They say that you can’t fight city hall, but the U.S. government is another matter. A non-compliant business in the alcohol or tobacco industry can dispute an adverse action imposed by the Alcohol and Tobacco Tax and Trade Bureau (TTB), which operates under the U.S. Treasury. This administrative action is used to resolve willful violations.
The results will be:
- Offer in compromise
- Suspension
- Voluntary Surrender
What is an offer in compromise?
It applies to certain criminal and civil cases. In the context of the TTB, this involves a compromise agreement where the alleged violator offers to pay a certain amount instead of facing civil or criminal legal action by the government. It is generally the starting point for the TTB, who will actually try to work with the violator and their attorney to negotiate an acceptable offer of compromise.
Such was the case on June 17, 2021, for the famed tobacco store N.D. Cigars, Inc. in the Bronx borough of New York City. The store on Arthur Ave. (not far from Yankee Stadium) serves celebrities and locals alike, selling hand-rolled cigars and providing a smoking room, rolling classes and other services.
ND Cigars, Inc initially faced an administrative action for $259,278.43. However, the compromise was $115,000.00. Seeking the compromise saved the company $144,278.43, which is more than half of the original action. The business will pay in 60 monthly installments of $1,916.67.
The listed violations are:
- Manufacturing tobacco products without a permit
- Underestimating their excise tax liability
- Non-payment of special occupation tax
- Failure to keep records of tobacco received, cigars made and cigars sold
The violations took place from March 15, 2011, through August 31, 2019.
This is commonplace
The TTB accepts dozens of offers to compromise each year. Businesses that get the best results often work with attorneys who have experience representing clients in compliance matters like this.