exceeding  one   year,  or  both,  at  the 
             discretion of the court, with the costs of prosecution. 
         
        8.   When the  return is  not filed  within the  required time by 
             reason  of   sickness  or  absence  of  the  individual,  an 
             extension of  time, not  exceeding 30  days  from  March  1, 
             within which  to file  such return,  may be  granted by  the 
             collector, provided  an application  therefor is made by the 
             individual within  the period  for which  such extension  is 
             required. 
         
        9.   This return  properly filled  out must be made under oath or 
             affirmation.   Affidavits may  be made  before  any  officer 
             authorized by  law to administer oaths.  If before a justice 
             of the  peace or magistrate, not using a seal, a certificate 
             of the  clerk of  the court  as to  the  authority  of  such 
             officer to  administer  oaths  should  be  attached  to  the 
             return. 
         
        10.  Expense  for  medical  attendance,  store  accounts,  family 
             supplies, wages  of domestic  servants, cost of board, room, 
             or house  rent for  family or personal use, are not expenses 
             that can  be  deducted  from  gross  income.    In  case  an 
             individual owns  his own  residence he  can not  deduct  the 
             estimated value of his rent, neither shall he be required to 
             include such estimated rental of his home as income. 
         
        11.  The farmer,  in computing  the net  income from his farm for 
             his annual  return, shall  include all  moneys received  for 
             produce and  animals sold,  and for  the wool  and hides  of 
             animals slaughtered,  provided such wool and hides are sold, 
             and he  shall deduct  therefrom the  sums actually  paid  as 
             purchase money  for the  animals sold  or slaughtered during 
             the year. 
         
             When  animals   were  raised   by  the  owner  and  sold  or 
             slaughtered he  shall not  deduct their value as expenses or 
             loss.   He may  deduct the  amount of money actually paid as 
             expense for  producing any  farm products,  live stock, etc. 
             In deducting  expenses for  repairs  on  farm  property  the 
             amount deducted must not exceed the amount actually expended 
             for such  repairs during  the year  for which  the return is 
             made.  (See page 3, item 6.)  The cost of replacing tools or 
             machinery is  a deductible  expense to  the extent  that the 
             cost of  the new  articles does  not exceed the value of the 
             old. 
         
        12.  In calculating  losses, only  such losses as shall have been 
             actually  sustained   and  the  amount  of  which  has  been 
             definitely ascertained during the year covered by the return 
             can be deducted. 
 
        13.  Persons receiving  fees or  emoluments for  professional  or 
             other services,  as in  the case  of physicians  or lawyers, 
             should include  all actual receipts for services rendered in 
             the year  for which return is made, together with all unpaid 
             accounts, charges for services, or contingent income due for 
             that year, if good and collectible. 
         
        14.  Debts which were contracted during the year for which return 
             is made,  but found  in said  year to  be worthless,  may be 
             deducted from gross income for said year, but such debts can 
             not be  regarded as  worthless until after legal proceedings 
             to recover  the same  have proved  fruitless, or  it clearly 
             appears that  the debtor  is insolvent.  If debts contracted 
             prior to  the year for which return is made were included as 
             income  in   return  for  year  in  which  said  debts  were 
             contracted, and  such debts  shall subsequently  prove to be 
             worthless, they  may be deducted under the head of losses in 
             the return for the year in which such debts were charged off 
             as worthless. 
         
        15.  Amounts due  or accrued  to  the  individual  members  of  a 
             partnership  from  the  net  earnings  of  the  partnership, 
             whether  apportioned   and  distributed  or  not,  shall  be 
             included in the annual return of the individual. 
         
        16.  United States pensions shall be included as income. 
         
        17.  Estimated advance in value of real estate is not required to 
             be reported  as income,  unless the increased value is taken 
             up on the books of the individual as an increase of assets. 
         
        18.  Costs of  suits and  other legal  proceedings  arising  from 
             ordinary business  may be  treated as  an  expense  of  such 
             business, and may be deducted from gross income for the year 
             in which such costs were paid. 
         
        19.  An unmarried  individual or  a married individual not living 
             with wife  or husband  shall  be  allowed  an  exemption  of 
             $3,000.   When husband  and wife live together they shall be 
             allowed jointly  a total  exemption of  only $4,000 on their 
             aggregate income.   They  may  make  a  joint  return,  both 
             subscribing thereto,  or if they have separate incomes, they 
             may make  separate returns;   but  in  no  case  shall  they 
             jointly claim  more than $4,000 exemption on their aggregate 
             income. 
         
        20.  In  computing   net  income  there  shall  be  excluded  the 
             compensation of all officers and employees of a State or any 
             political subdivision thereof, except when such compensation 
             is paid by the United States Government. 
         
                                                                  c2-7357 
 
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