Rev. Rul. 54-217

Advice is requested whether municipally-owned hospitals which are governed by a board of directors or trustees and hold a tax-free alcohol user's permit need give notification in the event there is a change in the personnel of the board of directors or trustees.

Usually, the board of directors or trustees is appointed by the governing body of the city or county involved, and certain members of the board are ex-officio members, such as the mayor of the city, the chairman of the county commissioners, or similar officers.

Section 182.165(a) of Regulations 3 provides in part that applications for permits to use tax-free alcohol by municipal subdivisions of a State or Territory shall be made to the Assistant Regional Commissioner, Alcohol and Tobacco Tax, by the officer duly authorized to procure such alcohol, and evidence of such authority shall be submitted with the application. Section 182.168 of Regulations 3 gives the Commissioner or the Assistant Regional Commissioner, Alcohol and Tobacco Tax, the authority to require persons carrying on business under Regulations 3 to furnish such additional information as he may, at any time in his discretion, deem necessary with respect to the qualifying documents.

In the case of a corporation, section 182.266 of Regulations 3 requires that where there is a change in the officers or directors, the Assistant Regional Commissioner, Alcohol and Tobacco Tax, must be furnished extracts of the minutes of meetings showing such changes. However, the Internal Revenue Service holds that it is not necessary that the Assistant Regional Commissioner, Alcohol and Tobacco Tax, be notified each time there is a change in the board of directors or trustees of a hospital operated by a municipal subdivision of a State where application for a permit to procure tax-free alcohol has been properly filed under section 182.165(a) since such information may, in appropriate cases, be required under section 182.168.