52 STAT.] 75TH CONG., 3D SESS.-CH. 289-MAY 28, 1938 (b) JOINT FIDUCIAImES.- Under such regulations as the Commis- sioner with the approval of the Secretary may prescribe a return made by one of two or more joint fiduciaries and filed in the office of the collector of the district where such fiduciary resides shall be sufficient compliance with the above requirement. Such fiduciary shall make oath (1) that he has sufficient knowledge of the affairs of the individual, estate, or trust for which the return is made, to enable him to make the return, and (2) that the return is, to the best of his knowledge and belief, true and correct. (c) LAW APPLICABLE TO FIDUCIARIES. - Any fiduciary required to make a return under this title shall be subject to all the provisions of law which apply to individuals. SEC. 143. WITHHOLDING OF TAX AT SOURCE. (a) TAX-FREE COVENANT BONDS. - (1) REQUIREMENT OF WITHHOLDING. -In any case where bonds, mortgages, or deeds of trust, or other similar obligations of a corporation, issued before January 1, 1934, contain a contract or provision by which the obligor agrees to pay any portion of the tax imposed by this title upon the obligee, or to reimburse the obligee for any portion of the tax, or to pay the interest without deduction for any tax which the obligor may be required or permitted to pay thereon, or to retain therefrom under any law of the United States, the obligor shall deduct and withhold a tax equal to 2 per centum of the interest upon such bonds, mortgages, deeds of trust or other obligations, whether such interest is payable annually or at shorter or longer periods, if payable to an individual, a partnership, or a foreign corporation not engaged in trade or business within the United States and not having any office or place of business therein: Provided, That if the liability assumed by the obligor does not exceed 2 per centum of the interest, then the deduction and withholding shall be at the following rates: (A) 10 per centum in the case of a nonresident alien individual (except that such rate shall be reduced, in the case of a resident of a contiguous country, to such rate, not less than 5 per centum, as may be provided by treaty with such country), or of any partnership not engaged in trade or business within the United States and not having any office or place of business therein and composed in whole or in part of nonresident aliens, (B) in the case of such a foreign corporation, 15 per centum, and (C) 2 per centum in the case of other individuals and partnerships: Providedfurther, That if the owners of such obligations are not known to the withholding agent the Commissioner may authorize such deduc- tion and withholding to be at the rate of 2 per centum, or, if the liability assumed by the obligor does not exceed 2 per centum of the interest, then at the rate of 10 per centum. (2) BENEFIT OF CREDITS AGAINST NET INCOME. -Such deduction and withholding shall not be required in the case of a citizen or resident entitled to receive such interests, if he files with the withholding agent on or before February 1 a signed notice in writing claiming the benefit of the credits provided in section 25 (b); nor in the case of a nonresident alien individual if so provided for in regulations prescribed by the Commissioner under section 215. (3) INCOME OF OBLIGOR AND OBLIGEE. -The obligor shall not be allowed a deduction for the payment of the tax imposed by this title, or any other tax paid pursuant to the tax-free covenant clause, nor shall such tax be included in the gross income of the obligee. 511 Joint fiduciaries. Oath. Law applicable to fiduciaries. Withholding of tax at source. Tax-free covenant bonds. Requirement of withholding. Provisos. Rates. Nonresident alien individuals, etc. Foreign corpora- tions. Other individuals, etc. Unknown owners. Benefit of credits against net income. Ante, p. 467. Post, p . 529 Income of obligor and obligee.
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