American wit holding papers for storage of smoke? (7)
I believe the answer is:
humidor
'storage of smoke?' is the definition.
(a humidor might contain a cigar aka a 'smoke')
'american wit holding papers' is the wordplay.
'american wit' becomes 'humor' (US spelling of 'humour').
'holding' indicates putting letters inside.
'papers' becomes 'id' (identification papers).
'humor' going around 'id' is 'HUMIDOR'.
'for' is the link.
(Other definitions for humidor that I've seen before include "Cigar or tobacco container" , "Airtight container for storing cigars" , "cigar box" , "Container that keeps cigars moist" , "Protection for Havana" .)