Manufactured Tobacco--manufacturers, Importers, and Dealers

§ 275.100 Emergency premises. In cases of emergency, the assistant regional commissioner may authorize, for a stated period, the temporary use of a place for the temporary storage of tobacco materials and manufactured tobacco, without making the application or furnishing the extension of coverage required under §§ 275.99 and 275.145, or the temporary separation of factory premises by means other than those specified in paragraph (b) of § 275.77, where such action will not hinder the effective administration of this part, is not contrary to law, and will not jeopardize the revenue.

SUBPART G-BONDS AND EXTENSIONS OF
COVERAGE OF BONDS

§ 275.110 Corporate surety. Surety bonds, required under the provisions of this part, may be given only with corporate sureties holding certificates of authority from the Secretary of the Treasury as acceptable sureties on Federal bonds. Power of attorney and other evidence of appointment of agents and officers to execute bonds on behalf of such corporate sureties shall be filed with, and passed upon by, the Surety Bonds Branch, Division of Deposits and Investments, Bureau of Accounts, Treasury Department. Limitations concerning corporate sureties are prescribed by the Secretary in Treasury Department Form 356, revised. The surety shall have no interest whatever in the business covered by the bond.

(68A Stat. 711, 61 Stat. 646; 26 U. S. C. 5711, 6 U. S. C. 6)

$275.111 Deposit of bonds, notes, or obligations in lieu of corporate surety. Bonds or notes of the United States, or other obligations which are unconditionally guaranteed as to both interest and principal by the United States, may be pledged and deposited by the manufacturer of tobacco as security in connection with bond to cover his operations, in lieu of the corporate surety, in accordance with the provisions of Treasury Department Circular No. 154, revised (31 CFR Part 225). Such bonds or notes which are nontransferable, or the pledging of which will not be recognized by the Treasury Department, are not acceptable as security in lieu of corporate surety.

(68A Stat. 711, 61 Stat. 646; 26 U. S. C. 5711, 6 U. S C. 15)

§ 275.112 Amount of bond. The amount of a manufacturer's bond to cover the manufacture of tobacco shall be equal to the amount of the tax liability on such product manufactured in his factory during the twelve months preceding the month in which the bond is to be filed, divided by twelve. In the case of a manufacturer commencing business, his production shall be estimated for the purpose of this section. The amount of any such bond (or the total amount where original and strengthening bonds are filed) shall not exceed $20,000 nor be less than $1,000. (68A Stat. 711; 26 U. S. C. 5711)

§ 275.113 Strengthening bond. Where the assistant regional commissioner determines that the amount of the bond

under which a manufacturer of tobacco is currently carrying on such business no longer adequately protects the revenue, the assistant regional commissioner may require the manufacturer to file a strengthening bond in an appropriate amount with the same surety as that on the bond already in effect, in lieu of a superseding bond to cover the full liability on the basis of § 275.112. The assistant regional commissioner shall refuse to approve any strengthening bond where any notation is made thereon which is intended or which may be construed as a release of any former bond, or as limiting the amount of either bond to less than its full amount. Such strengthening bonds shall have placed thereon, by the obligors at the time of execution, the notation "Strengthening Bond."

(68A Stat. 711; 26 U. S. C. 5711)

§ 275.114 Superseding bond. A manufacturer of tobacco shall file a new bond to supersede his current bond, immediately when (a) the corporate surety on the current bond becomes insolvent, (b) the assistant regional commissioner approves a request from the surety on the current bond to terminate his liability under the bond, (c) payment of any liability under a bond is made by the surety thereon, or (d) the assistant regional commissioner considers such a superseding bond necessary for the protection of the revenue.

(68A Stat. 711; 26 U. S. C. 5711)

§ 275.115 Extension of coverage of bond. An extension of the coverage of any bond filed under this part shall be manifested on Form 2105 by the manufacturer of tobacco and by the surety on the bond with the same formality and proof of authority as required for the execution of the bond.

(68A Stat. 711; 26 U. S. C. 5711)

§ 275.116 Approval of bond and extension of coverage of bond. No person shall commence operations under any bond, nor extend his operations, until he receives from the assistant regional commissioner notice of his approval of the bond or of an appropriate extension of coverage of the bond required under this part.

(68A Stat 711; 26 U. S. C. 5711)

§ 275.117 Termination of liability of surety under bond. The liability of a surety on any bond required by this part shall be terminated only as to operations on and after the date of approval of a superseding bond, or the date of approval of the discontinuance of operations by the manufacturer of tobacco, or otherwise in accordance with the termination provisions of the bond. The surety shall remain bound in respect of any liability for unpaid taxes, penalties, and interest, not in excess of the amount of the bond, incurred by the manufacturer while the bond is in force. (68A Stat. 711; 26 U. S. C. 5711)

§ 275.118 Release of bonds, notes, and obligations. Bonds, notes, and other obligations of the United States, pledged and deposited as security in connection with bonds required by this part, shall

be released only in accordance with the provisions of Treasury Department Circular No. 154, revised (31 CFR Part 225). When the assistant regional commissioner who has accepted such security is satisfied that it is no longer necessary to hold such security, he shall fix the date or dates on which a part or all of such security may be released. At any time prior to the release of such security, the assistant regional commissioner may, for proper cause, extend the date of release of such security for such additional length of time as in his judgment may be appropriate.

(68A Stat. 711, 61 Stat. 646; 26 U. S. C. 5711, 6 U. S. C. 15)

SUBPART H-OPERATIONS BY MANUFACTURERS

§ 275.130 Sign. Every manufacturer of tobacco shall place and keep, on the outside of the building in which his factory is located, or at the entrance of his factory, where it can be plainly seen, a sign, in plain and legible letters, exhibiting the name under which he operates, and (a) the type of business (“Manufacturer of Tobacco") or (b) the number of the permit issued to the manufacturer under this part. Such sign shall be in the English language.

§ 275.131 Inventories-(a) General. Every manufacturer of tobacco shall make a true and accurate inventory, on Form 2130, to the assistant regional commissioner, of the quantity of tobacco materials, manufactured tobacco, and stamps held by him at the times specified in this section, which inventory shall be subject to verification by a revenue officer.

(b) Opening. An opening inventory shall be made by the manufacturer at the time of commencing business. The date of commencing business under this part shall be the effective date indicated on the permit issued under § 275.80. A similar inventory shall be made by the manufacturer when he files a superseding bond. The date of such inventory shall be the effective date of such superseding bond as indicated thereon by the assistant regional commissioner.

(d) Closing. A closing inventory shall be made by the manufacturer when he transfers ownership, or changes his location to another region, or concludes business. Such inventory at the time of transfer of ownership shall be made as of the day preceding the date of the opening inventory of the suc

cessor.

(68A Stat. 713; 26 U. S. C. 5721)

§ 275.132 Record. Every manufacturer of tobacco shall keep a record, on Form 2141, and enter therein daily all (a) tobacco materials received (except with respect to samples as provided by § 275.148), shipped, and lost or destroyed, (b) manufactured tobacco produced, received, removed, furnished for personal consumption or use by employees, used for experimental purposes, reduced to material, and lost or destroyed, and (c) stamps received, used, and lost or destroyed. The entries in the record for

each day will be considered timely if made by the close of the business day following that on which occur the operations or transactions required to be recorded. Such record shall be retained for two years following the close of the year covered in the record, and made available for inspection by any revenue officer upon his request.

(68A Stat. 715; 26 U. S. C. 5741)

§ 275.133 Reports-(a) General. Every manufacturer of tobacco shall make a monthly report, on Form 2134, to the assistant regional commissioner, of all (1) tobacco materials received (except with respect to samples as provided by § 275.148), shipped, used, and lost or destroyed, (2) manufactured tobacco produced, received, removed, furnished for personal consumption or use by employees, used for experimental purposes, reduced to material, and lost or destroyed, and (3) stamps received, used, and lost or destroyed. The report shall be made on or before the 20th day following the end of the month covered in the report. A copy of each such report shall be retained by the manufacturer for two years following the close of the year covered in such reports, and made available for inspection by any revenue officer upon his request.

(b) Opening. An opening report, covering the period from the date of the opening inventory, or inventory made in connection with a superseding bond, to the end of the month, shall be made on or before the 20th day following the end of the month in which the business was commenced.

(c) Special. A special report, covering the unreported period to the day preceding the date of any special inventory required by a revenue officer, shall be made with such inventory. Another report, covering the period from the date of such inventory to the end of the month, shall be made on or before the 20th day following the end of the month in which the inventory was made.

(d) Closing. A closing report, covering the period from the first of the month to the date of the closing inventory, or the day preceding the date of an inventory made in connection with a superseding bond, shall be made with such inventory.

(68A Stat. 713; 26 U. S. C. 5722)

General.

§ 275.134 Packages — (a) All manufactured tobacco shall, before removal, be put up by the manufacturer in packages which shall bear the stamps and mark, required by this subpart. Such packages shall be of such construction as will securely contain such tobacco therein and maintain the stamps and mark thereon: Provided, That manufactured tobacco transferred to another such manufacturer, removed for export, furnished for consumption or use by employees, or used for experimental purposes, shall be exempt from the provisions of this paragraph.

(b) Subdivision into parcels. Packages may be subdivided into parcels which shall not bear the stamps or mark.

or an interest in, or dependent on, the event of a lottery shall be contained in, attached to, or stamped, marked, written, or printed on any package of manufactured tobacco removed for domestic consumption or use.

(d) Indecent or immoral material. No indecent or immoral picture, print, or representation shall be contained in, attached to, or stamped, marked, written, or printed on any package of manufactured tobacco.

(68A Stat. 713; 26 U. S. C. 5723)

$275.135 Mark. Every package of manufactured tobacco subject to tax shall, before removal, have legibly imprinted thereon, or on a label securely affixed thereto, the name and location of the manufacturer, or his permit number, and a warning reading "Law forbids the reuse of the Federal stamps hereon and requires the person who empties this package to destroy such stamps when the package is emptied."

§ 275.136 Dummy packages for display purposes. So-called "dummy" packages to be used for display purposes in advertising manufactured tobacco, which do not contain such product, shall not bear the stamps required by this part.

(68A Stat. 716, 865; 26 U. S. C. 5752, 7271)

in the factory in such quantities as desired. Each employee may also be furnished, for off-factory personal consumption or use, not more than two ounces of manufactured tobacco by the manufacturer, without payment of tax, for each day the employee is at work. For the purpose of this section the term "employee" shall include all persons who work for and receive compensation from the manufacturer, or a parent, subsidiary, or auxiliary company or corporation of the manufacturer, in the city, town, or village, where the manufactured tobacco so furnished to employees is produced. Such tobacco furnished for off

factory consumption or use shall be taken from the factory by the employee on the day furnished. Employees shall not sell, offer for sale, or give away manufactured tobacco so furnished to them. (68A Stat. 708; 26 U. S. C. 5704)

§ 275.140 Use of manufactured tobacco for experimental purposes. Manufacturers of tobacco may use manufactured tobacco, without payment of tax, for experimental purposes, in their factories, in such quantities as desired. Such manufacturers may also remove such manufactured tobacco, under their bonds, without payment of tax, for experimental purposes outside their factories, when authorized by the assistant regional commissioner.

(68A Stat. 708; 26 U. S. C. 5704)

$275.141 Transfer of manufactured tobacco. A manufacturer of tobacco may transfer manufactured tobacco, under his bond, without payment of tax, to any qualified manufacturer of tobacco.

§ 275.137 Stamps-(a) Denominations provided. Stamps to denote the payment of tax on manufactured tobacco are provided, for sale to manufacturers of tobacco, in the following denominations: 8, 8, 2, 5/8, 34, 8, 1, 18, 14, 1%, 12, 15%, 134, 18, 2, 28, 24, 28, 22, 23, 24, 28, 3, 34, 32, 334, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, and 181⁄2 ounces; 1⁄2, 1, 14, 12, 134, 2, 22, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 14, 15, 19, 20, 24, 29, 30, 39, 40, 49, 50, 59, 60, tobacco to factory. Manufactured toReturn of manufactured and 69 pounds.

(b) Method of purchase. Manufacturers of tobacco shall purchase stamps, for the payment of tax on such product, from the district director. Manufacturers shall use Form 173 in ordering

stamps for snuff and Form 172 in ordering stamps for other kinds of manufactured tobacco. A copy of each such order form which has been marked paid by the district director shall be retained by the manufacturer for two years following the close of the year in which the stamps were purchased, and made available for inspection by any revenue officer upon his request. Each order form shall be accompanied by remittance in the proper amount.

(68A Stat. 707; 26 U. S. C. 5703)

§ 275.138 Affixture of stamps. Every manufacturer of tobacco, shall, before removal subject to tax, securely affix to each package of manufactured tobacco one or more stamps of such denominations as will fully taxpay the contents of such package.

(68A Stat. 713; 26 U. S. C. 5723)

§ 275.139 Manufactured tobacco furnished to employees for personal consumption or use. Manufacturers of tobacco may furnish manufactured tobacco, without payment of tax, for personal consumption or use by employees

(68A Stat. 708; 26 U. S. C. 5704)

§ 275.142

bacco which has been removed from the factory may be returned thereto without internal revenue supervision when so authorized by the assistant regional commissioner. If the tobacco is contained in packages to which stamps de

noting the tax are affixed and the manufacturer desires to file claim for refund of the value of such stamps, the procedure in § 275.154 shall be followed.

§ 275.143 Reduction of manufactured tobacco to tobacco materials. Manufacturers may reduce manufactured tobacco to tobacco materials without internal revenue supervision. If the product has been entered in the factory record as manufactured, an entry shall be made in such record of the quantity of manufactured tobacco to be reduced to material and an entry shall also be made of the resultant quantity of tobacco materials. If the products to be reduced to material are contained in packages bearing stamps denoting the tax and the manufacturer desires to file claim for refund of the value of such stamps, the applicable procedure in § 275.154 shall be followed. (68A Stat. 715; 26 U. S. C. 5741)

§ 275.144 Destruction of manufactured tobacco. When a manufacturer desires to destroy manufactured tobacco which has been entered in the factory

record as manufactured, without salvaging the tobacco material, such destruction shall be accomplished under the supervision of a revenue officer, by burning completely or by mixing thoroughly with lime, sulphur, bone dust, ashes, or other such substance. If the products to be destroyed are contained in packages bearing stamps denoting the tax and the manufacturer desires to file claim for refund of the value of such stamps, the applicable procedure in § 275.154 shall be followed. (68A Stat. 715; 26 U. S. C. 5741)

$275.145 Storage of tobacco materials-(a) Within the factory. Tobacco materials may be stored, under the provisions of this part, only within the premises of a tobacco factory, except as provided in paragraph (b) of this section.

(b) Outside the factory. Tobacco materials may be stored outside the premises of a tobacco factory, in the same region in which the factory is situated, if an extension of coverage of the bond for such purpose has been approved by the assistant regional commissioner.

(68A Stat. 711; 26 U. S. C. 5711)

§ 275.146 Shipment or delivery of tobacco materials. A manufacturer of tobacco may ship or deliver tobacco materials, under his bond, without payment of tax, to (a) a qualified dealer in tobacco materials; (b) a qualified manufacturer of tobacco products; (c) a State institution; (d) a foreign country, Puerto Rico, the Virgin Islands, or a possession of the United States; or (e) any person for experimental or display purposes when authorized by the assistant regional commissioner. A manufacturer of tobacco may similarly ship stems and waste to any person for use by him as fertilizer or insecticide or in the production of fertilizer, insecticide, or nicotine.

(68A Stat. 708; 26 U. S. C. 5704)

§ 275.147 Fumigation of tobacco materials. Tobacco materials held by, or released or in transit to, a manufacturer of tobacco may be delivered, without payment of tax, to a person, who is not qualified as a dealer in tobacco materials or manufacturer of tobacco products, solely for purposes of fumigation by such person and return or delivery to the manufacturer. Such tobacco materials shall be covered by the bond of the manufacturer and shall not be regarded as shipped by the manufacturer for purposes of §§ 275.132 and 275.133. Therefore, no entries shall be made in the revenue record of the manufacturer showing delivery of the tobacco materials to the fumigator.

burning or by mixing thoroughly with lime, sulphur, bone dust, ashes, or other such substance.

(b) Other materials. Where a manufacturer of tobacco desires to destroy tobacco in process, Perique, Black Fat, leaf tobacco, scraps, cuttings, clippings, and siftings, and obtain credit therefor in the record kept by him under § 275.132, he shall notify the assistant regional commissioner of the kind and quantity of such tobacco materials and the date on which he desires to destroy such tobacco materials. The assistant regional commissioner may assign a revenue officer to supervise the destruction of the tobacco materials, or he may authorize the manufacturer to destroy the tobacco materials in the manner provided in paragraph (a) of this section.

(68A Stat. 715; 26 U. S. C. 5741)

§ 275.150 Credit for loss of tobacco materials by theft or destruction. Every loss of tobacco materials by theft, or destruction by fire, casualty, or act of God, while in the possession or ownership of a manufacturer of tobacco, shall be reported to the assistant regional commissioner and the facts of such loss shall be established to his satisfaction, before credit therefor in the records of such manufacturer may be authorized.

(68A Stat. 715; 26 U. S. C. 5741)

§ 275.151 Claim for remission of tax on manufactured tobacco. Every loss (otherwise than by theft) or destruction, by fire, casualty, or act of God, of manufactured tobacco upon which the tax has not been paid and which is in the possession or ownership of the manufacturer of such tobacco, shall be reported by the manufacturer to the assistant regional commissioner and the facts of such loss or destruction shall be established to his satisfaction. Claim for remission of such tax may be filed with the assistant regional commissioner. Such claim shall be in letter form, in duplicate, setting forth the reasons why such tax should be remitted, and shall be accompanied by evidence necessary to support the claim. (68A Stat. 709; 26 U. S. C. 5705)

§ 275.152 Claim for abatement of assessment. Claim for abatement of the unpaid portion of the assessment of any tax on manufactured tobacco, or any liability in respect of such tax, alleged to be excessive in amount, assessed after the expiration of the period of limitation applicable thereto, or erroneously or illegally assessed, shall be filed on Form 843, in duplicate, with the assistant regional commissioner. Such claim shall set forth the reasons relied upon for the allowance of the claim and shall be accompanied by evidence necessary to support the claim.

(68A Stat. 792; 26 U. S. C. 6404)

§ 275.153 Claim for refund of tax. The tax paid on manufactured tobacco (otherwise than by stamp) may be refunded where the tax has been paid in error. Any person who paid the tax (except an importer of such products who may file claim for refund of the tax under § 275.186) may file claim for re

fund thereof under this section. The claim for refund, Form 843, shall be filed in duplicate within three years from the date of payment of the tax, with the assistant regional commissioner for the region in which the tax was paid, and the claim shall be supported by evidence necessary to establish to the satisfaction of the assistant regional commissioner that the claim is valid.

(68A Stat. 709; 26 U. S. C. 5705)

§ 275.154 Claim for redemption, refund of the value, of stamps. Stamps to denote the tax on manufactured tobacco may be redeemed, or the value thereof may be refunded, subject to the following provisions:

(a) Redemption of stamps. Stamps which have been spoiled, destroyed, or rendered useless or unfit for the purpose intended, or for which the manufacturer of such product may have no use, or which through mistake may have been improperly or unnecessarily used, or where the taxes represented thereby have been excessive in amount, paid in error, or in any manner wrongfully collected, may be redeemed by such manufacturer. Claim for redemption of such stamps shall be filed on Form 843, in duplicate, with the assistant regional commissioner, within three years after the stamps were purchased from the Government. Stamps may be destroyed under internal revenue supervision, or they may be presented with the claim, or satisfactory evidence submitted showing the reason why they cannot be so destroyed or presented. Where the stamps are to be destroyed under internal revenue supervision, a schedule on Form 178 shall be prepared by the manufacturer with respect to the stamps covered by the claim. When the schedule has been prepared, the manufacturer shall notify the assistant regional commissioner in order that he may detail a revenue officer to verify the schedule and supervise the destruction of the stamps. A copy of the verified schedule, returned to the manufacturer, shall be attached to his claim when filed. If required, the manufacturer shall satisfactorily trace the history of the stamps from their issuance to the filing of his claim.

(b) Refund of the value of stamps. The value of stamps affixed to packages of manufactured tobacco may be refunded to the manufacturer thereof, where such product is withdrawn from the market by such manufacturer, or the product is lost (otherwise than by theft) or destroyed by fire, casualty, or act of God, while in the possession or ownership of the manufacturer. Claim for refund of the value of such stamps shall be filed on Form 843, in duplicate, within three years from the date of payment of the tax.

(1) Stamps affixed to packages of manufactured tobacco completely lost or destroyed. Where the packages of manufactured tobacco to which stamps were stroyed beyond recognition by fire, affixed have been completely lost or decasualty, or act of God, the claim for refund shall be filed with the assistant regional commissioner, for the region in which the stamps were affixed, and the

claim shall be supported by such evidence necessary to establish to the satisfaction of the assistant regional commissioner that the claim is valid.

(2) Stamps affixed to packages of manufactured tobacco damaged or withdrawn from the market. Where the packages of manufactured tobacco to which stamps were affixed have been merely damaged by fire, casualty, or act of God, so that the identity of the product and the manufacturer thereof, and the amount of tax paid, can be established, or where the manufactured tobacco is merely withdrawn from the market by the manufacturer, which would permit a similar identification and a determination of the tax paid, such manufactured tobacco shall be assembled by the manufacturer in a suitable place in his factory or where such tobacco is held or withdrawn from the market. The manufacturer shall group such tobacco according to the sizes of packages, and shall prepare a schedule on Form 177, listing such packages of manufactured tobacco. Such manufactured tobacco which is not taken back into the factory of the manufacturer shall be destroyed under internal revenue supervision, in which event the manufacturer shall so notify the assistant regional commissioner, for the region in which such tobacco is assembled, and request the detail of a revenue officer to inspect the manufactured tobacco, verify the schedule thereof, and supervise destruction of the stamps and manufactured tobacco, and disposition of the packages as desired by the manufacturer. Upon completion of his detail, the revenue officer shall execute the certificate on both copies of the schedule of the manufactured tobacco, to show the disposition of such stamps, and the packages involved, and return one copy to the manufacturer, which shall be attached to, and made a part of, his claim, which claim shall be filed with the assistant regional commissioner for the region in which the manufactured tobacco was so destroyed. Where the manufactured tobacco is returned to the factory of the manufacturer in accordance with the provisions of § 275.142, the manufacturer shall then notify the assistant regional commissioner, for the region in which the factory is situated, and request the detail of a revenue officer to inspect the product, verify the schedule thereof, and supervise the destruction of the stamps affixed to the packages of such product, and the proper disposition of the product and packages as desired by the manufacturer. Upon completion of his detail, the revenue officer shall properly execute his certificate on both copies of the schedule of such manufactured tobacco. The revenue officer shall return one copy of the completed schedule to the manufacturer which shall be attached to, and made a part of, the manufacturer's claim, which shall be filed with the appropriate assistant regional commissioner.

(68A Stat. 709, 830; 26 U. S. C. 5705, 6805)

§ 275.155 Tobacco materials and manufactured tobacco released from customs custody. Tobacco materials

and manufactured tobacco imported into the United States from a foreign country, or brought in from Puerto Rico, the Virgin Islands, or a possession of the United States, may be released from customs custody, without the payment of tax, for delivery to a qualified manufacturer of tobacco under his bond, solely for receipt into premises covered by the manufacturer's bond. Before such tobacco materials and manufactured tobacco are released to him, the manufacturer shall prepare and furnish to the collector of customs having custody of the tobacco materials and manufactured tobacco a notice of release of tobacco materials, Form 2146, or a notice of release of manufactured tobacco, Form 2145, as the case may be. With respect to Form 2145, it will be necessary for the manufacturer to present such notice to the assistant regional commissioner for his endorsement to show that the applicant is a properly qualified manufacturer in his region before it is furnished to the collector of customs. The collector of customs shall insert the date of release of the tobacco materials or manufactured tobacco described thereon, return one copy to the manufacturer, retain one copy for his records, and transmit one copy to the assistant regional commissioner shown thereon. The copy returned to the manufacturer shall be retained by him for two years after the close of the year of such release, and shall be made available for inspection by any revenue officer upon his request. (68A Stat. 708; 26 U. S. C. 5704)

§ 275.156 Use of the United States. A manufacturer of tobacco may remove such manufactured tobacco, under his bond, without payment of tax, for use of the United States. Such removal shall be made in accordance with the provisions of 26 CFR Part 295.

(68A Stat. 708; 26 U. S. C. 5704)

§ 275.157 Exportation. A manufacturer of tobacco may remove such manufactured tobacco and tobacco materials, under his bond, without payment of tax, for shipment to a foreign country, Puerto Rico, the Virgin Islands, or a possession of the United States, or for consumption or use beyond the jurisdiction of the internal revenue laws of the United States, in accordance with the applicable provisions of 26 CFR Part 290.

(68A Stat. 708; 26 U. S. C. 5704) SUBPART I-SUSPENSION AND DISCONTINUANCE OF OPERATIONS BY MANUFACTURERS § 275.170 Discontinuance of operations. Every manufacturer of tobacco who desires to discontinue operations and close out his factory shall dispose of all tobacco materials, manufactured tobacco, and stamps on hand, in accordance with this part, make a closing inventory and closing report, in accordance with the provisions of §§ 275.131 and 275.133, respectively, and surrender, with such inventory and report, his permit to the assistant regional commissioner as notice of such discontinuance and to permit the assistant regional commissioner to terminate the liability of the surety on the bond of the manufacturer.

(68A Stat. 713; 26 U. S. C. 5721, 5722)

$275.171 Suspension and revocation of permit. Where the assistant regional commissioner has reason to believe that a manufacturer of tobacco has not in good faith complied with the provisions of Chapter 52, I. R. C., and regulations thereunder, or with any other provisions of the I. R. C. with intent to defraud, or has violated any condition of his permit, or has failed to disclose any material information required or made any material false statement in the application for the permit, or has failed to maintain his premises in such manner as to protect the revenue, the assistant regional commissioner shall issue an order, stating the facts charged, citing such manufacturer to show cause why his permit should not be suspended or revoked after hearing thereon in accordance with 26 CFR (1939) Part 200, which part (including the provisions relating to appeals) is made applicable to such proceedings. If the hearing examiner, or the Director, Alcohol and Tobacco Tax Division, on appeal, decides the permit should be revoked or suspended for such time as to him seems proper, the assistant regional commissioner shall by order give effect to such decision.

(68A Stat. 712; 26 U. S. C. 5713)

SUBPART J-OPERATIONS BY IMPORTERS

Pack

(b) Subdivision into parcels. ages may be subdivided into parcels which shall not bear the stamps.

(c) Lottery features. No certificate, coupon, or other device purporting to be or to represent a ticket, chance, share, or an interest in, or dependent on, the event of a lottery shall be contained in, attached to, or stamped, marked, written, or printed on any package of manufactured tobacco removed for domestic consumption or use.

(68A Stat. 713; 26 U. S. C. 5723)

§ 275.181 Stamps-(a) Denominations provided. Stamps to denote the payment of tax on manufactured tobacco are provided, for sale to importers of such tobacco, in the following denominations: 8, 8, 1/2, 5/8, 3/4, 78, 1, 18, 14, 18, 12, 15%, 14, 1%, 2, 28, 24, 28, 22, 28, 24, 28, 3, 34, 32. 334, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, and 181⁄2 ounces; 1⁄2, 1, 14, 12, 14, 2, 22, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 14, 15, 19, 20, 24, 29, 30, 39, 40, 49, 50, 59, 60, and 69 pounds.

(b) Method of purchase. Importers of manufactured tobacco shall purchase stamps, for the payment of tax on such product, from the district director. Importers shall use Form 923, certified by

the customs officer having custody of such products, in ordering such stamps, except as provided in §§ 275.183 and 275.184 with respect to the purchase of stamps for affixture to packages in foreign countries; Puerto Rico, and the Virgin Islands. Each order form shall be accompanied by remittance in the proper amount. A copy of each such order form which has been marked paid by the district director shall be retained by the importer for two years following the close of the year in which the stamps were purchased, and made available for inspection by any revenue officer upon his request.

(68A Stat. 707; 26 U. S. C. 5703)

§ 275.182 Afixture of stamps. Every importer of manufactured tobacco shall, before removal subject to tax, securely affix to each package of such product one or more stamps of such denominations as will fully taxpay the contents of such package.

(68A Stat. 713; 26 U. S. C. 5723)

§ 275.183 Stamps for affixture in foreign countries. Stamps in payment of the tax on imported manufactured tobacco may be affixed to such product in the foreign country in which manufactured, provided the laws of such foreign country grant a like privilege in respect of manufactured tobacco produced in the United States and exported to such foreign country. An importer desiring to have the stamps in payment of the tax on imported manufactured tobacco affixed to this product in such foreign country shall file with any district director an order for the necessary stamps. No particular form for such order is prescribed, but the order shall show (a) the name and address of the person by whom such product is to be imported, (b) the name of the foreign country, (c) the quantity of such product to be imported, and (d) the number and value of the stamps of each denomination, and the total value of all the stamps. Each order shall be accompanied by remittance in the proper amount.

§ 275.184 Stamps for affixture in Puerto Rico and the Virgin Islands. Stamps denoting the tax on manufactured tobacco, produced in Puerto Rico and the Virgin Islands for shipment to the United States, may be affixed to packages of such product in Puerto Rico and the Virgin Islands. Such stamps may be purchased by the manufacturers from the Internal Revenue Service office in Puerto Rico.

(68A Stat. 829; 26 U. S. C. 6801)

§ 275.185 Exemption of consular officers and employees of foreign states(a) Rule of exemption. No internal revenue tax shall be due with respect to manufactured tobacco imported by a consular officer of a foreign state or by an employee of a consulate of a foreign state, whether such product accompanies the officer or employee to his post in the United States, its insular possessions, or the Panama Canal Zone, or is imported by him at any time during the exercise of his functions therein, if—

(1) Such officer or employee is a national of the state appointing him and not engaged in any profession, business, or trade within the territory specified in this section;

(2) The manufactured tobacco is imported by the officer or employee for his personal or official use; and

(3) The foreign state grants an equivalent exemption to corresponding officers or employees of the Government of the United States stationed in such foreign state.

(b) Certificate by Secretary of State. The Secretary of State shall certify to the Secretary of the Treasury the names of the foreign states which grant an equivalent exemption to the consular officers or employees of the Government of the United States stationed in such foreign states.

(68A Stat. 900; 26 U. S. C. 7511)

§ 275.186 Claim for refund of tax. The tax paid on manufactured tobacco by the importer thereof (otherwise than by stamp) may be refunded where the tax has been paid in error. Only the importer who paid the tax may file claim for refund thereof under this section. The claim for refund, Form 843, shall be filed in duplicate within three years from the date of payment of the tax, with the assistant regional commissioner for the region in which the tax was paid, and the claim shall be supported by evidence necessary to establish to the satisfaction of the assistant regional commissioner that the claim is valid. (68A Stat. 709; 26 U. S. C. 5705)

§ 275.187 Claim for redemption, or refund of the value, of stamps. Stamps to denote the tax on manufactured tobacco may be redeemed, or the value thereof may be refunded, subject to the following provisions:

(a) Redemption of stamps. Stamps which have been spoiled, destroyed, or rendered useless or unfit for the purpose intended, or for which the importer of such product may have no use, or which through mistake may have been improperly or unnecessarily used, or where the taxes represented thereby have been excessive in amount, paid in error, or in any manner wrongfully collected, may be redeemed by such importer. Claim for redemption of such stamps shall be filed on Form 843, in duplicate, with the assistant regional commissioner, within three years after the stamps were purchased from the Government. Stamps may be destroyed under internal revenue supervision, or they may be presented with the claim, or satisfactory evidence submitted showing the reason why they cannot be so destroyed or presented. Where the stamps are to be destroyed under internal revenue supervision, a schedule on Form 178 shall be prepared by the importer with respect to the stamps covered by the claim. When the schedule has been prepared, the importer shall notify the assistant regional commissioner in order that he may detail a revenue officer to verify the schedule and supervise the destruction of the stamps. A copy of the verified schedule, returned to the importer, shall be at

tached to his claim when filed. If required, the importer shall satisfactorily trace the history of the stamps from their issuance to the filing of his claim

(b) Refund of the value of stamps. The value of stamps affixed to packages of manufactured tobacco may be refunded to the importer thereof, where such product is withdrawn from the market by such importer, or the product is lost (otherwise than by theft) or destroyed by fire, casualty, or act of God, while in the possession or ownership of the importer. Claim for refund of the value of such stamps shall be filed on Form 843, in duplicate, within three years from the date of payment of the tax.

(1) Stamps affixed to packages of manufactured tobacco completely lost or destroyed. Where the packages of manufactured tobacco to which stamps were affixed have been completely lost or destroyed beyond recognition by fire, casualty, or act of God, the claim for refund shall be filed with the assistant regional commissioner, for the region in which the stamps were affixed, and the claim shall be supported by such evidence necessary to establish to the satisfaction of the assistant regional commissioner that the claim is valid.

(68A Stat. 709, 830; 26 U. S. C. 5705, 6805)

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Manufactured Tobacco--manufacturers, Importers, and Dealers: Part 275 of ...