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FEDERAL RESERVE BANK OF NEW YORK Fiscal Agent of the United States 'Circular No. 2 3 72T . January 30, 1942 J TREASURY FOLDER "TAX SAVINGS NOTES" To All Banks and Trust Companies in the Second Federal Reserve District: This bank has received a supply of a folder entitled "Tax Savings Notes" prepared by the Treasury Department covering Treasury Notes of Tax Series A-1944 and Treasury Notes of Tax Series B-1944. The folder contains a summary of Treasury Circular No. 674, dated December 15,1941, a copy of which was transmitted with Circular No. 2347 of this bank, dated December 31,1941. The earlier leaflet entitled " Tax Savings Plan", a copy of which was enclosed with Circular No. 2318 of this bank, dated November 19,1941, is supplanted by this folder and should no longer be distributed. Five copies of the new folder "Tax Savings Notes" are enclosed. Should you have need of additional copies, this bank will appreciate your returning the enclosed card after having indicated thereon the number of copies you desire. ALLAN SPROUL, President. TABLE OF PURCHASE PRICE AND TAX PAYMENT VALUE Purchase price and tax-payment value during successive months of $100 Treasury Tax Notes dated January 1942, Series A and B (par and accrued interest, during successive months; other denominations in proportion) The total shown for any denomination for any month—January through December 1942— while the notes remain on sale, is the purchase price, or cost of the note during that month. Also the total shown for any denomination for any month—January 1942 through January 1944—is the tax-payment value of the note if receivable during that month in payment of taxes. 1942 January February March April May June July August September October November December Series A Series B $100.00 100.16 100.32 100.48 100.64 100.80 100.96 101.12 101.28 101.44 101.60 101.76 $100.00 100.04 100.08 100.12 100.16 100.20 100.24 100.28 100.32 100.36 100.40 100.44 101.92 102.08 102.24 102.40 102.56 102.72 102.88 103.04 103.20 103.36 103.52 103.68 100.48 100.52 100.56 100.60 100.64 100.68 100.72 100.76 100.80 100.84 100.88 100.92 103.84 100.96 1943 January February March April May June July August September October November December 1944 January U. S. GOVERNMENT PRINTING OFFICE 16—26153-1 UNITED STATES TREASURE TAX SAVINGS NOTES Tax Series A-1944 Tax Series B-194 Dated Jan. 1, 1942—Due Jan. 1. 1944 Issued at par and accrued interest. Accep able at par and accrued interest in paymei of Federal income, estate, and girt taxes. FOR THE NATIONAL WAR PROGRA/^ greatly increased taxes are necessary, cons quently, as income is received, the taxpay< should set aside the amount necessary to pay tr taxes due the following year. This can be dor by purchasing Treasury Tax Notes on a regul; schedule, from current income, and later usir. them in paying Federal income, estate, and gi taxes. TWO SERIES. Two series are available; Seri A, designed to be particularly attractive to tl small or moderate taxpayers, and Series B, i tended for the larger taxpayers. The notes cu rently on sale will be dated January 1,1942, ar mature January 1, 1944. . UCE OF NOTES. The notes of both series e sold at par and accrued interest from their ite to month of purchase. Defense Savings amps will be accepted at face value in payment r these Treasury Tax Notes. When the notes e used to. pay taxes, the taxpayer is given credit r the accrued interest which was included in e purchase price, plus the further interest crued while the notes were in the taxpayer's ^session. ENOMINATIONS. Series A, $25, $50, $100, 500, $1,000; Series B, $100, $500, $1,000, ..0,000, $100,000, $500,000, $1,000,000. 1TEREST. Interest accrues on Series A at rate " 16 cents a month per $100. That is at a rate ' about 1.92 percent a year. Interest accrues on ;ries D at 4 cents a month per $100. That is at rate of about 0.48 percent a year. terest accrued after purchase is allowed only ) notes used for tax payments. Interest will >t accrue after the maturity of the notes. \ X PAYM ENTS. The notes are inscribed with e name of the taxpayer and are nonnegotiable. hey may be used by the owner, his agent, or s estate in payment of Federal income taxes rurrent and back personal and corporation taxes id excess-profits taxes) assessed against his come; also in payment of Federal estate and ft taxes. They may be so used when at least le full calendar month has intervened between e month of acceptance and the month of purlase. For example, a note of Tax Series -1944 purchased in April 1942 may be acpted in June 1942, but such a note purchased May 1942 may not be accepted until July )42. The notes are receivable in payment the above-mentioned taxes at par, plus accrued terest from their date to and including the onth in which they are presented to the Collecr of Internal Revenue. MOUNTS ACCEPTABLE, SERIES A. Not ore than $1,200 principal amount and accrued terest thereon of Series A notes of any date and maturity will be accepted on account of a taxpayer's liability for each taxable period. But in the case of a joint return, this limitation applies separately to both husband and wife. Similarly it applies separately to decedent before death and also to his estate for the balance of the same year. The $1,200 limitation also applies separately to each of the three classes of taxes (income, estate, and gift) for which these notes are acceptable. AMOUNTS ACCEPTABLE, SERIES B. No limit is placed on the amount of Series B notes acceptable, either alone or in addition to Series A notes. Tax notes, both Series A and Series B, will be received in payment of taxes only in amounts of their denominations plus accrued interest. TAXABILITY. Interest accrued after purchase has no exemption from Federal income tax, but should be reported as income for the year in which the notes are used for tax payment. PvEDEMPTION. Notes not used for tax-payment purposes may be redeemed, in whole or in part (corresponding to an authorized denomination), at the purchase price only; that is, at the face value of the note, plus the interest accrued at the time of purchase. Series A notes may be redeemed at any time; Series B notes after 60 days from date of issue, on 30 days' notice. PURCHASE OF NOTES. Tax notes may be purchased from any Federal Reserve bank or branch or from the Treasurer of the United States, Washington, D. C. Banks, trust companies, investment houses, securities dealers, and savings and loan associations generally throughout the United States will secure the notes for their customers, making no charge for this service. For any special information concerning the acceptance of these notes in payment of Federal income, estate, and/or gift taxes, consult the nearest Collector of Internal Revenue. ""(Cut along"tfaii"irne> APPLICATION FOR U. S. TREASURY TAX NOTES To the Federal Reserve bank of Tax Series A—Tax Series B NUMBER OF NOTES DENOMINATION (Face value) Tax Series Tax Series Tax Series Tax Series Tax Series Tax Series Tax Series Tax Series Tax Series Tax Series Tax Series Tax Series PURCHASE PRICE (See previous page) A $25 ; A $50 A $100 A $500 A $1,000 B $100 B $500 B $1,000 B $10,000 B $100,000 B $500,000 B $1,000,000 Total amount of purchase (remittance herewith) $ AMOUNT (Total cost) The undersigned hereby applies for United States Treasury Notes of n T a x Series A QTax Series B as indicated on the form to the left. (Draw remittances to the Treasurer of the United States.) (Purchaser's name—type or print plainly) (Signature of purchaser) (Address of purchaser) will be forwarded by registered mail to address above unless other instructions are given DELIVERY INSTRUCTIONS.—Notes here (IMPORTANT—Refer to table on back page before filling in Purchase Price.) Questions & Answers Q. Is $1,200 the absolute limit of Series A Notes that an individual taxpayer can use in any one taxable period? A. Yes; but if husband and wife file a joint income tax return, each of them may use $1,200 of Series A Notes in payment—a total of $2,400. Q. During that same year could a taxpayer use Series A Notes in payment of Federal gift taxes? A. Yes; during that same could also use $1,200 of gift tax payments. In estate could use another of Federal estate tax. year, any taxpayer Series A Notes for case of death, his $1,200 in payment Q. What happens to a person's Treasury TaxSavings Notes if he dies? A. The notes can be presented by the estate for the payment of income taxes due from the decedent; or they can be redeemed for the amount paid for them. Q. / / necessary, can these Tax Savings Notes be sold? A. N o ; but the purchaser may present them for redemption at the price he paid for them. Unless they are used for payment of taxes they earn no interest, but also there is no risk of receiving less than was paid for them. Q. Can these Tax Savings Notes be used as collateral? A. N o ; nor are they transferable. If lost or stolen they cannot be used by any other person than the purchaser. Please send us additional copies of the folder prepared by the Treasury Department, entitled "Tax Savings Notes", referred to in your Circular No. 2372. (Date) (Xame—typewrite or print) (Signature) (Street Address) (City or Town) (State) FEDERAL RESERVE BANK OF NEW YORK Federal Reserve Station, P. O., New York, N. Y
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