Rev. Proc. 56-3

SECTION 1. PURPOSE.

The purpose of this Revenue Procedure is to advise manufacturers of tobacco products that they must make an inventory of all tobacco materials held at the beginning of business on January 1, 1956.

SEC. 2. REQUIREMENTS OF LAW.

Section 5721 of the Internal Revenue Code of 1954 requires that every manufacturer of articles shall make a true and accurate inventory at such time, in such manner and form, and to include such items as the Secretary or his delegate shall by regulations prescribed.

SEC. 3. GENERAL INSTRUCTIONS.

Pursuant to the above authority of law, every manufacturer of tobacco, cigars, and cigarettes is required to make an inventory, for each factory operated by such manufacturer, of tobacco materials as of the beginning of business on January 1, 1956. The inventory shall show the quantities of (a) unstemmed leaf tobacco (to include Black Fat), (b) stemmed leaf tobacco (to include Perique), (c) tobacco in process, (d) scraps, cuttings, and clippings, (e) siftings, and (f) stems (if received or intended for use in manufacture), held at the beginning of business January 1, 1956. Report of the inventory of tobacco materials shall be made in section 1 (columns (a) through (f)) of Form 2130, Inventory-Manufacturer of Tobacco, or Form 2131, Inventory-Manufacturer of Cigars and Cigarettes, as the case may be. In addition, the materials reported on such inventory shall be entered in the factory revenue record, Form 73-Part 1, Book to be Kept by Manufacturers of Large Cigars, Form 73-Part 2, Book for Use by Manufacturers of Small Cigarettes, Large Cigarettes, or Small Cigars, or Form 74, Book to be Kept by Manufacturers of Tobacco and Snuff, as the case may be. However, in the case of Form 73-Parts 1 and 2, tobacco in process, siftings, and stems received for use in manufacture shall be included as scraps, cuttings, and clippings, and in the case of Form 74, siftings shall be included as scraps, cuttings, and clippings.

SEC. 4. SPECIAL ENTRIES IN FORMS 2130 AND 2131.

In the preparation of Form 2130 or 2131 for the purpose of this inventory, each manufacturer should make a check mark in the special inventory block at the bottom of the form. In the declaration, above the space for the signature of the manufacturer, the words `manufactured tobacco, and stamps' in the case of Form 2130, and the words `cigars and cigarettes, and stamps,' in the case of Form 2131, should be stricken out.

SEC. 5. FORWARDING OF INVENTORY.

The inventory on Form 2130 or 2131 shall be forwarded to the Assistant Regional Commissioner, Alcohol and Tobacco Tax, with the monthly report, Form 2134 of 2136, for December 1955, for the factory concerned.

SEC. 6. INQUIRIES.

Inquiries in regard to this Revenue Procedure should refer to the number thereof and should be directed to the appropriate Assistant Regional Commissioner, Alcohol and Tobacco Tax.

¹ The requirements of this Revenue Procedure were communicated to all persons concerned by Industry Circular No. 55-36, dated November 10, 1955.