the rate of one-half of 1 per cent per month on such amount from the date when the payment should have been made if no extension had been granted until the expiration of the period of the extension. (See section 905 (e).)
Art. 402. Fractional part of a cent.—In the payment of the tax or any installment thereof a fractional part of a cent shall be disregarded unless it amounts to one-half cent or more, in which case it shall be increased to 1 cent. Fractional parts of a cent should not be disregarded in the computation of the tax or any installment thereof.
Section 1118 (a) of the Revenue Act of 1926
Collectors may receive, at par with an adjustment for accrued interest, notes or certificates of indebtedness issued by the United States and uncertified checks in payment of income, war-profits, and excess-profits taxes and any other taxes payable other than by stamp, during such time and under such rules and regulations as the Commissioner, with the approval of the Secretary, shall prescribe; but if a check so received is not paid by the bank on which it is drawn the person by whom such check has been tendered shall remain liable for the payment of the tax and for all legal penalties and additions to the same extent as if such check had not been tendered.
Section 1 of the act of March 2, 1911 (36 Stat. 965), as amended by the act of March 3, 1913 (37 Stat. 733)
It shall be lawful for collectors of internal revenue to receive for internal taxes and all public dues certified checks drawn on National and State banks, and trust companies during such time and under such regulations as the Secretary of the Treasury may prescribe. No person, however, who may be indebted to the United States on account of internal taxes who shall have tendered a certified check or checks as provisional payment for such duties or taxes, in accordance with the terms of this section, shall be released from the obligation to make ultimate payment thereof until such certified check so received has been duly paid; and if any such check is received is not duly paid by the bank on which it is drawn and so certifying, the United States shall, in addition to its right to exact payment from the party originally indebted therefor, have in lien for the amount of such check upon all the assets of such bank; and such amount shall be paid out of its assets in preference to any or all other claims whatsoever against said bank, except the necessary costs and expenses of administration and the reimbursement of the United States for the amount expended in the redemption of the circulating notes of such bank.
Art. 403. Method of payment—(a) Payment of tax by uncertified checks.—Collectors may receive uncertified checks in payment of the tax if such checks are collectible at par—that is, for their full amount, without deduction for exchange or other charges. The collector will stamp on the face of each check before deposit the words "This check is in payment of an obligation to the United States and must be paid at par. No protest", with his name and title.
(b) Procedure with respect to dishonored checks.—If the bank upon which any such check is drawn should, for any reason, refuse to pay it at bar, the check should be returned through the depositary bank and treated as a dishonored check. All expenses incident to the attempt to collect such check and return of it through the depositary bank must be paid by the drawer of the check, since no deduction can be made from amounts received in payment of taxes. If any taxpayer whose check has been returned uncollected by the depositary bank should fall at once to make the check good, or to pay the amount thereof, the collector should proceed to collect the tax as though no check had been given. A taxpayer who tenders a check, whether certified or no, in payment of taxes is not released from his obligation until the check has been paid.
CHAPER V—MISCELLANEOUS PROVISIONS
Jeopardy Assessments
Section 1105 of the Revenue Act of 1932, as amended by section 510 of the Revenue Act of 1934
(a) If the Commissioner believes that the collection of any tax (other than income tax, estate tax, and gift tax) under any provision of the internal-revenue laws will be jeopardized by delay, he shall, whether or not the time otherwise prescribed by law for making return and paying such tax has expired, immediately assess such tax (together with all interest and penalties the assessment of which is provided for by law). Such tax, penalties, and interest shall thereupon become immediately due and payable, and immediate notice and demand shall be made by the collector for the payment thereof. Upon failure or refusal to pay such tax, penalty, or interest, collection thereof by distraint shall be lawful without regard to the period prescribed in section 3187 of the Revised Statutes, as amended.
(b) The collection of the whole or any part of the amount of such assessment may be stayed by filing with the collector a bond in such amount, not exceeding double the amount as to which the stay is desired, and which such sureties, as the collector deems necessary, conditioned upon the payment of the amount collection of which is stayed, at the time at which, but for this section, such amount would be due.
Art. 500. Jeopardy assessment—Immediate collection of the tax.—(a) Whenever, in the opinion of the collector, the collection of the tax will be jeopardized by delay, he should report the case promptly to the Commissioner by telegram or letter. The communication should recite the full name and address of the person involved, the amount of taxes due, the period involved, and any other pertinent facts.
(b) If a jeopardy assessment is made, the taxpayer may stay the collection of the tax by filing with the collector a bond in such amount, not exceeding double the amount of the tax, and with such sureties, as the collector deems necessary, conditioned upon the payment of the tax at the usual time. In lieu of surety or sureties the taxpayer may deposit with the collector bonds or notes of the United States having a par value not less than the amount of the bond required to be furnished, together with an agreement authorizing the collector to collect and sell such bonds or notes so deposited in case of default. (See paragraph 3, appendix B.)
Closing Agreements
Section 606 (a) and (b) of the Revenue Act of 1928
(a) Authorization.—The Commissioner (or any officer or employee of the Bureau of Internal Revenue, including the field service, authorized in writing by the Commissioner) is authorized to enter into an agreement in writing with any person relating to the liability of such person (or of the person or estate for whom he acts) in respect of any internal-revenue tax for any taxable period ending prior to the date of the agreement.
(b) Finality of agreements.—If such agreement is approved by the Secretary, or the Undersecretary, within such time as may be stated in the agreement, or later agreed to, such agreement shall be final and conclusive, and, except upon a showing of fraud or malfeasance, or misrepresentation of material fact—
(1) the case shall not be reopened as to the matters agree upon or the agreement modified, by any officer, employee, or agent of the United States, and
(2) in any suit, action, or proceeding, such agreement, or any determination, assessment, collection, payment, abatement, refund, or credit made in accordance therewith, shall not be annulled, modified, set aside, or disregarded.
Art. 501. Closing agreements.—Agreements for the final determination of taxes may be entered into under the provisions of section 606 (a) and (b) of the Revenue Act of 1928. Such closing or final agreements may relate to any taxable period ending prior to the date of the agreement. Such an agreement may be executed even though under such agreement the taxpayer is not liable for any tax for the period covered by the agreement. The matter agreed upon may relate to the total tax liability of the taxpayer or it may relate to one or more separate items affecting the tax liability of the taxpayer. Accordingly, there may be a series of agreements relating to the tax liability for a single taxable period.
Interest and Penalties
Section 905 (a) of the act
* * * If the tax is not paid when due, there shall be added as part of the tax interest at the rate of one-half of 1
