Rev. Rul. 54-196

Advice is requested whether documentary stamps may be removed from instruments for the purpose of sale or exchange by or with stamp collectors.

Under section 3312 of the Internal Revenue Code assessment of documentary stamp taxes due may be made at any time within 4 years after the taxes accrued. After 4 years, but not more than 5 years, suit may be instituted without assessment to recover any taxes alleged to be due but which remain unpaid.

Pursuant to the provisions of section 113.150 of Regulations 71, all instruments, memoranda, books, or documents to which documentary stamps have been affixed and canceled shall be maintained and preserved for at least 4 years from the time of the related transaction.

In view of the foregoing canceled documentary stamps may not be removed from the instruments to which they are attached during the 4-year period from the date the tax accrued and, as a matter of protection to the taxpayer, should not be removed before the expiration of the 5-year period during which suit may be instituted.

Although the Internal Revenue Service recognizes that there is no prohibition in the law or regulations against the removal of such stamps after the 4-year period, attention is directed to the penalties provided under section 1823 of the Internal Revenue Code for the fraudulent use or reuse of such stamps.