law) at the same place is subject to special tax for each business. (68A Stat. 624; 26 U. S. C. 5144) § 194.82 Retail and wholesale beer dealer at same location. A person who engages in or carries on the business of a retail and wholesale beer dealer (different businesses under the law) at the same place is subject to special tax for each business. (68A Stat. 624; 26 U. S. C. 5144) § 194.83 Retail dealer in beer and retail dealer in liquors at same location. A person who begins business as a retail dealer in beer and procures the requisite special tax stamp as such, and thereafter during the same or a subsequent month begins business as a retail dealer in liquors (a different business under the law) must pay special tax and procure a special tax stamp as a retail dealer in liquors. (68A Stat. 621; 26 U. S. C. 5122) (68A Stat. 624; 26 U. S. C. 5144) § 194.91 Preparation of special tax stamp. In issuing a special tax stamp to a partnership, the district director shall show thereon the name of each and every partner, followed by the firm or trade name, if any. The issuance by the district director of a special tax stamp in a firm or trade name only is not authorized. (68A Stat. 846; 26 U. S. C. 7011) § 194.92 Addition of partners or incorporation of partnership. Where a number of persons who have paid special tax as partners admit one or more new members to the firm or form a corporation (a separate legal entity) to take over the business, the new firm or corporation so formed shall pay special tax computed from the first day of the month in which it commenced business. (68A Stat. 618, 620; 28 U. 8. C. 5111, 5121) § 194.93 Formation of a partnership by two dealers. Where two persons, each holding a special tax stamp for a business carried on by himself, form a partnership, the firm must pay special tax to cover the business conducted by the partnership. (68A Stat. 618, 620; 26 U. S. C. 5111, 5121) § 194.94 Withdrawal of one or more partners. When a member, or members, withdraw from the partnership the remaining partner, or partners, may, without incurring additional special tax liability, carry on the same business at the same address for the balance of the taxable period for which special tax was paid, provided the partner, or partners, remaining file with the district director from whom the special tax stamp was purchased, within 30 days after the date he or they begin to carry on the business, a return on Form 11, showing the basis of succession. If the notice of succession is not filed with the district director within 30 days from the date the remaining partner, or partners, begin to carry on the business, he or they will become liable to additional special tax computed from the 1st day of the calendar month in which he or they began to carry on the business to and including June 30 following. (See §§ 194.168194.171.) (68A Stat. 846; 26 U. S. C. 7011) SUBPART G-PAYMENT OF SPECIAL TAX SOURCE: §§ 194.100 to 194.112 appear at 20 F. R. 2164, Apr. 6, 1955. § 194.100 Special tax rates. Special taxes are imposed upon liquor dealers at the following annual (fiscal year) rates: Retail dealers in liquors.. Wholesale dealers in liquors.. Retail dealers in beer. Wholesale dealers in beer-----. (68A Stat. 618, 620; 26 U. S. C. 5111, 5121) $50.00 200.00 22.00 100.00 § 194.101 Date special tax is due. All special taxes become due on the 1st day of July of each year, or on the 1st day of the month in which a taxable business or occupation is commenced. (68A Stat. 624; 26 U. S. C. 5142) § 194.102 Computation of special tax. In the case of a person engaged in business during the month of July, the liability shall be reckoned for the entire fiscal year beginning July 1 and ending June 30 following. Where business is commenced subsequent to July, the liability shall be reckoned proportionately from the 1st day of the month in which business is commenced to June 30 following. For example, a person commencing business in August is liable to special tax for 11 months, or eleven-twelfths of the annual tax. If business is discontinued before the end of the fiscal year, the amount of tax is not thereby reduced. (68A Stat. 624; 26 U. S. C. 5142) § 194.103 Filing of return and payment of special tax. Persons liable to special tax shall render their returns on Form 11, with remittances to the district director of the district in which the business is carried on, at such time within the calendar month in which the special tax liability commenced as shall enable the district director to receive such return and remittance not later than the last day of the month: Provided, That where the United States postmark stamped on the cover shows that the return was deposited in the mail in the United States within the time prescribed for filing, or within any extension of such time, in an envelope or other appropriate wrapper which was properly addressed, with postage prepaid, the return must be considered as timely filed. In the event the last day for filing falls on a Saturday, Sunday, or legal holiday, a postmark showing the next succeeding day which is not a Saturday, Sunday, or legal holiday, must be considered as evidence of timely filing. (68A Stat. 624; 26 U. S. C. 5143) § 194.104 Method of payment. Payment for special tax stamps may be made in cash, or by check or money order. If a check or money order so tendered is not honored when presented for payment, the person who tendered such check or money order shall remain liable for the payment of the special tax, and for all penalties and additions, to the same extent as if the check or money order had not been tendered. In addition, unless the person who tendered the check or money order can show that such check or money order was issued in good faith, and with reasonable cause to believe that it would be duly paid, there shall be paid as penalty an amount equal to 1 percent of the amount of the check or money order, except that if the amount of the check or money order is less than $500, the penalty shall be $5, or the amount of the check or money order, whichever is lesser. (68A Stat. 777, 826; 26 U. S. C. 6311, 6657) SPECIAL TAX RETURN, FORM 11 § 194.105 Data required. Special tax returns shall be made on Form 11, which may be procured from the district director of internal revenue of the district in which the business is located, and shall disclose in the space provided, the following: (a) The true name of the taxpayer, which may be followed by the words "trading as" and any trade name under which the business may be conducted. (b) In the case of a partnership, the true names of each and every person comprising the partnership. (c) The exact location of the place of business, as by name and number of building or street and, where these do not exist, by some particularization in addition to the post office address. on. (d) The kind of liquor business carried (68A Stat. 846; 26 U. S. C. 7011) § 194.106 Execution of Form 11. The return of an individual proprietor shall be signed by the proprietor; the return of a partnership shall be signed by a member of the firm; and the return of a corporation shall be signed by an officer thereof. In each case, the person signing the return shall designate his capacity as "individual owner," "member of firm," or, in the case of a corporation, the title of the officer. Receivers, trustees, assignees, executors, administrators, and other legal representatives who continue the business of a bankrupt, insolvent, deceased person, etc., will indicate the fiduciary capacity in which they act. Returns signed by persons as agents will not be accepted unless they file with the district director a power of attorney, authorizing them so to act. Form 11 must be verified by a written declaration that the return has been executed under the penalties of perjury. (68A Stat. 748, 749; 26 U. S. C. 6061, 6065) § 194.107 Extensions of time for filing returns. The district director may grant such reasonable extension of time for the filing of Form 11 as he deems proper. Application for extension of time for filing the return must be made in writing and addressed to the district director of the district in which the business is located and must contain a full recital of the causes of delay. Except in the case of taxpayers who are abroad, no such extension shall be for more than 6 months. (68A Stat. 624, 751; 26 U. S. C. 5143, 6081) § 194.108 Penalty for failure to file return. Any person liable to special tax who, without reasonable cause, fails to file a return on Form 11 within the calendar month in which special tax liability commenced shall be subject to a delinquency penalty computed on the amount of special tax due. The penalty shall be 5 percent if the failure is not for more than 1 month, and an additional 5 percent for each additional month or fraction thereof during which the delinquency continues, but not to exceed 25 percent in the aggregate. (68A Stat. 821; 26 U. S. C. 6651) DELINQUENT RETURNS § 194.109 Reasonable causes for delinquency. The penalty set forth in § 194.108 will be asserted and collected in every case in which a special tax return is not filed within the calendar month in which the tax liability commenced, unless an extension of time is granted under § 194.107 or a reasonable cause for delinquency is clearly established by the taxpayer. The following, when clearly established, may be accepted by district directors and assistant regional commissioners as reasonable causes: (a) Where return was filed within the legal period but in the wrong internal revenue district, or in the wrong office in the proper district. (b) Where the delay or failure to file was due to erroneous information given the taxpayer by an internal revenue officer or employee. (c) Where the delay was caused by death or serious illness of the taxpayer or by serious illness in his immediate family. (d) Where the delay was caused by unavoidable absence of the taxpayer. (e) Where delinquency was caused by the destruction by fire or other casualty of the taxpayer's place of business or business records. (f) Where the taxpayer, prior to the time for filing return, made timely application to the district director's office for proper blanks and these were not furnished him in sufficient time to permit the executed return to be filed on or before its due date. (g) Where the taxpayer proves that he personally visited the office of the district director or other collection officer before the expiration of the time within which to file return for the purpose of securing information or aid properly to make out his return, and through no fault of his own was unable to see the representatives of the Service. (68A Stat. 895, 896; 26 U. S. C. 7502, 7503) causes. § 194.110 Other alleged Where other grounds are alleged as reasonable causes for delinquency in filing a return on Form 11, a statement in explanation thereof shall be filed by the taxpayer with the district director with the Form 11, except as provided in § 194.111. The reasonableness of other alleged causes will be determined by the district director on the facts submitted. The policy generally to be followed is that a cause for delinquency which appeals to a man of ordinary prudence and intelligence as a reasonable cause for delay in filing the return and which clearly negatives a willful intent to disobey the taxing statutes, or gross negligence, will be accepted as reasonable. Mere ignorance of the law will not be considered a reasonable cause. (68A Stat. 821; 26 U. S. C. 6651) § 194.111 Delinquency discovered by officer working under direction of assistant regional commissioner. Where the delinquency is discovered by an internal revenue officer working under the direction of the assistant regional commissioner, and the return on Form 11 is filed by or with such officer, a statement in explanation of the delinquency shall be attached to the Form 11 and transmitted to the assistant regional commissioner, who will determine the reasonableness of other alleged causes on the facts submitted. (68A Stat. 821; 26 U. S. C. 6651) § 194.112 Causes not considered reasonable. Where grounds other than those listed in § 194.109 are alleged as reasonable causes, but it is determined by the assistant regional commissioner or district director, as the case might be, that the cause is not one to be considered as reasonable within the provisions of §§ 194.110 and 194.111 the penalty shall be asserted, entered on the district director's excise tax list, and collected. (68A Stat. 821; 26 U. S. C. 6651) SUBPART H-SPECIAL TAX STAMPS SOURCE: $194.120 to 194.147 appear at 20 F. R. 2165, Apr. 6, 1955, except as otherwise noted. § 194.120 Issuance of stamps. Upon receipt of a return properly executed on Form 11, together with a remittance in the proper amount, the district director will issue an appropriately designated stamp to the taxpayer. District directors and collection officers shall not issue special tax stamps before the tax is fully paid. (68A Stat. 625; 26 U. S. C. 5145) § 194.121 Receipt in lieu of stamp prohibited. District directors and collection officers are prohibited from issuing a receipt in lieu of a stamp. A receipt may be furnished only pending the issuance of a stamp, or where the tax liability relates to a prior fiscal year. (68A Stat. 778; 26 U. S. C. 6314) § 194.122 Stamps covering business in violation of State law. District directors are without authority to refuse to issue a special tax stamp to a liquor dealer engaged in business in violation of State law. The stamp is not a Federal permit or license, but is merely a receipt for the tax. The stamp affords the holder no protection against prosecution for violation of State law. (68A Stat. 626; 26 U. S. C. 5148) § 194.123 Stamps not transferable. A special tax stamp may not be sold or transferred to another dealer. STAMPS FOR PASSENGER TRAINS, AIRCRAFT, AND VESSELS § 194.124 General. Special tax stamps may be issued to persons carrying on the business of retail dealers in liquors or retail dealers in beer upon passenger trains or upon aircraft, steamboats, or other vessels engaged in the business of carrying passengers. The regular retail liquor dealer and retail beer dealer stamps shall be issued in such cases. (68A Stat. 621; 26 U. S. C. 5123) § 194.125 Transfer of special taz stamps. Special tax stamps issued for the retailing of liquors on passenger carrying aircraft, trains and vessels are to be made in general terms "In the United States." The taxpayer may transfer such stamps from one passenger carrier to another on which he does business without registering the transfer with a district director. (68A Stat. 621; 26 U. S. C. 5128) § 194.126 Sales on passenger carriers. The provision of § 194.68 is equally applicable to passenger trains and to aircraft, steamboats or other vessels engaged in the business of carrying passengers. (68A Stat. 621, 624; 26 U. B. C. 5123, 5144) § 194.127 Carriers not engaged in passenger service. A special tax stamp may not be issued for the retailing of liquor on any railroad train, aircraft, or boat that is not engaged in the business of carrying passengers. (68A Stat. 621; 26 U. S. C. 5123) STAMPS FOR RETAIL DEALERS "AT LARGE" § 194.128 General. A retail liquor dealer or retail dealer in beer whose business is such as to require him to travel from place to place in different States of the United States, such as those who sell at carnivals or circuses, may procure a special tax stamp “At Large" covering his activities throughout the United States with the payment of but one special tax as a retail dealer in liquors or as a retail dealer in beer, as the case may be. (68A Stat. 621; 26 U. S. C. 5123) § 194.129 Form 11 to show nature of business. A retail liquor dealer or retail dealer in beer who desires a special tax stamp "At Large” will so note on Form 11 filed with the district director to whom the special tax is paid, and will state thereon the nature of his business. Before issuing a special tax stamp “At Large," the district director will satisfy himself that the applicant is entitled to obtain a stamp so designated. (68A Stat. 621; 26 U. S. C. 5123) § 194.130 Business in more than one State. A special tax stamp "At Large" may not be issued to a dealer whose business does not require him to travel from place to place in more than one State. (68A Stat. 621; 26 U. S. C. 5123) STAMPS FOR DEALERS IN WINES ONLY, OR WINES AND BEER ONLY § 194.131 General. Retail and wholesale dealers in liquors who sell or offer for sale wines only, or wines and beer only, may obtain stamps as retail or wholesale dealers in liquors, as the case may be, under the following designations upon application and payment of special tax at the annual (fiscal year) rates indicated: Retail dealer in wines__. $50.00 50.00 200.00 Retail dealer in wines and beer. § 194.132 Stamps as receipts for special taxes. Special tax stamps as dealers in wines only, or dealers in wine and beer only, are receipts for the special taxes imposed upon retail and wholesale liquor dealers, and the holders of such stamps are subject to all provisions of internal revenue laws and regulations relating to such dealers, except as provided in §§ 194.210-194.232, inclusive. (68A Stat. 618, 621; 26 U. S. C. 5112, 5122) § 194.133 Sales of distilled spirits by dealers in wines or wines and beer. A qualified retail dealer in wines, or in wines and beer, may also sell distilled spirits in less quantities than 5 wine gallons without payment of additional special tax. A qualified wholesale dealer in wines, or in wines and beer, may also sell distilled spirits in quantities of 5 wine gallons or more without payment of additional special tax. (68A Stat. 618, 621; 26 U. S. C. 5112, 5122) § 194.134 Stamps not exchangeable. The holders of special tax stamps as dealers in wines only, or dealers in wine and beer only, may not exchange them for the regular retail and wholesale liquor dealer stamps. In the absence of specific demand or application for such stamps, district directors shall issue the regular stamps to persons paying special tax as retail or wholesale dealers in liquors. (68A Stat. 618, 621; 26 U. S. C. 5112, 5122) MEDICINAL SPIRITS STAMPS § 194.135 Stamps for drug stores and pharmacies selling through licensed pharmacists. Proprietors of drug stores and pharmacies making sales of distilled spirits through duly licensed pharmacists, may procure stamps designated "Medicinal Spirits Stamp Tax” upon ap plication and payment of special tax at the $50 annual rate. The holders of such stamps are subject to all provisions of internal revenue laws relating to retail liquor dealers. District directors shall, in the absence of specific demand or application for such stamps, issue the regular retail liquor dealer special tax stamp. (68A Stat. 621; 26 U. S. C. 5122) STAMP TO BE POSTED § 194.136 General. A special-tax payer shall conspicuously display his special tax stamp in his place of business. A person holding a special tax stamp as a retail dealer in liquors or a retail dealer in beer "At Large" must place and keep the stamp conspicuously posted at the place where he is conducting such business. (68A Stat. 831; 26 U. S. C. 6806) MISSING STAMPS § 194.137 Lost or destroyed. If a special tax stamp has been lost or destroyed, the taxpayer should immediately notify the district director of internal revenue. A "Certificate in Lieu of Lost or Destroyed Special Tax Stamp" will be issued to the taxpayer who submits an affidavit showing to the satisfaction of the district director that the stamp was lost or destroyed. The certificate must be posted in place of the stamp, otherwise, liability for failure to post the stamp will be incurred. § 194.138 Seizure by State authorities. Where a stamp designated "Retail Dealer in Liquors" is seized by State authorities because it does not conform to the dealer's local license or permit (wine, or wine and beer), the district director will, upon request, issue a "Certificate in Lieu of Lost or Destroyed Special Tax Stamp" to show that the dealer has paid special tax as a "Retail Dealer in Wine" or "Retail Dealer in Wines and Beer," as the case may require. However, where a special tax stamp has been seized by State authorities because the dealer has operated in violation of local law, a "Certificate in Lieu of Lost or Destroyed Special Tax Stamp" will not be issued by the district director. CORRECTION OF ERRORS ON SPECIAL TAX STAMPS § 194.139 Errors disclosed by taxpayers. On receipt of a special tax stamp, the taxpayer will examine it to insure |