Rev. Rul. 54-157

Section 2734 of the Internal Revenue Code provides a tax on the making of firearms at the rate of $200 for each firearm except in the case of certain weapons defined therein for which the rate of tax is $1 for each such weapon. Section 2720 of the Internal Revenue Code provides that each transfer of a firearm in the United States is subject to tax at the rate of $200 for each firearm except in the case of certain weapons defined therein upon which the transfer tax is at the rate of $1 for each such weapon.

Section 319.131 of Regulations 88 provides that $1 and $200 adhesive stamps bearing the words `Firearms Act' are used for the payment of the tax on the making of firearms by other than a qualified manufacturer who has registered and paid special (occupational) tax, and the transfer tax. Section 319.71 of Regulations 88 provides that such adhesive stamps issued by District Directors of Internal Revenue are canceled by writing or stamping thereon, in ink, the initials of the person canceling the stamp and the day, month, and year, or by cutting with a machine or punch the initials and date. The stamps are affixed to the original copies of the appropriate Forms 1A (Firearms) in the case of the tax on the making of firearms, or Forms 4 (Firearms) in the case of the transfer of a firearm.

Section 1823 of the Internal Revenue Code provides, in part, that whoever willfully removes, or alters the cancellation or defacing marks of, or otherwise prepares, any adhesive stamp with intent to use, or causes the same to be used, after it has already been used, shall, upon conviction, be punished by a fine of not more than $1,000, or by imprisonment for not more than 5 years, or both, and any such reused, canceled, or counterfeit stamp and the vellum, parchment, document, paper, package, or article upon which it is placed or impressed shall be forfeited to the United States.

A `Firearms Act' stamp is considered to have been `used' after it has once been affixed to an instrument, whether or not such instrument is proper or acceptable. The removal of any adhesive stamp from a document to which once affixed with intent to reuse such stamp is specifically prohibited by law.

Except where specifically prohibited, minor corrections may be effected on all copies of an original form to which a stamp has been affixed and such form will be accepted for filing. However, if the desired changes require extensive correction, or are of a substantive nature, a new form must be executed. In such event a new `Firearms Act' stamp must be purchased and affixed to the form prior to submission to the Commissioner of Internal Revenue.

Where a `Firearms Act' stamp has been affixed to a Form 1A (Firearms) or Form 4 (Firearms) which is improperly executed or unacceptable for any reason, the stamp should not be removed but the form, with the stamp affixed thereto, should be submitted to the appropriate District Director of Internal Revenue with a claim for redemption filed on Form 843.