Rev. Rul. 56-426

A cigarette manufacturer desires to withdraw from his factory, without payment of tax, cigarettes to be donated by him to veterans hospitals throughout the country for distribution gratuitously to patients, without the necessity of requiring the donee to prepare Form 7996, Requisition for Tax-Free Manufactured Tobacco, Snuff, Cigars, Cigarettes, or Cigarette Papers or Tubes, for Use of the United States. Held, a manufacturer may remove tobacco products from his factory, without the payment of tax, and donate such products to Federal agencies and institutions. Such shipments of donated tobacco products must, however, be made pursuant to the applicable provisions of the Regulations relating to Removal of Tobacco Products and Cigarette Papers and Tubes, Without Payment of Tax, for Use of the United States. Accordingly, the agency or institution for which the tobacco products are intended must prepare a requisition on Form 7996 for each shipment to be received, in accordance with the provisions of section 295.51 of the regulations, regardless of whether such shipment was purchased by the Federal agency or donated by the manufacturer.