Rev. Proc. 62-16

SECTION 1. PURPOSE.

The purpose of this Revenue Procedure is to establish standards and to provide instructions for the use of meter machines in the sale of documentary stamps.

SEC. 2. BACKGROUND.

Section 47.6801-1 of the Documentary Stamp Tax Regulations authorizes the Commissioner of Internal Revenue or his delegate to set the standards for and to approve meter machines for use in the sale of documentary stamps and to prescribe instructions and requirements governing the circumstances and conditions under which such machines may be used. That section of the regulations provides that, in addition to the documentary stamps customarily sold and used for the rayment of taxes imposed under chapter 34 of the Internal Revenue Code of 1954, stamps produced by authorized documentary stamp meter machines shall be proper for such use.

SEC. 3. APPROVAL OF METERS.

No documentary stamp meter may be authorized for use unless the model of that meter has been approved by the Internal Revenue Service. Manufacturers of meters may obtain this approval under the standards and instructions set forth in Revenue Procedure 62-15, page 445, this Bulletin. Each District Director of Internal Revenue will maintain information regarding those models which have been approved for use in his district. Persons desiring to use meters will enter into lease arrangements with a manufacturer of an approved meter.

SEC. 4. PERMISSION TO USE.

.01 A prospective user of a documentary stamp meter must obtain the permission of the District Director for the district in which the meter will be used. To request this permission, the prospective user must file Form 2969, Application and Permit to Use Documentary Stamp Tax Meter. This form may be obtained from the District Director or from the meter manufacturer's representative.

.02 If the District Director approves the application, he will retain the original application and will send endorsed copies to (1) the applicant, (2) the meter manufacturer, and (3) the Internal Revenue office designated to set the meter.

SEC. 5. METERED STAMPS.

.01 Documentary stamp meters can be set to print a stamp in any denomination up to $999.99. These stamps are printed with an indelible ink approved for such use by the Internal Revenue Service. It is the user's responsibility to see that each stamp is printed to clearly and legibly show its value, serial number, the date and the identification number of the meter being used. If the stamp is illegible in respect to its serial number, date or meter machine number, the user may, on the stamp or adjoining thereto, set forth the matter or matters which are illegible and sign his name in respect thereto. If the amount of such stamp is not entirely clear, but is legible to the extent that the amount can be determined, the stamp may be submitted for refund as provided in section 11 of this Revenue Procedure. However, stamps on which the amount cannot be determined will not be acceptable as a basis for refund claim except under such facts and circumstances as will enable the District Director or other Service representative designated by the Commissioner to determine with accuracy the amount that such stamp should show.

.02 The metered stamp may be printed either directly on a document (such as a deed) or on a gummed tape of special protected paper. The method to be used depends upon the convenience of the user. Each metered stamp which is printed on tape must be affixed to the appropriate document by use of the adhesive on the tape, and then it must be cancelled. See section 7 below.

.03 The ink and the special protected paper tape to be used in the meter are to be furnished by the manufacturer who leases the meter.

SEC. 6. SETTING OF THE METER.

.01 Each District Director will designate the Internal Revenue offices within his district which are authorized to set documentary stamp meters. Each approved Form 2969 will indicate the office at which the applicant's meter may be set.

.02 After approval of an application for permission to use a meter, the applicant must arrange to meet the meter manufacturer's representative at the Internal Revenue office designated to set the meter. The meter cannot be delivered to the user by the manufacturer's representative until it has been set and sealed at the designated Internal Revenue office. The user must present at that office (1) his endorsed copy of Form 2969, (2) a completed Form 2970, Order for Setting Documentary Stamp Tax Meter, and (3) a remittance in the amount for which he wishes to have the machine set. The maximum total amount for which a meter can be set is $99,999.99.

.03 Each time thereafter when the user wishes to have the meter reset, he must bring to the designated Internal Revenue office (1) the meter, (2) a Meter Record Book (provided by the meter manufacturer), (3) a completed Form 2970, and (4) a remittance. The meter will be reset and sealed, and the Meter Record Book will be returned to the user.

.04 If a user wishes to have a receipt for his remittance, he may submit Form 2970 in duplicate so that one copy may be endorsed and returned to him as a receipt.

SEC. 7. CANCELLATION OF STAMPS.

.01 A stamp which is printed on gummed tape and affixed to a document must be cancelled in the manner prescribed by section 47.6804-2(a) of the regulations which states that a person using or affixing a stamp shall cancel it and so deface it as to render it unfit for reuse by marking it with his initials and the day, month, and year when the affixing occurs. Such marking shall be made by writing or stamping in indelible ink or by perforating with a machine or punch. However, the stamp shall not be so defaced as to prevent ready determination of its denomination and genuineness.

.02 Under the provisions of section 47.6804-2(b) of the regulations, it is not necessary that the user cancel a stamp printed directly on a document by an authorized meter machine.

SEC. 8. CONTROL OF METER.

.01 The user must maintain in the Meter Record Book a daily record of use of the meter. This record is for the protection of the user as well as for the protection of the Federal government. At the end of each calendar month (irrespective of whether the meter has been used during that month), the user must remove the original daily record from the Meter Record Book and send it to the Internal Revenue office which set the meter. The meter should be presented to that office at least once each year for inspection, if it has not been presented during that time for resetting.

.02 The permission to use a documentary stamp meter may be revoked at any time by the District Director, (1) if the meter has been used in any scheme to defraud the Federal government, (2) if the user fails to comply with instructions, or (3) if the meter has not been used for more than two years.

SEC. 9. MECHANICAL FAILURE.

The user should report immediately to the manufacturer's representative any mechanical failure of a meter. If the meter must be repaired, the user must take the meter and the Meter Record Book to the Internal Revenue office which set the meter. The amount of unused stamp value in the meter may be transferred to another meter, or it may be refunded to the user.

SEC. 10. DISCONTINUANCE OF METER.

When the user discontinues the use of a meter, he must return it to the Internal Revenue office which set the meter, in order to have the amount of unused stamp value in the meter transferred to another meter or refunded to the user. If the user desires that this unused amount be refunded, he must submit Form 843, Claim, when he returns the meter. The user may not transfer the meter to another person for use.

SEC. 11. UNUSED STAMPS.

The meter user may file a claim for refund with respect to any unused or erroneously issued stamps. To be eligible for refund, the amounts of such stamps must be determinable to the satisfaction of the District Director or such other official as designated by the Commissioner to pass upon such claim. The claim must be filed on Form 843 and must be supported by submitting the stamps or by furnishing any information required by the District Director.