INTERNAL REVENUE. (T. D. 1294.) Denatured alcohol. Concerning bonds and storeroom prescribed by Circular 714. TREASURY DEPARTMENT, OFFICE OF COMMISSIONER OF INTERNAL REVENUE, SIR: Referring to your letter of the 23d ultimo, requesting copies of wholesale dealers' bonds mentioned in Circular 714, you are informed that these bonds will not be furnished by this office. Dealers desiring to qualify under the conditions of Circular 714 may file this bond typewritten, following the form set forth in said circular. Replying to that portion of your letter relative to the use of denatured alcohol storerooms, you are informed that this office sees no objection either to manufacturers using completely or specially denatured alcohol or to dealers in completely denatured alcohol qualifying as wholesale dealers in alcohol specially denatured, under the provisions of said Circular 714. Specially denatured alcohol, however, must in either case be stored in the designated storeroom, and under no circumstances should completely or specially denatured alcohol be deposited in the same room. As each manufacturer using either completely or specially denatured alcohol is required to provide a separate storeroom for denatured alcohol received and recovered by him, and separate records are required to be kept of the alcohol deposited therein, such storeroom can not be used for the storage of specially denatured alcohol intended for sale where the manufacturer has qualified as a wholesale dealer. In such cases, however, separate storerooms may be located on the same premises provided there is no interior communication between the same. The statement contained in section 37, Part VI, Regulations 30, that it will be held to be a breach of the manufacturer's bond if denatured alcohol should be found stored on the manufacturer's premises outside of the storeroom, is intended to apply only to denatured alcohol which, by regulation, is required to be deposited in such storeroom, and will not therefore apply to denatured alcohol deposited in the wholesale dealer's storeroom, provided for in subsequent regulations (Circular 714). 4476-08-1IR You are further informed that manufacturers securing specially denatured alcohol from bonded dealers in such alcohol must file the same bond as if the alcohol was obtained from a denaturing bonded warehouse. Bond, Form 583, given by manufacturers to secure specially denatured alcohol from denaturing bonded warehouses, to cover the securing of such alcohol from bonded dealers in the same. TREASURY DEPARTMENT, OFFICE OF COMMISSIONER OF INTERNAL REVENUE, Washington, D. C., January 9, 1908. SIR: This office is in receipt of your letter of the 7th instant, relative to bonds given by manufacturers covering the purchase and use of specially denatured alcohol from denaturing bonded warehouses, and inquiring as to the continued use of said bonds in cases where manufacturers who have given the same desired in the future to obtain specially denatured alcohol from bonded dealers in such alcohol under the provisions of Circular 714. In reply, you are informed that T. D. 1270 applies in such cases. In addition to the requirements of this decision, the following form of consent, to be signed by both the principal and surety, must be entered on the bond on file in the collector's office: It is hereby expressly stipulated and agreed that the within bond shall apply to alcohol obtained by the principal to said bond from the storeroom of any bonded dealer in specially denatured alcohol the same to all intents and purposes as if said bond was originally so conditioned. Respectfully, Mr. W. FRANK KINNEY, JOHN G. CAPERS, Commissioner. Collector Internal Revenue, Hartford, Conn. (T. D. 1296.) Removal of tops of boxes, etc., containing cigars. Conditions under which retail dealers in cigars may detach the tops of cigar boxes to economize space in show cases and facilitate the sale of cigars at retail from properly stamped packages. TREASURY DEPARTMENT, OFFICE OF COMMISSIONER OF INTERNAL REVENUE, Washington, D. C., January 10, 1908. SIR: Your letter of the 6th instant has been received; also the letter addressed to this office by the Company, manufacturers of cigars and stogies in your district, in which attention is called to the ruling of this office as set forth in T. D. 1287, dated December 13, 1907, relating to the removal of tops of cigar boxes to which the greater portion of the internal-revenue stamps are affixed. It is stated by the manufacturers named that compliance with the terms of that ruling not only works a hardship upon the manufacturers of the cheaper grades of cigars, but is difficult, if not impossible, of accomplishment in connection with the kind of packages commonly used for packing stogies and other cheap cigars. Especial attention is called to glass jars, pasteboard boxes, and those constructed of tin and other materials in place of wood, authorized by law to be used when approved by the Commissioner of Internal Revenue. When the ruling was made it was well understood that its application to the numerous kinds of packages made of materials other than wood was impracticable, and it was presumed and intended that it would be made to apply to the ordinary wooden-cigar boxes then under consideration, and the same is true of T. D. 724 and T. D. 788. The question under consideration related to the removal of the entire tops of boxes to which the major portion of the stamps was affixed, which tops were thereafter thrown away, leaving the package unprotected by proper stamp. That practice has heretofore been condemned and disapproved as illegal and entirely unwarranted by any regulations. Section 3398 reads: The absence of the proper revenue stamp on any box of cigars sold, or offered for sale, or kept for sale, shall be notice to all persons that the tax has not been paid thereon, and shall be prima-facie evidence of the nonpayment thereof, and such cigars shall be forfeited to the United States. One or two small fractions of a stamp can not be considered to be the "proper internal-revenue stamp" required by the law, and a box of cigars in such a condition can not be said to be a proper one from which retail dealers are permitted to make sales and such a package is liable to seizure and forfeiture under the provisions of section 3398, heretofore quoted. The purpose of this statute was clearly to prevent frauds on the revenue and its provisions can not be ignored or its execution evaded. In order that the revenue might be safe-guarded the law (sec. 3396, Rev. Stat.) gives the Commissioner of Internal Revenue exclusive power to prescribe such regulations as he may deem proper or most effective for the prevention of frauds in the payment of taxes imposed upon such product. The establishment of the stamping system was for no other purpose than securing a means of publicity which would afford every person an opportunity for seeing that the internal-revenue tax had been paid upon articles subject to the same and the law specifically maintains the necessity for the use of the proper stamps in such cases. It is the province of the internal-revenue office to see that the laws are executed. Taking up the subject of packages of various sizes and shapes and made of materials other than wood, some of which can not be opened without the removal of the entire top or side to which the major part of the stamp is affixed, a somewhat different rule may be laid down, a sufficient compliance with which would be the retention of such piece bearing the portion of the stamp affixed to the packages, so that the entire stamp can be identified by an officer or other person examining the same. This can be accomplished by simply attaching such removed top to the side or bottom of the box so that the entire stamp can be said to be present in each case. Had this method been adopted and followed out by retail dealers who removed the tops from cigar boxes, the stringent regulations which it has been found necessary to promulgate to secure a proper observance of the law, would likely have been avoided. It is far from the desire of this office to interpose unnecessary obstacles in the way of business of any kind, and the regulations made are only such as are found to be indispensable. T. D. 1287 directs collectors to report such violations of law as are referred to therein to the United States district attorney. This the law requires, and the collector is vested with no discretion as to what particular violations shall be thus reported. However, regulations 12, which embrace instructions to collectors concerning such matters, hold that no encouragement should be given to the commencement of prosecutions of merely slight and unintentional offenses causing the Government no loss, and where no question of fraud is involved. While such cases must be reported by the collector and the facts stated in full, he is privileged to accompany such report with the recommendation for or against prosecution, as the circumstances seem to warrant. This office deprecates the practice of magnifying trivial offenses or any disposition on the part of any internal-revenue officer to consider it necessary to inflict undue punishment for small infractions. where the Government has suffered no loss. The correction of the irregularity and warning of the delinquent citizen, coupled with the report of facts to the proper superior officer, would seem to meet the necessities in a great majority of such cases. A compliance with the internal-revenue laws is imperative on the part of all concerned. Property forfeited by operation of the law must be seized, a duty devolved upon collectors of internal revenue which can not be avoided for sentimental reasons. |