CLAIMS COVERING CIGARS WITHDRAWN FROM THE MARKET
Manufacturers and importers of cigars:
Purpose. The purpose of this industry circular is to call to your attention
the advisability of your having a means for establishing that claims filed after
June 30, 1959, for refund of tax paid by return on cigars withdrawn from the
market were filed within the statutory period of limitation.
Background. Because the return system for the taxpayment of cigars
became effective July 1, 1956, any claim filed on or before June 30, 1959, for
refund of cigar taxes paid by return, is within the three-year time limitation
imposed by section 5705(c) of the Internal Revenue Code. In such claim, a
general statement that the cigars were taxpaid on or after July 1, 1956, in lieu
of a more specific fixing of the time of taxpayment, is acceptable. After June 30,
1959, failure or inability of the claimant to establish the timely filing of a claim
will result in its rejection. Since cigars which are now being taxpaid by return
and which are withdrawn from the market may be the subject of a claim filed
after June 30, 1959, the matter is being called to your attention.
Suggested Means. It is suggested that you devise some means for establishing the timely filing of claims filed after June 30, 1959, such as by marking your
packages of cigars, in code or otherwise, to indicate the date of taxpayment.
Where it is not feasible to indicate the date of taxpayment, you may desire to
mark the packages to indicate an earlier date, from which date to measure the
period for the timely filing of claims, such as the date of packaging of the cigars,
or the date of removal of the cigars from the factory or from customs' custody.
This marking may represent the week or month of the year, in lieu of the
specific date. The key to any code in use or to be adopted, for this purpose,
should be immediately furnished to your assistant regional commissioner
(alcohol and tobacco tax).
Effect of Proposed Legislation. The future need for such marking for the
purpose of claims for refund of taxes paid by return on cigars withdrawn from
the market may be eliminated if the Excise Tax Technical Changes Act of 1957
(H. R. 7125 85th Congress, 1st Session) is enacted into law, since section
5705(c), as proposed in such Bill, would replace the existing limitation, that
claims be filed within three years of the date of taxpayment, with a provision
that such claims for refund shall be filed within six months after the date of
withdrawal from the market, loss, or destruction of the cigars, as the case
Inquiries. Inquiries in regard to this industry circular should refer to its
number and be addressed to the office of your assistant regional commissioner
(alcohol and tobacco tax).
Dwight E. Avis
Director, Alcohol and Tobacco Tax Division
IRS D. C. 37873