Rev. Proc. 57-9

SECTION 1. PURPOSE.

The purpose of this Revenue Procedure is to establish certain basic procedures to be followed by manufacturers of tobacco products in connection with the receipt of taxpaid tobacco products on and after January 1, 1957.

SEC. 2. PRODUCTS WHICH MAY BE RECEIVED.

The receipt into tobacco products factories of packages of tobacco products on which the tax has been paid, by stamps or by returns, is permissible, including such products received from another factory, for purposes of reshipment in the same packages in which received, without reworking, reconditioning, or other rehandling. However, a manufacturer may receive into his factory only the kind of product which he is authorized to produce in the factory. In this connection see Revenue Ruling 56-141, C.B. 1656-1, 543, relative to transfers of tobacco products from one factory to another.

SEC. 3. APPLICATION.

A manufacturer of tobacco products must, prior to receipt of taxpaid products into the bonded factory, make application to, and receive permission from, the Assistant Regional Commissioner, Alcohol and Tobacco Tax, for the region in which his factory is located, to do so. The application should show the name of the manufacturer of the product and the quantity, kind, and class designation (in the case of large cigars) of the tobacco product to be received into the bonded factory premises. Where it is decided to receive tobacco products into the bonded premises under a continuing arrangement, the Assistant Regional Commissioner may grant a blanket authority upon proper application therefor. However, the manufacturer must furnish the information indicated above with respect to each lot or shipment received.

SEC. 4. IDENTIFICATION.

Such taxpaid tobacco products received must be stored, segregated, or labeled in such manner as to make them readily identifiable as taxpaid products received and they must be accessible for inspection by any internal revenue officer upon his request.

SEC. 5. ACCOUNTING.

In connection with the revenue accounting for taxpaid tobacco products received, the new records required to be kept by manufacturers of tobacco products, to be issued for use beginning January 1, 1957, will provide, in section V, a separate account for the recording of the receipt of taxpaid tobacco products and the subsequent disposition thereof. See in this connection Rev. Proc. 57-7, page 730, and Rev. Proc. 57-8, page 732. These records are Form 2141, Record to be Kept by Manufacturer of Tobacco, Forms 2142 and 2142-A, Record to be Kept by Manufacturer of Large Cigars, and Form 2143, Record to be Kept by Manufacturer of Small Cigars and Large and Small Cigarettes. No other debit or credit entry of such products, or of any stamps affixed to the packages of such products, shall be made in such forms with respect to taxpaid tobacco products so received or disposed of. Further, such products shall not be included in any inventory or report required to be made by the manufacturer.

SEC. 6. TAXPAID PRODUCTS RECEIVED TO BE REWORKED, RECONDITIONED, ETC.

The procedure set forth in section 5 hereof is not to be confused with the procedure to be followed with respect to tobacco products on which tax has been paid where such products are to be taken up in the factory records as untaxpaid products received because they are to be reworked, reconditioned, or otherwise rehandled, or claim is to be filed for refund of the original tax paid, since such products will not be entered in the separate account under section V of the revenue records referred to in section 5.

SEC. 7. EFFECT ON OTHER DOCUMENTS.

The penultimate paragraph of Revenue Ruling 56-141, supra, is hereby superseded as to factory records maintained on and after January 1, 1957.

SEC. 8. 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.