Full text of Federal Reserve Bank of New York Circulars : 5945. Deposits of March Tax Collections in Treasury Tax and Loan Accounts

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FEDERAL RESERVE BANK
OF N EW YORK
Fiscal Agent of the United States
I" Circular No. 5 9 4 5 1
L February 16, 1967 J

Deposits of March Tax Collections in Treasury Tax and Loan Accounts

To All Treasury Tax and Loan Depositaries
in the Second Federal Reserve D istrict:

The Treasury Department has advised us that Directors of Internal Revenue will
be instructed to make special deposits with Federal Reserve Banks of checks o f $10,000
or more from March 15 through March 31, 1967, representing payments of corporation
income taxes due March 15. Drawee banks qualified as Special Depositaries o f Public
Moneys may receive up to 50 per cent of the amount o f such checks for deposit in Treasury
Pax and Loan Accounts, subject, however, to the condition that the Treasury may find
it necessary to increase or decrease the percentage of the check amounts for credit to the
l a x and Loan Accounts from time to time during the period, if such action is required
to prevent undue fluctuations in the account of the Treasurer of the United States with
Federal Reserve Banks.
W e will prepare daily a special form of cash letter, with an attached certificate form,
for the tax checks included in the special deposits o f the Directors of Internal Revenue
during the period. The amount shown in the certificate will be fo r 50 per cent of the
amount of those checks eligible for credit to Treasury Tax and Loan Accounts or for such
other percentage as the Treasury may subsequently specify. Special depositaries wishing
to accept for deposit in Tax and Loan Accounts the amount shown in the certificate
attached to the cash letter should execute and return the certificate, in accordance with the
instructions contained in the cash letter.
The Treasury will deny credit to depositaries for customers’ tax checks arising out of
sales to the depositaries of customers’ tax anticipation Treasury bills maturing March 22,
1967. As the Treasury has in the past stated, it does not look with favor upon such
transactions, inasmuch as they increase the amount of tax anticipation bills presented
for cash redemption in advance of the availability of Treasury receipts from the income
tax payment due on March 15 and make it more difficult for the Treasury and the Federal
Reserve System to handle the large income tax collections during the month in a manner
that will maintain stability in the money market.
Additional copies of this circular will be furnished upon request.




A

lfred

H

ayes,

President.