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FEDERAL RESERVE BANK OF DALLAS
F I S C A L A G E N T O F T H E U N IT E D S T A T E S
Dallas, Texas, January 28,1942
To All Banking Institutions in the
Eleventh Federal Reserve District:
There are enclosed several Tax Savings Notes leaflets pre
pared by the Treasury Department, covering Tax Savings
Notes of Series A and Series B, 1944.
The purpose of the leaflet is to provide banks and corpora
tions with a brief summary of Treasury Department Circular
No. 674, to be used in discussing Tax Savings Notes with de
positors.
Should your bank desire additional copies, they will be
gladly furnished upon request.
Yours very truly,
R. R. GILBERT
President
E E SE
FN
BUY
UNITED
STATES
SAVINGS
BONDS
A DSTAMPS
N
This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org)
UNITED
STATES
TREASURY
TAX
SAVINGS
NOTES
Tax Series A-1944
Tax Series B-1944
Dated Jan. 1, 1942— Due Jan. 1. 1944
Issued at par and accrued interest. Accept
able at par and accrued interest in payment
of Federal income, estate, and gift taxes.
FOR THE NATIONAL WAR PROGRAM,
greatly increased taxes are necessary, conse
quently, as income is received, the taxpayer
should set aside the amount necessary to pay the
taxes due the follow ing year. This can be done
by purchasing Treasury Tax Notes on a regular
schedule, from current income, and later using
them in paying Federal income, estate, and gift
taxes.
TWO SERIES. Tw o series are available; Series
A, designed to be particularly attractive to the
small or moderate taxpayers, and Series B, inS nded for the larger taxpayers. The notes curently on sale will be dated January 1, 1942, and
mature January 1, 1944.
P R IC E O F N O T E S . The notes o f both series
are sold at par and accrued interest from their
date to month o f purchase. Defense Savings
Stamps w ill be accepted at face value in payment
for these Treasury Tax Notes. W hen the notes
are used to pay taxes, the taxpayer is given credit
for the accrued interest which was included in
the purchase price, plus the further interest
accrued while the notes were in the taxpayer’s
possession.
D E N O M I N A T I O N S . Series A, $25, $50, $100,
$500, $1,000; Series B, $100, $500, $1,000,
$10,000, $100,000, $500,000, $1,000,000.
IN T E R E S T . Interest accrues on Series A at rate
o f 16 cents a month per $100. That is at a rate
o f about 1.92 percent a year. Interest accrues or.
Series B at 4 cents a month per $100. That is a '
a rate o f about 0.48 percent a year.
In+eresf a c c ru e d a f te r purchase is a llo w e d o n ly
on n o tes used fo r ta x p a y m e n ts . In te re s t w ill
n o t a c c ru e a f te r th e m a tu rity of th e no te s .
T A X P A Y M E N T S . The notes are inscribed with
the name o f the taxpayer and are nonnegotiable.
They may be used by the owner, his agent, or
his estate in payment o f Federal income taxes
(current and back personal and corporation taxes
and excess-profits taxes) assessed against 'his
income; also iry payment o f Federal estate and
gift taxes. They may be so used when at least
one full calendar month has intervened between
the month o f acceptance and the month o f pur
chase.
For example, a note o f Tax Series
A—
1944 purchased in April 1942 may be ac
cepted in June 1942, but such a note purchased
in May 1942 may not be accepted until July
1942.
V A L U E . The notes are receivable in payment
o f the above-mentioned taxes at par, plus accrued'
interest from their date to and including th,
month in which they are presented to the Collec
tor o f Internal Revenue.
AM OUNTS
A C C E P T A B L E , S E R IE S A .
Not
more than $1,200 principal amount and accrued
interest thereon of Series A notes o f any date and
Vi
^
P U R C H A S E O F N O T E S . Tax notes may be
purchased from any Federal Reserve bank or
branch or from the Treasurer o f the United
States, Washington, D . C. Banks, trust com
panies, investment houses, securities dealers, and
savings and loan associations generally through
out the United States w ill secure the notes for
their customers, making no charge for this serv
ice. For any special information concerning the
acceptance o f these notes in payment o f Federal
'%*ome, estate, and/or gift taxes, consult the
rest Collector o f Internal Revenue.
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R E D E M P T IO N . Notes not used for tax-pay
ment purposes may be redeemed, in whole or in
part (corresponding to an authorized denomina
tion), at the purchase price only; that is, at the
face value o f the note, plus the interest accrued
at the time o f purchase. Series A notes may be
redeemed at any time; Series B notes after 60
days from date o f issue, on 30 days’ notice.
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X A B IL IT Y . 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.
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A M O U N T S A C C E P T A B L E , S E R IE S B. N o
limit is placed on the amount o f 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 o f taxes only in
amounts o f their denominations plus accrued
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(remittance herewith) $ .......................
maturity will be accepted on account o f a tax
payer’s liability for each taxable period. But in
the case o f 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 o f the same year.
The $1,200 limitation also applies separately to
each o f the three classes o f taxes (income, estate,
and g ift) for which these notes are acceptable.
Questions & Answers
Q. Is $1,200 the absolute limit o f Series A
Notes that an individual taxpayer can use in
any one taxable period?
A. Y es; but if husband and wife file a joint
income tax return, each o f them may use
$1,200 o f Series A Notes in payment— a
total o f $2,400.
Q. During that same year could a taxpayer use
Series A N otes in payment o f Federal gift
taxes?
A . Y es; during that same
could also use $1,200 o f
gift tax payments. In
estate could use another
o f Federal estate tax.
year, any taxpayer
Series A Notes for
case o f death, his
$1,200 in payment
Q. What happens to a person’s Treasury Tax
Savings Notes if he dies?
A. The notes can be presented by the estate for
the payment o f income taxes due from the
decedent; or they can be redeemed for the
amount paid for them.
Q. I f 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 o f taxes
they earn no interest, but also there is no risk
o f 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.
TABLE OF PURCHASE PRICE AND
TA X 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.
Series A
1942
January .................. ............. $100.00
February ................ ............. 100.16
March .................... ............. 100.32
April ...................... ............. 100.48
May ...................... ............. 100.64
June ...................... ............. 100.80
July ....................................... 100.96
August .................. ............. 101.12
September ........... ............. 101.28
October ............... ............. 101.44
November ........... .............. 101.60
December ............. ............. 101.76
Series B
$100.00
100.04
100.08
100.12
100.16
100.20
100.24
100.28
100.32
100.36
100.40
100.44
1943
January ............... .............
Feb ru ary................ .............
March ...................................
April ...................... .............
May ........................ .............
June ...................... .............
July .......................................
August .................. .............
September ........... .............
October ................ .............
November ........... .............
December ............. .............
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
1944
January ............... .............
103.84
100.9C
U. S. GOVERNMENT PRINTING OFFICE
10— 2 0 1 5 3 -1
@FedFRASER