Information Relative to Supporting
Records Maintained by Manufacturers
of Cigars Who Pay Tax by Return
Manufacturers of cigars:
1. The purpose of this industry circular is to furnish advice
relative to the supporting records to be kept by manufacturers of
cigars who pay tax on cigars by return, as required by regulations
26 CFR 270.224, as added by Treasury Decision 6185.
2. The National Office has been informed that for years the
manufacturers have been maintaining in their factories invoices and
other commercial records of cigars removed subject to tax and for
tax-exempt purposes. While such invoices and records show the
quantities of cigars of each brand removed, the names and addresses
of the persons to whom the cigars are shipped or delivered, and the
prices charged for the cigars, in many cases such invoices and records
do not show specifically the internal revenue classes of the cigars.
However, it is understood that the classes of cigars can be readily
determined from the information contained in such invoices and records.
3. The regulations (26 CFR 270.224) require that every manufacturer who pays tax on his cigars by return, Form 2135, shall keep
a supporting record, in addition to Form 2142 or 2143, as the case
may be, which shall show, with respect to each removal, the date of
the removal, the name and address of the person to whom the cigars
are shipped or delivered, and the class and quantity of cigars.
However, the section further provides that where the manufacturer
keeps copies of invoices or other commercial records containing the
information required as to each such removal, in such orderly manner
that such information may be readily ascertained therefrom by revenue
officers, such copies will be considered the supporting record required
by this section.
4. Therefore, the regulations will be satisfied in this respect
where manufacturers maintain commercial records from which revenue
officers may readily determine the classes of cigars removed, although
such records do not show specifically the classes of the cigars removed.
5. Inquiries in regard to this industry circular should refer to
the number thereof and should be directed to the appropriate Assistant
Regional Commissioner, Alcohol and Tobacco Tax.
Dwight E. Avis
Director, Alcohol and Tobacco Tax Division