QUALIFICATION OF USERS OF SPECIALLY DENATURED SPIRITS

CAUTION

SECTION 5271 I. R. C., AS AMENDED BY PUBLIC LAW 85-859, (72 STAT. 1370) PROVIDES THAT NO PERSON SHALL PROCURE OR USE SPECIALLY DENATURED SPIRITS ON AND AFTER JULY 1, 1959, UNTIL HE HAS FILED AN APPLICATION TO DO SO Specially denatured alcohol users and others concerned:

What applications should you file? In order to continue to use and procure specially denatured spirits (formerly called specially denatured alcohol) on and after July 1, 1959, you are required to make application on Form 1479 (Revised April 1959), copies included, for an industrial use permit (formerly called a basic permit) to use specially denatured spirits and an application on Form 1485 (Revised April 1959), copies included, for a permit to procure specially denatured spirits.

What quantities should you show on your applications? Your application for an industrial use permit, Form 1479, requires that you state the quantity of specially denatured spirits, including recovered or restored denatured spirits and recovered or restored articles, that will be on hand, in transit, and unaccounted for at any one time. This quantity will determine the penal sum of your bond. It may be large enough to permit you to order containers of the size that you usually purchase and have the specially denatured spirits in transit while you have a sufficient quantity on hand to care for your needs.

Your application on Form 1485 will require that you state the total quantity to be withdrawn during a calendar month and the total quantity to be withdrawn during a year. The proposed regulations state that the quantity of any formula to be withdrawn during any calendar month should not be more than one-twelfth of the annual requirements but provides that where you desire to withdraw more than one-twelfth of your annual quota during any month you should state your needs and furnish sufficient information for the assistant regional commissioner to determine whether such withdrawals should be authorized. If one-twelfth of your annual quota is less than a 55 gallon drum and you have sufficient reasons for desiring to purchase in a 55 gallon container, you should enter 55 gallons as the quantity to be withdrawn

per calendar month and furnish sufficient information for the assistant regional commissioner to determine whether that portion of your application should be approved. The same procedure would hold true if you have a seasonal business that required that you use specially denatured spirits in only a few months during a year. You should determine your annual quota and the need for each of the few months that you expect to use the material and adequately explain your desires.

Period to be entered on Form 1485. Your entry for the beginning of the period should be July 1, 1959, but the ending date should be left blank at this time.

What should be done about your bond? You shall file a new bond, Form 1480, or you may continue your current bond in effect by filing a consent of surety, Form 1533, copies attached, extending the terms of the bond to cover specially denatured spirits on hand, in transit, and unaccounted for on and after July 1, 1959. If you have submitted a strengthening bond, such bond shall also be covered by a separate consent. If you increase the quantity, you should submit a strengthening bond with your same surety or submit a new bond. Where and when qualifying documents should be filed? The above described applications bond or consent of surety with the necessary supporting documents outlined in the accompanying excerpts from the proposed regulations shall be filed in duplicate with your assistant regional commissioner (alcohol and tobacco tax). They should be filed as soon as possible after you receive the forms in order to expedite handling in the office of your assistant regional commissioner.

Result if applications are not filed prior to July 1, 1959. If you do not file the two applications and bond or consent of surety on your bond or bonds prior to July 1, 1959, you will not be entitled to use specially denatured spirits on and after July 1, 1959, and the vendor named on your current withdrawal permit will be notified by the assistant regional commissioner that you may not continue to withdraw specially denatured spirits.

Continuation of permits on and after July 1, 1959. The proposed regulations provide that if you hold a permit as a user, have a valid withdrawal permit on Form 1485 on June 30, 1959, and have filed the required applications, you may continue to use and withdraw specially denatured spirits on and after July 1, 1959, under such permits until final action is taken on your applications.

Inquiries. Inquires in regard to this industry circular should refer to its number and be addressed to the office of your assistant regional commissioner (alcohol and tobacco tax).

Dwight E. Avis
Director, Alcohol and Tobacco Tax Division

IRS D. C. 46853

Industry Circular No. 59-10, Supp. No. 1 May 6, 1959

QUALIFICATION OF USERS OF SPECIALLY DENATURED SPIRITS (ALCOHOL)

Specially denatured alcohol users, and others concerned:

Purpose. The purpose of this supplement is to advise you of certain changes to be made in the instructions furnished you with Industry Circular No. 59-10.

Background. Reference was made in Industry Circular No. 59-10 to proposed regulations, and the instructions furnished contained excerpts from the proposed regulations. These proposed regulations were published in Part II of the Federal Register for April 21, 1959, as a notice of proposed rule making. During recent conferences with industry members and personnel from our regional offices suggestions were made for simplifying these proposed regulations. We believe that some of the suggestions are excellent, and we expect to propose their inclusion in the regulations. Accordingly, we have anticipated these changes and revised the earlier instructions. In filing your application you may follow the revised instructions. If, upon further review, additional information is found to be necessary, you will be so advised.

Information relative to changes.

(a) In listing your equipment, as required by paragraph 1 (f), it will be sufficient to list only the principal articles of equipment to be directly involved in the use of the specially denatured alcohol.

(b) The information required in the first sentence of paragraph 1 (i) need not be submitted except on the specific request of the assistant regional commissioner.

(c) The second sentence of paragraph 1 (i) permits you to adopt, by reference, items of information on file in the office of the assistant regional commissioner and applies to all of the items of information required under paragraphs (d) through (h). This provision also applies to the documents listed under section 3, Organizational Documents.

(d) In lieu of the corporate documents listed in section 3 (a), only the following documents need be submitted.

(1) Certified true copy of the certificate of incorporation, or certified true copy of certificate authorizing the corporation to operate in the State where premises are located, if other than that in which incorporated.

(2) Certified list of the names and addresses of the officers and directors.

(3) Statement showing the number of shares of each class of stock or other evidence of ownership, authorized and outstanding, the par value thereof, and the voting rights of the respective owners or holders.

(e) You need not submit certified extracts or digests of minutes of meetings of boards of directors, authorizing certain individuals to sign for the corporation but your application must be accompanied by evidence which will establish the authority of the officer or other person who executes the application for permit to execute the same unless such authority is already on file in the office of the assistant regional commissioner.

(f) The names of the persons interested in a parent corporation, mentioned in the second sentence of paragraph 3 (c)(1), need be submitted only at the specific request of your assistant regional commissioner.

Modification of Form 1479. The use of a more specific term than "specially denatured spirits" is desired. Please modify Form 1479 by inserting the term "specially denatured alcohol" or "denatured rum", as the case may be, at the end of the statement immediately above item 3. Inquiries. If you have any questions regarding your qualification, they should be addressed to your assistant regional commissioner (alcohol and tobacco tax).

Important

If you have already filed your application in accordance with the first instructions furnished you, no further action is necessary.

Dwight E. Avis Director, Alcohol and Tobacco Tax Division