SECTION 3. SCOPE

This revenue procedure applies to the cost of smallwares incurred by taxpayers engaged in the trade or business of operating a restaurant or tavern. It does not apply to the cost of smallwares that are start-up expenditures as defined in § 195. Thus, a taxpayer that is not already engaged in the trade or business of operating a restaurant that opens a new restaurant may not use the smallwares method provided in section 5 of this revenue procedure to account for the cost of smallwares paid or incurred before the new restaurant opens.