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FED ERAL RESER VE BANK O F NEW YORK F iscal A g en t o f the U nited States r Circular No. 3 9 8 1 1 L. May 27, 1953 J P A Y M E N T OF JUNE TAXES Use o f T ax A nticipation Bills Deposits in Treasury Tax and Loan Accounts To all Treasury Tax and Loan Depositaries, and Others Concerned, in the Second Federal Reserve D istrict: A t the request o f the T reasury Departm ent, we transm it a cop y o f a letter dated M ay 25, 1953, from the F iscal A ssistant S ecretary o f the Treasury, outlining procedures to be follow ed in m aking paym ent o f June 1953 taxes w ith T reasury Bills, T ax A nticipation Series, m aturing June 19, 1953. The T reasury has announced that D irectors o f Internal Revenue w ill be instructed to make special deposits with F ederal R eserve Banks, during the period June 1 through J u ly 3, 1953, o f checks o f $10,000 or m ore representing payments o f individual or corporate incom e taxes, excess profits taxes, interest, or penalties, including deficiencies and payments o f estim ated taxes. The T reasu ry has also announced that draw ee banks qualified as Special D epositaries o f P ublic M oneys m ay receive 50 per cent o f these rem ittances fo r deposit in their T reasury T ax and L oan Accounts. W e w ill prepare daily a special form o f cash letter, w ith an attached certificate form , fo r the June tax collections. U ntil further notice, the amount shown in the certificate w ill be f o r 50 per cent o f the amount o f those checks eligible fo r credit to T reasury T ax and L oan Accounts. Special depositaries, w ishing to accept funds equal to 50 per cent o f the amount o f the cash letter fo r deposit in their T reasury T ax and L oan Accounts, should execute and return the certificate attached to the cash letter, in accordance w ith the instructions contained in the letter. W ithdraw als from funds arising fro m the June tax payments in the T ax and L oan A ccounts w ill be made in such manner as required by the needs o f the Treasury. F o r reasons explained by the F isca l A ssistant S ecretary in his letter, those checks o f $10,000 or m ore draw n on funds that arose from the redem ption o f the T ax A nticipation Series T reasury bills or T reasu ry Savings notes w ill not be eligible fo r credit to T reasury T ax and L oan Accounts. H ow ever, in com puting the amount to be deposited in T reasury T ax and L oan Accounts, w e w ill include in the certificate attached to the special cash letter 50 per cent o f the amount o f those checks drawn on a depositary presenting T reasury Bills, T ax A nticipation Series, due June 19, 1953, fo r cash redem ption fo r its own account, i f the depositary certifies that— (1 ) The bills were acquired b y purchase p rior to June 1, 1953 and were held continuously until date o f maturity, or (2 ) They were acquired on and after June 1, and paym ent o f the purchase price was not credited in a custom er’s deposit account on its books. Requests to apply the T ax A nticipation bills to the paym ent o f taxes should be made on F orm T X 1. A request by a bank o r trust com pany to redeem T ax A nticipation bills, m aturing June 19, 1953, should be made on F orm T X 2. Copies o f both form s are enclosed. A ddition al copies o f this circular and o f the enclosed form s w ill be furnished upon request. A llan S proul, P resident. ( over) T R E A S U R Y VVj frgiitJ'J D E P A R T M E N T F IS C A L SE R V IC E W A S H IN G T O N F is c a l A s s is ta n t S ecr etar y May 25, 1953 T o Treasury T ax and Loan Depositaries, and Others Concerned: Treasury Bills, T a x Anticipation Series, dated November 21, 1952, maturing June 19, 1953, are outstanding in the amount of $2,002,666,000. These Treasury bills are acceptable in payment of Federal income taxes due June 15, 1953, and were issued to enable taxpayers to invest their accumulated tax reserves in an interest-bearing security which will be received in payment o f Federal income taxes. In order to facilitate the use of Treasury Bills, T a x Anticipation Series, by taxpayers in payment o f their income taxes, the Treasury has authorized Federal Reserve Banks and Branches, as fiscal agents o f the United States, to accept such securities on or before the income tax instalment date, from or for account o f Federal taxpayers, and to issue receipts to Directors of Internal Revenue showing that such Treasury bills are held for the purpose of applying the proceeds o f redemption to the payment of income taxes of the taxpayer named in the receipts. T w o copies o f each receipt will be delivered to the taxpayer concerned, who will attach one copy to his income tax return filed with the Director o f Internal Revenue. Directors of Internal Revenue have been instructed (Internal Revenue Mimeograph N o. 122, Coll. No. 24, dated February 2, 1953) to accept tax returns to which are attached copies of receipts addressed to them by Federal Reserve Banks and Branches that Treasury bills due June 19, 1953 are being held for application of the proceeds of redemption to the payment of income taxes due on June 15, 1953, of the taxpayer named in the receipt. The continuing policy o f the Treasury is not to look with favor upon efforts by banks which are special deposi taries for Treasury tax and loan accounts to encourage their customers to sell to them their Treasury Bills, Tax Anticipation Series, maturing June 19, 1953, and to accept payment for the Treasury bills by a deposit credit in their checking accounts, or to present Treasury Savings notes for cash redemption, with the proceeds being deposited in their checking accounts, and to pay their taxes by checks drawn on the taxpayers’ accounts with the banks. Depositaries following this practice apparently do so in expectation that under arrangements which have been in effect for quarterly tax payments since March, 1951, they may obtain a deposit in their Treasury tax and loan accounts for an amount equal to the taxpayers’ checks (fo r checks over $10,000 in amount) drawn on their accounts with the banks, and in regular course they can present the Treasury bills to the Treasury for cash redemption at maturity. These practices by depositaries will increase the amount of such bills or Savings notes presented for cash redemption in advance of the availability of Treasury receipts from the income tax instalment due on June 15, 1953, and will make it more difficult for the Treasury and the Federal Reserve System to handle the large income tax col lections during June in a manner that will maintain stability in the money market. Accordingly, the Treasury will follow the same procedure as was adopted in connection with the March 15, 1952 and June 15, 1952 income tax instalments. Depositaries having Treasury tax and loan accounts are advised that to the extent they present Treasury bills maturing June 19, 1953 for cash redemption for their own account, or if tax payers present their Treasury Savings notes for cash redemption, and use the proceeds o f redemption through deposit with and withdrawal from depositaries by checks in payment of their June 15, 1953 income taxes, an equal amount o f income tax checks o f $10,000 and over drawn on such banks in payment of income taxes due June 15, 1953 will be withheld from deposit in their tax and loan accounts. However, if a depositary presenting Treasury Bills, T a x Anticipation Series, due June 19, 1953, for cash redemption for its own account, can certify that they were acquired by purchase prior to June 1, 1953, and were held continuously until date of maturity, or that they were acquired on and after June 1st, and payment of the pur chase price was not credited in a customer’s deposit account on its books, such bills will not be included in arriving at the amount of income tax checks of $10,000 and over to be withheld from deposit in their tax and loan accounts. V ery truly yours, E. F . B a r t e l t Fiscal Assistant Secretary of the Treasury (S U B M IT W IT H D U P L IC A T E W H IT E C O P Y ) TX 1 REQ U EST F O R RED EM PTION OF T R E A S U R Y BILLS, T A X A N T IC IP A T IO N SERIES, DUE JUNE 19, 1953, AN D F O R A P P L IC A T IO N OF PROCEEDS TO P A Y M E N T OF INCOM E TAXES Date....................................................................... F ederal R eserve B a n k of N ew Y 1953 ork, Fiscal Agent of the United States, Federal Reserve P. 0. Station, New York 45, N. Y. Attention: Government Bond Department— 2nd Floor The undersigned herewith presents and surrenders the follow ing described T R E A S U R Y B IL L S , T A X A N T IC IP A T IO N S E R IE S , dated November 21, 1952, due June 19, 1953, in payment o f taxes due on June 15, 1953: Pieces Denomination $ Face amount List serial numbers (If space is not sufficient, use back of form.) 1,000 5,000 10,000 100,000 500,000 1,000,000 Total P A Y M E N T INSTRUCTIONS Credit the total face amount o f the bills described above on June 15, 1953 to the D irector o f Internal Revenue at— C A U T IO N As a protectionto the sender, ship ments of bearer securities by mail should be registered and insured. (Street Address) (City, Zone No., and State) for account of taxpayer indicated below. Name of taxpayer........................................................ (Print same name that appears on tax return) Address of taxpayer...................................................... (Street Address) (City, Zone No., and State) Signature of taxpayer..................................................... (Not required when application is submitted on behalf of the taxpayer by an agent.) Request submitted by..................................................... (Name of Agent) (Street Address) (City, Zone No., and State) By.............. ......... ...................... ..... (Official signature required) (Title) (S p a c e b e lo w f o r u se o f F e d e ra l R e s e rv e B ank o f N ew Y o r k ) Received Securities verified and recorded Receipt prepared Receipt verified (D U P L IC A T E C O P Y F O R U SE O F F E D E R A L R E S E R V E B A N K OF N E W Y O R K ) TX 1 REQ U EST F O R RED EM PTIO N OF T R E A S U R Y BILLS, T A X A N T IC IP A T IO N SERIES, DUE JUNE 19, 1953, AN D F O R A P P L IC A T IO N OF PROCEEDS TO P A Y M E N T OF INCOM E TAXES Date........................................................................... , 1953 F ederal R eserve B a n k op N ew Y ork, Fiscal Agent of the United States, Federal Reserve P. 0. Station, New York 45, N. Y. Attention: Government Bond Department—2nd Floor The undersigned herewith presents and surrenders the follow in g described T R E A S U R Y B IL L S , T A X A N T IC IP A T IO N S E R IE S , dated November 21, 1952, due June 19, 1953, in paym ent o f taxes due on June 15, 1953: Pieces Denomination $ Face amount List serial numbers (I f space is not sufficient, use back of form.) 1,000 5,000 10,000 100,000 500,000 1,000,000 Total PAYMENT INSTRUCTIONS Credit the total face amount o f the bills described above on June 15, 1953 to the D irector o f Internal Revenue at— C A U T IO N As a protection to the sender, ship ments of bearer securities by mail should be registered and insured. (Street Address) (City, Zone No., and State) for account of taxpayer indicated below. Name of taxpayer................................................................................................................................ (Print same name that appears on tax return) Address of taxpayer............................................................................................................................ (Street Address) (City, Zone No., and State) Signature of taxpayer.................................................................................................................. ....... (Not required when application is submitted on behalf of the taxpayer by an agent.) Request submitted by......................................................................................................................... (Name of Agent) (Street Address) (City, Zone No., and State) By....................................................................................................... . (Official signature required) (Title) ( S p a c e b e lo w f o r u se o f F e d e ra l R e s e rv e B a n k o f N ew Y o r k ) Received Securities verified and recorded Receipt prepared Receipt verified TX 2 (S U B M IT W IT H D U P L IC A T E W H IT E C O P Y ) REQUEST BY A BANK OR TRUST COMPANY FOR REDEMPTION OF TREASURY BILLS, TAX ANTICIPATION SERIES, DUE JUNE 19, 1953 c Date........................................................................... , 1953 F ederal R eserve B a n k of New Y ork, Fiscal A gent o f the United States, Federal Reserve P. 0 . Station, New York 45, N. Y. A tten tion : Government B ond Department— 2nd F loor The undersigned herewith presents and surrenders fo r redemption T R E A S U R Y B IL L S , T A X A N T IC IP A T IO N S E R IE S Dated November 21, 1952 Due June 19, 1953 1. F o r own account (certification below a p p lie s )............................................................................................ $........................................ 2. F o r own account (acquired on and after June 1, 1953 and paym ent o f purchase price credited on our books in the deposit accounts o f the customers shown on the reverse side o f this form ) ........................................................................................................................................................... $......................................... 3. F o r our customers as shown on reverse side o f this fo r m ............................................................................ $......................................... Total am ount............................ ... $......................................... Description o f B ills Surrendered Denomination Piece* Face amount List serial numbers (If space is not sufficient, use back of form.) $ 1 ,0 0 0 5 ,0 0 0 1 0 ,0 0 0 1 0 0 ,0 0 0 5 0 0 ,0 0 0 1 ,0 0 0 ,0 0 0 T o ta l C A U T IO N CERTIFICATE A s a protection to the sender, shipments o f bills by mail should be registered and insured. The undersigned hereby certifies that the bills presented, as indi cated in item 1 above, are presented fo r cash redem ption fo r its own account and were acquired b y purchase prior to June 1, 1953 and were held continuously until date o f m aturity or that they were acquired on and after June 1 and paym ent o f the purchase price was not credited in a custom er’s deposit account on our books. P A Y M E N T IN STR U C T IO N S By ch eck □ B y credit to reserve account (F o r use o f Federal R eserve Bank o f N ew Y o r k ) Received (Name of Bank) ----------------------------.(Street Address) Securities verified and r e c o r d e d ----------------------------(City, Zone No., and State) Paym ent p re p a re d ----------------------------Paym ent checked ----------------------------- B y ................................................................................................................... (Official Signature and Title Required) List o f customers to which items 2 and 3 on the reverse side apply A m ount N a m e a n d a d d r e ss o f c u s t o m e r (P lea se print or use typew riter) D E N O M IN A T IO N S A N D S E R IA L N U M B E R S O P B O N D S SU R R E N D E R E D TX 2 (D U PLICA TE COPY FOE USE OF FED ER AL EESEEVE B A N K OF NEW Y O E K ) REQUEST B Y A BANK OR TRUST COMPANY FOR REDEMPTION OF TREASURY BILLS, T A X ANTICIPATION SERIES, DUE JUNE 19, 1953 Date............................,1953 F e d e r a l R e serve B a n k op New Y ork, Fiscal Agent of the United States, Federal Reserve P. 0. Station, New York 45, N. Y. Attention:Government Bond Department— 2nd Floor The undersigned herewith presents and surrenders for redemption TREASURY BILLS, T A X ANTICIPATION SERIES Dated November 21, 1952 Due June 19, 1953 1. F o r own account (certification below a p p lie s )............................................................................................ ... $. 2. F o r own account (acquired on and after June 1, 1953 and paym ent o f purchase price credited on our books in the deposit accounts o f the customers shown on the reverse side o f this form ) ........................................................................................................................................................ ...$. 3. F or our customers as shown on reverse side o f this fo r m ............................................................................$. Total am ount............................ ... $. Description of Bills Surrendered Denomination Pieces Face amount List serial numbers ( I f space is not sufficient, use bach o f form.) $ 1,000 5,000 10,000 100,000 500,000 1,000,000 Total C A U T IO N As a protection to the sender, shipments of bills by mail should be registered and insured. P A Y M E N T INSTRUCTIONS By check □ CERTIFICATE The undersigned hereby certifies that the bills presented, as indi cated in item 1 above, are presented fo r cash redem ption fo r its own account and were acquired by purchase prior to June 1, 1953 and were held continuously until date o f maturity or that they were acquired on and after June 1 and payment o f the purchase price was not credited in a custom er’s deposit account on our books. By credit to reserve account ( F o r use o f Federal R eserve Bank o f N ew Y o r k ) Received (N am e o f Bank) ---------(Street Address) Securities verified and recorded ----------------------------(City, Zone No., and State) Paym ent p re p a re d ----------------------------Paym ent checked ----------------------------- B y ................................................................................................................... (Official Signature and Title Required) List o f customers to which items 2 and 3 on the reverse side apply Amount Name and address of customer (P lea se print or use typew riter) Total D E N O M IN A T IO N S A N D S E R IA L N U M B E R S OF B O N D S SU R R E N D E R E D
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