Rev. Rul. 57-497

Advice has been requested whether a cabaret owner is relieved from payment of the cabaret tax under the circumstances described below.

A cabaret experienced an armed robbery. A portion of the money stolen represented funds that the cabaret owner had set aside for payment of the cabaret tax. Therefore, it is contended that relief from payment of the cabaret tax should be allowed to the extent that the funds stolen represented cabaret tax.

Section 4231(6) of the Internal Revenue Code of 1954 imposes a tax upon all amounts paid for admission, refreshment, service, or merchandise, at any roof garden, cabaret, or other similar place furnishing a public performance for profit, by or for any patron or guest who is entitled to be present during any portion of such performance. The tax imposed under this paragraph shall be returned and paid by the person receiving such payment.

There is no provision of law affording relief from payment of the cabaret tax by a person liable therefor where his funds, including those he may have set aside to discharge such liability, are stolen. Accordingly, it is held that, under the circumstances described above, there is no basis for reducing the cabaret operator's liability for the tax.