26 U.S.C. § 5712 — Application for permit

Page 3269 TITLE 26—INTERNAL REVENUE CODE § 5712 1 So in original. The comma probably should be a semicolon. by persons suffering a major disaster, pursuant to former act Sept. 30, 1950, ch. 1125, 64 Stat. 1109, for dis- asters occurring in the United States after Dec. 31, 1954, and before Sept. 2, 1958, in respect to tobacco products and cigarette papers and tubes; specified persons to whom the payments would be made and the procedure for allowance of claims; required the destruction of such tobacco products and cigarette papers and tubes under supervision; and made other laws applicable to such payments insofar as not inconsistent with section 209 of Pub. L. 85–859. Subchapter B—Qualification Requirements for Manufacturers and Importers of Tobacco Products and Cigarette Papers and Tubes, and Export Warehouse Proprietors Sec. 5711. Bond. 5712. Application for permit. 5713. Permit. Editorial Notes AMENDMENTS 1997—Pub. L. 105–33, title IX, § 9302(h)(2)(C), Aug. 5, 1997, 111 Stat. 674, inserted ‘‘and Importers’’ after ‘‘Manufacturers’’ in subchapter heading. 1965—Pub. L. 89–44, title V, § 502(b)(5), June 21, 1965, 79 Stat. 151, struck out reference to dealers in tobacco materials from subchapter heading. § 5711. Bond (a) When required Every person, before commencing business as a manufacturer of tobacco products or cigarette papers and tubes, or as an export warehouse pro- prietor, shall file such bond, conditioned upon compliance with this chapter and regulations issued thereunder, in such form, amount, and manner as the Secretary shall by regulation pre- scribe. A new or additional bond may be re- quired whenever the Secretary considers such action necessary for the protection of the rev- enue. (b) Approval or disapproval No person shall engage in such business until he receives notice of approval of such bond. A bond may be disapproved, upon notice to the principal on the bond, if the Secretary deter- mines that the bond is not adequate to protect the revenue. (c) Cancellation Any bond filed hereunder may be canceled, upon notice to the principal on the bond, when- ever the Secretary determines that the bond no longer adequately protects the revenue. (Aug. 16, 1954, ch. 736, 68A Stat. 711; Pub. L. 85–859, title II, § 202, Sept. 2, 1958, 72 Stat. 1421; Pub. L. 89–44, title V, § 502(b)(6), June 21, 1965, 79 Stat. 151; Pub. L. 94–455, title XIX, § 1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1834.) Editorial Notes AMENDMENTS 1976—Pub. L. 94–455 struck out ‘‘or his delegate’’ after ‘‘Secretary’’ wherever appearing. 1965—Subsec. (a). Pub. L. 89–44 struck out reference to dealers in tobacco materials. 1958—Subsec. (a). Pub. L. 85–859 included export ware- house proprietors, and substituted ‘‘manufacturer of tobacco products or cigarette papers and tubes’’ for ‘‘manufacturer of articles’’. Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 1965 AMENDMENT Amendment by Pub. L. 89–44 applicable on and after January 1, 1966, see section 701(d) of Pub. L. 89–44, set out as a note under section 5701 of this title. EFFECTIVE DATE OF 1958 AMENDMENT Amendment by Pub. L. 85–859 effective Sept. 3, 1958, see section 210(a)(1) of Pub. L. 85–859, set out as an Ef- fective Date note under section 5001 of this title. TRANSITIONAL RULE Pub. L. 111–3, title VII, § 702(g), Feb. 4, 2009, 123 Stat. 111, provided that: ‘‘Any person who— ‘‘(1) on April 1, 2009[,] is engaged in business as a manufacturer of processed tobacco or as an importer of processed tobacco, and ‘‘(2) before the end of the 90-day period beginning on such date, submits an application under subchapter B of chapter 52 of such Code [this subchapter] to engage in such business, may, notwithstanding such sub- chapter B, continue to engage in such business pend- ing final action on such application. Pending such final action, all provisions of such chapter 52 [this chapter] shall apply to such applicant in the same manner and to the same extent as if such applicant were a holder of a permit under such chapter 52 to en- gage in such business.’’ § 5712. Application for permit Every person, before commencing business as a manufacturer or importer of tobacco products or processed tobacco or as an export warehouse proprietor, and at such other time as the Sec- retary shall by regulation prescribe, shall make application for the permit provided for in sec- tion 5713. The application shall be in such form as the Secretary shall prescribe and shall set forth, truthfully and accurately, the informa- tion called for on the form. Such application may be rejected and the permit denied if the Secretary, after notice and opportunity for hearing, find that— (1) the premises on which it is proposed to conduct the business are not adequate to pro- tect the revenue; (2) the activity proposed to be carried out at such premises does not meet such minimum capacity or activity requirements as the Sec- retary may prescribe,1 or (3) such person (including, in the case of a corporation, any officer, director, or principal stockholder and, in the case of a partnership, a partner)— (A) is, by reason of his business experience, financial standing, or trade connections or by reason of previous or current legal pro- ceedings involving a felony violation of any other provision of Federal criminal law re- lating to tobacco products, processed to- bacco, cigarette paper, or cigarette tubes, not likely to maintain operations in compli- ance with this chapter, (B) has been convicted of a felony viola- tion of any provision of Federal or State criminal law relating to tobacco products, processed tobacco, cigarette paper, or ciga- rette tubes, or Page 3270 TITLE 26—INTERNAL REVENUE CODE § 5713 (C) has failed to disclose any material in- formation required or made any material false statement in the application therefor. (Aug. 16, 1954, ch. 736, 68A Stat. 712; Pub. L. 85–859, title II, § 202, Sept. 2, 1958, 72 Stat. 1421; Pub. L. 94–455, title XIX, §§ 1905(a)(27), 1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1821, 1834; Pub. L. 105–33, title IX, § 9302(h)(2)(A), (5), Aug. 5, 1997, 111 Stat. 674; Pub. L. 111–3, title VII, § 702(a)(1)(A), (b)(1), Feb. 4, 2009, 123 Stat. 108, 109.) Editorial Notes AMENDMENTS 2009—Pub. L. 111–3, § 702(a)(1)(A), inserted ‘‘or proc- essed tobacco’’ after ‘‘tobacco products’’ in introduc- tory provisions. Par. (3). Pub. L. 111–3, § 702(b)(1), amended par. (3) gen- erally. Prior to amendment, par. (3) read as follows: ‘‘such person (including, in the case of a corporation, any officer, director, or principal stockholder and, in the case of a partnership, a partner) is, by reason of his business experience, financial standing, or trade con- nections, not likely to maintain operations in compli- ance with this chapter, or has failed to disclose any material information required or made any material false statement in the application therefor.’’ 1997—Pub. L. 105–33, § 9302(h)(5), struck out ‘‘or’’ at end of par. (1), added par. (2), and redesignated former par. (2) as (3). Pub. L. 105–33, § 9302(h)(2)(A), inserted ‘‘or importer’’ after ‘‘manufacturer’’ in introductory provisions. 1976—Pub. L. 94–455 struck out ‘‘or his delegate’’ after ‘‘Secretary’’ and struck out provision that no person subject to this section, who was lawfully engaged in business on the date of the enactment of the Excise Tax Technical Changes Act of 1958, be denied the right to carry on that business pending reasonable opportunity to make applications for permit and final action there- on. 1958—Pub. L. 85–859 included export warehouse propri- etors, and excluded dealers in tobacco materials. Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 2009 AMENDMENT Amendment by section 702(a)(1)(A) of Pub. L. 111–3 ef- fective Apr. 1, 2009, see section 702(a)(6) of Pub. L. 111–3, set out as a note under section 5702 of this title. Pub. L. 111–3, title VII, § 702(b)(3), Feb. 4, 2009, 123 Stat. 110, provided that: ‘‘The amendments made by this subsection [amending this section and section 5713 of this title] shall take effect on the date of the enact- ment of this Act [Feb. 4, 2009].’’ EFFECTIVE DATE OF 1997 AMENDMENT Amendment by Pub. L. 105–33 applicable to articles removed, as defined in section 5702(j) of this title, after Dec. 31, 1999, with transition rule, see section 9302(i) of Pub. L. 105–33, set out as a note under section 5701 of this title. EFFECTIVE DATE OF 1976 AMENDMENT Amendment by section 1905(a)(27) of Pub. L. 94–455 ef- fective on first day of first month which begins more than 90 days after Oct. 4, 1976, see section 1905(d) of Pub. L. 94–455, set out as a note under section 5005 of this title. EFFECTIVE DATE OF 1958 AMENDMENT Amendment by Pub. L. 85–859 effective Sept. 3, 1958, see section 210(a)(1) of Pub. L. 85–859, set out as an Ef- fective Date note under section 5001 of this title. § 5713. Permit (a) Issuance A person shall not engage in business as a manufacturer or importer of tobacco products or processed tobacco or as an export warehouse proprietor without a permit to engage in such business. Such permit, conditioned upon compli- ance with this chapter and regulations issued thereunder, shall be issued in such form and in such manner as the Secretary shall by regula- tion prescribe, to every person properly quali- fied under sections 5711 and 5712. A new permit may be required at such other time as the Sec- retary shall by regulation prescribe. (b) Suspension or revocation (1) Show cause hearing If the Secretary has reason to believe that any person holding a permit— (A) has not in good faith complied with this chapter, or with any other provision of this title involving intent to defraud, (B) has violated the conditions of such per- mit, (C) has failed to disclose any material in- formation required or made any material false statement in the application for such permit, (D) has failed to maintain his premises in such manner as to protect the revenue, (E) is, by reason of previous or current legal proceedings involving a felony viola- tion of any other provision of Federal crimi- nal law relating to tobacco products, proc- essed tobacco, cigarette paper, or cigarette tubes, not likely to maintain operations in compliance with this chapter, or (F) has been convicted of a felony viola- tion of any provision of Federal or State criminal law relating to tobacco products, processed tobacco, cigarette paper, or ciga- rette tubes, the Secretary shall issue an order, stating the facts charged, citing such person to show cause why his permit should not be suspended or revoked. (2) Action following hearing If, after hearing, the Secretary finds that such person has not shown cause why his per- mit should not be suspended or revoked, such permit shall be suspended for such period as the Secretary deems proper or shall be re- voked. (Aug. 16, 1954, ch. 736, 68A Stat. 712; Pub. L. 85–859, title II, § 202, Sept. 2, 1958, 72 Stat. 1421; Pub. L. 94–455, title XIX, § 1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1834; Pub. L. 105–33, title IX, § 9302(h)(2)(A), Aug. 5, 1997, 111 Stat. 674; Pub. L. 111–3, title VII, § 702(a)(1)(B), (b)(2), Feb. 4, 2009, 123 Stat. 108, 109.) Editorial Notes AMENDMENTS 2009—Subsec. (a). Pub. L. 111–3, § 702(a)(1)(B), inserted ‘‘or processed tobacco’’ after ‘‘tobacco products’’. Subsec. (b). Pub. L. 111–3, § 702(b)(2), amended subsec. (b) generally. Prior to amendment, text read as follows: ‘‘If the Secretary has reason to believe that any person