27 C.F.R. § 41.25
When any Federal, State, or local officer having custody of forfeited, condemned, or abandoned tobacco products or cigarette papers or tubes, upon which the Federal tax has not been paid, is of the opinion that the sale thereof will not bring a price equal to the tax due and payable thereon, and the expenses incident to the sale thereof, he shall not sell, nor cause to be sold, such articles for consumption in the United States. Where the articles are not sold, the officer may deliver them to a Federal or State hospital or institution (if they are fit for consumption) or cause their destruction by burning completely or by rendering them unfit for consumption. Where such articles are sold, they shall not be released by the officer having custody thereof until they are properly packaged and taxpaid, which tax shall be considered as a portion of the sales price. Except when the tax is to be paid to the Port Director of Customs or other authorized customs officer in accordance with customs regulations ( 19 CFR part 127 ) on sales of articles by customs officers, the payment of tax on those articles must be evidenced by presentation, to the officer having custody of the articles, of a receipt from the appropriate TTB officer showing such payment. In the case of such articles held by or for the Federal Government, the sale thereof shall be subject to the applicable provisions of the Regulations of the General Services Administration, Title 1, Personal Property Management.
27 C.F.R. § 41.25
68A Stat. 872, 903; 26 U.S.C. 7342 , 7606
Effective Date Note: At 78 FR 38568, June 27, 2013, § 41.25 was amended by revising the fourth sentence, effective Aug. 26, 2013 through Aug. 26, 2016.